F5 Networks, Inc. (NASDAQ:FFIV) Q1 2015 Earnings Conference Call - Final Transcript

Jan 21, 2015 • 04:30 pm ET


F5 Networks, Inc. (NASDAQ:FFIV) Q1 2015 Earnings Conference Call - Final Transcript


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Good afternoon, and welcome to the F5 Networks First Quarter 2015 Financial Results Conference Call. At this time, all parties will be on listen only and for the question and answer portion, also today's conference is being recorded. If you have objections, please disconnect at this time. I'd now like to turn the call over to John Eldridge, Director of Investor Relations.

John Eldridge

Thank you, Brian, and welcome to our conference call for the first quarter and fiscal 2015. John McAdam, President and CEO; and Andy Reinland, Executive VP and CFO, will be the speakers on today's call. Other members of our executive team are also on hand to answer questions following John and Andy's prepared comments. If you have any follow-up questions after the call, please direct them to me at 206

Unidentified Speaker

272-6571. A copy of today's press release is available on our Web site at f5.com. In addition, you can access an archived version of today's live webcast from the Events Calendar page of our website through April 22. From 4:30 p.m. today until midnight Pacific Time, January 22, you can also listen to a telephone replay at 888 673-3568 or 402 220-6431.

(Forward-Looking Cautionary Statements)

Now I will turn the call over to Andy Reinland.

Andy Reinland

Thank you, John. Before I start my prepared remarks, I'd just ask you to be a little patient if pause I have been battling with cough so with that we'll get underway. Sales in the first quarter of fiscal 2015 reflected the seasonality we normally see at the beginning of our fiscal year. And in general we saw fewer large deals this quarter compared to previous quarters. As a result revenue of $462.8 million was in the lower half of our guided range of $460 million to $470 million reflecting 14% year-over-year growth and down slightly from the fourth quarter of fiscal 2014.

GAAP EPS was $1.21 per share, above our guidance of $1.10 to $1.13 per share. Non-GAAP EPS of $1.55 per share also exceeded our guidance of $1.46 to $1.49 per share. Both GAAP and non-GAAP results include a one-time benefit related to the retroactive reinstatement of the R&D tax credit for 2014 resulting in a benefit to EPS of approximately $0.08 per share on a GAAP basis and $0.07 per share on a non-GAAP basis.

Product revenue of $240.9 million in the first quarter was up 10% year-over-year, down 6% sequentially and accounted for 52% of total revenue. Service

Unidentified Speaker

revenue of $221.9 million grew 18% year-over-year, 6% sequentially and represented 48% of total revenue. Accounting for 56% of the total, revenue from the Americas was up 14% from the first quarter of fiscal 2014. EMEA which represented 25% of revenue grew 20% from the first quarter of last year. APAC accounted for 14% of revenue and grew 9% year-over-year and Japan revenue representing 5% of total, grew 3% from a year ago.

Sales to enterprise customers represented 63% of total sales during the quarter. Service providers accounted for 23% and government