F5 (FFIV) 10-K risk factor changes: FY2022 vs FY2021

[removed: In addition to the challenges presented by new cloud computing models, we] [added: We] are dependent upon the overall economic health of our current and prospective customers and the continued growth and evolution of the Internet.

[Table of [removed: Contents](#i4633b04cec6f4f6683f24458423fe05b_7)][added: Contents](#i117435926e4b4273a51addec3ea8bf69_7)]

Cloud-based [added: and SaaS] computing trends present competitive and execution risks

We are devoting significant resources to develop and deploy our own competing cloud-based [added: and SaaS] software and services strategies.

In addition to software development costs, we are incurring costs to build and maintain infrastructure to support cloud-computing [removed: services.][added: and SaaS services, and the securitization of our customers’ data.]

These costs may reduce the [added: gross and] operating margins we have previously achieved.

- continuing to innovate and bring to market compelling cloud-based [added: and SaaS] services [added: through consumption models] that generate increasing traffic and market share;

- maintaining the utility, compatibility and performance of our software on the growing array of cloud [added: and SaaS] computing platforms and the enhanced interoperability requirements associated with orchestration of cloud computing environments; and

- implementing the infrastructure [added: and the securitization of our customers' data] to deliver our own cloud-based [added: and SaaS] services.

These new business models may reduce our revenues or [added: gross and] operating margins and could have a material adverse effect on our business, results of operations and financial condition.

Our success depends on our timely development of new [added: software and systems] products and features, market acceptance of new [added: software and systems] product offerings and proper management of the timing of the life cycle of our [added: software and systems] products

Our continued success depends on our ability to identify and develop new [added: software and systems] products and new features for our existing [removed: products] [added: software and systems products,] to meet the demands of these changes, and the acceptance of those products and features by our existing and target customers.

In addition, our [added: software and systems] products must interoperate with our end customers’ IT infrastructure, [added: including the expanding use of the cloud and hybrid cloud environments,] which often have different specifications, deploy products from multiple vendors, and utilize multiple protocol standards.

Our customers’ IT infrastructure is becoming more complex and we may be reliant on orchestration and interoperability with third party vendors on whom we are reliant for testing and support of new [added: software and systems] product versions and configurations.

If we are unable to identify, develop and deploy new [added: software and systems] products and new product features on a timely basis, our business and results of operations may be harmed.

The [added: development timetable to commercial release and availability to our customers is uncertain, and the] introduction of new products or product enhancements may shorten the life cycle of our existing products, or replace sales of some of our current products, thereby offsetting the benefit of even a successful product introduction, and may cause customers to defer purchasing our existing products in anticipation of the new products.

This could harm our operating results by decreasing [removed: sales,] [added: sales of our software and systems products, or] increasing our inventory levels of older [added: systems] products and exposing us to greater risk of product obsolescence.

We have also experienced, and may in the future experience, delays in developing and releasing new [added: software and systems] products and [added: related] product enhancements.

Also, in the development of our [added: systems] products, we have experienced delays in the [removed: prototyping of our products,] [added: prototyping,] which in turn has led to delays in product introductions.

Our success depends on sales and continued innovation of our application [removed: security and] delivery [added: and security] product lines

We expect to derive a significant portion of our net revenues from [removed: sales] [added: the sale] of our [removed: application security] [added: software] and [added: hardware application] delivery [added: and security] product lines in the future.

[added: Despite our security measures, and those of our] third-party vendors, our information technology and infrastructure has experienced breaches or disruptions and may be [removed: vulnerable in the future to breach, attacks or disruptions.]

Many of our business processes depend upon our IT systems, the systems and processes of third parties, [added: including cloud hosting service providers,] and on interfaces with the systems of third parties.

[removed: For example, our order entry system provides] information to the systems of our contract manufacturers, which enables them to build and ship our products.

In the first fiscal quarter of [removed: 2020,] [added: 2022,] we completed a restructuring program to match strategic and financial objectives and optimize resources for long term growth.

It is possible that the average selling prices of our products will decrease in the future in response to competitive pricing pressures, increased sales discounts, [added: including responses to inflationary pressures,] new product introductions by us or our competitors, [removed: as well as the shift to more software consumption based and “as a service based” models,] or other factors.

In particular, we currently subcontract manufacturing of our products to a single contract [removed: manufacturer with whom we do not have a long-term contract.][added: manufacturer.]

For example, customers frequently begin by evaluating our products on a limited basis and devote time and resources to testing our products before they decide whether or [added: not to purchase.]

In addition, two worldwide distributors of our products accounted for [removed: 30.3%] [added: 33.4%] of our total net revenue for fiscal year [removed: 2021.][added: 2022.]

Accordingly, a delay in an anticipated sale past the end of a particular quarter may [added: negatively impact our results of operations for that quarter, or in some cases, that fiscal year.]

In addition, we may be subject to examination of our income tax [added: returns by the U.S. Internal Revenue Service and other tax authorities.]

In either event, we could be required to seek licenses from third parties in order to continue offering our products, to re-engineer our products or to discontinue the sale of our products in the event re-engineering cannot [added: be accomplished on a timely or successful basis, any of which could adversely affect our business, operating results and financial condition.]

We filed a report on Form SD with the SEC regarding such [removed: matters on May 27, 2021.]

Our inability to successfully operate and integrate newly-acquired businesses appropriately, effectively and in a timely manner, or to retain key personnel of any acquired business, could have a material adverse effect on our ability to take [added: advantage of further growth in demand for integrated traffic management and security solutions and other advances in technology, as well as on our revenues, gross margins and expenses.]

In addition, cyber-attacks, acts of terrorism, or other [removed: geo-political] [added: geopolitical] unrest could cause disruptions in our business or the business of our supply chain, manufacturers, logistics providers, partners, or end-customers or the economy as a [removed: whole.]

[removed: While our analysis shows COVID-19 did not have a significant impact on our results of operations for the fiscal year ended September 30, 2021, the] [added: The] impacts of the global pandemic on our business and financial outlook are currently unknown.

- changes in the mix of our products and services, including increases in [added: SaaS and other] subscription-based offerings;

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

The current development cycle for our software and systems products varies and has become increasingly complex due to the sophistication and the addressing of our customers' needs.

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

vulnerable in the future to breach, attacks or disruptions.

For example, our order entry system provides

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

This could harm our ability to ship products or our ability to deliver cloud-based services, which could harm our financial results.

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

Global economic and geopolitical conditions may harm our industry, business and results of operations.

We operate globally and as a result, our business, revenues and profitability are impacted by global macroeconomic conditions.

The success of our activities is affected by general economic and market conditions, including, among others, inflation, interest rates, tax rates, economic uncertainty, political instability, warfare, changes in laws, trade barriers, and economic and trade sanctions.

The U.S. capital markets experienced and continue to experience extreme volatility and disruption following the global outbreak of COVID-19 in 2020 and the Russian invasion of Ukraine in 2022.

Furthermore, inflation rates in the U.S. have recently increased to levels not seen in decades.

Such economic volatility could adversely affect our business, financial condition, results of operations and cash flows, and future market disruptions could negatively impact us.

These unfavorable economic conditions could increase our operating costs, which could negatively impact our profitability.

Geopolitical destabilization and warfare have impacted and could continue to impact global currency exchange rates,

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

commodity prices, trade and movement of resources, which may adversely affect the buying power of our customers, our access to and cost of resources from our suppliers, and ability to operate or grow our business.

Additionally, we have offices and employees located in regions that historically have and may experience periods of political instability, warfare, changes in laws, trade barriers, and economic and trade sanctions.

Adverse conditions in these countries directly affect our operations.

As a result, our operations and employees could be disrupted and may not be able to function at full capacity, which could adversely affect our business, results of operations, financial condition, and cash flows.

Further, while our ability to do business has not been materially affected, the Russian invasion of Ukraine and the global restrictive measures that have been taken, and could be taken in the future, have created significant global economic uncertainty that could prolong and escalate tensions and expand the geopolitical conflict, which could have a lasting impact on regional and global economies, any of which could harm our business and operating results.

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

matters on May 31, 2022.

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

whole.

Within application delivery we compete against Citrix Systems and a number of other competitors that have a smaller market presence or limited feature set, such as Amazon Web Services, HAProxy, Kemp Technologies, Microsoft Azure, and VMware.

We see emerging demand to support modern, container-based applications with new capabilities including managing APIs, optimizing Kubernetes traffic management, and load balancing cloud-native and hybrid cloud applications.

For these use cases we compete against emerging players like Apogee and Kong.

In application security, we compete with companies that provide web application firewalls, bot detection and mitigation, carrier-grade firewall, carrier-grade NAT, SSL orchestration, access policy management, DDoS protection, and fraud defense.

Competitors include Akamai, Citrix Systems, Imperva, Juniper Networks, and Symantec/Blue Coat.

With the addition of Shape, additional fraud, abuse, and analytics solutions become indirect competitors, including Akamai, Cloudflare, Imperva (Distil Networks), Fastly (Signal Sciences) and PerimeterX.

Volterra’s use cases include multi-cloud networking, as well as security offered as SaaS, competing with the likes of Imperva, Fastly, Akamai, and Cloudflare.

The current development cycle for our products is on average 12-24 months.

Despite our security measures, and those of our

This would harm our ability to ship products, and our financial results may be harmed.

not to purchase.

negatively impact our results of operations for that quarter, or in some cases, that fiscal year.

returns by the U.S. Internal Revenue Service and other tax authorities.

be accomplished on a timely or successful basis, any of which could adversely affect our business, operating results and financial condition.

Sales outside of the Americas represented 44.0% and 44.0% of our net revenues for the fiscal years ended September 30, 2021 and 2020, respectively.

advantage of further growth in demand for integrated traffic management and security solutions and other advances in technology, as well as on our revenues, gross margins and expenses.

We face risks associated with having operations and employees located in Israel

We have offices and employees located in Israel.

As a result, political, economic, and military conditions in Israel directly affect our operations.

The future of peace efforts between Israel and its Arab neighbors remains uncertain.

There has been a significant increase in hostilities and political unrest in Israel in the past year.

The effects of these hostilities and violence on the Israeli economy and our operations in Israel are unclear, and we cannot predict the effect on us of further increases in these hostilities or future armed conflict, political instability or violence in the region.

In addition, many of our employees in Israel are obligated to perform annual reserve duty in the Israeli military and are subject to being called for active duty under emergency circumstances.

We cannot predict the full impact of these conditions on us in the future, particularly if emergency circumstances or an escalation in the political situation occurs.

If many of our employees in Israel are called for active duty for a significant period of time, our operations and our business could be disrupted and may not be able to function at full capacity.

Current or future tensions and conflicts in the Middle East could adversely affect our business, operating results, financial condition and cash flows.

We market and sell our products primarily through multiple indirect sales channels in the [removed: Americas (primarily the United States);] [added: Americas;] Europe, the Middle East, and Africa [removed: (EMEA);] [added: ("EMEA");] and the Asia Pacific region [removed: (APAC).][added: ("APAC").]

[removed: Approximately 52% of our fiscal year 2021] [added: We also derive] revenues [removed: were derived] from the sales of global services including annual maintenance contracts, training and consulting services.

We [removed: carefully] monitor the sales mix of our revenues within each reporting period.

We believe customer acceptance rates of our new [removed: products and] [added: products,] feature enhancements [added: and consumption models] are indicators of future trends.

We also consider overall revenue concentration by [removed: customer and by] geographic region as [added: an] additional [removed: indicators] [added: indicator] of current and future trends.

[removed: Our margins have remained relatively stable; however,] [added: In addition,] factors such as sales price, product and services mix, inventory obsolescence, returns, component price increases, warranty costs, [added: global supply chain constraints,] and the [added: remaining] uncertainty surrounding the COVID-19 pandemic [removed: and its potential impacts to our supply chain] could significantly impact our gross margins from quarter to [removed: quarter and represent significant indicators we monitor on a regular basis.][added: quarter.]

[removed: The] [added: In fiscal year 2021, the] decrease [removed: in] [added: to] cash and [added: cash equivalents, short-term] investments [removed: for fiscal] [added: and long-term investments from the prior] year [removed: 2021] was primarily due to $500.0 million of cash required for the repurchase of [removed: shares] [added: outstanding common stock] under our Accelerated Share Repurchase agreements and $411.3 million in cash paid for the acquisition of businesses, primarily Volterra in the second quarter of fiscal 2021.

The decrease in cash and investments for fiscal year [removed: 2021] [added: 2022] was partially offset by cash provided by operating activities of [removed: $645.2] [added: $442.6] million.

We will continue to evaluate possible acquisitions of, or investments in businesses, products, or technologies that we believe are strategic, which may [removed: require the use of cash.]

[Table of [removed: Contents](#i4633b04cec6f4f6683f24458423fe05b_7)][added: Contents](#i117435926e4b4273a51addec3ea8bf69_7)]

[added: 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").

As of September 30, [removed: 2021,] [added: 2022,] there were no outstanding borrowings under the Revolving Credit Facility, and we had available borrowing capacity of $350.0 million.

Deferred revenues continued to increase in fiscal [removed: 2021] [added: 2022] due to the growth of our subscriptions [removed: business, including the acquired deferred revenue associated with the Volterra acquisition.][added: business.]

Our days sales outstanding for the fourth quarter of fiscal year [removed: 2021] [added: 2022] was [removed: 45.][added: 60.]

[added: Revenue Recognition.] We sell products through distributors, resellers, and directly to end users.

We also offer several products by subscription, either through term-based license agreements or as [removed: a service through our cloud-based platform.][added: SaaS offerings.]

Revenue for term-based license agreements is recognized at a point in [removed: time,] [added: time] when we deliver the software license to the customer and the [added: subscription term has commenced.]

For our [removed: software-as-a-service] [added: SaaS] offerings, revenue is recognized ratably as the services are provided.

Perpetual or subscription software offerings that are deployed on a standalone basis, along with [removed: software sold as a service] [added: our SaaS offerings,] are considered [removed: Software] [added: software] revenue.

Further, this approach extends to our customers as we look for ways that we can support their [removed: operations during this crisis.][added: operations.]

Global supply chain constraints in the wake of the COVID-19 pandemic [removed: continue to decrease] [added: have reduced] our visibility into component availability and lead times [removed: are increasing] [added: and costs have increased] for [removed: critical] components necessary for [removed: the assembly of] our [removed: hardware products.][added: hardware-based solutions.]

In addition, we are conducting business with [removed: substantial] modifications to employee travel, employee work locations, and virtualization [removed: or cancellation] of certain sales and marketing events, among other modifications.

| | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Products | | | | | | $ | [removed: 1,247,084] [added: 1,317,117] | | | | | $ | [removed: 1,025,856] [added: 1,247,084] | | | | | $ | [removed: 985,591] [added: 1,025,856] | |

| Services | | | | | | [removed: 1,356,332] [added: 1,378,728] | | | | | | [removed: 1,324,966] [added: 1,356,332] | | | | | | [removed: 1,256,856] [added: 1,324,966] | | |

| Total | | | | | | $ | [removed: 2,603,416] [added: 2,695,845] | | | | | $ | [removed: 2,350,822] [added: 2,603,416] | | | | | $ | [removed: 2,242,447] [added: 2,350,822] | |

| Products | | | | | | [removed: 47.9] [added: 48.9] | | % | | | | [removed: 43.6] [added: 47.9] | | % | | | | [removed: 44.0] [added: 43.6] | | % |

| Services | | | | | | [removed: 52.1] [added: 51.1] | | | | | | [removed: 56.4] [added: 52.1] | | | | | | [removed: 56.0] [added: 56.4] | | |

*Net Revenues.* Total net revenues increased [removed: 10.7%] [added: 3.6%] in fiscal year [removed: 2021] [added: 2022] from fiscal year [removed: 2020,] [added: 2021,] compared to an increase of [removed: 4.8%] [added: 10.7%] in fiscal year [removed: 2020] [added: 2021] from the prior year.

Overall revenue growth for the year ended September 30, [removed: 2021] [added: 2022] was due to increases in both product and service revenue.

The product revenue increase was driven by software revenue increases, specifically from [removed: the addition of the software-as-a-service product offerings through the Shape acquisition and] our subscription-based offerings, which include software sold via our flexible consumption program or multi-year [removed: subscriptions.][added: subscriptions, and our SaaS product offerings.]

[removed: Revenues outside of the United States] [added: International revenues] represented [removed: 47.5%, 48.1%] [added: 44.8%, 47.5%] and [removed: 49.3%] [added: 48.1%] of net revenues in fiscal years [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019,] [added: 2020,] respectively.

*Net Product Revenues.* Net product revenues increased [removed: 21.6%] [added: 5.6%] in fiscal year [removed: 2021] [added: 2022] from fiscal year [removed: 2020,] [added: 2021,] compared to an increase of [removed: 4.1%] [added: 21.6%] in fiscal year [removed: 2020] [added: 2021] from the prior year.

The increase of $221.2 million in net product sales for fiscal year 2021 was [added: primarily] due to an increase in both software and systems revenue compared to the [removed: same period in the] prior year.

The increase of [removed: $40.3] [added: $70.0] million in net product sales for fiscal year [removed: 2020] [added: 2022] was [removed: primarily] due to [removed: an increase] [added: continued growth] in software [removed: sales compared to the prior year,] [added: revenue,] partially offset by a decrease in systems [removed: revenue.][added: revenue associated with a shortage of components to meet systems demand.]

| Systems revenue | | | | | | $ | [removed: 748,192] [added: 651,902] | | | | | $ | [removed: 668,313] [added: 748,192] | | | | | $ | [removed: 745,798] [added: 668,313] | |

| Software revenue | | | | | | [removed: 498,892] [added: 665,215] | | | | | | [removed: 357,543] [added: 498,892] | | | | | | [removed: 239,793] [added: 357,543] | | |

| Total net product revenue | | | | | | $ | [removed: 1,247,084] [added: 1,317,117] | | | | | $ | [removed: 1,025,856] [added: 1,247,084] | | | | | $ | [removed: 985,591] [added: 1,025,856] | |

| Systems revenue | | | | | | [removed: 60.0] [added: 49.5] | | % | | | | [removed: 65.1] [added: 60.0] | | % | | | | [removed: 75.7] [added: 65.1] | | % |

| Software revenue | | | | | | [removed: 40.0] [added: 50.5] | | | | | | [removed: 34.9] [added: 40.0] | | | | | | [removed: 24.3] [added: 34.9] | | |

The majority of our product revenues are derived from sales of our application security and delivery solutions including our BIG-IP software and systems, F5 NGINX software, and our Silverline offerings.

Our BIG-IP software solutions are sold both on a perpetual license and a subscription basis.

We sell F5 NGINX on a subscription basis.

Our Silverline solution is a managed services offering, also sold on a subscription basis.

During our fiscal year 2022, we launched F5 Distributed Cloud Services.

F5 Distributed Cloud Services provides security, multi-cloud networking, and edge-based computing solutions, encompassing software solutions from what were previously branded as our Shape, Volterra, and Silverline product offerings.

F5 Distributed Cloud Services are offered on a subscription basis, under a unified software-as-a-service ("SaaS") platform.

Near term, we expect challenging global supply chain conditions, particularly semiconductor constraints, will result in a shortfall in our ability to meet customer demand for our hardware-based solutions, thereby impacting revenues from systems sales.

The decrease in cash and investments for fiscal year 2022 was primarily due to $500.0 million of cash used for the repurchase of shares and $68.0 million in cash paid for the acquisition of Threat Stack in the first quarter of fiscal 2022.

require the use of cash.

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

We continue to monitor the ongoing uncertainty related to the global pandemic on our business and financial outlook.

We are continuing to undertake efforts to mitigate supply chain constraints, but pandemic-related impacts to component availability have lengthened systems shipment lead times and delayed our ability to fulfill some hardware orders.

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

This was partially offset by a decrease in systems revenue associated with a shortage of components required to meet systems demand.

| | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

| | | | | | | 2022 | | | | | | 2021 | | |

| | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

In addition, we experienced an increase in component prices, expedite fees and other sourcing-related costs in fiscal 2022.

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

| | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

Sales and marketing expense for fiscal year 2022 included a decrease of $14.0 million in commissions, partially offset by an increase in employee travel and customer outreach of $12.9 million, compared to the prior year.

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

Volterra.

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

The increase in the effective tax rate from fiscal year 2021 to 2022 is primarily due to a discrete impact recorded in fiscal year 2021 from filing the Company’s fiscal year 2020 U.S. federal income tax return.

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

The decrease was also driven by $33.6 million of capital expenditures 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.

The decrease was partially offset by cash provided by operating activities of $442.6 million.

Cash provided by operating activities for fiscal year 2022 decreased from the prior year primarily due to strong multi-year subscription sales in fiscal year 2022, which are generally sold on three-year terms.

Multi-year subscriptions are billed on an annual basis with the remainder recognized on the balance sheet as unbilled assets.

In addition, during fiscal year 2022, we had significant prepayments with our contract manufacturer associated with components for future hardware-based solution builds.

Investing activities include purchases, sales and maturities of available-for-sale securities, business acquisitions and capital expenditures.

Cash provided by investing activities for fiscal year 2022 was primarily the result of $260.4 million in maturities of investments and $120.6 million in sales of investments, partially offset by $68.0 million cash paid for the acquisition Threat Stack in the first quarter of fiscal 2022 and purchases of investments of $61.3 million.

Cash used in financing activities for fiscal year 2022 included $500.0 million to repurchase shares under our Share Repurchase program,

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

Approximately 48% of our fiscal year 2021 revenues were derived from sales of our application security and delivery 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 are also monitoring the uncertainty related to the impacts that the COVID-19 pandemic has on the global economy and our customer base.

Additionally, on January 31, 2020, we

Revenue Recognition. On October 1, 2018, we adopted the new revenue recognition standard by applying the modified retrospective approach to those contracts which were not completed as of October 1, 2018.

Results for reporting periods beginning after October 1, 2018 are presented under the new revenue recognition standard, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior periods.

subscription term has commenced.

On January 22, 2021, we completed our acquisition of Volterra, Inc. for a total purchase price of $427.2 million, of which approximately $59.5 million of finite-lived developed technology was recorded.

Management valued the developed technology using the relief-from-royalty method under the income approach.

Management applied significant judgment in estimating the fair value of the acquired developed technology, which involved the use of a significant assumption with respect to the royalty rate.

While our analysis shows COVID-19 did not have a significant impact on our results of operations for the fiscal year ended September 30, 2021, the impacts of the global pandemic on our business and financial outlook are currently unknown.

We are undertaking efforts to mitigate these supply chain constraints, but unavailability of components may impact our ability to complete assembly of our hardware products thereby limiting our ability to fulfill our sales to our customers.

In addition, our stand-alone security product revenue and our global services revenue associated with security continued to grow in fiscal 2021.

| Tech Data | | | | | | — | | | | | | — | | | | | | 10.2 | | % |

| Westcon Group, Inc. | | | | | | — | | | | | | — | | | | | | 10.0 | | % |

In fiscal year 2020, research and development expense increased 8.2%, compared to the prior year.

In fiscal year 2020, general and administrative expense increased 22.6% compared to the prior year.

In addition, personnel costs increased $18.5 million, compared to the prior year due to growth in general and administrative headcount, including employees from the acquisition of Shape.

The decrease in other (expense) income, net for fiscal year 2020 as compared to fiscal year 2019 was primarily due to a decrease of $13.1 million in interest income from our investments.

In addition, interest expense increased $7.5 million for fiscal year 2020 compared to the prior year as a result of $400.0 million of debt issued as part of our acquisition of Shape in January 2020.

The increase in the effective tax rate from fiscal year 2019 to 2020 is primarily due to an increase in the tax impact from stock based compensation and other non-deductible expenses.

In fiscal year 2020, the decrease to cash and cash equivalents, short-term investments and long-term investments from the prior year was primarily due to $955.6 million in cash paid for the acquisition of Shape in the second quarter of fiscal 2020 as well as $100.0 million of cash required for the repurchase of outstanding common stock under our share repurchase program in fiscal year 2020 and $59.9 million of capital expenditures related to the expansion of our facilities to support our operations worldwide.

The decrease was partially offset by cash provided by operating activities of $660.9 million and $400.0 million in cash proceeds from the issuance of debt in connection with our acquisition of Shape.

However, we anticipate our current cash, cash equivalents and investment balances, anticipated cash flows generated from operations, and available borrowing capacity on the Revolver Credit Facility will be sufficient to meet our liquidity needs.

Cash used in investing activities for fiscal year 2019 was primarily the result of $611.6 million in cash paid for the acquisition of NGINX, along with capital expenditures related to the build-out of our new corporate headquarters and the purchase of investments, partially offset by the maturity and sale of investments.

Cash provided by financing activities for fiscal year 2020 included $400.0 million in cash proceeds from a term

We will monitor the effect that the COVID-19 pandemic may have on our leverage ratio calculation but do not believe there will be a material impact to the interest payable on our borrowings under the Term Loan Facility.

We outsource the manufacturing of our pre-configured hardware platforms to contract manufacturers who assemble each product to our specifications.

Our agreement with our largest contract manufacturer allows them to procure component inventory on our behalf based upon a rolling production forecast.

We are contractually obligated to purchase the component inventory in accordance with the forecast, unless we give notice of order cancellation in advance of applicable lead times.

In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) (ASU 2018-15), which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software, and hosting arrangements that include an internal-use software license.

The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update.

The Company adopted this new standard prospectively on October 1, 2020.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which modifies the accounting for credit losses for most financial assets and requires the use of an expected loss model, replacing the currently used incurred loss method.

Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset.

The Company adopted this new standard on October 1, 2020 using the modified retrospective approach.

The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

Under the current business combinations guidance, such assets and liabilities are recognized by the acquirer at fair value on the acquisition date.

The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022.

Early adoption is permitted.

A hypothetical increase in interest rates of 100 basis points at September 30, [removed: 2021] [added: 2022] could result in a market value reduction for our portfolio of approximately [removed: $3.4] [added: $0.5] million.

*Foreign Currency Risk.* The majority of our [removed: sales] [added: sales, cost of net revenues,] and [added: operating] expenses are denominated in U.S. dollars and as a result, we have not experienced significant foreign currency transaction gains and losses to date.

While we [removed: have conducted some] [added: conduct] transactions in foreign currencies [removed: during the fiscal year ended 2021] and expect to continue to do so, we do not anticipate that foreign currency transaction gains or losses will be significant at our current level of operations.

[Table of [removed: Contents](#i4633b04cec6f4f6683f24458423fe05b_7)][added: Contents](#i117435926e4b4273a51addec3ea8bf69_7)]

*Inflation Risk.* We are actively monitoring the current inflationary environment, but we do not believe that inflation has had a material effect on our business, financial condition or results of operations.

If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases.

Our inability or failure to do so could harm our business, financial condition and results of operations.

If the current inflationary environment constrains our customers’ ability to procure goods and services from us, we may see customers reprioritize these investment decisions.

These macroeconomic conditions could harm our business, financial condition and results of operations.

We have not engaged in foreign currency hedging to date.

However, we may do so in the future.

[removed: In connection with our solutions, we offer] [added: We also sell high-performance systems and] a broad range of professional services, including consulting, training, installation, maintenance, and other technical support services.

Our business is organized into three geographic regions: Americas; Europe, the Middle East, and Africa [removed: (EMEA);] [added: (“EMEA”);] and the Asia Pacific region [removed: (APAC).][added: (“APAC”).]

Our revenue is comprised of [removed: services] [added: product] revenue and [removed: product] [added: services] revenue.

At the end of fiscal [removed: 2021,] [added: year 2022,] we had product backlog of approximately [removed: $124.9] [added: $231] million.

Backlog is primarily systems-based and represents orders confirmed with a purchase order for products to be fulfilled and [removed: invoiced, generally within 90 days] [added: invoiced] to customers with approved credit status.

We have [removed: 80] [added: 82] subsidiaries, branch offices, or representative offices worldwide.

Through a link on the Investor Relations section of our website, we make available the following filings as soon as reasonably possible after they are electronically filed with or furnished to the Securities and Exchange Commission [removed: (SEC):] [added: (“SEC”):] our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act.

[Table of [removed: Contents](#i4633b04cec6f4f6683f24458423fe05b_7)][added: Contents](#i117435926e4b4273a51addec3ea8bf69_7)]

[removed: F5’s portfolio of] [added: Our] multi-cloud application security and delivery [removed: technologies enables] [added: solutions reduce] our [added: customers’ operational complexity and costs, enabling our] customers to scale, [removed: secure] [added: secure,] and optimize both [removed: traditional] [added: legacy] and modern applications, [removed: making those amazing] [added: across any infrastructure and create extraordinary] digital experiences [removed: possible.][added: for their end users.]

Through our organic [removed: investments and the acquisitions of NGINX in May 2019, Shape Security in January 2020,] [added: innovation] and [removed: Volterra in January 2021,] [added: inorganic investments,] we have [removed: assembled] [added: created] the broadest portfolio of [added: multi-cloud] application security and delivery technologies in the [removed: market today.][added: market.]

[removed: We] [added: Over the last several years, we] have made it easier for our customers to procure, deploy, manage, and upgrade our [removed: technologies by introducing new consumption models and continuing to evolve our solutions’ capabilities.][added: technologies.]

[removed: Over] [added: In] the [removed: last ten years, enterprises] [added: previous decade, our customers] were focused on protecting their networks from attack.

[removed: Attacks] [added: Today, attackers] are [removed: now focused on the] [added: targeting] applications with threats like malware, bots, and API penetration.

F5’s portfolio of multi-cloud application [removed: security] [added: services] and [removed: delivery] [added: security] technologies are enabling customers to address the challenges of delivering differentiated digital experiences to their customers.

Simplifying [removed: traditional] [added: legacy] app delivery for multi-cloud environments

[added: BIG-IP Software and Systems.] Our BIG-IP family of [added: product] offerings [removed: provides] [added: provide] feature-rich, highly programmable and configurable application delivery solutions for [removed: traditional] [added: legacy] applications in enterprises and service providers.

Such [removed: traditional] [added: legacy] applications are the most ubiquitous application architecture today, and many organizations continue to rely exclusively on [removed: traditional] [added: legacy] applications to power the most mission-critical business applications, customer facing digital interfaces and internally used applications.

For most organizations, the priority around [removed: traditional] [added: legacy] applications is maximizing operational efficiency and minimizing the total cost of ownership.

BIG-IP has established itself as the leading application security and delivery technology for [removed: traditional] [added: legacy] applications, providing load balancing, and [removed: DNS (domain] [added: domain] name [removed: system)] [added: system] services.

[removed: Many customers] [added: Customers] also use the advanced security capabilities of BIG-IP, including [removed: WAF (web] [added: web] application [removed: firewall),] [added: firewall,] carrier-grade firewall and [removed: NAT (network] [added: network] address [removed: translation),] [added: translation,] identity-aware proxy, SSL-VPN, and SSL (securer sockets layer) offloading, [removed: that] [added: which] are available as [removed: tightly-integrated] [added: tightly integrated] modules or extensions.

BIG-IPs “best-of-suite” approach helps standardize and consolidate application [removed: delivery and] security [added: and delivery] functions into a single solution, [removed: and enables] automating [removed: the] functions [removed: to reduce] [added: and reducing] operational cost.

[added: - F5] BIG-IP [added: Software. BIG-IP] capabilities are available in [added: a] software-only [removed: Virtual Editions (VEs)] [added: virtual edition] that [removed: deploy] [added: deploys] on any standard hypervisor in private and public [removed: clouds and are available in many performance throughput options.][added: clouds.]

[removed: VEs are available] [added: BIG-IP software can be purchased] via [removed: utility pricing (via public cloud marketplaces),] short- and long-term subscriptions, [removed: and] perpetual [removed: licensing models.][added: license models, and through utility pricing via public cloud marketplaces.]

[added: -] F5 BIG-IQ Centralized [removed: Management provides] [added: Management. BIG-IQ simplifies, enhances management of, and reduces customer operational costs associated with BIG-IP deployments through] central management, analytics, and automation for BIG-IP instances.

[removed: F5’s physical] [added: - F5 BIG-IP Systems. BIG-IP] systems are designed to enhance the performance of our software by leveraging a combination of custom FPGA logic and off-the-shelf silicon, providing a balance of cost and flexibility.

Currently, we [removed: offer two types of physical configurations:] [added: offer:] BIG-IP iSeries [removed: appliances] and [added: our next-generation rSeries systems and our] chassis-based VIPRION and [added: next-generation] VELOS systems.

[removed: To better address] [added: The F5 NGINX technology suite builds on] the [removed: needs of digitally transforming] [added: open-source capabilities to offer] enterprises [removed: that have] a [removed: mix of traditional, three-tier architectures and cloud-first microservices architectures, our NGINX technologies offer] lightweight, agile ADC and API management software [added: solution] for container-built applications, CI/CD workflows, and microservices.

[removed: -] [added: F5] NGINX [removed: Plus, an all-in-one] [added: Plus is our all-in-one, high performance] load balancer, web server, content cache, and API gateway for modern [removed: applications.][added: applications sold in a subscription consumption model.]

[removed: -] [added: Our offering includes F5] NGINX [added: Management Suite which includes software tools that provide application and API management along with orchestration and analytics and F5 NGINX] Ingress Controller and [added: F5] NGINX Service [removed: Mesh,] [added: Mesh] which provide traffic management for Kubernetes clusters.

[added: Finally, F5] NGINX App Protect provides web application protection with self-service access and API-driven integration into automation and orchestration frameworks.

[removed: These services] [added: Silverline Managed Services. We] provide [added: fully managed application security for] enterprise and service provider customers with [removed: F5’s] [added: our] proven security technologies coupled with world-class security professionals.

[removed: BIG-IP] [added: Our product] offerings also [removed: comprise our] [added: encompass] service provider solutions that address the complex requirements for enabling fast, secure, reliable communications [removed: among the elements of] [added: on] existing infrastructures such as [removed: 4G/LTE] [added: 4G/LTE,] and [removed: evolving to newly designed] [added: emerging] cloud-native 5G [added: core] networks, network functions [removed: virtualization (NFV)] [added: virtualization, Kubernetes] environments, and edge computing.

In addition to the solutions described above, [removed: F5] [added: we] also [removed: offers] [added: offer] solutions for fixed and mobile service provider customers to enable fast, secure, reliable communications in their networks.

Our [removed: carrier-class network] [added: edge] firewall [added: and CGNAT (“Carrier Grade NAT”)] services are used to secure the Gi/N6 interface, secure signaling threats and IoT applications, and detect and mitigate DDoS attacks.

As F5 expands its reach and role into a broader set of multi-cloud solutions, the companies that we consider competitors [removed: evolves] [added: evolve] as well.

[removed: In addition to] [added: We compete against companies that offer] server load balancing, traffic management, and other functions normally associated with application delivery, [removed: our suite of solutions has expanded our addressable market into] [added: application] security, and policy [removed: management, where we compete with a number of companies focused on niche areas of application security.][added: management.]

Within application delivery, we compete against Citrix [removed: Systems] [added: Systems, VMware] and a number of other competitors that have a smaller market presence or limited feature set, such as Amazon Web Services, [added: Envoy, Google Cloud Platform,] HAProxy, [removed: Kemp Technologies, Microsoft Azure,] and [removed: VMware.][added: Microsoft Azure.]

For these use cases, we compete against emerging players like [removed: Apogee] [added: Apigee (Google Cloud)] and Kong.

Competitors include Akamai, Citrix Systems, [added: Cloudflare,] Imperva, Juniper Networks, [added: Radware,] and Symantec/Blue Coat.

[removed: Volterra’s] [added: F5 Distributed Cloud Services] use cases include multi-cloud networking, as well as security offered as SaaS, competing with the likes of [removed: Imperva, Fastly,] Akamai, [added: Cloudflare, Fastly,] and [removed: Cloudflare.][added: Imperva.]

F5 is a multi-cloud application services and security provider committed to bringing a better digital world to life.

F5 partners with the world’s largest, most advanced organizations to optimize and secure every application and Application Programming Interface (“API”) anywhere, including on-premises, in the cloud, in multi-cloud environments, or at the edge.

F5 enables organizations to provide exceptional, secure digital experiences for their customers and continuously stay ahead of threats.

Our application services and security solutions are available in a range of consumption models, including software solutions available in perpetual, subscription-based, and software-as-a-service (“SaaS”) consumption models.

In fiscal year 2022, product revenue of $1.3 billion represented 49% of our total revenue, and services revenue of $1.4 billion represented 51% of our total revenue.

We are actively managing a transformation to a more balanced revenue composition, with a greater percentage of our product revenue coming from our software and SaaS solutions.

In fiscal year 2022, product revenue from software sales was $665 million, representing 51% of product revenue and delivering 33% growth from the prior year.

Product revenue from systems sales was $652 million, representing 49% of product revenue and a decline of 13% from fiscal year 2021 as a result of global semiconductor shortages.

Nearly all organizations today find themselves at the convergence of two significant trends: the evolution of applications as the center of their businesses and their customers’ digital lives and the escalation of threats against those applications.

This presents a tremendous challenge as many companies now manage complex application portfolios comprising older legacy and newer modern technologies and infrastructures.

In our 2022 State of Application Strategy Report, 88 percent of organizations said they operate both legacy and modern application architectures, and 70 percent operate in multiple clouds.

These hybrid

environments create operational complexity and expand the threat surface area as companies are forced to deploy separate, and often inconsistent, security controls across different environments.

Over the past several years, F5 has transformed its business and significantly expanded its software and cloud offerings to deliver a broad portfolio of solutions to help customers address the complexity and risk in today’s hybrid IT environments.

Through BIG-IP, F5 NGINX, and F5 Distributed Cloud Services, F5 offers a range of integrated, machine learning-driven solutions that protect legacy and modern applications and APIs across data center, cloud, and edge locations.

We are leveraging near real-time collection of live application telemetry, machine learning and artificial intelligence, and toolchain automation to create adaptive applications capable of rapidly responding to changes in performance, availability, and security threats with little to no human interaction.

We are able to support our customers’ modern and legacy application security and delivery needs across any environment, with the flexibility of multiple deployment models including hardware, software, and SaaS offerings.

F5 is continuing to converge our application security and delivery capabilities on our recently launched F5 Distributed Cloud Services platform, unifying policy declaration, enabling broader telemetry, and driving significant automation.

Doing so will dramatically simplify application creation, deployment and management for our customers, reducing the time it takes to turn up and repair applications while lowering total cost of ownership, through a SaaS-based consumption model.

Our goal is to create a unified and frictionless F5 experience for our customers.

We also have taken steps to integrate the customer experience across our growing portfolio by simplifying product naming and rebranding several acquired and integrated solutions as part of our F5 Distributed Cloud Services platform.

Through both organic and inorganic investment, we have expanded our application security portfolio and the deployment models through which customers can consume our solutions.

F5’s leading security capabilities combined with our multi-cloud approach enables our customers to deploy a consistent security posture across their entire application estate.

In fiscal year 2022 we announced a major expansion of our security and delivery portfolio with the launch of F5 Distributed Cloud Services.

This platform integrates F5 capabilities and recently acquired technologies to deliver security, multi-cloud networking and edge-based computing solutions on a unified SaaS platform.

Our first solution for the platform, F5 Distributed Cloud WAAP (“Web Application Firewall and API Protection”), augments multiple security capabilities across F5 technologies enabling our customers to deploy advanced security, and unify and consistently manage policies while providing visibility into the enterprise security stature across all environments where the solution is deployed.

Beyond delivering security capabilities via multiple deployment models including hardware, software and SaaS, we continue to innovate across our software offerings including improving automation and orchestration in our BIG-IP software, and advancing the capabilities of our F5 NGINX solution.

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

Our multi-cloud, infrastructure-agnostic approach means we can create a more unified experience across customers’ disparate hybrid IT environments.

We are enhancing automation and driving operational efficiencies and corresponding cost efficiencies for customers.

Our BIG-IP family includes:

All of our systems run the same BIG-IP software modules.

F5 NGINX Software Solutions. Open source F5 NGINX software is deployed in millions of websites and applications across the world.

F5 NGINX Plus software delivers cloud-native, Kubernetes-friendly solutions that drive mission-critical applications and APIs with scalability, visibility, security, and governance.

F5 security solutions provide application and API security in an era of accelerating application development, hybrid architectures and deployments, and increasing vulnerability to emerging threats and automated attacks.

Complexity is fueled by rapid adoption of API services, connecting cloud-native workloads to the heterogeneous operations landscape of the modern enterprise.

In addition to the application security capabilities of our BIG-IP and F5 NGINX families, we also offer application security via SaaS and managed service consumption models.

F5 Distributed Cloud Services. A unified, security, networking, and application management service that enables customers to deploy, secure, and operate their applications wherever they may reside, regardless of platform or architecture.

Products available as SaaS-based security solutions under F5 Distributed Cloud Services, include the following:

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

F5 is a multi-cloud application security and delivery company.

We see a world where we enable our customers’ applications to adapt to changing environments, automating redundant processes for greater efficiencies, expanding and contracting based on performance needs, protecting themselves, and securing points of vulnerability.

Adaptive applications bring intelligence and real-time changes to the world of application deployments, which today are mostly static and manual.

Our enterprise-grade solutions are available in a range of consumption models, from on-premises to managed services, optimized for multi-cloud environments.

On January 25, 2021, we completed the acquisition of Volterra, a provider of edge-as-a-service platform solutions.

The F5+Volterra platform will be designed to address challenges found with current edge solutions that are built on CDNs and have limited security features.

F5’s new enterprise-focused edge will be security-first and app-driven, with unlimited scale.

While the majority of our product revenue today is derived from appliance sales, we are actively managing a transformation to a software- and SaaS-driven business with product revenue from software sales growing 40% in fiscal year 2021 and representing 40% of product revenue.

F5 is focused on solving our customers’ most important application challenges and we have continued to evolve our business as our customer’s needs have changed.

Today, our customers need to securely and cost effectively deliver extraordinary digital experiences to their end users, which include employees, consumers and partners.

Adaptive applications utilize an architectural approach that can rapidly respond to changes in performance, global availability, or security problems across one or more infrastructure environments and with little to no human interaction.

These apps are enabled by a near-real-time collection of live application telemetry, analyzed by machine learning and artificial intelligence techniques, and harnessed to automation toolchains to rapidly adjust infrastructure to new conditions.

As a result of the continued evolution of our BIG-IP family, we enable customers to transition traditional applications from data centers to multi-cloud environments while maintaining private data center levels of security.

At the same time, we are enabling modern application architectures with our NGINX technologies, F5 SaaS offerings, and Aspen Mesh.

Our State of Application Strategy Report 2021 shows 87% of organizations are managing a complex application portfolio spanning traditional and modern architectures.

F5 is unique in our ability to span both traditional and modern architectures, as a result, our customers are able to provision consistent, and industry-leading application security across their combined traditional and modern application portfolio.

In addition, we are leveraging our access to application data and our analytics capabilities to enable automation and unlock business insights for our customers.

As we have expanded our offerings, we are better able to solve a broader range of customer challenges and increasingly, customers are choosing a suite of F5 solutions.

Our ability to serve both traditional and modern architectures means we are uniquely suited to provide consistent, industry-leading security across our customers entire application estate.

Our acquisition of Shape Security brings the leader in online fraud and abuse prevention, adding protection against automated attacks, bots, and targeted fraud, to F5’s world-class portfolio of application security and delivery technologies.

Volterra’s SaaS platform will help detect threats more rapidly and reduce neutralization times.

Together, F5’s portfolio provides maximum protection and reduced risk for all applications across data centers, cloud, and the edge.

This reduces our customers’ total cost of application security by reducing standalone products and leveraging a unified portfolio of on-premises and SaaS-based controls.

In the last several years, we have significantly enhanced and expanded our software offerings.

Our meaningful software growth over the last two years has largely been driven by steps we have taken to improve automation and orchestration in our BIG-IP software, making it easier to procure, deploy and upgrade, as well as the introduction of new flexible commercial models, including annual and longer-term subscriptions.

We expect to drive continued software and SaaS growth from additional enhancements to our BIG-IP family, as well as advancements and continued customer adoption of NGINX, application security, Shape, and Volterra solutions.

VEs can be deployed on public clouds, including Amazon Web Services, Microsoft Azure, and Google Cloud Platform, through Bring Your Own License (BYOL) and the public cloud marketplaces.

In addition, F5 offers customers additional licensing, consumption flexibility, and value via our flexible consumption program or multi-year subscriptions.

Available in virtual or physical form factors, BIG-IQ simplifies, enhances management of, and reduces customer operational costs associated with BIG-IP deployments.

Both BIG-IP iSeries and our chassis-based systems run the same BIG-IP software modules as are available in the Virtual Edition and are licensed on a perpetual basis or subscription basis.

To help customers comply with regulatory requirements and protect sensitive data, our physical systems are certified up to NIST FIPS 140-2 Level 2 and Common Criteria Evaluation Assurance Level (EAL 4+).

BIG-IP iSeries appliances and chassis-based systems differ primarily in their performance and size characteristics resulting from the hardware components and configurations that make up these systems.

As we align to modern architectures, we also added the VELOS chassis-based system to our lineup.

VELOS relies on a Kubernetes-based platform layer that is integrated tightly with F5’s TMOS software.

In addition, going to a microservice-based platform layer allows VELOS to provide new and exciting features that were not possible in previous generations of F5 BIG-IP platforms.

Our NGINX technology enables developer and DevOps agility to get applications to market quickly, with security and automation closer to the code.

Our NGINX product offerings are:

- NGINX Controller, which provides orchestration and analytics for NGINX Plus.

- NGINX App Protect, which integrates F5’s market-leading WAF with the flexibility and performance of NGINX Plus.

We believe NGINX solutions help our customers enable adaptive applications in container, cloud-native, and microservices environments, providing the ease-of-use and flexibility developers require while also delivering the scale, security, reliability, and enterprise readiness network operations teams demand.

See Note [removed: 13] [added: 12] - Commitments and Contingencies of the Notes to Financial Statements (Part II, Item 8 of this Form 10-K) for information regarding legal proceedings in which we are involved.

[Table of [removed: Contents](#i4633b04cec6f4f6683f24458423fe05b_7)][added: Contents](#i117435926e4b4273a51addec3ea8bf69_7)]

For the fiscal year ended September 30, [removed: 2021][added: 2022]

As of March 31, [removed: 2021,] [added: 2022,] the aggregate market value of the Registrant’s [removed: Common Stock] [added: common stock] held by non-affiliates of the Registrant was [removed: $12,481,712,486] [added: $12,578,190,940] based on the closing sales price of the Registrant’s [removed: Common Stock] [added: common stock] on the NASDAQ Global Select Market on that date.

As of November [removed: 8, 2021,] [added: 7, 2022,] the number of shares of the Registrant’s common stock outstanding was [removed: 61,229,388.][added: 60,368,610.]

Information required in response to Part III of this Form 10-K (Items 10, 11, 12, 13 and 14) is hereby incorporated by reference to the specified portions of the Registrant’s Definitive Proxy Statement for the Annual Shareholders Meeting for fiscal year [removed: 2021,] [added: 2022,] which Definitive Proxy Statement shall be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days of the end of the fiscal year to which this Report relates.

| Item 1. | | | [removed: [Business](#i4633b04cec6f4f6683f24458423fe05b_16)] [added: [Business](#i117435926e4b4273a51addec3ea8bf69_16)] | | | [removed: [3](#i4633b04cec6f4f6683f24458423fe05b_16)] [added: [3](#i117435926e4b4273a51addec3ea8bf69_16)] | | |

| Item 1A. | | | [Risk [removed: Factors](#i4633b04cec6f4f6683f24458423fe05b_34)] [added: Factors](#i117435926e4b4273a51addec3ea8bf69_34)] | | | [removed: [14](#i4633b04cec6f4f6683f24458423fe05b_34)] [added: [14](#i117435926e4b4273a51addec3ea8bf69_34)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#i4633b04cec6f4f6683f24458423fe05b_37)] [added: Comments](#i117435926e4b4273a51addec3ea8bf69_37)] | | | [removed: [27](#i4633b04cec6f4f6683f24458423fe05b_37)] [added: [27](#i117435926e4b4273a51addec3ea8bf69_37)] | | |

| Item 2. | | | [removed: [Properties](#i4633b04cec6f4f6683f24458423fe05b_40)] [added: [Properties](#i117435926e4b4273a51addec3ea8bf69_40)] | | | [removed: [27](#i4633b04cec6f4f6683f24458423fe05b_40)] [added: [28](#i117435926e4b4273a51addec3ea8bf69_40)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#i4633b04cec6f4f6683f24458423fe05b_43)] [added: Proceedings](#i117435926e4b4273a51addec3ea8bf69_43)] | | | [removed: [27](#i4633b04cec6f4f6683f24458423fe05b_43)] [added: [28](#i117435926e4b4273a51addec3ea8bf69_43)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#i4633b04cec6f4f6683f24458423fe05b_46)] [added: Disclosures](#i117435926e4b4273a51addec3ea8bf69_46)] | | | [removed: [27](#i4633b04cec6f4f6683f24458423fe05b_46)] [added: [28](#i117435926e4b4273a51addec3ea8bf69_46)] | | |

| Item 5. | | | [Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i4633b04cec6f4f6683f24458423fe05b_52)] [added: Securities](#i117435926e4b4273a51addec3ea8bf69_52)] | | | [removed: [28](#i4633b04cec6f4f6683f24458423fe05b_52)] [added: [29](#i117435926e4b4273a51addec3ea8bf69_52)] | | |

| Item 6. | | | [Selected Financial [removed: Data](#i4633b04cec6f4f6683f24458423fe05b_55)] [added: Data](#i117435926e4b4273a51addec3ea8bf69_55)] | | | [removed: [30](#i4633b04cec6f4f6683f24458423fe05b_55)] [added: [31](#i117435926e4b4273a51addec3ea8bf69_55)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i4633b04cec6f4f6683f24458423fe05b_58)] [added: Operations](#i117435926e4b4273a51addec3ea8bf69_58)] | | | [removed: [31](#i4633b04cec6f4f6683f24458423fe05b_58)] [added: [32](#i117435926e4b4273a51addec3ea8bf69_58)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosure About Market [removed: Risk](#i4633b04cec6f4f6683f24458423fe05b_82)] [added: Risk](#i117435926e4b4273a51addec3ea8bf69_82)] | | | [removed: [41](#i4633b04cec6f4f6683f24458423fe05b_82)] [added: [41](#i117435926e4b4273a51addec3ea8bf69_82)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#i4633b04cec6f4f6683f24458423fe05b_85)] [added: Data](#i117435926e4b4273a51addec3ea8bf69_85)] | | | [removed: [42](#i4633b04cec6f4f6683f24458423fe05b_85)] [added: [42](#i117435926e4b4273a51addec3ea8bf69_85)] | | |

| Item 9. | | | [Changes in and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#i4633b04cec6f4f6683f24458423fe05b_160)] [added: Disclosure](#i117435926e4b4273a51addec3ea8bf69_160)] | | | [removed: [81](#i4633b04cec6f4f6683f24458423fe05b_160)] [added: [78](#i117435926e4b4273a51addec3ea8bf69_160)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#i4633b04cec6f4f6683f24458423fe05b_163)] [added: Procedures](#i117435926e4b4273a51addec3ea8bf69_163)] | | | [removed: [81](#i4633b04cec6f4f6683f24458423fe05b_163)] [added: [78](#i117435926e4b4273a51addec3ea8bf69_163)] | | |

| Item 9B. | | | [Other [removed: Information](#i4633b04cec6f4f6683f24458423fe05b_166)] [added: Information](#i117435926e4b4273a51addec3ea8bf69_166)] | | | [removed: [82](#i4633b04cec6f4f6683f24458423fe05b_166)] [added: [79](#i117435926e4b4273a51addec3ea8bf69_166)] | | |

| [PART [removed: III](#i4633b04cec6f4f6683f24458423fe05b_169)] [added: III](#i117435926e4b4273a51addec3ea8bf69_169)] | | | | | | | | |

| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#i4633b04cec6f4f6683f24458423fe05b_172)] [added: Governance](#i117435926e4b4273a51addec3ea8bf69_172)] | | | [removed: [83](#i4633b04cec6f4f6683f24458423fe05b_172)] [added: [80](#i117435926e4b4273a51addec3ea8bf69_172)] | | |

| Item 11. | | | [Executive [removed: Compensation](#i4633b04cec6f4f6683f24458423fe05b_175)] [added: Compensation](#i117435926e4b4273a51addec3ea8bf69_175)] | | | [removed: [83](#i4633b04cec6f4f6683f24458423fe05b_175)] [added: [80](#i117435926e4b4273a51addec3ea8bf69_175)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i4633b04cec6f4f6683f24458423fe05b_178)] [added: Matters](#i117435926e4b4273a51addec3ea8bf69_178)] | | | [removed: [83](#i4633b04cec6f4f6683f24458423fe05b_178)] [added: [80](#i117435926e4b4273a51addec3ea8bf69_178)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i4633b04cec6f4f6683f24458423fe05b_181)] [added: Independence](#i117435926e4b4273a51addec3ea8bf69_181)] | | | [removed: [83](#i4633b04cec6f4f6683f24458423fe05b_181)] [added: [80](#i117435926e4b4273a51addec3ea8bf69_181)] | | |

| Item 14. | | | [Principal Accountant Fees and [removed: Services](#i4633b04cec6f4f6683f24458423fe05b_184)] [added: Services](#i117435926e4b4273a51addec3ea8bf69_184)] | | | [removed: [83](#i4633b04cec6f4f6683f24458423fe05b_184)] [added: [80](#i117435926e4b4273a51addec3ea8bf69_184)] | | |

| [PART [removed: IV](#i4633b04cec6f4f6683f24458423fe05b_187)] [added: IV](#i117435926e4b4273a51addec3ea8bf69_187)] | | | | | | | | |

| Item 15. | | | [Exhibits and Financial Statement [removed: Schedules](#i4633b04cec6f4f6683f24458423fe05b_190)] [added: Schedules](#i117435926e4b4273a51addec3ea8bf69_190)] | | | [removed: [84](#i4633b04cec6f4f6683f24458423fe05b_190)] [added: [81](#i117435926e4b4273a51addec3ea8bf69_190)] | | |

| Item 16. | | | [Form 10-K [removed: Summary](#i4633b04cec6f4f6683f24458423fe05b_193)] [added: Summary](#i117435926e4b4273a51addec3ea8bf69_193)] | | | [removed: [84](#i4633b04cec6f4f6683f24458423fe05b_190)] [added: [81](#i117435926e4b4273a51addec3ea8bf69_190)] | | |

| [removed: [SIGNATURES](#i4633b04cec6f4f6683f24458423fe05b_199)] [added: [SIGNATURES](#i117435926e4b4273a51addec3ea8bf69_199)] | | | | | | [removed: [87](#i4633b04cec6f4f6683f24458423fe05b_199)] [added: [84](#i117435926e4b4273a51addec3ea8bf69_199)] | | |

For example, “fiscal year [removed: 2021”] [added: 2022”] and “fiscal [removed: 2021”] [added: 2022”] refer to the fiscal year ended September 30, [removed: 2021.][added: 2022.]

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

For the Fiscal Year Ended September 30, 2022

| [PART II](#i117435926e4b4273a51addec3ea8bf69_49) | | | | | | | | |

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

F5 Networks, Inc.

(Former name or former address, if changed since last report)

| [PART II](#i4633b04cec6f4f6683f24458423fe05b_49) | | | | | | | | |

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

[Table of [removed: Contents](#i4633b04cec6f4f6683f24458423fe05b_7)][added: Contents](#i117435926e4b4273a51addec3ea8bf69_7)]

| | | | | | | Fiscal Year [removed: 2021] [added: 2022] | | | | | | | | | | | | Fiscal Year [removed: 2020] [added: 2021] | | | | | | | | |

| First Quarter | | | | | | $ | [removed: 178.09] [added: 249.00] | | | | | $ | [removed: 121.77] [added: 193.50] | | | | | $ | [removed: 153.00] [added: 178.09] | | | | | $ | [removed: 128.51] [added: 121.77] | |

| Second Quarter | | | | | | $ | [removed: 215.91] [added: 245.59] | | | | | $ | [removed: 173.41] [added: 188.50] | | | | | $ | [removed: 141.31] [added: 215.91] | | | | | $ | [removed: 79.78] [added: 173.41] | |

| Third Quarter | | | | | | $ | [removed: 216.15] [added: 215.28] | | | | | $ | [removed: 174.34] [added: 147.47] | | | | | $ | [removed: 153.56] [added: 216.15] | | | | | $ | [removed: 101.42] [added: 174.34] | |

| Fourth Quarter | | | | | | $ | [removed: 215.56] [added: 174.38] | | | | | $ | [removed: 181.98] [added: 141.91] | | | | | $ | [removed: 156.36] [added: 215.56] | | | | | $ | [removed: 116.79] [added: 181.98] | |

The last reported sales price of our common stock on the Nasdaq Global Select Market on November [removed: 8, 2021] [added: 7, 2022] was [removed: $223.16.][added: $137.22.]

As of November [removed: 8, 2021,] [added: 7, 2022,] there were [removed: 43] [added: 41] holders of record of our common stock.

Unregistered Securities Sold in [removed: 2021][added: 2022]

We did not sell any unregistered shares of our common stock during the fiscal year [removed: 2021.][added: 2022.]

On [removed: October 31, 2018,] [added: July 25, 2022,] we announced that our Board of Directors authorized an additional $1.0 billion for our common stock share repurchase program.

This authorization is incremental to the existing [removed: $4.4] [added: $5.4] billion program, initially approved in October 2010 and expanded in [removed: each] [added: subsequent] fiscal [removed: year thereafter.][added: years.]

The shares received by the Company were retired, accounted for as a reduction to stockholder’s equity in the [removed: Condensed Consolidated Balance Sheets,] [added: consolidated balance sheets,] and treated as a repurchase of common stock for purposes of calculating earnings per share.

During fiscal year [removed: 2021,] [added: 2022,] we repurchased and retired [removed: 2,501,279] [added: 2,611,462] shares [added: of common stock] at an average price of [removed: $199.90] [added: $191.47] per share and as of September 30, [removed: 2021,] [added: 2022,] we had [removed: $773 million] [added: $1.3 billion] remaining authorized to purchase shares.

[Table of [removed: Contents](#i4633b04cec6f4f6683f24458423fe05b_7)][added: Contents](#i117435926e4b4273a51addec3ea8bf69_7)]

The following graph compares the annual percentage change in the cumulative total return on shares of our common stock, the Nasdaq Composite Index and the S&P 500 Index for the period commencing September 30, [removed: 2016,] [added: 2017,] and ending September 30, [removed: 2021.][added: 2022.]

On Investment Since September 30, [removed: 2016*][added: 2017*]

[removed: ][added: ]

The Company’s closing stock price on September 30, [removed: 2021,] [added: 2022,] the last trading day of the Company’s [removed: 2021] [added: 2022] fiscal year, was [removed: $198.78] [added: $144.73] per share.

* Assumes that $100 was invested September 30, [removed: 2016] [added: 2017] in shares of [removed: Common Stock] [added: common stock] and in each index, and that all dividends were reinvested.

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

[Table of [removed: Contents](#i4633b04cec6f4f6683f24458423fe05b_7)][added: Contents](#i117435926e4b4273a51addec3ea8bf69_7)]

| [Report of Independent Registered Public Accounting [removed: Firm](#i4633b04cec6f4f6683f24458423fe05b_88)] [added: Firm](#i117435926e4b4273a51addec3ea8bf69_88) (PCAOB ID: 238)] | | | [removed: [43](#i4633b04cec6f4f6683f24458423fe05b_88)] [added: [43](#i117435926e4b4273a51addec3ea8bf69_88)] | | |

| [Consolidated Balance [removed: Sheets](#i4633b04cec6f4f6683f24458423fe05b_91)] [added: Sheets](#i117435926e4b4273a51addec3ea8bf69_91)] | | | [removed: [45](#i4633b04cec6f4f6683f24458423fe05b_91)] [added: [45](#i117435926e4b4273a51addec3ea8bf69_91)] | | |

| [Consolidated Income [removed: Statements](#i4633b04cec6f4f6683f24458423fe05b_94)] [added: Statements](#i117435926e4b4273a51addec3ea8bf69_94)] | | | [removed: [46](#i4633b04cec6f4f6683f24458423fe05b_94)] [added: [46](#i117435926e4b4273a51addec3ea8bf69_94)] | | |

| [Consolidated Statements of Comprehensive [removed: Income](#i4633b04cec6f4f6683f24458423fe05b_97)] [added: Income](#i117435926e4b4273a51addec3ea8bf69_97)] | | | [removed: [47](#i4633b04cec6f4f6683f24458423fe05b_97)] [added: [47](#i117435926e4b4273a51addec3ea8bf69_97)] | | |

| [Consolidated Statements of Shareholders' [removed: Equity](#i4633b04cec6f4f6683f24458423fe05b_100)] [added: Equity](#i117435926e4b4273a51addec3ea8bf69_100)] | | | [removed: [48](#i4633b04cec6f4f6683f24458423fe05b_100)] [added: [48](#i117435926e4b4273a51addec3ea8bf69_100)] | | |

| [Consolidated Statements of Cash [removed: Flows](#i4633b04cec6f4f6683f24458423fe05b_103)] [added: Flows](#i117435926e4b4273a51addec3ea8bf69_103)] | | | [removed: [49](#i4633b04cec6f4f6683f24458423fe05b_103)] [added: [49](#i117435926e4b4273a51addec3ea8bf69_103)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i4633b04cec6f4f6683f24458423fe05b_106)] [added: Statements](#i117435926e4b4273a51addec3ea8bf69_106)] | | | [removed: [51](#i4633b04cec6f4f6683f24458423fe05b_106)] [added: [51](#i117435926e4b4273a51addec3ea8bf69_106)] | | |

[Table of [removed: Contents](#i4633b04cec6f4f6683f24458423fe05b_7)][added: Contents](#i117435926e4b4273a51addec3ea8bf69_7)]

We have audited the accompanying consolidated balance sheets of F5, Inc. and its subsidiaries (the “Company”) as of September [removed: 30, 2021] [added: 30,2022] and [removed: 2020,] [added: 2021,] and the related consolidated statements of income, of comprehensive income, of shareholders’ equity and of cash flows for each of the three years in the period ended September 30, [removed: 2021,] [added: 2022,] including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of September 30, [removed: 2021,] [added: 2022,] based on criteria established in [removed: *Internal] [added: Internal] Control - Integrated [removed: Framework*] [added: Framework] (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the three years in the period ended September 30, [removed: 2021] [added: 2022] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, [removed: 2021,] [added: 2022,] based on criteria established in [removed: *Internal] [added: Internal] Control - Integrated [removed: Framework*] [added: Framework] (2013) issued by the COSO.

As discussed in [removed: Notes 8 and 1] [added: Note 7] to the consolidated financial statements, the Company changed the [removed: manner in which it accounts for leases as of October 1, 2019 and] [added: way] the manner in which it accounts for [removed: revenues from contracts with customers] [added: leases] as of October 1, [removed: 2018.][added: 2019.]

[removed: As described in Notes 1 and 3 to the consolidated financial statements, on January 22,] [added: On October 1,] 2021, the Company completed [removed: the] [added: its] acquisition of [removed: Volterra,] [added: Threat Stack,] Inc. for a total purchase price of [removed: $427.2] [added: $68.9] million, of which [removed: approximately $59.5] [added: $11.4] million of finite-lived developed technology was recorded.

[added: |] November [removed: 16,] [added: 1,] 2021 [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| | | | | | | [added: 2022 | | | | | |] 2021 | | | | | | 2020 | | |

| Cash and cash equivalents | | | | | | $ | [removed: 580,977] [added: 758,012] | | | | | $ | [removed: 849,556] [added: 580,977] | |

| Short-term investments | | | | | | [removed: 329,630] [added: 126,554] | | | | | | [removed: 360,333] [added: 329,630] | | |

| Accounts receivable, net of allowances of [removed: $3,696] [added: $6,020] and [removed: $3,105] [added: $3,696] | | | | | | [removed: 340,536] [added: 469,979] | | | | | | [removed: 296,183] [added: 340,536] | | |

| Inventories | | | | | | [removed: 22,055] [added: 68,365] | | | | | | [removed: 27,898] [added: 22,055] | | |

| Other current assets | | | | | | [removed: 337,902] [added: 489,314] | | | | | | [removed: 259,506] [added: 337,902] | | |

| Total current assets | | | | | | [removed: 1,611,100] [added: 1,912,224] | | | | | | [removed: 1,793,476] [added: 1,611,100] | | |

| Property and equipment, net | | | | | | [removed: 191,164] [added: 168,182] | | | | | | [removed: 229,239] [added: 191,164] | | |

| Operating lease right-of-use assets | | | | | | [removed: 244,934] [added: 227,475] | | | | | | [removed: 300,680] [added: 244,934] | | |

| Long-term investments | | | | | | [removed: 132,778] [added: 9,544] | | | | | | [removed: 102,939] [added: 132,778] | | |

| Deferred tax assets | | | | | | [removed: 128,193] [added: 183,365] | | | | | | [removed: 45,173] [added: 128,193] | | |

| Goodwill | | | | | | [removed: 2,216,553] [added: 2,259,282] | | | | | | [removed: 1,858,966] [added: 2,216,553] | | |

| Other assets, net | | | | | | [removed: 472,558] [added: 516,122] | | | | | | [removed: 347,447] [added: 472,558] | | |

| Total assets | | | | | | $ | [removed: 4,997,280] [added: 5,276,194] | | | | | $ | [removed: 4,677,920] [added: 4,997,280] | |

| Accounts payable | | | | | | $ | [removed: 62,096] [added: 113,178] | | | | | $ | [removed: 64,472] [added: 62,096] | |

| Accrued liabilities | | | | | | [removed: 341,487] [added: 309,819] | | | | | | [removed: 321,398] [added: 341,487] | | |

| Deferred revenue | | | | | | [removed: 968,669] [added: 1,067,182] | | | | | | [removed: 883,134] [added: 968,669] | | |

| Current portion of long-term debt | | | | | | [removed: 19,275] [added: 349,772] | | | | | | 19,275 | | |

| Total current liabilities | | | | | | [removed: 1,391,527] [added: 1,839,951] | | | | | | [removed: 1,288,279] [added: 1,391,527] | | |

| Deferred tax liabilities | | | | | | [removed: 2,414] [added: 2,781] | | | | | | [removed: 602] [added: 2,414] | | |

| Deferred revenue, long-term | | | | | | [removed: 521,173] [added: 624,398] | | | | | | [removed: 389,498] [added: 521,173] | | |

| Operating lease liabilities, long-term | | | | | | [removed: 296,945] [added: 272,376] | | | | | | [removed: 338,715] [added: 296,945] | | |

| Long-term debt | | | | | | [removed: 349,772] [added: —] | | | | | | [removed: 369,047] [added: 349,772] | | |

| Other long-term liabilities | | | | | | [removed: 75,236] [added: 67,710] | | | | | | [removed: 59,511] [added: 75,236] | | |

| Total long-term liabilities | | | | | | [removed: 1,245,540] [added: 967,265] | | | | | | [removed: 1,157,373] [added: 1,245,540] | | |

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

*Revenue Recognition - Identification and Evaluation of Contractual Terms in Certain Customer Arrangements*

As described in Note 1 to the consolidated financial statements, the Company enters into certain contracts with customers, including flexible consumption programs and multi-year subscriptions, with non-standard terms and conditions.

The revenue recognized and deferred based on relative fair value represents a portion of Total Net revenues of $2,695.8 million for the year ended September 30, 2022, and Deferred revenue of $1,067.2 million and Deferred revenue, long-term of $624.4 million as of September 30, 2022.

The principal considerations for our determination that performing procedures relating to the identification and evaluation of contractual terms in certain customer arrangements is a critical audit matter are (i) the significant judgment by management in assessing contractual terms in certain customer arrangements and in determining the appropriate revenue recognition and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s judgment relating to assessing the contractual terms in certain customer arrangements to identify and evaluate performance obligations.

These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls related to assessing contractual terms used in the identification and evaluation of performance obligations.

These procedures also included, among others, on a sample basis (i) testing the completeness and accuracy of management’s assessment of the contractual terms by evaluating certain customer arrangements and (ii) testing management’s process for determining the appropriate amount and timing of revenue recognition based on management’s assessment of the contractual terms identified in certain customer arrangements.

November 15, 2022

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

| | | | | | | 2022 | | | | | | 2021 | | |

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

| Net income | | | | | | $ | 322,160 | | | | | $ | 331,241 | | | | | $ | 307,441 | |

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

| Repurchase of common stock | | | | | | (2,611) | | | | | | (394,141) | | | | | | — | | | | | | (105,882) | | | | | | (500,023) | | |

| Taxes paid related to net share settlement of equity awards | | | | | | (104) | | | | | | (21,025) | | | | | | — | | | | | | — | | | | | | (21,025) | | |

| Net income | | | | | | — | | | | | | — | | | | | | — | | | | | | 322,160 | | | | | | 322,160 | | |

| Other comprehensive loss | | | | | | — | | | | | | — | | | | | | (6,103) | | | | | | — | | | | | | (6,103) | | |

| Balances, September 30, 2022 | | | | | | 59,860 | | | | | | $ | 91,048 | | | | | $ | (26,176) | | | | | $ | 2,404,106 | | | | | $ | 2,468,978 | |

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

| Net income | | | | | | $ | 322,160 | | | | | $ | 331,241 | | | | | $ | 307,441 | |

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

| | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

On October 1, 2021, the Company completed its acquisition of Threat Stack, Inc. ("Threat Stack"), a provider of cloud security and workload protection solutions.

Actual results may differ materially from management's estimates and assumptions.

As an approximation to fair value, equity investments are measured using net asset value (“NAV”) and are classified as long-term investments.

Unrealized and realized gains and losses are recorded in other income (expense) in the Company's consolidated income statements.

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

Unbilled Receivables

Unbilled receivables are converted to accounts receivable at the point in time when the Company has the contractual right to invoice its customers.

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

certain conditions are met.

Management exercises significant judgment in assessing contractual terms in these arrangements to identify and evaluate performance obligations.

Management allocates consideration to each performance obligation based on relative fair value using standalone selling price and recognizes associated revenue as control is transferred to the customer.

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

the date of grant.

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

*Acquisition of Volterra, Inc. – Valuation of the Developed Technology Intangible Asset*

Management valued the developed technology using the relief-from-royalty method under the income approach.

Management applied significant judgment in estimating the fair value of the acquired developed technology, which involved the use of a significant assumption with respect to the royalty rate.

The principal considerations for our determination that performing procedures relating to the valuation of the developed technology intangible asset from the acquisition of Volterra, Inc. is a critical audit matter are (i) a high degree of auditor judgment and subjectivity in applying procedures relating to the fair value of the acquired developed technology intangible asset due to the significant judgment by management when developing the estimate; (ii) the significant audit effort in evaluating the significant assumption related to the royalty rate; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the acquired developed technology intangible asset and controls over the development of the royalty rate assumption.

These procedures also included, among others (i) reading the merger agreement and (ii) testing management’s process for estimating the fair value of the acquired developed technology intangible asset.

Testing management’s process included evaluating the appropriateness of the valuation method, testing the completeness and accuracy of data provided by management, and evaluating the reasonableness of management’s significant assumption related to the royalty rate.

Evaluating the reasonableness of the royalty rate assumption involved considering (i) the past performance of the acquired business; (ii) the consistency with external market and industry data; and (iii) whether the assumption was consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s valuation method and the royalty rate assumption.

| Balance, 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 | | |

| Repurchase of common stock | | | | | | (1,186) | | | | | | (88,110) | | | | | | — | | | | | | (112,935) | | | | | | (201,045) | | |

| Net income | | | | | | — | | | | | | — | | | | | | — | | | | | | 427,734 | | | | | | 427,734 | | |

| Other comprehensive income | | | | | | — | | | | | | — | | | | | | 2,988 | | | | | | — | | | | | | 2,988 | | |

| Non-cash provisions for exit costs | | | | | | — | | | | | | — | | | | | | 8,211 | | |

| Capitalized leasehold improvements paid directly by landlord | | | | | | — | | | | | | — | | | | | | 34,948 | | |

On November 12, 2021, the Company changed its corporate name from F5 Networks, Inc. to F5, Inc. (the "Company").

On January 22, 2021, the Company completed the acquisition of Volterra, Inc. ("Volterra"), a provider of edge-as-a-service platform solutions.

Actual results may differ materially from management's estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment due to the global impact of the COVID-19 pandemic.

An allowance for credit losses for the excess of amortized cost over the expected cash flows is recorded in other income, net in the Company's consolidated income statements.

The cost of investments for purposes of computing realized and unrealized gains and losses is based on the specific identification method.

On January 22, 2021, the Company completed its acquisition of Volterra, Inc. for a total purchase price of $427.2 million, of which approximately $59.5 million of finite-lived developed technology was recorded.

On October 1, 2018, the Company adopted the new revenue recognition standard by applying the modified retrospective approach to those contracts which were not completed as of October 1, 2018.

Results for reporting periods beginning after October 1, 2018 are presented under the new revenue recognition standard, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior periods.

The Company has entered into indemnification

For the performance stock awards granted prior to fiscal 2018, attainment is based on the Company achieving specific quarterly revenue and EBITDA targets.

In each case, 70% of the quarterly performance stock grant is based on achieving at least 80% of the quarterly revenue goal set by the Company's Board of Directors, and the other 30% is based on achieving at least 80% of the quarterly EBITDA goal set by the Company's Board of Directors.

The quarterly performance stock grant is paid linearly over 80% of the targeted goals.

At least 100% of both goals must be attained in order for the quarterly performance stock grant to be awarded over 100%.

Each goal is evaluated individually and subject to the 80% achievement threshold and the 100% over-achievement threshold.

Each goal is also capped at achievement of 200% above target.

In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) (ASU 2018-15), which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software, and hosting arrangements that include an internal-use software license.

The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update.

The Company adopted this new standard prospectively on October 1, 2020.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which modifies the accounting for credit losses for most financial assets and requires the use of an expected loss model, replacing the currently used incurred loss method.

Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset.

The Company adopted this new standard on October 1, 2020 using the modified retrospective approach.

The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

Under the current business combinations guidance, such assets and liabilities are recognized by the acquirer at fair value on the acquisition date.

[Table of [removed: Contents](#i4633b04cec6f4f6683f24458423fe05b_7)][added: Contents](#i117435926e4b4273a51addec3ea8bf69_7)]

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, [removed: 2021] [added: 2022] and, based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of September 30, [removed: 2021.][added: 2022.]

Management conducted an assessment of the effectiveness of our internal control over financial reporting as of September 30, [removed: 2021.][added: 2022.]

Based on the results of this assessment and on those criteria, management concluded that our internal control over financial reporting was effective as of September 30, [removed: 2021.][added: 2022.]

The effectiveness of the Company’s internal control over financial reporting as of September 30, [removed: 2021,] [added: 2022,] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

Although the majority of F5's global workforce is working remotely as a result of the COVID-19 pandemic, there were no material changes to our existing internal controls over financial reporting as a result of this.

[Table of [removed: Contents](#i4633b04cec6f4f6683f24458423fe05b_7)][added: Contents](#i117435926e4b4273a51addec3ea8bf69_7)]

Certain information required by this item regarding the Company’s directors and executive officers is incorporated herein by reference to the sections entitled “Board of Directors — Nominees and Continuing Directors,” “Corporate Governance — Committees of the Board — Audit Committee” and “— Code of Ethics for Senior Financial Officers” and “— Director Nomination,” and “Security Ownership of Certain Beneficial Owners and Management — Section 16(a) Beneficial Ownership Reporting Compliance” in the Company’s definitive Proxy Statement that will be furnished to the SEC no later than January 28, [removed: 2022] [added: 2023] (the “Proxy Statement”).

[Table of [removed: Contents](#i4633b04cec6f4f6683f24458423fe05b_7)][added: Contents](#i117435926e4b4273a51addec3ea8bf69_7)]

[Table of [removed: Contents](#i4633b04cec6f4f6683f24458423fe05b_7)][added: Contents](#i117435926e4b4273a51addec3ea8bf69_7)]

| 2.1 | | | | | | — | | | [Merger [removed: Agreement] [added: Agreement,] dated [removed: as of March 9,] [added: December 19,] 2019, by and among [removed: the Registrant, Nginx,] [added: F5 Networks,] Inc., [removed: Neva] [added: Silhouette] Merger [removed: Sub Limited,] [added: Sub, Inc., Shape Security, Inc.,] and [removed: Fortis Advisors LLC(1)+](http://www.sec.gov/Archives/edgar/data/1048695/000119312519070884/d713823dex21.htm)] [added: Shareholder Representative Services LLC(](http://www.sec.gov/Archives/edgar/data/1048695/000114036119023141/nc10007101x1_ex2-1.htm)[1](http://www.sec.gov/Archives/edgar/data/1048695/000114036119023141/nc10007101x1_ex2-1.htm)[)+](http://www.sec.gov/Archives/edgar/data/1048695/000114036119023141/nc10007101x1_ex2-1.htm)] | | |

| 2.2 | | | | | | — | | | [Merger [removed: Agreement,] [added: Agreement] dated [removed: December 19, 2019,] [added: as of January 5, 2021,] by and among [removed: F5 Networks, Inc., Silhouette] [added: the Registrant, Voyager] Merger [removed: Sub, Inc., Shape Security,] [added: Sub Corporation, Volterra,] Inc., and Shareholder Representative Services [removed: LLC(2)+](http://www.sec.gov/Archives/edgar/data/1048695/000114036119023141/nc10007101x1_ex2-1.htm)] [added: LLC(](https://www.sec.gov/Archives/edgar/data/0001048695/000114036121000498/nc10018716x1_ex2-1.htm)[2](https://www.sec.gov/Archives/edgar/data/0001048695/000114036121000498/nc10018716x1_ex2-1.htm)[)+](https://www.sec.gov/Archives/edgar/data/0001048695/000114036121000498/nc10018716x1_ex2-1.htm)] | | |

| 3.1 | | | | | | — | | | [Fourth Amended and Restated Articles of Incorporation of the [removed: Registrant(4)](https://www.sec.gov/Archives/edgar/data/1048695/000104869521000041/a31-articlesofincorporatio.htm)] [added: Registrant(](https://www.sec.gov/Archives/edgar/data/1048695/000104869521000041/a31-articlesofincorporatio.htm)[3](https://www.sec.gov/Archives/edgar/data/1048695/000104869521000041/a31-articlesofincorporatio.htm)[)](https://www.sec.gov/Archives/edgar/data/1048695/000104869521000041/a31-articlesofincorporatio.htm)] | | |

| 3.2 | | | | | | — | | | [removed: [Eighth](https://www.sec.gov/Archives/edgar/data/1048695/000104869521000041/a32-bylaws11122021.htm) [Amended] [added: [Eighth Amended] and Restated Bylaws [removed: adopted](https://www.sec.gov/Archives/edgar/data/1048695/000104869521000041/a32-bylaws11122021.htm) [November] [added: adopted November] 12, [removed: 2021(5)](https://www.sec.gov/Archives/edgar/data/1048695/000104869521000041/a32-bylaws11122021.htm)] [added: 2021(](https://www.sec.gov/Archives/edgar/data/1048695/000104869521000041/a32-bylaws11122021.htm)[4](https://www.sec.gov/Archives/edgar/data/1048695/000104869521000041/a32-bylaws11122021.htm)[)](https://www.sec.gov/Archives/edgar/data/1048695/000104869521000041/a32-bylaws11122021.htm)] | | |

| 4.1 | | | * | | | — | | | [Description of the Registrant's [removed: Securities](https://www.sec.gov/Archives/edgar/data/1048695/000104869521000044/ffiv10kex419302021.htm)] [added: Securities](https://www.sec.gov/Archives/edgar/data/1048695/000104869522000033/ffiv10kex419302022.htm)] | | |

| 4.2 | | | | | | — | | | [Specimen Common Stock [removed: Certificate(6)](http://www.sec.gov/Archives/edgar/data/1048695/0001047469-99-013872.txt)] [added: Certificate(](http://www.sec.gov/Archives/edgar/data/1048695/0001047469-99-013872.txt)[5](http://www.sec.gov/Archives/edgar/data/1048695/0001047469-99-013872.txt)[)](http://www.sec.gov/Archives/edgar/data/1048695/0001047469-99-013872.txt)] | | |

| 10.1 | | | | | | — | | | [removed: [Commitment Letter,] [added: [Term Credit Agreement,] dated as of [removed: December 19, 2019, by and] [added: January 24, 2020,] among F5 Networks, Inc., [added: the lenders party thereto and] JPMorgan Chase Bank, [removed: N.A, Bank of America,] N.A., [removed: and BofA Securities, Inc.(2)](http://www.sec.gov/Archives/edgar/data/1048695/000114036119023141/nc10007101x1_ex10-1.htm)] [added: as Administrative Agent(](https://www.sec.gov/Archives/edgar/data/1048695/000114036120001429/nc10007101x3_ex10-1.htm)[6](https://www.sec.gov/Archives/edgar/data/1048695/000114036120001429/nc10007101x3_ex10-1.htm)[)](https://www.sec.gov/Archives/edgar/data/1048695/000114036120001429/nc10007101x3_ex10-1.htm)] | | |

| 10.2 | | | | | | — | | | [removed: [Term] [added: [Revolving] Credit [removed: Agreement,] [added: Agreement] dated as of January [removed: 24,] [added: 31,] 2020, among F5 Networks, Inc., the lenders party thereto and JPMorgan Chase Bank, N.A., as [added: the] Administrative [removed: Agent(7)](https://www.sec.gov/Archives/edgar/data/1048695/000114036120001429/nc10007101x3_ex10-1.htm)] [added: Agent(](https://www.sec.gov/Archives/edgar/data/1048695/000104869520000012/ffiv10qex10212312019.htm)[7](https://www.sec.gov/Archives/edgar/data/1048695/000104869520000012/ffiv10qex10212312019.htm)[)](https://www.sec.gov/Archives/edgar/data/1048695/000104869520000012/ffiv10qex10212312019.htm)] | | |

| [removed: 10.4] [added: 10.3] | | | | | | — | | | [Office Lease Agreement between the Registrant and Fifth & Columbia Investors, LLC dated May 3, [removed: 2017(9)](https://www.sec.gov/Archives/edgar/data/1048695/000119312517155818/d368864dex101.htm)] [added: 2017(](https://www.sec.gov/Archives/edgar/data/1048695/000119312517155818/d368864dex101.htm)[8](https://www.sec.gov/Archives/edgar/data/1048695/000119312517155818/d368864dex101.htm)[)](https://www.sec.gov/Archives/edgar/data/1048695/000119312517155818/d368864dex101.htm)] | | |

| [removed: 10.5] [added: 10.4] | | | | | | — | | | [Form of Indemnification Agreement between the Registrant and each of its directors and certain of its [removed: officers(10)] [added: officers(](https://www.sec.gov/Archives/edgar/data/1048695/0001047469-99-013872.txt)[9](https://www.sec.gov/Archives/edgar/data/1048695/0001047469-99-013872.txt)[)] §](https://www.sec.gov/Archives/edgar/data/1048695/0001047469-99-013872.txt) | | |

| [removed: 10.6] [added: 10.5] | | | | | | — | | | [F5 Networks, Inc. 2011 Employee Stock Purchase Plan (Amended and Restated effective March 14, [removed: 2019)(11)] [added: 2019)(1](https://www.sec.gov/Archives/edgar/data/1048695/000104869519000010/exhibit1022011plan.htm)[0](https://www.sec.gov/Archives/edgar/data/1048695/000104869519000010/exhibit1022011plan.htm)[)] §](https://www.sec.gov/Archives/edgar/data/1048695/000104869519000010/exhibit1022011plan.htm) | | |

| [removed: 10.7] [added: 10.6] | | | | | | — | | | [Form of Change of Control Agreement between the Registrant and the executive [removed: officers(12)] [added: officers(1](https://www.sec.gov/Archives/edgar/data/1048695/000095013409009301/v52332exv10w36.htm)[1](https://www.sec.gov/Archives/edgar/data/1048695/000095013409009301/v52332exv10w36.htm)[)] §](https://www.sec.gov/Archives/edgar/data/1048695/000095013409009301/v52332exv10w36.htm) | | |

| [removed: 10.9] [added: 10.7] | | | | | | — | | | [F5 Networks, Inc. 2014 Incentive Plan, as amended and [removed: restated(14)] [added: restated(1](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000015/exhibit1012014plan.htm)[2](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000015/exhibit1012014plan.htm)[)] §](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000015/exhibit1012014plan.htm) | | |

| [removed: 10.10] [added: 10.8] | | | | | | — | | | [Nginx, Inc. 2011 Share [removed: Plan(15)] [added: Plan(1](https://www.sec.gov/Archives/edgar/data/1048695/000104869519000018/ffivs-8ex991assumednginxin.htm)[3](https://www.sec.gov/Archives/edgar/data/1048695/000104869519000018/ffivs-8ex991assumednginxin.htm)[)] §](https://www.sec.gov/Archives/edgar/data/1048695/000104869519000018/ffivs-8ex991assumednginxin.htm) | | |

| [removed: 10.11] [added: 10.9] | | | | | | — | | | [Nginx, Inc. Acquisition Equity Incentive [removed: Plan(15)] [added: Plan(1](https://www.sec.gov/Archives/edgar/data/1048695/000104869519000018/ffivs-8ex992nginxacquisiti.htm)[3](https://www.sec.gov/Archives/edgar/data/1048695/000104869519000018/ffivs-8ex992nginxacquisiti.htm)[)] §](https://www.sec.gov/Archives/edgar/data/1048695/000104869519000018/ffivs-8ex992nginxacquisiti.htm) | | |

| [removed: 10.12] [added: 10.10] | | | | | | — | | | [Nginx, Inc. Acquisition Equity Incentive Plan Award [removed: Agreement(16)] [added: Agreement(1](https://www.sec.gov/Archives/edgar/data/1048695/000104869519000030/ffiv10qex1016302019.htm)[4](https://www.sec.gov/Archives/edgar/data/1048695/000104869519000030/ffiv10qex1016302019.htm)[)] §](https://www.sec.gov/Archives/edgar/data/1048695/000104869519000030/ffiv10qex1016302019.htm) | | |

| [removed: 10.13] [added: 10.11] | | | | | | — | | | [F5 Networks, Inc. Assumed Shape 2011 Stock [removed: Plan(17)] [added: Plan(1](https://www.sec.gov/Archives/edgar/data/1048695/000104869520000009/ffivs-8ex991assumedshapese.htm)[5](https://www.sec.gov/Archives/edgar/data/1048695/000104869520000009/ffivs-8ex991assumedshapese.htm)[)] §](https://www.sec.gov/Archives/edgar/data/1048695/000104869520000009/ffivs-8ex991assumedshapese.htm) | | |

| [removed: 10.14] [added: 10.12] | | | | | | — | | | [F5 Networks, Inc. Shape Acquisition Equity Incentive [removed: Plan(17)] [added: Plan(1](https://www.sec.gov/Archives/edgar/data/1048695/000104869520000009/ffivs-8ex992shapeacquisiti.htm)[5](https://www.sec.gov/Archives/edgar/data/1048695/000104869520000009/ffivs-8ex992shapeacquisiti.htm)[)] §](https://www.sec.gov/Archives/edgar/data/1048695/000104869520000009/ffivs-8ex992shapeacquisiti.htm) | | |

| [removed: 10.15] [added: 10.13] | | | | | | — | | | [Form of 2014 Incentive Plan Award Agreement (Accelerated Vesting) as revised October [removed: 2017(18)] [added: 2017(1](https://www.sec.gov/Archives/edgar/data/1048695/000104869517000028/ffiv10kex10189302017.htm)[6](https://www.sec.gov/Archives/edgar/data/1048695/000104869517000028/ffiv10kex10189302017.htm)[)] §](https://www.sec.gov/Archives/edgar/data/1048695/000104869517000028/ffiv10kex10189302017.htm) | | |

| [removed: 10.16] [added: 10.14] | | | | | | — | | | [Form of 2014 Incentive Plan Award Agreement (Accelerated Vesting) as revised November [removed: 2019(19)] [added: 2019(1](https://www.sec.gov/Archives/edgar/data/0001048695/000104869520000041/ffiv10kex10199302020.htm)[7](https://www.sec.gov/Archives/edgar/data/0001048695/000104869520000041/ffiv10kex10199302020.htm)[)] §](https://www.sec.gov/Archives/edgar/data/0001048695/000104869520000041/ffiv10kex10199302020.htm) | | |

| [removed: 10.17] [added: 10.15] | | | | | | — | | | [F5 Networks, Inc. Assumed Volterra, Inc. Amended and Restated 2017 Stock [removed: Plan](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000007/ffivs-8ex991assumedvolterr.htm)[(20)] [added: Plan(](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000007/ffivs-8ex991assumedvolterr.htm)[1](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000007/ffivs-8ex991assumedvolterr.htm)[8](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000007/ffivs-8ex991assumedvolterr.htm)[)] §](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000007/ffivs-8ex991assumedvolterr.htm) | | |

| [removed: 10.18] [added: 10.16] | | | | | | — | | | [F5 Networks, Inc. Volterra Acquisition Equity Incentive [removed: Plan(20)] [added: Plan(](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000007/ffivs-8ex992volterraacquis.htm)[1](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000007/ffivs-8ex992volterraacquis.htm)[8](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000007/ffivs-8ex992volterraacquis.htm)[)] §](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000007/ffivs-8ex992volterraacquis.htm) | | |

| [removed: 10.19] [added: 10.17] | | | | | | — | | | [F5 Networks, Inc. Assumed Volterra, Inc. 2019 Restricted Stock Unit Sub-Plan France (sub-plan to the F5 Networks, Inc. Assumed Volterra, Inc. Amended and Restated 2017 Stock [removed: Pl](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000007/ffivs-8ex993assumedvolterr.htm)[an)](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000007/ffivs-8ex993assumedvolterr.htm)[(20)] [added: Plan)(](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000007/ffivs-8ex993assumedvolterr.htm)[1](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000007/ffivs-8ex993assumedvolterr.htm)[8](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000007/ffivs-8ex993assumedvolterr.htm)[)] §](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000007/ffivs-8ex993assumedvolterr.htm) | | |

| [removed: 10.20] [added: 10.18] | | | | | | — | | | [F5 Networks, Inc. Threat Stack Acquisition Equity Incentive [removed: Plan(21)](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000037/ffivs-8ex991threatstackacq.htm) [](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000037/ffivs-8ex991threatstackacq.htm)[§](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000037/ffivs-8ex991threatstackacq.htm)] [added: Plan(](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000037/ffivs-8ex991threatstackacq.htm)[19](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000037/ffivs-8ex991threatstackacq.htm)[) §](https://www.sec.gov/Archives/edgar/data/0001048695/000104869521000037/ffivs-8ex991threatstackacq.htm)] | | |

| [removed: 10.21] [added: 10.20] | | | | | | — | | | [Offer Letter from the Registrant to François [removed: Locoh-Donou(22)] [added: Locoh-Donou(2](https://www.sec.gov/Archives/edgar/data/1048695/000104869517000004/francoislocoh-donouofferle.htm)[1](https://www.sec.gov/Archives/edgar/data/1048695/000104869517000004/francoislocoh-donouofferle.htm)[)] §](https://www.sec.gov/Archives/edgar/data/1048695/000104869517000004/francoislocoh-donouofferle.htm) | | |

| 21.1 | | | * | | | — | | | [Subsidiaries of the [removed: Registrant](https://www.sec.gov/Archives/edgar/data/1048695/000104869521000044/ffiv10kex2119302021.htm)] [added: Registrant](https://www.sec.gov/Archives/edgar/data/1048695/000104869522000033/ffiv10kex2119302022.htm)] | | |

| 23.1 | | | * | | | — | | | [Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting [removed: Firm](https://www.sec.gov/Archives/edgar/data/1048695/000104869521000044/ffiv10kex2319302021.htm)] [added: Firm](https://www.sec.gov/Archives/edgar/data/1048695/000104869522000033/ffiv10kex2319302022.htm)] | | |

| 31.1 | | | * | | | — | | | [Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/1048695/000104869521000044/ffiv10kex3119302021.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/1048695/000104869522000033/ffiv10kex3119302022.htm)] | | |

| 31.2 | | | * | | | — | | | [Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/1048695/000104869521000044/ffiv10kex3129302021.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/1048695/000104869522000033/ffiv10kex3129302022.htm)] | | |

| 32.1 | | | * | | | — | | | [Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/1048695/000104869521000044/ffiv10kex3219302021.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/1048695/000104869522000033/ffiv10kex3219302022.htm)] | | |

[removed: (1)Incorporated] [added: (10)Incorporated] by reference from Current Report on Form 8-K dated March [removed: 11,] [added: 14,] 2019 and filed with the SEC on March [removed: 11,] [added: 14,] 2019.

[removed: (2)Incorporated] [added: (1)Incorporated] by reference from Current Report on Form 8-K dated December 19, 2019 and filed with the SEC on December 24, 2019.

[removed: (3)Incorporated] [added: (2)Incorporated] by reference from Current Report on Form 8-K dated January 5, 2021 and filed with the SEC on January 7, 2021.

[removed: (4)Incorporated] [added: (3)Incorporated] by reference from Current Report on Form 8-K dated November [removed: 15,] [added: 12,] 2021 and filed with the SEC on November 15, 2021.

[removed: (5)Incorporated] [added: (4)Incorporated] by reference from Current Report on Form 8-K dated November [removed: 15,] [added: 12,] 2021 and filed with the SEC on November 15, 2021.

[removed: (6)Incorporated] [added: (5)Incorporated] by reference from Exhibit 4.1 of Registration Statement on Form S-1, File No. 333-75817.

[removed: (7)Incorporated] [added: (6)Incorporated] by reference from Current Report on Form 8-K dated January 24, 2020 and filed with the SEC on January 24, 2020.

[removed: (8)Incorporated] [added: (7)Incorporated] by reference from Quarterly Report on Form 10-Q for the quarter ended December 31, 2019.

[removed: (9)Incorporated] [added: (8)Incorporated] by reference from Current Report on Form 8-K dated May 3, 2017 and filed with the SEC on May 3, 2017.

| 10.19 | | | | | | — | | | [F5, Inc. Incentive Plan, as amended and restated(2](https://www.sec.gov/Archives/edgar/data/1048695/000104869522000009/exhibit101incentiveplan.htm)[0](https://www.sec.gov/Archives/edgar/data/1048695/000104869522000009/exhibit101incentiveplan.htm)[) §](https://www.sec.gov/Archives/edgar/data/1048695/000104869522000009/exhibit101incentiveplan.htm) | | |

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

[Table of Contents](#i117435926e4b4273a51addec3ea8bf69_7)

| | | | | | | | | | | | | | | | | | | | | |

| By: | | | | | | /S/ JAMES PHILLIPS | | | | | | Director | | | | | | November 14, 2022 | | |

| | | | | | | James Phillips | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| By: | | | | | | /S/ MARIANNE BUDNIK | | | | | | Director | | | | | | November 14, 2022 | | |

| | | | | | | Marianne Budnik | | | | | | | | | | | | | | |

| 2.3 | | | | | | — | | | [Merger Agreement dated as of January 5, 2021, by and among the Registrant, Voyager Merger Sub Corporation, Volterra, Inc., and Shareholder Representative Services LLC(3)](https://www.sec.gov/Archives/edgar/data/0001048695/000114036121000498/nc10018716x1_ex2-1.htm)[+](https://www.sec.gov/Archives/edgar/data/0001048695/000114036121000498/nc10018716x1_ex2-1.htm) | | |

| 10.3 | | | | | | — | | | [Revolving Credit Agreement dated as of January 31, 2020, among F5 Networks, Inc., the lenders party thereto and JPMorgan Chase Bank, N.A., as the Administrative Agent(8)](https://www.sec.gov/Archives/edgar/data/1048695/000104869520000012/ffiv10qex10212312019.htm) | | |

| 10.8 | | | | | | — | | | [Traffix Communication Systems Ltd. 2007 Israeli Employee Share Option Plan(13) §](https://www.sec.gov/Archives/edgar/data/1048695/000119312512088683/d306389dex101.htm) | | |

| 10.22 | | | | | | — | | | [Offer Letter from the Registrant to Francis J. Pelzer(23) §](https://www.sec.gov/Archives/edgar/data/1048695/000104869518000015/f5offerletter-frankpelzer.htm) | | |

(22)Incorporated by reference from Current Report on Form 8-K dated January 27, 2017 and filed with the SEC on January 30, 2017.

(23)Incorporated by reference from Current Report on Form 8-K dated April 20, 2018 and filed with the SEC on April 25, 2018.