By Dhirendra Tripathi
Investing.com – F5 Networks stock (NASDAQ:FFIV) plunged 15% Wednesday as supply chain constraints led the cloud security company to lower its annual outlook.
“While demand for its solutions remains robust, the company expects that its ability to meet customers’ continued strong demand for systems will be restricted by supply chain constraints for the remainder of fiscal year 2022,” President and CEO François Locoh-Donou said in comments after releasing the company’s first quarter results.
F5 expects 2022 revenue growth to be 4.5% to 8%, down from its prior expectation of 8% to 9% growth.
The company’s projections for the current quarter also fell short of estimates and added to the pressure on the stock. F5 expects second-quarter revenue to be $630 million at the center of its guidance range. Even at the top end of $650 million, the second-quarter revenue is projected to be sequentially lower while being only $5 million more than year-ago.
The October-December revenue was higher by 10% year-on-year at $687 million, marking its fifth consecutive quarter of double-digit revenue growth.
The company said escalating demand for applications is driving its growth, currently being held back by supply shortages. The company said over the last 30 days, a decline in component availability is significantly restricting its “ability to meet customers’ continued strong systems demand”.
Operating margin eroded by 2.3 percentage points to 16.6%. Adjusted net profit rose 11% to $179 million and exceeded estimates.