Gross Margin % is calculated as gross profit divided by its revenue. F5's Gross Profit for the
three
months ended in Dec. 2023 was $556 Mil. F5's Revenue for the
three
months ended in Dec. 2023 was $693 Mil. Therefore, F5's Gross Margin % for the quarter that ended in Dec. 2023 was 80.31%.
Warning Sign:
F5 Inc gross margin has been in long-term decline. The average rate of decline per year is -1.3%.
The historical rank and industry rank for F5's Gross Margin % or its related term are showing as below:
FFIV'
s Gross Margin % Range Over the Past 10 Years
Min: 78.91 Med: 82.67 Max: 84.1
Current: 79.52
During the past 13 years, the highestGross Margin % of F5 was 84.10%. The lowest was 78.91%. And the median was 82.67%.
FFIV's Gross Margin % is ranked better than 86.94% of 2627
companies
in the Software industry
Industry Median: 41.67
vs FFIV: 79.52
F5 had a gross margin of 80.31% for the quarter that ended in Dec. 2023 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for F5 was -1.30% per year.
F5 Gross Margin % Historical Data
The historical data trend for F5's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Software - Infrastructure subindustry, F5's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
F5 Gross Margin % Distribution
For the Software industry and Technology sector, F5's Gross Margin % distribution charts can be found below:
* The bar in red indicates where F5's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange 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.
F5 (NAS:FFIV) Gross Margin % 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 had a gross margin of 80.31% for the quarter that ended in Dec. 2023 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
F5 Gross Margin % Related Terms
Thank you for viewing the detailed overview of F5's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
F5 is a market leader in the application delivery controller market. The company sells products for security, application performance, and automation. Its three customer verticals are enterprises, service providers, and government entities. Revenue is evenly split between its services business and products business with revenue trending toward products due to software adoption. The Seattle-based firm was incorporated in 1996, has about 6,500 employees, and generates about 55% its revenue within the Americas, 25% in EMEA, and 20% in APAC/Japan.
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