It was another solid quarter of growth for networking vendor F5, thanks in part to a strong showing in security.
F5 reported second quarter fiscal 2012 earnings late Wednesday with revenue coming in at $339.6 million, for a 22.4 percent year-over-year gain. Net income was reported at $68.6 million or $0.86 per share, up from $55.6 million or $0.68 per share for the second quarter of 2011. Moving forward, F5 provided revenue guidance for the third quarter of 2012 to be in the range of $350 to $355 million.
ADC's push earnings higher
The bulk of F5's revenues during the second quarter came from their core application delivery networking business, which contributed $333.1 million in revenue. Revenue from F5's ARX File Virtualization business was $6.5 million. In terms of vertical market share, Telco represented 27 percent of total sales, financial services was 16 percent, technology 19 percent, and government 12 percent.
While F5's technology at the top level is identified as being in the application delivery controller (ADC) space, it's also used as a data center firewall. In January, F5's ADC became certified as a firewall by testing vendor ICSA Labs.
"It’s very much a meaningful revenue contributor right now," F5 CEO John McAdam said during the company's earnings call. "I mean, we have won pretty significant deals and by significant -- greater than $1 million in some cases."
McAdam noted that for the seven-figure deals, F5 has competed against Check Point, Cisco and Juniper to win business.
In addition to taking aim at security, F5 has also recently accelerated their portfolio for enhanced performance. Earlier this month, F5 announced the VIPRION 4480 chassis which can deliver up to 320 gigabytes per second (Gbps) of Layer4 throughput and up to 80 Gbps of SSL throughput.
F5's VIPRION and Big-IP hardware appliances are all powered by their TMOS operating system, which is set for a major new release later this year. McAdam said that the new release will include deep packet inspection (DPI) functionality as well as a host of new security features and major enhancements for private and public cloud environments.
Software defined networking on the horizon
Another area that F5 is looking at is the possible integration with software defined networking (SDN) approaches like OpenFlow. With SDN, network traffic flows become programmable enabling full network virtualization. Other networking vendors including HP and Juniper have already publicly embraced the model.
"Internally, we have been working towards looking at how that could be adjacent or fit into our business," Dan Matte, senior vice president of Marketing and Business Development at F5 said. "But in terms of the technology, we see a pretty good synergy with what we do and how that might fit that model, so we expect to work with that in the future to go forward."