Shares in F5 Inc. surged in late trading today after the application security firm reported beats in both earnings and revenue in its latest quarter.

For its fiscal third quarter, F5 reported earnings per share of $3.21 before costs such as stock compensation, up from $2.57 in the same quarter of last year, on revenue of $703 million, up 4% year-over-year. Analysts were expecting adjusted earnings per share of $2.86 on revenue of $698.81 million.

F5 saw its global services revenue increase 8% year-over-year, while product revenue inched up 1%. Notably, while the company saw its systems revenue grow 5% year-over-year in the quarter, its software revenue dropped 3% from the same time last year.

The application security firm booked $561 million in gross profit in the quarter, up from $544 million the year prior, and net income came in at $89 million and operating profit at $104 million. F5’s operating margin was 14.7%, down from 15.9%.

“In an environment that remains challenged by macroeconomic uncertainty, our team is executing well, delivering third-quarter revenue at the midpoint of our guidance range and earnings per share well above the high end of our guidance range,” François Locoh-Donou, president and chief executive officer of F5, said in the company’s earnings release. “We are seeing some early signs of demand stabilization as customers look to F5 to help them secure and optimize the applications and APIs that power their businesses.”

Looking forward, F5 said that it expected non-GAAP EPS of  $3.15 to $3.27 in its fiscal fourth quarter on revenue of $690 million to $710 million. Analysts were expecting an outlook of $3.22 on revenue of $702 million.

“Over the last several years, through the combination of organic innovation, acquisitions and technology integration, we have created a converged portfolio uniquely capable of simplifying the complexities our customers face operating today’s hybrid, multicloud IT environments,” Locoh-Donou added.

The results contrasted with F5’s previous quarter, which missed expectations and was accompanied by layoffs. F5’s layoffs, which involved about 9% of its staff, or 623 employees, did cost the company money, but the one-off costs — approximately $45 million in severance benefits — are starting to deliver in cost savings. At the time of the layoffs, F5 estimated that they would result in $130 million in annual savings.

Investors loved the numbers, as F5 shares rose more than 10% in late trading today.

In an interview with theCUBE, SiliconANGLE Media Inc.’s livestreaming studio, in May, Michael Rau, senior vice president and general manager, and Brian McHenry, vice president of product management for web applications and application programming interface security at F5, spoke about how the company takes a unified approach to application and API security across infrastructures:

Image: F5