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F5 Networks Inc. (FFIV) filed Quarterly Report for the period ended 2011-12-31.
F5 Networks Inc. has a market cap of $9.58 billion; its shares were traded at around $120.52 with a P/E ratio of 38.7 and P/S ratio of 8.4. F5 Networks Inc. had an annual average earning growth of 30.3% over the past 5 years.
This is the annual revenues and earnings per share of FFIV over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of FFIV.
Highlight of Business Operations:
In August 2010, the Company granted 181,334 and 83,000 RSUs to certain current executive officers as part of the annual equity and retention awards programs, respectively. Fifty percent of the aggregate number of RSUs granted as part of the annual equity awards program vest in equal quarterly increments over three years, until such portion of the grant is fully vested on August 1, 2013. One-sixth of the annual equity awards RSU grant, or a portion thereof, was subject to the Company achieving specified quarterly revenue and EBITDA goals during the period beginning in the fourth quarter of fiscal year 2010 through the third quarter of fiscal year 2011. In each case, 50% of the quarterly performance stock grant is based on achieving at least 80% of the quarterly revenue goal and the other 50% is based on achieving at least 80% of the quarterly EBITDA goal. The quarterly performance stock grant is paid linearly above 80% of the targeted goals. At least 100% of both goals must be attained in order for the quarterly performance stock grant to be awarded over 100%. Each goal is evaluated individually and subject to the 80% achievement threshold and 100% over-achievement threshold. The remaining 33.33% of this annual equity awards RSU grant shall be subject to performance based vesting for each of the four quarter periods beginning with the fourth quarters of fiscal years 2011 and 2012 (16.66% in each period). The Compensation Committee of the Board of Directors will set applicable performance targets and vesting formulas for each of these periods. All RSUs granted as part of the retention awards program fully vest on August 1, 2013.Two worldwide distributors of the Company’s products accounted for 31.6% of total net revenue for the three months ended December 31, 2011. One worldwide distributor accounted for 18.8% of total net revenue for the three months ended December 31, 2010. One worldwide distributor accounted for 15.6% of the Company’s accounts receivable as of December 31, 2011. One worldwide distributor accounted for 16.9% of the Company’s accounts receivable as of December 31, 2010. No other distributors accounted for more than 10% of total net revenue or receivables.
Avnet Technology Solutions and Ingram Micro, two of our worldwide distributors, accounted for 17.9% and 13.7% of our total net revenue for the three months ended December 31, 2011, respectively. Avnet Technology Solutions accounted for 18.8% of our total net revenue for the three months ended December 31, 2010. Avnet Technology Solutions accounted for 15.6% of our accounts receivable as of December 31, 2011. Avnet Technology Solutions accounted for 16.9% of our accounts receivable as of December 31, 2010. No other distributors accounted for more than 10% of total net revenue or receivables.
Sales and marketing. Sales and marketing expenses consist of salaries, commissions and related benefits of our sales and marketing staff, the costs of our marketing programs, including public relations, advertising and trade shows, travel, facilities, and depreciation expenses. Sales and marketing expenses increased 22.4% for the three months ended December 31, 2011, from the comparable period in the prior year. The increase in sales and marketing expense was primarily due to an increase of $15.9 million in commissions and personnel costs for the three months ended December 31, 2011, from the comparable period in the prior year. The increased commissions and personnel costs were driven by growth in sales and marketing employee headcount and increased sales volume for the corresponding periods. Sales and marketing headcount at the end of December 2011 increased to 1,141 from 923 at the end of December 2010. Sales and marketing expense included stock-based compensation expense of $9.1 million for the three months ended December 31, 2011, compared to $8.7 million for the same period in the prior year. The increase in sales and marketing expense was also due to investments in marketing promotions and initiatives aimed at promoting our brand and creating market awareness of our technology and our products.
Research and development. Research and development expenses consist of the salaries and related benefits for our product development personnel, prototype materials and other expenses related to the development of new and improved products, facilities and depreciation expenses. Research and development expenses increased 20.0% for the three months ended December 31, 2011, from the comparable period in the prior year. The increase in research and development expense was primarily due to an increase of $4.8 million in personnel costs for the three months ended December 31, 2011, from the comparable period in the prior year. Research and development headcount at the end of December 2011 increased to 646 from 527 at the end of December 2010. In addition, research and development expense included a year over year increase in computer equipment and software costs of $1.4 million to support the development of new and improved products. Research and development expense included stock-based compensation expense of $5.8 million for the three months ended December 31, 2011, compared to $5.9 million for the same period in the prior year. We expect research and development expenses to remain consistent as a percentage of net revenue in the foreseeable future.
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