ffiv-20241231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-26041

F5, INC.

(Exact name of registrant as specified in its charter)


Washington						91-1714307
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

801 5th Avenue

Seattle, Washington 98104

(Address of principal executive offices and zip code)

(206) 272-5555

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, no par value	FFIV	NASDAQ Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer

☑

Accelerated Filer

☐

Non-accelerated Filer

☐ (Do not check if a smaller reporting company)

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The number of shares outstanding of the registrant’s common stock as of January 30, 2025 was 57,652,256.


			Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)			4
Consolidated Balance Sheets			4
Consolidated Income Statements			5
Consolidated Statements of Comprehensive Income			6
Consolidated Statements of Shareholders' Equity			7
Consolidated Statements of Cash Flows			8
Notes to Consolidated Financial Statements			9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			21
Item 3. Quantitative and Qualitative Disclosures About Market Risk			26
Item 4. Controls and Procedures			27
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			27
Item 1A. Risk Factors			27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			28
Item 4. Mine Safety Disclosures			29
Item 5. Other Information			29
Item 6. Exhibits			29
SIGNATURES			30


	December 31, 2024		September 30, 2024
ASSETS
Current assets
Cash and cash equivalents	$	1,150,907	$	1,074,602

Accounts receivable, net of allowances of $4,955 and $4,585	484,989		389,024
Inventories	73,239		76,378
Other current assets	632,893		569,467
Total current assets	2,342,028		2,109,471
Property and equipment, net	149,979		150,943
Operating lease right-of-use assets	198,206		178,180
Long-term investments	11,177		8,580
Deferred tax assets	378,334		365,951
Goodwill	2,312,362		2,312,362
Other assets, net	508,555		487,517
Total assets	$	5,900,641	$	5,613,004
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	53,611	$	67,894
Accrued liabilities	316,369		300,076
Deferred revenue	1,217,664		1,121,683

Total current liabilities	1,587,644		1,489,653
Deferred tax liabilities	7,702		7,179
Deferred revenue, long-term	728,596		676,276
Operating lease liabilities, long-term	242,872		215,785

Other long-term liabilities	98,076		94,733
Total long-term liabilities	1,077,246		993,973
Commitments and contingencies (Note 8)
Shareholders' equity
Preferred stock, no par value; 10,000 shares authorized, no shares issued and outstanding	—		—
Common stock, no par value; 200,000 shares authorized, 58,132 and 58,094 shares issued and outstanding	9,461		5,889
Accumulated other comprehensive loss	(24,199)		(20,912)
Retained earnings	3,250,489		3,144,401
Total shareholders' equity	3,235,751		3,129,378
Total liabilities and shareholders' equity	$	5,900,641	$	5,613,004


	Three months ended December 31,
	2024		2023
Net revenues
Products	$	368,497	$	305,859
Services	397,992		386,738
Total	766,489		692,597
Cost of net revenues
Products	82,836		82,708
Services	57,674		53,681
Total	140,510		136,389
Gross profit	625,979		556,208
Operating expenses
Sales and marketing	206,035		198,927
Research and development	130,518		119,575
General and administrative	73,023		64,718
Restructuring charges	11,321		8,472
Total	420,897		391,692
Income from operations	205,082		164,516
Other income, net	3,962		9,882
Income before income taxes	209,044		174,398
Provision for income taxes	42,599		36,016
Net income	$	166,445	$	138,382
Net income per share — basic	$	2.85	$	2.34
Weighted average shares — basic	58,305		59,122
Net income per share — diluted	$	2.82	$	2.32
Weighted average shares — diluted	59,058		59,653


	Common Stock			Accumulated Other Comprehensive Loss		Retained Earnings		Total Shareholders’ Equity
	Shares	Amount

	Three months ended December 31, 2023
Balances, September 30, 2023	59,207	$	24,399	$	(23,221)	$	2,799,054	$	2,800,232
Exercise of employee stock options	14	408		—		—		408
Issuance of stock under employee stock purchase plan	188	21,468		—		—		21,468
Issuance of restricted stock	355	—		—		—		—
Repurchase of common stock, including excise taxes	(922)	(77,099)		—		(74,139)		(151,238)
Taxes paid related to net share settlement of equity awards	(45)	(6,830)		—		—		(6,830)
Stock-based compensation	—	56,002		—		—		56,002
Net income	—	—		—		138,382		138,382
Other comprehensive income	—	—		2,553		—		2,553
Balances, December 31, 2023	58,797	$	18,348	$	(20,668)	$	2,863,297	$	2,860,977

	Three months ended December 31, 2024
Balances, September 30, 2024	58,094	$	5,889	$	(20,912)	$	3,144,401	$	3,129,378
Exercise of employee stock options	13	523		—		—		523
Issuance of stock under employee stock purchase plan	164	23,172		—		—		23,172
Issuance of restricted stock	408	—		—		—		—
Repurchase of common stock, including excise taxes	(490)	(64,663)		—		(60,357)		(125,020)
Taxes paid related to net share settlement of equity awards	(57)	(13,368)		—		—		(13,368)
Stock-based compensation	—	57,908		—		—		57,908
Net income	—	—		—		166,445		166,445
Other comprehensive loss	—	—		(3,287)		—		(3,287)
Balances, December 31, 2024	58,132	$	9,461	$	(24,199)	$	3,250,489	$	3,235,751


				Gross Unrealized						Classification on Balance Sheet
December 31, 2024	Fair Value Level	Cost or Amortized Cost		Gains		Losses		Aggregate Fair Value		Cash and Cash Equivalents		Short-Term Investments		Long-Term Investments
Changes in fair value recorded in other comprehensive income (loss)
Money Market Funds	Level 1	$	488,514	$	—	$	—	$	488,514	$	488,514	$	—	$	—





Total debt investments		$	488,514	$	—	$	—	$	488,514	$	488,514	$	—	$	—
Changes in fair value recorded in other net income (expense)
Equity investments	*							$	11,177	$	—	$	—	$	11,177
Total equity investments								11,177		—		—		11,177
Total investments								$	499,691	$	488,514	$	—	$	11,177


				Gross Unrealized						Classification on Balance Sheet
September 30, 2024	Fair Value Level	Cost or Amortized Cost		Gains		Losses		Aggregate Fair Value		Cash and Cash Equivalents		Short-Term Investments		Long-Term Investments
Changes in fair value recorded in other comprehensive income (loss)
Money Market Funds	Level 1	$	437,273	$	—	$	—	$	437,273	$	437,273	$	—	$	—





Total debt investments		$	437,273	$	—	$	—	$	437,273	$	437,273	$	—	$	—
Changes in fair value recorded in other net income (expense)
Equity investments	*							$	8,580	$	—	$	—	$	8,580
Total equity investments								8,580		—		—		8,580
Total investments								$	445,853	$	437,273	$	—	$	8,580


	December 31, 2024		September 30, 2024
Finished goods	$	29,141	$	27,922
Raw materials	44,098		48,456
	$	73,239	$	76,378


	December 31, 2024		September 30, 2024
Unbilled receivables	$	433,929	$	401,104
Prepaid expenses	113,416		93,467
Capitalized contract acquisition costs	33,661		32,681
Other	51,887		42,215
	$	632,893	$	569,467


	December 31, 2024		September 30, 2024
Intangible assets	$	101,015	$	111,576
Unbilled receivables	303,854		277,965
Capitalized contract acquisition costs	36,685		33,577
Other	67,001		64,399
	$	508,555	$	487,517


	December 31, 2024		September 30, 2024
Payroll and benefits	$	153,661	$	171,571
Operating lease liabilities, current	31,452		33,779
Income and other tax accruals	77,762		45,247
Other	53,494		49,479
	$	316,369	$	300,076


	Three months ended December 31,
	2024		2023
Balance, beginning of period	$	66,258	$	66,468
Additional capitalized contract acquisition costs	13,223		7,287
Amortization of capitalized contract acquisition costs	(9,134)		(9,114)
Balance, end of period	$	70,347	$	64,641


	Three months ended December 31,
	2024		2023
Balance, beginning of period	$	1,797,959	$	1,775,121
Amounts added but not recognized as revenues	556,919		452,697

Revenues recognized related to the opening balance of deferred revenue	(408,618)		(397,708)
Balance, end of period	$	1,946,260	$	1,830,110


	Three months ended December 31,
	2024		2023
Operating lease expense	$	10,007	$	10,326
Short-term lease expense	819		695
Variable lease expense	5,592		6,034
Total lease expense	$	16,418	$	17,055


Fiscal Years Ending September 30:	Operating Lease Payments
2025 (remainder)	$	29,620
2026	39,568
2027	38,716
2028	34,449
2029	31,820
2030	31,421
Thereafter	109,346
Total lease payments	314,940
Less: imputed interest	(40,616)
Total lease liabilities	$	274,324


	December 31, 2024		September 30, 2024
Income taxes payable	$	88,890	$	85,461

Other	9,186		9,272
	$	98,076	$	94,733


	December 31, 2024			September 30, 2024
Operating lease right-of-use assets, net	$	198,206		$	178,180

Operating lease liabilities, current1	31,452			33,779
Operating lease liabilities, long-term	242,872			215,785
Total operating lease liabilities	$	274,324		$	249,564

Weighted average remaining lease term (in years)	8.2			7.9
Weighted average discount rate	3.14		%	2.94		%


	December 31, 2024		September 30, 2024
Americas:
United States	$	112,655	$	112,420
Other	1,621		1,773
Total Americas	114,276		114,193
EMEA	20,481		21,970
APAC	15,222		14,780
	$	149,979	$	150,943


	December 31, 2024		September 30, 2024
Ingram Micro, Inc.	14.1	%	20.3	%
Synnex Corporation	14.7	%	14.8	%

SEC Form 10-Q filed by F5 Inc.