Seeking Alpha
 

F5 Networks, Inc. (FFIV)

- NASDAQ
  • Dec. 30, 2013, 7:46 PM
    • As part of its major Domain 2.0 infrastructure project, AT&T (T) has sent a request for information (RFI) to equipment suppliers asking them to submit ideas and architectures that support software-defined networking (SDN) - the shifting of network intelligence to software-based controllers that interact with switches/routers.
    • MKM's Michael Genovese predicts AT&T's RFI will likely "have significant long-term consequences" for the telecom equipment industry. He sees the impact being "most negative" for Cisco (CSCO), and a positive for Ciena (CIEN), F5 (FFIV), Finisar (FNSR), and early data center SDN software leader VMware (VMW, EMC)
    • AT&T, like others, is enthusiastic about SDN's potential to lower management costs, improve network efficiency, speed the provisioning of new services, and allow "white box" switches/routers to take the place of proprietary hardware.
    • The last feature has many Cisco investors nervous, given its potential to increase competition and pressure margins. John Chambers has declared white box hardware (already embraced by many Web/cloud companies) to be a major long-term threat.
    • Cisco is counting on its powerful Insieme hardware/software and ACI architecture (meant to adapt to the needs of apps/services) to help neutralize the SDN threat. But Genovese thinks ACI "seems too complex and proprietary compared to more white box-oriented architectures."
    • Regarding VMware, Genovese believes the company's NSX platform (combines SDN with other features) has "a strong chance of being selected as the Data Center virtualization platform." Strong uptake is expected for NSX, which has won the support of many Cisco rivals, starting in 2015. Major carrier SDN adoption is expected to arrive later.
    | 2 Comments
  • Dec. 12, 2013, 11:51 AM
    • Cisco (CSCO -2.3%) is now targeting annual revenue growth of 3%-6% over the next 3-5 years, down from a prior 5%-7%, says CFO Frank Calderoni states at the networking giant's analyst meeting. In addition, Calderoni says Cisco's FY14 (ends July '14) revenue growth outlook is "basically" in-line with a Street forecast for a 4% decline.
    • Cisco is now aiming for services revenue growth of 7%-10% over the next 3-5 years, down from 9%-11%; services accounted for 22% of Cisco's Oct. quarter revenue. Businesses related to "enabling the cloud" (a somewhat nebulous term) are expected to show a 12%-18% growth rate.
    • Cisco, already pressured by John Chambers' macro comments, continues to trade lower. Many networking equipment peers and component/chip suppliers are also selling off; in addition to Cisco, Ciena's mixed FQ4 results and slightly soft FQ1 guidance could be playing a role here.
    • Notable networking equipment/component/chip decliners: JNPR -3.1%. BRCM -2.5%. PKT -2.8%. FFIV -2.2%. ERIC -2.1%. JDSU -1.9% (getting pulled from the S&P 500). AFOP -5.5%. CAVM -1.7%. AMCC -1.8%. BRCD -1.8%. MRVL -1.6%. ARUN -1.7%. CALX -1.7%.
    | 2 Comments
  • Nov. 25, 2013, 6:45 PM
    • F5's (FFIV) new buyback funds are good for repurchasing 4.7% of outstanding shares at current levels. (8-K)
    • On its Sep. quarter CC (transcript), F5 stated it spent $50M on buybacks during the quarter, and that it had $181M remaining on its authorization.
    | Comment!
  • Nov. 13, 2013, 8:34 PM
    • Cisco's (CSCO) dispiriting Jan. quarter guidance and Oct. quarter order data has produced an AH selloff in enterprise IT and telecom equipment names, as well as a couple of the companies supplying them. NetApp's below-consensus guidance might not be helping either.
    • HPQ -2.1% AH. IBM -1.1%. ALU -2%. FFIV -1.9%. CIEN -0.9%. CAVM -3%. BRCM -1.3%.
    • Cisco's slumping FQ1 service provider (-13% Y/Y) and emerging markets (-12%) orders are bound to fuel concerns about carrier capex and macro trends. At the same time, it's worth noting Juniper and Alcatel-Lucent have been seeing better router sales to carriers (though not to Asia), and that Huawei has been doing better in emerging markets.
    • The rest of Cisco's order data for major regions and customer groups was relatively better, but not exactly encouraging. Americas orders -2%, EMEA -4%, Asia-Pac (hurt by emerging markets weakness) -9%. Enterprise orders +2%, commercial (SMBs) +1%, public sector -1%.
    • Switch sales (31% of revenue) rose 3% Y/Y, while routers (17% of revenue) fell 1%. Collaboration rose 1%, and service provider video fell 14% due to set-top weakness. Cisco's ASR 9000 edge router line, which EZchip (EZCH) supplies network processors for, grew 20% in FQ1 vs. 43% in FQ4.
    • Data center (UCS servers) had another strong quarter, growing 44%, but still only accounts for 5% of revenue. Wireless (dominated by Wi-Fi gear) grew only 8% after growing 32% in FQ4 (could be a negative for ARUN and RKUS).
    • John Chambers was asked on the CC (transcript) if the NSA spying uproar was affecting Cisco. He admitted it's a problem in China, but denied it was a major issue elsewhere.
    | 5 Comments
  • Oct. 24, 2013, 9:56 AM
    • Angie's List (ANGI -3.9%) has been cut to Neutral by B. Riley after missing Q3 estimates and issuing below-consensus Q4 revenue guidance. However, shares have pared the majority of yesterday's AH losses.
    • F5 (FFIV +1.6%) has been cut to Neutral by BofA/Merrill after beating FQ4 estimates and issuing mixed FQ1 guidance. Shares have given back most of yesterday's AH gains.
    • Fusion-io (FIO -23.6%) has been cut to Equal Weight by Morgan Stanley after providing FQ1 guidance that was far below consensus, and disclosing its CFO and sales chief are leaving.
    • Akamai (AKAM -9.3%) has been cut to Neutral by Macquarie after providing disappointing Q4 guidance to go with a Q3 beat and buyback announcement.
    • Citrix (CTXS +4.2%) has been cut to Neutral by Susquehanna after providing soft (but better-than-feared) Q4 guidance to go with Q3 numbers that were slightly above the guidance ranges given in a recent warning.
    • Rogers (RCI -2.3%) has been cut to Neutral by Macquarie after posting Q3 results.
    • Cadence (CDNS -6.2%) has been cut to Hold by Needham after slightly missing Q3 revenue estimates and providing soft Q4 revenue guidance.
    • Vipshop (VIPS +0.9%) has been started at Outperform by CLSA.
    | Comment!
  • Oct. 23, 2013, 4:08 PM
    • F5 (FFIV): FQ4 EPS of $1.26 beats by $0.07.
    • Revenue of $395.3M (+9% Y/Y) beats by $10.7M.
    • Expects FQ1 revenue of $390M-$400M and EPS of $1.17-$1.20 vs. consensus of $389.6M and $1.20.
    • Shares +9.6% AH. CC at 4:30PM ET. (PR)
    | 3 Comments
  • Oct. 23, 2013, 2:23 PM
    • The soft Q4 top-line guidance provided with Juniper's (JNPR -5.9%) Q3 beat has led shares to fall below $20. Several peers are also off on a down day for tech: FFIV -4.3% (reporting after the close). DRWI -3.9%. PKT -2.8%. RKUS -2.6%. CIEN -2.4%. RVBD -2.2%.
    • On its CC, Juniper attributed its guidance to U.S. federal weakness caused in part by the government shutdown, and called the macro environment "dynamic." The company also disclosed it's cutting another 280 jobs (~3% of its workforce) in Q4, and that it's in the "later stages" of its search for a replacement for departing CEO Kevin Johnson.
    • Some of the job cuts are related to Juniper's decision to kill off its MobileNext 3G/4G infrastructure software line.
    • The sell-side is nervous about declining enterprise sales, caused in large part by security share losses. Juniper promises a resumption of security growth in 2014; favorable comps should make that easier.
    • Carrier routers continue to be a bright spot: MX series edge router sales rose  15% Q/Q, and core router sales 11% Q/Q. Both Cisco and Juniper have been seeing strong edge router demand in recent quarters.
    • Juniper also states it's seeing healthy carrier demand in all three major geographies. However, Americas demand is generally stronger than EMEA and Asia-Pac demand.
    | Comment!
  • Oct. 23, 2013, 12:10 AM
  • Oct. 22, 2013, 5:35 PM
  • Oct. 15, 2013, 10:05 AM
    • A week after some of them temporarily fell in response to Citrix's warning, enterprise IT names are slumping on account of Teradata's Q3/2013 warning, which was largely the result of weaker-than-expected Asian numbers.
    • Three other data warehousing/business intelligence software providers - Informatica (INFA -4.4%), MicroStrategy (MSTR -4.1%), and Qlik (QLIK -3.3%) are among the biggest decliners. The companies rallied in August in response to Teradata's better-than-feared Q2 report.
    • Other decliners: EMC -1.8%. NTAP -2.1%. CVLT -2.5%. FFIV -2%. JIVE -2.2%. NOW -2%.
    • Teradata isn't alone among enterprise IT names in seeing its Asian ops underperform. Cisco and Oracle have reported similar issues.
    | Comment!
  • Oct. 10, 2013, 12:02 PM
    • "Investors shouldn't read this as purely a macro-driven issue," says Wells Fargo's Jason Maynard about Citrix's (CTXS -11.1%) Q3 warning. He believes Q3 enterprise software spend "trended better than expected," even if a demand tailwind hasn't yet emerged.
    • Maynard thinks Citrix's Q3 shortfall could be due to "some combination" of weaker NetScaler application delivery controller (ADC) sales (gaining share lately), "execution issues" related to a transition towards mobile software sales, and smaller deal sizes. He also thinks sales of mobile device/app management software simply might not be able to offset "sluggish" PC virtualization sales. Nonetheless, he reiterates an Outperform and $88-$89 PT.
    • Piper's Mark Murphy thinks VMware (VMW +1%) is providing tougher competition for Citrix in PC virtualization. "VMware resellers had noted Citrix customers approaching them 'more and more,' [they] stated that traction [for] VMware’s desktop virtualization solution (View) is ‘exploding.’"
    • VMware mentioned on its Q2 CC its end-user computing (PC/mobile software) bookings rose at a mid-teens Y/Y rate. The company recently hired ex-SAP exec Sanjay Poonen to run the business.
    • BMO is defending Citrix ADC rival F5 (FFIV +1.3%), arguing the company's Sep. quarter results should be solid.
    | 2 Comments
  • Oct. 9, 2013, 4:26 PM
    • Citrix (CTXS) expects Q3 revenue of $710M-$712M, below a prior guidance range of $730M-$740M and a $737.3M consensus. EPS guidance has been lowered to $0.68-$0.69, below a prior $0.72-$0.73 and a $0.73 consensus. (PR)
    • The thin client/virtualization software and application delivery controller vendor doesn't give a reason for the shortfall. Full Q3 results arrive on Oct. 23.
    • CTXS -11.1% AH. Off in sympathy: RHT -2.2% VMW -4.4%. EMC -1.5%. FFIV -4.3%.
    | Comment!
  • Oct. 2, 2013, 6:05 PM
    • Deutsche's Brian Modoff says channel checks point to "a gradual pickup" in sales of F5's (FFIV) BIG-IP virtual application delivery controllers (ADCs), and that new features and software licensing model changes could be helping F5 halt share losses to Citrix's (CTXS) NetScaler virtual ADC line.
    • Virtual ADCs - software that runs on 3rd-party servers - have been taking share from traditional ADC hardware. Meanwhile, Citrix has been growing its ADC share with the help of its Cisco partnership.
    • Modoff considers F5's FQ4 (Sep. quarter) consensus "beatable," and also thinks a BIG-IP refresh and strong firewall sales could yield upside to FQ1 estimates.
    • Long-term, Modoff is encouraged by F5's ability to benefit from the network functions virtualization (NFV) initiatives set to be launched by top carriers (migrates network management software to commodity servers), and growing IT interest in the company's full-proxy architecture for handling complex security needs.
    • FQ4 results arrive on Oct. 23.
    | Comment!
  • Sep. 24, 2013, 12:50 PM
    • Several enterprise IT names are lower after Red Hat reported weaker-than-expected Aug. quarter billings and issued soft top-line guidance yesterday afternoon, and Red Hat, EMC (EMC -1.2%), NetApp (NTAP -0.5%), and F5 (FFIV -2.2%) were hit with downgrades this morning.
    • Notable decliners include Citrix (CTXS -2.6%), VMware (VMW -1.9%), SolarWinds (SWI -2.1%), Teradata (TDC -2.1%), CommVault (CVLT -2.1%), and Radware (RDWR -2.4%). Red Hat partly blamed its performance on weak European demand.
    • Barclays' Ben Reitzes suggests his downgrades of EMC and NetApp are partly valuation calls (both companies are near his PTs). But he adds "there may be more upside in networking names today" in light of "long-term headwinds to storage demand." The growth of cloud infrastructure platforms relying on commodity hardware (AWS being the most notable) is generally viewed as a threat to storage incumbents.
    • William Blair cut NetApp to Underperform last week, raising concerns about executive departures, a flash memory-focused refresh to EMC's VNX mid-range storage line, and the Cisco-Whiptail deal.
    • Goldman's Kent Schofield, who cut F5 to Neutral, says he thinks Street estimates now take into account F5's application delivery controller (ADC) refresh cycle and Cisco ADC displacements.
    | Comment!
  • Sep. 24, 2013, 10:11 AM
    • Red Hat (RHT -12.3%) has been cut to neutral ratings by Piper and Pac Crest in the wake of its disappointing FQ2 billings data and mixed guidance.
    • Storage giants EMC (EMC -1.7%) and NetApp (NTAP -1.2%) have been cut to Equal Weight by Barclays.
    • F5 (FFIV -2.4%) has been cut to Neutral by Goldman.
    • Rovi (ROVI +2.5%) has been upgraded to Buy by B. Riley.
    • Microchip (MCHP +0.7%) has been upgraded to Buy by Goldman.
    | Comment!
  • Sep. 17, 2013, 2:06 PM
    • Looking to challenge Cisco (CSCO +0.3%), Check Point (CHKP +0.9%), and market leader Palo Alto Networks (PANW +1.1%) in the growing next-gen firewall (NGFW) hardware market, H-P (HPQ -0.4%) has launched its TippingPoint NGFW line. (PR)
    • Five models are being offered, the most powerful of which offers 10Gbps of throughput. Palo Alto's high-end PA-5060 firewall offers 20Gbps of throughput. Though H-P plans to continue selling TippingPoint intrusion prevention (IPS) appliances, the functionality of its new hardware leads Gartner's Greg Young to view the latter as a replacement for the former.
    • Young estimates NGFWs have grown to make up 15% of the $8B firewall market.
    • H-P is also launching Threat Central, a cloud-based service that analyzes potential threats detected by the company's ArcSight security software.
    • Consider the moves an escalation of H-P's rivalry with Cisco. Cisco is set to acquire IPS leader Sourcefire, which has also rolled out hardware that combines NGFW and IPS features, and recently formed a managed security services unit.
    • Meanwhile, F5 (FFIV +0.8%) has acquired Versafe, a developer of online fraud protection software and a cloud-based monitoring service, for an undisclosed sum. F5 declares Versafe's products will complement its firewall and access/policy management hardware, as well as its mobile app management software.
    • Versafe can already be integrated with F5's mainstay application delivery controllers. In a blog post discussing the deal, F5 argues the ongoing rise of remote/mobile file access increases Versafe's value.
    • H-P and F5's moves comes amid growing corporate interest in cybersecurity, following well-publicized hacking events.
    | Comment!
Visit Seeking Alpha's
FFIV vs. ETF Alternatives
Company Description
F5 Networks Inc provides Application Delivery Networking (ADN) technology that secures and optimizes the delivery of network-based applications and the security, performance and availability of servers, and other network resources.
Sector: Technology
Country: United States