Strong growth in North America led to a better-than-expected first quarter for F5 Networks, which saw its profit jump 37% and sales climb 16% compared to the year-ago quarter.
For the three months ended Dec. 31, F5 announced revenue of $191.2 million, compared with $165.6 million in last year's fiscal Q1. Net income came in at $29.3 million (36 cents per share), compared to $21.4 million (27 cents per share) a year ago.
"For the second quarter in a row, strong product sales continued to drive our top-line growth," said John McAdam, F5's president and CEO, in a prepared statement. "During the first quarter, F5's product revenue grew 9.5% compared to the prior quarter and 10.5% year-over-year. With the exception of Japan, results were strong across all regions and especially in North America, where overall revenue was up 12% from the prior quarter and 24% compared to the first quarter a year ago. Our business in EMEA continues to be quite strong, with a 20% increase in revenue from last quarter and a 15% increase from the first quarter of fiscal 2009."
Customers who bought or renewed service maintenance contracts also added to F5's sales gains, driving deferred revenue up 15.5% during the quarter to $211.4 million, according to McAdam.
In a positive sign for the tech sector, F5 grew headcount during the quarter. "The combination of strong revenue growth and stable gross margins enabled us to add nearly 100 employees in Q1," McAdam said.
Looking ahead, F5 is optimistic about its current quarter, which ends March 31. The vendor has set a revenue goal of $195 million to $200 million with an earnings target of 36 cents to 38 cents per share.
"While seasonal factors typically make the second quarter our most challenging quarter, customer buying patterns continue to stabilize and our near-term business outlook remains strong," McAdam said.