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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended September 30, 2017
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to .
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WASHINGTON
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91-1714307
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common stock, no par value
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NASDAQ Global Select Market
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Large accelerated filer
x
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Accelerated filer
¨
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Non-accelerated filer
¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
¨
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Emerging growth company
¨
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Page
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PART I
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||
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Item 1.
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||
Item 1A.
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||
Item 1B.
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||
Item 2.
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Item 3.
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Item 4.
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||
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||
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Item 5.
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Item 6.
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||
Item 7.
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Item 7A.
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Item 8.
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Item 9.
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||
Item 9A.
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Item 9B.
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||
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||
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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||
Item 1.
|
Business
|
•
|
Programmability and customization of F5 products for applications (iApps), for control and management (iControl), for the data plane (iRules and iRules LX), and for threshold breaches and alerts (iCall). See more details below in the
DevOps & Programmability
sub-section.
|
•
|
Scale
N
is a set of three unique capabilities that enhance the flexibility of our products:
|
◦
|
Clustered Multiprocessing (CMP) allows customers to cluster and aggregate processors (cores) within BIG-IP appliances or VIPRION chassis products.
|
◦
|
Virtual Clustered Multiprocessing (vCMP) enables the creation of separate virtual instances of TMOS within an appliance or chassis, each with a different configuration and assigned to a different application.
|
◦
|
Device Service Clustering (DSC) gives customers the ability to group devices and services across an array of physical and virtual devices (BIG-IP appliances, VIPRION chassis, or Virtual Editions). Devices can be added to or removed from a DSC without disrupting application services, and application services can be independently managed within the cluster.
|
•
|
Local Traffic Manager (LTM) provides intelligent load balancing, traffic management, and application health checking.
|
•
|
BIG-IP DNS (DNS) improves the performance and availability of global applications by intelligently directing users to the closest or best-performing physical, virtual, or cloud environment. In addition, it enhances DNS security by automatically scaling to absorb a rapid increase in queries resulting from a denial-of-service attack and mitigates complex threats from malware and viruses by blocking access to malicious IP domains.
|
•
|
Advanced Firewall Manager (AFM) enables high-performance network firewall capabilities designed to ensure that traffic is not interrupted even under the most intense attacks. AFM scales to support millions of concurrent connections per second and uses the flexibility of iRules, sophisticated filtering, immediate blacklisting, and over a hundred built-in threat vectors
|
•
|
Application Security Manager (ASM) is a web application firewall that provides comprehensive, proactive, application-layer protection against both generalized and targeted attacks. Combining a positive security model (“deny all unless allowed”) with signature-based detection, ASM can prevent “zero-day” attacks in addition to known security threats.
|
•
|
Access Policy Manager (APM) provides secure, granular, context-aware access to networks and applications while simplifying authentication, authorization, and accounting (AAA) management. Our endpoint security service validates client devices, including personal devices used by employees to access corporate applications and data, to protect organizations from viruses or malware infections, accidental data loss, and rogue device access. This allows users to apply repeatable access policies across many devices, networks, applications and servers with centralized visibility of their authorization infrastructure.
|
•
|
Carrier-Grade Network Address Translation (CGNAT) offers a broad set of tools that enables service providers to successfully migrate to IPv6 while continuing to support and interoperate with existing IPv4 devices and content. BIG-IP CGNAT offers service providers tunneling solutions with Dual-Stack Lite capabilities as well as native network address translation solutions such as NAT44 and NAT64. It provides carrier-grade scalability by offering a very high number of IP address translations, very fast NAT translation setup rates, high throughput, and high-speed logging.
|
•
|
Policy Enforcement Manager (PEM) offers service providers a comprehensive set of traffic classification capabilities to accurately identify the specific applications and services subscribers are using and how they are using them. This information allows them to steer application and subscriber traffic to the most appropriate value-added services (such as web caching, video optimization, or parental control) and reduce the burden on other services. PEM also provides deep reporting, enabling service providers to build tailored services and packages based on subscribers’ application usage and traffic classification.
|
•
|
Silverline is a SaaS platform that allows customers to subscribe to security services running on our own high-performance, massively-scalable hardware in cloud-based points of presence around the globe. Two services are currently available on Silverline: Denial of Service (DoS) protection and Web Application Firewall (WAF). Depending on the level of protection they require, customers can route traffic through Silverline 24/7 or only when an attack is detected. For customers who want to minimize the upfront costs and expense of maintaining on-premise solutions, these services are simple to deploy and an affordable alternative. For large enterprises, subscribing to these services in conjunction with F5's on-premises DDoS solution (AFM) and Web Application Firewall (ASM) can provide a first line of defense against attacks before they have a significant down-time impact on their application or network services.
|
•
|
WebSafe and MobileSafe are software modules that inject code into traffic between a large enterprise, such as a major financial institution, and its online customers or clients. The code is then downloaded transparently onto the client device and provides real-time protection against malware, phishing, and other cyberthreats, including fraud, without any impact to the user experience. WebSafe protects against all web-based threat types, and MobileSafe protects against advanced threats targeting the mobile user.
|
•
|
Secure Web Gateway Services is a function of APM that protects enterprises against both inbound and outbound malware. Integrated with cloud-based threat intelligence provided by Websense, Secure Web Gateway enables enterprises to manage user access to websites, as well as to hundreds of web-based applications, protocols, and videos, ensuring adherence to corporate acceptable use policies, and compliance regulations.
|
•
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IP Intelligence uses contextual awareness and analysis of traffic and constantly refreshed data from a global threat-sensor network to block threats from a dynamic set of high-risk IP addresses.
|
•
|
GiLAN Solution
|
◦
|
GiLAN solution is made up of BIG-IP LTM and DNS, Carrier-Grade Nework Address Translation (CGNAT) and Policy Enforcement Manager (PEM). The modules have been described above in this document.
|
◦
|
Carrier-Grade Network Address Translation (CGNAT) offers a broad set of tools that enables service providers to successfully migrate to IPv6 while continuing to support and interoperate with existing IPv4 devices and content. BIG-IP CGNAT offers service providers tunneling solutions with Dual-Stack Lite capabilities as well as native network address translation solutions such as NAT44 and NAT64. It provides carrier-grade scalability by offering a very high number of IP address translations, very fast NAT translation setup rates, high throughput, and high-speed logging.
|
◦
|
Policy Enforcement Manager (PEM) offers service providers a comprehensive set of traffic classification capabilities to accurately identify the specific applications and services subscribers are using and how they’re using them. This information allows them to steer application and subscriber traffic to the most appropriate value-added services (such as web caching, video optimization, or parental control) and reduce the burden on other services. PEM also provides deep reporting, enabling service providers to build tailored services and packages based on subscribers’ application usage and traffic classification.
|
•
|
Network Function Virtualization (NFV)
|
•
|
Carrier Class Firewall (CCFW)
|
•
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Signaling Traffic Management
|
•
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Manage up to 400 physical and/or virtual BIG-IP devices, including inventory, status, reporting, backups, updates and upgrades, and handle licensing for up to 5,000 virtual devices.
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•
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Centrally manage configurations and policies for F5 security products, securing applications and providing insights via dashboard views, reports and alerts for recognized security events.
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•
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Onboarding of F5 devices
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•
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Deployment of configurable, administrator-defined application policies, in the form of iApp templates
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•
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Collaboration between Network and Application teams through service catalog of application policies in a multi-tenant environment
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•
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Integration with third-party management and orchestration systems through its declarative REST APIs
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•
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Development and deployment of customized integrations as part of service provisioning workflows
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•
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Deployment of L4-7 services in Cisco ACI and VMware NSX environments
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•
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Automation and partner integrations via iControl REST APIs
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•
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Simplified application deployments via iApps
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•
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Customized application delivery via iRules and iRules LX
|
•
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Event-based automation via iCall
|
•
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Programmability extensibility via iControl LX / iApps LX
|
•
|
iRules LX Streaming support
|
◦
|
High-performance Node.js-native data plane programmability
|
•
|
Application Services Integration iApp
|
◦
|
Enables customers to define and customize Application Service Catalogs for application owners/tenants as part of MANOVA solution
|
•
|
iApps LX framework to enable rich presentation layer for:
|
◦
|
SSL Orchestrator
|
◦
|
DDoS Hybrid Defender
|
◦
|
APM Access Guided Configuration
|
◦
|
Application Connector
|
•
|
F5 API Lifecycle
|
◦
|
Ensures iControl REST API upgrade compatibility, prevents breaking changes
|
◦
|
API provides visibility into endpoint lifecycle state (EA, GA, Internal, Test, Deprecated) to ensure customers use appropriate APIs and plan for upgrades
|
•
|
iControl LX General Availability for last-mile customizations
|
◦
|
Enables customers to extend fundamental platform capabilities via custom REST API endpoints
|
•
|
Incremental Ansible modules to provide comprehensive BIG-IP onboarding and configuration capabilities
|
•
|
Cisco, Juniper Networks, and Checkpoint Systems for network firewall capabilities;
|
•
|
Cisco, Imperva, Citrix and Barracuda Networks in the web application firewall market;
|
•
|
Cisco, Juniper and A10 in Carrier Grade NAT;
|
•
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Procera, Allot, Sandvine, and other DPI vendors with our PEM offering;
|
•
|
Oracle via the acquisition of Tekelec and Acme Packet in the Diameter signaling market;
|
•
|
IBM in end-user protection against malware, phishing, and other cyberthreats;
|
•
|
Akamai Networks in cloud-based DDoS protection; and
|
•
|
Symantec via the acquisition of Blue Coat Systems in protecting enterprises from inbound and outbound malware.
|
Name
|
|
Age
|
|
Position
|
|
François Locoh-Donou
|
|
46
|
|
|
President, Chief Executive Officer, and Director
|
John DiLullo
|
|
51
|
|
|
Executive Vice President of Worldwide Sales
|
Benjamin Gibson
|
|
49
|
|
|
Executive Vice President and Chief Marketing Officer
|
Ryan Kearny
|
|
48
|
|
|
Executive Vice President of Product Development and Chief Technology Officer
|
Steve McMillan
|
|
46
|
|
|
Executive Vice President of Global Services
|
Andy Reinland
|
|
53
|
|
|
Executive Vice President and Chief Financial Officer
|
Scot Rogers
|
|
50
|
|
|
Executive Vice President and General Counsel
|
Item 1A.
|
Risk Factors
|
•
|
continuing to innovate and bring to market compelling cloud-based services that generate increasing traffic and market share;
|
•
|
maintaining the utility, compatibility and performance of our software on the growing array of cloud computing platforms and the enhanced interoperability requirements associated with orchestration of cloud computing environments; and
|
•
|
implementing the infrastructure to deliver our own cloud based services.
|
•
|
Cisco, Juniper Networks and Checkpoint Systems for network firewall capabilities;
|
•
|
Cisco, Imperva, Citrix and Barracuda Networks in the web application firewall market;
|
•
|
Cisco, Juniper and A10 in Carrier Grade NAT;
|
•
|
Procera, Allot, Sandvine and other DPI vendors with our PEM offerings;
|
•
|
Oracle via the acquisition of Tekelec and Acme Packet in the Diameter signaling market;
|
•
|
IBM in end-user protection against malware, phishing and other cyberthreats;
|
•
|
Akamai Networks in cloud-based DDoS protection; and
|
•
|
Symantec via the acquisition of Blue Coat Systems in protecting enterprises from inbound and outbound malware.
|
•
|
rapid technological change;
|
•
|
evolving industry standards;
|
•
|
consolidation of network and application functions into existing network infrastructure products;
|
•
|
requirements that our products interoperate with those of other IT vendors to enable ease of management;
|
•
|
fluctuations in customer demand;
|
•
|
changes in customer requirements; and
|
•
|
frequent new product and service introductions and enhancements.
|
•
|
expenditures of significant financial and product development resources in efforts to analyze, correct, eliminate, or work-around errors and defects or to address and eliminate vulnerabilities;
|
•
|
loss of existing or potential customers or channel partners;
|
•
|
negative publicity and damage to our reputation;
|
•
|
delayed or lost revenue;
|
•
|
delay or failure to attain market acceptance;
|
•
|
an increase in warranty claims compared with our historical experience, or an increased cost of servicing warranty claims, either of which would adversely affect our gross margins; and
|
•
|
litigation, regulatory inquiries, or investigations that may be costly and harm our reputation.
|
•
|
greater difficulty in enforcing contracts and accounts receivable collection and longer collection periods;
|
•
|
the uncertainty of protection for intellectual property rights in some countries;
|
•
|
greater risk of unexpected changes in regulatory practices, tariffs, and tax laws and treaties;
|
•
|
risks associated with trade restrictions and foreign legal requirements, including the importation, certification, and localization of our products required in foreign countries;
|
•
|
greater risk of a failure of foreign employees, partners, distributors, and resellers to comply with both U.S. and foreign laws, including antitrust regulations, the U.S. Foreign Corrupt Practices Act, and any trade regulations ensuring fair trade practices;
|
•
|
heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements;
|
•
|
increased expenses incurred in establishing and maintaining office space and equipment for our international operations;
|
•
|
greater difficulty in recruiting local experienced personnel, and the costs and expenses associated with such activities;
|
•
|
management communication and integration problems resulting from cultural and geographic dispersion;
|
•
|
fluctuations in exchange rates between the U.S. dollar and foreign currencies in markets where we do business;
|
•
|
economic uncertainty around the world, including continued economic uncertainty as a result of sovereign debt issues in Europe; and
|
•
|
general economic and political conditions in these foreign markets.
|
•
|
Actual or anticipated variations in operating and financial results;
|
•
|
Analyst reports or recommendations;
|
•
|
Rumors, announcements or press articles regarding our competitors’ operations, management, organization, financial condition or financial statements; and
|
•
|
Other events or factors, many of which are beyond our control.
|
•
|
fluctuations in demand for our products and services due to changing market conditions, pricing conditions, technology evolution, seasonality, or other changes in the global economic environment;
|
•
|
changes or fluctuations in sales and implementation cycles for our products and services;
|
•
|
changes in the mix of our products and services, including increases in subscription based offerings;
|
•
|
changes in the growth rate of the application delivery market;
|
•
|
reduced visibility into our customers’ spending and implementation plans;
|
•
|
reductions in customers’ budgets for data center and other IT purchases or delays in these purchases;
|
•
|
changes in end-user customer attach rates and renewal rates for our services;
|
•
|
fluctuations in our gross margins, including the factors described herein, which may contribute to such fluctuations;
|
•
|
our ability to control costs, including operating expenses, the costs of hardware and software components, and other manufacturing costs;
|
•
|
our ability to develop, introduce and gain market acceptance of new products, technologies and services, and our success in new and evolving markets;
|
•
|
any significant changes in the competitive environment, including the entry of new competitors or the substantial discounting of products or services;
|
•
|
the timing and execution of product transitions or new product introductions, and related inventory costs;
|
•
|
variations in sales channels, product costs, or mix of products sold;
|
•
|
our ability to establish and manage our distribution channels, and the effectiveness of any changes we make to our distribution model;
|
•
|
the ability of our contract manufacturers and suppliers to provide component parts, hardware platforms and other products in a timely manner;
|
•
|
benefits anticipated from our investments in sales, marketing, product development, manufacturing or other activities;
|
•
|
impacts on our overall tax rate caused by any reorganization in our corporate structure;
|
•
|
changes in tax laws or regulations, or other accounting rules; and
|
•
|
general economic conditions, both domestically and in our foreign markets.
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
|
Fiscal Year 2017
|
|
Fiscal Year 2016
|
||||||||||||
|
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
First Quarter
|
|
$
|
148.34
|
|
|
$
|
114.45
|
|
|
$
|
123.25
|
|
|
$
|
94.51
|
|
Second Quarter
|
|
$
|
149.50
|
|
|
$
|
130.61
|
|
|
$
|
106.86
|
|
|
$
|
86.03
|
|
Third Quarter
|
|
$
|
142.92
|
|
|
$
|
124.27
|
|
|
$
|
124.91
|
|
|
$
|
93.64
|
|
Fourth Quarter
|
|
$
|
130.00
|
|
|
$
|
114.76
|
|
|
$
|
127.13
|
|
|
$
|
110.86
|
|
|
|
Total Number
of Shares
Purchased
|
|
Average Price
Paid per Share
|
|
Total Number of
Shares Purchased
per the Publicly
Announced Plan
|
|
Approximate Dollar
Value of Shares
that May Yet be
Purchased
Under the Plan
|
||||||
October 1, 2016 — October 31, 2016
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
773,743
|
|
November 1, 2016 — November 30, 2016
|
|
1,055,640
|
|
|
$
|
142.11
|
|
|
1,055,640
|
|
|
$
|
623,722
|
|
December 1, 2016 — December 31, 2016
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
623,722
|
|
|
|
|
|
|
|
|
|
|
||||||
January 1, 2017 — January 31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
623,722
|
|
February 1, 2017 — February 28, 2017
|
|
1,085,862
|
|
|
$
|
138.16
|
|
|
1,085,862
|
|
|
$
|
473,700
|
|
March 1, 2017 — March 31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
473,700
|
|
|
|
|
|
|
|
|
|
|
||||||
April 1, 2017 — April 30, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
473,700
|
|
May 1, 2017 — May 31, 2017
|
|
1,159,665
|
|
|
$
|
129.37
|
|
|
1,159,665
|
|
|
$
|
323,677
|
|
June 1, 2017 — June 30, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
323,677
|
|
|
|
|
|
|
|
|
|
|
||||||
July 1, 2017 — July 31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
323,677
|
|
August 1, 2017 — August 31, 2017
|
|
1,260,046
|
|
|
$
|
119.06
|
|
|
1,260,046
|
|
|
$
|
173,652
|
|
September 1, 2017 — September 30, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
173,652
|
|
*
|
Assumes that $100 was invested
September 30, 2012
in shares of Common Stock and in each index, and that all dividends were reinvested. Shareholder returns over the indicated period should not be considered indicative of future shareholder returns.
|
Item 6.
|
Selected Financial Data
|
|
|
Years Ended September 30,
|
||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
|
(In thousands, except per share data)
|
||||||||||||||||||
Consolidated Income Statement Data
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Products
|
|
$
|
964,662
|
|
|
$
|
944,469
|
|
|
$
|
991,539
|
|
|
$
|
936,130
|
|
|
$
|
798,856
|
|
Services
|
|
1,125,379
|
|
|
1,050,565
|
|
|
928,284
|
|
|
795,916
|
|
|
682,458
|
|
|||||
Total
|
|
2,090,041
|
|
|
1,995,034
|
|
|
1,919,823
|
|
|
1,732,046
|
|
|
1,481,314
|
|
|||||
Cost of net revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Products
|
|
176,032
|
|
|
166,624
|
|
|
174,225
|
|
|
158,788
|
|
|
129,066
|
|
|||||
Services
|
|
177,453
|
|
|
170,581
|
|
|
158,036
|
|
|
151,171
|
|
|
123,981
|
|
|||||
Total
|
|
353,485
|
|
|
337,205
|
|
|
332,261
|
|
|
309,959
|
|
|
253,047
|
|
|||||
Gross profit
|
|
1,736,556
|
|
|
1,657,829
|
|
|
1,587,562
|
|
|
1,422,087
|
|
|
1,228,267
|
|
|||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales and marketing
|
|
652,239
|
|
|
628,743
|
|
|
602,540
|
|
|
558,284
|
|
|
483,041
|
|
|||||
Research and development
|
|
350,365
|
|
|
334,227
|
|
|
296,583
|
|
|
263,792
|
|
|
209,614
|
|
|||||
General and administrative
|
|
156,887
|
|
|
138,431
|
|
|
135,540
|
|
|
106,454
|
|
|
102,401
|
|
|||||
Loss on facility sublease (1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,393
|
|
|||||
Litigation expense (2)
|
|
391
|
|
|
9,051
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Restructuring charges (3)
|
|
12,718
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
1,172,600
|
|
|
1,110,452
|
|
|
1,034,663
|
|
|
928,530
|
|
|
797,449
|
|
|||||
Income from operations
|
|
563,956
|
|
|
547,377
|
|
|
552,899
|
|
|
493,557
|
|
|
430,818
|
|
|||||
Other income, net
|
|
11,561
|
|
|
2,514
|
|
|
8,445
|
|
|
3,785
|
|
|
7,274
|
|
|||||
Income before income taxes
|
|
575,517
|
|
|
549,891
|
|
|
561,344
|
|
|
497,342
|
|
|
438,092
|
|
|||||
Provision for income taxes
|
|
154,756
|
|
|
184,036
|
|
|
196,330
|
|
|
186,159
|
|
|
160,778
|
|
|||||
Net income
|
|
$
|
420,761
|
|
|
$
|
365,855
|
|
|
$
|
365,014
|
|
|
$
|
311,183
|
|
|
$
|
277,314
|
|
Net income per share — basic
|
|
$
|
6.56
|
|
|
$
|
5.43
|
|
|
$
|
5.07
|
|
|
$
|
4.13
|
|
|
$
|
3.53
|
|
Weighted average shares — basic
|
|
64,173
|
|
|
67,433
|
|
|
71,944
|
|
|
75,395
|
|
|
78,565
|
|
|||||
Net income per share — diluted
|
|
$
|
6.50
|
|
|
$
|
5.38
|
|
|
$
|
5.03
|
|
|
$
|
4.09
|
|
|
$
|
3.50
|
|
Weighted average shares — diluted
|
|
64,775
|
|
|
67,984
|
|
|
72,547
|
|
|
76,092
|
|
|
79,136
|
|
|||||
Consolidated Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents, and short-term investments
|
|
$
|
1,016,928
|
|
|
$
|
882,395
|
|
|
$
|
774,342
|
|
|
$
|
645,379
|
|
|
$
|
542,143
|
|
Restricted cash (4)
|
|
1,224
|
|
|
1,151
|
|
|
1,149
|
|
|
798
|
|
|
860
|
|
|||||
Long-term investments
|
|
284,802
|
|
|
276,375
|
|
|
397,656
|
|
|
482,917
|
|
|
728,981
|
|
|||||
Total assets
|
|
2,480,800
|
|
|
2,306,323
|
|
|
2,312,290
|
|
|
2,184,950
|
|
|
2,230,554
|
|
|||||
Long-term liabilities
|
|
316,807
|
|
|
276,823
|
|
|
240,439
|
|
|
178,659
|
|
|
140,492
|
|
|||||
Total shareholders’ equity
|
|
1,229,392
|
|
|
1,185,262
|
|
|
1,316,728
|
|
|
1,369,310
|
|
|
1,538,712
|
|
(1)
|
Loss on facility sublease expense represents a charge related to the consolidation of certain subleases at our corporate headquarters in Seattle, Washington.
|
(2)
|
Litigation expense primarily represents a patent-related jury verdict and legal fees associated with the litigation.
|
(3)
|
Restructuring charges represent severance and other employee-related costs associated with a workforce reduction that took place in the fourth quarter of fiscal 2017.
|
(4)
|
Restricted cash represents escrow accounts established in connection with lease agreements for our facilities.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Revenues.
The majority of our revenues are derived from sales of our application delivery networking (ADN) products including our BIG-IP appliances and high end VIPRION chassis and related software modules and our software-only Virtual Editions; Local Traffic Manager (LTM), DNS Services (formerly Global Traffic Manager); Advanced Firewall Manager (AFM) and Policy Enforcement Manager (PEM), that leverage the unique performance characteristics of our hardware and software architecture; and products that incorporate acquired technology, including Application Security Manager (ASM) and Access Policy Manager (APM); signaling delivery controller products (SDC); and the WebSafe, MobileSafe, Secure Web Gateway and Silverline DDoS and Application security offerings which are sold to customers on a subscription basis. We also derive revenues from the sales of services including annual maintenance contracts, training and consulting services. We carefully monitor the sales mix of our revenues within each reporting period. We believe customer acceptance rates of our new products and feature enhancements are indicators of future trends. We also consider overall revenue concentration by customer and by geographic region as additional indicators of current and future trends.
|
•
|
Cost of revenues and gross margins.
We strive to control our cost of revenues and thereby maintain our gross margins. Significant items impacting cost of revenues are hardware costs paid to our contract manufacturers, third-party software license fees, amortization of developed technology and personnel and overhead expenses. Our margins have remained relatively stable; however, factors such as sales price, product and services mix, inventory obsolescence, returns, component price increases and warranty costs could significantly impact our gross margins from quarter to quarter and represent significant indicators we monitor on a regular basis.
|
•
|
Operating expenses.
Operating expenses are substantially driven by personnel and related overhead expenses. Existing headcount and future hiring plans are the predominant factors in analyzing and forecasting future operating expense trends. Other significant operating expenses that we monitor include marketing and promotions, travel, professional fees, computer costs related to the development of new products and provision of services, facilities and depreciation expenses.
|
•
|
Liquidity and cash flows.
Our financial condition remains strong with significant cash and investments and no long term debt. The increase in cash and investments for fiscal year
2017
was primarily due to cash provided by operating activities of
$740.3 million
, partially offset by cash used to repurchase outstanding common stock under our share repurchase program of
$600.1 million
and capital expenditures of
$38.7 million
. Going forward, we believe the primary driver of cash flows will be net income from operations. Capital expenditures for fiscal year
2017
were primarily related to the expansion of our facilities to support our operations worldwide as well as investments in information technology infrastructure and equipment purchases to support our core business activities. We will continue to evaluate possible acquisitions of, or investments in businesses, products, or technologies that we believe are strategic, which may require the use of cash.
|
•
|
Balance sheet.
We view cash, short-term and long-term investments, deferred revenue, accounts receivable balances and days sales outstanding as important indicators of our financial health. Deferred revenues continued to increase in fiscal
2017
due to growth in the amount of annual maintenance contracts purchased on new products and maintenance renewal contracts related to our existing product installation base. Our days sales outstanding for the fourth quarter of fiscal year
2017
was
49
.
|
•
|
Persuasive evidence of an arrangement exists. Evidence of an arrangement generally consists of a purchase order issued pursuant to the terms and conditions of a distributor, reseller or end user agreement.
|
•
|
Delivery has occurred. We use shipping or related documents, or written evidence of customer acceptance, when applicable, to verify delivery or completion of any performance terms.
|
•
|
The sales price is fixed or determinable. We assess whether the sales price is fixed or determinable based on payment terms associated with the transaction and whether the sales price is subject to refund or adjustment.
|
•
|
Collectability is reasonably assured. We assess collectability primarily based on the creditworthiness of the customer as determined by credit checks and related analysis, as well as the customer’s payment history.
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(in thousands, except percentages)
|
||||||||||
Net Revenues
|
|
|
|
|
|
|
||||||
Products
|
|
$
|
964,662
|
|
|
$
|
944,469
|
|
|
$
|
991,539
|
|
Services
|
|
1,125,379
|
|
|
1,050,565
|
|
|
928,284
|
|
|||
Total
|
|
$
|
2,090,041
|
|
|
$
|
1,995,034
|
|
|
$
|
1,919,823
|
|
Percentage of net revenues
|
|
|
|
|
|
|
||||||
Products
|
|
46.2
|
%
|
|
47.3
|
%
|
|
51.6
|
%
|
|||
Services
|
|
53.8
|
|
|
52.7
|
|
|
48.4
|
|
|||
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
Years Ended September 30,
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|||
Westcon Group, Inc.
2
|
|
17.7
|
%
|
|
18.7
|
%
|
|
17.6
|
%
|
Ingram Micro, Inc.
|
|
16.1
|
%
|
|
14.9
|
%
|
|
16.1
|
%
|
Tech Data
1
|
|
12.4
|
%
|
|
13.3
|
%
|
|
13.8
|
%
|
Arrow ECS
|
|
10.4
|
%
|
|
10.1
|
%
|
|
10.4
|
%
|
|
|
|
|
|
|
|
(1)
|
On February 27, 2017, Tech Data completed the acquisition of Avnet Technology Solutions. Revenues for the year ended September 30, 2017 represent combined revenues for Tech Data and Avnet while revenues for years ended September 30, 2016 and 2015 represent revenues from Avnet only.
|
(2)
|
On September 1, 2017, Synnex Corporation completed the acquisition of Westcon Americas.
|
|
|
September 30,
|
||||
|
|
2017
|
|
2016
|
||
Westcon Group, Inc.
|
|
—
|
%
|
|
18.0
|
%
|
Ingram Micro, Inc.
|
|
—
|
%
|
|
15.5
|
%
|
Synnex Corporation
1
|
|
13.6
|
%
|
|
—
|
%
|
Arrow ECS
|
|
11.5
|
%
|
|
—
|
%
|
|
|
|
|
|
(1)
|
On September 1, 2017, Synnex Corporation completed the acquisition of Westcon Americas.
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(in thousands, except percentages)
|
||||||||||
Cost of net revenues and Gross Margin
|
|
|
|
|
|
|
||||||
Products
|
|
$
|
176,032
|
|
|
$
|
166,624
|
|
|
$
|
174,225
|
|
Services
|
|
177,453
|
|
|
170,581
|
|
|
158,036
|
|
|||
Total
|
|
353,485
|
|
|
337,205
|
|
|
332,261
|
|
|||
Gross profit
|
|
$
|
1,736,556
|
|
|
$
|
1,657,829
|
|
|
$
|
1,587,562
|
|
Percentage of net revenues and Gross Margin (as a percentage of related net revenue)
|
|
|
|
|
|
|
||||||
Products
|
|
18.2
|
%
|
|
17.6
|
%
|
|
17.6
|
%
|
|||
Services
|
|
15.8
|
|
|
16.2
|
|
|
17.0
|
|
|||
Total
|
|
16.9
|
|
|
16.9
|
|
|
17.3
|
|
|||
Gross profit
|
|
83.1
|
%
|
|
83.1
|
%
|
|
82.7
|
%
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(in thousands, except percentages)
|
||||||||||
Operating expenses
|
|
|
|
|
|
|
||||||
Sales and marketing
|
|
$
|
652,239
|
|
|
$
|
628,743
|
|
|
$
|
602,540
|
|
Research and development
|
|
350,365
|
|
|
334,227
|
|
|
296,583
|
|
|||
General and administrative
|
|
156,887
|
|
|
138,431
|
|
|
135,540
|
|
|||
Litigation expense
|
|
391
|
|
|
9,051
|
|
|
—
|
|
|||
Restructuring charges
|
|
12,718
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
1,172,600
|
|
|
$
|
1,110,452
|
|
|
$
|
1,034,663
|
|
Operating expenses (as a percentage of net revenue)
|
|
|
|
|
|
|
||||||
Sales and marketing
|
|
31.2
|
%
|
|
31.5
|
%
|
|
31.4
|
%
|
|||
Research and development
|
|
16.8
|
|
|
16.8
|
|
|
15.4
|
|
|||
General and administrative
|
|
7.5
|
|
|
6.9
|
|
|
7.1
|
|
|||
Litigation expense
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|||
Restructuring charges
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
56.1
|
%
|
|
55.7
|
%
|
|
53.9
|
%
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(in thousands, except percentages)
|
||||||||||
Other income and income taxes
|
|
|
|
|
|
|
||||||
Income from operations
|
|
$
|
563,956
|
|
|
$
|
547,377
|
|
|
$
|
552,899
|
|
Other income, net
|
|
11,561
|
|
|
2,514
|
|
|
8,445
|
|
|||
Income before income taxes
|
|
575,517
|
|
|
549,891
|
|
|
561,344
|
|
|||
Provision for income taxes
|
|
154,756
|
|
|
184,036
|
|
|
196,330
|
|
|||
Net income
|
|
$
|
420,761
|
|
|
$
|
365,855
|
|
|
$
|
365,014
|
|
Other income and income taxes (as percentage of net revenue)
|
|
|
|
|
|
|
||||||
Income from operations
|
|
27.0
|
%
|
|
27.4
|
%
|
|
28.8
|
%
|
|||
Other income, net
|
|
0.5
|
|
|
0.1
|
|
|
0.4
|
|
|||
Income before income taxes
|
|
27.5
|
|
|
27.5
|
|
|
29.2
|
|
|||
Provision for income taxes
|
|
7.4
|
|
|
9.2
|
|
|
10.2
|
|
|||
Net income
|
|
20.1
|
%
|
|
18.3
|
%
|
|
19.0
|
%
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(in thousands)
|
||||||||||
Liquidity and Capital Resources
|
|
|
|
|
|
|
||||||
Cash and cash equivalents and investments
|
|
$
|
1,301,730
|
|
|
$
|
1,158,770
|
|
|
$
|
1,171,998
|
|
Cash provided by operating activities
|
|
740,281
|
|
|
711,535
|
|
|
684,541
|
|
|||
Cash (used in) provided by investing activities
|
|
(32,285
|
)
|
|
62,720
|
|
|
(10,699
|
)
|
|||
Cash used in financing activities
|
|
(546,032
|
)
|
|
(652,647
|
)
|
|
(556,902
|
)
|
|
|
Payment Obligations by Year
|
||||||||||||||||||||||||||
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
|
(in thousands)
|
||||||||||||||||||||||||||
Operating leases
|
|
$
|
27,713
|
|
|
$
|
24,864
|
|
|
$
|
40,892
|
|
|
$
|
38,764
|
|
|
$
|
37,250
|
|
|
$
|
298,605
|
|
|
$
|
468,088
|
|
Purchase obligations
|
|
20,274
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,274
|
|
|||||||
Total
|
|
$
|
47,987
|
|
|
$
|
24,864
|
|
|
$
|
40,892
|
|
|
$
|
38,764
|
|
|
$
|
37,250
|
|
|
$
|
298,605
|
|
|
$
|
488,362
|
|
Item 7A.
|
Quantitative and Qualitative Disclosure About Market Risk
|
|
|
Maturing in
|
||||||||||||||||||
|
|
Three Months
or Less
|
|
Three Months
to One Year
|
|
Greater Than
One Year
|
|
Total
|
|
Fair Value
|
||||||||||
|
|
(in thousands, except for percentages)
|
||||||||||||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Included in cash and cash equivalents
|
|
$
|
16,909
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,909
|
|
|
$
|
16,909
|
|
Weighted average interest rate
|
|
0.5
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Included in short-term investments
|
|
$
|
105,713
|
|
|
$
|
237,987
|
|
|
$
|
—
|
|
|
$
|
343,700
|
|
|
$
|
343,700
|
|
Weighted average interest rates
|
|
0.9
|
%
|
|
1.1
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Included in long-term investments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
284,802
|
|
|
$
|
284,802
|
|
|
$
|
284,802
|
|
Weighted average interest rate
|
|
—
|
|
|
—
|
|
|
1.4
|
%
|
|
—
|
|
|
—
|
|
|||||
September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Included in cash and cash equivalents
|
|
$
|
56,525
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
56,525
|
|
|
$
|
56,525
|
|
Weighted average interest rate
|
|
0.3
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Included in short-term investments
|
|
$
|
78,969
|
|
|
$
|
288,855
|
|
|
$
|
—
|
|
|
$
|
367,824
|
|
|
$
|
367,824
|
|
Weighted average interest rates
|
|
0.4
|
%
|
|
0.6
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Included in long-term investments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
276,375
|
|
|
$
|
276,375
|
|
|
$
|
276,375
|
|
Weighted average interest rate
|
|
—
|
|
|
—
|
|
|
1.0
|
%
|
|
—
|
|
|
—
|
|
|||||
September 30, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Included in cash and cash equivalents
|
|
$
|
60,144
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
60,144
|
|
|
$
|
60,144
|
|
Weighted average interest rate
|
|
0.1
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Included in short-term investments
|
|
$
|
74,744
|
|
|
$
|
309,138
|
|
|
$
|
—
|
|
|
$
|
383,882
|
|
|
$
|
383,882
|
|
Weighted average interest rates
|
|
0.5
|
%
|
|
0.5
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Included in long-term investments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
397,656
|
|
|
$
|
397,656
|
|
|
$
|
397,656
|
|
Weighted average interest rate
|
|
—
|
|
|
—
|
|
|
0.9
|
%
|
|
—
|
|
|
—
|
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
Page
|
Consolidated Financial Statements
|
|
|
|
September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
ASSETS
|
||||||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
673,228
|
|
|
$
|
514,571
|
|
Short-term investments
|
|
343,700
|
|
|
367,824
|
|
||
Accounts receivable, net of allowances of $1,815 and $2,062
|
|
291,924
|
|
|
268,175
|
|
||
Inventories
|
|
29,834
|
|
|
34,051
|
|
||
Deferred tax assets
|
|
53,084
|
|
|
51,601
|
|
||
Other current assets
|
|
67,538
|
|
|
52,579
|
|
||
Total current assets
|
|
1,459,308
|
|
|
1,288,801
|
|
||
Property and equipment, net
|
|
122,420
|
|
|
123,248
|
|
||
Long-term investments
|
|
284,802
|
|
|
276,375
|
|
||
Deferred tax assets
|
|
4,530
|
|
|
2,044
|
|
||
Goodwill
|
|
555,965
|
|
|
555,965
|
|
||
Other assets, net
|
|
53,775
|
|
|
59,890
|
|
||
Total assets
|
|
$
|
2,480,800
|
|
|
$
|
2,306,323
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current liabilities
|
|
|
|
|
||||
Accounts payable
|
|
$
|
50,760
|
|
|
$
|
34,117
|
|
Accrued liabilities
|
|
187,379
|
|
|
178,353
|
|
||
Deferred revenue
|
|
696,404
|
|
|
631,768
|
|
||
Deferred tax liabilities
|
|
58
|
|
|
—
|
|
||
Total current liabilities
|
|
934,601
|
|
|
844,238
|
|
||
Other long-term liabilities
|
|
44,589
|
|
|
34,138
|
|
||
Deferred revenue, long-term
|
|
267,902
|
|
|
238,473
|
|
||
Deferred tax liabilities
|
|
4,316
|
|
|
4,212
|
|
||
Total long-term liabilities
|
|
316,807
|
|
|
276,823
|
|
||
Commitments and contingencies (Note 7)
|
|
|
|
|
||||
Shareholders’ equity
|
|
|
|
|
||||
Preferred stock, no par value; 10,000 shares authorized, no shares outstanding
|
|
—
|
|
|
—
|
|
||
Common stock, no par value; 200,000 shares authorized, 62,594 and 65,315 shares issued and outstanding
|
|
17,627
|
|
|
13,191
|
|
||
Accumulated other comprehensive loss
|
|
(17,997
|
)
|
|
(13,194
|
)
|
||
Retained earnings
|
|
1,229,762
|
|
|
1,185,265
|
|
||
Total shareholders’ equity
|
|
1,229,392
|
|
|
1,185,262
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
2,480,800
|
|
|
$
|
2,306,323
|
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net revenues
|
|
|
|
|
|
|
||||||
Products
|
|
$
|
964,662
|
|
|
$
|
944,469
|
|
|
$
|
991,539
|
|
Services
|
|
1,125,379
|
|
|
1,050,565
|
|
|
928,284
|
|
|||
Total
|
|
2,090,041
|
|
|
1,995,034
|
|
|
1,919,823
|
|
|||
Cost of net revenues
|
|
|
|
|
|
|
||||||
Products
|
|
176,032
|
|
|
166,624
|
|
|
174,225
|
|
|||
Services
|
|
177,453
|
|
|
170,581
|
|
|
158,036
|
|
|||
Total
|
|
353,485
|
|
|
337,205
|
|
|
332,261
|
|
|||
Gross profit
|
|
1,736,556
|
|
|
1,657,829
|
|
|
1,587,562
|
|
|||
Operating expenses
|
|
|
|
|
|
|
||||||
Sales and marketing
|
|
652,239
|
|
|
628,743
|
|
|
602,540
|
|
|||
Research and development
|
|
350,365
|
|
|
334,227
|
|
|
296,583
|
|
|||
General and administrative
|
|
156,887
|
|
|
138,431
|
|
|
135,540
|
|
|||
Litigation expense
|
|
391
|
|
|
9,051
|
|
|
—
|
|
|||
Restructuring charges
|
|
12,718
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
1,172,600
|
|
|
1,110,452
|
|
|
1,034,663
|
|
|||
Income from operations
|
|
563,956
|
|
|
547,377
|
|
|
552,899
|
|
|||
Other income, net
|
|
11,561
|
|
|
2,514
|
|
|
8,445
|
|
|||
Income before income taxes
|
|
575,517
|
|
|
549,891
|
|
|
561,344
|
|
|||
Provision for income taxes
|
|
154,756
|
|
|
184,036
|
|
|
196,330
|
|
|||
Net income
|
|
$
|
420,761
|
|
|
$
|
365,855
|
|
|
$
|
365,014
|
|
Net income per share — basic
|
|
$
|
6.56
|
|
|
$
|
5.43
|
|
|
$
|
5.07
|
|
Weighted average shares — basic
|
|
64,173
|
|
|
67,433
|
|
|
71,944
|
|
|||
Net income per share — diluted
|
|
$
|
6.50
|
|
|
$
|
5.38
|
|
|
$
|
5.03
|
|
Weighted average shares — diluted
|
|
64,775
|
|
|
67,984
|
|
|
72,547
|
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
420,761
|
|
|
$
|
365,855
|
|
|
$
|
365,014
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
|
(3,671
|
)
|
|
2,067
|
|
|
(5,997
|
)
|
|||
Available-for-sale securities:
|
|
|
|
|
|
|
||||||
Unrealized (losses) gains on securities, net of taxes of $(493), $14, and $222 for the years ended September 30, 2017, 2016, and 2015, respectively
|
|
(822
|
)
|
|
23
|
|
|
379
|
|
|||
Reclassification adjustment for realized (gains) losses included in net income, net of taxes of $186, $(2), and $50 for the years ended September 30, 2017, 2016, and 2015, respectively
|
|
(310
|
)
|
|
4
|
|
|
(86
|
)
|
|||
Net change in unrealized (losses) gains on available-for-sale securities, net of tax
|
|
(1,132
|
)
|
|
27
|
|
|
293
|
|
|||
Total other comprehensive (loss) income
|
|
(4,803
|
)
|
|
2,094
|
|
|
(5,704
|
)
|
|||
Comprehensive income
|
|
$
|
415,958
|
|
|
$
|
367,949
|
|
|
$
|
359,310
|
|
|
|
Common Stock
|
|
Accumulated
Other
Comprehensive
Income/(Loss)
|
|
Retained
Earnings
|
|
Total
Shareholders’
Equity
|
|||||||||||
|
|
Shares
|
|
Amount
|
|
||||||||||||||
|
|
|
|||||||||||||||||
Balance, September 30, 2014
|
|
73,390
|
|
|
$
|
15,753
|
|
|
$
|
(9,584
|
)
|
|
$
|
1,363,141
|
|
|
$
|
1,369,310
|
|
Exercise of employee stock options
|
|
37
|
|
|
215
|
|
|
—
|
|
|
—
|
|
|
215
|
|
||||
Issuance of stock under employee stock purchase plan
|
|
411
|
|
|
40,224
|
|
|
—
|
|
|
—
|
|
|
40,224
|
|
||||
Issuance of restricted stock
|
|
1,232
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Repurchase of common stock
|
|
(4,932
|
)
|
|
(200,560
|
)
|
|
—
|
|
|
(406,298
|
)
|
|
(606,858
|
)
|
||||
Tax benefit from employee stock transactions
|
|
—
|
|
|
8,974
|
|
|
—
|
|
|
—
|
|
|
8,974
|
|
||||
Stock-based compensation
|
|
—
|
|
|
145,553
|
|
|
—
|
|
|
—
|
|
|
145,553
|
|
||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
365,014
|
|
|
365,014
|
|
||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
(5,704
|
)
|
|
—
|
|
|
(5,704
|
)
|
||||
Balance, September 30, 2015
|
|
70,138
|
|
|
$
|
10,159
|
|
|
$
|
(15,288
|
)
|
|
$
|
1,321,857
|
|
|
$
|
1,316,728
|
|
Exercise of employee stock options
|
|
19
|
|
|
179
|
|
|
—
|
|
|
—
|
|
|
179
|
|
||||
Issuance of stock under employee stock purchase plan
|
|
492
|
|
|
44,690
|
|
|
—
|
|
|
—
|
|
|
44,690
|
|
||||
Issuance of restricted stock
|
|
1,275
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Repurchase of common stock
|
|
(6,609
|
)
|
|
(197,677
|
)
|
|
—
|
|
|
(502,447
|
)
|
|
(700,124
|
)
|
||||
Tax loss from employee stock transactions
|
|
—
|
|
|
(920
|
)
|
|
—
|
|
|
—
|
|
|
(920
|
)
|
||||
Stock-based compensation
|
|
—
|
|
|
156,760
|
|
|
—
|
|
|
—
|
|
|
156,760
|
|
||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
365,855
|
|
|
365,855
|
|
||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
2,094
|
|
|
—
|
|
|
2,094
|
|
||||
Balance, September 30, 2016
|
|
65,315
|
|
|
$
|
13,191
|
|
|
$
|
(13,194
|
)
|
|
$
|
1,185,265
|
|
|
$
|
1,185,262
|
|
Exercise of employee stock options
|
|
9
|
|
|
201
|
|
|
—
|
|
|
—
|
|
|
201
|
|
||||
Issuance of stock under employee stock purchase plan
|
|
469
|
|
|
46,838
|
|
|
—
|
|
|
—
|
|
|
46,838
|
|
||||
Issuance of restricted stock
|
|
1,362
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Repurchase of common stock
|
|
(4,561
|
)
|
|
(223,826
|
)
|
|
—
|
|
|
(376,264
|
)
|
|
(600,090
|
)
|
||||
Tax benefit from employee stock transactions
|
|
—
|
|
|
5,897
|
|
|
—
|
|
|
—
|
|
|
5,897
|
|
||||
Stock-based compensation
|
|
—
|
|
|
175,326
|
|
|
—
|
|
|
—
|
|
|
175,326
|
|
||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
420,761
|
|
|
420,761
|
|
||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
(4,803
|
)
|
|
—
|
|
|
(4,803
|
)
|
||||
Balance, September 30, 2017
|
|
62,594
|
|
|
$
|
17,627
|
|
|
$
|
(17,997
|
)
|
|
$
|
1,229,762
|
|
|
$
|
1,229,392
|
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
||||||||||
Operating activities
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
420,761
|
|
|
$
|
365,855
|
|
|
$
|
365,014
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Realized (gain) loss on disposition of assets and investments
|
|
(439
|
)
|
|
693
|
|
|
282
|
|
|||
Stock-based compensation
|
|
175,326
|
|
|
156,760
|
|
|
145,553
|
|
|||
Provisions for doubtful accounts and sales returns
|
|
366
|
|
|
1,526
|
|
|
1,488
|
|
|||
Depreciation and amortization
|
|
61,148
|
|
|
56,776
|
|
|
52,583
|
|
|||
Deferred income taxes
|
|
(4,626
|
)
|
|
2,967
|
|
|
(12,571
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
(24,115
|
)
|
|
9,732
|
|
|
(38,680
|
)
|
|||
Inventories
|
|
4,218
|
|
|
(334
|
)
|
|
(9,246
|
)
|
|||
Other current assets
|
|
(14,890
|
)
|
|
(1,876
|
)
|
|
(6,533
|
)
|
|||
Other assets
|
|
(2,056
|
)
|
|
(712
|
)
|
|
569
|
|
|||
Accounts payable and accrued liabilities
|
|
30,524
|
|
|
33,217
|
|
|
39,521
|
|
|||
Deferred revenue
|
|
94,064
|
|
|
86,931
|
|
|
146,561
|
|
|||
Net cash provided by operating activities
|
|
740,281
|
|
|
711,535
|
|
|
684,541
|
|
|||
Investing activities
|
|
|
|
|
|
|
||||||
Purchases of investments
|
|
(446,838
|
)
|
|
(354,708
|
)
|
|
(609,875
|
)
|
|||
Maturities of investments
|
|
390,449
|
|
|
418,821
|
|
|
461,327
|
|
|||
Sales of investments
|
|
66,858
|
|
|
66,848
|
|
|
205,292
|
|
|||
Increase in restricted cash
|
|
(73
|
)
|
|
(3
|
)
|
|
(357
|
)
|
|||
Acquisition of intangible assets
|
|
(4,000
|
)
|
|
(4,750
|
)
|
|
(6,779
|
)
|
|||
Purchases of property and equipment
|
|
(38,681
|
)
|
|
(63,488
|
)
|
|
(60,307
|
)
|
|||
Net cash (used in) provided by investing activities
|
|
(32,285
|
)
|
|
62,720
|
|
|
(10,699
|
)
|
|||
Financing activities
|
|
|
|
|
|
|
||||||
Excess tax benefit from stock-based compensation
|
|
7,019
|
|
|
2,608
|
|
|
9,517
|
|
|||
Proceeds from the exercise of stock options and purchases of stock under employee stock purchase plan
|
|
47,039
|
|
|
44,869
|
|
|
40,439
|
|
|||
Repurchase of common stock
|
|
(600,090
|
)
|
|
(700,124
|
)
|
|
(606,858
|
)
|
|||
Net cash used in financing activities
|
|
(546,032
|
)
|
|
(652,647
|
)
|
|
(556,902
|
)
|
|||
Net increase in cash and cash equivalents
|
|
161,964
|
|
|
121,608
|
|
|
116,940
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
(3,307
|
)
|
|
2,503
|
|
|
(7,982
|
)
|
|||
Cash and cash equivalents, beginning of year
|
|
514,571
|
|
|
390,460
|
|
|
281,502
|
|
|||
Cash and cash equivalents, end of year
|
|
$
|
673,228
|
|
|
$
|
514,571
|
|
|
$
|
390,460
|
|
Supplemental information
|
|
|
|
|
|
|
||||||
Cash paid for taxes
|
|
$
|
162,944
|
|
|
$
|
164,362
|
|
|
$
|
189,235
|
|
|
|
September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Computer equipment
|
|
$
|
177,235
|
|
|
$
|
158,127
|
|
Office furniture and equipment
|
|
32,781
|
|
|
28,557
|
|
||
Leasehold improvements
|
|
88,410
|
|
|
83,712
|
|
||
|
|
298,426
|
|
|
270,396
|
|
||
Accumulated depreciation and amortization
|
|
(176,006
|
)
|
|
(147,148
|
)
|
||
|
|
$
|
122,420
|
|
|
$
|
123,248
|
|
•
|
Persuasive evidence of an arrangement exists. Evidence of an arrangement generally consists of a purchase order issued pursuant to the terms and conditions of a distributor, reseller or end user agreement.
|
•
|
Delivery has occurred. The Company uses shipping or related documents, or written evidence of customer acceptance, when applicable, to verify delivery or completion of any performance terms.
|
•
|
The sales price is fixed or determinable. The Company assesses whether the sales price is fixed or determinable based on payment terms associated with the transaction and whether the sales price is subject to refund or adjustment.
|
•
|
Collectability is reasonably assured. The Company assesses collectability primarily based on the creditworthiness of the customer as determined by credit checks and related analysis, as well as the Customer’s payment history.
|
|
|
Employee Stock Purchase Plan
Years Ended September 30, |
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|||
Risk-free interest rate
|
|
1.14
|
%
|
|
0.44
|
%
|
|
0.17
|
%
|
Expected dividend
|
|
—
|
|
|
—
|
|
|
—
|
|
Expected term
|
|
0.5 years
|
|
|
0.5 years
|
|
|
0.5 years
|
|
Expected volatility
|
|
22.03
|
%
|
|
29.97
|
%
|
|
24.44
|
%
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Numerator
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
420,761
|
|
|
$
|
365,855
|
|
|
$
|
365,014
|
|
Denominator
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding — basic
|
|
64,173
|
|
|
67,433
|
|
|
71,944
|
|
|||
Dilutive effect of common shares from stock options and restricted stock units
|
|
602
|
|
|
551
|
|
|
603
|
|
|||
Weighted average shares outstanding — diluted
|
|
64,775
|
|
|
67,984
|
|
|
72,547
|
|
|||
Basic net income per share
|
|
$
|
6.56
|
|
|
$
|
5.43
|
|
|
$
|
5.07
|
|
Diluted net income per share
|
|
$
|
6.50
|
|
|
$
|
5.38
|
|
|
$
|
5.03
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
|
Fair Value at
September 30,
2017
|
||||||||||||
|
|
Quoted Prices in
Active Markets for
Identical Securities
(Level 1)
|
|
Significant
Other Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|||||||||
Cash equivalents
|
|
$
|
13,967
|
|
|
$
|
3,192
|
|
|
$
|
—
|
|
|
$
|
17,159
|
|
Short-term investments
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities — corporate bonds and notes
|
|
—
|
|
|
172,493
|
|
|
—
|
|
|
172,493
|
|
||||
Available-for-sale securities — municipal bonds and notes
|
|
—
|
|
|
67,409
|
|
|
—
|
|
|
67,409
|
|
||||
Available-for-sale securities — U.S. government securities
|
|
—
|
|
|
72,930
|
|
|
—
|
|
|
72,930
|
|
||||
Available-for-sale securities — U.S. government agency securities
|
|
—
|
|
|
30,868
|
|
|
—
|
|
|
30,868
|
|
||||
Long-term investments
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities — corporate bonds and notes
|
|
—
|
|
|
191,782
|
|
|
—
|
|
|
191,782
|
|
||||
Available-for-sale securities — municipal bonds and notes
|
|
—
|
|
|
26,643
|
|
|
—
|
|
|
26,643
|
|
||||
Available-for-sale securities — U.S. government securities
|
|
—
|
|
|
29,374
|
|
|
—
|
|
|
29,374
|
|
||||
Available-for-sale securities — U.S. government agency securities
|
|
—
|
|
|
37,003
|
|
|
—
|
|
|
37,003
|
|
||||
Total
|
|
$
|
13,967
|
|
|
$
|
631,694
|
|
|
$
|
—
|
|
|
$
|
645,661
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
|
Fair Value at
September 30,
2016
|
||||||||||||
|
|
Quoted Prices in
Active Markets for
Identical Securities
(Level 1)
|
|
Significant
Other Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|||||||||
Cash equivalents
|
|
$
|
56,525
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
56,525
|
|
Short-term investments
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities — corporate bonds and notes
|
|
—
|
|
|
223,358
|
|
|
—
|
|
|
223,358
|
|
||||
Available-for-sale securities — municipal bonds and notes
|
|
—
|
|
|
53,621
|
|
|
—
|
|
|
53,621
|
|
||||
Available-for-sale securities — U.S. government securities
|
|
—
|
|
|
72,521
|
|
|
—
|
|
|
72,521
|
|
||||
Available-for-sale securities — U.S. government agency securities
|
|
—
|
|
|
18,324
|
|
|
—
|
|
|
18,324
|
|
||||
Long-term investments
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities — corporate bonds and notes
|
|
—
|
|
|
131,427
|
|
|
—
|
|
|
131,427
|
|
||||
Available-for-sale securities — municipal bonds and notes
|
|
—
|
|
|
27,050
|
|
|
—
|
|
|
27,050
|
|
||||
Available-for-sale securities — U.S. government securities
|
|
—
|
|
|
27,023
|
|
|
—
|
|
|
27,023
|
|
||||
Available-for-sale securities — U.S. government agency securities
|
|
—
|
|
|
90,875
|
|
|
—
|
|
|
90,875
|
|
||||
Total
|
|
$
|
56,525
|
|
|
$
|
644,199
|
|
|
$
|
—
|
|
|
$
|
700,724
|
|
September 30, 2017
|
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Corporate bonds and notes
|
|
$
|
172,560
|
|
|
$
|
25
|
|
|
$
|
(92
|
)
|
|
$
|
172,493
|
|
Municipal bonds and notes
|
|
67,382
|
|
|
36
|
|
|
(9
|
)
|
|
67,409
|
|
||||
U.S. government securities
|
|
72,991
|
|
|
—
|
|
|
(61
|
)
|
|
72,930
|
|
||||
U.S. government agency securities
|
|
30,954
|
|
|
—
|
|
|
(86
|
)
|
|
30,868
|
|
||||
|
|
$
|
343,887
|
|
|
$
|
61
|
|
|
$
|
(248
|
)
|
|
$
|
343,700
|
|
September 30, 2016
|
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Corporate bonds and notes
|
|
$
|
223,448
|
|
|
$
|
38
|
|
|
$
|
(128
|
)
|
|
$
|
223,358
|
|
Municipal bonds and notes
|
|
53,657
|
|
|
1
|
|
|
(37
|
)
|
|
53,621
|
|
||||
U.S. government securities
|
|
72,497
|
|
|
31
|
|
|
(7
|
)
|
|
72,521
|
|
||||
U.S. government agency securities
|
|
18,318
|
|
|
6
|
|
|
—
|
|
|
18,324
|
|
||||
|
|
$
|
367,920
|
|
|
$
|
76
|
|
|
$
|
(172
|
)
|
|
$
|
367,824
|
|
September 30, 2017
|
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Corporate bonds and notes
|
|
$
|
192,278
|
|
|
$
|
25
|
|
|
$
|
(521
|
)
|
|
$
|
191,782
|
|
Municipal bonds and notes
|
|
26,639
|
|
|
46
|
|
|
(42
|
)
|
|
26,643
|
|
||||
U.S. government securities
|
|
29,427
|
|
|
—
|
|
|
(53
|
)
|
|
29,374
|
|
||||
U.S. government agency securities
|
|
37,164
|
|
|
—
|
|
|
(161
|
)
|
|
37,003
|
|
||||
|
|
$
|
285,508
|
|
|
$
|
71
|
|
|
$
|
(777
|
)
|
|
$
|
284,802
|
|
September 30, 2016
|
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Corporate bonds and notes
|
|
$
|
131,273
|
|
|
$
|
249
|
|
|
$
|
(95
|
)
|
|
$
|
131,427
|
|
Municipal bonds and notes
|
|
27,017
|
|
|
46
|
|
|
(13
|
)
|
|
27,050
|
|
||||
U.S. government securities
|
|
26,989
|
|
|
36
|
|
|
(2
|
)
|
|
27,023
|
|
||||
U.S. government agency securities
|
|
90,877
|
|
|
52
|
|
|
(54
|
)
|
|
90,875
|
|
||||
|
|
$
|
276,156
|
|
|
$
|
383
|
|
|
$
|
(164
|
)
|
|
$
|
276,375
|
|
September 30, 2017
|
|
Cost or
Amortized
Cost
|
|
Fair Value
|
||||
One year or less
|
|
$
|
343,887
|
|
|
$
|
343,700
|
|
Over one year
|
|
285,508
|
|
|
284,802
|
|
||
|
|
$
|
629,395
|
|
|
$
|
628,502
|
|
|
|
Less Than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
September 30, 2017
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
||||||||||||
Corporate bonds and notes
|
|
$
|
262,852
|
|
|
$
|
(528
|
)
|
|
$
|
35,401
|
|
|
$
|
(85
|
)
|
|
$
|
298,253
|
|
|
$
|
(613
|
)
|
Municipal bonds and notes
|
|
30,256
|
|
|
(49
|
)
|
|
881
|
|
|
(2
|
)
|
|
31,137
|
|
|
(51
|
)
|
||||||
U.S. government securities
|
|
94,312
|
|
|
(105
|
)
|
|
7,992
|
|
|
(9
|
)
|
|
102,304
|
|
|
(114
|
)
|
||||||
U.S. government agency securities
|
|
36,121
|
|
|
(83
|
)
|
|
31,750
|
|
|
(164
|
)
|
|
67,871
|
|
|
(247
|
)
|
||||||
Total
|
|
$
|
423,541
|
|
|
$
|
(765
|
)
|
|
$
|
76,024
|
|
|
$
|
(260
|
)
|
|
$
|
499,565
|
|
|
$
|
(1,025
|
)
|
|
|
September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Acquired and developed technology and software development costs
|
|
$
|
25,085
|
|
|
$
|
33,924
|
|
Intangible assets
|
|
17,469
|
|
|
16,577
|
|
||
Restricted cash and deposits
|
|
11,221
|
|
|
9,389
|
|
||
|
|
$
|
53,775
|
|
|
$
|
59,890
|
|
|
|
2017
|
|
2016
|
||||||||||||||||||||
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
||||||||||||
Acquired and developed technology and software development costs
|
|
$
|
69,307
|
|
|
$
|
(44,222
|
)
|
|
$
|
25,085
|
|
|
$
|
103,031
|
|
|
$
|
(69,107
|
)
|
|
$
|
33,924
|
|
Customer relationships
|
|
8,242
|
|
|
(3,552
|
)
|
|
4,690
|
|
|
10,941
|
|
|
(5,427
|
)
|
|
5,514
|
|
||||||
Patents and trademarks
|
|
19,756
|
|
|
(7,159
|
)
|
|
12,597
|
|
|
15,433
|
|
|
(4,734
|
)
|
|
10,699
|
|
||||||
Trade names
|
|
973
|
|
|
(791
|
)
|
|
182
|
|
|
1,173
|
|
|
(809
|
)
|
|
364
|
|
||||||
Non-compete covenants
|
|
2,532
|
|
|
(2,532
|
)
|
|
—
|
|
|
2,732
|
|
|
(2,732
|
)
|
|
—
|
|
||||||
|
|
$
|
100,810
|
|
|
$
|
(58,256
|
)
|
|
$
|
42,554
|
|
|
$
|
133,310
|
|
|
$
|
(82,809
|
)
|
|
$
|
50,501
|
|
2018
|
$
|
11,080
|
|
|
2019
|
6,909
|
|
||
2020
|
6,415
|
|
||
2021
|
6,283
|
|
||
2022
|
5,076
|
|
||
|
$
|
35,763
|
|
|
|
September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Payroll and benefits
|
|
$
|
109,088
|
|
|
$
|
105,716
|
|
Sales and marketing
|
|
6,654
|
|
|
7,228
|
|
||
Restructuring
|
|
7,741
|
|
|
—
|
|
||
Income tax accruals
|
|
15,519
|
|
|
21,894
|
|
||
Other tax accruals
|
|
13,429
|
|
|
10,095
|
|
||
Other
|
|
34,948
|
|
|
33,420
|
|
||
|
|
$
|
187,379
|
|
|
$
|
178,353
|
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Income tax provision at statutory rate
|
|
$
|
201,431
|
|
|
$
|
192,462
|
|
|
$
|
196,470
|
|
State taxes, net of federal benefit
|
|
9,235
|
|
|
13,434
|
|
|
13,030
|
|
|||
Foreign operations
|
|
(40,606
|
)
|
|
(9,199
|
)
|
|
(1,386
|
)
|
|||
Research and development and other credits
|
|
(12,795
|
)
|
|
(18,368
|
)
|
|
(10,286
|
)
|
|||
Domestic manufacturing deduction
|
|
(15,802
|
)
|
|
(14,624
|
)
|
|
(18,236
|
)
|
|||
Stock-based and other compensation
|
|
12,688
|
|
|
17,137
|
|
|
15,462
|
|
|||
Other
|
|
605
|
|
|
3,194
|
|
|
1,276
|
|
|||
|
|
$
|
154,756
|
|
|
$
|
184,036
|
|
|
$
|
196,330
|
|
|
|
Years Ended September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Deferred tax assets
|
|
|
|
|
||||
Net operating loss carry-forwards
|
|
$
|
11,235
|
|
|
$
|
9,162
|
|
Allowance for doubtful accounts
|
|
1,236
|
|
|
624
|
|
||
Accrued compensation and benefits
|
|
11,617
|
|
|
10,385
|
|
||
Inventories and related reserves
|
|
715
|
|
|
1,062
|
|
||
Stock-based compensation
|
|
11,857
|
|
|
11,387
|
|
||
Deferred revenue
|
|
43,371
|
|
|
40,763
|
|
||
Other accruals and reserves
|
|
17,924
|
|
|
18,492
|
|
||
Tax credit carryforwards
|
|
7,873
|
|
|
5,829
|
|
||
Depreciation
|
|
628
|
|
|
376
|
|
||
|
|
106,456
|
|
|
98,080
|
|
||
Valuation allowance
|
|
(18,189
|
)
|
|
(14,249
|
)
|
||
|
|
88,267
|
|
|
83,831
|
|
||
Deferred tax liabilities
|
|
|
|
|
||||
Purchased intangibles and other
|
|
(17,459
|
)
|
|
(19,308
|
)
|
||
Depreciation
|
|
(16,893
|
)
|
|
(14,440
|
)
|
||
Other accruals and reserves
|
|
(676
|
)
|
|
(652
|
)
|
||
|
|
(35,028
|
)
|
|
(34,400
|
)
|
||
|
|
|
|
|
||||
Net deferred tax assets
|
|
$
|
53,239
|
|
|
$
|
49,431
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Balance, beginning of period
|
|
$
|
13,687
|
|
|
$
|
9,562
|
|
|
$
|
6,394
|
|
Gross increases related to prior period tax positions
|
|
2,769
|
|
|
1,622
|
|
|
2,704
|
|
|||
Gross decreases related to prior period tax positions
|
|
—
|
|
|
(7
|
)
|
|
(642
|
)
|
|||
Gross increases related to current period tax positions
|
|
8,507
|
|
|
4,441
|
|
|
1,290
|
|
|||
Decreases relating to settlements with tax authorities
|
|
(240
|
)
|
|
(521
|
)
|
|
(116
|
)
|
|||
Reductions due to lapses of statute of limitations
|
|
(1,588
|
)
|
|
(1,410
|
)
|
|
(68
|
)
|
|||
Balance, end of period
|
|
$
|
23,135
|
|
|
$
|
13,687
|
|
|
$
|
9,562
|
|
|
|
Performance Stock Units
|
|
Restricted Stock Units
|
||||||||||
|
|
Outstanding
Performance
Stock Units
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Outstanding
Restricted
Stock Units
|
|
Weighted
Average
Grant Date
Fair Value
|
||||||
Balance, September 30, 2016
|
|
49,528
|
|
|
$
|
110.50
|
|
|
1,442,170
|
|
|
$
|
111.45
|
|
Units granted
|
|
51,988
|
|
|
100.95
|
|
|
1,373,799
|
|
|
135.61
|
|
||
Units vested
|
|
(48,423
|
)
|
|
128.99
|
|
|
(1,296,435
|
)
|
|
129.20
|
|
||
Units cancelled
|
|
(39,222
|
)
|
|
112.25
|
|
|
(172,103
|
)
|
|
122.65
|
|
||
Balance, September 30, 2017
|
|
13,871
|
|
|
$
|
121.44
|
|
|
1,347,431
|
|
|
$
|
127.89
|
|
|
|
Options Outstanding
|
|||||
|
|
Number of
Shares
|
|
Weighted
Average
Exercise Price
per Share
|
|||
Balance, September 30, 2016
|
|
12,574
|
|
|
$
|
21.84
|
|
Options granted
|
|
—
|
|
|
—
|
|
|
Options exercised
|
|
(9,281
|
)
|
|
21.66
|
|
|
Options cancelled
|
|
(2,317
|
)
|
|
30.42
|
|
|
Balance, September 30, 2017
|
|
976
|
|
|
$
|
3.18
|
|
|
|
Number of
Shares
|
|
Weighted
Average
Remaining
Contractual
Life (in Years)
|
|
Weighted
Average
Exercise
Price
per Share
|
|
Aggregate
Intrinsic
Value(1)
|
|||||
|
|
|
|
|
|
|
|
(In thousands)
|
|||||
Stock options outstanding
|
|
976
|
|
|
4.03
|
|
$
|
3.18
|
|
|
$
|
115
|
|
Exercisable
|
|
834
|
|
|
3.62
|
|
$
|
3.10
|
|
|
$
|
98
|
|
Vested and expected to vest
|
|
974
|
|
|
4.02
|
|
$
|
3.18
|
|
|
$
|
114
|
|
(1)
|
Aggregate intrinsic value represents the difference between the fair value of the Company’s common stock underlying these options at
September 30, 2017
and the related exercise prices.
|
|
|
Awards
Available for
Grant
|
|
Balance, September 30, 2016
|
3,195,747
|
|
|
Granted
|
(1,425,787
|
)
|
|
Cancelled
|
216,055
|
|
|
Additional shares reserved (terminated), net
|
1,095,270
|
|
|
Balance, September 30, 2017
|
3,081,285
|
|
|
|
Gross Lease
Payments
|
|
Sublease
Income
|
|
Net Lease
Payments
|
||||||
2018
|
|
27,713
|
|
|
2,828
|
|
|
24,885
|
|
|||
2019
|
|
24,864
|
|
|
—
|
|
|
24,864
|
|
|||
2020
|
|
40,892
|
|
|
—
|
|
|
40,892
|
|
|||
2021
|
|
38,764
|
|
|
—
|
|
|
38,764
|
|
|||
2022
|
|
37,250
|
|
|
—
|
|
|
37,250
|
|
|||
Thereafter
|
|
298,605
|
|
|
—
|
|
|
298,605
|
|
|||
|
|
$
|
468,088
|
|
|
$
|
2,828
|
|
|
$
|
465,260
|
|
|
|
Employee Severance, Benefits and Related Costs
|
||
Accrued expenses, October 1, 2016
|
|
$
|
—
|
|
Restructuring charges
|
|
12,718
|
|
|
Cash payments
|
|
(4,977
|
)
|
|
Non-cash items
|
|
—
|
|
|
Accrued expenses, September 30, 2017
|
|
$
|
7,741
|
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Americas:
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
1,075,222
|
|
|
$
|
1,019,054
|
|
|
$
|
1,004,601
|
|
Other
|
|
110,298
|
|
|
106,228
|
|
|
94,906
|
|
|||
Total Americas
|
|
1,185,520
|
|
|
1,125,282
|
|
|
1,099,507
|
|
|||
EMEA
|
|
506,571
|
|
|
487,966
|
|
|
464,078
|
|
|||
Japan
|
|
95,055
|
|
|
94,767
|
|
|
88,297
|
|
|||
Asia Pacific
|
|
302,895
|
|
|
287,019
|
|
|
267,941
|
|
|||
|
|
$
|
2,090,041
|
|
|
$
|
1,995,034
|
|
|
$
|
1,919,823
|
|
|
|
Years Ended September 30,
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|||
Westcon Group, Inc.
2
|
|
17.7
|
%
|
|
18.7
|
%
|
|
17.6
|
%
|
Ingram Micro, Inc.
|
|
16.1
|
%
|
|
14.9
|
%
|
|
16.1
|
%
|
Tech Data
1
|
|
12.4
|
%
|
|
13.3
|
%
|
|
13.8
|
%
|
Arrow ECS
|
|
10.4
|
%
|
|
10.1
|
%
|
|
10.4
|
%
|
|
|
|
|
|
|
|
(1)
|
On February 27, 2017, Tech Data completed the acquisition of Avnet Technology Solutions. Revenues for the year ended September 30, 2017 represent combined revenues for Tech Data and Avnet while revenues for years ended September 30, 2016 and 2015 represent revenues from Avnet only.
|
(2)
|
On September 1, 2017, Synnex Corporation completed the acquisition of Westcon Americas.
|
|
|
Three Months Ended
|
||||||||||||||||||||||||||||||
|
|
Sept. 30, 2017
|
|
June 30, 2017
|
|
March 31, 2017
|
|
Dec. 31, 2016
|
|
Sept. 30, 2016
|
|
June 30, 2016
|
|
March 31, 2016
|
|
Dec. 31, 2015
|
||||||||||||||||
|
|
(unaudited and in thousands, except per share data)
|
||||||||||||||||||||||||||||||
Net revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Products
|
|
$
|
248,990
|
|
|
$
|
235,109
|
|
|
$
|
241,080
|
|
|
$
|
239,483
|
|
|
$
|
252,984
|
|
|
$
|
231,366
|
|
|
$
|
225,441
|
|
|
$
|
234,678
|
|
Services
|
|
289,008
|
|
|
282,728
|
|
|
277,168
|
|
|
276,475
|
|
|
272,365
|
|
|
265,156
|
|
|
258,236
|
|
|
254,808
|
|
||||||||
Total
|
|
537,998
|
|
|
517,837
|
|
|
518,248
|
|
|
515,958
|
|
|
525,349
|
|
|
496,522
|
|
|
483,677
|
|
|
489,486
|
|
||||||||
Cost of net revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Products
|
|
46,641
|
|
|
43,787
|
|
|
43,928
|
|
|
41,676
|
|
|
43,591
|
|
|
40,474
|
|
|
39,908
|
|
|
42,651
|
|
||||||||
Services
|
|
43,900
|
|
|
45,983
|
|
|
43,984
|
|
|
43,586
|
|
|
41,358
|
|
|
43,869
|
|
|
42,322
|
|
|
43,032
|
|
||||||||
Total
|
|
90,541
|
|
|
89,770
|
|
|
87,912
|
|
|
85,262
|
|
|
84,949
|
|
|
84,343
|
|
|
82,230
|
|
|
85,683
|
|
||||||||
Gross profit
|
|
447,457
|
|
|
428,067
|
|
|
430,336
|
|
|
430,696
|
|
|
440,400
|
|
|
412,179
|
|
|
401,447
|
|
|
403,803
|
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Sales and marketing
|
|
162,068
|
|
|
160,952
|
|
|
164,705
|
|
|
164,514
|
|
|
158,198
|
|
|
156,620
|
|
|
156,469
|
|
|
157,456
|
|
||||||||
Research and development
|
|
85,479
|
|
|
88,602
|
|
|
89,234
|
|
|
87,050
|
|
|
83,746
|
|
|
83,042
|
|
|
86,294
|
|
|
81,145
|
|
||||||||
General and administrative
|
|
37,832
|
|
|
39,368
|
|
|
38,009
|
|
|
41,678
|
|
|
35,193
|
|
|
34,182
|
|
|
34,803
|
|
|
34,253
|
|
||||||||
Litigation expense
|
|
525
|
|
|
1
|
|
|
(135
|
)
|
|
—
|
|
|
630
|
|
|
(527
|
)
|
|
8,948
|
|
|
—
|
|
||||||||
Restructuring charges
|
|
12,718
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total operating expenses
|
|
298,622
|
|
|
288,923
|
|
|
291,813
|
|
|
293,242
|
|
|
277,767
|
|
|
273,317
|
|
|
286,514
|
|
|
272,854
|
|
||||||||
Income from operations
|
|
148,835
|
|
|
139,144
|
|
|
138,523
|
|
|
137,454
|
|
|
162,633
|
|
|
138,862
|
|
|
114,933
|
|
|
130,949
|
|
||||||||
Other income, net
|
|
5,027
|
|
|
2,589
|
|
|
1,302
|
|
|
2,643
|
|
|
268
|
|
|
978
|
|
|
133
|
|
|
1,135
|
|
||||||||
Income before income taxes
|
|
153,862
|
|
|
141,733
|
|
|
139,825
|
|
|
140,097
|
|
|
162,901
|
|
|
139,840
|
|
|
115,066
|
|
|
132,084
|
|
||||||||
Provision for income taxes
|
|
18,119
|
|
|
44,071
|
|
|
46,687
|
|
|
45,879
|
|
|
53,966
|
|
|
48,051
|
|
|
39,651
|
|
|
42,368
|
|
||||||||
Net income
|
|
$
|
135,743
|
|
|
$
|
97,662
|
|
|
$
|
93,138
|
|
|
$
|
94,218
|
|
|
$
|
108,935
|
|
|
$
|
91,789
|
|
|
$
|
75,415
|
|
|
$
|
89,716
|
|
Net income per share — basic
|
|
$
|
2.15
|
|
|
$
|
1.53
|
|
|
$
|
1.44
|
|
|
$
|
1.45
|
|
|
$
|
1.66
|
|
|
$
|
1.37
|
|
|
$
|
1.12
|
|
|
$
|
1.29
|
|
Weighted average shares — basic
|
|
63,088
|
|
|
63,935
|
|
|
64,479
|
|
|
65,195
|
|
|
65,772
|
|
|
66,851
|
|
|
67,549
|
|
|
69,554
|
|
||||||||
Net income per share — diluted
|
|
$
|
2.14
|
|
|
$
|
1.52
|
|
|
$
|
1.43
|
|
|
$
|
1.44
|
|
|
$
|
1.64
|
|
|
$
|
1.37
|
|
|
$
|
1.11
|
|
|
$
|
1.28
|
|
Weighted average shares — diluted
|
|
63,446
|
|
|
64,361
|
|
|
65,028
|
|
|
65,645
|
|
|
66,262
|
|
|
67,235
|
|
|
67,804
|
|
|
69,878
|
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accountant Fees and Services
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
(a)
|
Documents filed as part of this report are as follows:
|
1.
|
Consolidated Financial Statements:
|
2.
|
Financial Statement Schedule:
|
3.
|
Exhibits:
|
Item 16.
|
Form 10-K Summary
|
|
F5 N
ETWORKS
, I
NC
.
|
||
|
|
|
|
|
By:
|
|
/s/ FRANÇOIS LOCOH-DONOU
|
|
|
|
François Locoh-Donou
|
|
|
|
Chief Executive Officer and President
|
Signature
|
|
Title
|
|
Date
|
||
|
|
|
|
|
|
|
By:
|
|
/s/ FRANÇOIS LOCOH-DONOU
|
|
Chief Executive Officer, President, and
Director (principal executive officer)
|
|
November 3, 2017
|
|
|
François Locoh-Donou
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/
S
/ ANDY REINLAND
|
|
Executive Vice President, Chief Financial
Officer (principal financial officer and principal accounting officer)
|
|
November 3, 2017
|
|
|
Andy Reinland
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/
S
/ ALAN J. HIGGINSON
|
|
Director
|
|
November 3, 2017
|
|
|
Alan J. Higginson
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/
S
/ A. GARY AMES
|
|
Director
|
|
November 3, 2017
|
|
|
A. Gary Ames
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/
S
/ SANDRA BERGERON
|
|
Director
|
|
November 3, 2017
|
|
|
Sandra Bergeron
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/
S
/ DEBORAH L. BEVIER
|
|
Director
|
|
November 3, 2017
|
|
|
Deborah L. Bevier
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/
S
/ JONATHAN CHADWICK
|
|
Director
|
|
November 3, 2017
|
|
|
Jonathan Chadwick
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/
S
/ MICHAEL L. DREYER
|
|
Director
|
|
November 3, 2017
|
|
|
Michael L. Dreyer
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/
S
/ PETER KLEIN
|
|
Director
|
|
November 3, 2017
|
|
|
Peter Klein
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/
S
/ STEPHEN SMITH
|
|
Director
|
|
November 3, 2017
|
|
|
Stephen Smith
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/
S
/ JOHN MCADAM
|
|
Director
|
|
November 3, 2017
|
|
|
John McAdam
|
|
|
|
Exhibit
Number
|
|
|
Exhibit Description
|
|
2.1
|
|
|
—
|
|
3.1
|
|
|
—
|
|
3.2
|
|
|
—
|
|
4.1
|
|
|
—
|
|
10.1
|
|
|
—
|
|
10.2
|
|
|
—
|
|
10.3
|
|
|
—
|
|
10.4
|
|
|
—
|
|
10.5
|
|
|
—
|
|
10.6
|
|
|
—
|
|
10.7
|
|
|
—
|
|
10.8
|
|
|
—
|
|
10.9
|
|
|
—
|
|
10.10
|
|
|
—
|
|
10.11
|
|
|
—
|
|
10.12
|
|
|
—
|
|
10.13
|
|
|
—
|
|
10.14
|
|
|
—
|
|
10.15
|
|
|
—
|
|
10.16
|
|
|
—
|
|
10.17
|
|
|
—
|
|
10.18
|
|
*
|
—
|
|
10.19
|
|
|
—
|
|
10.20
|
|
|
—
|
|
10.21
|
|
|
—
|
|
10.22
|
|
|
—
|
|
21.1
|
|
*
|
—
|
|
23.1
|
|
*
|
—
|
|
31.1
|
|
*
|
—
|
|
31.2
|
|
*
|
—
|
|
32.1
|
|
*
|
—
|
|
101.INS
|
|
*
|
—
|
XBRL Instance Document
|
101.SCH
|
|
*
|
—
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
*
|
—
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
*
|
—
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
*
|
—
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
*
|
—
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith.
|
§
|
Indicates a management contract or compensatory plan or arrangement.
|
(1)
|
Incorporated by reference from Current Report on Form 8-K dated May 31, 2004 and filed with the SEC on June 2, 2004.
|
(2)
|
Incorporated by reference from Current Report on Form 8-K dated March 19, 2013 and filed with the SEC on March 19, 2013.
|
(3)
|
Incorporated by reference from Current Report on Form 8-K dated April 22, 2015 and filed with the SEC on April 22, 2015.
|
(4)
|
Incorporated by reference from Registration Statement on Form S-1, File No. 333-75817.
|
(5)
|
Incorporated by reference from Current Report on Form 8-K dated April 5, 2010 and filed with the SEC on April 8, 2010.
|
(6)
|
Incorporated by reference from Quarterly Report on Form 10-Q for the quarter ended June 30, 2001.
|
(7)
|
Incorporated by reference from Annual Report on Form 10-K for the year ended September 30, 2006.
|
(8)
|
Incorporated by reference from Current Report on Form 8-K dated October 31, 2006 and filed with the SEC on November 3, 2006.
|
(9)
|
Incorporated by reference from Current Report on Form 8-K dated May 3, 2017 and filed with the SEC on May 3, 2017.
|
(10)
|
Incorporated by reference from Appendix B of Proxy Statement for 2015 Annual Meeting of Stockholders and filed with the SEC on January 16, 2015.
|
(11)
|
Incorporated by reference from Current Report on Form 8-K dated April 29, 2009 and filed with the SEC on May 4, 2009.
|
(12)
|
Incorporated by reference from Registration Statement on Form S-8 File No. 333-179794.
|
(13)
|
Incorporated by reference from Registration Statement on Form S-8 File No. 333-191773.
|
(14)
|
Incorporated by reference from Registration Statement on Form S-8 File No. 333-217436.
|
(15)
|
Incorporated by reference from Registration Statement on Form S-8 File No. 333-196405.
|
(16)
|
Incorporated by reference from Annual Report on Form 10-K for the year ended September 30, 2014.
|
(17)
|
Incorporated by reference from Quarterly Report on Form 10-Q for the quarter ended March 31, 2015.
|
(18)
|
Incorporated by reference from Current Report on Form 8-K dated December 13, 2015 and filed with the SEC on January 6, 2016.
|
(19)
|
Incorporated by reference from Current Report on Form 8-K dated September 26, 2016 and filed with the SEC on September 30, 2016.
|
(20)
|
Incorporated by reference from Current Report on Form 8-K dated January 27, 2017 and filed with the SEC on January 30, 2017.
|
NAME __________________________________________
|
|
ID:
|
ADDRESS _______________________________________
|
|
|
CITY____________ , STATE______ ZIPCODE________
|
|
|
Vesting Schedule:
|
|
Name
|
Jurisdiction of Organization
|
F5 Networks de Argentina SRL
|
Argentina
|
F5 Networks Australia Pty Ltd.
|
Australia
|
F5 Networks Belgium BVBA
|
Belgium
|
FCINCO REPRESENTAÇÕES DO BRASIL LTDA
|
Brazil
|
Magnifire Networks, Ltd.
|
British Virgin Islands
|
F5 Networks Canada, Ltd.
|
Canada
|
F5 Network Chile Limitada
|
Chile
|
F5 Networks Colombia S.A.S.
|
Colombia
|
F5 Networks Zagreb LLC
|
Croatia
|
F5 Networks Finland Oy
|
Finland
|
F5 Networks SARL
|
France
|
F5 Networks GmbH
|
Germany
|
F5 Networks Hong Kong Ltd.
|
Hong Kong
|
F5 Networks India Pte Ltd.
|
India
|
F5 Networks, (Israel) Ltd.
|
Israel
|
Traffix Communication Systems, Ltd. (Israel)
|
Israel
|
Versafe, Ltd.
|
Israel
|
F5 Networks SRL
|
Italy
|
F5 Networks, Japan G.K.
|
Japan
|
F5 Networks Korea Ltd.
|
Korea
|
F5 Networks Malaysia Sdn. Bhd.
|
Malaysia
|
F5 Network Mexico S de RL de CV
|
Mexico
|
F5 Networks Benelux B.V.
|
Netherlands
|
F5 Networks New Zealand Ltd.
|
New Zealand
|
F5 Networks China
|
People's Republic of China
|
F5 Networks Poland sp z.o.o.
|
Poland
|
F5 Networks Singapore Pte Ltd.
|
Singapore
|
F5 Networks South Africa (Pty) Ltd.
|
South Africa
|
F5 Networks Iberia SL
|
Spain
|
F5 Networks Sweden Aktiebolag
|
Sweden
|
F5 Networks Taiwan Company Ltd.
|
Taiwan
|
F5 Networks Turkey Teknoloji Ltd. Sirketi
|
Turkey
|
F5 Networks Ltd.
|
United Kingdom
|
Acopia Networks, Inc.
|
Delaware, U.S.A.
|
Defense.net, Inc.
|
Delaware, U.S.A.
|
F5 Government Solutions LLC
|
Virginia, U.S.A.
|
F5 RO, Inc.
|
Washington, U.S.A.
|
LineRate Systems, Inc.
|
Delaware, U.S.A.
|
Magnifire Websystems LLC
|
Delaware, U.S.A.
|
Swan Labs Corporation
|
Delaware, U.S.A.
|
Traffix Systems, Inc.
|
Delaware, U.S.A.
|
Versafe, Inc.
|
Delaware, U.S.A.
|
/s/ FRANÇOIS LOCOH-DONOU
|
François Locoh-Donou
Chief Executive Officer and President
|
/s/ ANDY REINLAND
|
Andy Reinland
Executive Vice President, Chief Financial Officer
(principal financial officer and principal accounting officer)
|
/s/ FRANÇOIS LOCOH-DONOU
|
François Locoh-Donou
Chief Executive Officer and President
|
|
/s/ ANDY REINLAND
|
Andy Reinland
Executive Vice President, Chief Financial Officer
(principal financial officer and principal accounting officer)
|