PRESS RELEASE

F5 Delivers 5% Revenue Growth in Fiscal Year 2020 on Building Software Momentum

Published October 26, 2020

PRESS CONTACTS

Suzanne DuLong
VP, Investor Relations
(206) 272-7049
s.dulong@f5.com

Rob Gruening
F5 Corporate Communications
(206) 272-6208
r.gruening@f5.com

SEATTLE--(BUSINESS WIRE)-- F5 Networks, Inc. (NASDAQ: FFIV) today announced financial results for its fiscal fourth quarter and year ended September 30, 2020.

“F5 is well on its way to becoming a software-led business, with customer demand for our multi-cloud application security and delivery services driving 5% GAAP and non-GAAP annual revenue growth in fiscal year 2020,” said François Locoh-Donou, president and CEO of F5. “Going forward, we expect continued robust software growth from a more diversified base of subscription and SaaS revenue, a software subscription renewals flywheel that is starting to turn with momentum, and true-forward revenue opportunities on a significant percentage of our long-term software subscription contracts.”

“We have prioritized our innovation and investment to focus on solving our customers’ most pressing application challenges,” continued Locoh-Donou. “New ways of working and higher consumer expectations for application performance along with exploding application growth have created new challenges for customers that F5 is uniquely positioned to address.”

Fiscal Year 2020 Performance Summary

Following its acquisition of Shape Security, to provide transparency to what F5 management believes reflects its ongoing business results, during fiscal year 2020, F5 is reporting both GAAP and non-GAAP revenue. Non-GAAP revenue excludes the impact of the purchase accounting write-down on Shape’s assumed deferred revenue.

GAAP revenue of $2.35 billion for fiscal year 2020 reflects 5% growth from $2.24 billion in fiscal year 2019.

Non-GAAP revenue for fiscal year 2020 was $2.36 billion, reflecting 5% growth in total revenue and 52% growth in software revenue from the year ago period.

GAAP net income for fiscal year 2020 was $307 million, or $5.01 per diluted share compared to fiscal year 2019 GAAP net income of $428 million, or $7.08 per diluted share.

Non-GAAP net income for fiscal year 2020 was $575 million, or $9.37 per diluted share, compared to $626 million, or $10.36 per diluted share, in fiscal year 2019. Non-GAAP net income for fiscal year 2020 excludes $202 million in stock-based compensation, $56 million in acquisition-related charges, $35 million in amortization of purchased intangible assets, and $17 million in facility-exit costs.

Fourth Quarter Performance Summary

GAAP revenue of $615 million for the fourth quarter of fiscal year 2020 reflects 4% growth from $590 million in the fourth quarter of fiscal year 2019.

Non-GAAP revenue for the fourth quarter of fiscal year 2020 was $617 million, reflecting 4% growth in total revenue and 36% growth in software revenue from the year ago period.

GAAP net income for the fourth quarter of fiscal year 2020 was $78 million, or $1.26 per diluted share compared to fourth quarter fiscal year 2019 GAAP net income of $95 million, or $1.57 per diluted share.

Non-GAAP net income for the fourth quarter of fiscal year 2020 was $150 million, or $2.43 per diluted share, compared to $157 million, or $2.59 per diluted share, in the fourth quarter of fiscal year 2019. Non-GAAP net income for the fourth quarter of fiscal year 2020 excludes $52 million in stock-based compensation, $11 million in acquisition-related charges, $11 million in amortization of purchased intangible assets, and $11 million in facility-exit costs.

A reconciliation of revenue, net income, earnings per share, and other measures on a GAAP to non-GAAP basis is included in the attached Consolidated Income Statements. Additional information about non-GAAP financial information is included in this release.

Business Outlook

For the first quarter of fiscal year 2021 ending December 31, 2020, F5 expects to deliver revenue in the range of $595 million to $615 million with non-GAAP earnings in the range of $2.26 to $2.38 per diluted share.

All forward-looking non-GAAP measures included in the outlook exclude estimates for amortization of intangible assets, share-based compensation expenses, significant effects of tax legislation and judicial or administrative interpretation of tax regulations (including the impact of income tax reform), non-recurring income tax adjustments, valuation allowance on deferred tax assets, and the income tax effect of non-GAAP exclusions, and do not include the impact of any future acquisitions or divestitures, acquisition-related charges and write-downs, restructuring charges, facility exit costs, or other non-recurring charges that may occur in the period. F5 is unable to provide a reconciliation of non-GAAP earnings guidance measures to corresponding U.S. generally accepted accounting principles or GAAP measures on a forward-looking basis without unreasonable effort due to the overall high variability and low visibility of most of the foregoing items that have been excluded. Material changes to any one of these items could have a significant effect on our guidance and future GAAP results. Certain exclusions, such as amortization of intangible assets and share-based compensation expenses, are generally incurred each quarter, but the amounts have historically varied and may continue to vary significantly from quarter to quarter.

Live Webcast and Conference Call

F5 will host a live webcast and conference call to review its financial results and outlook today, October 26, 2020, at 4:30 pm ET. The live webcast can be accessed from the investor relations portion of F5.com. To participate in the live call via telephone in the U.S. and Canada, dial (833) 714-0927. Outside the U.S. and Canada, dial +1 (778) 560-2886. Reference Meeting ID 6055259. Please call at least 5 minutes prior to the call start time. The webcast replay will be archived on the investor relations portion of F5’s website.

Forward Looking Statements

This press release contains forward-looking statements including, among other things, statements regarding the continuing strength and momentum of F5's business, future financial performance, projected and target revenue and earnings ranges, income, earnings per share, share amounts and share price assumptions, share repurchases, demand for application delivery networking, application delivery services, security, and software products, expectations regarding future services and products, expectations regarding future customers, markets and the benefits of products, and other statements that are not historical facts and which are forward-looking statements. These forward-looking statements are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors. Such forward-looking statements involve risks and uncertainties, as well as assumptions and other factors that, if they do not fully materialize or prove correct, could cause the actual results, performance or achievements of the company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to: the impact of the COVID-19 global pandemic including but not limited to the advantages of incumbency in an uncertain environment, caution in spending patterns in the most severely impacted verticals, delays in orders in some impacted regions due to COVID-19 impacts; prolonged face-to-face sales engagement delaying some new strategic projects; customer acceptance of our new security, application delivery, optimization, and software and SaaS offerings; the timely development, introduction and acceptance of additional new products and features by F5 or its competitors; F5 may not realize the financial and strategic goals that are contemplated through its acquisitions, including Shape and NGINX, and F5 may not successfully operate and integrate newly-acquired businesses appropriately or as expected; competitive factors, including but not limited to pricing pressures, industry consolidation, entry of new competitors into F5’s markets, and new product and marketing initiatives by our competitors; increased sales discounts; uncertain global economic conditions, including those related to COVID-19, which may result in reduced customer demand for our products and services and changes in customer payment patterns; global economic conditions and uncertainties in the geopolitical environment; overall information technology spending; litigation involving patents, intellectual property, shareholder and other matters, and governmental investigations; natural catastrophic events; F5's ability to sustain, develop and effectively utilize distribution relationships; F5's ability to attract, train and retain qualified product development, marketing, sales, professional services and customer support personnel; F5's ability to expand in international markets; the unpredictability of F5's sales cycle; F5’s share repurchase program; future prices of F5's common stock; and other risks and uncertainties described more fully in our documents filed with or furnished to the Securities and Exchange Commission, including our most recent reports on Form 10-K and Form 10-Q and current reports on Form 8-K and other documents that we may file or furnish from time to time, which could cause actual results, performance or achievements to vary from expectations. The financial information contained in this presentation should be read in conjunction with the consolidated financial statements and notes thereto included in F5’s most recent reports on Forms 10-Q and 10-K as each may be amended from time to time. All forward-looking statements in this presentation are based on information available as of the date hereof and qualified in their entirety by this cautionary statement. F5 assumes no obligation to revise or update these forward-looking statements.

GAAP to non-GAAP Reconciliation

F5’s management evaluates and makes operating decisions using various operating measures. These measures are generally based on the revenues of its products, services operations, and certain costs of those operations, such as cost of revenues, research and development, sales and marketing and general and administrative expenses. One such measure is GAAP net income excluding, as applicable, stock-based compensation, amortization of purchased intangible assets, acquisition-related charges, net of taxes, restructuring charges, facility-exit costs, significant litigation and other contingencies and certain non-recurring tax expenses and benefits, which is a non-GAAP financial measure under Section 101 of Regulation G under the Securities Exchange Act of 1934, as amended. This measure of non-GAAP net income is adjusted by the amount of additional taxes or tax benefit that the company would accrue if it used non-GAAP results instead of GAAP results to calculate the company’s tax liability.

The non-GAAP adjustments, and F5's basis for excluding them from non-GAAP financial measures, are outlined below:

Acquisition-related write-downs of assumed deferred revenue.Included in its GAAP financial statements, F5 records acquisition-related write-downs of assumed deferred revenue to fair value, which results in lower recognized revenue over the term of the contract. F5 includes revenue associated with acquisition-related write-downs of assumed deferred revenue in its non-GAAP financial measures as management believes it provides a more accurate depiction of revenue arising from our strategic acquisitions.

Stock-based compensation. Stock-based compensation consists of expense for stock options, restricted stock, and employee stock purchases through the company’s Employee Stock Purchase Plan. Although stock-based compensation is an important aspect of the compensation of F5’s employees and executives, management believes it is useful to exclude stock-based compensation expenses to better understand the long-term performance of the company’s core business and to facilitate comparison of the company’s results to those of peer companies.

Amortization of purchased intangible assets. Purchased intangible assets are amortized over their estimated useful lives and generally cannot be changed or influenced by management after the acquisition. Management does not believe these charges accurately reflect the performance of the company’s ongoing operations, therefore, they are not considered by management in making operating decisions. However, investors should note that the use of intangible assets contributed to F5’s revenues earned during the periods presented and will contribute to F5’s future period revenues as well.

Facility-exit costs.In fiscal year 2019, F5 relocated its headquarters in Seattle, Washington, and recorded charges in connection with this facility exit as well as other non-recurring lease activity. These charges are not representative of ongoing costs to the business and are not expected to recur. As a result, these charges are being excluded to provide investors with a more comparable measure of costs associated with ongoing operations.

Acquisition-related charges, net. F5 does not acquire businesses on a predictable cycle and the terms and scope of each transaction can vary significantly and are unique to each transaction. F5 excludes acquisition-related charges from its non-GAAP financial measures to provide a useful comparison of the company’s operating results to prior periods and to its peer companies. Acquisition-related charges consist of planning, execution and integration costs incurred directly as a result of an acquisition.

Impairment charges. In fiscal year 2019, F5 recorded impairment of capitalized software development costs reflecting strategy changes in certain product development initiatives. These charges are not representative of ongoing costs to the business and are not expected to recur. As a result, these charges are being excluded to provide investors with a more comparable measure of costs associated with ongoing operations

Restructuring charges. F5 has incurred restructuring charges that are included in its GAAP financial statements, primarily related to workforce reductions and costs associated with exiting facility lease commitments. F5 excludes these items from its non-GAAP financial measures when evaluating its continuing business performance as such items vary significantly based on the magnitude of the restructuring action and do not reflect expected future operating expenses. In addition, these charges do not necessarily provide meaningful insight into the fundamentals of current or past operations of its business.

Management believes that non-GAAP net income per share provides useful supplemental information to management and investors regarding the performance of the company’s core business operations and facilitates comparisons to the company’s historical operating results. Although F5’s management finds this non-GAAP measure to be useful in evaluating the performance of the core business, management’s reliance on this measure is limited because items excluded from such measures could have a material effect on F5’s earnings and earnings per share calculated in accordance with GAAP. Therefore, F5’s management will use its non-GAAP earnings and earnings per share measures, in conjunction with GAAP earnings and earnings per share measures, to address these limitations when evaluating the performance of the company’s core business. Investors should consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures in accordance with GAAP.

F5 believes that presenting its non-GAAP measures of earnings and earnings per share provides investors with an additional tool for evaluating the performance of the company’s core business and is used by management in its own evaluation of the company’s performance. Investors are encouraged to look at GAAP results as the best measure of financial performance. However, while the GAAP results are more complete, the company provides investors these supplemental measures since, with reconciliation to GAAP, it may provide additional insight into the company’s operational performance and financial results.

For reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section in our attached Condensed Consolidated Income Statements entitled “Non-GAAP Financial Measures.”

About F5

F5 is a multi-cloud application services and security company committed to bringing a better digital world to life.​​​​​​​ F5 partners with the world’s largest, most advanced organizations to optimize and secure every app and API anywhere, including on-premises, in the cloud, or at the edge. F5 enables organizations to provide exceptional, secure digital experiences for their customers and continuously stay ahead of threats. For more information, go to f5.com. (NASDAQ: FFIV)

You can also follow @F5 on Twitter or visit us on LinkedIn and Facebook for more information about F5, its partners, and technologies. F5 is a trademark, service mark, or tradename of F5, Inc., in the U.S. and other countries. All other product and company names herein may be trademarks of their respective owners.

       
               
F5 Networks, Inc      
Consolidated Balance Sheets      
(unaudited, in thousands)      
               
               
   

September 30,

 

September 30,

     
   

 

2020

 

 

 

2019

 

     
               
Assets              
Current assets              
Cash and cash equivalents  

$

849,556

 

 

$

599,219

 

     
Short-term investments  

 

360,333

 

 

 

373,063

 

     
Accounts receivable, net of allowances of $3,105 and $3,259  

 

296,183

 

 

 

322,029

 

     
Inventories  

 

27,898

 

 

 

34,401

 

     
Other current assets  

 

259,506

 

 

 

182,874

 

     
Total current assets  

 

1,793,476

 

 

 

1,511,586

 

     
               
Property and equipment, net  

 

229,239

 

 

 

223,426

 

     
Operating lease right-of-use assets  

 

300,680

 

 

 

-

 

     
Long-term investments  

 

102,939

 

 

 

358,402

 

     
Deferred tax assets  

 

45,173

 

 

 

27,701

 

     
Goodwill  

 

1,858,966

 

 

 

1,065,379

 

     
Other assets, net  

 

347,447

 

 

 

203,781

 

     
Total assets  

$

4,677,920

 

 

$

3,390,275

 

     
               
Liabilities and Shareholders’ Equity              
Current liabilities              
Accounts payable  

$

64,472

 

 

$

62,627

 

     
Accrued liabilities  

 

321,398

 

 

 

235,869

 

     
Deferred revenue  

 

883,134

 

 

 

807,030

 

     
Current portion of long-term debt  

 

19,275

 

 

 

-

 

     
Total current liabilities  

 

1,288,279

 

 

 

1,105,526

 

     
               
Deferred tax liabilities  

 

602

 

 

 

313

 

     
Deferred revenue, long-term  

 

389,498

 

 

 

391,086

 

     
Operating lease liabilities, long-term  

 

338,715

 

 

 

-

 

     
Long-term debt  

 

369,047

 

 

 

-

 

     
Other long-term liabilities  

 

59,511

 

 

 

131,853

 

     
Total long-term liabilities  

 

1,157,373

 

 

 

523,252

 

     
               
Commitments and contingencies              
               
Shareholders’ equity              
Preferred stock, no par value; 10,000 shares authorized, no shares outstanding  

 

-

 

 

 

-

 

     
Common stock, no par value; 200,000 shares authorized, 61,099 and 60,367 shares issued and outstanding     305,453       142,597        
Accumulated other comprehensive loss  

 

(18,716)

 

 

 

(19,190)

 

     
Retained earnings  

 

1,945,531

 

 

 

1,638,090

 

     
Total shareholders' equity  

 

2,232,268

 

 

 

1,761,497

 

     
Total liabilities and shareholders' equity  

$

4,677,920

 

 

$

3,390,275

 

     
               
                   
                   
F5 Networks, Inc
Consolidated Income Statements
(unaudited, in thousands, except per share amounts)
                   
                   
   

Three Months Ended

 

Years Ended

 
   

September 30,

 

September 30,

 
   

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

 
                   
Net revenues                  
Products (1)  

$

278,451

 

 

$

264,926

 

 

$

1,025,856

 

 

$

985,591

 

 
Services  

 

336,365

 

 

 

325,462

 

 

 

1,324,966

 

 

 

1,256,856

 

 
Total  

 

614,816

 

 

 

590,388

 

 

 

2,350,822

 

 

 

2,242,447

 

 
                   
Cost of net revenues (2)(3)(4)(5)                  
Products  

 

62,634

 

 

 

44,693

 

 

 

215,275

 

 

 

174,986

 

 
Services  

 

49,333

 

 

 

46,225

 

 

 

192,612

 

 

 

181,591

 

 
Total  

 

111,967

 

 

 

90,918

 

 

 

407,887

 

 

 

356,577

 

 
Gross profit  

 

502,849

 

 

 

499,470

 

 

 

1,942,935

 

 

 

1,885,870

 

 
                   
Operating expenses (2)(3)(4)(5)(6)                  
Sales and marketing  

 

220,379

 

 

 

217,554

 

 

 

843,178

 

 

 

748,619

 

 
Research and development  

 

120,300

 

 

 

102,812

 

 

 

441,324

 

 

 

408,058

 

 
General and administrative  

 

63,557

 

 

 

64,390

 

 

 

258,366

 

 

 

210,730

 

 
Restructuring charges  

 

-

 

 

 

-

 

 

 

7,800

 

 

 

-

 

 
Total  

 

404,236

 

 

 

384,756

 

 

 

1,550,668

 

 

 

1,367,407

 

 
                   
Income from operations  

 

98,613

 

 

 

114,714

 

 

 

392,267

 

 

 

518,463

 

 
Other income, net  

 

(1,090)

 

 

 

3,397

 

 

 

4,130

 

 

 

22,648

 

 
Income before income taxes  

 

97,523

 

 

 

118,111

 

 

 

396,397

 

 

 

541,111

 

 
Provision for income taxes  

 

19,860

 

 

 

23,274

 

 

 

88,956

 

 

 

113,377

 

 
Net income  

$

77,663

 

 

$

94,837

 

 

$

307,441

 

 

$

427,734

 

 
                   
                   
Net income per share - basic  

$

1.27

 

 

$

1.57

 

 

$

5.05

 

 

$

7.12

 

 
Weighted average shares - basic  

 

61,149

 

 

 

60,283

 

 

 

60,911

 

 

 

60,044

 

 
                   
Net income per share - diluted  

$

1.26

 

 

$

1.57

 

 

$

5.01

 

 

$

7.08

 

 
Weighted average shares - diluted  

 

61,636

 

 

 

60,448

 

 

 

61,378

 

 

 

60,456

 

 
                   
                   
Non-GAAP Financial Measures                  
                   
Net income as reported  

$

77,663

 

 

$

94,837

 

 

$

307,441

 

 

$

427,734

 

 
Acquisition-related write-downs of assumed deferred revenue  

 

1,963

 

 

 

-

 

 

 

6,824

 

 

 

-

 

 
Stock-based compensation expense  

 

52,198

 

 

 

43,732

 

 

 

201,949

 

 

 

162,914

 

 
Amortization of purchased intangible assets  

 

10,720

 

 

 

4,586

 

 

 

34,604

 

 

 

11,846

 

 
Facility-exit costs  

 

11,045

 

 

 

15,048

 

 

 

16,601

 

 

 

28,800

 

 
Acquisiton-related charges  

 

11,321

 

 

 

8,079

 

 

 

56,483

 

 

 

41,742

 

 
Impairment charges  

 

-

 

 

 

6,273

 

 

 

-

 

 

 

6,273

 

 
Restructuring charges  

 

-

 

 

 

-

 

 

 

7,800

 

 

 

-

 

 
Tax effects related to above items  

 

(15,276)

 

 

 

(15,807)

 

 

 

(56,726)

 

 

 

(53,048)

 

 
Net income excluding acquisition-related write-downs of assumed deferred revenue, stock-based compensation expense, amortization of purchased intangible assets, facility-exit costs, acquisition-related charges, impairment charges, restructuring charges and non-recurring tax expenses and benefits (non-GAAP) - diluted  

$

149,634

   

$

156,748

   

$

574,976

   

$

626,261

   
                   
Net income per share excluding acquisition-related write-downs of assumed deferred revenue, stock-based compensation expense, amortization of purchased intangible assets, facility-exit costs, acquisition-related charges, impairment charges, restructuring charges and non-recurring tax expenses and benefits (non-GAAP) - diluted  

$

2.43

   

$

2.59

   

$

9.37

   

$

10.36

   
                   
Weighted average shares - diluted  

 

61,636

 

 

 

60,448

 

 

 

61,378

 

 

 

60,456

 

 
                   
(1) GAAP net product revenues  

$

278,451

 

 

$

264,926

 

 

$

1,025,856

 

 

$

985,591

 

 
Acquisition-related write-downs of assumed deferred revenue  

 

1,963

 

 

 

-

 

 

 

6,824

 

 

 

-

 

 
Non-GAAP net product revenues  

 

280,414

 

 

 

264,926

 

 

 

1,032,680

 

 

 

985,591

 

 
GAAP net service revenues  

 

336,365

 

 

 

325,462

 

 

 

1,324,966

 

 

 

1,256,856

 

 
Acquisition-related write-downs of assumed deferred revenue  

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 
Non-GAAP net service revenues  

 

336,365

 

 

 

325,462

 

 

 

1,324,966

 

 

 

1,256,856

 

 
Total non-GAAP net revenues  

$

616,779

 

 

$

590,388

 

 

$

2,357,646

 

 

$

2,242,447

 

 
                   
(2) Includes stock-based compensation expense as follows:                  
Cost of net revenues  

$

6,776

 

 

$

5,233

 

 

$

25,470

 

 

$

20,385

 

 
Sales and marketing  

 

22,258

 

 

 

19,832

 

 

 

88,446

 

 

 

69,477

 

 
Research and development  

 

13,367

 

 

 

10,288

 

 

 

50,271

 

 

 

40,886

 

 
General and administrative  

 

9,797

 

 

 

8,379

 

 

 

37,762

 

 

 

32,166

 

 
   

$

52,198

 

 

$

43,732

 

 

$

201,949

 

 

$

162,914

 

 
                   
(3) Includes amortization of purchased intangible assets as follows:                  
Cost of net revenues  

$

7,382

 

 

$

3,096

 

 

$

23,814

 

 

$

7,653

 

 
Sales and marketing  

 

2,749

 

 

 

961

 

 

 

8,612

 

 

 

2,083

 

 
General and administrative  

 

589

 

 

 

529

 

 

 

2,178

 

 

 

2,110

 

 
   

$

10,720

 

 

$

4,586

 

 

$

34,604

 

 

$

11,846

 

 
                   
(4) Includes facility-exit costs as follows:                  
Cost of net revenues  

$

1,457

 

 

$

1,806

 

 

$

2,300

 

 

$

3,520

 

 
Sales and marketing  

 

3,272

 

 

 

3,838

 

 

 

5,100

 

 

 

7,470

 

 
Research and development  

 

3,328

 

 

 

4,403

 

 

 

5,257

 

 

 

9,994

 

 
General and administrative  

 

2,988

 

 

 

5,001

 

 

 

3,944

 

 

 

7,816

 

 
   

$

11,045

 

 

$

15,048

 

 

$

16,601

 

 

$

28,800

 

 
                   
(5) Includes acquisition-related charges as follows:                  
Cost of net revenues  

$

114

 

 

$

-

 

 

$

127

 

 

$

-

 

 
Sales and marketing  

 

4,255

 

 

 

445

 

 

 

13,703

 

 

 

6,551

 

 
Research and development  

 

1,511

 

 

 

205

 

 

 

2,838

 

 

 

16,321

 

 
General and administrative  

 

5,441

 

 

 

7,429

 

 

 

39,815

 

 

 

18,870

 

 
   

$

11,321

 

 

$

8,079

 

 

$

56,483

 

 

$

41,742

 

 
                   
(6) Includes impairment charges as follows:                  
General and administrative  

$

-

 

 

$

6,273

 

 

$

-

 

 

$

6,273

 

 
   

$

-

 

 

$

6,273

 

 

$

-

 

 

$

6,273

 

 
                   
         
         
F5 Networks, Inc
Consolidated Statements of Cash Flows
(unaudited, in thousands)
         
         
    Years Ended
    September 30,
   

2020

 

2019

         
Operating activities        
Net income  

$

307,441

 

 

$

427,734

 

Adjustments to reconcile net income to net cash provided by operating activities:        
Stock-based compensation  

 

201,948

 

 

 

162,914

 

Depreciation and amortization  

 

95,857

 

 

 

68,507

 

Non-cash operating lease costs  

 

39,139

 

   
Other  

 

2,122

 

 

 

1,662

 

Deferred income taxes  

 

7,293

 

 

 

7,440

 

Impairment of assets  

 

9,673

 

 

 

6,273

 

Non-cash provisions for exit costs  

 

-

 

 

 

8,211

 

Changes in operating assets and liabilities:        
Accounts receivable  

 

46,502

 

 

 

(18,305)

 

Inventories  

 

6,503

 

 

 

(3,832)

 

Other current assets  

 

(49,895)

 

 

 

(75,449)

 

Other assets  

 

(25,690)

 

 

 

(22,742)

 

Accounts payable and accrued liabilities  

 

34,742

 

 

 

74,710

 

Deferred revenue  

 

35,514

 

 

 

110,718

 

Lease liabilities  

 

(50,251)

 

 

 

-

 

Net cash provided by operating activities  

 

660,898

 

 

 

747,841

 

         
Investing activities        
Purchases of investments  

 

(584,240)

 

 

 

(602,987)

 

Maturities of investments  

 

543,065

 

 

 

625,201

 

Sales of investments  

 

309,687

 

 

 

278,244

 

Acquisition of businesses, net of cash acquired  

 

(955,574)

 

 

 

(611,550)

 

Purchases of property and equipment  

 

(59,940)

 

 

 

(103,542)

 

Net cash used in investing activities  

 

(747,002)

 

 

 

(414,634)

 

         
Financing activities        
Proceeds from the exercise of stock options and purchases of stock under employee stock purchase plan    

52,835

     

45,598

 
Repurchase of common stock  

 

(100,016)

 

 

 

(201,045)

 

Proceeds from term debt agreement  

 

400,000

 

 

 

-

 

Payments on term debt agreement  

 

(10,000)

 

 

 

-

 

Payments for debt issuance costs  

 

(3,040)

 

 

 

-

 

Taxes paid related to net share settlement of equity awards  

 

(2,536)

 

 

 

-

 

Net cash provided by (used in) financing activities  

 

337,243

 

 

 

(155,447)

 

         
Net increase in cash, cash equivalents and restricted cash  

 

251,139

 

 

 

177,760

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash  

 

(567)

 

 

 

(1,400)

 

Cash, cash equivalents and restricted cash, beginning of period  

 

602,254

 

 

 

425,894

 

Cash, cash equivalents and restricted cash, end of period  

$

852,826

 

 

$

602,254

 

         
Supplemental disclosures of cash flow information        
Cash paid for taxes, net of refunds  

$

80,236

 

 

$

100,569

 

Cash paid for amounts included in the measurement of lease liabilities  

 

60,564

 

 

 

-

 

Cash paid for interest on long-term debt  

 

6,568

 

 

 

-

 

Supplemental disclosures of non-cash activities        
Right-of-use assets obtained in exchange for lease obligations  

$

402,007

 

 

$

-

 

Capitalized leasehold improvements paid directly by landlord  

 

-

 

 

 

34,948

 

         

View source version on businesswire.comhttps://www.businesswire.com/news/home/20201026005842/en/

# # #

This press release may contain forward looking statements relating to future events or future financial performance that involve risks and uncertainties. Such statements can be identified by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue," or the negative of such terms or comparable terms. These statements are only predictions and actual results could differ materially from those anticipated in these statements based upon a number of factors including those identified in the company's filings with the SEC.