F5 Networks, a Seattle-based provider of hardware and software to increase networked-application speed and security, posted revenue of $516 million for its first FY17 quarter ended Dec. 31, up 5.4 percent from the year-ago period. Net income was $94.2 million, or $1.44 per diluted share, compared with $89.7 million, or $1.28 per diluted share, in the same quarter last year.
Analysts polled by Capital IQ had been expecting better performance, forecasting a profit of $1.94 per share on revenue of $517 million. But the results exceeded F5’s own guidance.
Shares tumbled 4 percent, to $139.79, in after-hours trading.
“I was very pleased with our performance,” president and CEO John McAdam said in a call with press and analysts after the release of earnings. “The launch of BIG-IP iSeries, completed in November, was a significant contributor to product revenue, which grew 2 percent year-over-year.”
McAdam added: “We believe the migration of applications to public and private clouds, the build-out of hybrid cloud infrastructures, the explosion of SSL-encrypted traffic, and the need to provide security for applications, including the burgeoning array of IoT applications, all represent major market opportunities in the current quarter and beyond.”
F5’s application-delivery controllers and BIG-IP i-units provide cloud users with website acceleration, encryption and decryption and load balancing. The company’s Equinix product acts as a gateway to public-cloud services including Amazon Web Services and Microsoft Azure.
F5 used the earnings release to highlight two hardware-and-software offerings in a new line it’s calling Herculon. One of them, SSL Orchestrator, is a device built to enhance security on networks using Secure Sockets Layer (SSL) and its successor, Transport Layer Security (TLS) by adding cryptographic capabilities. The other, DDoS Hybrid Defender, is meant to offer protection against distributed denial-of-service attacks by analyzing network behavior.
F5 announced cloud-based web-application security services for which F5 staffers provide monitoring and attack mitigation, a new part of the company’s Silverline WAF (web-application firewall) Express offering. And it debuted a “security incident response team” that it said will provide additional expert support if needed during a security crisis.
The company added 65 employees last quarter, bringing the headcount to about 4,460, CFO Andy Reinland said during the call. Plans call for adding another 60 to 80 employees in the current quarter, he said.
McAdam is nominally an interim CEO, having stepped back into that role in December 2016 with the unexpected resignation of Manny Rivelo. The board’s search for his replacement is “progressing really well,” he said during the phone call. “Meanwhile, my focus is on the business and on delivering another good quarter.”