Financial Data and Key Metrics Changes - F5 reported a total revenue growth of 12% year-over-year, reaching $780 million, with product revenue growing by 26%, marking the strongest growth in 14 years [8][27] - The company achieved a GAAP net income of $190 million, translating to $3.25 per share, while non-GAAP net income was $243 million or $4.16 per share, reflecting a 24% EPS growth year-over-year [32][38] - Cash flow from operations reached a record $282 million, with cash and investments totaling approximately $1.44 billion at the end of the quarter [32][33] Business Line Data and Key Metrics Changes - Global services revenue grew by 1% to $392 million, while product revenue increased by 26% to $389 million [27] - Software revenue grew by 16% year-over-year to $208 million, with subscription-based software revenue increasing by 19% to $185 million, representing 89% of total software revenue [28] - Systems revenue totaled $181 million, up 39% year-over-year, driven by tech refresh and data center modernization [28] Market Data and Key Metrics Changes - Revenue from the Americas grew by 13%, accounting for 55% of total revenue, while EMEA delivered 6% growth (26% of revenue) and APAC grew by 21% (19% of revenue) [29] - Enterprise customers represented 70% of product bookings, with government customers at 15% and service providers also at 15% [29] Company Strategy and Development Direction - F5 is focusing on modernizing data centers and adopting hybrid multi-cloud architectures, which are seen as significant growth drivers [7][11] - The company is leveraging its application delivery and security platform to simplify operations and enhance security for customers, particularly in the context of AI workloads [11][12] - F5 aims to continue innovating and expanding its offerings in AI-driven applications and infrastructure [19][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for data center modernization and hybrid multi-cloud solutions, expecting continued strong demand in Q4 [10][36] - The company anticipates Q4 revenue in the range of $780 million to $800 million, implying approximately 9% revenue growth for FY '25 [10][36] - Management noted that the long-term structural shift towards data center modernization will persist, creating ongoing investment opportunities [11][37] Other Important Information - F5 repurchased $125 million worth of shares during the quarter, with $1 billion remaining on the authorized stock repurchase program [34] - The company ended the quarter with approximately 6,540 employees [35] Q&A Session Summary Question: Can you discuss the strength in hardware and its sustainability? - Management noted strong tech refresh dynamics and secular trends in hybrid cloud and AI driving hardware growth, with expectations for continued growth next year but at a more modest rate [45][50] Question: What is the outlook for software renewals and new deal activity? - Management highlighted a healthy renewal base and strong expansion trends, with new use cases contributing to software growth [52][55] Question: What factors affected gross margins this quarter? - Gross margins were slightly lower due to high-performance use cases with compliance demands and the strength in the systems business, which has a lower margin than software [58][60] Question: How significant is the AI-related business for F5? - Management indicated that direct AI use cases are currently small but growing, with indirect AI-related spending also increasing as customers invest in data capacity for AI [98][99] Question: What is the expected growth for hardware and software in FY '26? - Management expects hardware to grow modestly next year, while software growth is anticipated in the mid-single digits, with potential for reacceleration in FY '27 [67][70]

Q3FY25 Results Published July 30, 2025 PERIOD ENDING June 30, 2025 We deliver and secure every app. F5 specializes in application delivery and security. Our solutions are backed by three decades of expertise to ensure that every app is fast, available, secure, and ready for the AI-era. Forward-looking statements This presentation contains forward-looking statements including, among other things, that F5's strong topline performance along with continued operating leverage, is testament to the team's executio ...