Good afternoon, and welcome to the F5 Inc. Q2 fiscal 2026 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Also, today's conference is being recorded. If anyone has any objections, please disconnect at this time. I'll now turn the call over to Ms. Suzanne DuLong. Ma'am, you may begin. Hello, and welcome. I'm Suzanne DuLong, F5 Vice President of Investor Relations. We are here to discuss our Q2 fiscal year 2026 financial results. François Locoh-Donou, F5's Chairman, 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 Today's press release is available on our website at f5.com, where an archived version of today's audio will be available through 27 July 2026. We will post the slide deck accompanying today's webcast to our IR site following this call. The telephonic replay will be available through midnight Pacific Time, 29 April 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've 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. Before I pass the call to François, I am pleased to announce that F5 will be hosting an analyst and investor event in N.Y. on Thursday, 28 May 2026. Details about the event will be provided in a press release soon. I'll now turn the call over to François. Thank you, Suzanne, and hello, everyone. Our team delivered another robust quarter with 11% revenue growth. Product revenue grew 22%, marking our seventh consecutive quarter of double-digit product growth. This includes strong 26% systems revenue growth and 17% software revenue growth. Hybrid multi-cloud has become a strategic architecture, and it is increasing demand across F5's core markets. Customers are rapidly scaling their digital infrastructures to improve resiliency, meet data sovereignty requirements, and get ready for AI. Our strong Q2 performance reflects those dynamics and F5's alignment with where customers are headed. We captured robust international demand for digital sovereignty initiatives. We also converted hybrid multi-cloud adoption into meaningful systems and software growth. We capitalized on heightened demand for best-in-class security solutions, and we built on AI momentum with another standout quarter for AI wins. As a result of our strong growth and our proven operating model, we delivered 14% non-GAAP earnings growth and a record $348 million in free cash flow. The powerful combination of secular and cyclical demand trends is providing strong Q3 visibility and a growing pipeline. We are raising our fiscal year 2026 outlook to reflect revenue growth of 7%-8%, up from 5%-6% previously. Cooper will elaborate on our outlook in his remarks. Our outlook for stronger growth is reinforced by what we are seeing in the market. We see three forces significantly reshaping how our customers operate: hybrid multi-cloud adoption, threat landscape expansion, and AI inference inflection. First, hybrid multi-cloud adoption. Workloads now span on-premises, private cloud, and multiple public clouds. Our research shows more than 90% of enterprises run hybrid multi-cloud today across an average of 19 locations. Organizations need flexibility, resiliency, and digital sovereignty in every environment, and they are investing to support these demands. Second, threat landscape expansion. As AI models become more capable, attackers are using them to launch attacks against production applications at higher volume and with greater variation than traditional defenses were designed for. Our customers see this, and they are responding. They are deploying more application security and prioritizing best-in-class defenses. The era of checkbox security is over. AI applications require best-in-class security to match both the volume and the sophistication of AI-driven attacks. Third, the AI inference inflection. Organizations are connecting their applications and APIs to AI models, and inference calls are becoming a regular part of how applications run. Our research shows 78% of enterprises run inference themselves using more than seven models on average. Organizations are standardizing on a new architecture with models distributed across the data center, the cloud, and the edge. The next shift is already on the way. AI agents are moving into production, and enterprises are adapting their applications for agent interaction. This is driving more compute, more data delivery, and more security to protect inference. These three market forces are driving demand across our business. Because of accelerating hybrid multi-cloud adoption, we are taking an already strong refresh cycle and leveraging it into significant opportunities for expansion, competitive displacement, and platform consolidation. I will double-click on each of these, spotlighting customer examples from the quarter. With this refresh, we are seeing a refresh plus dynamic that is different from prior cycles. Customers are deploying higher performance, higher capacity F5 systems as they upgrade their data centers to support modern applications, digital resilience and sovereignty, and AI. As customers refresh, we are capitalizing on that moment to attach new use cases, expanding our footprint and growing overall wallet share. For example, this quarter, a large healthcare services organization started with a life cycle refresh across hundreds of legacy systems. As the project progressed, they expanded the scope to support an AI-driven consumer engagement platform. F5 became the control point for secure, low-latency traffic and data movement across applications, storage, and their GPU server environment. That gave the customer a more resilient foundation for both sensitive internal workloads and new AI interactions at scale. Our deliberate investment in hybrid multi-cloud solutions is translating into market share gains. We are winning customers from competitors who did not build the same breadth and depth of capabilities across on-premises, software, and SaaS. In Q2, we displaced a long-standing incumbent at a Fortune 100 energy company whose environment had hit scalability limits. The customer needed a platform that could scale into cloud while maintaining strong on-premises performance. Their incumbent provider was unable to serve workloads in hybrid multi-cloud environments. F5 modernized traffic management and simplified operations, improving reliability and creating a clean path for long-term cloud adoption. Hybrid multi-cloud customers require stronger performance and security with fewer tools and simpler operations. We are replacing point products with a unified approach that improves performance and security and is easier to operate at scale. For example, during Q2, an energy and utilities provider, an existing BIG-IP customer, needed to secure APIs with better visibility and automation across their data center, cloud, and edge environments. They selected F5 Distributed Cloud Services to simplify their approach and standardize API protection across their full footprint with simpler management. Moving on to threat landscape expansion. The pace and scope with which the threat landscape is expanding is driving demand for best-in-class application and API security, both on-premises and across cloud environments. For example, this quarter, a software and managed service provider needed to standardize application and API security across a rapidly expanding hybrid multi-cloud estate built through acquisitions. They lacked a consistent way to enforce front door and API protections across their multiple public cloud environments and on-premises. With F5, they deployed a single policy and management layer with security enforced locally in every environment, supporting strict privacy, audit, and healthcare requirements. F5 enabled faster regional expansion with stronger security and improved data sovereignty alignment. Finally, the AI inference inflection is driving demand for F5. We are seeing this indirectly through hybrid multi-cloud adoption and the requirements that come with it. We are also seeing it directly through our three primary AI use cases. We are winning new AI insertion points, including AI data delivery and AI factory load balancing. We are capturing AI runtime security wins, protecting AI applications, APIs, and models from emerging threats such as model abuse, data leakage, and prompt injection. In an AI data delivery win, a global payments company needed a more resilient way to move rapidly growing AI data between storage and compute as they scaled training and retrieval workloads. F5 improved performance and resiliency while displacing both an in-house solution and a competitor, positioning us at the center of the customer's AI infrastructure strategy. In an AI runtime security win, an industrial automation firm needed a scalable way to assess risk and govern a growing number of AI applications and models. They chose F5 based on the depth of our red teaming insights and strong integration with their existing security stack. In an AI factory load balancing win, a major manufacturer and existing F5 customer needed to support operations and establish a digital twin of their manufacturing environment for simulation and optimization. They deployed BIG-IP as the production traffic layer across their GPU server environment, improving availability and offloading encryption. Taken together, these wins underscore two things. The forces reshaping our customers' environments are real, and F5 is well positioned to capture them. Staying ahead of the pace of change requires relentless innovation. In Q2, we brought multiple new capabilities to market, strengthening our leadership in application delivery and security for the AI era and driving greater value for customers. We introduced AI-powered capabilities in Distributed Cloud WAF, replacing manual policy tuning with automated outcome-based threat blocking. Our F5 Train model helps customers stay ahead of increasingly sophisticated AI-driven attacks that are growing in both speed and complexity. We launched Agentic Bot Defense, extending our industry-leading bot defense to autonomous AI agents, a new and fast-growing category of traffic. The result is that customers can confidently adopt agentic AI while ensuring only verified, trusted agents reach their applications. We released F5 AI Remediate, which closes the loop between our AI Red Team and AI Guardrails products. It collapses the path from vulnerability discovery to runtime protection from days or weeks into minutes. Finally, we launched F5 Insight for ADSP, providing deeper visibility across application estates. The result is that customers can identify and resolve issues faster with less guesswork. We are innovating so customers can run faster, stay protected, and simplify their hybrid multi-cloud and AI environment. We are accelerating that innovation by rapidly integrating AI into our solutions to create practical capabilities customers can deploy quickly. That innovation engine is also sharpening our view of what's next. As we look ahead, we have conviction in the power and durability of hybrid multi-cloud, the expanding threat landscape, and inflecting AI inference as the main drivers for F5. We look forward to digging deeper into these drivers and our expectations for how they will shape F5's longer-term growth outlook at our May analyst and investor event. I will turn the call over to Cooper, who will walk through our Q2 results and our outlook. Cooper. Thank you, François, and hello, everyone. I will review our Q2 results before I provide our guidance for Q3 and update our outlook for FY 2026. We delivered a strong Q2, growing revenue 11% to $812 million, with a mix of 51% product revenue and 49% services revenue. Product revenue totaled $411 million, increasing 22% year-over-year, while services revenue of $401 million grew 2% year-over-year. Systems revenue totaled $226 million, up 26% over Q2 FY 2025. Our software revenue of $184 million grew 17% year-over-year. Subscription-based software revenue totaled $165 million, up 20% year-on-year, representing 90% of our Q2 software revenue. Perpetual license software totaled $19 million, down 4% year-over-year. Revenue from recurring sources contributed 70% of our Q2 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 3% year-over-year, representing 50% of total revenue. Both our EMEA and APAC regions delivered very strong quarters. EMEA grew 22%, representing 32% of revenue. APAC grew 19%, representing 18% of revenue. Looking at our major verticals, enterprise customers contributed 66% of Q2's product bookings. Government customers represented a strong 24% of product bookings, including 8% from US Federal. Service providers contributed 9% of Q2 product bookings. Our continued financial discipline contributed to our strong Q2 operating results. GAAP gross margin was 81.4%. non-GAAP gross margin was 83.7%. Our GAAP operating expenses were $482 million. Our non-GAAP operating expenses were $406 million. Our GAAP operating margin was 22.1%. Our non-GAAP operating margin was 33.8%. Our GAAP effective tax rate for the quarter was 21.9%. Our non-GAAP effective tax rate was 21.5%. Our GAAP net income for the quarter was $148 million or $2.58 per share. Our non-GAAP net income was $223 million or $3.90 per share, reflecting 14% EPS growth from the year ago period. I will now turn to cash flow and balance sheet metrics. We generated $366 million in cash flow from operations in Q2 and free cash flow of $348 million, both records highlighting the strength of our operating model. CapEx was $18 million. DSO for the quarter was 47 days. Cash and investments totaled $1.46 billion at quarter end. Deferred revenue was $2.12 billion, up 10% from the year ago period. In Q2, we repurchased $100 million worth of F5 shares at an average price of $269 per share. We had $522 million remaining on our authorized share repurchase program as of the end of the quarter. We ended the quarter with approximately 6,500 employees. I will now speak to our outlook and guidance, beginning with Q3, followed by our full year view. We expect the market trends we've outlined, hybrid multi-cloud adoption, threat landscape expansion, and AI inference inflection, to drive strong demand for our products and services in the second half of FY 2026. We expect Q3 revenue in a range of $820 million-$840 million, reflecting approximately 6.5% growth at the midpoint. We expect non-GAAP gross margin in the range of 82.5%-83.5%. We estimate Q3 non-GAAP operating expenses of $406 million-$418 million. We expect Q3 share-based compensation expense of approximately $68 million-$70 million. We anticipate Q3 non-GAAP EPS in a range of $3.91-$4.03 per share. Turning to our fiscal year 2026 outlook. With continued strong close rates in Q2 and strong pipeline creation into the second half, we are raising our FY 2026 outlook. We now expect FY 2026 revenue growth of 7%-8%, up from our prior outlook of 5%-6%. We continue to expect mid-single-digit software revenue growth, double-digit systems revenue growth, and low single-digit services revenue growth for the year. Our gross and operating margin outlook for FY 2026 is unchanged. We expect FY 2026 non-GAAP gross margin in a range of 82.5%-83.5%. On a modeling note, we expect higher component costs, primarily related to memory, will cause gross margins to step down sequentially from Q3 into Q4. We expect non-GAAP operating margin in a range of 34%-35%. We now expect our FY 2026 non-GAAP effective tax rate will be in a range of 20%-21%. Reflecting the strength of our Q2 and our increased revenue outlook, we now expect FY 2026 non-GAAP EPS in a range of $16.25-$16.55, up from the prior range of $15.65-$16.05. Finally, we expect our full year share repurchase to be at least 50% of our free cash flow. I will now pass the call back to François. Thank you, Cooper. Looking ahead, our strengths are well matched to the secular shifts transforming IT infrastructure, hybrid multi-cloud adoption, threat landscape expansion, and AI inference inflection. We expect these trends to support continued growth for F5 in fiscal 2026 and beyond. F5 is built for hybrid multi-cloud and the AI era. We deliver and secure every app and API anywhere with one unified platform across on-premises, multiple public clouds, and the edge. Our Application Delivery and Security Platform reduces complexity. Customers get centralized security, high performance delivery, and consistent policy without stitching together point products. We provide a control point for traffic, APIs, and data flows as applications and AI become more distributed. Operator, please open the call to questions. Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. We'll take our first question from Tim Long at Barclays. Thank you. One question and one clarification. On the software side, looks like it was a pretty good quarter, and you're keeping the mid-single digit for the year. I know, you know, sometimes these are on, you know, three-year cycles given the term. Maybe just touch a little bit on, you know, why not a little bit more of a raise there after a pretty solid growth quarter. Are you still looking at potential acceleration on that number into next year? After that, I'll come back with a follow-up. Hey, thanks, Tim. This is Cooper. Yeah, I'll take that. You know, we did have a good growth quarter in Q2. I would say it was right where we expected it to be for the quarter. You're right, we do caution against kind of over-rotating on any individual quarter's reported revenue growth rate. The second half of the year is where we have a more balanced growth expectation for the year. Just based on where we're at with the renewal base, we continue to expect it to perform as we had seen it shaping up for the year. That's where we're still at the mid-single digit growth rate for the year. All trends look very healthy. Yes, as we look ahead to next year, we do expect to see an inflection in the growth rate. We're continuing to see strong trends around consumption rates across that renewal base, and we have a larger base coming up for renewal next year. With the expansion we would anticipate against that larger renewal base, we feel pretty confident about a higher growth rate into FY 2027. Okay, great. Thank you. If I could on the AI front, you know, a lot of different applications, a lot of activity. Maybe you could help us a little bit with, you know, some benchmarks or some metrics. How do we, you know, frame the success as, you know, revenues, orders, customers? How should we look at it? Any data points you can give us as far as the scale and the traction you guys are seeing on the On the customer side? Yes, Tim. It's François here. What we're seeing in AI, Tim, is that enterprises are now putting AI into production, you know, the term we use is inferencing, and that's creating substantial opportunity for F5. We've talked about three big areas where we see opportunity. The first one is in hardening data pipelines between data stores and AI models, a use case we call data delivery, and we're seeing growing demand for F5 in these use cases. We're also seeing growing demand in securing AI in runtime, so both AI applications and AI models increasingly require security that is tailored for AI models that traditional security solutions do not address. We also address load balancing, AI factory load balancing, which is a third area where we're starting to see growing demand. If you look at all that, if you look at the H1 of the year, we had approximately $50 million in sales in the H1 of the year on these use cases. That's up more than 200% year-on-year. We're now approaching about 100 customers that are using F5 for their AI use cases. That's probably a bit of a conservative estimate because those are customers from whom we absolutely know that they are using F5 for these AI use cases. We believe there are other parts of the business where we're getting indirect benefits from customers getting ready for their AI infrastructure, but those are harder to quantify, harder to count. The ones I'm sharing with you are ones where we actually have the data and can attribute it directly to these use cases. Enterprise AI is one of the big trends that's fueling some tailwinds in our business. Hybrid multi-cloud and an expanding threat landscape are the other two very significant trends we're seeing. Okay. Thank you, François. Thank you. We'll move next to Samik Chatterjee at JPMorgan. Hey. Thanks for taking my questions. François, a pretty strong quarter. You're raising the guide for the year as well and getting ready, it seems, to give us a more longer-term view of the business. Just trying to get sort of how you're thinking about sustainability of the high single-digit growth as you look forward, given that you did sort of have a softer year in software this year, but you also have the hardware sort of tailwinds in relation to end of support for some of your products. Like, how should we think about sustainability of these growth rates as you look forward beyond this year? How are you thinking about that, if you can help us, then I have a follow-up. Yes, Samik. I mean, as it relates specifically to software, I think Cooper touched on it, where, you know, we expect stronger, even stronger software growth next year than this year. Let me step back a little bit and talk about the overall business, Samik. We are seeing, you know, a couple of things. One, of course, is, you know, we are seeing a very strong refresh cycle, and the refresh cycle, by definition, is cyclical. We're also seeing three secular trends that we think are very durable and that are just growing and accelerating our business. The first one is hybrid multi-cloud. You know, we've been talking at F5 about hybrid multi-cloud for several years. If you look at the past few years, hybrid multi-cloud was by default. Customers needed the flexibility to put their application in different environments. Now we're seeing it being more of a strategic architecture that is by design, and customers are implementing that for digital sovereignty reasons to be able to rely not just on big public clouds but local cloud alternatives or on-premise environments. They're also implementing digital hybrid multi-cloud architectures for resilience reasons. Increasingly, AI is also pushing customers toward these hybrid multi-cloud architectures. That is a secular trend, Samik, that is there for the long term, and that is providing substantial tailwinds for the business that we believe are durable. The other trend that we're seeing is the threat landscape is expanding. What we're seeing is customers are having more frequent attacks that are more sophisticated attacks because of AI. There was a report published recently that showed the increase in web attack year-on-year was up 77%. Increase in bot attacks were up 150% year-on-year. All of that means that our customers have more apps to protect because their apps, their APIs, their now AI models, both on premise and in the cloud. With the frequency and the sophistication of attacks increasing, there is a need for best-in-class application security solutions, and that is, you know, right where F5 has been focused, and we are seeing that demand in our business. To give you a couple of data points, in our Distributed Cloud Services platform, for example, you know, we saw this quarter the number of customers choosing F5 for web application firewalls are up 62% year-on-year. The number of customers choosing F5 for API security is up 54% year-over-year. And for bot defense, it's up 33% year-over-year. You can see these trends of, you know, increasing attacks, our customers responding, needing more application security solution that are best in class and coming to F5. These are important trends. We think they are durable, Samik, and therefore, we think the inflection we're seeing in our business is, you know, is likely to continue. Got it. Got it. François, maybe I'll follow up on that aspect itself on sort of the attacks that customers have to be ready for. Have you seen any change in engagement or even a step up in engagement following all the discussion that enterprises have to deal with in relation to Anthropic's Mythos model and sort of the vulnerabilities that they've highlighted? Are you seeing any step change in your engagement with customers on the security front? How are you sort of looking for or looking to your customers and trying to address some of those issues? Thank you. Thank you, Samik, for the second one, the second question. Yes, we are seeing a step change, Samik. We've had a number of conversations over the last several weeks with customers. If you think about it, you know, we are now in an era where the window of time for, you know, an enterprise to patch their applications has closed as, you know, we have AI models that are very powerful and can now find and exploit vulnerabilities in any application almost in real time. There are a couple of implications for that. The first is given, you know, if you don't have a significant window of time to patch your applications, you are going to rely more on runtime security, and specifically runtime security that is protecting the front door of your applications. That's precisely where F5 has focused and you know, we're having conversations with customers who are sharing with us that they're going to have to rely on us, you know, even more than they have in the past. The second implication is that we believe that all security is going to be AI-powered. You know, your static security, static signatures are really not going to be able to cope with the power and the speed that these new models have in terms of, you know, creating exploits. This is a shift that we saw coming. We have been investing in AI-powered security for a while now. Just this quarter, you may have seen this, we released our AI-powered web application firewall. We also released our Agentic Bot Defense solution. Over time, our entire portfolio is going to be AI-powered, but we are basically already fighting AI with AI, and that we think is a significant shift for our customers. Probably the other step change for our customers, it's a trend that has been happening, but I think the new era really accelerates this, is the consolidation towards platforms. If you're a customer that's operating in multiple environments, 95% of our customers are operating into hybrid and multi-cloud environments, the era of having a point product solution in any one of these environments really just creates complexity that you don't want to have to deal with if you have to try and really patch your systems very quickly. I think we're going to see more customers move towards platform, and the breadth of our portfolio can really help them simplify their operations. Those are three of the implications that we see with this change, and we're seeing that in our conversations with customers already over the last several weeks. Got it. Thank you. Thanks for taking my questions. Thank you. We'll go next to Simon Leopold at Raymond James. Great. Thank you very much. I wanted to ask about, I guess a phenomenon that may be occurring. What we've heard is that some customers may be showing a preference for your hardware solutions based on the performance, the relative performance that perhaps the total cost of ownership of implementing software is actually more expensive than the relative hardware. I'm wondering if you're seeing this shift and that might explain some of the relative growth between your hardware and software. Simon, first of all, we are seeing, in fact, a number of customers that are recommitting to hardware. I wouldn't say that it's just about performance. Performance is a factor. There are a number of reasons for customers to want to be doing that. I think one of those reasons is a lot of customers are modernizing their data centers and wanting to have strong on-prem infrastructure with strong performance in their data centers. We have seen In the H1, just to give you a data point, we generated about $60 million in sales from customers who had previously kind of stopped buying hardware and recommitted to hardware. We are seeing this phenomenon of customers recommitting to hardware. If you expand from that, 'cause, you know, we delivered 22% growth on hardware this quarter and 17% growth on software. The broader trend we're seeing, Simon, is that the hybrid multi-cloud is really what's driving customers to both modernize their data center and continue to invest in software to have the flexibility to be able to deploy the same solution, the same software stack from F5, either on-prem or in public clouds. Yes, at this moment, there is a very strong momentum on hardware, but we continue to see customers wanting to have the flexibility of software or subscription-based software to be able to deploy license across their environment. Thanks. Just as a quick follow-up, please, could you update us on any progress around the engagement and discussions you've had with NVIDIA? You've talked about that on earlier calls. I'm not sure that you've updated us on in the prepared remarks. Any updates you can offer? Thank you. Of course. Yes, we have, as you know, we have developed an integration with NVIDIA where we have been able to basically refactor our software to work in ARM architectures and specifically work on NVIDIA BlueField technology. We've done a lot of work with NVIDIA over the last 18 months. As of December, we have now been formally put into NVIDIA's reference architecture. Since then, there have been a number of tests, including third-party tests, to test the efficiency gains from this integration. Those tests have validated, basically, the integration of F5 software on these NVIDIA DPUs helps AI factories generate 30%-40% more tokens for a certain amount of GPUs. We are now taking that value proposition to market, and we are involved in a number of proof of concepts and trials around this technology and this integration. I would say that what we are seeing is that a number of customers who are building AI factories are early in terms of sophistication in that their first priority is to get these AI factories, these GPU farms up and running, get them running, get them working, get these Kubernetes clusters to work. That takes quite a bit of technical sophistication, customers are really focused on that. For those who are really providing GPUs as a service, really the goal initially is to get these GPUs to work and to be able to provide that to their customers. I think the issue of making those GPUs more efficient is the issue that comes next. I think as more and more customers go to inferencing, you know, we think that this value proposition is gonna resonate. Great. Thank you. Thank you. We'll go next to Matt Hedberg at RBC Capital Markets. Great. Thanks, guys, for taking my questions. Congrats on the results. Really, really good to see. You know, you know, based on a lot of our conversations with partners and customers, you know, we think F5 sits at really a critical junction in really this hybrid cloud infrastructure build-out and increasing AI app traffic. In your prepared remarks, you talked about sort of your role in this evolving threat landscape. I'm curious, you know, you have a lot of security solutions now, but are you hearing customers pull you into additional use cases? I mean, you're such a unique spot of the traffic flow with the lens that you see. You know, are there other opportunities for you to add, you know, either further security capabilities in this kind of this new AI era? Absolutely. You know, a couple of things. I shared earlier that in this new era, runtime security, and specifically securing the front door of applications, is going to be even more important than it was in the past, and especially for the folks who have invested, like us, in best-in-class application and API security. The first thing we're seeing is really strong growth in, you know, web application security, in API security, and in bot security. We're also seeing API discovery, and whether on-prem or in the cloud, being a growing use case with more and more customers really now worried about knowing where all their APIs are and being able to protect them. When you go to AI, we also have now a new attack surface, which is these AI models and these agents, both of which will be using more APIs, and our customers, of course, will need help discovering and securing them. We've also introduced in the last, you know, few months, AI Guardrails, which is AI Red Team and AI Guardrails. Technologies that help our customers both detect vulnerabilities in their AI models and mitigate these vulnerabilities. We have introduced a product called AI Remediate that automates the process of creating mitigation for these vulnerabilities. All of these are new use cases in security that are going to grow as our customers deploy more AI models in production. We are seeing new use cases and new opportunities to insert F5. Security, I think, is a very significant opportunity. As I said earlier, we're also seeing that opportunity in delivery, specifically in data delivery for AI. That's great. That's great. Then François, you know, The other thing you touched on in your prepared remarks was you're starting to see AI inferencing inflect with the customer base, which it makes sense given, you know, some of the AI models, you know, the innovation that we're seeing. I guess, you know, it feels to me like the broader sort of non-AI native cohort of customers are becoming increasingly AI leaning. Is there a way to talk about, you know, how early we are in that? You know, is this, you know, part of a multi-year, really inflection? You know, could we be talking about this inferencing inflection, you know, two years from now, for instance? Yeah. On that, Matt, I think, you know, the customers who are today really, you know, focused on it, have already started worrying about AI security and protecting AI models and AI applications that have new types of vulnerabilities like prompt injections, model abuse, et cetera. Those customers are a small minority, typically the largest customers in any vertical. The customers perhaps, you know, that have a lot of sophistication in security, financial services companies, very large technology companies. Today, it's a small minority of the universe of customers we serve. I think, you know, that number of customers is only gonna grow over the next couple of years as more and more customers actually implement AI in inference. I think we are just at the very start of this trend. The number of, you know, models for inference and agents will dramatically increase over the next couple of years. We'll go next to George Notter at Wolfe Research. Hi. Thanks a lot, guys. If I look back, you guys have been raising prices pretty conservatively, I think once per year. Obviously, you know, there's some more memory costs here, you mentioned in the context of gross margins. Any thoughts about raising prices a bit more aggressively or a bit more frequently? I think if I look back historically, you guys also talked about kind of balancing price increases with the opportunity to gain share. I'm just curious, like, on the share side of things, are you making progress there? Are there any metrics you can give us in terms of logos or, you know, incremental revenue or share that you can point to that kind of, you know, reinforce the idea that you guys are winning share? Thanks. Yeah, George. Thanks. This is Cooper. I'll start on the pricing. So we do have kind of an annual pricing review that we do. Typically, it's in our Q2 where we make price adjustments to factor in the innovation that we've been bringing to market, and that's part of our ongoing playbook. We've also been closely monitoring what's been going on with memory and SSD pricing, which has just been accelerating through the year and really kind of had a big step up in Q2. That's something that we continue to look at price adjustments to pass through some of that impact through to offset the impact on our gross profits. It's a combination of price adjustments and discount discipline, and that's something that we have to stay really agile with, and we'll continue to kind of monitor that, and make those adjustments on more of a one-off basis tied specifically to the rising costs of memory. Long term, as we think about share, you know, what we've seen, particularly recently, is our competitive takeout rate has gone up pretty materially. I think that really speaks to the hybrid multi-cloud adoption that our customers are seeing, where we're really the only vendor in this space that can support a customer's applications in any environment. That's really been resonating, particularly recently with the evolving threat landscape, as customers are looking for a platform approach to resolve a number of complexities in their environment. They've been coming to F5, and so we've been seeing a lot of share gain in that regard. Got it. Thanks very much. Appreciate it. Thank you. Our next question comes from James Fish at Piper Sandler. Hey, guys. Great quarter. Maybe to give François a bit of a break, especially the AI side, Cooper, for you, I'm gonna get at this tomorrow. On the two-point raise to guide year for the year, it looks about one point just from this past quarter's upside. Are you actually passing through memory much at this point? What are you guys assuming from memory prices kind of in the back half of the year? Do you have enough supply still lined up given the outperformance of hardware? How far along with you are on migrating to DDR5 from DDR4 in particular? Yeah, okay. I'll try to make sure I hit all three, but if I forget, please let me know. In terms of our revenue guide for the year, that doesn't really contemplate new pricing adjustments. I just referenced the work that we're doing around that. You know, any pricing adjustments that we did are more likely gonna flow through into FY 2027 just based on where we are with the cycle. It is something that we continue to look at, but it's not really a significant component to our back half revenue guide for the year. In terms of supply availability, yeah, we feel pretty good about our near-term visibility. We've really been out in front of this, and I'm really proud of our manufacturing team for identifying this as an issue, you know, going back to kinda mid FY 2025, where we increased our build forecast, we extended the length of our build forecast, and we took on additional supply and components that we thought might have more constraints. That's allowed us to secure the memory that we need, not just for the revenue outlook that we had at the time, but for the upside we've been delivering over the last six quarters or so. We feel pretty good, at least for the near term. Now, you get it longer term into FY 2027, the build forecast we have out there are within our needs for what we would expect to do on the high side for our systems business. Obviously, the visibility four or five quarters out is not as strong as it is in the near term, but right now we feel pretty good with where we sit. And then the last. The last question, DDR4. The current appliance lineup that we have leverages DDR4. Future appliance cycles will be on newer technology. We haven't discussed the timing of those, the next generation of appliances. Fair enough. If I could follow up just because if I look at your billings, you had a really strong deferred here, especially on the current side. What are you guys seeing with any net pull in or demand or build-up of product backlog here? As a lot of us here will kind of be reminiscent of the supply chain crisis just a few years ago, in that this would be about the time you guys would start to see a build-up in product backlog. Thanks, guys. Just to be clear, backlog does not show up in our deferred revenues. Our deferred revenue strength is almost entirely tied to our services business, where we have maintenance renewals. We saw the strength both on short-term and long-term. Deferred maintenance is actually a little bit higher on the long term. We did see some customers that were doing multi-year renewals. I'm certain that some of them are getting in front of, you know, perceived risk around price increases as they're working with other vendors. That is playing out to an extent, I would imagine, on the maintenance side. But the growth is not tied to product orders. Thank you. No problem. Thank you. Next, we'll move to Meta Marshall at Morgan Stanley. Great. Thanks. A couple of questions from me. One, just on the continued strength that you're seeing in EMEA and particularly around data sovereignty. You know, just how much further or kind of are there initiatives that you guys are taking to kind of capitalize on that opportunity? Then maybe second, you know, a very clean competitive landscape kind of on the ADC front, just as a lot of those vendors have kind of fallen by the wayside. Just as you move more onto the security space, just what are you seeing in terms of the competitive landscape there or the chance to gain mind share there? Thanks. Thank you, Meta. On EMEA, we think the trend that we're seeing there is durable. In fact, we saw an acceleration in that trend this quarter. You know, a lot of the customers, whether it's government agencies, the defense sector, of course, all regulated industries, including financial services, all have a strong push for digital sovereignty. That implies, in a lot of cases, you know, modernization, reinvestment in data centers, and also creating consistency of security and delivery across their hybrid multi-cloud environments. We're seeing an interesting trend there, where when, you know, customers went to the public cloud, they created separate team between public cloud and on-premise environment. Now that they're kind of coming back and creating true hybrid multi-cloud architectures, they are merging those teams together, and it's creating more opportunities for the provider that can cover their needs across on-prem and public cloud with a single platform. That trend, we think, is gonna continue in EMEA. Meta, we're leveraging it more. We have increased our coverage, our field coverage in EMEA, and we'll probably continue to do that in the future and probably accentuate our focus there on the defense sector 'cause we're seeing significant spend in defense in EMEA. As it relates to the landscape, the competitive landscape in security, we are focused, as you know, on runtime application and API security. In that space, we are seeing substantial growth, both for on-premises requirements and cloud requirements. Our differentiation is really the ability to serve both environment with an extensive security portfolio that includes application firewall, securing API, securing against bot, securing against DoS attacks. Frankly, none of our competitors, whether it's for application security or AI security, are really hybrid multi-cloud. The more we see customers embracing these architectures and needing a solution for both on-prem and public cloud, we are alone in that category and have a very, very strong value proposition. There are a few examples that I mentioned in my prepared remarks, where customers needed to secure APIs or they needed to secure their applications for a solution that worked both on-prem and in the cloud, and they came to F5. That consistency is more important than ever, that's where we are focused, and we're gonna continue to invest there. One of the highlights of the quarter for me, and I'm really proud of our product team for the work that we did this quarter, was incredible innovation in security. We released our AI-powered WAF. We have already a significant interest for that. A new solution for Agentic Bot Defense, which is really important now to understand which agents are authorized to access a model and which agents are not. We innovated on our AI security solutions with F5 AI Remediate, a new solution. We introduced new solutions that is AI-powered, F5 Insight. We brought API discovery on-premise with our BIG-IP solution. A lot of innovation that is accelerating, in part, by the way, because we're also leveraging AI to do that. I'm excited about the place we're at as the company that invested in hybrid multi-cloud architectures, I think ahead of everybody else. Is now starting to reap the reward of that, and now doubling down on our innovation, accelerating the pace of our innovation to capture a growing landscape of opportunities in front of us. Great. Thanks so much. We'll move next to Jeffrey Hopson at Needham. Hi. Thank you for the question. I just wanted to follow up on the memory situation and the gross margin implications. You gave guidance for, you know, the last quarter to have a step down from Q3 to Q4. Just curious if there's any more color on the magnitude of that step down. I think I had like around 150 basis points. Is this just a function of, you know, memory bought today, you know, takes about two quarters of flow through, and that's kind of dynamics at play? Thank you. Yeah. Thank you. Yeah, that's the dynamic. As I referenced earlier, we had taken a pretty extensive position early, and so we've been able to kind of mitigate any impact up through, you know, the H1 of this year. We're now starting to see some of the later purchases that we have been doing at higher price points are gonna start to flow through into the model. It'll start to flow into Q3, but it'll be kind of more at full run rate in Q4. It's an incredibly dynamic situation with memory pricing. It's, you know, we're trying to get the signals on what it could look like in the next few quarters. Our expectation is that there will be relief, you know, several quarters out. Right now, for at least through the better part of FY 2027, we would expect memory prices to stay elevated. Got it. Thank you. Maybe just on the US Federal side, it's been a couple of really nice quarters. Maybe just any additional information on the dynamics that are going on in US Fed. Generally, the dynamics are strong. We had a strong US Federal quarter. I would actually expand that beyond US Federal to the global government sector in the H1 was really strong. I think you are seeing that that's not, I would say, just an F5 trend. I think you are seeing that generally defense spending across the globe has been growing, and we are a beneficiary of that trend. In part because generally defense customers are investing more in security. In part also because those customers are very hybrid multi-cloud. We have a number of customers in the defense sectors that want air-gapped environment. Sometimes they want to leverage cloud as well, but a lot of them want air-gapped environment in their own data centers. We have been making investments for that opportunity, and we're seeing the benefit of that today. I think the Fed has been strong for us. Globally, government spending has been strong, and I think will continue to be for the next several quarters. Thanks for the colors. We'll move next to Amit Daryanani at Evercore ISI. Hi there. This is Caden on for Amit. I guess services growth at 2% was fairly muted. Can you maybe just touch on what's happening there, and maybe your updated thoughts on how to think about it in the long term? Thank you. Yeah. I'll start. You know, I would say ironically, I think this is tied to a good news story, which is the strength that we're seeing with the refresh. This is kind of a dynamic that we've seen with past refresh cycles. When you see a strong refresh in the very near term, it has a little bit of a headwind to the services business. Part of that has to do with you're replacing legacy appliances that have been carrying service for a number of years. As those come out of the system, then you backfill with the new appliances, there's a little bit of a lag on the maintenance revenue stream. Conversely, when we've had periods where customers were sweating assets, that's where you saw some strength in the maintenance revenue. The longer term picture is that the refresh has been very strong, and it's a refresh plus expansion story. What we're seeing is that we're getting better retention of that footprint than we had in prior cycles. Ultimately, that's gonna be a great story for services, because with the larger footprint that you get with maintenance revenue against, you're gonna see a better revenue outcome. In the very immediate term, as customers are making that transition, it's a bit of a headwind on the maintenance revenue. Next, we'll move to Tal Liani at Bank of America. Hi, guys. I think everyone is trying to basically get to the same question, whether this is finally a sign that AI is showing its impact on the company's growth or whether this is just a refresh story that is temporary. The question I have is: I think you touched on some of it, but why are we seeing the growth only outside of the US or less in the US? Meaning US is leading AI. Out of $80 million growth year-over-year, US was only $11 million growth. Last year, out of $56 million, it was $7 million. The majority of the growth is outside of the US. What I'm trying to understand is to link the story of AI uplift to the fact that the growth is coming only from outside of the US. Why don't we see more U.S.? That's number one. Number two, why do we see a lag between system growth that is consistently growing every quarter? You went from 160 to 226 in five quarters, but software is back to Q1 level of 25, so 160, give or take 164. Why do we see a lag between software? At the time of refresh, don't companies upgrade their software package as well, we should see growth in software? Thanks. Okay. Tal, thank you. I will start, and then Cooper may complement me on a couple of aspects you've raised. Let me start with the U.S. First of all, the trends of our business in the U.S. are very healthy. I would not read too much into a given quarter's performance of this or that region. Some of it is the timing of what was able to ship to which customers in the quarter. Generally, the trends that we're seeing around the expanding threat landscape that's creating more opportunity, we had a very strong security quarter, as I shared. That trend around expanding threat landscape driving more security opportunity for F5 is a global trend. The trend of AI I shared some numbers. Earlier I shared we did, we are approaching 100 customers in AI. We did about $50 million in sales in the H1 of the year in AI. That is a global trend that obviously includes the U.S., and the U.S. is actually pretty strong in that trend. The hybrid multi-cloud trend is also global and including, of course, in the U.S., where we are seeing more customers want resiliency. But that particular trend is, in fact, very pronounced in Europe, Middle East, and Africa because of digital sovereignty requirements there, and we are seeing extra growth coming from there. I would say when you're trying to dissect, you said you're trying to dissect what's a refresh versus what are a secular trend. The three trends that I've mentioned are secular, and they are global. In addition, of course, we have a strong refresh cycle. Cooper mentioned the attributes of the refresh. It is stronger than usual because we have an even higher retention rate than we've had in the past, and we have more customers expanding at the time of refresh. That is also a global trend. I, you know what I would take away is the three big trends that I've talked about are cyclical. Sorry, they are secular, and they are global, and they are at play in the U.S. as well. Yeah. Just to touch on the software and systems dynamic, just a couple of dynamics that I would point you to is, one, the software business is largely a subscription business. We said this quarter, 90% of our software business was subscription, and of that subscription business, the majority does come through in a renewal motion. So we are seeing strong attach of software at the time of refresh, but it's still a relatively small component of the overall software number. The majority of the software number is this base that we continue to expand over time, and we referenced this year that because the renewal cycle is coming off of our a flat software year from FY 2023, that there would be a bit of a slower growth rate this year, followed by a much stronger growth rate next year. Don't mistake the slower growth rate this year is having to do with expansion and attach rates at that time of refresh because those trends are actually pretty healthy. Got it. Thank you. Thank you, Tal. Next we'll move to Michael Ng at Goldman Sachs. Good afternoon. Thanks for the question. I just have two. First, this is just on systems revenue growth in fiscal 2027. Obviously, you guys have had two, you know, strong back-to-back years in systems revenue. Could you just talk about your early expectations around whether fiscal 2027 systems can grow, just given the strong refresher we've had in the last couple of years? A related question. It's been about, I think, four or five years since the launch of rSeries and BIG-IP VELOS. Are you expecting a new kind of ADC form factor system to drive another refresh cycle, particularly given all the incremental demands from AI? Just wondering how you guys think about new products on the ADC side. Thank you. Yeah. Okay. I'll start with the growth question. It's a little bit early to be guiding for next year, but yes, we do expect there to be a growth opportunity for the systems business, just where we're at with the refresh cycle right now and the strong trends we've been seeing, both in expansion at the time of refresh, but also new use cases. We haven't spent as much time on that, but we really have been seeing new growth, you know, pretty healthy growth outside of the refresh. Some of it's the AI use cases that we've talked about. We've been seeing higher takeout rates, from competitors. Some of the data sovereignty, digital sovereignty dynamics are coming through as new business in addition to expansion at the time of refresh. All of that's kind of giving us pretty good visibility, you know, two quarters out into next year, and we feel pretty good about the growth opportunity in that regard. As far as the next range of appliances and systems offerings, we wouldn't get into specifics at this point. Yes, of course, we are well down the path of planning. We think there are some pretty interesting growth opportunities further downstream as we start thinking about things like PQC. Continuous investment in innovation on our systems as well as our software has been something that's been critically important, and I think we're really kind of the only player in the space that has stayed steadfast in investing in systems, and I think that's really paying off right now. We've always felt like customers are going to need choice and that their environments are dynamic in how they architect. It can change over time. Giving that flexibility for customers to deploy how they need to is going to be important, and that's really coming through right now with the business that we're seeing. Great. Very clear. Thank you, Cooper. Thank you. That concludes our Q&A session. I will now turn the conference back over to Suzanne for closing remarks. Thank you, Audra. We look forward to seeing many of you during the quarter and especially at our Analyst and Investor Day in May. Watch for more details in a press release about the event coming soon. Thank you all for joining us. This concludes today's conference call. Thank you for your participation. You may now disconnect.