F5, Inc.

Good afternoon and welcome to the F5 Network's second quarter fiscal 2020 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone keypad. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. Also, today's conference If you have any objections, please disconnect at this time. I will 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. Francois Locoh-Donou, F5's President and CEO, and Frank Peltzer, 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 on hand to answer questions during the Q&A portion of today's call. A copy of today's press release is available on our website at F5.com, where an archived version of the call will be available through July 27, 2020. The replay of today's discussion also will be available through Midnight Pacific tomorrow, April 28, by dialing 800-585 , or 416-621-4642. For additional information or follow-up questions, please reach out to me directly at s.dulong at 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. Factors that may affect our results are summarized in the press release announcing our financial results and described in detail in our SEC findings. Please note that F5 has no duty to update any information presented in this call. With that, I will turn the call over to Francois.

Thank you, Suzanne, and good afternoon, everyone. Thank you for joining us today. For all of us, this has been an extraordinary few months. COVID-19 has altered just about everything about our daily lives. My deepest sympathies go to those that have been personally affected by the disease, an already enormous number that sadly grows each day. At F5, our culture prioritizes the humanness of us all. Like most companies, our first priority in a crisis is ensuring the health and safety of our employees, their families, and our communities. For most of March and April, our entire global team has been working remotely. Beyond health and safety, though, we have taken a human first approach to this crisis. For us, that means supporting our customers and each other however we can. Over the last weeks, I have witnessed small and large acts of F5ers' generosity, perseverance, and creativity around the world. They have supported our customers through crisis, they have donated to communities most in need, and they have lent helping hands to colleagues who are struggling. These acts of humanity are what make me so proud to be an F5er. Franck and I will speak in greater detail about COVID-19's impact on our business during our remarks today. Overall, we delivered a very strong second fiscal quarter. Our 7% total revenue growth was driven by customer demand for reliable application access and performance and consistent application security. Our analysis shows COVID-19 had a net neutral impact on business in the quarter. For the first two and a half months of Q2, We experienced minimal disruption outside of Asia. Beginning in March, we experienced accelerated activity in our access and control solutions. We worked with customers to quickly and, in some cases, massively scale access and capacity to deal with increasing numbers of remote workers. We also saw some evidence of certain customers accelerating purchases of S5 solutions to strengthen their critical application infrastructures. These tailwinds were offset by some project pushouts as customers prioritized acute COVID-19 priorities. Strong customer demand for software subscriptions and security use cases fueled our 96% overall software growth. Consistent with last quarter, our systems business was down 11%, while our services business grew 5%. Even considering the macro environment, Our customer engagement remains very high. I will speak to our COVID-19 related actions in more detail and other customer highlights from the quarter after Franck reviews the quarter's financial results and our Q3 outlook.