Market Commentary

F5 Rallies on Strong Profit Beat

Abdul Rehman
6 Feb 2024 · 1 minute read

F5 Inc (FFIV:US) shares gained on Tuesday after the cloud security business reported better-than-expected results for its fiscal third quarter.

The company said its revenue rose 4% year-over-year to $703 million, topping the $699.3 million expected by analysts. The modest revenue beat was driven by a 7.6% YoY revenue increase in the company’s biggest division – Services. 

Shares rose around 10% in early Tuesday trading.

F5 also reported an adjusted EPS of $3.21, ahead of the expected $2.85, which is likely driving post-earnings strength in shares.

"In an environment that remains challenged by macroeconomic uncertainty, our team is executing well, delivering third-quarter revenue at the midpoint of our guidance range and earnings per share well above the high end of our guidance range," said François Locoh-Donou, F5's President and CEO.

For the fourth quarter of fiscal year 2023, the company expects to deliver revenue in the range of $690 million to $710 million, with adjusted earnings seen in the range of $3.15 to $3.27 per share. Analysts were looking for EPS of $3.22 on revenue of $702.3 million.

“We are delivering the gross margin improvement and operating leverage we committed to, and we are confident in our ability to achieve our target of double-digit non-GAAP earnings growth for fiscal year 2023,” Locoh-Donou added.

Congressman Ro Khanna was trading FFIV shares this year. Senator Dan Sullivan also sold some FFIV shares in November 2022.

The earnings beat will help FFIV recover some of its losses as the stock was up just 4.7% year-to-date through Monday.