F5 Inc at Goldman Sachs Communacopia & Technology Conference Transcript

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

Question: Michael Ng - Goldman Sachs Group Inc - Analyst : Thank you. To start things off, maybe just a bigger picture question. F5 is a leader in the ADC and security market. the company's talks about this intensifying complexity that customers face in a hybrid multi-cloud environment. Could you elaborate on some of the challenges here and why F5 is uniquely situated to address some of the complexity of that customer face?

Question: Michael Ng - Goldman Sachs Group Inc - Analyst : Great. Maybe just going back to some of the basics. I was wondering if you could just talk about the role of an ADC in a modern data center. I think there's a perception that this is a piece of hardware that is probably more of a legacy piece of hardware, but the demand and the growth in the category has been very strong, right? And you guys have been leading the charge there. So maybe you could just take a moment and clear up any potential misperceptions beyond ADC just being a legacy device and why the features that are made available through ADC are still critically important to workloads today?

Question: Michael Ng - Goldman Sachs Group Inc - Analyst : And maybe we can just double-click on what's happening in the ADC category, talk about ADC market share. I mean some of the market research data that we've seen is that F5 has gained 16 percentage points of market share over the last five years within the ADC market. So put simply, what's going on? And why are you gaining so much market share? I think this is a very intriguing story in terms of why there's so many opportunities for you here.

Question: Michael Ng - Goldman Sachs Group Inc - Analyst : Yeah. And how could you describe why your competitors in the ADC market aren't investing like the way you are? And I guess my understanding was your primary competitors have either been acquired and kind of run for cash, and that includes being really aggressive with price increases. I don't know if that's a fair description of how you view the competitive market, but would just love to hear your thoughts there.

Question: Michael Ng - Goldman Sachs Group Inc - Analyst : Right. So you've got market share gains. But I think there's also very interesting refresh story as well, where you have this large installed base of users. And I think you have said more than 50% of the installed base is on older generation, the Brion or i-Series. And I think there's an emphasis on well over 50%. I don't think you guys have quantified exactly where that number is. But with end of software support for some of these legacy products coming in the next 12 to 24 months, maybe you could just update us on the pace and timing of refresh and how that gives you visibility into, I'll call them, upgrades, right, over the next couple of years?

Question: Michael Ng - Goldman Sachs Group Inc - Analyst : Great. Yeah. And I think on the -- I think it was last earnings call, you guys talked about one-third of the systems revenue coming from what was described as, I think, non-refresh demand, right? And some of that was AI, I guess some of that is new use cases, modernization, capacity expansion. Maybe you can just talk a little bit about the key drivers of those non-refresh demand drivers and whether these are related to mostly existing customers? Or are you actually getting net new customers who are interested in some of the things like supporting AI application delivery and security that helps you get new customers as well.

Question: Michael Ng - Goldman Sachs Group Inc - Analyst : That's great. Shifting gears and maybe just talking about software growth and software renewals. I think you have a revenue growth outlook for fiscal '26 of mid-single-digit growth in software. And software is a lot of different components, perpetual, SaaS and term. Could you just talk a little REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 09, 2025 / 6:30PM, FFIV.OQ - F5 Inc at Goldman Sachs Communacopia & Technology Conference bit about some of the dynamics that impacts software revenue growth? What is the fiscal '23 cohort look like for term? And how does that inform -- how you think about fiscal '26?

Question: Michael Ng - Goldman Sachs Group Inc - Analyst : That's great. Sorry, if I could just jump back on the competitive takeouts for a moment. What is the process for a competitive takeout? Like said differently, as for instance, if F5 was replacing Citrix, like how long would that process take? And I know you guys generate an incredible amount of your revenue from services. And maybe you could also just touch upon the services component and the complexity of the systems that require healthy services. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 09, 2025 / 6:30PM, FFIV.OQ - F5 Inc at Goldman Sachs Communacopia & Technology Conference

Question: Michael Ng - Goldman Sachs Group Inc - Analyst : So your entree into a potential competitive displacement might be that person didn't like the price increases they got from your competitor, and then the --

Question: Michael Ng - Goldman Sachs Group Inc - Analyst : Could we just talk a little bit about security. I mean the company has, I think, increasingly been incorporating and investing in security capabilities across its entire portfolio. And I think, last year, security represented about 41% of revenue. Why is F5 well positioned to address application security when you think about security as an umbrella? Which facets of security does F5 compete in most aggressively?

Question: Michael Ng - Goldman Sachs Group Inc - Analyst : Cooper, I was wondering if I could ask you about financial guidance. The company has performed incredibly well this year. You guys are guiding to 9% revenue growth at the midpoint, which is up from the initial outlook of 4% to 5%. What drove the outperformance this year? And how are things pacing kind of post last quarter?

Question: Michael Ng - Goldman Sachs Group Inc - Analyst : And then on the margin side of the equation, what's been helping there? And do you see further opportunities for continued margin accretion and expansion? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 09, 2025 / 6:30PM, FFIV.OQ - F5 Inc at Goldman Sachs Communacopia & Technology Conference

Question: Michael Ng - Goldman Sachs Group Inc - Analyst : Francois, in closing, I was just wondering if you could tie it all together for us and talk about the next 12 to 24 months key priorities, things you're most excited about. It seems like between ADC refresh, non-refresh demand wins, AI, the term renewal seeing good expansion rates, it seems like there's a lot of things going in your favor right now, but perhaps you can pull it all together for us.

Question: Michael Ng - Goldman Sachs Group Inc - Analyst : So great place to wrap it up, Francois, Cooper. Thank you so much for coming out here to the conference and being on stage here with us. It's been an incredible privilege to be able to host you guys. So thank you.