F5 Networks Inc (FFIV)’s First Quarter 2015 Earnings Conference Call Transcript

Ehud Gelblum, Citigroup

Can you be specific who you’d be down on that or it was an incumbent there?

John McAdam, President and Chief Executive Officer

I mean incumbent typically in the area in the US is Eureka. It’s not always been that, and some of the placements, but that’s typically the incumbent.

Ehud Gelblum, Citigroup

Okay. One last thing I want to ask about is services. Services obviously were very, very strong. There is obviously a renewal period that happens. But between deferred the revenue and large company services, is there any global comment we can get a sense on as to what made the jumps that strong in services?

John McAdam, President and Chief Executive Officer

On the revenue side the jump was — we’ve seen for a number of years, our clients go for coterminous contracts for 1st of January and the 1st of July. This quarter obviously ended with the 1st of January. We had a very strong push and we’re able to recognize more revenue within the quarter and as far that push we build out the deferred revenue.

Ehud Gelblum, Citigroup

So January 1, haven’t you recognized it again in December quarter?

John McAdam, President and Chief Executive Officer

Because contracts end for January 1, when you’re trying get them renewal before that date. And because their coterminous, some of the units have not been on support for two, three or four months so we get some back-dated revenue in there at the same time.

Ehud Gelblum, Citigroup

Interesting. Okay. I appreciate it. Thank you.

Operator

Next question comes from Kent Schofield with Goldman Sachs. Your line is open.

Kent Schofield, Goldman Sachs

Follow-up on the million dollar deal, idea, can you talk a little bit about — it’s just seems like you’ve been talking a little bit more about large deals. Is this a function of some of the new products, some of the bundling? Is this just something that we should think about more going forward in terms of having these larger deals in the mix?

John McAdam, President and Chief Executive Officer

No, we don’t think so, I mean if you look at last fiscal year 2014, we saw a pretty significant rebound in the large million dollar plus deals every single quarter. Obviously we saw a blip in our Q1 ending in December. But having said that, we expect to see that rebound given what we’re looking at, A, in terms of some of that have slipped, and B, the creation rate that we’ve done in Q1 which was pretty solid. So we expect the million dollar numbers that strong again in the current quarter.

Kent Schofield, Goldman Sachs

Okay. And if some of that closing the deals from the December quarter —

John McAdam, President and Chief Executive Officer

Exactly, some of that and some its new deals with — I mentioned the pretty strong rate.

Kent Schofield, Goldman Sachs

Okay. Thank you for that.