F5, Inc. has recently released its 10-K report, providing insights into the company's financial performance and operations. F5, Inc. is a leading provider of multicloud application security and delivery solutions, enabling customers to deploy, secure, and operate applications in various architectures, from on-premises to the public cloud. The company offers a range of unified security, networking, and application management solutions, including web app and API protection, multi-cloud networking, and application delivery and deployment.
In the 10-K report's Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations," F5, Inc. detailed its financial performance and key performance indicators. In fiscal 2024, the company's total net revenues reached $2,816.1 million, a slight increase of 0.1% from fiscal 2023. This growth was primarily driven by an increase in service revenue, particularly from maintenance contract renewals, partially offset by a decrease in product revenue. International revenues accounted for 47.1% of net revenues in fiscal 2024.
The net product revenues for fiscal 2024 decreased by 4.6% compared to fiscal 2023, primarily due to a decrease in systems sales, partially offset by an increase in software revenue, particularly from packaged software sales. The company's software revenues, as a component of net product revenues, increased by 10.8% in fiscal 2024, driven by subscription-based sales.
F5, Inc. also provided insights into its key performance indicators, including revenues, cost of revenues and gross margins, operating expenses, liquidity and cash flows, and balance sheet. The company highlighted that customer budget constraints due to uncertainties in the macroeconomic environment led to delays in customer purchase decisions, impacting the demand for its software and systems products and services. However, the company noted that customer demand has started to stabilize in fiscal 2024.
Additionally, F5, Inc. discussed its critical accounting policies and estimates, particularly focusing on revenue recognition. The company emphasized that revenue related to contracts with customers is recognized through a five-step process, including identifying the contract, performance obligations, determining transaction price, allocating the transaction price, and recognizing revenue when performance obligations are satisfied.
Following these announcements, the company's shares moved -0.2%, and are now trading at a price of $239.62. If you want to know more, read the company's complete 10-K report here.
