|
|
☑
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Washington
|
|
91-1714307
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common stock, no par value
|
FFIV
|
NASDAQ Global Select Market
|
Large Accelerated Filer
|
|
☑
|
|
Accelerated Filer
|
|
☐
|
Non-accelerated Filer
|
|
☐ (Do not check if a smaller reporting company)
|
|
Smaller Reporting Company
|
|
☐
|
|
|
|
|
Emerging Growth Company
|
|
☐
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Page
|
|
|
|
|
Item 1.
|
Financial Statements
|
|
|
March 31,
2020 |
|
September 30,
2019 |
||||
ASSETS
|
|
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
572,888
|
|
|
$
|
599,219
|
|
Short-term investments
|
|
248,257
|
|
|
373,063
|
|
||
Accounts receivable, net of allowances of $3,305 and $3,259
|
|
338,655
|
|
|
322,029
|
|
||
Inventories
|
|
30,942
|
|
|
34,401
|
|
||
Other current assets
|
|
217,989
|
|
|
182,874
|
|
||
Total current assets
|
|
1,408,731
|
|
|
1,511,586
|
|
||
Property and equipment, net
|
|
232,006
|
|
|
223,426
|
|
||
Operating lease right-of-use assets
|
|
327,436
|
|
|
—
|
|
||
Long-term investments
|
|
204,969
|
|
|
358,402
|
|
||
Deferred tax assets
|
|
47,230
|
|
|
27,701
|
|
||
Goodwill
|
|
1,864,991
|
|
|
1,065,379
|
|
||
Other assets, net
|
|
355,614
|
|
|
203,781
|
|
||
Total assets
|
|
$
|
4,440,977
|
|
|
$
|
3,390,275
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Accounts payable
|
|
$
|
56,200
|
|
|
$
|
62,627
|
|
Accrued liabilities
|
|
286,902
|
|
|
235,869
|
|
||
Deferred revenue
|
|
889,629
|
|
|
807,030
|
|
||
Current portion of long-term debt
|
|
19,275
|
|
|
—
|
|
||
Total current liabilities
|
|
1,252,006
|
|
|
1,105,526
|
|
||
Deferred tax liabilities
|
|
221
|
|
|
313
|
|
||
Deferred revenue, long-term
|
|
391,475
|
|
|
391,086
|
|
||
Operating lease liabilities, long-term
|
|
357,645
|
|
|
—
|
|
||
Long-term debt
|
|
378,685
|
|
|
—
|
|
||
Other long-term liabilities
|
|
62,751
|
|
|
131,853
|
|
||
Total long-term liabilities
|
|
1,190,777
|
|
|
523,252
|
|
||
Commitments and contingencies (Note 9)
|
|
|
|
|
||||
Shareholders' equity
|
|
|
|
|
||||
Preferred stock, no par value; 10,000 shares authorized, no shares outstanding
|
|
—
|
|
|
—
|
|
||
Common stock, no par value; 200,000 shares authorized, 60,629 and 60,367 shares issued and outstanding
|
|
223,101
|
|
|
142,597
|
|
||
Accumulated other comprehensive loss
|
|
(22,903
|
)
|
|
(19,190
|
)
|
||
Retained earnings
|
|
1,797,996
|
|
|
1,638,090
|
|
||
Total shareholders' equity
|
|
1,998,194
|
|
|
1,761,497
|
|
||
Total liabilities and shareholders' equity
|
|
$
|
4,440,977
|
|
|
$
|
3,390,275
|
|
|
|
Three months ended
March 31, |
|
Six months ended
March 31, |
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net revenues
|
|
|
|
|
|
|
|
|
||||||||
Products
|
|
$
|
259,538
|
|
|
$
|
237,859
|
|
|
$
|
494,074
|
|
|
$
|
471,736
|
|
Services
|
|
323,911
|
|
|
307,036
|
|
|
658,680
|
|
|
616,929
|
|
||||
Total
|
|
583,449
|
|
|
544,895
|
|
|
1,152,754
|
|
|
1,088,665
|
|
||||
Cost of net revenues
|
|
|
|
|
|
|
|
|
||||||||
Products
|
|
53,086
|
|
|
43,547
|
|
|
95,204
|
|
|
85,957
|
|
||||
Services
|
|
48,152
|
|
|
44,631
|
|
|
94,676
|
|
|
88,935
|
|
||||
Total
|
|
101,238
|
|
|
88,178
|
|
|
189,880
|
|
|
174,892
|
|
||||
Gross profit
|
|
482,211
|
|
|
456,717
|
|
|
962,874
|
|
|
913,773
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Sales and marketing
|
|
215,472
|
|
|
170,954
|
|
|
410,991
|
|
|
335,213
|
|
||||
Research and development
|
|
109,028
|
|
|
96,314
|
|
|
205,033
|
|
|
188,352
|
|
||||
General and administrative
|
|
74,013
|
|
|
46,656
|
|
|
133,017
|
|
|
89,199
|
|
||||
Restructuring charges
|
|
—
|
|
|
—
|
|
|
7,800
|
|
|
—
|
|
||||
Total
|
|
398,513
|
|
|
313,924
|
|
|
756,841
|
|
|
612,764
|
|
||||
Income from operations
|
|
83,698
|
|
|
142,793
|
|
|
206,033
|
|
|
301,009
|
|
||||
Other (loss) income, net
|
|
(141
|
)
|
|
7,434
|
|
|
5,079
|
|
|
14,529
|
|
||||
Income before income taxes
|
|
83,557
|
|
|
150,227
|
|
|
211,112
|
|
|
315,538
|
|
||||
Provision for income taxes
|
|
22,178
|
|
|
34,140
|
|
|
51,206
|
|
|
68,546
|
|
||||
Net income
|
|
$
|
61,379
|
|
|
$
|
116,087
|
|
|
$
|
159,906
|
|
|
$
|
246,992
|
|
Net income per share — basic
|
|
$
|
1.01
|
|
|
$
|
1.94
|
|
|
$
|
2.63
|
|
|
$
|
4.12
|
|
Weighted average shares — basic
|
|
60,869
|
|
|
59,686
|
|
|
60,758
|
|
|
59,954
|
|
||||
Net income per share — diluted
|
|
$
|
1.00
|
|
|
$
|
1.93
|
|
|
$
|
2.62
|
|
|
$
|
4.09
|
|
Weighted average shares — diluted
|
|
61,084
|
|
|
60,029
|
|
|
61,017
|
|
|
60,374
|
|
|
|
Three months ended
March 31, |
|
Six months ended
March 31, |
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net income
|
|
$
|
61,379
|
|
|
$
|
116,087
|
|
|
$
|
159,906
|
|
|
$
|
246,992
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
|
(1,586
|
)
|
|
(197
|
)
|
|
(952
|
)
|
|
(56
|
)
|
||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized (losses) gains on securities, net of taxes of $(368) and $679 for the three months ended March 31, 2020 and 2019, respectively, and $(344) and $743 for the six months ended March 31, 2020 and 2019, respectively
|
|
(2,999
|
)
|
|
2,849
|
|
|
(2,831
|
)
|
|
2,893
|
|
||||
Reclassification adjustment for realized losses included in net income, net of taxes of $(17) and $0 for the three months ended March 31, 2020 and 2019, respectively, and $(18) and $0 for the six months ended March 31, 2020 and 2019, respectively
|
|
58
|
|
|
—
|
|
|
70
|
|
|
—
|
|
||||
Net change in unrealized (losses) gains on available-for-sale securities, net of tax
|
|
(2,941
|
)
|
|
2,849
|
|
|
(2,761
|
)
|
|
2,893
|
|
||||
Total other comprehensive (loss) income
|
|
(4,527
|
)
|
|
2,652
|
|
|
(3,713
|
)
|
|
2,837
|
|
||||
Comprehensive income
|
|
$
|
56,852
|
|
|
$
|
118,739
|
|
|
$
|
156,193
|
|
|
$
|
249,829
|
|
|
|
Common Stock
|
|
Accumulated
Other Comprehensive Loss |
|
Retained
Earnings |
|
Total
Shareholders’ Equity |
|||||||||||
|
|
Shares
|
|
Amount
|
|
||||||||||||||
|
|
(In thousands)
|
|||||||||||||||||
|
|
Three months ended March 31, 2019
|
|||||||||||||||||
Balances, December 31, 2018
|
|
60,058
|
|
|
$
|
13,277
|
|
|
$
|
(21,993
|
)
|
|
$
|
1,417,904
|
|
|
$
|
1,409,188
|
|
Issuance of restricted stock
|
|
254
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Repurchase of common stock
|
|
(617
|
)
|
|
(23,370
|
)
|
|
—
|
|
|
(76,643
|
)
|
|
(100,013
|
)
|
||||
Stock-based compensation
|
|
—
|
|
|
39,494
|
|
|
—
|
|
|
—
|
|
|
39,494
|
|
||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
116,087
|
|
|
116,087
|
|
||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
2,652
|
|
|
—
|
|
|
2,652
|
|
||||
Balances, March 31, 2019
|
|
59,695
|
|
|
$
|
29,401
|
|
|
$
|
(19,341
|
)
|
|
$
|
1,457,348
|
|
|
$
|
1,467,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Three months ended March 31, 2020
|
|||||||||||||||||
Balances, December 31, 2019
|
|
60,803
|
|
|
$
|
211,217
|
|
|
$
|
(18,376
|
)
|
|
$
|
1,736,617
|
|
|
$
|
1,929,458
|
|
Exercise of employee stock options
|
|
20
|
|
|
498
|
|
|
—
|
|
|
—
|
|
|
498
|
|
||||
Issuance of restricted stock
|
|
248
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Repurchase of common stock
|
|
(442
|
)
|
|
(50,009
|
)
|
|
—
|
|
|
—
|
|
|
(50,009
|
)
|
||||
Stock-based compensation
|
|
—
|
|
|
61,395
|
|
|
—
|
|
|
—
|
|
|
61,395
|
|
||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,379
|
|
|
61,379
|
|
||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
(4,527
|
)
|
|
—
|
|
|
(4,527
|
)
|
||||
Balances, March 31, 2020
|
|
60,629
|
|
|
$
|
223,101
|
|
|
$
|
(22,903
|
)
|
|
$
|
1,797,996
|
|
|
$
|
1,998,194
|
|
|
|
|
|||||||||||||||||
|
|
Six months ended March 31, 2019
|
|||||||||||||||||
Balances, September 30, 2018
|
|
60,215
|
|
|
$
|
20,427
|
|
|
$
|
(22,178
|
)
|
|
$
|
1,287,243
|
|
|
$
|
1,285,492
|
|
Cumulative effect adjustment from adoption of ASC 606
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36,048
|
|
|
36,048
|
|
||||
Issuance of stock under employee stock purchase plan
|
|
135
|
|
|
18,901
|
|
|
—
|
|
|
—
|
|
|
18,901
|
|
||||
Issuance of restricted stock
|
|
531
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Repurchase of common stock
|
|
(1,186
|
)
|
|
(88,110
|
)
|
|
—
|
|
|
(112,935
|
)
|
|
(201,045
|
)
|
||||
Stock-based compensation
|
|
—
|
|
|
78,183
|
|
|
—
|
|
|
—
|
|
|
78,183
|
|
||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
246,992
|
|
|
246,992
|
|
||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
2,837
|
|
|
—
|
|
|
2,837
|
|
||||
Balances, March 31, 2019
|
|
59,695
|
|
|
$
|
29,401
|
|
|
$
|
(19,341
|
)
|
|
$
|
1,457,348
|
|
|
$
|
1,467,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Six months ended March 31, 2020
|
|||||||||||||||||
Balances, September 30, 2019
|
|
60,367
|
|
|
$
|
142,597
|
|
|
$
|
(19,190
|
)
|
|
$
|
1,638,090
|
|
|
$
|
1,761,497
|
|
Exercise of employee stock options
|
|
31
|
|
|
789
|
|
|
—
|
|
|
—
|
|
|
789
|
|
||||
Issuance of stock under employee stock purchase plan
|
|
169
|
|
|
20,670
|
|
|
—
|
|
|
—
|
|
|
20,670
|
|
||||
Issuance of restricted stock
|
|
504
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Repurchase of common stock
|
|
(442
|
)
|
|
(50,009
|
)
|
|
—
|
|
|
—
|
|
|
(50,009
|
)
|
||||
Stock-based compensation
|
|
—
|
|
|
109,054
|
|
|
—
|
|
|
—
|
|
|
109,054
|
|
||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
159,906
|
|
|
159,906
|
|
||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
(3,713
|
)
|
|
—
|
|
|
(3,713
|
)
|
||||
Balances, March 31, 2020
|
|
60,629
|
|
|
$
|
223,101
|
|
|
$
|
(22,903
|
)
|
|
$
|
1,797,996
|
|
|
$
|
1,998,194
|
|
|
|
Six months ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
Operating activities
|
|
|
|
|
||||
Net income
|
|
$
|
159,906
|
|
|
$
|
246,992
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Stock-based compensation
|
|
98,447
|
|
|
78,183
|
|
||
Depreciation and amortization
|
|
43,112
|
|
|
28,246
|
|
||
Non-cash operating lease costs
|
|
18,970
|
|
|
—
|
|
||
Other
|
|
54
|
|
|
(43
|
)
|
||
Deferred income taxes
|
|
5,353
|
|
|
3,606
|
|
||
Changes in operating assets and liabilities (excluding effects of the acquisition of businesses):
|
|
|
|
|
||||
Accounts receivable
|
|
4,317
|
|
|
(24,419
|
)
|
||
Inventories
|
|
3,459
|
|
|
(2,895
|
)
|
||
Other current assets
|
|
(19,603
|
)
|
|
(35,735
|
)
|
||
Other assets
|
|
(4,298
|
)
|
|
2,683
|
|
||
Accounts payable and accrued liabilities
|
|
(1,936
|
)
|
|
16,746
|
|
||
Deferred revenue
|
|
43,987
|
|
|
78,046
|
|
||
Lease liabilities
|
|
(25,948
|
)
|
|
—
|
|
||
Net cash provided by operating activities
|
|
325,820
|
|
|
391,410
|
|
||
Investing activities
|
|
|
|
|
||||
Purchases of investments
|
|
(195,123
|
)
|
|
(211,087
|
)
|
||
Maturities of investments
|
|
237,892
|
|
|
351,600
|
|
||
Sales of investments
|
|
232,255
|
|
|
2,499
|
|
||
Acquisition of businesses, net of cash acquired
|
|
(955,574
|
)
|
|
—
|
|
||
Purchases of property and equipment
|
|
(35,463
|
)
|
|
(50,056
|
)
|
||
Net cash (used in) provided by investing activities
|
|
(716,013
|
)
|
|
92,956
|
|
||
Financing activities
|
|
|
|
|
||||
Proceeds from the exercise of stock options and purchases of stock under employee stock purchase plan
|
|
21,443
|
|
|
18,900
|
|
||
Repurchase of common stock
|
|
(50,009
|
)
|
|
(201,045
|
)
|
||
Proceeds from term debt agreement
|
|
400,000
|
|
|
—
|
|
||
Payments for debt issuance costs
|
|
(3,040
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
|
368,394
|
|
|
(182,145
|
)
|
||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
|
(21,799
|
)
|
|
302,221
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
|
(1,090
|
)
|
|
(265
|
)
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
|
602,254
|
|
|
425,894
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
|
$
|
579,365
|
|
|
$
|
727,850
|
|
Supplemental disclosures of cash flow information
|
|
|
|
|
||||
Cash paid for amounts included in the measurement of operating lease liabilities
|
|
$
|
30,067
|
|
|
$
|
—
|
|
Cash paid for interest on long-term debt
|
|
$
|
2,089
|
|
|
$
|
—
|
|
Supplemental disclosures of non-cash activities
|
|
|
|
|
||||
Right-of-use assets obtained in exchange for lease obligations
|
|
$
|
399,203
|
|
|
$
|
—
|
|
Capitalized leasehold improvements paid directly by landlord
|
|
$
|
—
|
|
|
$
|
28,814
|
|
Balance, September 30, 2019
|
|
$
|
59,446
|
|
Additional capitalized contract acquisition costs deferred
|
|
21,836
|
|
|
Amortization of capitalized contract acquisition costs
|
|
(16,972
|
)
|
|
Balance, March 31, 2020
|
|
$
|
64,310
|
|
Balance, September 30, 2019
|
|
$
|
132,492
|
|
Revenue recognized during period but not yet billed
|
|
13,998
|
|
|
Contract asset additions
|
|
38,060
|
|
|
Contract assets acquired through the purchase of Shape
|
|
6,045
|
|
|
Contract assets reclassified to accounts receivable
|
|
(33,211
|
)
|
|
Balance, March 31, 2020
|
|
$
|
157,384
|
|
Balance, September 30, 2019
|
|
$
|
1,198,116
|
|
Amounts billed but not recognized as revenues
|
|
587,983
|
|
|
Amounts acquired through the purchase of Shape
|
|
39,000
|
|
|
Revenues recognized related to the opening balance of deferred revenue
|
|
(543,995
|
)
|
|
Balance, March 31, 2020
|
|
$
|
1,281,104
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
|
|
||||||||||||
|
|
Quoted Prices in
Active Markets for
Identical Securities
(Level 1)
|
|
Significant
Other Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Fair Value at
March 31, 2020 |
||||||||
Cash equivalents
|
|
$
|
100,355
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
100,355
|
|
Short-term investments
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities — certificates of deposits
|
|
—
|
|
|
493
|
|
|
—
|
|
|
493
|
|
||||
Available-for-sale securities — corporate bonds and notes
|
|
—
|
|
|
201,811
|
|
|
—
|
|
|
201,811
|
|
||||
Available-for-sale securities — municipal bonds and notes
|
|
—
|
|
|
8,057
|
|
|
—
|
|
|
8,057
|
|
||||
Available-for-sale securities — U.S. government securities
|
|
—
|
|
|
27,232
|
|
|
—
|
|
|
27,232
|
|
||||
Available-for-sale securities — U.S. government agency securities
|
|
—
|
|
|
10,664
|
|
|
—
|
|
|
10,664
|
|
||||
Long-term investments
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities — corporate bonds and notes
|
|
—
|
|
|
180,625
|
|
|
—
|
|
|
180,625
|
|
||||
Available-for-sale securities — U.S. government agency securities
|
|
—
|
|
|
24,344
|
|
|
—
|
|
|
24,344
|
|
||||
Total
|
|
$
|
100,355
|
|
|
$
|
453,226
|
|
|
$
|
—
|
|
|
$
|
553,581
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
|
|
||||||||||||
|
|
Quoted Prices in
Active Markets for
Identical Securities
(Level 1)
|
|
Significant
Other Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Fair Value at
September 30,
2019
|
||||||||
Cash equivalents
|
|
$
|
140,238
|
|
|
$
|
153,404
|
|
|
$
|
—
|
|
|
$
|
293,642
|
|
Short-term investments
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities — certificates of deposits
|
|
—
|
|
|
249
|
|
|
—
|
|
|
249
|
|
||||
Available-for-sale securities — corporate bonds and notes
|
|
—
|
|
|
259,547
|
|
|
—
|
|
|
259,547
|
|
||||
Available-for-sale securities — municipal bonds and notes
|
|
—
|
|
|
12,129
|
|
|
—
|
|
|
12,129
|
|
||||
Available-for-sale securities — U.S. government securities
|
|
—
|
|
|
78,992
|
|
|
—
|
|
|
78,992
|
|
||||
Available-for-sale securities — U.S. government agency securities
|
|
—
|
|
|
22,146
|
|
|
—
|
|
|
22,146
|
|
||||
Long-term investments
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities — corporate bonds and notes
|
|
—
|
|
|
298,916
|
|
|
—
|
|
|
298,916
|
|
||||
Available-for-sale securities — municipal bonds and notes
|
|
—
|
|
|
2,524
|
|
|
—
|
|
|
2,524
|
|
||||
Available-for-sale securities — U.S. government securities
|
|
—
|
|
|
5,515
|
|
|
—
|
|
|
5,515
|
|
||||
Available-for-sale securities — U.S. government agency securities
|
|
—
|
|
|
51,447
|
|
|
—
|
|
|
51,447
|
|
||||
Total
|
|
$
|
140,238
|
|
|
$
|
884,869
|
|
|
$
|
—
|
|
|
$
|
1,025,107
|
|
March 31, 2020
|
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Certificates of deposits
|
|
$
|
493
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
493
|
|
Corporate bonds and notes
|
|
202,270
|
|
|
259
|
|
|
(718
|
)
|
|
201,811
|
|
||||
Municipal bonds and notes
|
|
8,056
|
|
|
10
|
|
|
(9
|
)
|
|
8,057
|
|
||||
U.S. government securities
|
|
27,007
|
|
|
225
|
|
|
—
|
|
|
27,232
|
|
||||
U.S. government agency securities
|
|
10,627
|
|
|
37
|
|
|
—
|
|
|
10,664
|
|
||||
|
|
$
|
248,453
|
|
|
$
|
531
|
|
|
$
|
(727
|
)
|
|
$
|
248,257
|
|
September 30, 2019
|
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Certificates of deposits
|
|
$
|
249
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
249
|
|
Corporate bonds and notes
|
|
259,242
|
|
|
402
|
|
|
(97
|
)
|
|
259,547
|
|
||||
Municipal bonds and notes
|
|
12,128
|
|
|
6
|
|
|
(5
|
)
|
|
12,129
|
|
||||
U.S. government securities
|
|
78,988
|
|
|
18
|
|
|
(14
|
)
|
|
78,992
|
|
||||
U.S. government agency securities
|
|
22,138
|
|
|
9
|
|
|
(1
|
)
|
|
22,146
|
|
||||
|
|
$
|
372,745
|
|
|
$
|
435
|
|
|
$
|
(117
|
)
|
|
$
|
373,063
|
|
March 31, 2020
|
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Corporate bonds and notes
|
|
$
|
183,265
|
|
|
$
|
259
|
|
|
$
|
(2,899
|
)
|
|
$
|
180,625
|
|
U.S. government agency securities
|
|
24,276
|
|
|
71
|
|
|
(3
|
)
|
|
24,344
|
|
||||
|
|
$
|
207,541
|
|
|
$
|
330
|
|
|
$
|
(2,902
|
)
|
|
$
|
204,969
|
|
September 30, 2019
|
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Corporate bonds and notes
|
|
$
|
298,888
|
|
|
$
|
469
|
|
|
$
|
(441
|
)
|
|
$
|
298,916
|
|
Municipal bonds and notes
|
|
2,528
|
|
|
2
|
|
|
(6
|
)
|
|
2,524
|
|
||||
U.S. government securities
|
|
5,515
|
|
|
3
|
|
|
(3
|
)
|
|
5,515
|
|
||||
U.S. government agency securities
|
|
51,463
|
|
|
5
|
|
|
(21
|
)
|
|
51,447
|
|
||||
|
|
$
|
358,394
|
|
|
$
|
479
|
|
|
$
|
(471
|
)
|
|
$
|
358,402
|
|
|
|
Less Than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
March 31, 2020
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
||||||||||||
Corporate bonds and notes
|
|
$
|
254,910
|
|
|
$
|
(3,477
|
)
|
|
$
|
11,732
|
|
|
$
|
(140
|
)
|
|
$
|
266,642
|
|
|
$
|
(3,617
|
)
|
Municipal bonds and notes
|
|
2,911
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
2,911
|
|
|
(9
|
)
|
||||||
U.S. government agency securities
|
|
1,498
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
1,498
|
|
|
(3
|
)
|
||||||
Total
|
|
$
|
259,319
|
|
|
$
|
(3,489
|
)
|
|
$
|
11,732
|
|
|
$
|
(140
|
)
|
|
$
|
271,051
|
|
|
$
|
(3,629
|
)
|
|
|
Less Than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
September 30, 2019
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
||||||||||||
Corporate bonds and notes
|
|
$
|
237,747
|
|
|
$
|
(434
|
)
|
|
$
|
109,613
|
|
|
$
|
(104
|
)
|
|
$
|
347,360
|
|
|
$
|
(538
|
)
|
Municipal bonds and notes
|
|
864
|
|
|
—
|
|
|
7,800
|
|
|
(11
|
)
|
|
8,664
|
|
|
(11
|
)
|
||||||
U.S. government securities
|
|
27,095
|
|
|
(12
|
)
|
|
9,991
|
|
|
(5
|
)
|
|
37,086
|
|
|
(17
|
)
|
||||||
U.S. government agency securities
|
|
30,946
|
|
|
(22
|
)
|
|
—
|
|
|
—
|
|
|
30,946
|
|
|
(22
|
)
|
||||||
Total
|
|
$
|
296,652
|
|
|
$
|
(468
|
)
|
|
$
|
127,404
|
|
|
$
|
(120
|
)
|
|
$
|
424,056
|
|
|
$
|
(588
|
)
|
|
|
|
Estimated
|
||
|
|
|
Useful Life
|
||
Assets acquired
|
|
|
|
||
Cash, cash equivalents, and restricted cash
|
$
|
53,934
|
|
|
|
Fair value of tangible assets:
|
|
|
|
||
Accounts receivable
|
21,077
|
|
|
|
|
Deferred tax assets
|
24,619
|
|
|
|
|
Operating lease right-of-use assets
|
29,644
|
|
|
|
|
Other tangible assets
|
22,571
|
|
|
|
|
Identifiable intangible assets:
|
|
|
|
||
Developed technologies
|
120,000
|
|
|
7 years
|
|
Customer relationships
|
21,000
|
|
|
4 years
|
|
Trade name
|
9,500
|
|
|
5 years
|
|
Goodwill
|
799,611
|
|
|
|
|
Total assets acquired
|
$
|
1,101,956
|
|
|
|
Liabilities assumed
|
|
|
|
||
Deferred revenue
|
$
|
(39,000
|
)
|
|
|
Operating lease liabilities
|
(30,773
|
)
|
|
|
|
Other assumed liabilities
|
(18,571
|
)
|
|
|
|
Total liabilities assumed
|
$
|
(88,344
|
)
|
|
|
Net assets acquired
|
$
|
1,013,612
|
|
|
|
|
|
|
Estimated
|
||
|
|
|
Useful Life
|
||
Assets acquired
|
|
|
|
||
Cash and cash equivalents
|
$
|
29,911
|
|
|
|
Fair value of tangible assets:
|
|
|
|
||
Other tangible assets
|
23,699
|
|
|
|
|
Identifiable intangible assets:
|
|
|
|
||
Developed technologies
|
62,500
|
|
|
7 years
|
|
Customer relationships
|
12,000
|
|
|
15 years
|
|
Trade name
|
14,500
|
|
|
7 years
|
|
Non-competition agreements
|
300
|
|
|
2 years
|
|
Goodwill
|
509,414
|
|
|
|
|
Total assets acquired
|
$
|
652,324
|
|
|
|
Liabilities assumed
|
|
|
|
||
Other assumed liabilities
|
$
|
(9,116
|
)
|
|
|
Total liabilities assumed
|
$
|
(9,116
|
)
|
|
|
Net assets acquired
|
$
|
643,208
|
|
|
|
|
|
March 31,
2020 |
|
September 30,
2019 |
||||
Cash and cash equivalents
|
|
$
|
572,888
|
|
|
$
|
599,219
|
|
Restricted cash included in other assets, net
|
|
6,477
|
|
|
3,035
|
|
||
Total cash, cash equivalents and restricted cash
|
|
$
|
579,365
|
|
|
$
|
602,254
|
|
|
|
March 31,
2020 |
|
September 30,
2019 |
||||
Finished goods
|
|
$
|
20,102
|
|
|
$
|
22,441
|
|
Raw materials
|
|
10,840
|
|
|
11,960
|
|
||
|
|
$
|
30,942
|
|
|
$
|
34,401
|
|
|
|
March 31,
2020 |
|
September 30,
2019 |
||||
Contract assets
|
|
$
|
101,049
|
|
|
$
|
79,407
|
|
Prepaid expenses
|
|
53,569
|
|
|
49,051
|
|
||
Capitalized contract acquisition costs
|
|
27,202
|
|
|
28,228
|
|
||
Other
|
|
36,169
|
|
|
26,188
|
|
||
|
|
$
|
217,989
|
|
|
$
|
182,874
|
|
|
|
March 31,
2020 |
|
September 30,
2019 |
||||
Intangible assets
|
|
$
|
246,182
|
|
|
$
|
108,903
|
|
Contract assets
|
|
56,335
|
|
|
53,085
|
|
||
Capitalized contract acquisition costs
|
|
37,108
|
|
|
31,218
|
|
||
Other
|
|
15,989
|
|
|
10,575
|
|
||
|
|
$
|
355,614
|
|
|
$
|
203,781
|
|
|
|
March 31,
2020 |
|
September 30,
2019 |
||||
Payroll and benefits
|
|
$
|
141,076
|
|
|
$
|
138,453
|
|
Operating lease liabilities, current
|
|
46,840
|
|
|
—
|
|
||
Income and other tax accruals
|
|
32,007
|
|
|
31,801
|
|
||
Other
|
|
66,979
|
|
|
65,615
|
|
||
|
|
$
|
286,902
|
|
|
$
|
235,869
|
|
|
|
March 31,
2020 |
|
September 30,
2019 |
||||
Income taxes payable
|
|
$
|
41,340
|
|
|
$
|
42,324
|
|
Deferred rent
|
|
—
|
|
|
66,103
|
|
||
Other
|
|
21,411
|
|
|
23,426
|
|
||
|
|
$
|
62,751
|
|
|
$
|
131,853
|
|
Fiscal Years Ending September 30:
|
|
Amount
|
||
2020 (remainder)
|
|
$
|
5,000
|
|
2021
|
|
20,000
|
|
|
2022
|
|
20,000
|
|
|
2023
|
|
355,000
|
|
|
Total
|
|
$
|
400,000
|
|
|
|
Three months ended
March 31, 2020 |
|
Six months ended
March 31, 2020 |
||||
Operating lease expense
|
|
$
|
12,975
|
|
|
$
|
24,293
|
|
Short-term lease expense
|
|
813
|
|
|
1,627
|
|
||
Variable lease expense
|
|
4,262
|
|
|
10,101
|
|
||
Total lease expense
|
|
$
|
18,050
|
|
|
$
|
36,021
|
|
|
|
March 31, 2020
|
||
Operating lease right-of-use assets, net
|
|
$
|
327,436
|
|
|
|
|
||
Operating lease liabilities, current1
|
|
46,840
|
|
|
Operating lease liabilities, long-term
|
|
357,645
|
|
|
Total operating lease liabilities
|
|
$
|
404,485
|
|
|
|
|
||
Weighted average remaining lease term (in years)
|
|
10.5
|
|
|
Weighted average discount rate
|
|
2.60
|
%
|
(1)
|
Current portion of operating lease liabilities is included in accrued liabilities on the Company's consolidated balance sheet.
|
Fiscal Years Ending September 30:
|
|
Operating Lease
Payments
|
||
2020 (remainder)
|
|
$
|
26,897
|
|
2021
|
|
59,217
|
|
|
2022
|
|
56,041
|
|
|
2023
|
|
43,029
|
|
|
2024
|
|
38,334
|
|
|
2025
|
|
32,119
|
|
|
Thereafter
|
|
215,923
|
|
|
Total lease payments
|
|
471,560
|
|
|
Less: imputed interest
|
|
(67,075
|
)
|
|
Total lease liabilities
|
|
$
|
404,485
|
|
Fiscal Year
|
|
Gross Lease
Payments
|
|
Sublease
Income
|
|
Net Lease
Payments
|
||||||
2020
|
|
$
|
54,046
|
|
|
$
|
683
|
|
|
$
|
53,363
|
|
2021
|
|
50,712
|
|
|
1,051
|
|
|
49,661
|
|
|||
2022
|
|
47,550
|
|
|
1,082
|
|
|
46,468
|
|
|||
2023
|
|
36,514
|
|
|
368
|
|
|
36,146
|
|
|||
2024
|
|
33,971
|
|
|
—
|
|
|
33,971
|
|
|||
Thereafter
|
|
242,826
|
|
|
—
|
|
|
242,826
|
|
|||
|
|
$
|
465,619
|
|
|
$
|
3,184
|
|
|
$
|
462,435
|
|
|
|
Three months ended
March 31, |
|
Six months ended
March 31, |
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Numerator
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
61,379
|
|
|
$
|
116,087
|
|
|
$
|
159,906
|
|
|
$
|
246,992
|
|
Denominator
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding — basic
|
|
60,869
|
|
|
59,686
|
|
|
60,758
|
|
|
59,954
|
|
||||
Dilutive effect of common shares from stock options and restricted stock units
|
|
215
|
|
|
343
|
|
|
259
|
|
|
420
|
|
||||
Weighted average shares outstanding — diluted
|
|
61,084
|
|
|
60,029
|
|
|
61,017
|
|
|
60,374
|
|
||||
Basic net income per share
|
|
$
|
1.01
|
|
|
$
|
1.94
|
|
|
$
|
2.63
|
|
|
$
|
4.12
|
|
Diluted net income per share
|
|
$
|
1.00
|
|
|
$
|
1.93
|
|
|
$
|
2.62
|
|
|
$
|
4.09
|
|
|
|
Three months ended
March 31, |
|
Six months ended
March 31, |
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Americas:
|
|
|
|
|
|
|
|
|
||||||||
United States
|
|
$
|
302,192
|
|
|
$
|
282,037
|
|
|
$
|
577,691
|
|
|
$
|
546,788
|
|
Other
|
|
23,094
|
|
|
25,375
|
|
|
49,157
|
|
|
52,268
|
|
||||
Total Americas
|
|
325,286
|
|
|
307,412
|
|
|
626,848
|
|
|
599,056
|
|
||||
EMEA
|
|
147,985
|
|
|
136,549
|
|
|
303,937
|
|
|
285,533
|
|
||||
Asia Pacific
|
|
110,178
|
|
|
100,934
|
|
|
221,969
|
|
|
204,076
|
|
||||
|
|
$
|
583,449
|
|
|
$
|
544,895
|
|
|
$
|
1,152,754
|
|
|
$
|
1,088,665
|
|
|
|
Three months ended
March 31, |
|
Six months ended
March 31, |
||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
Ingram Micro, Inc.
|
|
17.3
|
%
|
|
20.0
|
%
|
|
16.9
|
%
|
|
18.4
|
%
|
Westcon Group, Inc.
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.5
|
%
|
Arrow ECS
|
|
—
|
|
|
10.3
|
%
|
|
—
|
|
|
10.6
|
%
|
Tech Data
|
|
—
|
|
|
10.0
|
%
|
|
—
|
|
|
—
|
|
|
|
March 31,
2020 |
|
September 30,
2019 |
||||
United States
|
|
$
|
200,035
|
|
|
$
|
194,176
|
|
EMEA
|
|
16,244
|
|
|
13,451
|
|
||
Other countries
|
|
15,727
|
|
|
15,799
|
|
||
|
|
$
|
232,006
|
|
|
$
|
223,426
|
|
|
|
Employee Severance, Benefits and Related Costs
|
||
Accrued expenses, October 1, 2019
|
|
$
|
—
|
|
Restructuring charges
|
|
7,800
|
|
|
Cash payments
|
|
(6,956
|
)
|
|
Non-cash items
|
|
—
|
|
|
Accrued expenses, March 31, 2020
|
|
$
|
844
|
|
Item 2.
|
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 controller (ADC) products including our BIG-IP appliances and 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); NGINX Plus and NGINX Controller; Shape Defense and Enterprise Defense; and the 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. We are also monitoring the uncertainty related to the impacts that the COVID-19 pandemic has on the global economy and our customer base.
|
•
|
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, Silverline infrastructure, 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, warranty costs, and the uncertainty surrounding the COVID-19 pandemic and its potential impacts to our supply chain 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. The decrease in cash and investments for the first six months of fiscal year 2020 was primarily due to $955.6 million in cash paid for the acquisition of Shape in the second quarter of fiscal 2020, partially offset by cash provided by operating activities of $325.8 million. Going forward, we believe the primary driver of cash flows will be net income from operations. Capital expenditures of $35.5 million for the first six months of fiscal year 2020 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. Additionally, on January 31, 2020, we entered into a Revolving Credit Agreement (the "Revolving Credit Agreement") that provides for a senior unsecured revolving credit facility in an aggregate principal amount of $350.0 million (the "Revolving Credit Facility"). We have the option to increase commitments under the Revolving Credit Facility from time to time, subject to certain conditions, by up to $150.0 million. As of March 31, 2020, there were no outstanding borrowings under the Revolving Credit Facility, and we had available borrowing capacity of $350.0 million.
|
•
|
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 increased in the second quarter of fiscal year 2020 primarily 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 at the end of the second quarter of fiscal year 2020 was 52. Days sales outstanding is calculated by dividing ending accounts receivable by revenue per day for a given quarter.
|
|
|
Three months ended
March 31, |
|
Six months ended
March 31, |
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
(in thousands, except percentages)
|
||||||||||||||
Net Revenues
|
|
|
|
|
|
|
|
|
||||||||
Products
|
|
$
|
259,538
|
|
|
$
|
237,859
|
|
|
$
|
494,074
|
|
|
$
|
471,736
|
|
Services
|
|
323,911
|
|
|
307,036
|
|
|
658,680
|
|
|
616,929
|
|
||||
Total
|
|
$
|
583,449
|
|
|
$
|
544,895
|
|
|
$
|
1,152,754
|
|
|
$
|
1,088,665
|
|
Percentage of net revenues
|
|
|
|
|
|
|
|
|
||||||||
Products
|
|
44.5
|
%
|
|
43.7
|
%
|
|
42.9
|
%
|
|
43.3
|
%
|
||||
Services
|
|
55.5
|
|
|
56.3
|
|
|
57.1
|
|
|
56.7
|
|
||||
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Three months ended
March 31, |
|
Six months ended
March 31, |
||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
Ingram Micro, Inc.
|
17.3
|
%
|
|
20.0
|
%
|
|
16.9
|
%
|
|
18.4
|
%
|
Westcon Group, Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
10.5
|
%
|
Arrow ECS
|
—
|
|
|
10.3
|
%
|
|
—
|
|
|
10.6
|
%
|
Tech Data
|
—
|
|
|
10.0
|
%
|
|
—
|
|
|
—
|
|
|
March 31,
2020 |
|
September 30, 2019
|
||
Ingram Micro, Inc.
|
15.4
|
%
|
|
12.4
|
%
|
Arrow ECS
|
10.6
|
%
|
|
—
|
|
Carahsoft Technology
|
11.5
|
%
|
|
11.5
|
%
|
Synnex Corporation
|
11.2
|
%
|
|
12.9
|
%
|
|
|
Three months ended
March 31, |
|
Six months ended
March 31, |
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
(in thousands, except percentages)
|
||||||||||||||
Cost of net revenues and gross profit
|
|
|
|
|
|
|
|
|||||||||
Products
|
|
$
|
53,086
|
|
|
$
|
43,547
|
|
|
$
|
95,204
|
|
|
$
|
85,957
|
|
Services
|
|
48,152
|
|
|
44,631
|
|
|
94,676
|
|
|
88,935
|
|
||||
Total
|
|
101,238
|
|
|
88,178
|
|
|
189,880
|
|
|
174,892
|
|
||||
Gross profit
|
|
$
|
482,211
|
|
|
$
|
456,717
|
|
|
$
|
962,874
|
|
|
$
|
913,773
|
|
Percentage of net revenues and gross profit (as a percentage of related net revenue)
|
||||||||||||||||
Products
|
|
20.5
|
%
|
|
18.3
|
%
|
|
19.3
|
%
|
|
18.2
|
%
|
||||
Services
|
|
14.9
|
|
|
14.5
|
|
|
14.4
|
|
|
14.4
|
|
||||
Total
|
|
17.4
|
|
|
16.2
|
|
|
16.5
|
|
|
16.1
|
|
||||
Gross profit
|
|
82.6
|
%
|
|
83.8
|
%
|
|
83.5
|
%
|
|
83.9
|
%
|
|
|
Three months ended
March 31, |
|
Six months ended
March 31, |
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
(in thousands, except percentages)
|
||||||||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Sales and marketing
|
|
$
|
215,472
|
|
|
$
|
170,954
|
|
|
$
|
410,991
|
|
|
$
|
335,213
|
|
Research and development
|
|
109,028
|
|
|
96,314
|
|
|
205,033
|
|
|
188,352
|
|
||||
General and administrative
|
|
74,013
|
|
|
46,656
|
|
|
133,017
|
|
|
89,199
|
|
||||
Restructuring charges
|
|
—
|
|
|
—
|
|
|
7,800
|
|
|
—
|
|
||||
Total
|
|
$
|
398,513
|
|
|
$
|
313,924
|
|
|
$
|
756,841
|
|
|
$
|
612,764
|
|
Operating expenses (as a percentage of net revenue)
|
|
|
|
|
|
|
|
|
||||||||
Sales and marketing
|
|
36.9
|
%
|
|
31.4
|
%
|
|
35.7
|
%
|
|
30.8
|
%
|
||||
Research and development
|
|
18.7
|
|
|
17.7
|
|
|
17.8
|
|
|
17.3
|
|
||||
General and administrative
|
|
12.7
|
|
|
8.5
|
|
|
11.5
|
|
|
8.2
|
|
||||
Restructuring charges
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
||||
Total
|
|
68.3
|
%
|
|
57.6
|
%
|
|
65.7
|
%
|
|
56.3
|
%
|
|
|
Three months ended
March 31, |
|
Six months ended
March 31, |
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
|
(in thousands, except percentages)
|
||||||||||||||
Other income and income taxes
|
|
|
|
|
|
|
|
|
||||||||
Income from operations
|
|
$
|
83,698
|
|
|
$
|
142,793
|
|
|
$
|
206,033
|
|
|
$
|
301,009
|
|
Other (loss) income, net
|
|
(141
|
)
|
|
7,434
|
|
|
5,079
|
|
|
14,529
|
|
||||
Income before income taxes
|
|
83,557
|
|
|
150,227
|
|
|
211,112
|
|
|
315,538
|
|
||||
Provision for income taxes
|
|
22,178
|
|
|
34,140
|
|
|
51,206
|
|
|
68,546
|
|
||||
Net income
|
|
$
|
61,379
|
|
|
$
|
116,087
|
|
|
$
|
159,906
|
|
|
$
|
246,992
|
|
Other income and income taxes (as percentage of net revenue)
|
||||||||||||||||
Income from operations
|
|
14.3
|
%
|
|
26.2
|
%
|
|
17.9
|
%
|
|
27.7
|
%
|
||||
Other (loss) income, net
|
|
—
|
|
|
1.4
|
|
|
0.4
|
|
|
1.3
|
|
||||
Income before income taxes
|
|
14.3
|
|
|
27.6
|
|
|
18.3
|
|
|
29.0
|
|
||||
Provision for income taxes
|
|
3.8
|
|
|
6.3
|
|
|
4.4
|
|
|
6.3
|
|
||||
Net income
|
|
10.5
|
%
|
|
21.3
|
%
|
|
13.9
|
%
|
|
22.7
|
%
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
|
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
|
||||||
January 1, 2020 — January 31, 2020
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,372,527
|
|
February 1, 2020 — February 29, 2020
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,372,527
|
|
March 1, 2020 — March 31, 2020
|
|
441,851
|
|
|
$
|
113.18
|
|
|
441,851
|
|
|
$
|
1,322,518
|
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
Exhibit
Number
|
|
|
Exhibit Description
|
|
|
|
|
3.1
|
—
|
|
|
|
|
|
|
10.1
|
—
|
|
|
|
|
|
|
10.2
|
—
|
|
|
|
|
|
|
10.3*
|
—
|
|
|
|
|
|
|
10.4
|
—
|
|
|
|
|
|
|
10.5
|
—
|
|
|
|
|
|
|
10.6
|
—
|
|
|
|
|
|
|
31.1*
|
—
|
|
|
|
|
|
|
31.2*
|
—
|
|
|
|
|
|
|
32.1*
|
—
|
|
|
|
|
|
|
101.INS*
|
—
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|
|
|
|
101.SCH*
|
—
|
|
Inline XBRL Taxonomy Extension Schema Document
|
|
|
|
|
101.CAL*
|
—
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
101.DEF*
|
—
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
101.LAB*
|
—
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
101.PRE*
|
—
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
104*
|
—
|
|
Cover Page Interactive Data File (embedded within the Inline XBRL document)
|
§
|
Indicates a management contract or compensatory plan or arrangement.
|
*
|
Filed herewith.
|
(1)
|
Incorporated by reference to Exhibit 3.1 on Current Report on Form 8-K dated January 21, 2020 and filed with the SEC on January 23, 2020.
|
(2)
|
Incorporated by reference to Exhibit 99.1 on Form S-8 filed with the SEC on February 3, 2020.
|
(3)
|
Incorporated by reference to Exhibit 99.2 on Form S-8 filed with the SEC on February 3, 2020.
|
(4)
|
Incorporated by reference to Exhibit 10.1 on Current Report on Form 8-K dated March 12, 2020 and filed with the SEC on March 13, 2020.
|
(5)
|
Incorporated by reference to Exhibit 10.1 on Current Report on Form 8-K dated January 24, 2020 and filed with the SEC on January 24, 2020.
|
(6)
|
Incorporated by reference to Exhibit 10.2 on Quarterly Report on Form 10-Q for the quarter ended December 31, 2019.
|
|
F5 NETWORKS, INC.
|
||
|
|
|
|
|
By:
|
|
/s/ FRANCIS J. PELZER
|
|
|
|
Francis J. Pelzer
|
|
|
|
Executive Vice President,
|
|
|
|
Chief Financial Officer
|
|
|
|
(principal financial officer and principal accounting officer)
|
1)
|
I have reviewed this Quarterly Report on Form 10-Q of F5 Networks, Inc.;
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4)
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal controls over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting; and
|
5)
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 6, 2020
|
|
|
/s/ FRANÇOIS LOCOH-DONOU
|
|
François Locoh-Donou
|
|
Chief Executive Officer and President
|
1)
|
I have reviewed this Quarterly Report on Form 10-Q of F5 Networks, Inc.;
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4)
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal controls over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting; and
|
5)
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 6, 2020
|
|
|
/s/ FRANCIS J. PELZER
|
|
Francis J. Pelzer
|
|
Executive Vice President,
|
|
Chief Financial Officer
|
|
(principal financial officer and principal accounting officer)
|
Date:
|
May 6, 2020
|
|
|
/s/ FRANÇOIS LOCOH-DONOU
|
|
François Locoh-Donou
|
|
Chief Executive Officer and President
|
|
|
|
/s/ FRANCIS J. PELZER
|
|
Francis J. Pelzer
|
|
Executive Vice President and Chief Financial Officer
|
|
(principal financial officer and principal accounting officer)
|