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Friday, May 20, 2022

F5, Inc. (FFIV) Stock Faltering in Aftermarket, Here’s the Reason

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F5, Inc. (FFIV), a company that provides multi-cloud application security and delivery solutions intended for the security, performance, and availability of network applications, servers, and storage systems, has plunged 14.69% during the aftermarket trading session to $188.65 at the time of the writing. During Tuesday’s regular session, the stock slid by 2.44% and closed the day at $221.14. The decline could be attributed to lowered guidance for 2022 revenues.

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FFIV Q1 2022 Operational Results

On Tuesday, FFIV announced the operational results for the first quarter of fiscal 2022. The quarter ended on 31st December 2021. The company generated net revenue of $343.1 million during the quarter against $288 million for the same quarter of 2020. The total operating expenses for the three months were $437.8 million against $391.8 million for the same three-month period of 2020. The net income generated by the company during the period was $93.55 million (or $1.54 and $151 per basic and diluted share respectively) against $87.6 million (or $1.43 and $1.41 per basic and diluted share respectively) for the same period of 2020.

Business Outlook

Alongside the operational results, FFIV also released the business outlook for upcoming periods. The company said that it expects the Q2, 2021 revenues to stand in the range of $610 to $650 million. The company expected the fiscal year 2022 revenue growth to stand in the range of 4.5% to 8%. Before that, the company expected an 8% to 9% growth for the full year of 2022. The company also expected fiscal 2022 software revenue growth to the top end of the previously provided 35% to 40% guidance range, while global services revenue is expected to grow by 1% to 2%.

Executive Commentary

François Locoh-Donou, President and CEO of FFIV, while commenting said that customers’ need to grow and evolve the applications supporting their businesses has led to the strong demand for the company’s application security and delivery solutions, which in turn caused 10% revenue growth during the quarter. Software solutions were in particular demand during the quarter with non-GAAP software revenue growing 47% compared to the same period for the previous fiscal.

Future Outlook for FFIV

Stats reveal that during the last month, FFIV had a meagre decline of approximately 5%. Analyst analyses show that there are no positive signals for stock in the upcoming few weeks, hence, a negative evaluation of the stock is being held as it is expected to perform weakly in the next couple of weeks.

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