F5 Inc at Bank of America Global Technology Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Tal Liani - BofA Global Research - Analyst : Thanks. So I'll start with a general question. Any -- by the way, any question I'm interesting is to both of you so (multiple speakers) and step on one or (inaudible). It's great to have a little bit of a fight. I'm joking. But I wanted to understand how will the company look like three to five years from now, meaning what are the opportunities you're going after? And I know it's going to be a long answer, which is fine, but what are the opportunities you're going after? And how do you go from point A to point B. Meaning how do you go from where you are today to where you wanted to be three to five years?

Question: Tal Liani - BofA Global Research - Analyst : You started your histories from delivery and you talk about security, is delivering security synergistic to one another, meaning the fact that you have a leading position in delivery, does it help you to also be in security?

Question: Tal Liani - BofA Global Research - Analyst : Great. First quarter, software grew 20% in the context of what we're discussing, what are the sources for growth for in the software [space]? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 05, 2024 / 6:20PM, FFIV.OQ - F5 Inc at Bank of America Global Technology Conference

Question: Tal Liani - BofA Global Research - Analyst : And [in your view], when you describe I asked you about delivery and you describe delivering and securing always connecting and the other are the decisions always together, meaning or are there customers that are only about delivery customers only about security? How is the market evolving?

Question: Tal Liani - BofA Global Research - Analyst : So I spoke with someone from the market participants, one of the professionals. And he -- I told him describe for me where is that F5 from like a strategic point of like what do they need to do? And he said they need to satisfy their solution that they need to satisfy every end. The only issue is when you specify, meaning it's when it's all SaaS base, you find new competition, like, for example, CDN companies who are trying to operate the same. So talk about the journey for SaaS, talk about the competition you're seeing and what benefits do you bring to the table or what are the challenges, same thing?

Question: Tal Liani - BofA Global Research - Analyst : You showed up.

Question: Tal Liani - BofA Global Research - Analyst : And that's exactly the question I have. It's so we talked a lot about products, but forget the product presenting. Because you made acquisitions, you have a complete portfolio. The question is the whether you are ready in terms of your own internal company, salespeople compensation, et cetera. And whether the channel is ready, meaning you used to sell your product in a certain way now it's more of a SaaS model. Is your channel willing to do it or do you get pushback? So talk about not the product side, but rather the other parts of the organization and go to market, where are you in terms of being ready to offer SaaS?

Question: Tal Liani - BofA Global Research - Analyst : So let's translate into numbers your guidance for this year was 1% revenue growth, but there is a lot of headwind from last year depletion of backlog. And can you take us through what's included in this 1%? What are the big buckets of growth and (inaudible).

Question: Tal Liani - BofA Global Research - Analyst : And if I think about the longer-term, without giving a date or if I think about the longer-term, what is the potential for software to grow? And what do you think will happen to systems?

Question: Tal Liani - BofA Global Research - Analyst : Right. I have a follow-up question on the software 2025 growth. You mentioned with the renewals. I remember when you spoke about renewals before there is some revenue recognition that brings it upfront. The revenue like 62% is recognized upfront, [if] remember and then there is the average is altering that upfront. So when you talk about strong growth, double digit, is it because of the revenue recognition, meaning a lot of it being very upfront or is it even on the bookings level when you look at it on a trying to normalize as much as you can for a revenue recognition timing.

Question: Tal Liani - BofA Global Research - Analyst : Got it. Is there, by the way, is there any question from the audience before we wrap it up? No, so I'm going to continue in my line of questioning --

Question: Tal Liani - BofA Global Research - Analyst : I wanted to ask you about orders and when you talk, we talk a lot about revenues, but revenues there is a problem with revenues because there is backlog and there is timing or recognition, et cetera. Can you talk about the concept of orders and the concept of the current environment? Because on the call, I'm going to mix two things together on the call, you talked about customers sweating assets right now. So talk about what do you expect from on that front of customers, switching assets and then talk about kind of what you see in terms of orders or what are your expectations in terms of orders regardless of the timing when it's recognized?

Question: Tal Liani - BofA Global Research - Analyst : Right. Okay, Frank and Tom, thank you very much.

Question: Tal Liani - BofA Global Research - Analyst : But actually it was excellent. I think we covered everything we wanted. Thank you.