Investing.com-- F5 Networks (NASDAQ:FFIV) saw its shares soar more than 12% after the company reported better-than-expected fourth quarter results and provided an optimistic outlook for the upcoming fiscal year.
The network security and application delivery company also announced a new $1 billion share repurchase program.
F5 Networks reported adjusted earnings per share of $3.67 for the fourth quarter, surpassing the analyst estimate of $3.45.
Revenue for the quarter came in at $746.67 million, beating the consensus estimate of $730.39 million and representing a 5.6% increase YoY.
The company's software revenue, a key growth driver, jumped 19% YoY to $228 million. Systems revenue declined 3% to $130 million, while global services revenue grew 2% to $388 million.
"Our results speak to the power of our portfolio and innovation, the strength of our operating model, and the resilience of our business," said François Locoh-Donou, F5's President and CEO.
For the first quarter of fiscal year 2025, F5 Networks expects revenue between $705 million and $725 million, with the midpoint slightly above the consensus of $706 million.
The company forecasts adjusted EPS of $3.29 to $3.41, compared to the analyst estimate of $3.37.
Looking ahead to fiscal year 2025, F5 Networks anticipates total revenue growth of 4% to 5% and adjusted EPS growth of 5% to 7% over fiscal year 2024.
Evercore ISI analysts raised their price target on F5 stock to $240 following the report.
They said the company is "benefiting from its transition from a hardware-centric to software-centric company." This, alongside the "prudent self-help levers it implemented through this downcycle," Evercore's team believes F5 could reach EPS of around $14 in fiscal 2025, "with potential upside given the early signs of a secular and cyclical upcycle."
Separately, Jefferies analysts noted that F5 continues to deliver encouraging performance, however, their view of the company's long-term revenue growth and EPS power remain "largely unchanged."
"We do think their AI opportunity is interesting, although it’s still 1-2 years into the future," they said.
F5's board of directors authorized an additional $1 billion for its common stock repurchase program, supplementing the $422 million remaining in the existing program.
Senad Karaahmetovic contributed to this report.