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2023 ReportPeers and competitors of F5:
NICE58141_13_Cover 1/18/00 2:14 PM Page 1 C M Y CM MY CY CMY K S S K K R R O O W W T T E E N N 2 0 0 1 s t A v e n u e W e s t # 5 0 0 S e a t t l e , W a s h i n g t o n 9 8 1 1 9 w w w . f 5 . c o m 5 5 1 9 9 9 A N N U A L R E P O R T F F Composite 58141_13_Cover 1/18/00 2:14 PM Page 2 C M Y CM MY CY CMY K 1 9 9 9 F I N A N C I A L H I G H L I G H T C O R P O R AT E A N D S H A R E H O L D E R I N F O R M AT I O N C USTOMER G ROWT H 750 479 339 217 145 91 Quarter Ended 6/98 9/98 12/98 3/99 6/99 9/99 R EVEN UE $13.8M $7.6 M $3.8 M $2.7 M $1.9 M $.8 M $1 M $1.1 M D I R E C T O R S Jeffrey S. Hussey Chairman of the Board F5 Networks, Inc . Carlton G. Amdahl Technology Consultant Keith Grinstein Vice–Chairman Nextel International, Inc . Karl D. Guelich Certified Public Accountant Alan J. Higginson Consultant Quarter Ended FYE 9/30 12/97 3/98 6/98 9/98 12/98 3/99 6/99 9/99 N O T I C E O F A N N U A L M E E T I N G Our annual shareholders meeting will be held: February 17, 2000, 9:00AM The Sheraton Hotel & Towers 1400 6th Avenue Seattle, Washington S ELECTED F INA NCIAL D ATA Net revenues Loss from operations Net loss 1999 1999 1998 1998 1997 1997 $ 27,825 $ 4,889 $ 229 (4,878) (3,668) (1,428) (4,344) (3,672) (1,456) Net loss per share – basic and diluted ( 0.42) ( 0.60) ( 0.24) Weighted average shares – basic and diluted 10,238 6,086 6,000 Cash and cash equivalents $ 24,797 6,206 Total employees at year end 187 80 143 20 Composite O F F I C E R S Jeffrey S. Hussey President and Chief Executive Officer Robert J. Chamberlain Vice President of Finance - Chief Financial Officer and Treasurer Steven Goldman Senior Vice President Sales, Marketing & Services Brett L. Helsel Vice President of Product Development Chief Technology Officer C O R P O R AT E H E A D Q U A R T E R S F5 Networks 200 – 1st Avenue West, Seattle, WA. 98119 (206) 505-0800 N A S D A Q L I S T I N G NASDAQ Symbol – FFIV I N V E S T O R R E L AT I O N S Michael Newman Street Connect (206) 320-1231 I N D E P E N D E N T A U D I T O R S PricewaterhouseCoopers LLP Seattle, Washington L E G A L C O U N S E L Heller Ehrman White & McAuliffe Seattle, Washington T R A N S F E R A G E N T A N D R E G I S TA R American Stock Transfer 40 Wall Street New, York, NY 10005 (212) 936-5100 58141_12_Inside 1/18/00 2:11 PM Page 1 C M Y CM MY CY CMY K F 5 N E T W O R K S M I L E S T O N E S T O O U R S H A R E H O L D E R S S e p t . 9 9 7 5 0 + C u s t o m e r s S e p t . 9 9 1 8 0 + E m p l o y e e s S e p t . 9 9 1 s t P r o f i t a b l e Q u a r t e r J u n . 9 9 I P O $ 4 M i l l i o n D o l l a r M o n t h Dear Shareholders: This has been a remarkable year for F5. During the past fiscal year we completed two successful public offerings, raising over $56,000,000. We increased our net revenue by 469% over the prior year and reported a profit in the fourth quarter. We also tripled the size of our staff to 187 employees, developed a strong presence in key international markets, particularly Europe and Asia Pacific, and introduced two major new products into the marketplace. During the past fiscal year our customer base grew to over 750 customers, including leading companies in a variety of industries that rely on the internet as a fundamental component of their business. We also developed important strategic partnerships with major resellers and original equipment manufacturers to help leverage our market reach and increase sales worldwide. Nearly four years ago, when the internet was still in its infancy, F5 embarked on its mission to enhance the reliability and scalability of networked servers. Since that time, there has been dramatic growth of internet- based commerce and communications, and more organizations are recognizing the value of F5’s products and services in helping to optimize the reliability, scalability and manageability of their mission-critical Internet infrastructure. We are proud of our achievements to date, and believe the best is yet to come. To meet our customers’ rapidly evolving requirements we continue to develop our product portfolio. We continually strive to enhance the performance, management and security functionality of our products through internal development and by leveraging the complementary products of our strategic partners. We are also increasing our direct sales and marketing presence world-wide, and enhancing our sales and marketing channels by developing new relationships with strategic partners in Internet traffic and content management. At F5, we remain committed to the goal of becoming the definitive standard for Internet traffic and content management products and services. Thank you for your support. Sincerely, Jeffrey S. Hussey President, Chief Executive Officer and Chairman D e c . 9 8 1 s t M i l l i o n D o l l a r M o n t h F e b . 9 6 C o m p a n y F o u n d e d Composite 58141_12_Inside 1/18/00 2:11 PM Page 2 C M Y CM MY CY CMY K What We Do If you think about it, most things in life are predictable. Pick up the phone and you get a dialtone. Flip a switch and the lights turn on. Go to a web site and … oops … perhaps not everything is predictable. What is Internet Quality Control? Businesses need control over the availability and performance of Businesses want – and need – control over their web sites. Revenue their web sites. Is the web site available and working properly and and profitability depend on being able to control web site availability can the web server respond to ever–increasing customer demands? and performance. But while we’ve come to expect a certain Quality The level of control a company has over their web site is called of Service (QoS) from services such as the telephone and power, Internet Quality Control. no such standard exists for web sites. When F5 first started, we talked with dozens of companies and Not only is QoS required for networks, but also control over the developed a model showing how different types of companies define resources (servers, networks, and content) that ultimately deliver Internet Quality Control. the QoS users expect. Additionally, you need the tools to manage these areas in order to enforce your company’s Internet policies. That’s where F5 Networks, Inc. comes in. As pioneers in the field of high availability and Internet Quality Control, F5 develops turnkey solutions that increase the availability and performance of Internet Protocol (IP)–based servers and network devices such as firewalls, routers, cache servers, proxy servers, and more. For example, while all web sites care about availability, e-commerce sites have the greatest need. Similarly, multimedia sites and mega- websites have the greatest performance demands. F5 saw early on that it was not enough to focus on just one attribute – either availability or performance. The majority of companies F5 spoke with said they needed both. Our products act like air traffic controllers, routing client requests Based on this insight, F5 developed the first true high-availability to the most available server and re-routing requests away from load-balancing product line. Looking at some of the most successful downed servers – or servers that are not responding accurately. web sites today, it is clear that this vision was correct. Founded in 1996, F5 has grown to more than 180 employees and Successful web sites are those that address all elements of Internet boasts an impressive customer list of more than 750 of the top Quality Control, including high availability, high performance, intelligent corporations including USA Today, Microsoft and Alaska Airlines. load balancing, fault tolerance, security, manageability, open systems, BIG/ip® Controller BIG/ip optimizes server availability and performance. BIG/ip sits between the network and server array. It continuously monitors each server for service availability and performance, and routes incoming queries to the most available server. BIG/ip allows network managers to use a variety of sophisticated load-balancing algorithms to fine-tune performance and availability. 3DNS® Controller What happens when a major airport is closed due to weather? Airlines cannot afford to wait until their aircraft reaches that airport before finding out the airport is closed. That’s why every major airline staffs a central operations center that looks at all airports and reroutes planes when airports go down. 3DNS does the same job for multiple sites. It communicates with each server around the world on a regular basis – keeping track of key performance attributes. Then, when a request comes in, 3DNS routes the request to the most available site. see/IT™ Network Manager see/IT, is a traffic analysis and trending software tool for BIG/ip and 3DNS. With see/IT, managers can configure key high availability and intelligent load balancing factors. Managers can also analyze traffic flow to better understand how to optimize service. see/IT can even predict future sources of traffic jams. enforcement of policy management, and global data management. global/SITE™ Controller Products and Services Anyone who has ever been stuck in a holding pattern waiting to land understands the needs that drive F5’s product line. Just as air global/SITE began shipping in October, 1999. global/SITE is a network controller that manages the distribution and synchronization of content to geographically distributed IP-servers. Think of global/SITE as a “change appliance” or “content manager”. traffic controllers manage air traffic, F5 manages IP traffic flow. Each time the webmaster completes a new version of content, the Market Never has a new medium gained acceptance as fast as the Internet. From a virtual standing start in 1994, the net now boasts well over 100 million users. Compare this with television (20 years to reach 100 million users) and the Fax (10 years to reach 100 million users). The net is straining under this load, and corporations are busy struggling to build high-availability, business-critical applications. All of this is driving a new market for Internet Traffic Management. According to Internet Research Group, this new market – products F5 has 4 core products: the BIG/ip® Controller, 3DNS® Controller, global/SITE™ Controller and the see/IT™ Network Manager. All four help manage traffic to IP-based servers and devices in a way that maximizes availability and throughput. content set is registered with global/SITE. When ready, the webmaster with strategic partners, our ability to meet future customers’ needs and tells global/SITE to publish the new content. global/SITE is smart any other statements concerning future events or performance are enough to compare the new content to the prior version, and only forward-looking statements which are subject to a number of known and replicate the changes. Furthermore, global/SITE units can work in unknown risks, uncertainties and other factors which may cause our concert–a central global/SITE will post new content to remote actual results, performance or achievements to differ materially from that help provide high performance, high-availability, scalable access F5 products benefit Internet sites through four “points of control”. global/SITEs where the content is then published locally. The result those expressed or implied by such statements. Relevant risks and to servers – is projected to grow in excess of 65% annually through Servers (BIG/ip), the network (3DNS), content (global/SITE) and is a simple, efficient foolproof way to maintain dynamic content uncertainties include those discussed in Item 7 of Part I under the heading the year 2002. network management (see/IT). over a large set of servers. “Risk Factors” in the enclosed Annual Report on Form 10-K. Composite Professional Services F5’s Professional Services team is dedicated to making customers’ network applications successful. The team offers full service solutions for technical support, basic to advanced training, auditing/customization services, providing network monitoring and performance analysis reporting for future capacity planning. F5’s full service solutions meet customers’ needs for high availability today and tomorrow. Service support plans include 24x7 toll-free technical support, software updates and 24-hour replacement in the unlikely event a unit needs replacement. The F5 Professional Services team is dedicated to the seamless integration of BIG/ip, 3DNS, see/IT, global/SITE and all future F5 products into existing network infrastructures while ensuring the successful use of F5 technology on an ongoing basis. • • • Statements in this report concerning expected increases in our sales, expected increases in the functionality of our products, expected increases in our sales and marketing presence, our development of new relationships 58141_12_Inside 1/18/00 2:11 PM Page 2 C M Y CM MY CY CMY K What We Do If you think about it, most things in life are predictable. Pick up the phone and you get a dialtone. Flip a switch and the lights turn on. Go to a web site and … oops … perhaps not everything is predictable. What is Internet Quality Control? Businesses need control over the availability and performance of Businesses want – and need – control over their web sites. Revenue their web sites. Is the web site available and working properly and and profitability depend on being able to control web site availability can the web server respond to ever–increasing customer demands? and performance. But while we’ve come to expect a certain Quality The level of control a company has over their web site is called of Service (QoS) from services such as the telephone and power, Internet Quality Control. no such standard exists for web sites. When F5 first started, we talked with dozens of companies and Not only is QoS required for networks, but also control over the developed a model showing how different types of companies define resources (servers, networks, and content) that ultimately deliver Internet Quality Control. the QoS users expect. Additionally, you need the tools to manage these areas in order to enforce your company’s Internet policies. That’s where F5 Networks, Inc. comes in. As pioneers in the field of high availability and Internet Quality Control, F5 develops turnkey solutions that increase the availability and performance of Internet Protocol (IP)–based servers and network devices such as firewalls, routers, cache servers, proxy servers, and more. For example, while all web sites care about availability, e-commerce sites have the greatest need. Similarly, multimedia sites and mega- websites have the greatest performance demands. F5 saw early on that it was not enough to focus on just one attribute – either availability or performance. The majority of companies F5 spoke with said they needed both. Our products act like air traffic controllers, routing client requests Based on this insight, F5 developed the first true high-availability to the most available server and re-routing requests away from load-balancing product line. Looking at some of the most successful downed servers – or servers that are not responding accurately. web sites today, it is clear that this vision was correct. Founded in 1996, F5 has grown to more than 180 employees and Successful web sites are those that address all elements of Internet boasts an impressive customer list of more than 750 of the top Quality Control, including high availability, high performance, intelligent corporations including USA Today, Microsoft and Alaska Airlines. load balancing, fault tolerance, security, manageability, open systems, BIG/ip® Controller BIG/ip optimizes server availability and performance. BIG/ip sits between the network and server array. It continuously monitors each server for service availability and performance, and routes incoming queries to the most available server. BIG/ip allows network managers to use a variety of sophisticated load-balancing algorithms to fine-tune performance and availability. 3DNS® Controller What happens when a major airport is closed due to weather? Airlines cannot afford to wait until their aircraft reaches that airport before finding out the airport is closed. That’s why every major airline staffs a central operations center that looks at all airports and reroutes planes when airports go down. 3DNS does the same job for multiple sites. It communicates with each server around the world on a regular basis – keeping track of key performance attributes. Then, when a request comes in, 3DNS routes the request to the most available site. see/IT™ Network Manager see/IT, is a traffic analysis and trending software tool for BIG/ip and 3DNS. With see/IT, managers can configure key high availability and intelligent load balancing factors. Managers can also analyze traffic flow to better understand how to optimize service. see/IT can even predict future sources of traffic jams. enforcement of policy management, and global data management. global/SITE™ Controller Products and Services Anyone who has ever been stuck in a holding pattern waiting to land understands the needs that drive F5’s product line. Just as air global/SITE began shipping in October, 1999. global/SITE is a network controller that manages the distribution and synchronization of content to geographically distributed IP-servers. Think of global/SITE as a “change appliance” or “content manager”. traffic controllers manage air traffic, F5 manages IP traffic flow. Each time the webmaster completes a new version of content, the Market Never has a new medium gained acceptance as fast as the Internet. From a virtual standing start in 1994, the net now boasts well over 100 million users. Compare this with television (20 years to reach 100 million users) and the Fax (10 years to reach 100 million users). The net is straining under this load, and corporations are busy struggling to build high-availability, business-critical applications. All of this is driving a new market for Internet Traffic Management. According to Internet Research Group, this new market – products F5 has 4 core products: the BIG/ip® Controller, 3DNS® Controller, global/SITE™ Controller and the see/IT™ Network Manager. All four help manage traffic to IP-based servers and devices in a way that maximizes availability and throughput. content set is registered with global/SITE. When ready, the webmaster with strategic partners, our ability to meet future customers’ needs and tells global/SITE to publish the new content. global/SITE is smart any other statements concerning future events or performance are enough to compare the new content to the prior version, and only forward-looking statements which are subject to a number of known and replicate the changes. Furthermore, global/SITE units can work in unknown risks, uncertainties and other factors which may cause our concert–a central global/SITE will post new content to remote actual results, performance or achievements to differ materially from that help provide high performance, high-availability, scalable access F5 products benefit Internet sites through four “points of control”. global/SITEs where the content is then published locally. The result those expressed or implied by such statements. Relevant risks and to servers – is projected to grow in excess of 65% annually through Servers (BIG/ip), the network (3DNS), content (global/SITE) and is a simple, efficient foolproof way to maintain dynamic content uncertainties include those discussed in Item 7 of Part I under the heading the year 2002. network management (see/IT). over a large set of servers. “Risk Factors” in the enclosed Annual Report on Form 10-K. Composite Professional Services F5’s Professional Services team is dedicated to making customers’ network applications successful. The team offers full service solutions for technical support, basic to advanced training, auditing/customization services, providing network monitoring and performance analysis reporting for future capacity planning. F5’s full service solutions meet customers’ needs for high availability today and tomorrow. Service support plans include 24x7 toll-free technical support, software updates and 24-hour replacement in the unlikely event a unit needs replacement. The F5 Professional Services team is dedicated to the seamless integration of BIG/ip, 3DNS, see/IT, global/SITE and all future F5 products into existing network infrastructures while ensuring the successful use of F5 technology on an ongoing basis. • • • Statements in this report concerning expected increases in our sales, expected increases in the functionality of our products, expected increases in our sales and marketing presence, our development of new relationships 58141_12_Inside 1/18/00 2:11 PM Page 1 C M Y CM MY CY CMY K F 5 N E T W O R K S M I L E S T O N E S T O O U R S H A R E H O L D E R S S e p t . 9 9 7 5 0 + C u s t o m e r s S e p t . 9 9 1 8 0 + E m p l o y e e s S e p t . 9 9 1 s t P r o f i t a b l e Q u a r t e r J u n . 9 9 I P O $ 4 M i l l i o n D o l l a r M o n t h Dear Shareholders: This has been a remarkable year for F5. During the past fiscal year we completed two successful public offerings, raising over $56,000,000. We increased our net revenue by 469% over the prior year and reported a profit in the fourth quarter. We also tripled the size of our staff to 187 employees, developed a strong presence in key international markets, particularly Europe and Asia Pacific, and introduced two major new products into the marketplace. During the past fiscal year our customer base grew to over 750 customers, including leading companies in a variety of industries that rely on the internet as a fundamental component of their business. We also developed important strategic partnerships with major resellers and original equipment manufacturers to help leverage our market reach and increase sales worldwide. Nearly four years ago, when the internet was still in its infancy, F5 embarked on its mission to enhance the reliability and scalability of networked servers. Since that time, there has been dramatic growth of internet- based commerce and communications, and more organizations are recognizing the value of F5’s products and services in helping to optimize the reliability, scalability and manageability of their mission-critical Internet infrastructure. We are proud of our achievements to date, and believe the best is yet to come. To meet our customers’ rapidly evolving requirements we continue to develop our product portfolio. We continually strive to enhance the performance, management and security functionality of our products through internal development and by leveraging the complementary products of our strategic partners. We are also increasing our direct sales and marketing presence world-wide, and enhancing our sales and marketing channels by developing new relationships with strategic partners in Internet traffic and content management. At F5, we remain committed to the goal of becoming the definitive standard for Internet traffic and content management products and services. Thank you for your support. Sincerely, Jeffrey S. Hussey President, Chief Executive Officer and Chairman D e c . 9 8 1 s t M i l l i o n D o l l a r M o n t h F e b . 9 6 C o m p a n y F o u n d e d Composite 58141_13_Cover 1/18/00 2:14 PM Page 2 C M Y CM MY CY CMY K 1 9 9 9 F I N A N C I A L H I G H L I G H T C O R P O R AT E A N D S H A R E H O L D E R I N F O R M AT I O N C USTOMER G ROWT H 750 479 339 217 145 91 Quarter Ended 6/98 9/98 12/98 3/99 6/99 9/99 R EVEN UE $13.8M $7.6 M $3.8 M $2.7 M $1.9 M $.8 M $1 M $1.1 M D I R E C T O R S Jeffrey S. Hussey Chairman of the Board F5 Networks, Inc . Carlton G. Amdahl Technology Consultant Keith Grinstein Vice–Chairman Nextel International, Inc . Karl D. Guelich Certified Public Accountant Alan J. Higginson Consultant Quarter Ended FYE 9/30 12/97 3/98 6/98 9/98 12/98 3/99 6/99 9/99 N O T I C E O F A N N U A L M E E T I N G Our annual shareholders meeting will be held: February 17, 2000, 9:00AM The Sheraton Hotel & Towers 1400 6th Avenue Seattle, Washington S ELECTED F INA NCIAL D ATA Net revenues Loss from operations Net loss 1999 1999 1998 1998 1997 1997 $ 27,825 $ 4,889 $ 229 (4,878) (3,668) (1,428) (4,344) (3,672) (1,456) Net loss per share – basic and diluted ( 0.42) ( 0.60) ( 0.24) Weighted average shares – basic and diluted 10,238 6,086 6,000 Cash and cash equivalents $ 24,797 6,206 Total employees at year end 187 80 143 20 Composite O F F I C E R S Jeffrey S. Hussey President and Chief Executive Officer Robert J. Chamberlain Vice President of Finance - Chief Financial Officer and Treasurer Steven Goldman Senior Vice President Sales, Marketing & Services Brett L. Helsel Vice President of Product Development Chief Technology Officer C O R P O R AT E H E A D Q U A R T E R S F5 Networks 200 – 1st Avenue West, Seattle, WA. 98119 (206) 505-0800 N A S D A Q L I S T I N G NASDAQ Symbol – FFIV I N V E S T O R R E L AT I O N S Michael Newman Street Connect (206) 320-1231 I N D E P E N D E N T A U D I T O R S PricewaterhouseCoopers LLP Seattle, Washington L E G A L C O U N S E L Heller Ehrman White & McAuliffe Seattle, Washington T R A N S F E R A G E N T A N D R E G I S TA R American Stock Transfer 40 Wall Street New, York, NY 10005 (212) 936-5100 58141_13_Cover 1/18/00 2:14 PM Page 1 C M Y CM MY CY CMY K S S K K R R O O W W T T E E N N 2 0 0 1 s t A v e n u e W e s t # 5 0 0 S e a t t l e , W a s h i n g t o n 9 8 1 1 9 w w w . f 5 . c o m 5 5 1 9 9 9 A N N U A L R E P O R T F F Composite
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