F5 Drives 3Q15 Revenue with Security and Software Growth

As new CEO takes the reigns at F5, new BIG-IP 12.0 release is coming soon with some big changes.

By Sean Michael Kerner | Posted Jul 23, 2015
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Manny Rivelo hosted his first earnings call as CEO of F5 on July 22, with some positive results. F5 is growing on the continued strength of its security and software technologies, both of which are set to get a major boost later this year with the debut of BIG-IP 12.0.

For the quarter, F5 reported revenue of $486.6 million for a 10 percent year-over-year gain. Net income was reported at $93.2 million, up from $79.5 million in the third quarter of 2014. Looking forward, F5 is providing fourth quarter guidance for a revenue target range of $500 to $510 million.

While hardware remains part of F5's overall model, Rivelo emphasized the importance of software.

"Software is at the core of everything we do," Rivelo said during his company's earnings call. "Over the past three years, quarterly revenue from the sales of software modules and virtual editions has more than doubled, accounting for more than a third of our product revenue in Q3."

A key driver of growth is F5's security modules. F5's core products are Application Delivery Controllers (ADCs), with security being an important component. Since 2012, F5 has been positioning its ADCs as capable of functioning as network firewalls.

F5 has also been building out its Silverline services for security. Silverline includes DDoS protection capabilities.

"Given this past quarter’s highly visible cyber security attacks, more customers from an increasing diverse pool are approaching F5 for our ability to secure applications, manage user policy and access, and mitigate application attacks across traditional datacenters and public and private clouds," Rivelo said. "As a result, we had a number of notable wins this quarter, including a branch of the U.S. government, a prestigious medical research group, both of whom needed to secure their organization’s remote access capabilities."

Rivelo noted that over the next several quarters, F5 plans to deliver additional Silverline services, including a capability that can be leveraged for various application solutions allowing zero day vulnerability protection.

BIG-IP 12.0

Looking forward to the fourth quarter, F5 is planning on launching BIG-IP 12.0, codenamed "Badger," which will further expand the ADC platform.

"Badger is our largest release to date. 194 major features are being released with Badger and yes, we are doing a lot of work in security," Karl Triebes, F5 CTO, said. "So we are adding capabilities across the board in security…but also we have had a lot just into the core of the product being able to address protocols like HTTP 2.0."

Sean Michael Kerner is a senior editor at Enterprise Networking Planet and InternetNews.com. Follow him on Twitter @TechJournalist.

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