F5 Busts Out With Big Numbers

Application and network monitoring specialist F5 Networks Inc. (Nasdaq: FFIV) today reported profits of $7.4 million on a record $44.2 million of revenue for its third quarter of 2004.

That's a small step up from the $6.0 million in profits on $40.6 million in revenue reported last quarter and a huge leap from the $1.4 million in profits and $29.2 million in revenue reported a year ago.

The company has also boosted its revenue guidance. Officials say the company expects to grow sequentially in the next quarter and has set a target range of $45 million to $47 million in revenue.

Investors apparently viewed this as tasty news, as they snacked on shares in after-hours trading, driving F5 stock up $2.00 (8.93%) to $24.40.

F5 CEO and President John McAdam attributes growth to strong sales in its core product line, including the flagship Big-IP product and the FirePass SSL VPN products. FirePass revenue of $3.8 million was up from $2.7 million in the prior quarter.Next in line? F5 is focused on the Big-IP 9.0, the next major version of the flagship product, due in early September. Now code-named Buffalo Jump, the new release will help data center managers by adding features for bandwidth optimization, network management, security, and traffic management, F5 officials say.

The new version will share technology with F5's FirePass and TrafficShield products, acquired with F5's $29 million cash acquisition of MagniFire WebSystems in early June. Big-IP 9.0 will also integrate with major software such as Microsoft Operations Manager 2005 and the Oracle 10g database management system, according to officials.

However, F5's Big-IP Blade Controller is not doing well, McAdam says. "We're still not seeing any significant changes in the blade server space... and there's no sign of any change in the short term. It's just been pretty amazingly slow."

F5 made headlines this week, being accused of patent infringement by competitor Radware Ltd. (Nasdaq: RDWR). The alleged infringement affects U.S. patent number 6,718,359, which applies to methods for determining network proximity and its use in load balancing decisions (see Radware Fixes Legal Guns on F5).

Radware is already being sued by F5, which began a lawsuit in March 2003. F5 contends that Radware infringes its U.S. patent number 6,473,802, a method for storing load balancing information with cookie technology. As for the new suit, "we're still investigating. We do not believe that we infringe any of their claims," McAdam said in a conference call yesterday.F5 also announced:

Evan Koblentz, Senior Editor, Next-Gen Data Center Forum