Share in F5 Inc. dropped in late trading today after the network traffic management and security company predicted lower-than-expected earnings in its latest quarterly report.
For the quarter that ended Sept. 30, F5 reported a profit before costs such as stock compensation of $158 million, or $2.62 per share, down from $185 million or $3.01 per share in the same quarter of last year. Revenue rose 3%, to $700 million. Analysts had been expecting a $2.52-a-share profit on revenue of $692.1 million.
For the full fiscal year 2022, F5 reported an adjusted profit of $623 million, or $10.19 per share, down from $671 million, or $10.81 per share, a year ago. Revenue rose 4%, to $2.7 billion.
“Organizations across the globe have embraced and accelerated digital transformation to improve efficiency and to deliver the extraordinary digital experiences that are significant drivers of their businesses,” François Locoh-Donou, F5’s president and chief executive officer, said in a statement. “In a challenging macro environment, these efforts take on new importance.”
Looking forward, F5 is predicting adjusted earnings of $2.25 to $2.37 per share in its fiscal first quarter. Revenue is predicted to land between $690 million and $710 million. Analysts had been predicting an adjusted profit of $2.58 a share on revenue of $694.62 million.
F5’s earnings report comes days after the company became the latest notable tech company to announce layoffs. GeekWire reported Oct. 21 that the company is cutting around 100 jobs, about 1% of its global workforce of 6,900. A spokesperson for F5 referenced the current macroeconomic environment as the driving force behind its layoffs.
The F5 layoffs were significantly lower than others in the tech industry, with cybersecurity startup Snyk Ltd. laying off 14% of its workforce earlier this week. Other companies that had laid off staff include Microsoft Corp. on Oct. 18, DocuSign Inc. cutting 9% of its workforce on Sept. 28, Twilio Inc. shaving 11% of its workforce on Sept. 14 and Robinhood Markets Inc. slashing 23% on Aug. 2. Oracle Corp. was also reported on Aug. 1 to be laying off staff.
Other tech companies have avoided laying off staff but have imposed hiring restrictions or freezes instead, relying on natural attrition to reduce their headcounts. Tech companies doing so include Uber Technologies Inc. in May, Google LLC in July, Apple Inc. on Aug. 16 and Meta Platforms Inc. on Sept. 29.
Despite F5 reporting an earnings beat in its financials, investors focused on the lower-than-expected outlook. F5 shares fell about 4% in late trading.