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F5 Networks Inc FFIV
Q1 2012 Earnings Call Transcript

Transcript Call Date 01/18/2012

Operator: Good afternoon and welcome to the F5 First Quarter Financial Results Conference Call. At this time, all parties will be able to listen-only until the question-and-answer portion. Also today's conference is being recorded. If anyone has any objections, please disconnect at this time.

I'd now like to turn the call over to Mr. John Eldridge, Director of Investor Relations. Sir, you may begin.

John Eldridge - IR: Thanks, Carol, and welcome to all of you to our conference call for the first quarter fiscal 2012. The speakers on today's call are John McAdam, President and CEO of F5 and Andy Reinland, Senior Vice President and Chief Finance Officer. Other members of our executive team are also with us to answer questions following the prepared comments.

If you have question questions after today's call, please direct them to me at 206-272-6571. If you don't have the copy of today's press release, it's available on our website, f5.com. In addition, you can access an archived version of today's live webcast from the Investor Relations Events Calendar page of our website through April 18, 4.30 today until midnight Pacific Time, January 19. You can also listen to the telephone replay at 800-219-6381 or 402-220-3807.

During today's call, our discussion will contain forward-looking statements, which include words such as believe, anticipate, expect and target. These forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from those expressed or implied by these statements. Factors that may affect our results are summarized in our quarterly release and described in detail in our SEC filings.

Before we begin, I also want to remind you that F5 has no duty to update any information presented in this call.

Now, I'd like to turn the call over to Andy Reinland.

Andy Reinland - SVP and CFO: Thank you, John. For the first quarter of fiscal 2012 F5 achieved sequential revenue gains and solid year-over-year growth exceeding both revenue and earnings guidance. Revenue of $322.4 million which exceeded the high end of our $315 million to $320 million guided range, grew 2.5% from the prior quarter and 20% year-over-year. GAAP EPS of $0.83 per diluted share was above our guided range of $0.79 to $0.81. Excluding stock-based compensation expense, non-GAAP EPS of $1.03 per diluted share was also above our guided range of $0.99 to $1.01.

Product revenue of $196.6 million grew 15% year-over-year, and represented 61% of total revenue. Service revenue of $125.9 million grew 29% year-over-year, and accounted for 39% of total revenue. Book-to-bill for the quarter was greater than 1.

On a geographic basis, all regions contributed to the Company's solid year-over-year growth. Accounting for 59% of the total, revenues from the Americas grew 20% from the first quarter of fiscal 2011. EMEA, which represented 21% of revenue, grew 14% from the first quarter of last year. APAC accounted for 14% of revenue and grew 28% year-over-year, and Japan contributed 6% of revenue, a 22% increase year-over-year.

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