F5 Networks Inc Q3 2021 Earnings Call Transcript

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

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : I had a couple. Francois, if I can start off just on the software again here. One of the questions that we get quite often from investors, and we got a lot of those this quarter, is even as you kind of saw good acceleration in software revenue sequentially in the third quarter, there's a similar acceleration that's implied into the fourth quarter and then kind of into next year. So how much of that is just the momentum of the kind of existing business relative to kind of the true-ups or true forward as well as subscription renewals that's kind of influencing that. If you can talk about kind of the confidence into delivering that sequential improvement as you go along into next year. And then I have a follow-up as well.

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Got it. And if I can just follow up, maybe this is more for Frank, but related to when you gave initial guidance for this year, you were expecting more of a top line growth of 7% to 8% and operating margins of 31% to 32%. Clearly, top line growth has exceeded your initial expectations. But when I look at the operating margin, you're towards the lower end of the range here. So how should I think about that? Was it like reinvesting some of the incremental growth that you got? Or was it more of the headwinds because of the supply chain constraints? Just trying to think through why not more leverage on the operating margin as revenue exceeded expectations.