Good afternoon, and welcome to the F5, Inc. third quarter 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 that time, simply press star, then the number one on your telephone keypad. 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's Vice President of Investor Relations. We are here to discuss our third quarter 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 archive version of today's audio will be available through October 26th, 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 800-770-2030 or 609-800-9909 and use meeting ID 6076834. The telephonic replay will be available through midnight Pacific Time, July 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. Q3 was another outstanding quarter. We delivered 19% product revenue growth, driving 11% total growth. We have now delivered eight consecutive quarters of double-digit product growth, a signal that F5 is precisely where the market needs us to be. The reason is straightforward. The world runs on applications, including a new generation of AI-powered applications. The world is changing fast, driving higher demand for application security and delivery. AI is accelerating everything. More traffic, more APIs, more distributed architectures, and a dramatically larger attack surface. The complexity our customers are navigating has never been greater. F5 targets this complexity, simplifying and unifying application delivery and security across hybrid multi-cloud environments. We sit at the front door of the world's most critical applications, delivering and securing every app and every API. It's a position we've earned over three decades and one we are strengthening every day. F5 is at the intersection of three secular mega trends. Hybrid multi-cloud adoption, the expanding threat landscape, and the AI inference inflection. Our strong Q3 results reflect this trend and F5's alignment with where customers are investing. They also reflect the actions we are taking to drive faster growth. We are converting hybrid multi-cloud adoption into expansion opportunities, competitive displacements, digital sovereignty wins, and platform consolidation wins. We are innovating to ensure we are capitalizing on heightened demand for best-in-class application and API security. We are building AI momentum with another strong quarter of wins across AI data delivery, AI runtime security, and AI factory load balancing. Our top-line results tell that story clearly. We also continue to execute with discipline, delivering 14% non-GAAP earnings growth while continuing to invest in innovation and go-to-market capacity to sustain and extend our momentum. Looking ahead, we see strong demand driven by durable tailwinds. As a result, we are raising our fiscal year 2026 outlook to approximately 9%-10% revenue growth, up from 7%-8%. Cooper will cover more details about our outlook in his remarks. First, let me bring our growth dynamics to life with customer examples from the quarter. Each one illustrates why the forces reshaping IT are driving growing demand for F5 and reinforcing our critical role at the application delivery and security layer. Accelerating hybrid multi-cloud adoption is fueling multiple growth drivers for F5 across data center build-out and sovereignty, competitive displacement, and platform consolidation. During Q3, a large energy and utilities provider with more than 1,000 mission-critical applications running on F5 expanded its footprint significantly in a major overhaul of its cloud infrastructure across three regions and multiple data centers. When problems with its cloud environment began putting critical services at risk, the customer repatriated those workloads on premises and onto F5 hardware. This shift reduced its dependency on third-party platforms and restored confidence in the reliability of its delivery infrastructure. A European government agency wanted to standardize delivery and security across a growing multi-cloud environment while keeping select applications on premises for privacy and compliance. F5 delivered a sovereign-by-design architecture with consistent delivery, stronger security, and simpler operations across their multi-cloud environment. The customer refreshed and expanded their BIG-IP footprint. They also added distributed cloud services, including AI-powered WAF, to automate policy and advance threat protection. In an example that highlights both a competitive displacement and an AI data delivery win, we displaced an incumbent at a Fortune 100 global enterprise technology provider. The customer was looking to strengthen the delivery and security layer in front of its S3-compatible cloud storage service across 45 data centers worldwide. They selected BIG-IP for its ability to deliver the availability, resilience, and security required to support their AI and data-intensive workloads at global scale. The expanding threat landscape also continues to create significant tailwinds for F5. In the last several years, the front lines of cyber defense have shifted to the application layer. Attacks on IT assets grew more than 60% over the last three years. In that same timeframe, the volume of application layer attacks surged 140%. This is where F5 plays, as attacks at this layer continue to grow, our relevance and opportunity grow too. During Q3, a multi-brand telecommunications provider replaced a fragmented collection of security tools with F5 Distributed Cloud Services. The customer consolidated web application and API protection, bot defense, and DDoS mitigation on F5. We displaced both a SaaS-only competitor and a cloud-native toolset. F5's automated API discovery aligned with the customer's shift to microservices, reducing latency and keeping sensitive traffic off the public internet. Our unified management layer lowered operational overhead, supporting the customer's cost reduction goals and establishing F5 as an always-on security layer across their digital operations. In a similar consolidation win, a large multinational healthcare company pursuing a hybrid cloud strategy identified critical security gaps with their incumbent provider. Following a competitive evaluation, F5 Distributed Cloud Services displaced the incumbent, providing web application and API protection, DDoS mitigation, and bot defense on a unified platform. Since deployment, threats that previously evaded detection are now being identified and blocked. F5 improved security outcomes while reducing operational costs by consolidating multiple functions. Frontier AI models have escalated the threat level for organizations globally, creating a new layer of urgency on top of existing security demand. Customers know the threat equation has changed, and early movers are already strengthening their defenses. For instance, a major European retail banking institution, an existing F5 customer, accelerated plans to upgrade its application security infrastructure as the potential for AI-driven attacks escalated. The customer had been evaluating AI-based WAF solutions for nearly a year, and F5's AI-powered approach, including machine learning-based threat detection, granular per-application policy controls, and behavioral bot defense, differentiated us from their incumbent provider. In the first phase of their upgrade, they are deploying F5 Distributed Cloud Services as the front door to their application environments, creating a consistent, scalable on-premises bot defense architecture. This foundation can be extended to every new environment they deploy, mitigating both agentic and traditional bot attacks. We saw the same urgency play out in Asia, where one of the region's largest financial institutions and a longstanding F5 customer accelerated its application security strategy amidst rising AI-driven attacks and zero-day vulnerabilities. The customer doubled down on F5 as its strategic security vendor, deploying our AI-powered WAF to automate threat detection and accelerate virtual patching at scale. Finally, the AI inference inflection is driving demand for F5, both indirectly as customers expand hybrid multi-cloud deployments, and directly through our three AI use cases, AI data delivery, AI runtime security, and AI factory load balancing. Momentum is building across all three. In fact, our cumulative total customer count for direct AI use cases grew 50% just in Q3, underscoring the accelerating pace of demand. A few notable wins from the quarter illustrate our traction. In AI data delivery, we are accelerating secure AI data pipelines, ensuring storage, networking, and data delivery and keeping AI clusters fully utilized across hybrid and multi-cloud deployments. Earlier, I highlighted an AI data delivery win and competitive takeout. In another sizable win during the quarter, a leading autonomous systems manufacturer selected F5 over a competitor to handle escalating data volumes and throughput demand. The customer previously deployed F5 to repatriate AI training data from public cloud to on-premises data centers, deploying BIG-IP in front of their AI storage environment to improve latency. With exploding data volumes and throughput demand, the customer needed additional capacity. F5 outperformed the competitor, simplifying connectivity and storage sharing across their data centers, and expanding our role as the trusted traffic layer between storage and compute. In AI runtime security, we are safeguarding AI applications, APIs, and models from abuse, data leaks, and attacks like prompt injection. We are also delivering real-time threat defense, red teaming models, and robust guardrails. In Q3, a U.S.-based professional sports league was rolling out AI-powered applications to analyze highly sensitive data, including player health information and team strategy insights. With competitive integrity and league trust on the line, they needed confidence that their applications could be proactively tested for vulnerabilities and protected continuously in production. The customer deployed F5 AI Guardrails and F5 AI Red Team on premises to validate applications before launch and defend them at runtime. Our breadth of functional coverage beat out a competitor and enabled the league to standardize on F5 as their single trusted vendor. In AI factory load balancing, we are optimizing traffic and GPU utilization both across and within AI factories, increasing token throughput, reducing time to first token, and lowering per-token costs. In a Q3 AI factory load balancing win, a service provider in our EMEA region selected F5 to power its sovereign AI factory, purpose-built to deliver GPU as a service and AI model as a service. To support these offerings at scale, the customer deployed BIG-IP Next for Kubernetes, F5 Distributed Cloud Services, and NGINX, enabling secure multi-tenancy, traffic segmentation, token governance, and large language model API endpoint protection. Before I pass the call to Cooper, I will speak to innovation at F5. The customer examples I shared highlight what we are hearing consistently from customers. They are modernizing their architectures, and at the same time, the requirements for application delivery and security are rising. That's exactly why we are innovating to lead the next generation of capabilities and get them deployed with customers faster so they are ready as requirements intensify. Frontier AI has fundamentally altered both sides of the security equation. In the post-Mythos era, attackers can use AI to discover vulnerabilities, develop exploits, and vary attacks at a speed and scale that was previously impossible. This is compressing the time between vulnerability discovery and exploitation and forcing every enterprise to rethink how it protects its applications. In this environment, security cannot depend only on identifying a vulnerability and issuing a patch after the fact. Customers increasingly need runtime protection, the ability to detect malicious behavior and stop attacks while their applications, APIs, models, and agents are running. This is precisely where F5 is accelerating innovation. Our AI-powered capabilities in F5 Distributed Cloud WAF use a layered detection engine to assess the intent and risk of each request, moving customers beyond static signatures and manual policy tuning. Since launching in Q2, 15% of our F5 Distributed Cloud WAF customers have adopted the capability, and of those, 75% are running in blocking mode versus monitor mode. That shift from monitor to block reflects growing customer urgency around zero-day threats, and it's warranted. In real-world use, our AI-powered WAF is already stopping zero-day attacks without requiring new signatures. We are applying the same urgency to the security of our own products. This quarter, we shipped our first hardened software release as part of a new monthly rather than quarterly cadence. We are hardening our software releases by applying advanced and preview frontier models to vulnerability discovery and remediation. As a result, we are finding and fixing issues faster. More importantly, we are getting those fixes into customers' hands faster. This is a rigorous approach that we believe sets F5 apart in the world of security. Delivering fixes faster only matters if customers can deploy them. That is why we also introduced new fleet management capabilities in F5 Insight. F5 Insight gives customers visibility into software versions, security posture, and update readiness across their BIG-IP estates with guided workflows that simplify upgrades and patching. F5 Insight was launched last quarter, and the strong early uptake is evidence that customers want a faster, more operationally practical way to reduce risk. Together, these innovations create a continuous defense model for the AI era. We are using AI to identify risk earlier, protecting applications at runtime, delivering hardened software releases faster, and helping customers deploy those protections across their environments. This is how F5 is turning the disruption created by frontier AI into stronger security and greater resilience for our customers. Now, I will turn the call over to Cooper, who will walk through our Q3 results and our outlook. Cooper? Thank you, François, and good afternoon, everyone. Q3 marked another quarter of solid execution, with both revenue and earnings well above the top end of our guidance. We continue to see strong demand, with customers' hybrid multi-cloud adoption driving expanding opportunity for F5. I will first review our Q3 results, followed by our guidance for Q4. We delivered a strong Q3, growing revenue 11% to $865 million, with a mix of 54% product revenue and 46% services revenue. Product revenue totaled $463 million, increasing 19% YoY, while services revenue of $402 million grew 3% YoY. Systems revenue totaled $240 million, up 32% over Q3 FY 2025. Our software revenue of $223 million grew 7% YoY. Subscription-based software revenue totaled $201 million, up 9% year-on-year, representing 90% of our Q3 software revenue. Perpetual licensed software totaled $22 million, down 4% YoY. Revenue from recurring sources contributed 69% of our Q3 revenue. Shifting to revenue distribution by region. Revenue from the Americas grew 11% YoY, representing 55% of total revenue. EMEA delivered yet another robust quarter, with 27% revenue growth, representing 30% of revenue. Finally, APAC was down 11% against a very strong year ago period, representing 15% of revenue. Looking at our major verticals, enterprise customers contributed 71% of Q3's product bookings. Government customers represented 19% of product bookings, including 7% from U.S. federal. Finally, service providers contributed 11% of Q3 product bookings. Our continued financial discipline contributed to our strong Q3 operating results. GAAP gross margin was 82.2%. Non-GAAP gross margin was 84.2%. Our GAAP operating expenses were $498 million. Our non-GAAP operating expenses were $426 million. Our GAAP operating margin was 24.7%. Our non-GAAP operating margin was 35%. Our GAAP effective tax rate for the quarter was 8%. Our non-GAAP effective tax rate was 12.4%. This is below our previously guided annual range, primarily driven by discrete benefits associated with the filing of our annual federal income tax return and changes in unrecognized tax benefits during the quarter. Our GAAP net income for the quarter was $208 million, or $3.62 per share. Our non-GAAP net income was $272 million, or $4.73 per share, reflecting 14% EPS growth from the year-ago period. I will now turn to cash flow and balance sheet metrics. We generated $316 million in cash flow from operations in Q3 and free cash flow of $281 million. CapEx was $36 million. DSO for the quarter was 45 days. Cash and investments totaled $1.63 billion at quarter end. Deferred revenue was $2.19 billion, up 12% from the year-ago period. In Q3, we repurchased $100 million worth of F5 shares at an average price of $299 per share. We had $422 million remaining on our authorized share repurchase program as of the end of the quarter. Finally, we ended the quarter with approximately 6,600 employees. I will now speak to our outlook for Q4. We expect that the market trends we've outlined, hybrid multi-cloud adoption, threat landscape expansion, and AI inference inflection, will drive continued strong demand in Q4 and into FY 2027. As a result, we expect Q4 revenue in a range of $870 million to $890 million, reflecting just under 9% YoY growth at the midpoint. We now expect Q4 non-GAAP gross margin in the range of 83% to 84%, an improvement from our prior view. This improved outlook reflects a more favorable product mix toward higher performance systems that carry stronger gross margins along with lower Q4 component cost increases than our early estimates. While we are encouraged by the improved gross margin outlook for Q4, we are not revising our FY 2027 gross margin guidance of 80%-82% given the dynamic pricing environment for memory and storage components. We estimate Q4 non-GAAP operating expenses of $430 million-$442 million. We expect Q4 share-based compensation expense of approximately $68 million-$70 million. We anticipate Q4 non-GAAP EPS in a range of $4.14 to $4.26 per share. Based on our strong Q3 results and our Q4 outlook, we now expect to finish FY 2026 ahead of our prior guidance. With our Q4 revenue outlook, we now expect approximately 9%-10% revenue growth for the full year, up from our prior outlook of 7%-8%. 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. We expect FY 2026 non-GAAP gross margin in a range of 83.5% to 84%. We expect non-GAAP operating margin in a range of 34.5% to 35.5%. We expect our FY 2026 non-GAAP effective tax rate will be in a range of 18% to 19%, reflecting the impact of the tax rate benefit realized in Q3. We expect FY 2026 non-GAAP EPS in a range of $17.21 to $17.33, up from the prior range of $16.25 to $16.55. Finally, we expect our full-year share repurchase to be at least 50% of our free cash flow. With that, I will pass the call back to François. Thank you, Cooper. To recap briefly before we go to Q&A, our wins this quarter and our financial performance tell a consistent story. The market is moving toward F5. Hybrid multi-cloud is accelerating, threats are growing more sophisticated, and AI inference is becoming core to how applications run. These are durable, structural shifts that are benefiting F5. We are not just riding these trends, we are using them to fuel our growth. We are innovating at a pace that is opening new markets and new use cases for F5 while deepening our relationships with existing customers and expanding our footprint across their environments. Our F5 Application Delivery and Security Platform delivers and secures every app and every API across on-premises, cloud, and edge environments on a single unified architecture. We eliminate the complexity of stitching together point products and give customers consistent performance, security, and policy wherever their applications run. As traffic, data, and AI workloads become more distributed, that control point becomes even more valuable. We are executing with discipline, investing with conviction, and innovating with urgency, we look forward to continuing that momentum into Q4. Operator, please open the call to questions. At this time, if you would like to ask a question, press star, then the number one on your telephone keypad. To withdraw your question, simply press star one again. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Tim Long with Barclays. Please go ahead. Thank you. Excuse me. Two questions if I could. First, on the AI front, François, thanks for detailing the wins and the different solutions there. Just curious, I think last quarter you gave a little benchmark number for revenues. Are you seeing and expecting the revenues for your AI-related, direct related business to grow in line with that customer base? Should we think that 50% growth is a ballpark number there? Then the second one may be for Cooper on gross margin. Sounds like, in the near term, the component costs are not as bad as expected, you still seem to be building in a buffer for next year. Could you maybe talk about near-term gross margin-related easing and maybe potential for pressure? I guess it's still a pretty dynamic environment. Thank you. Thank you, Tim. I'll start on the first part of your question. On AI, I wouldn't necessarily approximate the growth in the number of customers with the growth of revenue. We did give an indicator of that last quarter that we had passed the $50 million revenue mark. That particular number we don't intend to update every quarter. We may come back to that at the end of the year, but I can tell you that the momentum in direct AI use cases is very strong. We've seen AI traffic generally increase with our customers, but specifically, AI data delivery continues to see strong momentum and a gain in customers. We also had a very strong quarter in AI security. The number of AI security customers actually grew 100% just in the quarter, driven by a number of customers wanting best-in-class security in front of their AI model and their AI applications. We're very excited about the momentum that we're seeing there. In addition, Tim, I would just remind you as well that our AI opportunity isn't just these direct AI use cases. There is an indirect opportunity that manifests itself in the amount of traffic that we're seeing with our customers on our ADC systems. Where you see that is the amount of expansion we're getting on ADC systems, the growth that we have seen this year in hardware. This quarter, I think hardware growth was 32% YoY. If you look at even the first three quarters of the year, the hardware growth is above 30%. Some of that expansion is because our customers are now scaling inference for AI in their enterprise environments, and we are in front of that traffic. Two categories of opportunities, and we're seeing strong momentum with both today. Tim, thanks. On the GM question, we saw the favorable result in Q3 and a little bit better outlook in Q4, and it was really tied to two dynamics. The first is that we've, s eeing a stronger adoption of some of our more high-performance appliances that carry a better gross margin profile. We're sourcing some of these components around memory and SSDs from multiple vendors as part of our strategy to get in front of any potential supply chain risk on these components. We had just a better outcome in terms of delivery from some vendors that carry a little bit lower cost profile on those components for Q3 and Q4. That's really what drove the improved outlook. We're not updating the guidance at this time for next year, just given how dynamic the environment is. That's something we'll continue to monitor. Okay. Thank you. Your next question comes from the line of Joseph Cardoso with J.P. Morgan. Please go ahead. Hey, thanks for the question here. Maybe for my first one, can you just touch on, maybe going back to the mix impact on the high-performance systems that you're seeing here. What are you seeing that's driving customers to kind of move mix-up into these higher performance systems? The second aspect there is more how sustainable that mix-up is into the high-performance systems. I have a follow-up. Thank you. I think it's a lot of the dynamics that we've been talking about over the last several quarters. We talked about our hardware business, and so much of the growth is coming from expansion use cases and digital sovereignty. The big one is really the traffic we're seeing from AI use cases. I think that it's really driving a need for customers to quickly provision higher performance units in support of that expansion initiative. Those higher performing units have higher gross margins. That's a trend that we think will continue. I think it's still relatively early. It's one of the dynamics that's really been driving the overall growth we've been seeing in our systems business. Got it. Maybe just quickly on an update on how you're thinking about the trends between software and system revenues, and maybe more specifically there as we think about software accelerating, obviously still doing high single digits versus the long-term guide of more into that double-digit type of framework. I guess, how are you guys thinking about potentially seeing an inflection upcoming? Is this still more in FY 2027, better visibility there? Any kind of comments that you can provide around the trajectory of software here? I'll provide a couple of thoughts. First off, just right now our pipeline looks really good. We feel good about how we're positioned for the remainder of this year in terms of software. We're seeing strong trends on our distributed cloud business as well. We've talked about in the past that our SaaS and managed service business has been a little bit of a headwind to growth in prior years because we were undertaking a transition on some legacy offerings. We're effectively through that transition now. We anticipate that that is going to be a growth driver to our software business next year, along with a much stronger renewal cohort on these multi-year agreements that we've been booking over time. We've got a really good base as we head into FY 2027. We've got pretty good visibility as to the utilization that we're seeing from customers across those software opportunities. That gives us a good window into the expansion that we would expect to see for next year. It all adds up to what we think is a pretty compelling growth opportunity, getting back to a solid double-digit growth outlook for next year. Thank you. Your next question comes from the line of George Notter with Wolfe Research. Please go ahead. Hi, guys. Thanks very much. I guess I wanted to ask about progress with the iSeries refresh. I'm just curious what your updated comments are and the pacing of the refresh. Obviously, the end of the support is the end of this year. I'm just curious about how much install base is left, how you see that kind of playing out in terms of the migration of iSeries to rSeries. Also just the impact of Mythos and Frontier AI models. I assume that's going to help kind of pull forward that refresh, but I'm wondering if you guys are seeing it. Thanks a lot. Yeah, I'll start. Then I'll let François follow up on the Mythos effect. Yeah, it's going really well. When we talk about refresh, we've talked a lot about the dynamic we've been seeing with this refresh that we've likened it to a refresh plus because of the expansion that we've been seeing at the time of refresh. Just in terms of refreshing the existing iSeries base, I would say it's been very orderly and in line with our expectations. It's been very consistent quarter to quarter. As you noted, there's an end of software support date in our Q2 of 2027, which we think will be a bit of a driver for acceleration of that activity over the next few quarters. The thing that's been more interesting to us is that rate of expansion we're seeing at that time of refresh has continued to improve. Of course, the business we're seeing outside of refresh has also been very strong. We're seeing really good growth in terms of expansion, both at the time of refresh and capacity expansion outside of the refresh. We're seeing new projects around data center modernization, digital sovereignty, and again, performance associated with AI-driven workloads. George, on the Mythos effect, I think we're seeing that with our customers in a couple of ways. The first is we're seeing a number of customers really focus on addressing technology debt, and that includes avoiding to have aged estates. That is actually a tailwind to the refresh motion because some customers that may have had aged estates and may have been dragging their feet to refresh those estates are actually taking that very seriously. We're also seeing customers that are focusing a lot on remediating vulnerabilities that may exist in their environment, and in some cases have stopped development of new applications and new features to go and address vulnerabilities. The other effect for F5 is what's happening in runtime security. What customers realize now is that, if you don't have the time, if you don't have the same window that you used to have to be able to patch your applications, having the path to the applications be secure is incredibly important. That's precisely where F5 is positioned, in runtime security in front of applications. We're seeing that. We had a very strong security quarter. Just to give you a manifestation of that, we just launched, a quarter ago, our AI-powered web application firewall on distributed cloud, and the uptake of that has been extraordinary. It's been the fastest-growing uptake of any product we've launched, really ever, with hundreds of customers already running on this product in the first few months of the technology. The vast majority of them actually using the product in blocking mode to stop potential AI-powered attacks. This product has already stopped potential zero-day attacks that would have come onto these customers. We see a lot of energy with AI-powered security, and that's why we're continuing to make these investments in WAF API security to drive that. Even beyond just AI-powered security, we're also seeing traction with securing AI itself. I mentioned the number of AI security customers for F5 have grown 100% this quarter, largely because there is also realization in the market that best-in-class security is also needed for AI models. You have probably followed last week's saga of OpenAI and Hugging Face, and that just reminded all of us of the importance of having best-in-class security for AI models, because the security that's provided by the frontier model providers is inadequate. We have invested in best-in-class security, and we're seeing that traction now. I think I give the example in the script, but one of the major sports leagues in the U.S. just recently put in production AI-enabled applications that have sensitive data around player health or team strategies and needed to have best-in-class security for these AI models and chose F5 to provide that. The effects of Mythos are actually wide-ranging. We're seeing that in refresh for customers that want to kind of remediate tech debt. We're seeing that in more energy in AI-powered security in front of applications. We're also seeing it in terms of the momentum we're seeing in AI security now to secure AI models. Thank you very much. Your next question- Thank you Your next question comes from the line of Matt Hedberg with RBC Capital Markets. Please go ahead. Great. Thanks for taking my questions, guys. Congrats on the quarter. Great to see. My first question is kind of a follow-up to a couple of prior questions. Obviously, you're seeing strong refresh activity in Cooper. I think in a prior question, you talked about seeing strong capacity expansion outside of the refresh, and obviously a lot of new business opportunities here in AI. I guess philosophically speaking, growth from this cycle will peak at some point. How should we think about growth post this cycle? Do you think it'll be a shallower kind of trough than post prior cycles? Yeah, I would say that is our belief, for a couple of reasons. One is just that in prior cycles, we didn't really have this kind of contribution to sales coming from new projects, whether that was digital sovereignty or AI-driven performance needs. The customer takeout opportunity-- or sorry, competitive takeout opportunity has been stronger in this period as well, compared to where we were at the last time we had a product cycle. Those are all opportunities for us to continue to drive healthy growth. We think that it's kind of a bit of a wild card, but post-quantum crypto is on the minds of a lot of our customers, and that potentially could drive an earlier adoption of the next product cycle. It's really too early for us to try to handicap that, but I think that those are all dynamics that give us confidence that we're going to continue to see healthy growth from this business over the next several years. That's great to hear. I've been really fascinated with sort of your AI factory success and being part of the NVIDIA reference architecture certainly seems to be helping you. François, in your prepared remarks, you talked about token costs, I guess I'm wondering, could you talk a little bit about the ROI and maybe how it's added to growth when you're seeing customers see higher GPU utilization and optimize token spend? Yes, Matt. I think as I shared before, our traffic management software, when paired with NVIDIA DPUs, really on a number of tests has shown the ability to generate 40%, like anywhere between 30%-50% more tokens for a given GPU infrastructure. We think that value proposition is compelling. Here's what we're seeing in the early market work that our teams have done with customers. Where we are actually, interestingly, where we are seeing traction now is more with sovereign AI customers. This is typically telcos outside of the U.S. that are implementing AI factories and are starting to put these AI factories in production, and they are quite cost-conscious and really want to get the most amount of tokens for the infrastructure that they're building. We think that will continue. That said, those sovereign AI factories are generally relative to the neo-cloud and neo-scalers. They're not the largest build of infrastructure. With the neo-scalers, what we're seeing today is most of them, their business model is GPU as a service and offering GPU as a service typically to hyperscalers. The neo-scalers themselves are not concerned with how many tokens they're generating per GPU, given that they're renting on a GPU unit. We think that is going to change. We think the market is going to evolve, that the economics of tokens are going to become important for neo-scalers as they go into the enterprise market, or even as they sell more and more to AI native companies. We think that market is going to evolve over time, and neo-scalers will care more about the tokenomics, which is really the value add that F5 provides. Great. Thanks. Your next question comes from the line of Simon Leopold with Raymond James. Please go ahead. Great. Thanks for taking the question. I guess I'm trying to understand why systems are continuing to outgrow software, I guess a couple theories I wanted to throw out there. One is just a total cost of ownership for systems maybe being less costly than the TCO on the software solution, whether it's a possibility that your customers are having trouble getting the servers to run software on, we've heard that from others, If there are other reasons for this growth difference. Thank you. No, it's a really good question. Look, in terms of software, the growth that we're seeing this year is actually very much in line with our expectations, the expectations we had set at the beginning of the year. I think we had shared the renewal cohort coming from the 2023 year was not a very strong renewal cohort, We expected growth this year that was in the mid-single digits. I think we will do that, maybe a little better. That's been the expectation and conversely, as Cooper shared earlier, we expect software growth to re-accelerate next year, in part because of a much stronger renewal cohort from 2024. As it relates to hardware, there are a number of dynamics that are playing out that are really causing our customers to want to put more hardware in. One, of course, is we are in a refresh cycle, of course, that provides strength to hardware bookings. There are other structural shifts we're seeing that are driver customers to want higher capacity hardware, higher throughput for higher performance. Those dynamics include some. Basically, sovereignty is a big part of it. We're seeing the customers in. We started to see this trend in Europe a few quarters ago, but now it's expanded to the Middle East, it's expanded to Asia, where customers are repatriating workloads from global hyperscalers into local alternatives. In fact, there is a forecast out by one of the analysts, I think this quarter, that there's an expectation now that 75% of enterprises internationally will repatriate workloads into local alternatives inside the next three to five years. We're seeing that phenomenon. Sovereignty also implies often building on their own infrastructure stack in their private data centers. There's also a dynamic around competitive displacement. We continue to win share from our competitors in hardware because we have placed bets on hardware innovation when they did not. Today, we find ourselves with hardware that has a better throughput, higher performance, higher capacity, less power consumption, and those benefits are translating into customer wins. Then there's another dynamic around hardware, which is consolidation, when customers have used multiple point solutions and want to consolidate on F5. All of these dynamics are really driving the growth that we're seeing on hardware. Many of these elements are structural in nature and we think will continue, which is the reason our Investor Day a month ago, we changed our long-term guidance on hardware, which had been in the mid-single-digit decline, and we confirmed that we expected hardware to be growing for the next few years. Thank you. Your next question comes from the line of James Fish with Piper Sandler. Please go ahead. Hey, guys, nice quarter. Maybe just specifically, what are you seeing on the inbound interest and pipeline build specifically on F5 AI Guardrails as of late? Are you seeing these customers specifically budget for AI agent security as sort of this new line item, or is it kind of being bundled into that broader application security platform? I just have a follow-up on billings. It's interesting. It varies from customer to customer. What we're seeing right now is in financial services and then other organizations that are quite advanced or sophisticated in their use of AI or their care for safety, we are seeing that they are budgeting specifically for securing AI. That includes securing AI models, securing AI agents, governance around AI, discovery of what their employees are using for AI. It's a number of functions, and we have invested quite rapidly in this area around testing and penetration of AI models, securing AI models in production. We made an acquisition this quarter of a company called SurePath AI that complemented our capabilities with discovery. We launched our AI security platform because we're seeing customers increasingly wanting more and more of these point solutions combined into a single platform. We think that's where the market is headed, just like the WAF market consolidated a few years ago with WAF, DDoS, API, and bot defense in a single platform. We see the same consolidation of functionality happening with AI security platforms. That's where we're seeing very strong interest. I shared earlier that the number of customers in that area doubled this quarter, and we expect that momentum to continue to grow with the investments we're making in this area. Cooper, just for you, obviously good top-line quarter, but actually if I look at billings here, another exceptional quarter again. Are you seeing product backlog build and that explains some of this, or is it more so the services lag here just has yet to flow into the revenue line? Thanks, guys. Yeah, thanks. No, it doesn't have anything to do with backlog because we wouldn't have billings yet. We don't bill until we ship product. It's more to do with, as you said, the lag factor on the service revenue, then we had a strong bookings quarter with new FCPs, there's a portion of the FCP booking that gets deferred. 2/3 or so gets recognized up front and the remainder gets deferred, that drove some strength in the deferred revenue on the deferred subscription revenue, which fed into that billings improvement. Your next question comes from the line of Meta Marshall with Morgan Stanley. Please go ahead. Great. Thanks for the question. Maybe first for François. Just in the three AI use cases, data delivery, runtime security, and load balancing, noted the commentary on the growth in customers on the AI security side. Just are there any developments in terms of deal sizes or just how you would size any of those opportunities versus, particularly as runtime security and load balancing mature? Then maybe just a follow-up question for Cooper, just if there's any kind of contribution to the quarter we should be mindful of from pricing, if you could just outline that. Thanks. Thank you, Meta. Look, the deal sizes, it's interesting because there's a wide divergence. They could be as small as hundreds of K's to be as large as we've done some eight-figure deals in this area of AI. I think in security, as we move more towards platform over time and we consolidate these functionalities, deal sizes will obviously grow. In AI data delivery, we are already seeing substantial deals because AI data delivery is all about getting data faster to models in training or for inference. Customers are highly sensitive to latency, want very high throughput, generally that means they want high-capacity hardware to perform that leads to large deal sizes. In AI factory load balancing, the deal sizes are initially smaller when you have factory build-outs of just a few hundred GPUs. I think as we get into more of the larger AI factories, we should see greater deal size there. Overall, look, I think our AI revenues are growing quite rapidly, and we may be able to touch on this more at the end of the year once we have a year's worth of data to share with you. In terms of price realization. We saw a modest contribution from price realization that was tied more to our discount governance. We've been pretty effective this year continuing to improve our discounting over time. The adjustments that we've made to pass through some of the costs on components will be more of a contributor to our FY 2027 revenue, but nothing that really hit our revenue in Q3. Great. Thanks so much. Your next question comes from the line of Tal Liani with Bank of America. Please go ahead. Hey guys, it is Tomer Zilberman on for Tal Liani. Just wanted to ask on a geographic basis, if we look at your Americas revenue, it accelerated from the last few quarters of low to mid-single digits, I think you said to 11% on the call. Just wanted to ask what the trends you saw on the geo. Was it more of a catch-up because of the last few quarters of under-investment or what did you see there? Yeah, I will take that one, Tomer. Really, we have seen good strength across all theaters from a bookings perspective. It is more to do with the timing of shipments, and François noted that last quarter on the call because the growth rate was down a bit from Americas, and we said that the underlying demand is actually quite strong. Then we thought that that would play out over time as we were able to ship more of those orders. In this environment, there is a bit of a lag on shipping time from when we book the orders. We saw that come through in the reported revenue in Q3. You will also notice this quarter, APAC is down 11% on a revenue reported basis. That is also not indicative of the underlying demand strength that we are seeing in APAC. I think just in this environment where there is a little bit more of a lag on the shipping timing, you are going to get more of that variability in the growth rates. Over a longer period of time, multiple quarters, you start to see that growth rate start to normalize. Broad answer to your question, the underlying demand growth has been healthy across all of our theaters. Got it. Maybe as a follow-up and a similar question to touch on the subscription line. Last quarter it was, I think, flat on a dollar basis sequentially, and you talked about a weak renewal base, which I think you also mentioned on the prepared remarks today. If I look at 2023 as a weak renewal base, I think an aggregate is what you mentioned. What drove the stronger performance this quarter? When we talked about the weak renewal base, we're largely talking about the full year. We had flattish software revenue in FY 2023 against FY 2022. As a result, the base that we had to renew for this year was more modest than it typically would be, and it's going to be much stronger in our FY 2027. From a sequential basis, you still get that variability. We did see some strength in our subscription business this quarter tied to a stronger cohort, and also good expansion in the quarter. Overall, the growth rate has been a little bit more orderly in terms of the quarter-to-quarter variability in the growth rate this year than what we've seen in past years. Next year, we think that the growth rates will be stronger in the second half of the year. It's just one of these things where we're always tracking what that base is that's coming up for renewal, what the expansion opportunities are, and then trying to give some visibility if there's any unusual patterns that we see. For this year, it's been more muted, the variability in the growth rates. Got it. Thank you. Your next question comes from the line of Michael Ng with Goldman Sachs. Please go ahead. Hey, good afternoon. Thank you so much for the question. I just had a few follow-ups on kind of implications for 2027. Maybe first on the systems side, just given all the momentum that you have there in terms of refresh and the expanding use cases, do you see upside to the prior outlook of mid to high single digits for 2027? Just would love any general thoughts there. Certainly hear you on the reiterated gross margin outlook for 2027. Just would love some commentary on whether you are seeing some better operating leverage now, but are kind of reserving some margin in the case that there's some outsized commodity cost inflation. Just trying to understand what's kind of embedded in the reiterated 80%-82% gross margin guide for next year. Thank you. Michael, thank you. Let me start and then Cooper will address the gross margin question. On the revenue expectations for next year, as you know, we've given guidance of upper single digits growth for 2027 and actually beyond at our Investor Day about a month ago. We're not updating that guidance today. Generally, we feel good about what we're seeing in the marketplace, the demand we're seeing both for hardware and our software. Beyond the immediate demand, what we are most pleased about is the structural demand drivers that we're seeing. We continue to drive competitive wins. We continue to drive consolidation onto F5. We have a number of customers that were using point solutions from cloud providers or other players in the space. Our whole investment into a platform strategy with our F5 Application Delivery and Security Platform, we're seeing real momentum with the ADSP platform and the real effects of that in consolidation. We just launched F5 Insight also this quarter, which really glues elements of our platform together. We're seeing very strong adoption of F5 Insight among our customers, which tells us that they're seeing significant value in our platform. Of course, we're seeing growth in AI use cases across data delivery and security. You take all of these drivers, I think we feel good about the guidance we've given for the next three years. We'll talk specifically about 2027 on our October call. In terms of the gross margin, we didn't reiterate our gross margin for next year. We just are not updating at this time. I know it's a little bit of a subtle nuance, but really, I think the way to think of it is we're encouraged with what we saw in Q3 and in Q4, but we're cognizant that things are fluid and transparently, we are getting mixed signals. We've seen a lot of signs of some stability in terms of memory pricing this quarter. We also hear other signals that it still could be more variable. We're looking at the rest of our BOM as well and other components that we're sourcing, and just as early as it is right now, we felt like it was too early to make an adjustment to our gross margin forecast for next year. That said, I think our manufacturing team has done an outstanding job in terms of making advanced purchases on some of these more scarce components, diversifying the supply base, we feel like we've got a pretty good handle on the supply that we need for our revenue for next year. We think we'll be in a position to give a better update on the gross margin guidance in October. Great. Thank you for all that incremental color. Super helpful. Your next question comes from the line of Jeffrey Hopson with Needham. Please go ahead. Hi, thank you for the question. We're seeing with AI workloads, some of a recent push to moving things on-prem for security or sovereign reasons. Just curious, in those more regulated industries that are on-prem, where are we in that adoption of AI and where are we with newer AI companies starting to consider on-prem deployments? Thank you. Well, let me start. In regulated industries, frankly, it varies from an industry to the next and from one customer to the next. I think in financial services, we're seeing rapid adoption of AI. I think we're also starting to see that in healthcare, and we're seeing our telco customers also regulated, but leveraging AI to significantly improve productivity and operations and the experience of their customers. In terms of what stack are people using and what models people are using, what I think we're seeing already is very strong signs that both enterprises, government agencies, and telcos are all going to use a mix of models. They are going to use closed models from frontier AI providers and open weight and/or open source models. They are going to consume public AI from the public cloud, and they are going to build their own stack, their own infrastructure on-premise to run their models. They're going to want to basically find the best model for each task, and ideally the cheapest model for each task. That multiplicity of models and types of infrastructure is exactly what plays to the strength of F5, because we have built the hybrid multi-cloud company precisely to serve and enable that choice for customers. Just in the same way that we predicted several years ago that our customers would end up wanting to have the choice in infrastructure environments and deploy applications in multiple infrastructure environments, and we designed our company to meet that moment. We think the same thing is happening with AI, where customers want the best model, the best environment for each task, and they're going to want a partner that can deliver these models and secure all these models across any environment, and in any cloud. That is the company that we've built. That is the company we're building for AI, and we are, I believe, meeting the moment, and we're very excited about the ways in which different customers are going to deploy AI and the way we're going to enable that choice for them. Got it. Thank you. Maybe just a follow-up on agentic workloads across apps. Is there any way to think about how they may be similar or different than traditional workloads and the resulting impacts on F5, then? Thank you. Hi there. Agents are fundamentally just regular applications with the exception that they're invoking models. They're invoking models for inference. Agents also have the ability to make subsequent calls inside of a data center or an environment. What we really see is agents are increasing data center traffic or hybrid multi-cloud traffic inside these organizational environments. For F5, what that fundamentally means is sitting in front of more of this traffic that's going to APIs, that's going to traditional applications, securing that traffic, but then also securing and delivering traffic to these AI models as well, whether they're frontier models or models that are fundamentally set up inside of a local data center or in a local environment for an organization. Thank you, Kunal. Jeff, that was Kunal, our Chief Product Officer. Thank you very much. Thank you, Jeff. Your final question comes from the line of Amit Daryanani with Evercore. Please go ahead. Yep. Thanks a lot. François, you folks saw, obviously, some very impressive growth on the system side, and you talked about multiple factors that are sort of helping you folks out in that space right now. I think what investors are really trying to struggle and trying to understand is how many of these vectors are cyclical versus secular. Just from your perspective, qualitatively or quantitatively, how do you think about this 32% growth and how much of this you think is cyclical versus secular as you go forward? Well, clearly, Amit, we think a portion of it is cyclical. If we didn't think that, we would be guiding 30% hardware growth for the next three years, and as you know, that's not what we guided at Investor Day. We shared we expected hardware to be in the mid-single-digit growth going forward. What's cyclical, obviously, is that we are in the middle of a refresh cycle with customers, and that, by definition, is cyclical. There are a number of more secular shifts that have layered onto that, and that are driving hardware growth in where you're seeing it. Those secular drivers we've talked about. It's the move now outside Europe, Middle East, and Asia for sovereignty that creates reinvestment in data centers. If there was a phase where customers were thinking about cloud first anytime they were thinking about new applications, now we're in a phase where customers think about sovereignty first. It means that they're reinvesting in data centers or building resilience between their cloud infrastructure and their data center infrastructure. That's a driver. A second driver, which is difficult to measure today, but I think we'll get more refined about it in the future and we'll get more intelligent about it in the future, is the amount of AI traffic that is now flowing on premise infrastructure and how much that is driving customers to either need more units from F5 or higher capacity units from F5. That is clearly also a driver. There are things that are specific to our competitive position, specifically what we're doing with platform adoption, what we're doing with competitive takeouts that are also exacerbating this trend. All of that is not trivial to completely separate and quantify for you what's cyclical, what's these other drivers, because sometimes these other drivers also manifest themselves in a refresh motion. Meaning, our teams are speaking with customers about a refresh, and rather than refreshing just the capacity they have, we're seeing very strong expansion at refresh that is driven by new use cases. All of these factors kind of come together and manifest themselves in the numbers, but I think you can fairly think about it as there's clearly a refresh portion that is cyclical, and there are these three or four drivers that we think are durable, and that is why we have changed our view on the trajectory of hardware, not just for this year, but for the next few years. Perfect. Thank you. Thank you. That concludes our question and answer session. I will now turn the call back to Suzanne DuLong for closing remarks. Thank you, Tiffany. Thanks everybody for joining us. We look forward to seeing many of you out and about at conferences during the quarter. Please reach out with any questions. Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.