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F5 Networks Inc (NAS:FFIV)
Gross Profit
$1,620 Mil (TTM As of Mar. 2016)

F5 Networks Inc's gross profit for the three months ended in Mar. 2016 was $401 Mil. F5 Networks Inc's gross profit for the trailing twelve months (TTM) ended in Mar. 2016 was $1,620 Mil.

Gross Margin is calculated as gross profit divided by its revenue. F5 Networks Inc's gross profit for the three months ended in Mar. 2016 was $401 Mil. F5 Networks Inc's revenue for the three months ended in Mar. 2016 was $484 Mil. Therefore, F5 Networks Inc's Gross Margin for the quarter that ended in Mar. 2016 was 83.00%.

F5 Networks Inc had a gross margin of 83.00% for the quarter that ended in Mar. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of F5 Networks Inc was 82.92%. The lowest was 77.08%. And the median was 81.22%.


Definition

Gross Profit is the different between the sale prices and the cost of buying or producing the goods.

F5 Networks Inc's Gross Profit for the fiscal year that ended in Sep. 2015 is calculated as

Gross Profit (A: Sep. 2015 )=Revenue - Cost of Goods Sold
=1919.823 - 332.261
=1,588

F5 Networks Inc's Gross Profit for the quarter that ended in Mar. 2016 is calculated as

Gross Profit (Q: Mar. 2016 )=Revenue - Cost of Goods Sold
=483.677 - 82.23
=401

F5 Networks Inc Gross Profit for the trailing twelve months (TTM) ended in Mar. 2016 was 397.927 (Jun. 2015 ) + 416.643 (Sep. 2015 ) + 403.803 (Dec. 2015 ) + 401.447 (Mar. 2016 ) = $1,620 Mil.

Gross Profit is the numerator in the calculation of Gross Margin:

F5 Networks Inc's Gross Margin for the quarter that ended in Mar. 2016 is calculated as

Gross Margin (Q: Mar. 2016 )=Gross Profit (Q: Mar. 2016 ) / Revenue (Q: Mar. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=401 / 483.677
=83.00 %

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.


Explanation

Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.

Durable competitive advantage creates a high Gross Margin because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin

1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key

F5 Networks Inc had a gross margin of 83.00% for the quarter that ended in Mar. 2016 => Durable competitive advantage


Related Terms

Cost of Goods Sold, Gross Margin, Revenue


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

F5 Networks Inc Annual Data

Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15
Gross_Profit 3064075015107109441,1411,2281,4221,588

F5 Networks Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
Gross_Profit 334344361383383390398417404401
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