F5 Networks Inc. FFIVreported second-quarter fiscal 2018 non-GAAP earnings per share (excluding amortization of intangible assets, stock-based compensation and other one-time items) of $2.31, surpassing the Zacks Consensus Estimate of $2.26 as well as the guidance of $2.24-$2.27. Furthermore, earnings increased 18.
5% from the year-ago bottom-line figure.Revenues
F5 Networks’ revenues grew 2.9% year over year to $533.3 million and came ahead of the Zacks Consensus Estimate of $530 million. Notably, revenues were also above the mid-point of the guided range of $525-$535 million.
Revenues were boosted by around 6.7% increase in service revenues, which accounted for 55% of total revenues. However, product revenues witnessed a decrease of 1.5% on a year-over-year basis.
Geographically, on a year-over-year basis, revenues from the Americas were up 1% and contributed 55% to total revenues. EMEA increased 8% and accounted for 26% of total revenues. Asia Pacific was up 2% on a year-over-year basis, representing 14% of total revenues. Japan revenues decreased 6% and represented 4% of total revenues.
By verticals, Enterprise, Service providers and Government (including 5% from the U.S. federal) accounted for 66%, 21% and 13% of total revenues, respectively.
The company’s distributors Ingram Micro and Tech Data TECDaccounted for 17% and 12% of revenues, respectively. Arrow, Westcon and Cynics contributed 11% each to total revenues.
Operating Results
F5 Networks’ non-GAAP gross profit (excluding amortization of intangible assets, other one-time items and stock-based compensation) was up 2. 9% on a year-over-year basis and came in at $451.2 million. Non-GAAP gross margin decreased 30 basis points (bps) during the quarter and came in at 84.7%, primarily due to higher cost of sales.
The company’s non-GAAP operating profit (excluding amortization of intangible assets, other one-time items and stock-based compensation) totaled $187.5 million, up 1% from the year-ago quarter. Non-GAAP operating margin was almost flat on a year-over-year basis.
The company’s non-GAAP net income (excluding amortization of intangible assets, other one-time items and stock-based compensation) came in at approximately $143.3 million compared with $127 million reported in the year-ago quarter. On a GAAP basis, net income came in at $109.6 million compared with $93.1 million reported in the year-ago period.