It was success all around for Citrix, F5 Networks, ServiceNow and Check Point, with the four companies reporting increased revenues for their respective quarters. We have highlighted the key takeaways from each company's earnings report.
The software company reported a seven per cent year-on-year increase in its revenue to $742m (£562m) for its Q2. Subscription revenue reported a similar growth rate as Q1 did, with a 49 per cent year-on-year hike to $111m. The vendor did, however, suffer a slight drop in its net income for the quarter, reporting $107m compared with $109m over the same period in 2017.
CEO David Henshall said the company is focusing on three "strategic motions": accelerating to the cloud, unifying its product portfolio and extending its solutions into new areas, such as security and analytics.
"Our transformation isn't about just porting our existing discrete products to cloud services, but unifying our products into complete solutions that more holistically address the needs of the market. And, in the process, giving us an increasing advantage over traditional and upstart competitors that continue to deliver just point products," said Henshall in an earnings call transcribed by Seeking Alpha.
The application traffic management vendor reported Q3 revenue growth of $542m, a five per cent increase on the same period in 2017. Product sales accounted for 44 per cent of total revenue at $239m. Services revenue saw a seven per cent year-on-year increase, representing the bulk of F5's revenue in the quarter at $303m.
On an earnings call, F5's CEO François Locoh-Donou told investors that the company plans to "realign resources" for 2019, stating that some employees had already been notified about redundancy. He insisted to investors that the restructuring is not about cost-cutting, rather the company is focusing on investing in software, digital infrastructure and multi-cloud technologies.
"We are very focused on the transformation of F5 into a multi-cloud application services leader, and as a result, there is legacy spend that is less relevant for the future than it has been for the past, and we are shifting our focus to the growth areas of F5," Locoh-Donou said.
The cloud-based IT services management vendor reported total revenues of $631m in its second quarter of the year, with subscription revenues taking the lion's share at $585m revenue, representing a 45 per cent year-on-year growth. The company stated that IT was one of the main drivers for its revenue increase. Operating margin came to 17 per cent.
ServiceNow expects to see more success in Q3, with subscription revenues predicted to sit between $610m and $615m, which would represent 36 per cent year-on-year growth. The company also forecasts 21 per cent operating margin for its third quarter.
The security vendor saw modest increases across the board, including a two per cent year-on-year increase in its second-quarter revenue to $468m. Its software services swelled by four per cent year on year to $210m, while its operating cashflow was down to $213m compared with $226m reported in the second quarter for 2017.
In an earnings call, transcribed by Seeking Alpha, CEO Gil Shwed told investors that the second-quarter results benefited from an increase in sales and marketing activities.
"While top revenues grew only slightly, behind the scenes we experienced solid execution, especially with our subscription," Shwed said.
However, he warned investors that Q3 could be challenging, due to summer holidays and seasonal fluctuation.
"Overall, the second-quarter internal metrics and execution were better than I anticipated, which leads me to our projection for the third quarter. You know my regular caveats, the future is always hard to predict," he said.
Shwed predicts revenues between $454m and $474m for Check Point's third quarter.
A summary of what you get if you subscribe to our premium market intelligence service
Matthew Polly says CrowdStrike is looking to branch out from the UK and into mainland Europe
Southampton-based VAR states that further acquisitions are in the pipeline
With UKFast launching a public cloud consultancy, Tom Wright asks if this is the way forward for all local hosting providers