~~Allocate the transaction price to the performance obligations in the contract.~~ ~~The transaction price in a contract is allocated based upon the relative standalone selling price of each distinct performance obligation identified in the contract.~~


•	Identify the contract(s) with a customer. Evidence of a contract generally consists of a purchase order issued pursuant to the terms and conditions of a distributor, reseller or end user agreement.


•	Identify the performance obligations in the contract. Performance obligations are explicitly identified in the Company's contracts and include hardware-based software, software-only solutions, cloud-based subscription services as well as a broad range of service performance obligations including consulting, training, installation and maintenance.


•	Determine the transaction price. The purchase price stated in an agreed upon purchase order is generally representative of the transaction price. The Company offers several programs in which customers are eligible for certain levels of rebates if certain conditions are met. When determining the transaction price, the Company considers the effects of any variable consideration.

~~Recognize revenue when (or as) the entity satisfies a performance obligation.~~ The Company satisfies performance obligations either over time or at a point in time as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring control of promised products and services to a customer.


•	Allocate the transaction price to the performance obligations in the contract. The transaction price in a contract is allocated based upon the relative standalone selling price of each distinct performance obligation identified in the contract.


•	Recognize revenue when (or as) the entity satisfies a performance obligation. The Company satisfies performance obligations either over time or at a point in time as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring control of promised products and services to a customer.

The following is a description of the principal activities from which the Company generates revenue:

Product

Revenue from the sale of the Company's hardware and perpetual software products is generally recognized at a point in time when the product has been delivered and the customer is obligated to pay for the product. When rights of return are present and the Company cannot estimate returns, revenue is recognized when such rights of return lapse. Payment terms to domestic customers are generally net 30 days to net 45 days. Payment terms to international customers range from net 30 days to net 120 days based on normal and customary trade practices in the individual markets.

Subscription

The Company also offers several products by subscription, either through term-based license agreements or as a service through its cloud-based Silverline platform. Revenue for term-based license agreements is recognized at a point in time, when the Company delivers the software license to the customer and the subscription term has commenced. For the Company's software-as-a-service Silverline offerings, revenue is recognized ratably as the services are provided.

Support and professional services

Revenues for post-contract customer support (PCS) are recognized on a straight-line basis over the service contract term. PCS includes a limited period of telephone support, updates, repair or replacement of any failed product or component that fails during the term of the agreement, bug fixes and rights to upgrades, when and if available. Consulting services are customarily billed at fixed hourly rates, plus out-of-pocket expenses, and revenues are recognized as the consulting is completed. Similarly, training revenue is recognized as the training is completed.

Contract acquisition costs

Sales commissions earned by the Company's sales force are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for initial service contracts and subscription offerings are deferred and then amortized as an expense on a straight-line basis over the period of benefit which management has determined to be 4.5 years and 3 years, respectively.

Significant Judgments

The Company’s contracts with customers often include promises to transfer multiple products and services. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment.

Judgment is also required to determine the standalone selling price (SSP) for each distinct performance obligation. The Company sells post-contract customer support (PCS), subscriptions and professional services on a standalone basis and can therefore use a population of historical standalone sales to determine fair value. For distinct performance obligations that the Company does not generally sell on a standalone basis (hardware and perpetual software), a combination of the adjusted market assessment approach and the expected cost plus a margin approach are used to estimate the SSP.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company invests its cash and cash equivalents in deposits with five major financial institutions, which, at times, may exceed federally insured limits. The Company has not experienced any losses on its cash and cash equivalents.

Amounts included in restricted cash represent those required to be set aside by a contractual agreement. The following table provides a reconciliation of the Company’s cash and cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total cash, cash equivalents and restricted cash shown in the Company’s consolidated statements

of cash flows for the periods presented (in thousands):



	June 30,		June 30,
	2019		2018
Cash and cash equivalents	$	688,350	$	599,268
Restricted cash included in other assets, net	3,013		1,182
Total cash, cash equivalents and restricted cash	$	691,363	$	600,450

December 31, September 30,
2018 2018
Cash and cash equivalents $ 480,121
$ 424,707
Restricted cash included in other assets, net 1,152
1,187
Total cash, cash equivalents and restricted cash $ 481,273
$ 425,894
Inventories

The Company outsources the manufacturing of its pre-configured hardware platforms to contract manufacturers, who assemble each product to the Company’s specifications. As protection against component shortages and to provide replacement parts for its service teams, the Company also stocks limited supplies of certain key product components. The Company reduces inventory to net realizable value based on excess and obsolete inventories determined primarily by historical usage and forecasted demand. Inventories consist of hardware and related component parts and are recorded at the lower of cost and net realizable value (as determined by the first-in, first-out method).

Goodwill and Acquired Intangible Assets

Goodwill represents the excess purchase price over the estimated fair value of net assets acquired as of the acquisition date. The Company tests goodwill for impairment on an annual basis and between annual tests when impairment indicators are identified, and goodwill is written down when impaired. Goodwill ~~was~~has been recorded in connection with various acquisitions, including the acquisition on Nginx in ~~prior years.~~the third quarter of fiscal 2019. For its annual goodwill impairment test in all periods to date, the Company has operated under one reporting unit and the fair value of its reporting unit has been determined by the Company’s enterprise value. The Company performs its annual goodwill impairment test during the second fiscal quarter.

As part of the annual goodwill impairment test, the Company has the option to perform a qualitative assessment to determine whether further impairment testing is necessary. Examples of events and circumstances that might indicate that the reporting unit’s fair value is less than its carrying amount include macro-economic conditions such as deterioration in the entity’s operating environment or industry or market considerations; entity-specific events such as increasing costs, declining financial performance, or loss of key personnel; or other events such as a sustained decrease in the stock price on either an absolute basis or relative to peers. If, as a result of its qualitative assessment, it is more-likely-than-not (i.e. greater than 50% chance) that the fair value of the Company’s reporting unit is less than its carrying amount, the quantitative impairment test will be required. Otherwise, no further testing will be required. ~~If the Company chooses to bypass the qualitative assessment, it completes a quantitative assessment in performing its annual impairment test.~~

For its annual impairment test performed in the second quarter of fiscal ~~2018,~~2019, the Company completed a quantitative assessment and determined that there was no impairment of goodwill. ~~The Company also considered potential impairment indicators of goodwill at December 31, 2018 and noted no indicators of impairment.~~

The Company's intangible assets subject to amortization are amortized using the straight-line method over their estimated useful lives, ranging from ~~three~~two to ~~ten~~fifteen years. The Company evaluates the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. The Company considered potential impairment indicators of acquired intangible assets at ~~December 31, 2018~~June 30, 2019 and noted no indicators of impairment.

Software Development Costs

The authoritative guidance requires certain internal software development costs related to software to be sold to be capitalized upon the establishment of technological feasibility. The Company's software development costs incurred subsequent to achieving technological feasibility have not been significant and, as a result all software development costs have been expensed as research and development activities as incurred.

Internal Use Software

In accordance with the authoritative guidance, the Company capitalizes application development stage costs associated with the development of internal-use software and software developed related to its SaaS-based product offerings. The capitalized costs are then amortized over the estimated useful life of the software, which is generally three to five years, and are included in property and equipment in the accompanying consolidated balance sheets.

Stock-Based Compensation

The Company accounts for stock-based compensation using the straight-line attribution method for recognizing compensation expense. The Company recognized ~~$38.7~~$41.0 million and ~~$40.9~~$38.7 million of stock-based compensation expense for the three months ended ~~December 31, 2018~~June 30, 2019 and ~~2017~~2018, respectively and $119.2 million and $121.0 million of stock-based compensation expense for the nine months ended June 30, 2019 and 2018, respectively. As of ~~December 31, 2018~~June 30, 2019, there was ~~$204.3~~$176.1 million of total unrecognized stock-based compensation cost, the majority of which will be recognized over the next two ~~years.~~ years. Going forward, stock-based compensation expenses may increase as the Company issues additional equity-based awards to continue to attract and retain key employees.

The Company issues incentive awards to its employees through stock-based compensation consisting of restricted stock units (RSUs). On October 31, 2018, the Company’s Board of Directors and Compensation Committee approved 774,313 RSUs to employees and executive officers pursuant to the Company’s annual equity awards program. The value of RSUs is determined using the fair value method, which in this case, is based on the number of shares granted and the quoted price of the Company’s common stock on the date of grant.

The Company recognizes compensation expense for only the portion of restricted stock units that are expected to vest. Therefore, the Company applies estimated forfeiture rates that are derived from historical employee termination behavior. Based on historical differences with forfeitures of stock-based awards granted to the Company’s executive officers and Board of Directors versus grants awarded to all other employees, the Company has developed separate forfeiture expectations for

these two groups. In determining the fair value of shares issued under the Employee Stock Purchase Plan (ESPP), the Company uses the Black-Scholes option pricing model. Compensation expense related to the shares issued pursuant to the ESPP is recognized on a straight-line basis over the offering period.

The Company issues incentive awards to certain current executive officers as part of its annual equity awards program. Fifty percent of the aggregate number of RSUs issued to executive officers vest in equal quarterly increments, and 50% are subject to the Company achieving specified performance goals.

For performance stock awards granted prior to fiscal 2018, attainment is based on the Company achieving specific quarterly revenue and EBITDA targets. In each case, 70% of the quarterly performance stock grant is based on achieving at least 80% of the quarterly revenue goal set by the Company's Board of Directors, and the other 30% is based on achieving at least 80% of the quarterly EBITDA goal set by the Company's Board of Directors. The quarterly performance stock grant is paid linearly over 80% of the targeted goals. At least 100% of both goals must be attained in order for the quarterly performance stock grant to be awarded over 100%. Each goal is evaluated individually and subject to the 80% achievement threshold and the 100% over-achievement threshold. Each goal is also capped at achievement of 200% above target.

For the fiscal 2018 and 2019 performance stock awards, the Company's Compensation Committee adopted a new set of metrics that are differentiated from the quarterly revenue and EBITDA measures, including (1) 50% of the annual performance stock grant is based on achieving 80% of the annual revenue goal set by the Company’s Board of Directors; (2) 25% of the annual performance stock grant is based on achieving at least a 18% increase in annual software revenue compared to the prior year; and (3) 25% of the annual performance stock grant is based on relative total shareholder return benchmarked to the S&P 500 index. In each case, no vesting or payment with respect to a performance goal shall occur unless a minimum threshold is met for the applicable goal. Vesting and payment with respect to the performance goal is linear above the threshold of the applicable goal and is capped at achievement of 200% above target.

As of ~~December 31, 2018,~~June 30, 2019, the following annual equity grants for executive officers or a portion thereof are outstanding:



Grant Date	RSUs Granted	Vesting Schedule	Vesting Period	Date Fully Vested
November 1, 2018	144,066	Quarterly, Annually¹	3 years	November 1, 2021
November 1, 2017	140,135	Quarterly, Annually¹	4 years	November 1, 2021
November 1, 2016	115,347	Quarterly	4 years	November 1, 2020
November 2, 2015	145,508	Quarterly	4 years	November 1, 2019


(1)	50% of the annual equity grant vests in equal quarterly increments and 50% is subject to the Company achieving specified annual performance goals.

The Company recognizes compensation costs for awards with performance conditions when it concludes it is probable that the performance condition will be achieved. The Company reassesses the probability of vesting at each balance sheet date and adjusts compensation costs based on the probability assessment.

Common Stock Repurchase

On October 31, 2018, the Company announced that its Board of Directors authorized an additional $1.0 billion for its common stock share repurchase program. This new authorization is incremental to the existing $4.4 billion program, initially approved in October 2010 and expanded in each fiscal year. Acquisitions for the share repurchase programs will be made from time to time in private transactions or open market purchases as permitted by securities laws and other legal requirements. ~~The programs can be terminated at any time.~~ For the ~~three~~nine months ended ~~December 31, 2018,~~June 30, 2019, the Company repurchased and retired ~~568,758~~1,185,881 shares at an average price of ~~$177.64~~$169.53 per share and the Company had ~~$1.5~~$1.4 billion remaining authorized to purchase shares at ~~December 31, 2018.~~June 30, 2019.

In the second quarter of fiscal 2019, the Company announced that, in connection with its acquisition of Nginx, it was suspending the automatic component of its common stock share repurchase program. Management will continue to evaluate market conditions and other factors including the Company’s capital requirements in determining when and whether to repurchase shares and when and whether to re-implement an automatic component of its repurchase program. The program does not require the purchase of any minimum number of shares and the program may be modified, suspended or discontinued at any time.

Earnings Per Share

Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted average number of common and dilutive common stock equivalent shares outstanding during the period. The Company’s nonvested restricted stock awards and restricted stock units do not have nonforfeitable rights to dividends or dividend equivalents and are not considered participating securities that should be included in the computation of earnings per share under the two-class method.

The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share data):



	Three months ended June 30,				Nine months ended June 30,
	2019		2018		2019		2018
Numerator
Net income	$	85,905	$	122,743	$	332,897	$	320,808
Denominator
Weighted average shares outstanding — basic	59,981		60,970		59,963		61,531
Dilutive effect of common shares from stock options and restricted stock units	215		663		409		683
Weighted average shares outstanding — diluted	60,196		61,633		60,372		62,214
Basic net income per share	$	1.43	$	2.01	$	5.55	$	5.21
Diluted net income per share	$	1.43	$	1.99	$	5.51	$	5.16

Three months ended
December 31,
2018 2017
Numerator
Net income $ 130,905
$ 88,429
Denominator
Weighted average shares outstanding — basic 60,216
62,195
Dilutive effect of common shares from stock options and restricted stock units 429
355
Weighted average shares outstanding — diluted 60,645
62,550
Basic net income per share $ 2.17
$ 1.42
Diluted net income per share $ 2.16
$ 1.41

Anti-dilutive stock-based awards excluded from the calculations of diluted earnings per share were immaterial for the three and nine months ended ~~December 31, 2018~~June 30, 2019 and ~~2017.~~2018.

Comprehensive Income

Comprehensive income includes certain changes in equity that are excluded from net income. Specifically, unrealized gains or losses on securities and foreign currency translation adjustments are included in accumulated other comprehensive income or loss.

Recently Adopted Accounting Standards

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09). ASU 2014-09 and the related amendments outline a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new model requires revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The Company adopted this new accounting standard and the related amendments on October 1, 2018 using the modified retrospective method. See Note 2 - Revenue from Contracts with Customers for further details.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15), which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. The Company adopted this new accounting standard on October 1, 2018. The adoption did not have an impact on the Company's ~~condensed~~ consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which requires a company’s cash flow statement to explain the changes during a reporting period of the totals for cash, cash equivalents, restricted cash and restricted cash equivalents. Additionally, amounts for restricted cash and restricted cash equivalents are to be included with cash and cash equivalents if the cash flow statement includes a reconciliation of the total cash balances for a reporting period. The Company adopted this new accounting standard on October 1, 2018, which resulted in an immaterial reclassification of beginning and ending cash, cash equivalents and restricted cash for the periods presented within the statement of cash flows. Upon adoption of this new standard, restricted cash activity is no longer separately presented within the investing activities in the statement of cash flows. The overall adoption of the standard did not have a material impact to the consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which provides a more robust framework to use in determining when a set of assets and activities is considered a business. The Company adopted this new accounting standard on October 1, 2018. The adoption did not have an impact on the Company's ~~condensed~~ consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (ASU 2017-09), which provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions or award classification and would not be required if the

changes are considered non-substantive. The Company adopted this new accounting standard on October 1, 2018. The adoption did not have an impact on the Company's ~~condensed~~ consolidated financial statements.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (ASU 2016-02), which requires lessees to recognize on the balance sheet a right-of-use asset, representing its right to use the underlying asset for the lease term, and a corresponding lease liability for all leases with terms greater than twelve months. The Company’s leases consist of operating leases for its ~~office~~offices and lab spaces. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing and uncertainty of cash flows arising from leases. Adoption of the new lease standard requires measurement of leases at the beginning of the earliest period presented on a modified retrospective basis. The new standard will be effective for the Company beginning October 1, 2019. The Company anticipates that its long-term leases for office space will be recognized as lease liabilities and corresponding right-of-use assets, and will ~~accordingly~~ have a material impact on its consolidated balance sheets upon adoption.

In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) (ASU 2018-11), which provides an optional transition method to adopt ASU 2016-02, Leases (Topic 842) by allowing lessees to apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Comparative periods will still be presented under current GAAP (ASC 840), along with the applicable Topic 840 disclosures for those comparative periods. The new standard is effective at the same time as adoption of ASU 2016-02, Leases (Topic 842), which the Company is planning to adopt in the first quarter of fiscal year 2020. The Company plans to adopt the transitional provisions allowed under ASU 2018-11.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company does not anticipate that the adoption of this standard will have a material impact on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) (ASU 2018-15), which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software, and hosting arrangements that include an internal use software license. The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted.

The Company does not anticipate that the adoption of this standard will have a material impact on its consolidated financial statements.

2. Revenue from Contracts with Customers

The following table summarizes the impact of adopting ASC 606 on the Company's consolidated balance sheet as of the date of adoption, October 1, 2018. This table does not represent the full consolidated balance sheet as it only reflects the accounts impacted by the adoption of ASC 606.



	Ending Balance as of September 30, 2018 (ASC 605)		ASC 606 Adjustments			Beginning Balance as of October 1, 2018 (ASC 606)
Assets
Other current assets¹	$	52,326	$	50,558		$	102,884
Other assets, net¹	$	42,186	$	59,676		$	101,862
Deferred tax assets	$	33,441	$	(7,902	)	$	25,539
Liabilities and Shareholders' Equity
Deferred revenue	$	715,697	$	35,464		$	751,161
Deferred revenue, long-term	$	299,624	$	32,614		$	332,238
Retained earnings²	$	1,287,243	$	36,048		$	1,323,291


(1)	Upon the adoption of ASC 606, capitalized contract ~~assets~~acquisition costs and unbilled accounts receivable are reported as part of other current assets and other assets, net.


(2)	The net increase to retained earnings of $36.0 million was primarily related to the capitalization of contract acquisition costs of $54.6 million, partially offset by a decrease of $8.8 million due to changes in deferred revenue and a decrease of $7.9 million from the impact on deferred income taxes.

As a result of an increase in sales of the Company's software solutions sold as Enterprise License Agreements and annual subscriptions, the adoption of ASC 606 had a material impact to the Company's consolidated balance sheet as of June 30, 2019 and consolidated income statements for the three and nine months ended June 30, 2019.

The following table summarizes the impact of adopting ASC 606 on the Company's consolidated balance sheet as of June 30, 2019 (in thousands):



	June 30, 2019
	As Reported (ASC 606)		Impacts Subsequent to the Date of Adoption			Impacts on the Date of Adoption (October 1, 2018)			Without Adoption (ASC 605)
Assets
Other current assets	$	161,940	$	23,480		$	50,558		$	87,902
Other assets, net	$	194,295	$	11,714		$	59,676		$	122,905
Deferred tax assets	$	25,079	$	(1,961	)	$	(7,902	)	$	34,942
Total assets	$	3,177,275	$	33,233		$	102,332		$	3,041,710
Liabilities and Shareholders' Equity
Accrued liabilities	$	213,195	$	4,916		$	—		$	208,279
Deferred revenue	$	803,241	$	11,589		$	35,464		$	756,188
Deferred revenue, long-term	$	363,271	$	(10,472	)	$	32,614		$	341,129
Total liabilities	$	1,553,493	$	6,033		$	68,078		$	1,479,382
Retained earnings	$	1,543,253	$	25,406		$	36,048		$	1,481,799
Total liabilities and shareholders' equity	$	3,177,275	$	31,439		$	104,126		$	3,041,710

The following table summarizes the impact of adopting ASC 606 on the Company's consolidated income statement for the three months ended June 30, 2019 (in thousands):



	Three Months Ended June 30, 2019
	As Reported (ASC 606)		Effect of Adoption of ASC 606			Without Adoption (ASC 605)
Total net revenues	$	563,394	$	29,338		$	534,056
Total cost of net revenues	$	90,767	$	626		$	90,141
Gross profit	$	472,627	$	28,712		$	443,915
Total operating expenses	$	369,887	$	(1,352	)	$	371,239
Income before income taxes	$	107,462	$	30,064		$	77,398
Provision for income taxes	$	21,557	$	6,031		$	15,526
Net income	$	85,905	$	24,033		$	61,872

Net income per share — basic	$	1.43	$	0.40		$	1.03
Net income per share — diluted	$	1.43	$	0.40		$	1.03

The following table summarizes the impact of adopting ASC 606 on the Company's consolidated income statement for the nine months ended June 30, 2019 (in thousands):



	Nine Months Ended June 30, 2019
	As Reported (ASC 606)		Effect of Adoption of ASC 606		Without Adoption (ASC 605)
Total net revenues	$	1,652,059	$	36,528	$	1,615,531
Total cost of net revenues	$	265,659	$	2,440	$	263,219
Gross profit	$	1,386,400	$	34,088	$	1,352,312
Total operating expenses	$	982,651	$	1,805	$	980,846
Income before income taxes	$	423,000	$	32,283	$	390,717
Provision for income taxes	$	90,103	$	6,877	$	83,226
Net income	$	332,897	$	25,406	$	307,491

Net income per share — basic	$	5.55	$	0.42	$	5.13
Net income per share — diluted	$	5.51	$	0.42	$	5.09

The adoption of ASC 606 ~~had an immaterial~~did not have a material impact to cash from or used in operating, financing, or investing activities on the ~~Company's~~Company’s consolidated ~~income statements and statements~~statement of cash flows for the ~~three~~nine months ended ~~December 31, 2018.~~June 30, 2019.

Capitalized Contract Acquisition Costs

The table below shows significant movements in capitalized contract acquisition costs (current and noncurrent) for the ~~three~~nine months ended ~~December 31, 2018~~June 30, 2019 (in thousands):



Balance, September 30, 2018	$	—
Impacts from adoption of ASC 606	$	54,608
Additional capitalized contract acquisition costs deferred	$	22,460
Amortization of capitalized contract acquisition costs	$	(21,380	)
Balance, June 30, 2019	$	55,688

Balance, September 30, 2018 $ —
Impacts from adoption of ASC 606 $ 54,608
Additional capitalized contract acquisition costs deferred $ 6,157
Amortization of capitalized contract acquisition costs $ (7,261 )
Balance, December 31, 2018 $ 53,504

Amortization of capitalized contract acquisition costs is recorded in Sales and Marketing expense in the accompanying consolidated income ~~statements.~~statements for the three and nine months ended June 30, 2019. There was no impairment ~~loss in relation to costs capitalized.~~of any capitalized contract acquisition costs.

~~Remaining Performance Obligations~~

Remaining performance obligations represent the amount of the transaction price under contracts with customers that are attributable to performance obligations that are unsatisfied or partially satisfied at the reporting date. The Company expects to recognize this amount as revenue over the following time periods (in thousands):

2019
2020
Thereafter
Total
Revenue expected to be recognized on remaining performance obligations $ 679,633
$ 292,714
$ 177,174
$ 1,149,521

Contract Balances

Timing may differ between the satisfaction of performance obligations and the invoicing and collection of amounts related to our contracts with customers. We record assets for amounts related to performance obligations that are satisfied but not yet billed and/or collected, in addition to contracts that have started, but not yet been fully billed. These assets are recorded as contract assets rather than receivables when receipt of the consideration is conditional on something other than the passage of time. Liabilities are recorded for amounts that are collected in advance of the satisfaction of performance obligations. These liabilities are classified as current and non-current deferred revenue.

The table below shows significant movements in contract assets (current and noncurrent) for the ~~three~~nine months ended ~~December 31, 2018~~June 30, 2019 (in thousands):



Balance, September 30, 2018	$	—
Impacts from adoption of ASC 606	$	57,499
Revenue recognized during period but not yet billed	$	15,240
Contract asset net additions	$	50,159
Contract assets reclassified to accounts receivable	$	(29,386	)
Balance, June 30, 2019	$	93,512

Balance, September 30, 2018 $ —
Impacts from adoption of ASC 606 $ 57,499
Revenue recognized during period but not yet billed $ 947
Contract asset net additions $ 18,459
Contract assets reclassified to accounts receivable $ (7,263 )
Balance, December 31, 2018 $ 69,642

As of ~~December 31, 2018,~~June 30, 2019, contract assets that are expected to be reclassified to receivables within the next 12 months are included in other current assets, with those expected to be transferred to receivables in more than 12 months included in other assets. There were no impairments of contract assets during the ~~three~~nine months ended ~~December 31, 2018.~~

June 30, 2019.

The impacts to deferred revenue from the adoption of ASC 606 are primarily related to unbilled accounts receivable now being capitalized and included as contract assets on the balance sheet. The table below shows significant movements in the deferred revenue balances (current and noncurrent) for the ~~three~~nine months ended ~~December 31, 2018~~June 30, 2019 (in thousands):



Balance, September 30, 2018	$	1,015,321
Impacts from adoption of ASC 606	$	68,078
Amounts billed but not recognized as revenues	$	731,306
Revenues recognized related to the opening balance of deferred revenue	$	(648,193	)
Balance, June 30, 2019	$	1,166,512

Balance, September 30, 2018 $ 1,015,321
Impacts from adoption of ASC 606 $ 68,078
Amounts billed but not recognized as revenues $ 347,611
Revenues recognized related to the opening balance of deferred revenue $ (281,489 )
Balance, December 31, 2018 $ 1,149,521

Our contract assets and liabilities are reported in a net position on a contract by contract basis at the end of each reporting period.

Remaining Performance Obligations



	2,019		2,020		Thereafter		Total
Revenue expected to be recognized on remaining performance obligations	$	278,529	$	574,901	$	313,082	$	1,166,512

See Note 8,9, Geographic Sales and Significant Customers, for disaggregated revenue by significant customer and geographic region.

3. Business Combinations

The Company’s business combinations are accounted for under the acquisition method. The total purchase price is allocated to the tangible and intangible assets acquired and the liabilities assumed based on their estimated fair values. The excess of the purchase price over those fair values is recorded as goodwill. The fair value assigned to the tangible and intangible assets acquired and liabilities assumed are based on estimates and assumptions provided by management. Goodwill is not amortized but instead is tested for impairment at least annually, as described in Note 1.

Fiscal Year 2019 Acquisition of Nginx, Inc.

On March 9, 2019, the Company entered into a Merger Agreement (the “Merger Agreement”) with Nginx, Inc. ("Nginx"), a provider of open source web server software and application delivery solutions. The transaction closed on May 8, 2019 with Nginx becoming a wholly-owned subsidiary of F5.

Pursuant to the Merger Agreement, at the effective time of the Merger, the capital stock of Nginx and the vested outstanding and unexercised stock options in Nginx were cancelled and converted to the right to receive approximately $643.2 million in cash, subject to certain adjustments and conditions set forth in the Merger Agreement, and the unvested stock options and restricted stock units in Nginx held by continuing employees of Nginx were assumed by F5, on the terms and conditions set forth in the Merger Agreement. Included in cash consideration was $19.0 million of transaction costs paid by F5 on behalf of Nginx. In addition, the Company incurred an additional $1.0 million of transaction costs associated with the acquisition which was included in General and Administrative expenses for the third quarter of fiscal 2019.

Nginx is an open source leader in application delivery. The combined company will enable multi-cloud application services across all environments, providing the ease-of-use and flexibility developers require while also delivering the scale, security, reliability and enterprise readiness network operations teams demand. As a result of the acquisition, the Company acquired all the assets and assumed all the liabilities of Nginx. The goodwill related to the Nginx acquisition is comprised primarily of expected synergies from combining operations and the acquired intangible assets that do not qualify for separate recognition. The results of operations of Nginx have been included in the Company’s consolidated financial statements from the date of acquisition.

The purchase price allocation is as follows (in thousands):



Assets acquired
Cash and cash equivalents	$	29,911
Fair value of tangible assets:
Accounts receivable	7,306
Other current assets	4,214
Property and equipment, net	1,822
Deferred tax assets	10,357
Intangible assets	89,300
Goodwill	509,414
Total assets acquired	$	652,324
Liabilities assumed
Accounts payable	$	(1,081	)
Deferred revenue	(4,000		)
Other liabilities	(4,035		)
Total liabilities assumed	$	(9,116	)
Net assets acquired	$	643,208

The allocation of the purchase price and the estimated useful lives associated with certain assets is as follows (in thousands):



			Estimated
	Amount		Useful Life
Net tangible assets	$	44,494	—
Identifiable intangible assets:
Developed technologies	62,500		7 years
Customer relationships	12,000		15 years
Trade name	14,500		7 years
Non-competition agreements	300		2 years
Goodwill	509,414		—
Total purchase price	$	643,208

The developed technology intangible asset will be amortized on a straight-line basis over its estimated useful life of seven years and included in cost of net product revenues. The trade names and customer relationships intangible assets will be amortized on a straight-line basis over their estimated useful lives of seven years and fifteen years, respectively, and included in sales and marketing expenses. The weighted average life of the amortizable intangible assets recognized from the Nginx merger was 8.1 years The estimated useful lives for the acquired intangible assets were based on the expected future cash flows associated with the respective asset. Tax deductible goodwill based on the Company's preliminary calculation is $437.4 million.

The unaudited pro forma financial information shown below summarizes the combined results of operations for F5 and Nginx as if the closing of the acquisition had occurred on October 1, 2017, the first day of F5's fiscal year 2018. The unaudited pro forma financial information includes adjustments that are directly attributable to the business combination and are factually supportable. The adjustments primarily reflect the amortization of acquired intangible assets, share-based compensation expense for replacement awards, as well as the pro forma tax impact for such adjustments at the statutory rate. The unaudited pro forma results for the nine months ended June 30, 2018 also includes $21.8 million in non-recurring retention costs for Nginx employees and $1.0 million in transaction costs associated with the acquisition. The unaudited pro forma results do not reflect any cost saving synergies from operating efficiencies or the effect of the incremental costs incurred from integrating these companies. Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the acquisitions had occurred at the beginning of the periods presented, nor are they indicative of future results of operations (in thousands, except per share amounts):



	Three months ended June 30,				Nine months ended June 30,
	2019		2018		2019		2018
Net revenue	$	568,272	$	546,324	$	1,671,875	$	1,609,341
Net income	$	100,329	$	110,800	$	324,074	$	267,742

For the three and nine months ended June 30, 2019, Nginx contributed $5.1 million to F5's consolidated net revenues and $5.9 million in losses to F5's consolidated net income.

4. Fair Value Measurements

In accordance with the authoritative guidance on fair value measurements and disclosure under GAAP, the Company determines fair value using a fair value hierarchy that distinguishes between market participant assumptions developed based on market data obtained from sources independent of the reporting entity, and the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances and expands disclosure about fair value measurements.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date, essentially the exit price.

The levels of fair value hierarchy are:

Level 1: Quoted prices in active markets for identical assets and liabilities at the measurement date that the Company has the ability to access.

Level 2: Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Unobservable inputs for which there is little or no market data available. These inputs reflect management’s assumptions of what market participants would use in pricing the asset or liability.

Level 1 investments are valued based on quoted market prices in active markets and include the Company’s cash equivalent investments. Level 2 investments, which include investments that are valued based on quoted prices in markets that are not active, broker or dealer quotations, actual trade data, benchmark yields or alternative pricing sources with reasonable levels of price transparency, include the Company’s certificates of deposit, corporate bonds and notes, municipal bonds and notes, U.S. government securities, U.S. government agency securities and international government securities. Fair values for

the Company’s level 2 investments are based on similar assets without applying significant judgments. In addition, all of the Company’s level 2 investments have a sufficient level of trading volume to demonstrate that the fair values used are appropriate for these investments.

A financial instrument’s level within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Company. The Company considers observable data to be market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

The Company’s financial assets measured at fair value on a recurring basis subject to the disclosure requirements at ~~December 31, 2018~~June 30, 2019, were as follows (in thousands):


	Fair Value Measurements at Reporting Date Using								Fair Value Measurements at Reporting Date Using
	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at December 31, 2018		Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at June 30, 2019
Cash equivalents	$	61,411	$	109,107	$	—	$	170,518	$	48,807	$	228,127	$	—	$	276,934
Short-term investments
Available-for-sale securities — certificates of deposits	—		2,970		—		2,970		—		734		—		734
Available-for-sale securities — corporate bonds and notes	—		471,015		—		471,015		—		256,422		—		256,422
Available-for-sale securities — municipal bonds and notes	—		24,085		—		24,085		—		13,054		—		13,054
Available-for-sale securities — U.S. government securities	—		117,624		—		117,624		—		25,929		—		25,929
Available-for-sale securities — U.S. government agency securities	—		36,781		—		36,781		—		1,998		—		1,998
Long-term investments
Available-for-sale securities — corporate bonds and notes	—		383,337		—		383,337		—		155,348		—		155,348
Available-for-sale securities — municipal bonds and notes	—		16,944		—		16,944		—		3,776		—		3,776
Available-for-sale securities — U.S. government securities	—		2,953		—		2,953
Available-for-sale securities — U.S. government agency securities	—		10,456		—		10,456		—		2,495		—		2,495
Total	$	61,411	$	1,175,272	$	—	$	1,236,683	$	48,807	$	687,883	$	—	$	736,690



~~WASHINGTON~~Washington		91-1714307
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, no par value	FFIV	NASDAQ Global Select Market



	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)	3
Consolidated Balance Sheets — ~~December 31, 2018~~June 30, 2019 and September 30, 2018	3
Consolidated Income Statements — Three and nine months ended ~~December 31,~~June 30, 2019 and 2018 ~~and 2017~~	4
Consolidated Statements of Comprehensive Income — Three and nine months ended ~~December 31,~~June 30, 2019 and 2018 ~~and 2017~~	5
Consolidated Statements of ~~Cash Flows~~Shareholders' Equity — Three and nine months ended ~~December 31,~~June 30, 2019 and 2018 ~~and 2017~~	6
Consolidated Statements of Cash Flows — Nine months ended June 30, 2019 and 2018	8
Notes to Consolidated Financial Statements	79
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	2126
Item 3. Quantitative and Qualitative Disclosures About Market Risk	2732
Item 4. Controls and Procedures	2732
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	2733
Item 1A. Risk Factors	2733
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	2733
Item ~~6. Exhibits~~4. Mine Safety Disclosures	2833
~~SIGNATURES~~Item 5. Other Information	2933
Item 6. Exhibits	34
SIGNATURES	35


	December 31, 2018			September 30, 2018			June 30, 2019			September 30, 2018
ASSETS
Current assets
Cash and cash equivalents	$	480,121		$	424,707		$	688,350		$	424,707
Short-term investments	652,475			614,705			298,137			614,705
Accounts receivable, net of allowances of $2,624 and $2,040	325,688			295,352
Accounts receivable, net of allowances of $2,562 and $2,040							320,465			295,352
Inventories	31,559			30,568			36,009			30,568
Other current assets	129,793			52,326			161,940			52,326
Total current assets	1,619,636			1,417,658			1,504,901			1,417,658
Property and equipment, net	179,224			145,042			226,002			145,042
Long-term investments	413,690			411,184			161,619			411,184
Deferred tax assets	23,131			33,441			25,079			33,441
Goodwill	555,965			555,965			1,065,379			555,965
Other assets, net	100,250			42,186			194,295			42,186
Total assets	$	2,891,896		$	2,605,476		$	3,177,275		$	2,605,476
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	66,859		$	57,757		$	55,630		$	57,757
Accrued liabilities	184,446			180,979			213,195			180,979
Deferred revenue	796,385			715,697			803,241			715,697
Total current liabilities	1,047,690			954,433			1,072,066			954,433
Other long-term liabilities	81,473			65,892			117,804			65,892
Deferred revenue, long-term	353,136			299,624			363,271			299,624
Deferred tax liabilities	409			35			352			35
Total long-term liabilities	435,018			365,551			481,427			365,551
Commitments and contingencies (Note 6)
Commitments and contingencies (Note 7)
Shareholders’ equity
Preferred stock, no par value; 10,000 shares authorized, no shares outstanding	—			—			—			—
Common stock, no par value; 200,000 shares authorized, 60,058 and 60,215 shares issued and outstanding	13,277			20,427
Common stock, no par value; 200,000 shares authorized, 60,129 and 60,215 shares issued and outstanding							98,722			20,427
Accumulated other comprehensive loss	(21,993		)	(22,178		)	(18,193		)	(22,178		)
Retained earnings	1,417,904			1,287,243			1,543,253			1,287,243
Total shareholders’ equity	1,409,188			1,285,492			1,623,782			1,285,492
Total liabilities and shareholders’ equity	$	2,891,896		$	2,605,476		$	3,177,275		$	2,605,476



þ☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



¨☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three months ended December 31,				Three months ended June 30,				Nine months ended June 30,
	2018		2017		2019		2018		2019		2018
Net revenues
Products	$	233,877	$	227,303	$	248,929	$	238,835	$	720,665	$	703,696
Services	309,893		295,888		314,465		303,368		931,394		895,002
Total	543,770		523,191		563,394		542,203		1,652,059		1,598,698
Cost of net revenues
Products	42,410		43,265		44,336		45,164		130,293		132,556
Services	44,304		44,122		46,431		45,845		135,366		135,485
Total	86,714		87,387		90,767		91,009		265,659		268,041
Gross profit	457,056		435,804		472,627		451,194		1,386,400		1,330,657
Operating expenses
Sales and marketing	164,259		167,934		195,852		165,806		531,065		503,710
Research and development	92,038		85,889		116,894		94,061		305,246		271,006
General and administrative	42,543		39,984		57,141		39,374		146,340		118,634
Total	298,840		293,807		369,887		299,241		982,651		893,350
Income from operations	158,216		141,997		102,740		151,953		403,749		437,307
Other income, net	7,095		2,145		4,722		2,259		19,251		7,194
Income before income taxes	165,311		144,142		107,462		154,212		423,000		444,501
Provision for income taxes	34,406		55,713		21,557		31,469		90,103		123,693
Net income	$	130,905	$	88,429	$	85,905	$	122,743	$	332,897	$	320,808
Net income per share — basic	$	2.17	$	1.42	$	1.43	$	2.01	$	5.55	$	5.21
Weighted average shares — basic	60,216		62,195		59,981		60,970		59,963		61,531
Net income per share — diluted	$	2.16	$	1.41	$	1.43	$	1.99	$	5.51	$	5.16
Weighted average shares — diluted	60,645		62,550		60,196		61,633		60,372		62,214



	Common Stock					Accumulated Other Comprehensive Loss			Retained Earnings			Total Shareholders’ Equity
	Shares		Amount			Accumulated Other Comprehensive Loss			Retained Earnings			Total Shareholders’ Equity
	(In thousands)
	Three months ended June 30, 2018
Balances, March 31, 2018	61,115		$	21,120		$	(20,980	)	$	1,226,474		$	1,226,614
Issuance of stock under employee stock purchase plan	282		28,900			—			—			28,900
Issuance of restricted stock	324		—			—			—			—
Repurchase of common stock	(903	)	(68,751		)	—			(81,267		)	(150,018		)
Stock-based compensation	—		38,739			—			—			38,739
Net income	—		—			—			122,743			122,743
Other comprehensive loss	—		—			(1,003		)	—			(1,003		)
Balances, June 30, 2018	60,818		$	20,008		$	(21,983	)	$	1,267,950		$	1,265,975

	Three months ended June 30, 2019
Balances, March 31, 2019	59,695		$	29,401		$	(19,341	)	$	1,457,348		$	1,467,408
Exercise of employee stock options	1		16			—			—			16
Issuance of stock under employee stock purchase plan	199		26,539			—			—			26,539
Issuance of restricted stock	234		—			—			—			—
Stock-based compensation	—		42,766			—			—			42,766
Net income	—		—			—			85,905			85,905
Other comprehensive income	—		—			1,148			—			1,148
Balances, June 30, 2019	60,129		$	98,722		$	(18,193	)	$	1,543,253		$	1,623,782



	December 31,		September 30,
	2018		2018
Cash and cash equivalents	$	480,121	$	424,707
Restricted cash included in other assets, net	1,152		1,187
Total cash, cash equivalents and restricted cash	$	481,273	$	425,894



	2019		2020		Thereafter		Total
Revenue expected to be recognized on remaining performance obligations	$	679,633	$	292,714	$	177,174	$	1,149,521


December 31, 2018	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2019										Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Certificates of deposits	$	2,970	$	—	$	—		$	2,970	$	734	$	—	$	—		$	734
Corporate bonds and notes	472,370		2		(1,357		)	471,015		256,471		238		(287		)	256,422
Municipal bonds and notes	24,156		1		(72		)	24,085		13,066		3		(15		)	13,054
U.S. government securities	117,806		1		(183		)	117,624		25,942		10		(23		)	25,929
U.S. government agency securities	36,898		—		(117		)	36,781		2,000		—		(2		)	1,998
	$	654,200	$	4	$	(1,729	)	$	652,475	$	298,213	$	251	$	(327	)	$	298,137



September 30, 2018	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Certificates of deposits	$	2,970	$	—	$	—		$	2,970
Corporate bonds and notes	394,684		9		(943		)	393,750
Municipal bonds and notes	22,588		1		(65		)	22,524
U.S. government securities	120,283		—		(205		)	120,078
U.S. government agency securities	75,587		—		(204		)	75,383
	$	616,112	$	10	$	(1,417	)	$	614,705



	Less Than 12 Months					12 Months or Greater					Total
June 30, 2019	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Corporate bonds and notes	$	66,064	$	(70	)	$	165,970	$	(352	)	$	232,034	$	(422	)
Municipal bonds and notes	1,105		—			10,786		(23		)	11,891		(23		)
U.S. government securities	—		—			12,964		(23		)	12,964		(23		)
U.S. government agency securities	—		—			4,492		(7		)	4,492		(7		)
Total	$	67,169	$	(70	)	$	194,212	$	(405	)	$	261,381	$	(475	)



	June 30, 2019		September 30, 2018
Finished goods	$	23,103	$	21,339
Raw materials	12,906		9,229
	$	36,009	$	30,568



	June 30, 2019		September 30, 2018
Prepaid expenses	$	82,794	$	39,531
Unbilled accounts receivable	51,798		—
Other	27,348		12,795
	$	161,940	$	52,326



	June 30, 2019		September 30, 2018
Deferred rent	$	65,526	$	31,151
Income taxes payable	35,655		30,864
Other	16,623		3,877
	$	117,804	$	65,892


(1)	Beginning with the first quarter of fiscal 2019, revenue from Japan is now included with the APAC region. This change has been applied to all periods presented for comparability purposes.


(1)	Arrow ECS accounted for under 10% of total net revenue for the three months ended June 30, 2019. Synnex Corporation accounted for under 10% of total net revenue for the three and nine months ended June 30, 2019.



	June 30, 2019		September 30, 2018
United States	$	198,902	$	126,790
EMEA	12,405		12,538
Other countries	14,695		5,714
	$	226,002	$	145,042


Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations


	December 31, 2018		September 30, 2018		December 31, 2017		June 30, 2019		September 30, 2018
Ingram Micro, Inc.	16.4	%	16.6	%	12.9	%	15.5	%	16.6	%
Westcon Group, Inc.	11.1	%	—		12.0	%	10.0	%	—
Arrow ECS	12.8	%	—		11.6	%	—		—
Synnex Corporation	—		10.3	%	10.3	%	—		10.3	%


Item 3.	Quantitative and Qualitative Disclosures About Market Risk


Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds


	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased per the Publicly Announced Plan	Approximate Dollar Value of Shares that May Yet be Purchased Under the Plan		Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased per the Publicly Announced Plan	Approximate Dollar Value of Shares that May Yet be Purchased Under the Plan
October 1, 2018 — October 31, 2018	—	$	—	—	$	1,573,571	—	$	—	—	$	1,573,571
November 1, 2018 — November 30, 2018	561,951	$	177.97	561,951	$	1,473,560	561,951	$	177.97	561,951	$	1,473,560
December 1, 2018 — December 31, 2018	6,807	$	150.01	6,807	$	1,472,539	6,807	$	150.01	6,807	$	1,472,539

January 1, 2019 — January 31, 2019							617,123	$	162.06	617,123	$	1,372,527
February 1, 2019 — February 28, 2019							—	$	—	—	$	1,372,527
March 1, 2019 — March 31, 2019							—	$	—	—	$	1,372,527

April 1, 2019 — April 30, 2019							—	$	—	—	$	1,372,527
May 1, 2019 — May 31, 2019							—	$	—	—	$	1,372,527
June 1, 2019 — June 30, 2019							—	$	—	—	$	1,372,527



Exhibit Number		Exhibit Description

10.1*	—	F5 Networks, Inc. Nginx Acquisition Equity Incentive Plan Award Agreement (Accelerated Vesting)

31.1*	—	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*	—	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*	—	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS*	—	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH*	—	Inline XBRL Taxonomy Extension Schema Document

101.CAL*	—	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*	—	Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*	—	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*	—	Inline XBRL Taxonomy Extension Presentation Linkbase Document



	F5 NETWORKS, INC.

	By:		/s/ FRANCIS J. PELZER
			Francis J. Pelzer
			Executive Vice President,
			Chief Financial Officer
			(principal financial officer and principal accounting officer)

Large ~~accelerated filer~~Accelerated Filer

Accelerated ~~filer~~Filer

Non-accelerated ~~filer~~Filer

¨☐ (Do not check if a smaller reporting company)

Smaller ~~reporting company~~Reporting Company

Emerging ~~growth company~~Growth Company