F5 Networks Gearing Up for Shuttle Launch

 F5 reports third quarter fiscal 2016 revenue of $496.5 million

By Sean Michael Kerner | Posted Jul 21, 2016
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F5 Networks reported its third quarter fiscal 2016 earnings on July 20, providing some insight into future products set to debut later this year.

For the quarter, F5 reported revenue of $496.5 million for a three percent year-over-year gain. Net income was reported at $91.8 million down from the $93.2 million reported for the third quarter of 2015. Looking forward, F5 provided fourth quarter guidance for revenue to be in the range of $515 million to $525 million.

While F5 is perhaps best known as a hardware vendor, an increasing amount of its business is now software based. F5 CEO John McAdam commented on his company's earnings call that software revenues were very solid in Q3, accounting for 38 percent of overall product revenues. Software revenues include virtual versions of F5's TMOS as well as modules shipped on F5 appliances including its VIPRION range of products.

During the quarter, F5 announced TMOS version 12.1 providing new programmability features, as well as application services enhanced public cloud integration, and security policies for on premises and hybrid cloud environments.

For the F5 current quarter, McAdam said that F5 will begin the process of delivering a range of new appliances with the target of completing a comprehensive appliance refresh by the October or November timeframe.

"The new appliances, known internally as the Shuttle series, offer significantly improved performance, decreased total cost of ownership, and increased our competitive leadership position," McAdam said.

He added that the new Shuttle series is much more than a simple product line upgrade. According to McAdam, the Shuttle series will be the world's most programmable flow-ready ADC (Application Delivery Controller).

"The Shuttle series provides the agility that DevOps organizations demand, together with the scaled security investment protection that our traditional customers have long enjoyed," McAdam said. "Our high level goal with the Shuttle series is to better meet the capacity, the rapidly changing needs of the additional IT buyer, the DevOps community and the growing ranks of enterprise cloud architects."

McAdam also announced that F5 plans to ship a new standalone SSL intercept product this quarter, called the SSL Orchestrator. The basic idea behind the SSL Orchestrator is to provide visibility into blind spots created by the growing use of encryption.

"This product combines industry-leading cryptographic capabilities, with context-aware dynamic service chaining," McAdam said.

During the call McAdam also took the time to address a pair of contentious issues, including his retirement. McAdam came out of retirement in December 2015 to retake the CEO role at F5 after the resignationof Manny Rivelo, the man that was supposed to be McAdam's successor.

"It has always been my intention to return to retirement at some point in the future," McAdam said. "We have set up a formal search committee to run this process and to vet potential candidates. We have no specific time targets in place, but expect that this process may take six months or more to complete."

McAdam also responded to a questions during the earnings call about a potential acquisition of F5 by Thoma Bravo.

"I think you're going to know the answer to this question," McAdams said. " We do not comment whatsoever on any rumors or anything like that and that will be the same right throughout the call."

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

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