Benzinga | Jul 27, 2021 06:06AM EDT

F5 Networks Q3 Result Tops Consensus Driven By Software Momentum

* F5 Networks Inc (NASDAQ:FFIV) reported third-quarter FY21 revenue growth of 12% year-on-year to $652 million, beating the analyst consensus of $638.14 million.

* Product revenue grew 22.3% Y/Y to $309.9 million, while Services revenue rose 3.5% Y/Y to $341.6 million.

* The software revenue grew 34% Y/Y to $129 million.

* Systems revenue increased 13% Y/Y to $180 million.

* The GAAP gross margin contracted marginally to 81.4%. The operating margin contracted slightly to 14.8%.

* The non-GAAP EPS of $2.76 beat the analyst consensus of $2.46.

* The company held $767.9 million in cash and equivalents.

* Net cash provided by operating activities was $448.14 million for the nine months ended June 30, 2021. It generated $182 million in operating cash flow in Q3.

* The company repurchased shares worth $100 million.

* It continues to advance its transition to a more software-driven model. It offers annual and multi-year subscriptions and a growing base of SaaS consumption models.

* Outlook: F5 Networks sees Q4 revenue of $660 million - $680 million versus the analyst consensus of $662.1 million. It sees non-GAAP EPS of $2.68 - $2.80 compared to the analyst consensus of $2.71.

* Price action: FFIV shares closed higher by 0.23% at $192.62 on Monday.