We Believe F5 Is Ready to Take Advantage of Past Investments as Application Demand Soars

F5, a leader in application delivery controllers, or ADCs, market sells to enterprises, service providers, and government entities. More than half of F5's revenue comes from selling support and maintenance services for its products. Mission-critical ADCs manage the uptime, delivery, and security of applications and network traffic flow. Growth in public cloud-based workloads caused a decline in the on-premises ADC hardware required and shifted ADC demand to software-based solutions. In our view, F5 was slow to embrace cloud-based workloads as it perilously defended its incumbent offerings, but a revamped management team properly pivoted F5's focus toward software and cloud-based products as growth catalysts to supplement its legacy hardware dominance, and we think the firm is set to thrive.