F5 Networks Inc said it expects to post a strong second quarter as a boom in data center consolidation boosts demand from enterprise customers for the network gear makers optimization products.
The company also reported a better-than-expected first quarter and allayed fears related to the lingering debt crisis in Europe.
Shares of the Seattle, Washington-based company, which have risen more than 18 percent in the last three months, jumped 10 percent after market and nudged up peer stocks.
Riverbed rose 2 percent in after-market trade while Brocade Communication Systems Inc and Citrix Systems Inc rose 1 percent each.
If you look at the sheer volume (in Europe) and we look at the pipeline and the close rates that we are applying to that, that feels good to us. We don't see any red flags there at all, a company executive said on a conference call with analysts.
The company gets a little less than a fifth of its total revenue from Europe, the Middle East and Africa (EMEA), but has over the course of last year warned about the impact of the ongoing financial uncertainty in Europe on its business.
However, sales in the EMEA region exceeded expectations, John McAdam, F5's chief executive said in a statement.
The company, a leader in the network optimization market, has been benefiting from the need to manage network bandwidth as millions of smartphone and tablet users exponentially grow data traffic.
The company has seen a rise in demand from its enterprise customers, who are eyeing data center consolidation to cut costs.
It expects second-quarter adjusted earnings of $1.05 to $1.07 per share on revenue of $332 million to $337 million.
September-December net income rose to $66.5 million, or 83 cents a share, from $55.7 million, or 68 cents a share, a year ago.
The company's shares were up 7 percent at $115.75 in extended trade. They closed at $108.46 on Wednesday on the Nasdaq.
(Reporting by Siddharth Cavale and Sruthi Ramakrishnan in Bangalore; Editing by Roshni Menon)