How Does F5 Networks View Fiscal 3Q16?
What Caused F5 Networks' Fiscal 2Q16 Revenue Rise?
Balance sheet and cash flow
F5 Networks’ (FFIV) cash flow from operations was $133.1 million in fiscal 2Q16. In fiscal 2Q16, the company repurchased 2.1 million shares of common stock at an average price of $94.62 for a total of $200 million.
F5 ended the quarter with $1.1 billion in cash and investments. The company also approved an additional share repurchase of $1 billion.
F5 Networks’ days sales outstanding (or DSO) was 50 days, with inventories at $35.2 million. Its capital expenditure in fiscal 2Q16 was $16.5 million, and its deferred revenue rose 17% YoY (year-over-year) to $842.7 million.
Outlook for fiscal 3Q16
CEO of F5 Networks John McAdam stated, “As we enter into the historically stronger second half of our fiscal year, we remain focused on business execution and the delivery of our upcoming new products and features to drive the next leg of growth for F5. With this in mind, our revenue target for the third quarter of fiscal 2016 is $490 million to $500 million.”
F5’s GAAP (generally accepted accounting principles) gross margin in fiscal 3Q16 is expected to be around 82.5%, whereas its non-GAAP gross margin is expected to be around 84%. Its GAAP operating expenses are expected to be in the range of $270 million–$279 million.
F5 Networks plans to increase its employee headcount by up to 50 employees in fiscal 3Q16, up from 4,325 employees. The company also expects its cash flow from operations to be approximately $155 million at the end of fiscal 3Q16.
FFIV accounts for 3.9% of the First Trust ISE Cloud Computing Index ETF (SKYY). The other top holdings of this ETF include SAP (SAP) at 4.3%, Google (GOOGL) at 4.1%, and Facebook (FB) at 3.9%.
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