F5 Networks, Inc. (NASDAQ:FFIV) Q4 2017 Earnings Conference Call Transcript
Oct 25, 2017 • 04:30 pm ET
Good afternoon, and welcome to the F5 Networks Fourth Quarter and Fiscal 2017 Financial Results Conference Call. At this time, all parties will be able to listen only until the question-and-answer portion. Also, today's conference is being recorded. If anyone has any objections, please disconnect at this time.
I'd now like to turn the call over to Mr. Jason Willey, Director of IR. Sir, you may begin.
Thank you, and good afternoon, everyone. As Lawrence said, I am Jason Willey, F5's Director of Investor Relations. Francois Locoh-Donou, President and CEO of F5 and Andy Reinland, EVP and CFO will be the speakers on today's call. Other members of F5's executive team are also on hand to answer questions following the prepared remarks.
If you have any questions after the call, please direct them to me at 206-272-7908 or j.willey@F5.com. A copy of today's press release is available on our website at www.F5.com. In addition, you can access an archived version of today's call from our website through January 24, 2018. You can also listen to a telephone replay at 888-566-0574 or 402-998-0680.
(Forward-Looking Cautionary Statements)
Before we begin the call, we wanted to announce that we plan to hold our 2018 Analyst Investor Meeting in New York on Thursday, March 8. More information on the meeting will be available shortly on our Investor Relations Events webpage.
I will now turn the call over to Andy.
Thank you, Jason. We ended our fiscal 2017 on a solid note, with record revenue and earnings for the fourth quarter. With solid growth in our virtual ADC offerings, particularly in public cloud environments, and continued strength in sales of our security offerings. Fourth quarter revenue of $538 million, up 4% from the prior quarter and 2% year-over-year, was above the midpoint of our guided range of $530 million to $540 million.
GAAP EPS of $2.14 per share was well above our guidance of $1.64 to $1.67 per share. Non-GAAP EPS of $2.44 per share was also above our guidance of $2.23 per share. I will discuss these strong EPS results in more detail later in my comments.
Product revenue of $249 million in the fourth quarter was down 2% year-over-year and accounted for 46% of total revenue. Service revenue of $289 million grew 6% year-over-year and represented 54% of total revenue.
On a regional basis, Americas revenue grew 1% year-over-year and represented 58% of total revenue. EMEA revenue grew 7% year-over-year and accounted for 24% of overall revenue. APAC revenue, which accounted for 14% of the total, increased 1% year-over-year, and Japan at 4% of total revenue, was also up 1% from a year ago. Sales to enterprise customers represented 64% of total sales during the quarter. Service providers accounted for 19%, and government sales were 16%, including 7% from U.S. Federal.
In Q4, we had four greater-than-10% distributors; Westcon, which accounted for 15% of total revenue; Ingram Micro, which accounted for 15%; Tech Data, which accounted for 13%; and Arrow at 10%.