Shares of Seattle-based network infrastructure and security technology company F5 Networks rose more than 3 percent after beating expectations for its fourth quarter earnings report.
F5 reported revenue of $525 million for Q4 of its fiscal 2016, up 5 percent from the year-ago period, and quarterly non-GAAP net income of $140 million, or $2.11 per diluted share, up from $130 million, or $1.84 per diluted share, in the fourth quarter of 2015.
Analysts expected earnings of $1.94 per share on revenue of $520 million.
Full-year revenue for F5 was a record $2 billion, up 4 percent from 2015, and record full-year net income was $496 million, or $7.30 per diluted share, compared with $480 million, or $6.62 per diluted share, last year.
“Strengthening product sales in the second half of fiscal 2016 culminated in strong fourth-quarter results and record annual revenue and earnings,” said John McAdam, F5’s president and CEO, in a prepared statement. “On a regional basis, Americas, APAC and Japan all delivered solid sequential and year-over-year sales growth, while sales in EMEA were down significantly from the fourth quarter a year ago.”
F5 also announced that it has appointed Ryan Kearny as CTO and executive VP of product development, reporting to McAdam. In this role, Kearny will oversee the company’s product development and innovation strategy. The position was previously held by Karl Triebes, who resigned last month after spending 12 years at F5. Triebes will remain in an advisory role with the company until Jan. 1 of next year.
Kearny joined F5 in 1998, previously serving as senior VP of product development. He holds a B.S. in electrical engineering from the University of Washington.
“Ryan’s experience, perspective, and technical acumen make him an ideal fit to take F5 further into emerging areas, particularly around software and cloud technologies,” McAdam said in a statement.
Update: The company’s headcount stood at 4,395 in the fourth quarter, and that number is expected to rise by 60 to 80 in the current quarter, a spokesperson said during a call with reporters and analysts after the release of earnings.
McAdam said F5’s SSL orchestration and inspection capabilities have become increasingly relevant as hackers refine their attacks. The company’s WebSafe product has also seen increased sales as increasingly sophisticated attacks focus on credential theft.
As more customers move more applications into the cloud, “we’re seeing they have a need for consistent security policies and processes. That’s a big opportunity,” McAdam said. He said the company will be beefing up internal-sales teams to focus more on assisting customers using Amazon Web Services and Azure.”We will be partnering with Azure and AWS,” he said.
That partnership will consist in part of putting products on the AWS and Azure online-marketplace sites, something it’s already doing and will continue to do, McAdam said later in a one-on-one interview.
McAdam continues to serve in an interim capacity as the search for his replacement continues, he said. He returned as CEO late last year after the unexpected resignation of Manny Rivolo. The search for McAdam’s replacement began in late July, and “there’s no time scale on it,” he said.
He declined to comment on a report that F5 in June had hired Goldman Sachs to field potential acquisition offers. And he declined to comment when asked whether any such offers had been received.
F5 builds internet traffic and content-management hardware and software designed to improve the availability and performance of mission-critical internet-based servers and applications. Their products help organizations scale their applications, whether they reside in the cloud, in a company data center or on-premises. “We feel quite good that this trend toward the cloud is an opportunity for us,” McAdam said.
