F5 Networks (NASDAQ: NASDAQ:FFIV) stock surged more than 14% following the announcement of third-quarter results that exceeded analyst expectations and guidance that beat consensus estimates.
The company's robust performance was underpinned by strong software growth and global services offerings, leading to a positive investor response.
For the third quarter ended June 30, 2024, F5 Networks reported adjusted earnings per share (EPS) of $3.36, surpassing the analyst estimate of $2.97 by $0.39. Revenue for the quarter was $695.5 million, also exceeding the consensus estimate of $685.76 million. When compared to the same quarter last year, revenue saw a slight decline from $703 million, with software revenue growing 3% and global services revenue increasing by the same percentage. However, systems revenue experienced a 16% decrease.
Commenting on the report, Jefferies analysts said:
"Our views of the company’s long-term revenue growth and EPS power are modestly improved. We do think their AI positioning is interesting, albeit still a ways into the future."
François Locoh-Donou, F5's President and CEO, attributed the strong quarter to the company's operational discipline and its role as a critical partner for large enterprises modernizing their IT infrastructures. "F5 is optimizing application security, delivery, management, and performance across hybrid, multicloud environments with enhanced automation and meaningful operational efficiencies," Locoh-Donou stated.
Looking ahead, F5 Networks provided guidance for the fourth quarter of fiscal year 2024, expecting EPS to be in the range of $3.38 to $3.50, which is above the analyst consensus of $3.33. Revenue is projected to be between $720 million and $740 million, also ahead of the consensus estimate of $717.4 million. For the full fiscal year 2024, the company anticipates revenue to reach approximately $2.8 billion, aligning with the top end of prior expectations and slightly above the consensus of $2.78 billion.
