F5 Networks FFIV reported better-than-expected second-quarter fiscal 2021 results. The company posted fiscal second-quarter non-GAAP earnings per share of $2.50, beating the Zacks Consensus Estimate of $2.39.Moreover, the quarterly earnings came in higher than management’s guidance of $2.32-$2.44 per share. Also, non-GAAP earnings increased 12% from the year-ago quarter, mainly on solid revenues and efficient cost management.Non-GAAP revenues climbed 11% year on year to $645.3 million, surpassing the Zacks Consensus Estimate of $634.8 million on robust software growth. The top-line figure also comes in higher than the company’s guided range of $625-$645 million.Despite reporting upbeat second-quarter results, shares of F5 Networks depreciated 4.6% during yesterday’s extended trading session as the fiscal third-quarter revenue and earnings guidance fell short of consensus estimates.F5 Networks, Inc. Price, Consensus and EPS Surprise F5 Networks, Inc. price-consensus-eps-surprise-chart | F5 Networks, Inc. QuoteRevenue DetailsProduct revenues (48% of total revenues), which comprise Software and Systems sub-divisions, went up 18% year on year to $309 million. Software sales jumped 20% year over year to $108 million, accounting for approximately 35% of the total Product revenues.Systems revenues climbed 17% to $201 million. During the earnings conference call, F5 Networks’ executive vice president and chief financial officer, Frank Pelzer, stated, “Systems demand was higher than anticipated in the quarter, largely from a broad-based increase in application usage and the corresponding increase in application traffic continued growth of systems-based security use cases as well as the emergence of 5G-driven service provider demand.”Global Service revenues (52% of total revenues) increased 4% to $336 million.Additionally, the company noted that it is moving ahead with its strategy of transitioning the business into a subscription-based model. During the fiscal second quarter, subscriptions represented 79% of Software revenues, up from the year-ago quarter’s 73%.Furthermore, F5 Networks registered sales growth across all regions, with the Americas, EMEA and APAC witnessing year-over-year increase of 6%, 16% and 15%, respectively. Revenue contributions from the Americas, EMEA and APAC regions were 54%, 27% and 20%, respectively.Customer wise, Enterprises, Service providers and Government represented 68%, 16% and 16%, respectively, of product bookings.MarginsGAAP gross margin contracted 290 basis points (bps) to 80.1%. Non-GAAP gross margin shrunk 160 bps to 83.4%.GAAP operating expenses flared up 16% year on year to $463 million, while non-GAAP operating expenses rose 4.6% to $342 million. The company’s GAAP operating margin shrunk 600 bps to 8.3%, while non-GAAP operating margin improved 120 bps to 30.3%.Balance Sheet & Cash FlowF5 Networks exited the January-March quarter with cash and investments of $662 million compared with the prior-year quarter’s $1.37 billion. This decline was mainly due to the cash used for the Volterra acquisition and initiation of the $500-MILLION share-repurchase program.During the fiscal second quarter, the company generated $128.5 million of operating cash flow. During the reported quarter, it repurchased shares worth $400 million through Accelerated Share Repurchase transaction.During the first-half of fiscal 2021, the company generated operating cash flow of $265.8 million and bought back $500 million worth of its common stock.OutlookThe company issued a bleak business outlook for the third quarter of fiscal 2021.For the fiscal third quarter, F5 Networks projects non-GAAP revenues of $620-$650 million (mid-point $635 million). The Zacks Consensus Estimate for revenues is pegged at $636.5 million.The company anticipates non-GAAP earnings per share in the $2.36-$2.54 band (mid-point $2.45). The Zacks Consensus Estimate is pinned at $2.48.We believe surging demand for multi-cloud application services will be a key growth driver during the fiscal third quarter. Furthermore, solid demand for software solutions is a tailwind. Rising traction from subscription and Enterprise License Agreement (ELA) offerings is another driving factor.Additionally, F5 Networks and NGINX’s first combined solution — Controller 3.0 — will likely boost the total addressable market and deal sizes by spending more use cases across DevOps and Super-NetOps customer profiles.Zacks Rank and Key PicksF5 Networks currently carries a Zacks Rank #3 (Hold).Better-ranked stocks in the broader technology sector include Lam Research Corporation LRCX, Micron MU and NVIDIA NVDA. Lam Research and Micron sport a Zacks Rank #1 (Strong Buy), while NVIDIA carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The long-term earnings growth rate for Lam Research, Micron, and NVIDIA is currently pegged at 32.8%, 15.7% and 15.1%, respectively.Zacks Names “Single Best Pick to Double”From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research SherazMian hand-picks one to have the most explosive upside of all.You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Micron Technology, Inc. (MU): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Lam Research Corporation (LRCX): Free Stock Analysis Report F5 Networks, Inc. (FFIV): Free Stock Analysis Report To read this article on Zacks.com click here.