F5 10-Q 2024-12-31

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2024

OR

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-26041

F5, INC.

(Exact name of registrant as specified in its charter)

Washington						91-1714307
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

801 5th Avenue

Seattle, Washington 98104

(Address of principal executive offices and zip code)

(206) 272-5555

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common stock, no par value			FFIV			NASDAQ Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer						☑						Accelerated Filer						☐
Non-accelerated Filer						☐ (Do not check if a smaller reporting company)						Smaller Reporting Company						☐
												Emerging Growth Company						☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The number of shares outstanding of the registrant’s common stock as of January 30, 2025 was 57,652,256.

Table of Contents

F5, INC.

QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended December 31, 2024

Table of Contents

			Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)			4
Consolidated Balance Sheets			4
Consolidated Income Statements			5
Consolidated Statements of Comprehensive Income			6
Consolidated Statements of Shareholders' Equity			7
Consolidated Statements of Cash Flows			8
Notes to Consolidated Financial Statements			9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			21
Item 3. Quantitative and Qualitative Disclosures About Market Risk			26
Item 4. Controls and Procedures			27
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			27
Item 1A. Risk Factors			27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			28
Item 4. Mine Safety Disclosures			29
Item 5. Other Information			29
Item 6. Exhibits			29
SIGNATURES			30

Table of Contents

PART I. FINANCIAL INFORMATION

F5, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands)

						December 31, 2024						September 30, 2024
ASSETS
Current assets
Cash and cash equivalents						$	1,150,907					$	1,074,602
Accounts receivable, net of allowances of $4,955 and $4,585						484,989						389,024
Inventories						73,239						76,378
Other current assets						632,893						569,467
Total current assets						2,342,028						2,109,471
Property and equipment, net						149,979						150,943
Operating lease right-of-use assets						198,206						178,180
Long-term investments						11,177						8,580
Deferred tax assets						378,334						365,951
Goodwill						2,312,362						2,312,362
Other assets, net						508,555						487,517
Total assets						$	5,900,641					$	5,613,004
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable						$	53,611					$	67,894
Accrued liabilities						316,369						300,076
Deferred revenue						1,217,664						1,121,683
Total current liabilities						1,587,644						1,489,653
Deferred tax liabilities						7,702						7,179
Deferred revenue, long-term						728,596						676,276
Operating lease liabilities, long-term						242,872						215,785
Other long-term liabilities						98,076						94,733
Total long-term liabilities						1,077,246						993,973
Commitments and contingencies (Note 8)
Shareholders' equity
Preferred stock, no par value; 10,000 shares authorized, no shares issued and outstanding						—						—
Common stock, no par value; 200,000 shares authorized, 58,132 and 58,094 shares issued and outstanding						9,461						5,889
Accumulated other comprehensive loss						(24,199)						(20,912)
Retained earnings						3,250,489						3,144,401
Total shareholders' equity						3,235,751						3,129,378
Total liabilities and shareholders' equity						$	5,900,641					$	5,613,004

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

F5, INC.

CONSOLIDATED INCOME STATEMENTS

(unaudited, in thousands, except per share amounts)

						Three months ended December 31,
						2024						2023
Net revenues
Products						$	368,497					$	305,859
Services						397,992						386,738
Total						766,489						692,597
Cost of net revenues
Products						82,836						82,708
Services						57,674						53,681
Total						140,510						136,389
Gross profit						625,979						556,208
Operating expenses
Sales and marketing						206,035						198,927
Research and development						130,518						119,575
General and administrative						73,023						64,718
Restructuring charges						11,321						8,472
Total						420,897						391,692
Income from operations						205,082						164,516
Other income, net						3,962						9,882
Income before income taxes						209,044						174,398
Provision for income taxes						42,599						36,016
Net income						$	166,445					$	138,382
Net income per share — basic						$	2.85					$	2.34
Weighted average shares — basic						58,305						59,122
Net income per share — diluted						$	2.82					$	2.32
Weighted average shares — diluted						59,058						59,653

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

F5, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited, in thousands)

						Three months ended December 31,
						2024						2023
Net income						$	166,445					$	138,382
Other comprehensive (loss) income:
Foreign currency translation adjustment						(3,287)						2,504
Available-for-sale securities:
Unrealized gains on securities, net of taxes of $0 and $12 for the three months ended December 31, 2024 and 2023, respectively						—						49
Net change in unrealized gains on available-for-sale securities, net of tax						—						49
Total other comprehensive (loss) income						(3,287)						2,553
Comprehensive income						$	163,158					$	140,935

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

F5, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(unaudited, in thousands)

						Common Stock												Accumulated Other Comprehensive Loss						Retained Earnings						Total Shareholders’ Equity
						Shares						Amount

Showing the first 8K of 70K characters. Open the full section

The following discussion of our financial condition and results of operations contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. These statements include, but are not limited to, statements about our plans, objectives, expectations, strategies, intentions or other characterizations of future events or circumstances and are generally identified by the words "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," and similar expressions. These forward-looking statements are based on current information and expectations and are subject to a number of risks and uncertainties. Our actual results could differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in Part II, Item 1A. "Risk Factors" herein and in other documents we file from time to time with the Securities and Exchange Commission. We assume no obligation to revise or update any such forward-looking statements.

Overview

F5 is a leading provider of multicloud application security and delivery solutions which enable our customers to develop, deploy, operate, secure, and govern applications in any architecture, from on-premises to the public cloud. Our enterprise-grade application services are available as cloud-based, software-as-a-service, and software-only solutions optimized for multicloud environments, with modules that can run independently, or as part of an integrated solution on our high-performance appliances. We market and sell our products primarily through multiple indirect sales channels in the Americas; Europe, the Middle East, and Africa ("EMEA"); and the Asia Pacific region ("APAC"). Enterprise customers (Fortune 1000 or Business Week Global 1000 companies) in the technology, telecommunications, financial services, transportation, education, manufacturing, and health care industries, along with government customers, continue to make up the largest percentage of our customer base.

Our management team monitors and analyzes a number of key performance indicators in order to manage our business and evaluate our financial and operating performance on a consolidated basis. Those indicators include:

• Revenues. Our revenue is derived from the sales of both global services and products. Our global services revenue includes annual maintenance contracts, training and consulting services. 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 F5 Distributed Cloud Services 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. F5 Distributed Cloud Services provides security, multicloud networking, and edge-based computing solutions and are offered on a subscription basis, under a unified software-as-a-service ("SaaS") and managed service platform.

We monitor the sales mix of our revenues within each reporting period. We believe customer acceptance rates of our new products, feature enhancements and consumption models are indicators of future trends. We also consider overall revenue concentration by geographic region as an additional indicator of current and future trends. Over the course of fiscal 2024, uncertainties in the macroeconomic environment began to stabilize and we saw improvements in customer demand during the second half of fiscal 2024, which continued in the first quarter of fiscal 2025.

• Cost of revenues and gross margins. We strive to control our cost of revenues and thereby maintain our gross margins. Significant items impacting cost of revenues are hardware costs paid to our contract manufacturers, third-party software license fees, software-as-a-service infrastructure costs, amortization of developed technology and personnel and overhead expenses. In addition, factors such as sales price, product and services mix, inventory obsolescence, returns, component price increases, warranty costs, and global supply chain constraints could significantly impact our gross margins.

• Operating expenses. Operating expenses are substantially driven by personnel and related overhead expenses. Existing headcount and future hiring plans are the predominant factors in analyzing and forecasting future operating expense trends. Other significant operating expenses that we monitor include marketing and promotions, travel, professional fees, computer costs related to the development of new products and provision of services, facilities and depreciation expenses.

• Liquidity and cash flows. Our financial condition remains strong with significant cash and investments. The increase in cash and investments for the first three months of fiscal year 2025 was primarily due to cash provided by operating activities of $202.8 million, partially offset by $125.0 million of cash used to repurchase outstanding common stock under our stock repurchase program. Going forward, we believe the primary driver of cash flows will be net income from operations. We will continue to evaluate possible acquisitions of, or investments in businesses, products, or technologies that we believe are strategic, which may require the use of cash. Additionally, on January 31, 2020, we entered into a Revolving Credit Agreement (the "Revolving Credit Agreement") that provides for a senior unsecured

Table of Contents

revolving credit facility in an aggregate principal amount of $350.0 million (the "Revolving Credit Facility"). As of December 31, 2024, there were no outstanding borrowings under the Revolving Credit Facility, and we had available borrowing capacity of $350.0 million. On January 31, 2025, the Revolving Credit Facility expired. At the time of expiration, there were no outstanding borrowings under the Revolving Credit Facility.

• Balance sheet. We view cash, short-term and long-term investments, deferred revenue, accounts receivable balances and days sales outstanding as important indicators of our financial health. Deferred revenues continued to increase in the first quarter of fiscal year 2025 primarily due to an increase in maintenance renewal contracts related to our existing product installation base, in addition to increased deferred revenue associated with subscription offerings. Our days sales outstanding for the first quarter of fiscal year 2025 was 57. Days sales outstanding is calculated by dividing ending accounts receivable by revenue per day for a given quarter.

Summary of Critical Accounting Policies and Estimates

The preparation of our financial condition and results of operations requires us to make judgments and estimates that may have a significant impact upon our financial results. We believe that, of our significant accounting policies, revenue recognition requires estimates and assumptions that require complex, subjective judgments by management, which can materially impact reported results. Actual results may differ from these estimates under different assumptions or conditions.

There were no material changes to our critical accounting policies and estimates compared to the critical accounting policies and estimates described in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Form 10-K for the fiscal year ended September 30, 2024. Refer to the "New Accounting Pronouncements" section of Note 1 in this Quarterly Report on Form 10-Q for a summary of the new accounting policies.

Impact of Macroeconomic Conditions

Our overall performance depends in part on worldwide economic and geopolitical conditions and their impacts on customer behavior. Uncertain economic conditions, including inflation, tariffs and other duties, higher interest rates, slower growth, fluctuations in foreign exchange rates, and other changes in economic conditions, may adversely affect our results of operations and financial performance. For further discussion of the potential impacts of recent macroeconomic events on our business, financial condition, and operating results, see Part 1, Item 1A, "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended September 30, 2024.

Results of Operations

The following discussion and analysis should be read in conjunction with our consolidated financial statements, related notes and risk factors included elsewhere in this Quarterly Report on Form 10-Q.

						Three months ended December 31,
						2024						2023
						(in thousands, except percentages)
Net revenues
Products						$	368,497					$	305,859
Services						397,992						386,738
Total						$	766,489					$	692,597
Percentage of net revenues
Products						48.1		%				44.2		%
Services						51.9						55.8
Total						100.0		%				100.0		%

Net Revenues. Total net revenues increased 10.7% for the three months ended December 31, 2024, from the comparable period in the prior year. The increase in total net revenues was primarily due to an increase in product revenues associated with both software and systems, as well as an increase in service revenues driven by continued growth in maintenance contract renewals. Revenues outside of the United States represented 46.9% of total net revenues for the three months ended December 31, 2024, compared to 49.5% for the same period in the prior year.

Net Product Revenues. Net product revenues increased 20.5% for the three months ended December 31, 2024, from the comparable period in the prior year. The increase in net product revenues was due to an increase in software revenue primarily from packaged software sales, as well as an increase in systems sales.

Table of Contents

The following presents net product revenues by systems and software (in thousands):

						Three months ended December 31,
						2024						2023
Net product revenues
Systems revenue						$	159,708					$	135,373
Software revenue						208,789						170,486
Total net product revenue						$	368,497					$	305,859
Percentage of net product revenues
Systems revenue						43.3		%				44.3		%
Software revenue						56.7						55.7
Total net product revenue						100.0		%				100.0		%

Software Revenues. As a component of net product revenues, software revenues increased 22.5% for the three months ended December 31, 2024, from the comparable period in the prior year.

Net Service Revenues. Net service revenues increased 2.9% for the three months ended December 31, 2024, from the comparable period in the prior year. The increase in net service revenues was primarily the result of increased initial purchases and renewals of maintenance contracts driven by growth in product revenue.

The following customers accounted for more than 10% of total net revenue:

						Three months ended December 31,
						2024						2023
Ingram Micro, Inc.						16.2		%				15.3		%
Synnex Corporation						16.8		%				15.6		%

The following customers accounted for more than 10% of total receivables:

						December 31, 2024						September 30, 2024
Ingram Micro, Inc.						14.1		%				20.3		%
Synnex Corporation						14.7		%				14.8		%

No other customers accounted for more than 10% of total net revenue or receivables.

						Three months ended December 31,
						2024						2023
						(in thousands, except percentages)
Cost of net revenues and gross profit
Products						$	82,836					$	82,708
Services						57,674						53,681
Total						140,510						136,389
Gross profit						$	625,979					$	556,208
Percentage of net revenues and gross margin (as a percentage of related net revenue)
Products						22.5		%				27.0		%
Services						14.5						13.9
Total						18.3						19.7
Gross margin						81.7		%				80.3		%

Table of Contents

Cost of Net Product Revenues. Cost of net product revenues consist of finished products purchased from our contract manufacturers, manufacturing overhead, freight, warranty, provisions for excess and obsolete inventory, software-as-a-service infrastructure costs and amortization expenses in connection with developed technology from acquisitions. Cost of net product revenues remained relatively flat for the three months ended December 31, 2024, from the comparable period in the prior year.

Cost of Net Service Revenues. Cost of net service revenues consist of the salaries and related benefits of our professional services staff, travel, facilities and depreciation expenses. For the three months ended December 31, 2024, cost of net service revenues as a percentage of net service revenues was 14.5%, compared to 13.9% for the comparable period in the prior year. Professional services headcount at the end of December 2024 increased to 1,093 from 1,049 at the end of December 2023.

						Three months ended December 31,
						2024						2023
						(in thousands, except percentages)
Operating expenses
Sales and marketing						$	206,035					$	198,927
Research and development						130,518						119,575
General and administrative						73,023						64,718
Restructuring charges						11,321						8,472
Total						$	420,897					$	391,692
Operating expenses (as a percentage of net revenue)
Sales and marketing						26.9		%				28.7		%
Research and development						17.0						17.3
General and administrative						9.5						9.4
Restructuring charges						1.5						1.2
Total						54.9		%				56.6		%

Sales and Marketing. Sales and marketing expenses consist of the salaries, commissions and related benefits of our sales and marketing staff, the costs of our marketing programs, including public relations, advertising and trade shows, travel, facilities, and depreciation expenses. Sales and marketing expense increased $7.1 million, or 3.6% for the three months ended December 31, 2024, from the comparable period in the prior year. The increase in sales and marketing expenses for the three months ended December 31, 2024 was primarily due to a increase of $4.3 million in personnel costs from the comparable period in the prior year. In addition, commissions for the three months ended December 31, 2024 increased $2.3 million from the comparable period in the prior year. Sales and marketing headcount at the end of December 2024 decreased to 2,099 from 2,154 at the end of December 2023. Sales and marketing expenses included stock-based compensation expense of $21.2 million for the three months ended December 31, 2024, compared to $21.6 million for the same period in the prior year.

Research and Development. Research and development expenses consist of the salaries and related benefits of our product development personnel, prototype materials and other expenses related to the development of new and improved products, facilities and depreciation expenses. Research and development expense increased $10.9 million, or 9.2% for the three months ended December 31, 2024, from the comparable period in the prior year. The increase in research and development expenses for the three months ended December 31, 2024 was primarily due to a increase of $8.3 million in personnel costs from the comparable period in the prior year. Research and development headcount at the end of December 2024 increased to 2,024 from 1,986 at the end of December 2023. Research and development expenses included stock-based compensation expense of $16.5 million for the three months ended December 31, 2024, compared to $16.0 million for the same period in the prior year.

General and Administrative. General and administrative expenses consist of the salaries, benefits and related costs of our executive, finance, information technology, human resource and legal personnel, third-party professional service fees, bad debt charges, facilities and depreciation expenses. General and administrative expenses increased $8.3 million, or 12.8% for the three months ended December 31, 2024, from the comparable period in the prior year. The increase in general and administrative expenses for the three months ended December 31, 2024 was primarily due to an increase of $2.4 million in professional services fees from the comparable period in the prior year. In addition, personnel costs increased $2.2 million for the three months ended December 31, 2024 from the comparable period in the prior year. General and administrative headcount at the end of December 2024 decreased to 840 from 882 at the end of December 2023. General and administrative expenses included stock-based compensation expense of $12.9 million for the three months ended December 31, 2024, compared to $10.7 million for the same period in the prior year.

Table of Contents

Restructuring Charges. In the first fiscal quarters of 2025 and 2024, we completed restructuring plans to align strategic and financial objectives and optimize resources for long term growth. As a result of our restructuring initiatives, we recorded charges of $11.3 million and $8.5 million, net of adjustments, related to reductions in workforce that are reflected in our results for the three months ended December 31, 2024 and December 31, 2023, respectively.

						Three months ended December 31,
						2024						2023
						(in thousands, except percentages)
Other income and income taxes
Income from operations						$	205,082					$	164,516
Other income, net						3,962						9,882
Income before income taxes						209,044						174,398
Provision for income taxes						42,599						36,016
Net income						$	166,445					$	138,382
Other income and income taxes (as percentage of net revenue)
Income from operations						26.8		%				23.8		%
Other income, net						0.5						1.4
Income before income taxes						27.3						25.2
Provision for income taxes						5.6						5.2
Net income						21.7		%				20.0		%

Other Income, Net. Other income, net consists primarily of interest income and expense and foreign currency transaction gains and losses. Other income, net decreased $5.9 million, or 59.9% for the three months ended December 31, 2024, from the comparable period in the prior year. The decrease in other income, net was primarily due to a decrease in foreign currency gains and losses of $9.0 million, partially offset by an increase in interest income from our investments of $2.5 million from the comparable period in the prior year.

Provision for Income Taxes. The effective tax rate was 20.4% and 20.7% for the three months ended December 31, 2024 and 2023, respectively. The decrease in the effective tax rate for the three months ended December 31, 2024 as compared to the three months ended December 31, 2023 is primarily due to the tax impact of stock-based compensation.

We record a valuation allowance to reduce our deferred tax assets to the amount we believe is more likely than not to be realized. In making these determinations we consider historical and projected taxable income, and ongoing prudent and feasible tax planning strategies in assessing the appropriateness of a valuation allowance. Our net deferred tax assets at December 31, 2024 and September 30, 2024 were $370.6 million and $358.8 million, respectively. The net deferred tax assets include valuation allowances of $39.6 million as of December 31, 2024 and $39.7 million as of September 30, 2024, which are primarily related to certain state and foreign net operating losses and tax credit carryforwards.

Our worldwide effective tax rate may fluctuate based on a number of factors, including variations in projected taxable income in the various geographic locations in which we operate, the impact of stock-based compensation, changes in the valuation of our net deferred tax assets, resolution of potential exposures, tax positions taken on tax returns filed in the various geographic locations in which we operate, and the introduction of new accounting standards or changes in tax laws or interpretations thereof in the various geographic locations in which we operate. We have recorded liabilities to address potential tax exposures related to business and income tax positions we have taken that could be challenged by taxing authorities. The ultimate resolution of these potential exposures may be greater or less than the liabilities recorded, which could result in an adjustment to our future tax expense.

Liquidity and Capital Resources

Cash and cash equivalents, short-term investments and long-term investments totaled $1,162.1 million as of December 31, 2024, compared to $1,083.2 million as of September 30, 2024, representing an increase of $78.9 million. The increase was primarily due to cash provided by operating activities of $202.8 million for the three months ended December 31, 2024. The increase in cash and investments for the first quarter of fiscal 2025 was partially offset by cash used for the repurchase of common stock during the three months ended December 31, 2024 of $125.0 million.

Table of Contents

Cash provided by operating activities for the first three months of fiscal year 2025 resulted from net income of $166.4 million combined with changes in operating assets and liabilities, as adjusted for various non-cash items including stock-based compensation, deferred revenue, depreciation, impairment and amortization charges. Cash provided by operating activities for the first quarter of fiscal 2025 increased from the comparable period in the prior year primarily due to an increase in net income, as well as an increase in cash received from customers.

Cash from operations could be affected by various risks and uncertainties, including, but not limited to, the effects of the risks detailed in Part 1, Item 1A, "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended September 30, 2024. However, we anticipate our current cash, cash equivalents and investment balances and anticipated cash flows generated from operations will be sufficient to meet our liquidity needs.

Cash used in investing activities was $10.0 million for the three months ended December 31, 2024, compared to cash used in investing activities of $7.1 million for the same period in the prior year. Investing activities include purchases, sales and maturities of available-for-sale securities, business acquisitions and capital expenditures. The amount of cash used in investing activities for the three months ended December 31, 2024 was primarily the result of $8.1 million in capital expenditures related to maintaining our operations worldwide.

Cash used in financing activities was $114.7 million for the three months ended December 31, 2024, compared to cash used in financing activities of $135.0 million for the same period in the prior year. Our financing activities for the three months ended December 31, 2024 primarily consisted of $125.0 million of cash used to repurchase shares of common stock. In addition, $13.4 million in cash was used for taxes related to net share settlement of equity awards. Cash used in financing activities was partially offset by cash received from the exercise of employee stock options and stock purchases under our employee stock purchase plan of $23.7 million.

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 December 31, 2024, there were no outstanding borrowings under the Revolving Credit Facility, and we had available borrowing capacity of $350.0 million. On January 31, 2025, the Revolving Credit Facility expired. At the time of expiration, there were no outstanding borrowings under the Revolving Credit Facility.

Obligations and Commitments

As of December 31, 2024, our principal commitments consisted of obligations outstanding under operating leases and purchase obligations with one of our component suppliers.

We lease our facilities under operating leases that expire at various dates through 2036. There have been no material changes in our principal lease commitments compared to those discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024.

In October 2022, we entered into an unconditional purchase commitment with one of our suppliers for the delivery of systems components. Under the terms of the agreement, we are obligated to purchase $10 million of component inventory annually, with a total committed amount of $40 million over a four-year term. As of December 31, 2024, we had no remaining purchase commitments under the third year of the agreement. Our total non-cancelable long-term purchase commitments outstanding as of December 31, 2024 was $10.0 million.

We have a contractual obligation to purchase inventory components procured by our primary contract manufacturer in accordance with our annual build forecast. The contractual terms of the obligation contain cancellation provisions, which reduce our liability to purchase inventory components for periods greater than one year. In order to support our build forecast, we will, from time-to-time prepay our primary contract manufacturer for inventory purchases.

Recent Accounting Pronouncements

The anticipated impact of recent accounting pronouncements is discussed in Note 1 to the accompanying Notes to Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

Interest Rate Risk. Our current cash and cash equivalents consist of money market funds as allowed and specified in our investment policy guidelines. Due to the current nature of our investment portfolio, we do not believe an immediate 10% increase or decrease in interest rates would have a material effect on the fair market value of our portfolio. Therefore, we do not expect our operating results or cash flows to be materially affected by a sudden change in interest rates.

Table of Contents

Inflation Risk. We are actively monitoring the macroeconomic 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 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.

Foreign Currency Risk. The majority of our sales, cost of net revenues, and 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 conduct transactions in foreign currencies 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. However, as we continue to expand our operations internationally, transaction gains or losses may become significant in the future.

Management believes there have been no material changes to our quantitative and qualitative disclosures about market risk during the three month period ended December 31, 2024, compared to those discussed in our Annual Report on Form 10-K for the year ended September 30, 2024.

The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) which are designed to ensure that required information is recorded, processed, summarized and reported within the required timeframe, as specified in the rules set forth by the Securities Exchange Commission. Our disclosure controls and procedures are also designed to ensure that information required to be disclosed is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

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 December 31, 2024 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 December 31, 2024.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

**Item 1.**Legal Proceedings

See Note 8 - Commitments and Contingencies of the Notes to Financial Statements (Part I, Item 1 of this Form 10-Q) for information regarding legal proceedings in which we are involved.

There have been no material changes to our risk factors from those described in Part 1, Item 1A, "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended September 30, 2024, which was filed with the Securities and Exchange Commission on November 18, 2024.

Table of Contents

**Item 2.**Unregistered Sales of Equity Securities and Use of Proceeds

On October 25, 2024, the Company announced that its Board of Directors authorized an additional $1.0 billion for its common stock share repurchase program. This authorization is incremental to the existing $6.4 billion program, initially approved in October 2010 and expanded in subsequent fiscal years. Acquisitions for the share repurchase programs will be made from time to time in private transactions, accelerated share repurchase programs, or open market purchases as permitted by securities laws and other legal requirements. The programs can be terminated at any time. As of December 31, 2024, the Company had $1,297 million remaining authorized to purchase shares under its share repurchase program.

Shares repurchased and retired for the three months ended December 31, 2024 are as follows (in thousands, except shares and per share data):

						Total Number of Shares Purchased****1						Average Price Paid per Share						Total Number of Shares Purchased per the Publicly Announced Plan						Approximate Dollar Value of Shares that May Yet be Purchased Under the Plan****2
October 1, 2024 — October 31, 2024						—						—						—						$	1,422,421
November 1, 2024 — November 30, 2024						136,989						$	242.84					79,937						$	1,402,421
December 1, 2024 — December 31, 2024						409,660						$	256.31					409,660						$	1,297,421

(1)Includes 57,052 shares withheld from restricted stock units that vested in the first quarter of fiscal 2025 to satisfy minimum tax withholding obligations that arose on the vesting of restricted stock units.

(2)Shares withheld from restricted stock units that vested to satisfy minimum tax withholding obligations that arose on the vesting of such awards do not deplete the dollar amount available for purchases under the repurchase program.

Table of Contents

**Item 4.**Mine Safety Disclosures

Not applicable.

Rule 10b5-1 and Non-Rule 10b5-1 Trading Arrangements

During the three months ended December 31, 2024, certain of our officers and directors adopted or terminated Rule 10b5-1 trading arrangements as follows:

On November 27, 2024, Scot Rogers, EVP, General Counsel, adopted a written plan intended to satisfy the affirmative defense of Rule 10b5-1(c) that is designed to be in effect until November 17, 2025 with respect to the sale of 15,217 Company shares.

On November 13, 2024, François Locoh-Donou, President and Chief Executive Officer, adopted a written plan intended to satisfy the affirmative defense of Rule 10b5-1(c) that is designed to be in effect until December 31, 2025 with respect to the sale of 19,500 Company shares.

Exhibit Number									Exhibit Description
31.1*			—						Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*			—						Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*			—						Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*			—						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*			—						Inline XBRL Taxonomy Extension Schema Document
101.CAL*			—						Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*			—						Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*			—						Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*			—						Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*			—						Cover Page Interactive Data File (embedded within the Inline XBRL document)

• Filed herewith.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 7th day of February, 2025.

			F5, INC.
			By:						/s/ EDWARD C. WERNER
									Edward C. Werner
									Executive Vice President,
									Chief Financial Officer
									(principal financial officer and principal accounting officer)