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

Apr 22, 2016 • 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. [Operator Instructions] 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 Mr. John Eldridge, Director of Investor Relations. Sir, you may begin.

John Eldridge

Thank you, Brian, and welcome to our conference call for the first quarter of fiscal 2015. John McAdam, President and CEO; and Andy Reinland, Executive VP and Chief Financial Officer, will be the speakers on today's call. Other members of our exec 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 206-272-6571.

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 In addition, you can access an archived version of today's live webcast from the events calendar page of our website through April 22nd.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

During today's call, our discussion will contain forward-looking statements that include words such as believe, anticipate, expect and target. These forward-looking statements involve uncertainties and risks 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 described in detail in our SEC filings. Please note that F5 has no duty to update any information presented in this call.

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

Andy Reinland

Thank you, John. Before I start my prepared remarks, I just ask you to be a little patient if I pause. I've been battling a cough. So with that, we will 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 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%