F5 Networks started out the calendar year by warning investors that revenue growth would be fairly slow as it continues to pivot from a hardware company to a software company, but it closed out its 2018 fiscal by delivering revenue at the high end of that guidance and exceeding it with its earnings-per-share results.
During its 2018 fiscal year, F5 recorded $2.2 billion in revenue, a 3.4 percent increase compared to the previous year, and GAAP earnings-per-share of $7.32. The company told investors in March that it expected to record between 2.5 percent and 3.5 percent revenue growth for the just-ended fiscal year, and GAAP earnings per share between $6.74 and $6.94.
Fourth-quarter revenue was $562.7 million, a 4.6 percent increase from the same period last year and ahead of analyst expectations of $561 million. Excluding special items, non-GAAP earnings per share was $2.90, well ahead of analyst expectations of $2.63.
Sales of F5’s networking products have slowed as companies eschew private data centers for public cloud providers. But they still need networking and application delivery software to manage their workloads on public clouds, and F5 has been scrambling to reorient itself around this new world like so many other enterprise computing vendors that enjoyed success over the last decade before cloud computing became the driving force.
F5 provided first-quarter fiscal 2019 revenue guidance in a range between $542 million to $552 million, the midpoint of which would represent a 4.5 percent increase in revenue compared to the previous period. At that March investor day, F5 executives said to expect revenue “low-to-mid single digit growth” in revenue during fiscal 2019.
F5 investors seemed pleased with the results, sending the company’s stock up nearly four percent in after-hours trading following a brutal day for tech stocks.