Seattle’s F5 today reported that its sales crossed the $1 billion a year mark, the highlight of a strong earnings report that boosted the stock on what was otherwise a rough day for tech stocks.
Although overall tech spending is suffering from the uncertain economic conditions, F5 and a few other companies found a niche providing software, hardware and services that big corporations are using to modernize their networks and datacenters.
F5’s traffic management and security products have been selling especially well
to phone companies upgrading their networks to handle the flood of data traffic from
mobile devices and video services.
“If you’re using social networking, if you’re doing online banking or booking an airline ticket or sending a text or trading a stock, there’s a real high chance you’re using us,” John McAdam, company president and chief executive officer, said in an interview.
The company also disclosed that it has been hiring like crazy and plans to continue adding jobs.
It hired about 480 people in its fiscal year ending in September – bringing its headcount to 2,490 – and plans to hire at least 100 more by the end of this year. That includes 155 jobs added over the last year in Washington, where it employs 850 in Seattle and 150 in Spokane.
Shares of the networking hardware maker jumped about 8 percent in after-hours trading to around $96 after the earnings were disclosed. Earlier they’d fallen 5 percent to close during regular trading at $88.76.
(UPDATE: The stock’s really moving today – Wednesday morning: it’s up 13 percent to $100.30 at last check)
Sales were up 24 percent during its last quarter and 31 percent – to $1.15 billion – during its fiscal year ending Sept. 30. Earnings per share were 84 cents during the quarter and $2.96 for the year, up from 77 cents and $1.86 the previous year.
McAdam said there was strong demand for its new Viprion 2400 and Viprion
4400 chassis. The company also released a major update to its operating system during the quarter.
F5 was incorporated in 1996 and went public in 1999.
Although F5 is expecting seasonal slowdowns in the current quarter, the broad upgrade cycle taking place in corporate computing – with companies using virtualization to consolidate servers and shifting applications to internal and external “cloud” networks -is nowhere near over, McAdam said.
“I think there’s at least a five-year run rate on this type of architecture and it could easily be longer,” he said.
Meanwhile finding enough of the right people to continue expanding the company will be a challenge for F5, McAdam said, but he expects the company will be able to continuing growing in Seattle and its other locations around the world.
There’s also enough room at its headquarters along Elliott Way to accommodate
the growth for a few more years, after which it will probably need to find another location in the city, he said.
To celebrate the $1 billion milestone, there’s a company meeting Wednesday at which employees will get cake and t-shirts with a rocketship logo.
Reaching $2 billion in annual sales will take a little longer, but McAdam said next year’s growth will be a big step in that direction.
“We reckon we can do at least 20 percent,” he said.
The company prepared a graphic timeline of its history to mark the occasion: