GAAP net income was $29.3 million ($0.36 per diluted share), compared to $28.4 million ($0.36 per diluted share) in the prior quarter and $21.4 million ($0.27 per diluted share) in the first quarter a year ago.
Excluding the impact of stock-based compensation net of tax, non-GAAP net income was $41.4 million ($0.52 per diluted share), compared to $40.0 million ($0.50 per diluted share) in the prior quarter and $32.3 million ($0.40 per diluted share) in the first quarter of fiscal 2009.
A reconciliation of GAAP net income to non-GAAP net income is included on the attached Consolidated Statements of Operations.
"For the second quarter in a row, strong product sales continued to drive our top-line growth," said John McAdam, F5 president and chief executive officer. "During the first quarter, F5's product revenue grew 9.5 percent compared to the prior quarter and 10.5 percent year-over-year. With the exception of Japan, results were strong across all regions and especially in North America, where overall revenue was up 12 percent from the prior quarter and 24 percent compared to the first quarter a year ago. Our business in EMEA continues to be quite strong, with a 20 percent increase in revenue from last quarter and a 15 percent increase from the first quarter of fiscal 2009.
"Because our products are strategic points of control in data centers, the initial purchase and renewal of service maintenance contracts continues to be a strong component of our business, driving deferred revenue up 15.5 percent during the quarter to $211.4 million.
"The combination of strong revenue growth and stable gross margins enabled us to add nearly 100 employees in Q1 while maintaining our non-GAAP operating margin at just under 32 percent.
"During the quarter we generated $74 million in cash from operations, and after repurchasing 309,160 shares of our outstanding common stock we ended the quarter with $647 million in cash and investments.
"While seasonal factors typically make the second quarter our most challenging quarter, customer buying patterns continue to stabilize and our near-term business outlook remains strong," McAdam said.
For the current quarter, ending on March 31, management has set a revenue goal of $195 million to $200 million with a GAAP earnings target of $0.36 to $0.38 per diluted share. Excluding stock-based compensation expense, the company's non-GAAP earnings target is $0.52 to $0.54 per diluted share.
About F5 Networks
F5 Networks is the global leader in Application Delivery Networking (ADN), focused on ensuring the secure, reliable, and fast delivery of applications. F5's flexible architectural framework enables community-driven innovation that helps organizations enhance IT agility and dynamically deliver services that generate true business value. F5's vision of unified application and data delivery offers customers an unprecedented level of choice in how they deploy ADN solutions. It redefines the management of application, server, storage, and network resources, streamlining application delivery and reducing costs. Global enterprise organizations, service and cloud providers, and Web 2.0 content providers trust F5 to keep their business moving forward. For more information, go to www.f5.com.