Bearish stock to watch: F5 Networks, Inc. (NASDAQ: FFIV)

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F5 Networks, Inc. (NASDAQ: FFIV) stock lost over 4.1% in the pre-market session of July 28th, 2020 (Source: Google finance) post the third quarter of 2020 update. The group’s GAAP net income fell to $70 million, or $1.14 per diluted share during the third quarter against the GAAP net income of $86 million, or $1.43 per diluted share in the prior corresponding period. Non-GAAP net income fell to $134 million, or $2.18 per diluted share, from $152 million, or $2.52 per diluted share, in the prior corresponding period. Gross profit slightly fell to $477.2 million during the period against $472.6 million in the prior corresponding period. Management estimates their GAAP and non-GAAP revenue to be in the range of $595 million to $615 million with non-GAAP earnings in the range of $2.30 to $2.42 per diluted share for the fourth quarter of fiscal year 2020 ending September 30, 2020.

Meanwhile, F5 Networks managed to deliver a GAAP revenue of $583 million or 4% rise for the third quarter of fiscal year 2020 driven by giant enterprise customers who are speeding up their digital transformations, enhancing their digital engagement, as well as strengthening their capacity and security on customer facing applications and on platforms that enable employee collaboration. The Demand for solutions to meet these immediate and long-term business requirements led to a 43% rise of their non-GAAP software revenue during the quarter. The overall product revenue rose to $253 million during the period as compared to $248.9 million in the prior corresponding period. Management believes that more Customers are deploying a combination of F5 solutions spanning their F5, NGINX and Shape multi-cloud application services portfolio during the ongoing uncertain times while having a distinct competitive advantage.

 

As per the balance sheet performance, total assets rose to $4,573.3 million during the quarter as compared to $3,390.2 million in the prior corresponding quarter. Total shareholders’ equity            rose to $2,153.9 million during the quarter as compared to $1,761.5 million in the prior corresponding quarter.

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