Summary
F5 closed fiscal 2024 with fourth quarter revenue of $746.67 million, up 5.6% from the prior-year quarter. Full-year revenue was $2.82 billion, flat with the prior year at plus 0.1%. The mix continued to shift. Software revenue grew 19% in the quarter, while systems revenue declined 3% and global services revenue grew 2%. For the full year, software revenue grew 11%, systems revenue declined 20%, and global services revenue grew 4%. That shift matters because software carries higher gross margin. Fourth quarter GAAP gross profit was $602.95 million, and GAAP gross margin was 80.8%, up from 80.1%. Full-year GAAP gross profit was $2.26 billion, and GAAP gross margin was 80.2%, up from 78.9%. Fourth quarter GAAP operating income was $191.02 million, and GAAP operating margin was 25.6%, up from 24.3%. Full-year GAAP operating income was $658.59 million, and GAAP operating margin was 23.4%, up from 16.8%. Fourth quarter GAAP net income was $165.30 million, up 8.7%. Full-year GAAP net income was $566.78 million, up 43.5%. Full-year GAAP diluted EPS was $9.55, up from $6.55, up 45.8%.
Cash generation improved. Fourth quarter operating cash flow was $246.50 million, up 29.9%. Full-year operating cash flow was $792.42 million, up 21.3%. Capital expenditures were $6.06 million in the quarter, down 60.6%, and $30.41 million for the full year, down 43.9%. Deferred revenue was $1.80 billion, up 1.3% from the prior-year quarter. Remaining performance obligations were $1.80 billion, flat with the prior-year quarter. The MD&A attributes the deferred revenue increase to deferred subscription contracts, including SaaS and maintenance tied to licensed-based subscriptions. Days sales outstanding was 47 in the fourth quarter. Cash and investments totaled $1,083.2 million at September 30, 2024, up $274.8 million from September 30, 2023. The company had no outstanding borrowings under its $350.0 million revolving credit facility. F5 also announced an additional $1 billion authorization for share repurchases, incremental to $422 million remaining in the existing program. The company used $500.6 million of cash to repurchase stock and pay related excise taxes in fiscal 2024.
Guidance points to growth. For fiscal year 2025, F5 expects total revenue growth of 4% to 5% and non-GAAP earnings per share growth of 5% to 7% over fiscal year 2024. On a tax-neutral basis, the midpoint of fiscal year 2025 non-GAAP earnings per share guidance reflects 10% growth year over year. For the first quarter of fiscal year 2025, the company expects revenue of $705 million to $725 million and non-GAAP earnings of $3.29 to $3.41 per diluted share. The full-year guidance is for fiscal year 2025, and the quarterly guidance is for the first quarter of fiscal year 2025. Management says the outlook calls for revenue acceleration in fiscal year 2025.
Risks remain. The MD&A notes that customer budget constraints and macroeconomic uncertainty led to delays in purchase decisions and softer demand for software, systems, and services as fiscal 2024 began. Demand stabilized over the year, but the company continues to monitor the macroeconomic environment. Named risks include supply chain disruptions, inability to source required parts, component price increases, global economic conditions, geopolitical uncertainty, information technology spending, competition, pricing pressures, industry consolidation, new competitors, increased sales discounts, cybersecurity attacks, security flaws in networks or products, litigation, and the ability to attract and retain personnel. The company also cites the unpredictability of its sales cycle and the ability to execute on its share repurchase program. Restructuring actions in fiscal 2024 and fiscal 2023 reduced headcount and operating expenses, which helped full-year operating margin. The company says its existing cash, investments, operating cash flow, and available borrowing capacity should meet liquidity needs for the next twelve months.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $746.7M | $695.5M | +7.4% | $707.0M | +5.6% |
| Gross profit | $603.0M | $559.1M | +7.8% | $566.0M | +6.5% |
| Gross margin | 80.8% | 80.4% | +0.4 pp | 80.1% | +0.7 pp |
| Research & development | $124.0M | $124.4M | -0.4% | $127.8M | -3.0% |
| Sales & marketing | $217.0M | $205.6M | +5.6% | $204.8M | +5.9% |
| General & administrative | $71.0M | $66.0M | +7.6% | $61.6M | +15.2% |
| Total operating expenses | $411.9M | $396.0M | +4.0% | $394.3M | +4.5% |
| Operating income (loss) | $191.0M | $163.1M | +17.1% | $171.7M | +11.2% |
| Operating margin | 25.6% | 23.4% | +2.1 pp | 24.3% | +1.3 pp |
| Net income (loss) | $165.3M | $144.1M | +14.7% | $152.1M | +8.7% |
| Net margin | 22.1% | 20.7% | +1.4 pp | 21.5% | +0.6 pp |
| Diluted EPS | $2.78 | $2.44 | +$0.34 | $2.52 | +$0.26 |
Risks
Two worldwide distributors, Ingram Micro and Synnex, accounted for 32.2% of total net revenue for fiscal year 2024, with Ingram Micro at 16.3% and Synnex at 15.9%. A substantial reduction or delay in sales to these distribution partners, if not replaced, could harm business, operating results and financial condition.
MD&A notes continued customer budget constraints from macroeconomic uncertainty led to delays in purchase decisions and softer demand for software and systems products in fiscal 2023 and entering fiscal 2024, though demand stabilized over fiscal 2024. Total net revenues were flat, up 0.1% year to date.
Risk factors state F5's IT infrastructure has experienced breaches or disruptions and may be vulnerable to future attacks, and its multicloud security products could be compromised. Such events could lead to liability to customers and partners, reputational harm, and financial loss.
F5 has a lengthy and unpredictable sales cycle, and its channel model has increased variability across transactions. It historically receives a substantial portion of orders in the last weeks of each fiscal quarter, so delayed or failed end-of-quarter purchase orders could cause quarterly revenue to fall below expectations.
Cloud-based and SaaS computing trends present competitive and execution risks, including new competitors such as large cloud providers and born-in-cloud companies. Costs to build and secure cloud services may reduce the gross and operating margins F5 has previously achieved.
F5 has offices and employees in Israel, and risk factors cite a significant increase in hostilities and political unrest in the region. Many Israel-based employees are obligated to perform military reserve duty and could be called for active duty, potentially disrupting operations.
F5 incorporates AI in certain products and operations and faces an uncertain and inconsistent legal/regulatory landscape, potential biases or flaws in AI solutions, and significant competition. AI-related issues could give rise to legal or regulatory action, damage reputation, or otherwise materially harm the business.
F5 subcontracts hardware manufacturing to a single contract manufacturer and purchases several hardware components from single or limited sources. Loss or impairment of this single source, or an interruption in component supply, could delay product fulfillment and harm revenue.
F5 depends on key personnel and has recently experienced senior leadership changes and restructuring plans, including a reduction in force, which could increase attrition among remaining employees. Competition for skilled developers, sales, and support personnel is intense in Silicon Valley and Seattle.
F5 faces evolving data protection, export/import control, government contracting, tax, and climate-related regulations. Failure to protect personal information could result in enforcement actions, fines, imprisonment of company officials, and reputational harm, while Pillar Two may increase future tax liability.
SaaS KPIs
All quarters →Summary, forecast, risks and KPIs are extracted from F5, INC.'s SEC filings for Q4 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 1, 2026.