In This Article:
F5 Inc. FFIV is likely to beat expectations when it reports second-quarter fiscal 2025 results on April 28, after market close.
For the second quarter of fiscal 2025, F5 projects non-GAAP earnings per share (EPS) in the range of $3.02-$3.14 (midpoint of $3.08). The Zacks Consensus Estimate for the same is pegged at $3.10, suggesting a year-over-year increase of 6.5%. The figure has remained unchanged for the past 60 days.
FFIV’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average earnings surprise of 8.6%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
FFIV projects its second-quarter fiscal 2025 non-GAAP revenues in the range of $705-$725 million. The Zacks Consensus Estimate for the same is pegged at $716.9 million, suggesting year-over-year growth of 5.2%.
F5, Inc. Price and EPS Surprise
F5, Inc. price-eps-surprise | F5, Inc. Quote
Factors Likely to Influence FFIV’s Q2 Results
FFIV’s Product segment performance in the fiscal second quarter is likely to have been aided by the recovering demand for its software solutions, offset by IT budget cuts amid lingering macroeconomic uncertainties. The growth in its Software revenues has continued in the past few quarters. This trend is likely to have continued in the to-be-reported quarter. Our estimate for Software revenues is pegged at $173.1 million.
Technology refresh activities by customers to refresh aging hardware estates are likely to have boosted the Systems segment sales in the second quarter. Our estimate for Systems revenues is pegged at $151.2 million.
Strong sales across the Software and Systems divisions are likely to have boosted the overall performance of the Product division. Our estimate of $324.3 million for Product revenues indicates an 8% year-over-year increase.
The acceleration in BIG-IP and NGINX subscription software deals is expected to have remained a major growth driver in the to-be-reported quarter. BIG-IP’s data point performance, automation capabilities and lower cost of ownership are likely to have helped F5 win multiple deals in the fiscal second quarter. Moreover, the company is anticipated to have witnessed strong demand for its NGINX subscription as large enterprises continue to adopt the solution for their cloud and Kubernetes workloads.
Additionally, its cost-saving initiatives, which include headcount reduction, eliminating portions of its facilities footprint and travel reduction, are likely to have boosted the bottom line.
Earnings Whispers for F5
Our proven model predicts an earnings beat for F5 this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is exactly the case here.