F5, Inc. Common Stock

Tax and financial reporting · Internal controls and compliance programs

If we are unable to maintain effective internal control over financial reporting, the accuracy and timeliness of our financial reporting may be adversely affected. As a public company, we are required to design and maintain proper and effective internal controls over financial reporting and to report any material weaknesses in such internal controls.

Tax and financial reporting · Tax compliance and changes in tax law

We may have exposure to greater than anticipated tax liabilities. Our provision for income taxes is subject to volatility and could be affected by changes in our business operations, including acquisitions, new offerings, and changes in the jurisdictions in which we operate. The Company operates in countries that have enacted a minimum tax in accordance with the OECD's Pillar Two framework, which may increase our tax liability in future years.

Core operations · Operational disruption and business continuity

Our business could suffer if there are any interruptions or delays in the supply of hardware components from our third-party sources. We currently purchase several hardware components used in the assembly of our products from a number of single or limited sources. The unavailability of suitable components, any interruption or delay in the supply of any of these hardware components may delay the assembly of our products and our ability to fulfill sales.

Project and contract management · Government contract dependency

A portion of our revenue is generated by sales to government entities, which are subject to a number of challenges and risks. Sales to government entities are subject to a number of risks including being highly competitive, expensive, and time consuming. Government entities may have statutory, contractual or other legal rights to terminate contracts with our distributors and resellers for convenience.

Human capital and workforce · Key personnel dependence and succession

Our success depends on our key personnel and our ability to hire, retain and motivate qualified executives, sales and marketing, operations, product development and professional services personnel. Competition for qualified developers, professional services, customer support and sales personnel in our industry is intense, especially in Silicon Valley and Seattle where we have substantial operations.

Digital transformation and innovation · Artificial intelligence and automation

Issues related to the development and use of artificial intelligence ('AI') could give rise to legal and/or regulatory action, damage our reputation or otherwise materially harm our business. AI solutions may use algorithms, datasets, or training methodologies that are incomplete, reflect biases, or contain other flaws or deficiencies. The AI-related legal and regulatory landscape remains uncertain and may be inconsistent from jurisdiction to jurisdiction.

Cybersecurity and data protection · Data privacy and protection regulations

Our failure to adequately protect personal information could have a material adverse effect on our business. A wide variety of local, state, national, and international laws, directives and regulations apply to the collection, use, retention, protection, disclosure, transfer, and other processing of personal data. Our failure to comply with applicable laws and regulations could result in enforcement action against us, including fines and claims for damages.

International and currency · Foreign exchange and currency exposure

We are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and results of operations. An increasing portion of our operating expenses is incurred outside the United States, is denominated in foreign currencies, and is subject to fluctuations due to changes in foreign currency exchange rates.

Market and investment · Market volatility and economic cycles

Our stock price could be volatile, particularly during times of economic uncertainty and volatility in domestic and international stock markets. Our stock price has been volatile and has fluctuated significantly in the past. The stock market in general and the market for technology companies in particular, have experienced extreme price and volume fluctuations.

Capital structure and performance · Financial performance volatility

Our quarterly and annual operating results may fluctuate in future periods, which may cause our stock price to fluctuate. Our quarterly and annual operating results have varied significantly in the past and could vary significantly in the future. A delay in the recognition of revenue, even from just one account, may have a significant negative impact on our results of operations for a given period.

Market position and competition · Competitive pressure and market share loss

We may not be able to compete effectively in the application security and delivery market. The markets we serve are rapidly evolving and highly competitive, and we expect competition to persist and intensify in the future. Larger companies with significant resources, brand recognition, and sales channels may form alliances with or acquire competing application services solutions.

Market position and competition · Market cyclicality and demand volatility

It is difficult to predict our future operating results because we have an unpredictable sales cycle. Our products have a lengthy sales cycle and the timing of our revenue is difficult to predict. Historically, our sales cycle has tended to lengthen as our products become increasingly complex.

Strategic execution · Strategic transformation and turnaround risks

Our success depends upon our ability to effectively plan and manage our resources and restructure our business. In the last few years, we have initiated restructuring plans to better align strategic and financial objectives, optimize operations, and drive efficiencies for long-term growth and profitability, which resulted in restructuring charges.

Innovation and product development · Intellectual property protection and infringement

We may not be able to adequately protect our intellectual property, and our products may infringe on the intellectual property rights of third parties. We rely on a combination of patent, copyright, trademark and trade secret laws to protect our intellectual property rights. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or otherwise obtain and use our products or technology.

Strategic execution · Merger acquisition and divestiture risks

Acquisitions present many risks and we may not realize the financial and strategic goals that are contemplated at the time of the transaction. We may find that the acquired businesses, products or technologies do not further our business strategy as expected, that we paid more than what the assets are later worth, or that economic conditions change, all of which may generate future impairment charges.

Market position and competition · Industry consolidation and market concentration

Industry consolidation may result in increased competition. Some of our competitors have made acquisitions or entered into partnerships or other strategic relationships to offer a more comprehensive solution. These consolidators may have significantly greater financial, technical and other resources than we do.

Market position and competition · Pricing pressure and margin compression

The average selling price of our products may decrease and our costs may increase, which may negatively impact revenues and profits. It is possible that the average selling prices of our products will decrease in the future in response to competitive pricing pressures, increased sales discounts, or other factors.

Natural and catastrophic events · Climate change and environmental impact

Climate change may have an impact on our business. We believe there will not be significant near-term impacts to our offices worldwide due to climate change, but long-term impacts remain unknown. We are subject to a range of new and anticipated climate-related and sustainability-focused laws and regulations, including the E.U.'s Corporate Sustainability Reporting Directive.

Economic and market conditions · Economic recession and downturns

Continued macroeconomic downturns or uncertainties may harm our industry, business, and results of operations. Adverse macroeconomic conditions both in the U.S. and abroad, including rising interest rates, inflationary pressures, challenges in the financial and credit markets, labor shortages, supply chain disruptions could adversely affect our business.

Geopolitical and trade · Political instability and government changes

We face risks associated with having operations and employees located in Israel. We have offices and employees located in Israel. As a result, political, economic, and military conditions in Israel and the surrounding region directly affect our operations. Many of our employees in Israel are obligated to perform annual reserve duty in the Israeli military.