Slide 1: Q1FY21 Results
Q1FY21 Results PERIOD ENDING DECEMBER 31, 2020 Published January 26, 2021
Slide 2: Forward-looking statements
Forward-looking statements This presentation and associated commentary contains forward-looking statements including, among other things, statements regarding the continuing strength and momentum of F5’s business, past and future financial performance including revenue, operating targets, earnings a
Slide 3: GAAP to non-GAAP presentation
GAAP to non-GAAP presentation In addition to financial information prepared in accordance with U.S. GAAP, this presentation also contains adjusted financial measures that we believe provide investors and management with supplemental information relating to operating performance and trends that facil
Slide 4: Introduction
Introduction François Locoh-Donou, CEO & President 4 | ©2021 F5
Slide 5: GAAP results
GAAP results Q1FY21 Q1FY20 Revenue $624.6M $569.3M Gross margin 81.6% 84.4% Operating margin 18.9% 21.5% Net income $87.7M $98.5M Diluted EPS $1.41 $1.62 5 | ©2021 F5
Slide 6: Digital transformation is accelerating with growing business & consumer dependency on applications
Digital transformation is accelerating with growing business & consumer dependency on applications Q1FY21 Growth Drivers +70% +1% +5% Software1 Global Systems Services 1 SEE APPENDIX FOR GAAP-TO-NON-GAAP RECONCILIATIONS. 6 | ©2021 F5
Slide 7: Q1FY2021 Results
Q1FY2021 Results Frank Pelzer, CFO & EVP 7 | ©2021 F5
Slide 8: Q1FY21 non-GAAP revenue mix
Q1FY21 non-GAAP revenue mix $700 Growth 10% $626 $600 $569 Non-GAAP revenue $ in millions $111 $65 +70% $500 $170 +5% $179 $400 $300 $200 $335 +1% $337 $100 $0 Q1FY20 Q1FY21 Services Systems Software Q1FY21 INCLUDES FULL QUARTER OF SHAPE. SEE APPENDIX FOR GAAP-TO-NON-GAAP RECONCILIATIONS. TOTALS MAY
Slide 9: Growing non-GAAP software revenue from subscriptions
Growing non-GAAP software revenue from subscriptions 23% 54% 46% 77% Q1FY20 Q1FY21 Subscription Perpetual SEE APPENDIX FOR GAAP-TO-NON-GAAP RECONCILIATIONS. 9 | ©2021 F5
Slide 10: Growing non-GAAP revenue from recurring sources
Growing non-GAAP revenue from recurring sources 37% 34% 63% 66% Q1FY20 Q1FY21 Recurring Non-recurring SEE APPENDIX FOR GAAP-TO-NON-GAAP RECONCILIATIONS. 10 | ©2021 F5
Slide 11: Q1FY21 non-GAAP revenue contribution by geography
Q1FY21 non-GAAP revenue contribution by geography Non-GAAP Non-GAAP revenue growth Non-GAAP $ in millions $ in millions 10% 20% $112 +7% 19% $119 % of non-GAAP revenue contribution by geo 27% $156 +4% 26% $162 53% $302 +14% 55% $344 Total Total $569 $626 Q1FY20 Q1FY21 North America EMEA APAC SEE APP
Slide 12: Q1FY21 customer verticals as a % of product bookings
Q1FY21 customer verticals as a % of product bookings 19% 18% % of total product bookings 65% 67% 16% 14% Q1FY20 Q1FY21 Service Providers Enterprise Government TOTALS MAY NOT ADD TO 100% DUE TO ROUNDING. 12 | ©2021 F5
Slide 13: Q1FY21 non-GAAP gross and operating margins
Q1FY21 non-GAAP gross and operating margins NON-GAAP GROSS MARGIN NON-GAAP OPERATING MARGIN 100.0% 40.0% Q1FY21 includes dilution from 33.8% 86.0% 84.4% 33.0% As a % of non-GAAP revenue Shape Security, acquired in 80.0% January 2020 60.0% 20.0% 40.0% 20.0% 0.0% 0.0% Q1FY20 Q1FY21 Q1FY20 Q1FY21 Q1FY2
Slide 14: Q1FY21 non-GAAP net income and EPS
Q1FY21 non-GAAP net income and EPS NON-GAAP NET INCOME NON-GAAP EPS $200.0 $2.80 Q1FY21 includes dilution from Shape Security, acquired in January 2020 Non-GAAP Net Income $2.59 Non-GAAP EPS in $ $2.60 $2.55 $161.5 $ in millions Q1FY21 non-GAAP effective $155.4 tax rate of 21.7% $150.0 $2.40 $2.20 $
Slide 15: Q1FY21 cash flow from operations
Q1FY21 cash flow from operations $200 $182 $180 $175 $159 $160 $144 $137 $140 $120 $ in millions $100 $80 $60 $40 $20 $0 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 15 | ©2021 F5
Slide 16: Q1FY21 cash and investments
Q1FY21 cash and investments $1,600 $1,474 Shape acq $1,462 $1,400 $1,313 $1,206 3-year $400M Term Loan $1,200 associated with Shape $1,026 $ in millions $1,000 acquisition to be paid down over time $800 $600 $400 $200 $- Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 SHAPE ACQUIRED Q2FY20 FOR $600M CASH PLUS $4
Slide 17: Business Outlook
Business Outlook 17 | ©2021 F5
Slide 18: Q2FY21 outlook
Q2FY21 outlook PROVIDED JANUARY 26, 2021 Q2 FY2021 Revenue $625 - $645M Non-GAAP gross margin 84.0% - 84.5% Non-GAAP operating expense $340 - $352M Non-GAAP diluted EPS $2.32 - $2.44 Non-GAAP effective tax rate 21% - 22% Share-based compensation $62 - $64M 18 | ©2021 F5
Slide 19: Business Overview
Business Overview François Locoh-Donou, CEO & President 19 | ©2021 F5
Slide 20: F5 growth drivers in FY2021
F5 growth drivers in FY2021 Software Transformation Application Security Systems Resiliency Ongoing software and Growing demand for Moderation in recent systems subscription momentum application security revenue deceleration 20 | ©2021 F5
Slide 21: Enterprises require a new edge paradigm for their apps: Edge 2.0
Enterprises require a new edge paradigm for their apps: Edge 2.0 Edge 1.0 Edge “1.5” Edge 2.0 CDN CDN → Closed edge Open edge • Specific services run on • Every service runs • Every service runs on specialized CDN servers on every CDN server any server, across all clouds • Focused on static content
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Slide 23: Appendix
Appendix 23 | ©2021 F5
Slide 24: GAAP to non-GAAP reconciliation
GAAP to non-GAAP reconciliation Gross Profit Reconciliation ($ in thousands) Q1FY21 Q1FY20 GAAP revenue $624,617 $569,305 Acquisition-related write-downs of assumed deferred revenue $1,283 $0 Non-GAAP revenue $625,900 $569,305 GAAP gross profit $509,638 $480,663 Stock-based compensation $7,342 $5,48
Slide 25: GAAP to non-GAAP reconciliation
GAAP to non-GAAP reconciliation Income from Operations Reconciliation ($ in thousands) Q1FY21 Q1FY20 GAAP operating income $117,748 $122,335 Total adjustments related to revenue $1,283 $0 Total adjustments related to gross profit $17,386 $8,907 Total adjustments related to operating expense $70,390
Slide 26: GAAP to non-GAAP reconciliation
GAAP to non-GAAP reconciliation The non-GAAP adjustments, and F5's basis for excluding them from non-GAAP financial measures, are outlined below: Acquisition-related write-downs of assumed deferred revenue. Included in its GAAP financial statements, F5 records acquisition-related write-downs of assu
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