Good afternoon, and welcome to the F5 Inc. First Quarter Fiscal 2026 Financial Results Conference Call. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Also, today's conference is being recorded. If anyone has any objections, please disconnect at this time. And I'll now turn the conference over to Ms. Suzanne DuLong. Thank you, ma'am. You may begin. Hello, and welcome. I'm Suzanne DuLong, F5's Vice President of Investor Relations. We're here to discuss our First Quarter Fiscal Year 2026 Financial Results. François Locoh-Donou, F5's President and CEO, and Cooper Werner, F5's Executive Vice President and CFO, will be making prepared remarks on today's call. Other members of the F5 executive team are also here to answer questions during the Q&A session. Today's press release is available on our website at f5.com, where an archived version of today's audio will be available through April 27, 2026. We will post the slide deck accompanying today's webcast to our IR site following this call. To access the replay of today's webcast by phone, dial 877-660-6853 or 201-612-7415 and use meeting ID 13757533. The telephonic replay will be available through midnight Pacific Time, January 28th, 2026. For additional information or follow-up questions, please reach out to me directly at s.dulong@f5.com. Our discussion today will contain forward-looking statements, which 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. We have summarized factors that may affect our results in the press release, announcing our financial results, and in detail in our SEC filings. In addition, we will reference non-GAAP metrics during today's discussion. Please see our full GAAP to non-GAAP reconciliation in today's press release and in the appendix of our earnings slide deck. Please note that F5 has no duty to update any information presented in this call. I will now turn the call over to François. Thank you, Suzanne, and hello, everyone. We are very pleased to report strong Q1 results with 7% revenue growth, driven by 11% product revenue growth, our 6th consecutive quarter of double-digit product growth. This includes a robust 37% systems revenue growth in the quarter. Our growth continues to be fueled by durable demand drivers, including hybrid multi-cloud adoption, scaling AI investment, and the demand for converged platforms. Our EMEA region delivered a particularly strong quarter, and we are seeing momentum from emerging trends which may prove durable. Regulations and mandates for resiliency and digital sovereignty are prompting customers to accelerate hybrid multi-cloud deployments, driving increased demand for F5 solutions. We are especially pleased with our Q1 results, given the uncertainty following the security incident at the start of the quarter. Our global sales and support teams mobilized rapidly, enabling customers to take action and get back to business quickly. They managed more than 9,000 additional support cases and earned positive customer feedback on our response efforts. As a result, we experienced minimal demand disruption in Q1. In addition, unexpected positive outcomes emerged, including customers gaining a deeper understanding and appreciation of F5's critical role in their infrastructure and opportunities to strengthen relationships, including deeper engagement with CISOs. We remain focused on protecting customers and earning their trust, recognizing the responsibilities that come with our critical role. We are hyper-focused on three areas: further investing in the security of our operations, including security automation, enhancing the security of our products and development environments, and supporting the broader security community by sharing our learnings and innovations, such as introducing Endpoint Detection and Response or EDR capabilities to perimeter devices. As we look ahead, we see three forces reshaping customer infrastructure decisions, and they are all accelerating simultaneously. The first is hybrid multi-cloud. Workloads now span on-premises, private cloud, and multiple public clouds. Customers want flexibility without lock-in, and hybrid multi-cloud has become the dominant operating model as a result. The second is Enterprise AI. Customers are shifting from general-purpose systems to AI-centric data centers. These environments require far higher levels of data movement and compute, and these new requirements are putting real pressure on networking, storage, and application delivery layers. Finally, organizations are replacing fragmented point products with converged platforms because complexity now directly impacts performance, uptime, and risk. Consolidation is no longer simply a cost exercise. It is how customers simplify operations and improve resilience. I will double-click on the first trend. Hybrid multi-cloud adoption has been driven by enterprises' need for flexibility, cost efficiency, vendor lock-in prevention, and data gravity. Today, drivers like regulations, including NIS2, GDPR, and DORA, are accelerating hybrid multi-cloud adoption by imposing greater resilience and digital sovereignty requirements, especially outside the U.S. Organizations are also modernizing infrastructures to enhance security, performance, and efficiency. They are repatriating sensitive workloads to ensure compliance and deploying advanced ADC and API security solutions. These trends underscore why hybrid multi-cloud is the leading operating model. F5 is purpose-built to lead in this space. Our unmatched ability to provide complete delivery and security for every app, deployable anywhere and in any form factor, sets us apart. With a platform architected for hybrid multi-cloud, it is no surprise that customers are turning to F5 to secure and scale their environments. Let me share a few examples of some hybrid multi-cloud wins from Q1. F5 is powering the hybrid multi-cloud strategy for a regional banking leader. The customer needed more capacity and a modern application infrastructure for digital banking services and AI-based application development. F5 is building an AI-ready infrastructure with enhanced security using BIG-IP for automated and simplified operations, NGINX for cloud-native performance, and Distributed Cloud Services for Bot Defense and DDoS mitigation. Second, a media and internet provider selected F5 to standardize application delivery across its on-premises and cloud environments. With F5, the customer uses the same ingress and security approach everywhere its applications and AI services run, ensuring predictable performance, security, and user experience. Teams can deploy or expand applications across environments without changing operational practices. This provides a reliable foundation for scaling AI and modern applications in a hybrid multi-cloud environment. Finally, a large operator of veterinary clinics is leveraging F5 to strengthen the resilience of its hybrid multi-cloud architecture. The customer needed to modernize their infrastructure and reduce risks tied to cloud concentration and vendor lock-in. F5 is delivering consistent networking and security functions and eliminating cloud-native dependencies. With F5, the customer is creating a durable foundation for future API and AI use cases. Now, let us look more closely at AI. AI-related investment is scaling as enterprises prepare for increased network capacity and services to support AI workloads, agentic AI, and inferencing demands. The resulting AI-related demand is fueling growth across our portfolio. AI is fundamentally transforming application behavior, and we are seeing three consistent patterns driving demand for F5 solutions. In AI data delivery, multimodal data growth is pushing terabit-scale ingestion. With idle GPUs costing real money, customers need sustained end-to-end, high-throughput data pipelines across network, storage, and application delivery. BIG-IP solves the AI training and inference throughput bottlenecks traditional infrastructure cannot handle. In AI runtime security, customers are moving quickly on generative AI, but security and compliance often become bottlenecks to deployment and ROI. Agentic systems raise the stakes by accessing and acting on sensitive data, driving demand for stronger runtime controls and guardrails. F5 safeguards AI applications, APIs, and models from abuse, data leaks, and attacks like prompt injection. We ensure visibility, control, and trust. With our Q4 acquisition of CalypsoAI, we enhanced our runtime security offerings with real-time threat defense, red teaming models, and robust guardrails. We are preventing prompt injections and ensuring models act as intended, even under attack. In AI factory load balancing, as AI deployments scale, intelligent traffic distribution across models, clusters, and GPUs is critical, creating new demand for load balancing across and within the AI factory. F5 optimizes traffic and GPU utilization, increasing token throughput, reducing time to first token, and lowering per-token costs. These trends highlight a clear reality: AI is accelerating demand for application delivery and security, areas where F5 excels. In Q1, we added nearly as many AI customers as we did in all of FY 2025. This growing demand is a testament to our Layer 7 expertise and decades of experience connecting applications and users, key differentiators in a rapidly evolving market. I will highlight a few of our AI wins from the quarter. In an AI data delivery use case, one of the largest global technology OEMs is expanding its BIG-IP infrastructure to support a new high-bandwidth AI data ingestion use case. The customer is repatriating large amounts of IoT data from the cloud to enable AI and analytics workloads. F5 is modernizing their S3 data delivery tier with BIG-IP for ultra-high performance... We are also accelerating their internal large language model development, powering large-scale data ingestion into AI storage and pipelines. In AI runtime security, a global financial services leader is leveraging F5 to integrate generative AI into its AI trust framework. F5 is ensuring security, regulatory compliance, and continuous access controls at scale. F5's AI Guardrails with programmable risk-based controls, reinforced with continuous F5 AI Red Team testing, is enhancing trust, resilience, and regulatory readiness across every AI interaction. F5's approach seamlessly integrates with a customer's existing identity, access management, and governance systems, and is providing advanced protection against emerging threats while delivering low latency performance. And finally, in an AI factory load balancing win with a major energy and chemicals company, our team successfully leveraged a tech refresh into an expanded AI use case. The customer is shifting from public AI consumption to hosting private AI models and needed a solution to reduce latency and prevent timeouts. F5 is ensuring faster, more reliable AI responses with hardware-level handling of layer four traffic and SSL processing, significantly improving time to first token. All of these examples highlight how customers are building their AI infrastructure with F5. Let's shift gears to the third trend, converged networking and security platforms. Growing hybrid multi-cloud complexity has customers desperate for ways to reduce costs and improve the performance of fragmented point solutions. F5's Application Delivery and Security Platform, or ADSP, is the first platform to unite high-performance traffic management with advanced application and API security across hybrid and multi-cloud environments. ADSP converges security, scalability, and operational efficiency. It enables customers to consolidate multiple point solutions in one unified platform, simplifying operations and reducing risk. ADSP also delivers valuable XOps capabilities for customers like policy management, analytics, and automation. Let me highlight a few Q1 wins that demonstrate how customers are adopting ADSP, converging solutions, and simplifying operations. In banking, a long-standing BIG-IP customer is modernizing its infrastructure, consolidating networking, application delivery, and security with F5. The customer is modernizing its digital banking applications and needed increased capacity and improved resilience to comply with central banking regulations. Today, the customer is leveraging a powerful combination of BIG-IP, NGINX, and Distributed Cloud Services for traffic management, WAF, and DDoS protection. A global consumer products company standardized on a converged F5 platform to address governance and reliability concerns. By expanding its use of NGINX and refreshing its BIG-IP footprint, the customer consolidated application delivery and security controls, ensuring consistent performance. Finally, a foreign national law enforcement agency selected a converged F5 platform to support its national open data initiative. The customer's disparate infrastructures struggled with ransomware threats, high false positive, and limited scalability. F5's converged solution enabled the agency to consolidate load balancing, API protection, authentication, and threat mitigation. These are just a few of the examples of customers leveraging F5's converged platform to consolidate vendors, simplify operations, and reduce risk. F5 is unmatched in delivering complete application delivery and security across hybrid multi-cloud environments. Our vision for a unified, converged platform is fueled by our commitment to customer-focused innovation, and we are continuing to invest to create even greater value for our customers. In November, we launched F5 BIG-IP version 21.0, scaling the core for the most demanding AI workloads. This release delivers the significant control plane enhancements required to handle the scale and complexity of modern traffic. Crucially, we have applied this performance directly to AI data delivery, introducing native support for the Model Context Protocol, or MCP, and S3. This ensures that BIG-IP is optimized for the high-throughput storage and retrieval workloads that are critical to AI architectures. We are also bringing our advanced API Security to the data center. One of the primary challenges our customers face is the risk of Shadow APIs, endpoints that are active but invisible within their private networks. We have now enabled our API discovery engines to run locally in customer environments. This means we can deliver the exact same discovery and security capabilities on premises that our customers already rely on in F5 Distributed Cloud Services. This allows customers to maintain a consistent API Security posture in any environment. In summary, our first quarter performance underscores F5's strong alignment with durable market demand drivers, including hybrid multi-cloud adoption, the acceleration of AI, and the increasing need for converged platforms. We remain deeply committed to driving innovation and to delivering cutting-edge solutions that address our customers' rapidly evolving application delivery and security challenges. Now, I will turn the call over to Cooper, who will walk you through our Q1 results and our outlook. Cooper? Thank you, François, and hello, everyone. I will review our Q1 results before I update our outlook for FY 2026 and provide our guidance for Q2. We delivered a strong Q1, growing revenue 7% to $822 million, with a mix of 50% product revenue and 50% services revenue. Demand in the quarter came from continued hybrid multi-cloud adoption, fueled by customers' need for flexibility and their efforts to modernize architectures. AI, regulations, and the resulting need for greater resilience and data sovereignty are also emerging as hybrid multi-cloud accelerants. As François mentioned, we saw minimal demand impact from the security incident in Q1. Product revenue totaled $410 million, increasing 11% year-over-year, while services revenue of $412 million grew 4% year-over-year. Systems revenue totaled $218 million, up 37% over Q1 FY 2025, driven by strong tech refresh and capacity expansion in connection with hybrid multi-cloud adoption and growing AI demand. Our software revenue of $192 million was down 8% year-over-year. This met our expectations, given the exceptionally strong results in Q1 25, including the sizable eight-figure renewal we discussed last year. Subscription-based software revenue totaled $164 million, up 1% year-over-year. Perpetual licensed software totaled $27 million, down year-over-year against exceptionally strong results from Q1 2025. Revenue from recurring sources contributed 69% of our Q1 revenue. Our recurring revenue consists of our subscription-based revenue and the maintenance portion of our services revenue. Shifting to revenue distribution by region. Revenue from the Americas grew 2% year-over-year, representing 53% of total revenue. As François highlighted, EMEA delivered exceptional 24% growth, representing 31% of revenue, and APAC declined 1% and represented 16% of revenue. Looking at our major verticals, enterprise customers represented 64% of Q1's product bookings. Government customers represented a strong 23% of product bookings, including 8% from U.S. Federal. Finally, service providers represented 13% of Q1 product bookings. Our continued financial discipline contributed to our strong Q1 operating results. GAAP gross margin was 81.5%. Non-GAAP gross margin was 83.8%. Our GAAP operating expenses were $456 million. Our non-GAAP operating expenses were $375 million. Our GAAP operating margin was 26.0%. Our non-GAAP operating margin was 38.2%, an improvement of 80 basis points year-over-year. Our GAAP effective tax rate for the quarter was 19.2%. Our non-GAAP effective tax rate was 19.8%. Our GAAP net income for the quarter was $180 million, or $3.10 per share. Our non-GAAP net income was $259 million, or $4.45 per share, reflecting 16% EPS growth from the year ago period. I will now turn to cash flow and balance sheet metrics. We generated $159 million in cash flow from operations in Q1. CapEx was $10 million. DSO for the quarter was 54 days. Cash and investments totaled approximately $1.22 billion at quarter end. Deferred revenue was $2.1 billion, up 6% from the year ago period. In Q1, we repurchased $300 million worth of F5 shares at an average price of $249 per share. We ended the quarter with approximately 6,400 employees. I will now speak to our fiscal year 2026 outlook. With strong close rates in Q1 and solid pipeline creation, we are raising our FY 2026 outlook. We now expect FY 2026 revenue growth of between 5%-6%, up from our prior outlook of 0%-4%. For the year, we now expect mid-single-digit software revenue growth, double-digit systems revenue growth, and low single-digit services revenue growth. We estimate FY 2026 gross margin in a range of 82.5%-83.5%. This reflects a modest reduction to our prior range, accounting for an anticipated impact to product COGS in the second half related to rising memory costs. We estimate FY 2026 non-GAAP operating margin to be in a range of 34%-35%, up from our prior range of 33.5%-34.5%. We continue to expect our FY 2026 non-GAAP effective tax rate will be in a range of 21%-22%, and we expect FY 2026 non-GAAP EPS in a range of $15.65-$16.05, up from the prior range of $14.50-$15.50. Finally, we continue to expect our full year share repurchase to be at least 50% of our free cash flow. Given the $300 million repurchased in Q1, we anticipate repurchase activity will be lower in the remaining quarters of FY 2026. Turning to our Q2 outlook, we expect Q2 revenue in a range of $770 million-$790 million, reflecting approximately 7% growth at the midpoint. We expect non-GAAP gross margin in the range of 82.5%-83%. We estimate Q2 non-GAAP operating expenses of $396 million-$408 million. As a reminder, our operating margins are typically lowest in fiscal Q2 due to January payroll tax resets and expenses from our large customer event in March. We expect Q2 share-based compensation expense of approximately $70 million-$72 million. We anticipate Q2 non-GAAP EPS in a range of $3.34-$3.46 per share. I will now pass the call back to François. Thank you, Cooper. In closing, I will say that F5's mission to help each other thrive and build a better digital world has never been more vital or more relevant. As we look ahead, we see our strengths aligning with the most significant secular trends reshaping the enterprise: hybrid multi-cloud adoption, the AI revolution, and the growing demand for converged platforms. We expect these trends will provide tailwinds for continued growth in fiscal year 2026 and beyond. Operator, please open the call to questions. Thank you. We will now be conducting a question-and-answer session. We ask that you please. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment as we poll for questions. The first question comes from the line of Matt Hedberg with RBC. Please proceed with your question. Great, guys. Thanks for taking my question. Congrats, really, on the results. Really, really good to see, especially following the security incident last year. You know, François, you know, you spent a lot of time talking about some of the drivers, and I thought it was super helpful. The one that continues to pique my interest is AI. And, you know, we're, we're basically three years after the release of ChatGPT, and, you know, it, it seems like non-AI native enterprise customers are accelerating their AI adoption. And I guess based on your results, I'd assume that customer cohort is becoming now more AI-leaning. I'm wondering if you could talk a little bit more about this trend, and I guess, like, how durable could that be? Because it feels like we could be very early in that cycle. Thank you, Matt. I'll start with where you left off, which is we absolutely are very early in the cycle. But let's talk a little bit about, you know, how we've seen AI develop over the last couple of years. As you know, started, of course, we've seen a lot of investment from hyperscalers in CapEx and building out AI infrastructure. We've then seen enterprise, especially either AI native enterprises or enterprise, large enterprises that were very forward-leaning in AI, start by investing in training, and, you know, starting to build models and train those models. But now we're entering a different phase of the cycle where these AI leaning enterprises are now shifting from training to moving AI applications into production. So you're seeing a shift from training to inference, and with that comes new requirements. Specifically, as enterprises move to production, their data pipelines need to be hardened. They need to be able to, you know, connect their data stores to their AI models, and they need to be able to do that at speed, at scale, with very low latency. That requires significant, significant performance from their traffic management solutions. So it requires low latency, high scale, high throughput, high performance, and that is perfect for F5. That's kind of the first requirement. And then the second requirement as they move into production is security. Specifically, runtime security becomes really, really important. And so this quarter, what we saw were a little bit of an inflection around enterprise adoption in AI. We won as many new customers in AI just in the last 90 days as we had for all of FY 2025. And interestingly, you know, the mix in FY 2025 was very oriented towards data delivery, basically high performance, load balancing for these data pipelines. But this quarter, the mix was, you know, almost balanced between data delivery and security, and we saw a lot more requirements for security. As we project forward, I think the trend is durable because the enterprises that are doing that today are kind of the largest enterprises that are very forward-leaning in AI. But we will see. I think we'll see a lot more enterprises adopt AI in the future, and the early enterprises that are doing so right now will also scale in production pretty significantly. An example I'll give you of that is we signed a multimillion-dollar deal with a global technology OEM this quarter, who have repatriated part of their data from the cloud because they're collecting more data from their customers. They know their data is, you know, more valuable. They're having a lot more telemetry from customers, from their products, and they're putting all this data in large data lakes on-prem, but they then need to leverage their data in their AI applications, and connecting their data to their AI applications requires significant enhancements to their infrastructure, and that is just gonna scale more and more in the future. So we think the trend is durable, both in terms of data delivery and in security. And then the last thing I'll say about security is a lot of the security that we've said we've seen so far, when I talked about runtime security, was really almost traditional security applied to AI applications. We are now in the early days of seeing AI models also go into production. There are specific threats for AI models that we now address with our AI Guardrails, and we had a very strong start to our AI Guardrail solution this quarter, really with strong adoption from some of the largest enterprises in sectors like financial services or technology or even management consulting, for these AI Guardrail solutions. So we're pretty excited about the quality of customers that we are seeing in the early stage of this, and we think the trend is, you know, is only gonna grow from here. Congrats. Thank you, Matt. The next question comes from the line of Tim Long with Barclays. Please proceed with your question. Thank you. Maybe if I could do one on software and one on hardware. Just on the software side, I get the tough year-over-year comparison in the December quarter, but the sequential, you know, looks like it was a little worse than normal. So, you know, how do we think about that in the quarter, and how we can get to mid-single-digit, you know, get that business accelerating? And then just on the hardware side, I'm just hoping you could break down your views a little bit. Continues to perform very well. Market share versus market growth. It seems like we're starting to see hardware that you're selling or systems that you're selling in maybe new use cases, so maybe the market growth dynamic is changing. Just love opinions on both of those. Thank you. Yeah, Tim, so this is Cooper. I'll speak to the software performance. So, you're right, we did have a pretty strong compare from the Q1 period of a year ago. We had the large eight-figure renewal that we had referenced. We also had a pretty strong quarter with our perpetual software business that was tied to a couple of specific deals in the service provider space. So it was a little bit of an anomalous growth quarter a year ago. But our performance in the quarter in Q1 of 2026 was right in line, is actually slightly ahead of our expectations. And I think as we look ahead, we're pleased both in terms of the execution that we saw in Q1, and that there was no demand disruption related to new software projects, so things moved forward in a pretty orderly fashion. But also, as we look ahead to the renewal cohort for the rest of the year, which is pretty strong, the utilization rates that we're seeing with customers is very healthy, and we see that as a good indicator that we should have a strong finish for the remainder of the year. And so that gives us confidence that we'll be able to grow the business in the mid-single-digit range. Tim, let's talk about the hardware. Although the trends we're seeing really apply to both hardware and software. But if you step back, really, the thing that has changed in the market is that hybrid multi-cloud deployments, hybrid multi-cloud architectures for enterprises are now the new normal. And we've seen that shift happen over the last two to three years, but it is accelerating now. Now, over the last three years, hybrid multi-cloud architectures have been driven by, you know, first of all, enterprises wanting to have the flexibility to deploy apps in any environment, cost optimization, control. Those have been the drivers of hybrid multi-cloud deployments. And we have been ideally positioned for hybrid multi-cloud because of the unique flexibility we provide with hardware, software, and SaaS. We're absolutely unique in the world of delivery and security in being able to do all of that. Now, we are seeing, and these have accelerated really over the last three to six months. We're seeing two new catalysts that are accelerating that and driving demand ultimately for both hardware and software, but in the near term, we're still seeing very strong demand for hardware. These two new catalysts are, number one, regulation. Especially outside of the U.S., there is regulation that has come into force or will come into force, that is, you know, forcing companies to adopt a stronger stance on resilience and a stronger stance on digital sovereignty. It means that companies need, for example, to be able to fail over from one, a cloud back to on-premise and to have true hybrid, resilience in their environment. It means, for example, that they need to have consistent security controls across all of their infrastructure, environments. Regulations like NIS2, DORA, cyber resilience regulations that have come into force, you know, in 2025 and all the way through 2027, will come into force, are really causing reinvestment in data center and stronger resilience between data center and the cloud, and we are perfectly positioned to benefit for that, and we're seeing those tailwinds in the business. This is one of the reasons that we had a very strong quarter in Europe, this quarter. And then the second new catalyst, driving also strong hardware demand is enterprise adoption of AI is accelerating. I shared that earlier, but AI is hyper hybrid, and it accelerates hybrid multi-cloud architectures, and we are seeing that, contribute meaningfully to the hardware demand that we saw this quarter. Okay, thank you, and I hope those sirens aren't current for you guys. No, we're, we're fine, Tim. Thank you. The next question comes from the line of Samik Chatterjee with JP Morgan. Please proceed with your question. Hi, thanks for taking my question. François, maybe if I can start off with, similarly on the hardware side, and the upgrade cycle you're seeing from your customers as well as the incremental use cases. But there is that sort of end of software support, I believe, in early 2027. How much of the momentum that you're seeing on the hardware is you would tie to sort of the VIPRION and the iSeries, which are going through the upgrades, versus maybe on the rest of the portfolio? And has the security incident led to any sort of BIG-IP customers coming in for those upgrades? And I have a quick follow-up after that. Thank you. I think, Samik, the clearly, we are, you know, in addition to the trends I've just talked about, which are, you know, which are macro trends, there is a trend that is specific to F5 at the moment, which is that we are in the middle of a refresh cycle, you know, with a lot of customers. You mentioned the dates, you know, looking to refresh their infrastructure. That said, what we are seeing this refresh cycle obviously is stronger than past refresh cycles, because what we are seeing is not just refresh, but a lot of expansion for customers. And from all the conversations we're having with customers and the data points we're seeing, we think the refresh is stronger and has a lot of expansion, because customers are also getting their infrastructure ready for AI, the deployments of AI infrastructure and getting their capacity ready for AI. We think that's a substantial driver. The other I've just talked about, hybrid multi-cloud also accelerating this refresh cycle. Yeah, and Samik, I would add, we're continuing to see strength on not just from the refresh motion that has a lot of expansion, but also outside of the refresh motion. We're seeing continued capacity expansion with existing customers. We're seeing, we think, some readiness for AI workloads, and then, of course, the, some of the data sovereignty and regulation drivers that François mentioned earlier. Got it. Got it. And my follow-up, I imagine this will be a question for everyone this season, earnings season, is sort of you did highlight the increasing memory costs and sort of what you're budgeting for it. But, maybe if you can outline sort of how are you managing it through your supply chain, and, are there any sort of concerns around capacity or sort of supply constraints as well, that you're baking into your guide, just outside of price, is there a supply constraint to be thought of as well? Thank you. Samik, this is an important topic of discussion. And as you know, the memory prices have gone up substantially, and there are worries about supply in the industry. Now, you know, we went through that in 2022, effectively with the same management team as we have today. So we did learn from what we saw in the supply chain crisis of 2022. We took a lot of actions early as it relates to memory. We raised our forecast and volume request with our suppliers several months ago. We give our suppliers extended visibility to our needs. We qualified additional suppliers to have more diversity. We started executing on broker buys. So we did a lot of the elements of the playbook that we had to do in 2022. And I think because of all these actions that we have taken in terms of supply, I think we feel very confident about where we are in the near term. Of course, as you know, as you go further into the future, there is some risk around supply for us as for anybody else in the ecosystem, and we are all aware of it and trying to take as many actions as possible to prevent having some shortage of components. Today, with the you know, the group of suppliers that we've put in place, what have not seen, you know, we have not been seeing decommits from these suppliers, but we have seen, of course, substantial price increases. And so we're monitoring that very, very closely, to ensure that we can, you know, continue to have the right supply, not just in the near term, but also, beyond the next couple of quarters. Correct. Correct. Great. Thank you. Thanks for taking my questions. The next question comes from the line of George Notter with Wolfe Research. Please proceed with your question. Hi, guys. Thanks very much. I just wanted to kind of button up the whole discussion of the security breach. I'm just curious about, you know, have you seen any evidence of your customers in turn getting breached since you first discovered the situation? I'm wondering if, you know, you guys are continuing to provide patches to your BIG-IP software code. You know, I'm wondering if there was any disruptions in the field and sales organizations that kind of inhibited you from selling. Just how long did that whole distraction last? And, you know, any impact you can kind of tie to the December quarter results. Thanks. Thank you, George. No, we have not seen any evidence of customers being breached as a result of our, you know, of our security incident. And, of course, I should caveat and say we are not aware of any customers having reported any such incident to us. And I would say generally, you know, we feel that our response, our collective response, both our customers, our partners and F5, our collective response to the security incident has been very successful. So if I go back in time, we, you know, back to where we were in October. You know, we had to mobilize very rapidly. We mobilized our, you know, our development teams to ensure that we had the right releases for our customers immediately upon disclosure, so they could take actions and protect themselves. We mobilized our support teams to be ready to take thousands and thousands of support calls, which did happen, but we were able to take all these calls with minimum wait times and attend to customers very quickly so they could perform upgrades in record time. And we mobilized our sales teams to engage and support customers quickly. Our customers were both extraordinarily patient with us and empathetic, but also acted with a sense of urgency around the actions they needed to take to protect themselves. And as a result of this, the partnership and the work with our customers, the disruption was actually kept to a minimum. We of course had disruption because customers had to mobilize their resources to do their upgrades, and we were extraordinarily thankful for that. But we also saw minimal disruption in demand for us. In terms of where we are on patches, well, we provided, you know, of course, significant patches to, you know, a number of versions of software around October 15th, and made those available to all of our customers. A lot of our customers upgraded really quickly. That has the benefit that today, you know, if I spoke to where we were at this time a year ago, we had about 15% of our customers on our latest release. As I speak to you today, we have over 50% of our customers that are on our latest software release. And that is kind of testament to the speed with which our customers acted, but we're also really happy with where the state is at. We're gonna remain, of course, vigilant with all of this. We have made significant enhancements to our security posture, and we are continuing to make enhancements to our overall security environment, our developmental environment, our product environment. So, you know, we will consider this an evergreen journey. But so far, we are very pleased with the, you know, the response from our customers and the way that they have continued to, of course, invest in F5. And frankly, we're taking this as an opportunity, not just to maintain the trust that our customers have in us, but to strengthen that trust they have in us. And we've had the opportunity to engage with dozens and dozens of CISOs over the last several months. I have personally spoken to, you know, dozens and dozens of our customers, and in every single one of these conversations, they have expressed their appreciation for F5's response. And I'm immensely proud of the way that all F5ers have rallied together, with our partners and our customers on this incident. That's great. Just as a quick follow-up, any financial impacts, you know, revenue that you lost or costs that you incurred incrementally that you can point to in the December quarter results? Thanks a lot. Yeah, no, we really didn't see any noticeable impact. You know, we talked about, as we went into the call in October, that we hadn't yet seen any change in terms of some of the sales metrics that we track around pipeline and close rates, but it was a very short period of time, as we reported. I think that something we're really happy with was just with the response that we had with customers; they were able to move pretty quickly through their remediation activities, and as a result, they were able to get back to business in a short period of time. And so that trend really held through all the way through the quarter in terms of a normal velocity around pipeline generation, you know, predictable close rates. And so it was kind of a very healthy execution throughout the quarter, and importantly, also a strong pipeline build as we, you know, head into Q2. Thank you. The next question comes from the line of Simon Leopold with Raymond James. Please proceed with your question. Thanks for taking the question. I've got two pretty straightforward, I hope. First one is regarding the progress in AI. You've given us interesting metrics around customer numbers. I'm wondering if we could frame it in terms of revenue. In other words, what rough percentage of revenue is coming from AI projects today? And then what do you expect full year, longer term, as a portion of the mix? You've had success raising product prices, passing through the higher costs. I'm wondering if you could maybe help us bridge, what portion of your systems revenue growth could you attribute to your price hikes? Thank you. Simon, I'll start with, I think, the first part, and Cooper will take the second part. Look, we have not, of course, broken out AI revenues, in part because we feel it's too early. We want to see, you know, more quarters behind us on AI. We have shared, I think in the past, that AI, if we isolate our answer here to use cases that we know are AI. I say that because there's part of our business that may well be related to AI, but it's not visible to us. And so if we, if we isolate this for use cases that we know are a direct AI use case, we said that, you know, last year it was kind of single-digit millions of dollars every quarter. You know, this quarter it was above that. It was, you know, healthily in the double-digit millions of dollars a quarter. But we're not, you know, prepared to go, you know, beyond that and qualify that. In terms of the future, you know, our, our view when we look at the trends over the last few quarters, our view is that it is likely to grow, because, you know, it, we're, we're seeing more use cases emerge, not just data delivery, which is an important and growing use case, but security is also going to be a growing use case. We think that runtime security in AI is going to be a multi-billion dollar market. We're just scratching the surface of the very early innings of this market. So clearly, there's a lot of growth potential, but, you know, we're gonna take it one quarter at a time. Yeah, and then in terms of the pricing increases and the impact on revenue, so where we see the biggest impact is in the systems business, because those are applied to, you know, they're effectively all net new sales. And so we had a price increase that we introduced last January, so January of 2025, and so we're still realizing the benefit of that. That was a roughly mid-single-digit price increase. You know, we had that factored into our outlook for the year, and so we'll continue to look to monetize that. On the software side, there's a little bit more of a muted impact because a lot of our software sales are sold in multi-year agreements, and so it takes time for some of the pricing increases to matriculate through that business. But we are seeing a healthy pickup from the pricing on the software side as well. Thank you. The next question comes from the line of Michael Ng with Goldman Sachs. Please proceed with your question. Hi, good afternoon. Thank you for the question. I just have two. First, just on the systems revenue outlook, you know, it's very encouraging to hear about the double-digit revenue growth for the full year. I think the guidance implies around, like, mid-teens systems revenue growth for the full year. And if that's right, could you just maybe talk a little bit about, you know, the revenue shape throughout the rest of the year? Is there, you know, anything that you would call out that might drive a deceleration relative to the, you know, obviously, very strong growth that we saw in the December quarter? And then, you know, second, I wanted to ask about the EPS upgrade. You know, you beat the midpoint in the December quarter by $0.85. The full year was raised by $0.85. You know, just given what sounds like a very constructive outlook for the top line for the rest of the year, is there anything that you would call out in terms of, like, incremental costs that would prevent, you know, more of the top-line upside flowing down to the bottom line for the full year? Thank you very much. Yeah, so I'll handle both. So on the revenue guide, I think you can see if you take the midpoint of the guidance for the full year, it implies kind of a 4%-5% growth in the second half and a little bit higher, I think it's around 7% for the first half. So to your point, it does reflect a little bit of a deceleration. I don't think there's anything that we're seeing today that where we have visibility, that there will be a deceleration. It's really just that it's early in the year, and so we've seen tremendous strength in the first quarter. We have a good pipeline in the second quarter, and I think what you're seeing is us take a little bit of a measured approach to how we look in the out quarters for the year, but, but nothing specific that suggests that the business should slow down. And so then to the EPS question, the two things I would point to is we have the gross margin. We took the guidance down a little bit, tied to the pricing increases, so that has a little bit of an effect on the operating margin guide. Just based on the strength that we're seeing and some of these trends that we think are pretty sustainable beyond FY 2026, we're making some targeted investments that we think can really help drive a better growth outlook in FY 2027 and beyond. So we're looking at sales capacity, you know, where we see additional opportunity that we wanna get in front of with some early investments. We're making some investments in the roadmap, you know, things. We talked about XOps, so, you know, capabilities we can bring to customers around analytics and telemetry that we think ultimately will drive a higher rate of adoption across the portfolio, and then just some other features on our roadmap. So we think it's an opportune time for us to really invest in future growth, just given the increased outlook we've got for this current year. Great. Thanks, Cooper. That's very clear. Appreciate the response. Great. Thank you, Michael. The next question comes from the line of Ryan Koontz with Needham & Company. Please proceed with your question. Great, thanks for the question, and congrats on a great quarter here. Wanted to ask about the strength in EMEA. You mentioned sovereignty. I wonder if you could just double-click on that a bit and expand on, you know, how long that dialogue's been going on. Is this a relatively new phenomenon you didn't see happening so quickly? And if there was any contribution of, you know, deferred upgrades or expansions from customers that may have pushed them off while they were going through the kind of the recovery from the breach. Thank you. Thank you, Ryan. Well, there's an element of both. So the dialogue around, you know, sort of hybrid multi-cloud deployment in Europe, driven by the need for digital sovereignty, the need for more resilience, has been going on for several quarters, but we did see an acceleration this quarter. If I go back to why that is, I think, first of all, this regulation have come into force. Some of them have come into force already in 2025, and organizations that are not compliant are moving quickly to be compliant before they face some penalties. In some cases, that is, and I would say in the majority of cases, we're seeing that translate into new projects. Customers that need both some hardware and some software or SaaS, to be able to deliver consistent security or consistent delivery across all their infrastructure environments. And there are some cases where we saw customers that perhaps should have refreshed their their equipment several moons ago, did not do so and were not in compliance, and in the face of coming enforcement, decided to refresh quickly and upgrade their equipment. And we're seeing that come to us by way of extra hardware demand. So we're seeing both, but it is a durable trend because there is for two reasons. One is there is more regulation coming. You know, NIS2 and DORA are already in place, but there's a Cyber Resilience Act that is coming. I think the enforcement date for that will be in 2027, and the regulation vary by countries. So I think we're going to see that deploy across multiple countries. And then the other phenomenon is, there are a number of large enterprises have expressed to us that, because they don't know yet how new regulations will be applied, it's very difficult for them to forecast where they should have their data or where they should have their workloads to be in compliance with this regulation. In the face of that uncertainty, a partner like F5 is ideal because we give them the flexibility to deploy their licenses of F5 in any environment they want today or in the future, and also to deploy it with whatever form factor they may want today or in the future, whether it's hardware, software, or SaaS. And so we are, at this time, for that uncertainty and for matters of digital sovereignty, this perfect company that has the perfect flexibility, the perfect number of models, and the perfect scalability for what these large enterprises are facing. And I think that is going to continue for some time. Super helpful, François. Thank you. Thank you. The next question comes from the line of Tal Liani with Bank of America. Please proceed with your question. Hey, guys, it's Tomer Zilberman on for Tal. Maybe going back to one of your earlier answers, you talked about second half implied deceleration to around 4%-5% growth. How do you balance that between the fact that as we approach next quarter and really the next three quarters, you're starting to lap much more difficult comparisons within systems of, I think, $180 million-$190 million kind of quarterly run rate versus, you know, maybe some of your large enterprises refreshing well ahead of that 2027 under service? Yeah, so just a couple of factors. So it isn't anything to do with the cadence of the refresh, so we're still relatively early in that opportunity. We have not seen any kind of an acceleration in terms of, you know, decommissioning on the legacy base. So I think it's been orderly. The strength in the refresh has really been around the expansion, and that's tied to the dynamics that François has been outlining that customers are facing today. So I don't think that we expect that to really slow down in the second half of the year. It again, it's just more about where we're sitting in the cycle. It's, you know, a new calendar year, so budgets are still getting cemented with customers. There are some fluid dynamics in just the macro, and so I think we're just being a little bit pragmatic with how we approach second half. But, the underlying pipeline trends that we're seeing and the momentum in the business is very strong as we enter the quarter, and that's reflected in the Q2 guide. So, it's more to do with just, you know, where we sit in the calendar as we're kind of looking ahead on our guidance. Got it. And, maybe just as one quick follow-up on the software side, do you see the renewal cohort equally balanced throughout the remainder of the year, or do you think that's more clustered around the second half? No, it's more balanced than it has been in prior years. We actually expect to have a pretty strong growth quarter in Q2 and then healthy growth in the second half of the year. Got it. Thanks. The next question comes from the line of Meta Marshall with Morgan Stanley. Please proceed with your question. Great, thanks. A couple quick ones for me. You know, François, you mentioned kind of a lot of strength around these hybrid implementations. Just wondering, you know, have there been any trends that have developed between kind of virtual ADCs versus product or, you know, or hardware versus the last time you kind of went through one of these cycles? And then second question, you know, maybe building on Ryan's question, you know, the government business or public sector business was probably the highest concentration it's been in, you know, three-plus years. Just wondering, you know, was there any kind of strength within Europe on the public sector side that was concentrated? Thanks. Thank you, Meta. I'll actually handle both, and I'll start with the, your last question about government sector was very strong. That was driven in by North America, in fact. You know, it may come as a surprise because we had, I think, the longest government shutdown in history in the quarter, over 40 days of shutdown. And of course, we had, you know, at entering the quarter, we had the expectation of some disruption with a security incident. But we had a very strong quarter with the Fed here in the U.S. Frankly, I'm very proud of the execution of our Federal team here, who, you know, put their shoulders behind the wheel. Despite not having as much time to interact with customers because of the shutdown, we're able to engage in the right conversations and get really interesting projects started. Interestingly, the strength in government came from new use cases, specifically, you know, on modern applications, and also we started to see our first AI use cases in government. So we feel very good about what we saw in the Fed this quarter and our ability to execute despite the shutdown and, you know, the continued trust that we have from our customers there. In terms of your question around, you know, have we seen a different dynamic between software and hardware in these hybrid multi-cloud architectures? I would say that, you know, as you know, part of what's really appealing for customers of F5 is the ability we give them to choose between hardware and software, and to implement their, you know, their software licenses across any infrastructure environment. Over the last week, I think you will continue to see a trend towards more customers wanting to move to software because they ultimately, it gives them more flexibility, and especially flexibility against the uncertainty that I talked about. But over the last couple of quarters, we have seen very strong demand for hardware. So I would say, at the moment, the dynamic is we're seeing more customers wanting to spend in hardware, in part because of some of the use cases in AI data delivery, where they really need the performance of hardware for high throughput, in part because of some of the security use cases. So we're seeing that strong demand in hardware. I think, you know, over time, you will continue to see our software grow, and we feel pretty confident about our software growth for the long term. I would add that one element that is going to fuel all of this, and we really started to see it this quarter, is in the past, you know, our customers, if they were purchasing, you know, hardware or software from F5 versus SaaS, those were two completely different experiences. And we have talked about building our Application Delivery and Security Platform, and some of that innovation is now making its way into production for our customers, and it's fueling their desire to have converged platforms. They all want to have simpler operating environments, and a number of the wins that we had this quarter were customers consolidating spend on F5 because they had multiple point security products or point delivery products, and they went to F5 because we were a single vendor that could deliver across all of their environments and replace multiple of their point vendors. And then on top of that, we're starting to give them a single experience from a single console. Cooper mentioned some of the XOps innovation that we are investing in. That gives them the ability to, you know, deploy policies from a single console across multiple environments. This quarter, we took the API discovery capabilities that were in F5 Distributed Cloud, and we're making them available on BIG-IP. So we're bringing that API discovery capability to the data center on-premises. That is a massive issue for customers. No one addresses that properly today. So the consistency that we're bringing around these security and delivery capabilities across hardware, software, across on-premise and cloud, is unique, and that convergence, I think, is gonna continue to fuel our growth into the hybrid multi-cloud environments. And then, Meta, I also wanted to add on the, on the government question. So the U.S. Fed was absolutely the headliner on the strength that we're seeing, but that said, we also saw fairly strong results in EMEA as well, with a number of government agencies, particularly around the same data sovereignty, you know, concerns. You can imagine those are, you know, top of mind for government entities, and so that drove a lot of strength in EMEA, in addition to the strength we were seeing in the Fed. Perfect. All right, great. Thanks so much, guys. Our final question comes from the line of James Fish with Piper Sandler. Please proceed with your question. Hey, guys, thanks for squeezing me in here. Just circling back on product refresh, what kind of capacity plus expansion are you seeing typically? And I get it, it's hard to tell exactly what your AI exposure to Simon's earlier question, but how are you able to tell that these are capacity plus increases related to sort of traditional general environments versus sort of AI modernizations? Yeah, so one thing that we're seeing is a lot of customers have higher security needs, which are driving a performance requirement. So we've been seeing this for the last couple of quarters, and this trend is continuing, where customers are refreshing very often higher up in the portfolio. And so we're seeing a higher ASB at that time of refresh, and then also additional capacities in terms of more units. And so it's, I'd say it's a combination of kind of getting in front of some of the performance needs for security, as well as getting in front of the kind of downstream performance needs they're anticipating related to AI workloads. And so the customers are just being a little bit more front and center in terms of their planning than we had seen in prior cycles. Got it. Thanks, guys. Thank you. Thank you. Ladies and gentlemen, that does conclude our question and answer session. I would like to turn the floor back over to Suzanne DuLong for any closing comments. Thank you, everyone, for joining us today. We look forward to seeing many of you out and about during the quarter. Ladies and gentlemen, thank you for your participation. That does conclude today's teleconference. Please disconnect your lines and have a wonderful day.