F5(US:FFIV)2026-01-27 22:32Financial Data and Key Metrics Changes - The company reported a revenue growth of 7% to $822 million, with product revenue at $410 million (up 11% year-over-year) and services revenue at $412 million (up 4% year-over-year) [20][21] - Systems revenue reached $218 million, a significant increase of 37% compared to Q1 FY25, driven by hybrid multi-cloud adoption and AI demand [21] - GAAP net income for the quarter was $180 million, or $3.10 per share, while non-GAAP net income was $259 million, or $4.45 per share, reflecting a 16% EPS growth from the previous year [23] Business Line Data and Key Metrics Changes - Product revenue growth was primarily driven by systems revenue, which saw a 37% increase, while software revenue decreased by 8% year-over-year [21] - Subscription-based software revenue grew by 1% year-over-year, totaling $164 million, while perpetual licensed software revenue decreased to $27 million [21] Market Data and Key Metrics Changes - Revenue from the Americas grew by 2% year-over-year, representing 53% of total revenue, while EMEA experienced exceptional growth of 24%, accounting for 31% of revenue [22] - APAC region revenue declined by 1%, representing 16% of total revenue [22] Company Strategy and Development Direction - The company is focused on three key areas: investing in security operations, enhancing product security, and supporting the broader security community [7] - The strategic emphasis is on hybrid multi-cloud adoption, enterprise AI, and converged platforms, which are seen as critical drivers for future growth [8][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of demand driven by hybrid multi-cloud adoption and AI investments, despite previous uncertainties due to a security incident [5][6] - The company raised its FY 2026 revenue growth outlook to 5%-6%, up from a prior range of 0%-4%, indicating strong pipeline creation and close rates [24][25] Other Important Information - The company generated $159 million in cash flow from operations in Q1, with cash and investments totaling approximately $1.22 billion at quarter end [23] - Deferred revenue increased to $2.1 billion, up 6% from the previous year [24] Q&A Session Summary Question: AI adoption trends among enterprise customers - Management noted that enterprises are shifting from training AI models to deploying them in production, which requires enhanced data pipelines and security measures [32][34] Question: Software and hardware performance outlook - Management acknowledged a tough year-over-year comparison for software but expressed confidence in mid-single-digit growth for the software business moving forward [44][45] Question: Impact of security incident on customer relationships - Management confirmed no evidence of customer breaches due to the security incident and highlighted a successful response that minimized disruption [65][66] Question: Revenue contribution from AI projects - Management indicated that AI-related revenue is growing but has not been broken out specifically, with current contributions in the double-digit million range per quarter [76][77]