Business Wire | Oct 26, 2021 04:06PM EDT

F5 Reports 11% Fourth Quarter Revenue Growth and 11% Fiscal Year Revenue Growth Fueled by Strong Software and Systems Demand

Oct. 26, 2021

SEATTLE--(BUSINESS WIRE)--Oct. 26, 2021--F5 Networks, Inc. (NASDAQ: FFIV) today announced financial results for its fiscal fourth quarter and year ended September 30, 2021.

"Our very strong fourth quarter results cap a year of robust financial performance for F5," said Franois Locoh-Donou, F5's President and CEO. "With software revenue representing 45% of product revenue in the fourth quarter, and 80% of this software revenue coming from subscriptions, we continue to mark milestone after milestone in our rapid transformation to a software led business model."

Locoh-Donou continued, "Skyrocketing application usage and heightened security awareness are driving strong demand for F5 solutions on premises, in the cloud, and across multiple clouds. Our expanded solutions portfolio and vision for enabling Adaptive Applications puts us at the intersection of these strong and sustainable secular trends and positions F5 for continued strong revenue and earnings growth."

Fiscal Year 2021 Performance Summary

Fiscal year 2021 GAAP revenue was $2.60 billion, up 11% from GAAP revenue of $2.35 billion and 10% from non-GAAP revenue of $2.36 billion in fiscal year 2020. Fiscal year 2021 non-GAAP revenue growth was driven by 21% product revenue growth and 2% global services revenue growth over the prior year. Non-GAAP product revenue growth was driven by 37% software revenue growth and 12% systems revenue growth compared to the year ago period.

GAAP net income for fiscal year 2021 was $331 million, or $5.34 per diluted share compared to fiscal year 2020 GAAP net income of $307 million, or $5.01 per diluted share.

Non-GAAP net income for fiscal year 2021 was $671 million, or $10.81 per diluted share, compared to $575 million, or $9.37 per diluted share, in fiscal year 2020.

Fourth Quarter Performance Summary

Fourth quarter fiscal year 2021 GAAP revenue was $682 million, up 11% from GAAP revenue of $615 million and non-GAAP revenue of $617 million in the fourth quarter of fiscal year 2020. Fourth quarter fiscal year 2021 non-GAAP revenue growth was driven by 21% product revenue growth and 2% global services revenue growth over the prior year. Non-GAAP product revenue was driven by 35% software revenue growth and 12% systems revenue growth compared to the year ago period.

GAAP net income for the fourth quarter of fiscal year 2021 was $111 million, or $1.80 per diluted share compared to fourth quarter fiscal year 2020 GAAP net income of $78 million, or $1.26 per diluted share.

Non-GAAP net income for the fourth quarter of fiscal year 2021 was $185 million, or $3.01 per diluted share, compared to $150 million, or $2.43 per diluted share, in the fourth quarter of fiscal year 2020.

A reconciliation of revenue, net income, earnings per share, and other measures on a GAAP to non-GAAP basis is included in the attached Consolidated Income Statements. Additional information about non-GAAP financial information is included in this release.

Business Outlook

For the first quarter of fiscal year 2022 ending December 31, 2021, F5 expects to deliver revenue in the range of $665 million to $685 million, with non-GAAP earnings in the range of $2.71 to $2.83 per diluted share.

For fiscal year 2022, F5 expects to deliver revenue growth of 8% to 9%, including software revenue growth of 35% to 40%.

All forward-looking non-GAAP measures included in the outlook exclude estimates for amortization of intangible assets, share-based compensation expenses, significant effects of tax legislation and judicial or administrative interpretation of tax regulations (including the impact of income tax reform), non-recurring income tax adjustments, valuation allowance on deferred tax assets, and the income tax effect of non-GAAP exclusions, and do not include the impact of any future acquisitions or divestitures, acquisition-related charges and write-downs, restructuring charges, facility exit costs, or other non-recurring charges that may occur in the period. F5 is unable to provide a reconciliation of non-GAAP earnings guidance measures to corresponding U.S. generally accepted accounting principles or GAAP measures on a forward-looking basis without unreasonable effort due to the overall high variability and low visibility of most of the foregoing items that have been excluded. Material changes to any one of these items could have a significant effect on our guidance and future GAAP results. Certain exclusions, such as amortization of intangible assets and share-based compensation expenses, are generally incurred each quarter, but the amounts have historically varied and may continue to vary significantly from quarter to quarter.

Live Webcast and Conference Call

F5 will host a live webcast and conference call to review its financial results and outlook today, October 26, 2021, at 4:30 pm ET. The live webcast can be accessed from the investor relations portion of F5.com. To participate in the live call via telephone in the U.S. and Canada, dial (833) 714-0927. Outside the U.S. and Canada, dial +1 (778) 560-2886. Reference Meeting ID 687-9935. Please call at least 5 minutes prior to the call start time. The webcast replay will be archived on the investor relations portion of F5's website.

Forward Looking Statements

This press release contains forward-looking statements including, among other things, statements regarding the continuing strength and momentum of F5's business, future financial performance including revenue, revenue growth and earnings growth; demand for application security and delivery services, and software products; expectations regarding future customers, markets and the benefits of products; and other statements that are not historical facts are forward-looking statements. These forward-looking statements are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors. Such forward-looking statements involve risks and uncertainties, as well as assumptions and other factors that, if they do not fully materialize or prove correct, could cause the actual results, performance or achievements of the company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to: customer acceptance of offerings; potential disruptions to F5's business and distraction of management as F5 integrates acquired businesses, teams, and technologies; F5's ability to successfully integrate acquired businesses' products with F5 technologies; the ability of F5's sales professionals and distribution partners to sell acquired businesses' product and service offerings; the timely development, introduction and acceptance of additional new products and features by F5 or its competitors; competitive factors, including but not limited to pricing pressures, industry consolidation, entry of new competitors into F5's markets, and new product and marketing initiatives by our competitors; increased sales discounts; the business impact of the acquisitions and potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement of completion of acquisitions; uncertain global economic conditions which may result in reduced customer demand for our products and services and changes in customer payment patterns; potential disruptions to the global supply chain resulting in inability to source required parts for F5's products or the ability to only do so at greatly increased prices thereby impacting our revenues and/or margins; global economic conditions and uncertainties in the geopolitical environment; overall information technology spending; litigation involving patents, intellectual property, shareholder and other matters, and governmental investigations; potential security flaws in the Company's networks, products or services; cybersecurity attacks on its networks, products or services; natural catastrophic events; a pandemic or epidemic; F5's ability to sustain, develop and effectively utilize distribution relationships; F5's ability to attract, train and retain qualified product development, marketing, sales, professional services and customer support personnel; F5's ability to expand in international markets; the unpredictability of F5's sales cycle; the ability of F5 to execute on its share repurchase program including the timing of any repurchases; future prices of F5's common stock; and other risks and uncertainties described more fully in our documents filed with or furnished to the Securities and Exchange Commission, including our most recent reports on Form 10-K and Form 10-Q and current reports on Form 8-K and other documents that we may file or furnish from time to time, which could cause actual results to vary from expectations. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in F5's most recent reports on Forms 10-Q and 10-K as each may be amended from time to time. All forward-looking statements in this press release are based on information available as of the date hereof and qualified in their entirety by this cautionary statement. F5 assumes no obligation to revise or update these forward-looking statements.

GAAP to non-GAAP Reconciliation

F5's management evaluates and makes operating decisions using various operating measures. These measures are generally based on the revenues of its products, services operations, and certain costs of those operations, such as cost of revenues, research and development, sales and marketing and general and administrative expenses. One such measure is GAAP net income excluding, as applicable, stock-based compensation, amortization of purchased intangible assets, acquisition-related charges, net of taxes, restructuring charges, facility-exit costs, significant litigation and other contingencies and certain non-recurring tax expenses and benefits, which is a non-GAAP financial measure under Section 101 of Regulation G under the Securities Exchange Act of 1934, as amended. This measure of non-GAAP net income is adjusted by the amount of additional taxes or tax benefit that the company would accrue if it used non-GAAP results instead of GAAP results to calculate the company's tax liability.

The non-GAAP adjustments, and F5's basis for excluding them from non-GAAP financial measures, are outlined below:

Acquisition-related write-downs of assumed deferred revenue. Included in its GAAP financial statements, F5 records acquisition-related write-downs of assumed deferred revenue to fair value, which results in lower recognized revenue over the term of the contract. F5 includes revenue associated with acquisition-related write-downs of assumed deferred revenue in its non-GAAP financial measures as management believes it provides a more accurate depiction of revenue arising from our strategic acquisitions.

Stock-based compensation. Stock-based compensation consists of expense for stock options, restricted stock, and employee stock purchases through the company's Employee Stock Purchase Plan. Although stock-based compensation is an important aspect of the compensation of F5's employees and executives, management believes it is useful to exclude stock-based compensation expenses to better understand the long-term performance of the company's core business and to facilitate comparison of the company's results to those of peer companies.

Amortization of purchased intangible assets. Purchased intangible assets are amortized over their estimated useful lives and generally cannot be changed or influenced by management after the acquisition. Management does not believe these charges accurately reflect the performance of the company's ongoing operations, therefore, they are not considered by management in making operating decisions. However, investors should note that the use of intangible assets contributed to F5's revenues earned during the periods presented and will contribute to F5's future period revenues as well.

Facility-exit costs. In fiscal year 2019, F5 relocated its headquarters in Seattle, Washington, and recorded charges in connection with this facility exit as well as other non-recurring lease activity. These charges are not representative of ongoing costs to the business and are not expected to recur. As a result, these charges are being excluded to provide investors with a more comparable measure of costs associated with ongoing operations.

Acquisition-related charges, net. F5 does not acquire businesses on a predictable cycle and the terms and scope of each transaction can vary significantly and are unique to each transaction. F5 excludes acquisition-related charges from its non-GAAP financial measures to provide a useful comparison of the company's operating results to prior periods and to its peer companies. Acquisition-related charges consist of planning, execution and integration costs incurred directly as a result of an acquisition.

Impairment charges. In fiscal year 2021, F5 recorded impairment charges related to the permanent exit of certain floors at its Seattle headquarters. These charges are not representative of ongoing costs to the business and are not expected to recur. As a result, these charges are being excluded to provide investors with a more comparable measure of costs associated with ongoing operations.

Restructuring charges. F5 has incurred restructuring charges that are included in its GAAP financial statements, primarily related to workforce reductions and costs associated with exiting facility-lease commitments. F5 excludes these items from its non-GAAP financial measures when evaluating its continuing business performance as such items vary significantly based on the magnitude of the restructuring action and do not reflect expected future operating expenses. In addition, these charges do not necessarily provide meaningful insight into the fundamentals of current or past operations of its business.

Management believes that non-GAAP net income per share provides useful supplemental information to management and investors regarding the performance of the company's core business operations and facilitates comparisons to the company's historical operating results. Although F5's management finds this non-GAAP measure to be useful in evaluating the performance of the core business, management's reliance on this measure is limited because items excluded from such measures could have a material effect on F5's earnings and earnings per share calculated in accordance with GAAP. Therefore, F5's management will use its non-GAAP earnings and earnings per share measures, in conjunction with GAAP earnings and earnings per share measures, to address these limitations when evaluating the performance of the company's core business. Investors should consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures in accordance with GAAP.

F5 believes that presenting its non-GAAP measures of earnings and earnings per share provides investors with an additional tool for evaluating the performance of the company's core business and is used by management in its own evaluation of the company's performance. Investors are encouraged to look at GAAP results as the best measure of financial performance. However, while the GAAP results are more complete, the company provides investors these supplemental measures since, with reconciliation to GAAP, it may provide additional insight into the company's operational performance and financial results.

For reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section in our attached Condensed Consolidated Income Statements entitled "Non-GAAP Financial Measures."

About F5

F5 (NASDAQ: FFIV) is a multi-cloud application security and delivery company that enables our customers-which include the world's largest enterprises, financial institutions, service providers, and governments-to bring extraordinary digital experiences to life. For more information, go to f5.com. You can also follow @F5 on Twitter or visit us on LinkedIn and Facebook for more information about F5, its partners, and technologies.

F5 is a trademark, service mark, or tradename of F5 Networks, Inc., in the U.S. and other countries. All other product and company names herein may be trademarks of their respective owners.

Source: F5 Networks

F5 Networks, Inc.Consolidated Balance Sheets(unaudited, in thousands) September 30, September 30,

2021 2020

AssetsCurrent assetsCash and cash equivalents $ 580,977 $ 849,556

Short-term investments 329,630 360,333

Accounts receivable, net of allowances of $3,696 340,536 296,183 and $3,105Inventories 22,055 27,898

Other current assets 337,902 259,506

Total current assets 1,611,100 1,793,476

Property and equipment, net 191,164 229,239

Operating lease right-of-use assets 244,934 300,680

Long-term investments 132,778 102,939

Deferred tax assets 128,193 45,173

Goodwill 2,216,553 1,858,966

Other assets, net 472,558 347,447

Total assets $ 4,997,280 $ 4,677,920

Liabilities and Shareholders' EquityCurrent liabilitiesAccounts payable $ 62,096 $ 64,472

Accrued liabilities 341,487 321,398

Deferred revenue 968,669 883,134

Current portion of long-term debt 19,275 19,275

Total current liabilities 1,391,527 1,288,279

Deferred tax liabilities 2,414 602

Deferred revenue, long-term 521,173 389,498

Operating lease liabilities, long-term 296,945 338,715

Long-term debt 349,772 369,047

Other long-term liabilities 75,236 59,511

Total long-term liabilities 1,245,540 1,157,373

Commitments and contingencies Shareholders' equityPreferred stock, no par value; 10,000 shares - - authorized, no shares outstandingCommon stock, no par value; 200,000 shares 192,458 305,453 authorized, 60,652 and 61,099 shares issued andoutstandingAccumulated other comprehensive loss (20,073 ) (18,716 )

Retained earnings 2,187,828 1,945,531

Total shareholders' equity 2,360,213 2,232,268

Total liabilities and shareholders' equity $ 4,997,280 $ 4,677,920

F5 Networks, Inc.Consolidated Income Statements(unaudited, in thousands, except per share amounts)Three Months EndedYears EndedSeptember 30,September 30,2021

2020

2021

2020

Net revenuesProducts (1)$

339,921

$

278,451

$

1,247,084

$

1,025,856

Services342,076

336,365

1,356,332

1,324,966

Total681,997

614,816

2,603,416

2,350,822

Cost of net revenues (2)(3)(4)(5)(6)Products76,992

62,634

286,293

215,275

Services51,686

49,333

206,853

192,612

Total128,678

111,967

493,146

407,887

Gross profit553,319

502,849

2,110,270

1,942,935

Operating expenses (2)(3)(4)(5)(6)Sales and marketing233,154

220,379

929,983

843,178

Research and development124,700

120,300

512,627

441,324

General and administrative69,101

63,557

273,635

258,366

Restructuring charges-

-

-

7,800

Total426,955

404,236

1,716,245

1,550,668

Income from operations126,364

98,613

394,025

392,267

Other income, net(2,865

)

(1,090

)

(7,088

)

4,130

Income before income taxes123,499

97,523

386,937

396,397

Provision for income taxes12,781

19,860

55,696

88,956

Net income$

110,718

$

77,663

$

331,241

$

307,441

Net income per share - basic$

1.83

$

1.27

$

5.46

$

5.05

Weighted average shares - basic60,526

61,149

60,707

60,911

Net income per share - diluted$

1.80

$

1.26

$

5.34

$

5.01

Weighted average shares - diluted61,606

61,636

62,057

61,378

Non-GAAP Financial MeasuresNet income as reported$

110,718

$

77,663

$

331,241

$

307,441

Acquisition-related write-downs of assumed deferred revenue-

1,963

1,283

6,824

Stock-based compensation expense60,522

52,198

243,279

201,949

Amortization of purchased intangible assets12,879

10,720

48,722

34,604

Facility-exit costs4,057

11,045

14,930

16,601

Acquisiton-related charges16,867

11,321

86,094

56,483

Impairment charges-

-

33,825

-

Restructuring charges-

-

-

7,800

Tax effects related to above items(19,804

)

(15,276

)

(88,408

)

(56,726

)

Net income excluding acquisition-related write-downs of assumed deferred revenue, stock-based compensationexpense, amortization of purchased intangible assets, facility-exit costs, acquisition-related charges,impairment charges, restructuring charges and non-recurring tax expenses and benefits (non-GAAP) - diluted$

185,239

$

149,634

$

670,966

$

574,976

Net income per share excluding acquisition-related write-downs of assumed deferred revenue, stock-basedcompensation expense, amortization of purchased intangible assets, facility-exit costs, acquisition-related charges,impairment charges, restructuring charges and non-recurring tax expenses and benefits (non-GAAP) - diluted$

3.01

$

2.43

$

10.81

$

9.37

Weighted average shares - diluted61,606

61,636

62,057

61,378

(1) GAAP net product revenues$

339,921

$

278,451

$

1,247,084

$

1,025,856

Acquisition-related write-downs of assumed deferred revenue-

1,963

1,283

6,824

Non-GAAP net product revenues339,921

280,414

1,248,367

1,032,680

GAAP net service revenues342,076

336,365

1,356,332

1,324,966

Acquisition-related write-downs of assumed deferred revenue-

-

-

-

Non-GAAP net service revenues342,076

336,365

1,356,332

1,324,966

Total non-GAAP net revenues$

681,997

$

616,779

$

2,604,699

$

2,357,646

(2) Includes stock-based compensation expense as follows:Cost of net revenues$

7,204

$

6,776

$

29,107

$

25,470

Sales and marketing25,896

22,258

104,578

88,446

Research and development17,109

13,367

67,155

50,271

General and administrative10,313

9,797

42,439

37,762

$

60,522

$

52,198

$

243,279

$

201,949

(3) Includes amortization of purchased intangible assets as follows:Cost of net revenues$

9,468

$

7,382

$

35,156

$

23,814

Sales and marketing2,836

2,749

11,266

8,612

General and administrative575

589

2,300

2,178

$

12,879

$

10,720

$

48,722

$

34,604

(4) Includes facility-exit costs as follows:Cost of net revenues$

679

$

1,457

$

2,605

$

2,300

Sales and marketing1,115

3,272

4,166

5,100

Research and development1,309

3,328

4,661

5,257

General and administrative954

2,988

3,498

3,944

$

4,057

$

11,045

$

14,930

$

16,601

(5) Includes acquisition-related charges as follows:Cost of net revenues$

10

$

114

$

2,532

$

127

Sales and marketing6,513

4,255

29,726

13,703

Research and development5,935

1,511

31,055

2,838

General and administrative4,409

5,441

22,781

39,815

$

16,867

$

11,321

$

86,094

$

56,483

(6) Includes impairment charges as follows:Cost of net revenues$

-

$

-

$

4,388

$

-

Sales and marketing-

-

10,256

-

Research and development-

-

9,845

-

General and administrative-

-

9,336

-

$

-

$

-

$

33,825

$

-

F5 Networks, Inc.Consolidated Income Statements(unaudited, in thousands, except per share amounts) Three Months Ended Years Ended September 30, September 30, 2021 2020 2021 2020

Net revenuesProducts (1) $ 339,921 $ 278,451 $ 1,247,084 $ 1,025,856

Services 342,076 336,365 1,356,332 1,324,966

Total 681,997 614,816 2,603,416 2,350,822

Cost of net revenues(2)(3)(4)(5)(6)Products 76,992 62,634 286,293 215,275

Services 51,686 49,333 206,853 192,612

Total 128,678 111,967 493,146 407,887

Gross profit 553,319 502,849 2,110,270 1,942,935

Operating expenses (2)(3)(4)(5)(6)Sales and marketing 233,154 220,379 929,983 843,178

Research and 124,700 120,300 512,627 441,324 developmentGeneral and 69,101 63,557 273,635 258,366 administrativeRestructuring charges - - - 7,800

Total 426,955 404,236 1,716,245 1,550,668

Income from operations 126,364 98,613 394,025 392,267

Other income, net (2,865 ) (1,090 ) (7,088 ) 4,130

Income before income 123,499 97,523 386,937 396,397 taxesProvision for income 12,781 19,860 55,696 88,956 taxesNet income $ 110,718 $ 77,663 $ 331,241 $ 307,441

Net income per share - $ 1.83 $ 1.27 $ 5.46 $ 5.05 basicWeighted average shares 60,526 61,149 60,707 60,911 - basic Net income per share - $ 1.80 $ 1.26 $ 5.34 $ 5.01 dilutedWeighted average shares 61,606 61,636 62,057 61,378 - diluted Non-GAAP FinancialMeasures Net income as reported $ 110,718 $ 77,663 $ 331,241 $ 307,441

Acquisition-related - 1,963 1,283 6,824 write-downs of assumeddeferred revenueStock-based 60,522 52,198 243,279 201,949 compensation expenseAmortization of 12,879 10,720 48,722 34,604 purchased intangibleassetsFacility-exit costs 4,057 11,045 14,930 16,601

Acquisiton-related 16,867 11,321 86,094 56,483 chargesImpairment charges - - 33,825 -

Restructuring charges - - - 7,800

Tax effects related to (19,804 ) (15,276 ) (88,408 ) (56,726 )above itemsNet income excludingacquisition-relatedwrite-downs of assumeddeferred revenue,stock-basedcompensationexpense, amortizationof purchased intangibleassets, facility-exitcosts,acquisition-relatedcharges,impairment charges,restructuring charges $ 185,239 $ 149,634 $ 670,966 $ 574,976 and non-recurring taxexpenses and benefits(non-GAAP) - diluted Net income per shareexcludingacquisition-relatedwrite-downs of assumeddeferred revenue,stock-basedcompensation expense,amortization ofpurchased intangibleassets, facility-exitcosts,acquisition-relatedcharges,impairment charges,restructuring charges $ 3.01 $ 2.43 $ 10.81 $ 9.37 and non-recurring taxexpenses and benefits(non-GAAP) - diluted Weighted average shares 61,606 61,636 62,057 61,378 - diluted (1) GAAP net product $ 339,921 $ 278,451 $ 1,247,084 $ 1,025,856 revenuesAcquisition-related - 1,963 1,283 6,824 write-downs of assumeddeferred revenueNon-GAAP net product 339,921 280,414 1,248,367 1,032,680 revenuesGAAP net service 342,076 336,365 1,356,332 1,324,966 revenuesAcquisition-related - - - - write-downs of assumeddeferred revenueNon-GAAP net service 342,076 336,365 1,356,332 1,324,966 revenuesTotal non-GAAP net $ 681,997 $ 616,779 $ 2,604,699 $ 2,357,646 revenues (2) Includesstock-basedcompensation expense asfollows:Cost of net revenues $ 7,204 $ 6,776 $ 29,107 $ 25,470

Sales and marketing 25,896 22,258 104,578 88,446

Research and 17,109 13,367 67,155 50,271 developmentGeneral and 10,313 9,797 42,439 37,762 administrative $ 60,522 $ 52,198 $ 243,279 $ 201,949

(3) Includesamortization ofpurchased intangibleassets as follows:Cost of net revenues $ 9,468 $ 7,382 $ 35,156 $ 23,814

Sales and marketing 2,836 2,749 11,266 8,612

General and 575 589 2,300 2,178 administrative $ 12,879 $ 10,720 $ 48,722 $ 34,604

(4) Includesfacility-exit costs asfollows:Cost of net revenues $ 679 $ 1,457 $ 2,605 $ 2,300

Sales and marketing 1,115 3,272 4,166 5,100

Research and 1,309 3,328 4,661 5,257 developmentGeneral and 954 2,988 3,498 3,944 administrative $ 4,057 $ 11,045 $ 14,930 $ 16,601

(5) Includesacquisition-relatedcharges as follows:Cost of net revenues $ 10 $ 114 $ 2,532 $ 127

Sales and marketing 6,513 4,255 29,726 13,703

Research and 5,935 1,511 31,055 2,838 developmentGeneral and 4,409 5,441 22,781 39,815 administrative $ 16,867 $ 11,321 $ 86,094 $ 56,483

(6) Includes impairmentcharges as follows:Cost of net revenues $ - $ - $ 4,388 $ -

Sales and marketing - - 10,256 -

Research and - - 9,845 - developmentGeneral and - - 9,336 - administrative $ - $ - $ 33,825 $ -

F5 Networks, Inc.Consolidated Statements of Cash Flows(unaudited, in thousands)Years Ended

September 30,

2021

2020

Operating activitiesNet income$

331,241

$

307,441

Adjustments to reconcile net income to net cash provided by operating activities:Stock-based compensation243,279

201,948

Depreciation and amortization115,424

95,857

Non-cash operating lease costs38,375

39,139

Deferred income taxes(76,930

)

7,293

Impairment of assets40,698

9,673

Other737

2,122

Changes in operating assets and liabilities:Accounts receivable(46,289

)

46,502

Inventories5,843

6,503

Other current assets(84,328

)

(49,895

)

Other assets(110,653

)

(25,690

)

Accounts payable and accrued liabilities22,933

34,742

Deferred revenue216,431

35,514

Lease liabilities(51,565

)

(50,251

)

Net cash provided by operating activities645,196

660,898

Investing activitiesPurchases of investments(472,165

)

(584,240

)

Maturities of investments197,279

543,065

Sales of investments271,521

309,687

Acquisition of businesses, net of cash acquired(411,319

)

(955,574

)

Purchases of property and equipment(30,651

)

(59,940

)

Net cash used in investing activities(445,335

)

(747,002

)

Financing activitiesProceeds from the exercise of stock options and purchases of stock under employee stock purchase plan65,752

52,835

Repurchase of common stock(500,000

)

(100,016

)

Proceeds from term debt agreement-

400,000

Payments on term debt agreement(20,000

)

(10,000

)

Payments for debt issuance costs-

(3,040

)

Taxes paid related to net share settlement of equity awards(14,032

)

(2,536

)

Net cash provided by (used in) financing activities(468,280

)

337,243

Net increase in cash, cash equivalents and restricted cash(268,419

)

251,139

Effect of exchange rate changes on cash, cash equivalents and restricted cash(74

)

(567

)

Cash, cash equivalents and restricted cash, beginning of period852,826

602,254

Cash, cash equivalents and restricted cash, end of period$

584,333

$

852,826

Supplemental disclosures of cash flow informationCash paid for taxes, net of refunds ...$

99,378

$

80,236

Cash paid for amounts included in the measurement of lease liabilities61,504

60,564

Cash paid for interest on long-term debt5,280

6,568

Supplemental disclosures of non-cash activitiesRight-of-use assets obtained in exchange for lease obligations$

13,051

$

402,007

View source version on businesswire.com: https://www.businesswire.com/news/home/20211026006205/en/

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