F5 Networks Announces Results For Third Quarter Of Fiscal 2012

PRESS RELEASE

SEATTLE, WA—July 18, 2012— For the third quarter of fiscal 2012, F5 Networks, Inc. (NASDAQ: FFIV) announced revenue of $352.6 million, up 3.8 percent from $339.6 million in the prior quarter and 21.3 percent from $290.7 million in the third quarter of fiscal 2011.

GAAP net income was $72.3 million ($0.91 per diluted share), compared to $68.6 million ($0.86 per diluted share) in the prior quarter and $62.5 million ($0.77 per diluted share) in the third quarter a year ago.

Excluding the impact of stock-based compensation, amortization of purchased intangible assets and acquisition-related charges and related tax effects, non-GAAP net income for the third quarter was $90.6 million ($1.14 per diluted share), compared to $87.1 million ($1.09 per diluted share) in the prior quarter and $79.4 million ($0.97 per diluted share) in the third quarter of last year.

A reconciliation of GAAP net income to non-GAAP net income is included on the attached Consolidated Statements of Operations.

“During the third quarter, F5’s revenue and earnings continued to grow sequentially and year over year despite a more cautious spending environment,” said John McAdam, F5 president and chief executive officer. “Overall, revenue growth slowed in Q3, but revenue by region was generally consistent with historical patterns; 57 percent for the Americas (primarily the United States) and 43 percent for EMEA and APJ, with EMEA contributing 21 percent of the total.

“As in the prior quarter, our security offerings were a key driver of product sales and accounted for a growing percentage of total revenue. In addition, we saw continued strong uptake of VIPRION 2400 along with increasing adoption of TMOS version 11.

“During the next six to nine months we are on track to deliver several new products, including a refresh of our BIG-IP appliance family, new policy enforcement capability for service providers and an eight-blade VIPRION chassis.

“Meanwhile, we are continuing to strengthen our organization and our financial position. In the third quarter, we added 100 employees, increased deferred revenue to $434 million and generated $113 million in cash from operations. After repurchasing 425,088 shares of our outstanding common stock we ended the quarter with $1.1 billion in cash and investments.”

In light of the cautious spending environment in the current global economy, McAdam said management has set a revenue goal of $360 million to $370 million with a GAAP earnings target of $0.90 to $0.93 per diluted share for the fourth quarter of fiscal 2012, ending September 30. Excluding the impact of stock-based compensation, amortization of purchased intangible assets and acquisition-related charges and related tax effects, the company’s non-GAAP earnings target is $1.16 to $1.19 per diluted share.

A reconciliation of the company’s expected GAAP and non-GAAP earnings is provided in the following table:

Three months ended

September 30, 2012

Reconciliation of Expected Non-GAAP Fourth Quarter Earnings Low High

Net income $72.1 $74.5

Stock-based compensation expense $27.0 $27.0

Amortization of purchased intangible assets $ 1.7 $ 1.7

Acquisition-related charges $ - $ -

Tax effects related to above items ($8.1) ($8.1)

Non-GAAP net income excluding stock-based compensation

expense and amortization of purchased intangible assets $92.7 $95.1

Net income per share - diluted $0.90 $0.93

Non-GAAP net income per share - diluted $1.16 $1.19

About F5 Networks

F5 Networks, Inc., the global leader in Application Delivery Networking (ADN), helps the world's largest enterprises and service providers realize the full value of virtualization, cloud computing, and on-demand IT. F5® solutions help integrate disparate technologies to provide greater control of the infrastructure, improve application delivery and data management, and give users seamless, secure, and accelerated access to applications from their corporate desktops and smart devices. An open architectural framework enables F5 customers to apply business policies at "strategic points of control" across the IT infrastructure and into the public cloud. F5 products give customers the agility they need to align IT with changing business conditions, deploy scalable solutions on demand, and manage mobile access to data and services. Enterprises, service and cloud providers, and leading online companies worldwide rely on F5 to optimize their IT investments and drive business forward. For more information, go to www.f5.com.

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