Summary
F5 reported FY2024 Q3 revenue of $695.5 million, down 1.0% from the prior-year quarter. Management said the result came in at the top end of its guidance range, helped by software growth and continued growth in global services. Gross profit was $559.1 million, flat versus the prior-year quarter, while gross margin rose to 80.4% from 79.8%. GAAP operating income climbed to $163.1 million, up 57.5%, and operating margin expanded to 23.4% from 14.7%. Net income reached $144.1 million, up 61.9%, and diluted EPS was $2.44, up 64.9%. Non-GAAP EPS was $3.36, up from $3.21, while non-GAAP operating margin was 33.4% and non-GAAP gross margin was 83.1%. The gap between GAAP and non-GAAP results reflects stock-based compensation, amortization of purchased intangibles, and restructuring charges, among other items.
Cost discipline drove much of the profit improvement. Sales and marketing expense fell to $205.6 million, down 0.8%, and research and development expense fell to $124.4 million, down 3.4%. General and administrative expense rose 1.8% to $66.0 million. Restructuring charges were $93 thousand in the quarter, down sharply from $56.6 million a year earlier, when the company recorded a large workforce reduction and lease exit charge. Headcount changes were modest: sales and marketing ended the quarter at 2,166 people, research and development at 1,995, and general and administrative at 874. Professional services headcount rose to 1,088 from 1,045.
Over the first nine months of FY2024, revenue was $2.07 billion, down 1.7% from the prior-year period. Gross profit was $1.66 billion, flat with a 0.1% increase, and gross margin was 80.0%, up 1.5 percentage points from 78.5%. Operating income was $467.6 million, up 55.4%, with operating margin of 22.6%, up 8.3 percentage points. Net income was $401.5 million, up 65.3%, and diluted EPS was $6.75, up 67.9%. Operating cash flow was $545.9 million, up 17.8%, while capital expenditures were $24.4 million, down 37.2%.
In the quarter, operating cash flow was $158.96 million, down 3.7% from the prior-year quarter, and capital expenditures were $5.85 million, down 61.0%. Deferred revenue ended the quarter at $1.77 billion, down 1.1% year over year, and remaining performance obligations were $1.80 billion, flat with the prior-year quarter. Management said total deferred revenue remained relatively flat through the first three quarters of fiscal 2024, and days sales outstanding for the third quarter was 54. The company described customer demand as stabilizing over the course of fiscal 2024, with early signs of improving demand in the third quarter, but it said it would keep monitoring the macroeconomic environment.
Guidance for the next quarter, the fourth quarter of fiscal year 2024, includes non-GAAP earnings in the range of $3.38 to $3.50 per diluted share. For the full fiscal year 2024, F5 expects revenue of approximately $2.8 billion, roughly flat with last year, and non-GAAP earnings per share growth of approximately 12% compared to fiscal year 2023. Management tied the full-year view to visibility into fourth quarter software demand and continued operating discipline. The non-GAAP outlook excludes amortization of intangible assets, share-based compensation, and certain tax items.
Risks include macroeconomic uncertainty, customer budget constraints and delays in purchase decisions, supply chain disruptions, competitive pricing pressure, and the ability of customers to accept new offerings. The company also flags execution risk around integrating acquisitions and potential security flaws or cyber attacks on its networks, products, or services. The quarter showed revenue pressure paired with strong margin expansion: GAAP operating margin was up 8.7 percentage points to 23.4% and net income grew 61.9%. Flat RPO and lower deferred revenue, however, point to limited near-term visibility, and systems demand remains a drag. The balance sheet carries no outstanding borrowings under a $350 million revolving credit facility, and the company repurchased $400.0 million of stock in the first nine months of fiscal 2024.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2024 | Q2 FY2024 | QoQ | Q3 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $695.5M | $681.4M | +2.1% | $702.6M | -1.0% |
| Gross profit | $559.1M | $540.2M | +3.5% | $561.0M | -0.3% |
| Gross margin | 80.4% | 79.3% | +1.1 pp | 79.8% | +0.5 pp |
| Research & development | $124.4M | $122.2M | +1.8% | $128.8M | -3.4% |
| Sales & marketing | $205.6M | $210.8M | -2.5% | $207.2M | -0.8% |
| General & administrative | $66.0M | $67.2M | -1.8% | $64.8M | +1.8% |
| Total operating expenses | $396.0M | $400.3M | -1.1% | $457.4M | -13.4% |
| Operating income (loss) | $163.1M | $140.0M | +16.5% | $103.6M | +57.5% |
| Operating margin | 23.4% | 20.5% | +2.9 pp | 14.7% | +8.7 pp |
| Net income (loss) | $144.1M | $119.0M | +21.1% | $89.0M | +61.9% |
| Net margin | 20.7% | 17.5% | +3.3 pp | 12.7% | +8.1 pp |
| Diluted EPS | $2.44 | $2.00 | +$0.44 | $1.48 | +$0.96 |
Risks
Customer budget constraints tied to macroeconomic uncertainty led to delays in purchase decisions and softer demand for software and systems products and services. Management notes demand stabilizing and early signs of improving demand in Q3 FY2024, but continues to monitor the environment.
Delays in customer purchase decisions and longer buying cycles pressured product revenues, contributing to total net revenues decreasing 1.0% for the quarter and 1.7% year to date ended June 30, 2024.
Three distributors each accounted for more than 10% of total net revenue in the quarter ended June 30, 2024: Ingram Micro 15.7%, Synnex 15.9%, and Carahsoft 10.5%. Receivables are similarly concentrated, with Synnex at 12.3% and Carahsoft at 11.1% as of June 30, 2024.
The company has non-cancelable long-term purchase commitments of $20.0 million as of June 30, 2024, including obligations to purchase component inventory annually from a supplier and to purchase inventory components procured by its primary contract manufacturer under its build forecast.
Restructuring plans in fiscal 2024 and fiscal 2023 involved workforce reductions and lease exits, which may disrupt operations and affect employee retention as the company seeks efficiencies for long-term growth.
The worldwide effective tax rate may fluctuate based on geographic mix of taxable income, stock-based compensation, valuation allowance changes, and resolution of tax exposures, which could result in adjustments to future tax expense.
International revenues represented 48.0% of total net revenues for the quarter and year to date ended June 30, 2024, up from 46.8% and 47.3% in the prior-year periods, exposing results to foreign exchange and geopolitical conditions.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Summary, forecast, risks and KPIs are extracted from F5, INC.'s SEC filings for Q3 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.