John Eldridge - Director, IR Andy Reinland - EVP & CFO John McAdam - President, CEO & Director Dave Feringa - EVP, Worldwide Sales Karl Triebes - EVP, Product Development and CTO Dan Matte - EVP, Marketing and Business Development

Ehud Gelblum - Morgan Stanley Jess Lubert - Wells Fargo Securities Subu Subrahmanyan - The Juda Group Sanjiv Wadhwani - Stifel Nicolaus Paul Mansky - Cantor Fitzgerald Jayson Noland - Robert Baird Rohit Chopra - Wedbush Catharine Trebnick - Northland Securities Simon Leopold - Raymond James Brian White - Topeka Capital Markets Kent Schofield - Goldman Sachs Ryan Hutchinson - Lazard Capital Markets

Good afternoon and welcome to the F5 third quarter financial results conference call. At this time all parties will be able to listen only until the question-and-answer portion. Also today's conference is being recorded. If anyone has any objections please disconnect at this time. I would now like to turn the call over to Mr. John Eldridge, Director of Investor Relations. Sir, you may begin.

Thanks Victor. Welcome all of you to our conference call for the third quarter of fiscal 2012. Speakers on today's call are John McAdam, President and CEO; Andy Reinland, Executive VP and Chief Financial Officer. Other members of our executive team are also with us to answer questions following our prepared comments. If you have questions following today's call please direct them to me 206-272-6571. If you don't have a copy of today's press release it's available on our website at f5.com. In addition you can access an archived version of today's live webcast from the Investor Relations Events Calendar page of our website through October 24. From 4:30 PM today until midnight Pacific Time July 19, you can also listen to the telephone replay at 866-454-9170 or 203-369-1254. During today's call our discussion will contain forward-looking statements which include words such as believe, anticipate, expect and target. These forward-looking statements involve risks and uncertainties 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 our quarterly release described in detail on our SEC filings. Before we begin, I want to remind you that F5 has no duty to update any information presented in this call. Now, I’ll turn the call over to Andy Reinland.

Thank you, John. In the third quarter of fiscal 2012, F5 achieved solid sequential and year-over-year growth in what proved to be a challenging macro environment. Revenue of $352.6 million grew 4% from the prior quarter and 21% from the third quarter of last year and was within our guided range of $350 million to $355 million. GAAP EPS of $0.91 per diluted share was above our guidance of $0.88 to $0.90 per diluted share. Non-GAAP EPS of $1.14 per diluted share was at the high end of our $1.12 to $1.14 guided range. Product revenue of $207.1 million grew 15% year-over-year and represented 59% of total revenue. Service revenue of $145.5 million grew 31% year-over-year and accounted for 41% of total revenue. Book-to-bill for the quarter was less than one. During Q3, our core Application Delivery Networking business accounted for $346.3 million and revenue from our ARX File Virtualization business was $6.3 million. From a geographic perspective all theatres generated sequential and year-over-year revenue growth. At 57% of total, the Americas grew 22% year-over-year, EMEA accounted for 21% of revenue, an increase of 27% versus Q3 of 2011. APAC represented 15% of the revenue mix with 17% growth year-over-year and Japan was 7% of revenue, up 9% over a strong Q3 of 2011. Looking at our key verticals, Telco accounted for 22% of sales. Sales in to the finance vertical represented 23% of total. Our US federal business equaled 6% of sales with total government at 12% and technology accounted for 16% of total sales. In Q3, we had two greater than 10% distributors, Avnet, which represented 17.3% of total revenue and Ingram Micro, which accounted for 14.8%. Our GAAP gross margin in Q3 was 82.9%. Non-GAAP gross margin was 84.2%. GAAP operating expenses of $182.3 million were within our guided range of $180.5 to $184.5 million. Non-GAAP operating expenses were $161.3 million. GAAP operating margin was 31.2%. Non-GAAP operating margin was 38.4%. Our GAAP effective tax rate for Q3 was 35.2% and our non-GAAP effective tax rate was 34%. Turning to the balance sheet. In Q3, we continued to strengthen our financial position. Cash flow from operations was $113.4 million contributing to total cash and investments of $1.1 billion at quarter end. Free cash flow for the quarter was $107.7 million. DSO at the end of Q3 was 49 days. Inventories were $17 million. Deferred revenue increased 5% sequentially to $433.9 million. Capital expenditures for the quarter were $5.7 million and depreciation and amortization expense was $10.1 million. We ended the quarter with approximately 2,905 employees, an increase of 100 from the prior quarter. During Q3, we repurchased approximately 425,000 shares of our common stock at an average price of $117.59 per share for a total of $50 million. Approximately $231 million remains authorized under the current share repurchase program. Looking ahead to Q4, we continue to see the key drivers of our business including mobile traffic growth, data center consolidation, growth in virtual environments and security concerns trending in our favor. We see solid growth in our software sales and we see strong momentum with our security products. We also have an exciting product roadmap that positions us to take advantage of an expanding addressable market. As a result, we continue to believe our prospects for long-term growth remain strong. That said, the context of a weak global economy lead us to be more cautious in our near-term outlook. With this in mind, our guidance for the current quarter is as follows. Our revenue target for Q4 is $360 million to $370 million. We expect GAAP gross margin to remain strong in the 83% range including approximately $3 million of stock-based compensation expense and $1.5 million in amortization of purchased intangible assets. We anticipate GAAP operating expenses in the range of $188 million to $195 million including approximately $24 million of stock-based compensation expense and $200,000 in amortization of purchased intangible assets. Our GAAP EPS target is $0.90 to $0.93 per diluted share and our non-GAAP EPS target is $1.16 to $1.19 per diluted share. We are forecasting a GAAP effective tax rate of 35.5% and a non-GAAP effective tax rate of 34%. We plan to increase our headcount by approximately 125 employees in the current quarter. We estimate our DSO will be in the upper-40 day range. We expect inventory levels within a range of $17 million to $19 million and we believe our cash flow from operations will be in excess of $135 million. With that I will turn the call over to John McAdam.

Thanks, Andy and good afternoon everyone. I was very pleased with our Q3 performance. In a difficult macro environment, we delivered solid year-over-year revenue growth of 21% and world class non-GAAP operating margins above [30]% and continued to strengthen our balance sheet with strong cash generation. Our major sales region, each major sales region produced double-digit sales bookings growth. Our services business had another stellar quarter exceeding both revenue and profit goals as well as posting a very significant increase in the Fed revenue. Sales of our VIPRION chassis-based products were very strong with sales bookings of VIPRION up over 82% from last year. Software module sales during the quarter were also very strong and the percentage of tax rate for our software sales reached a record high in Q3 driven by rapidly accelerating sales of our security software products. Sales of our data center firewall solution grew sequentially over last quarter and we expect that momentum to continue into next year. Our security solution portfolio now includes the most comprehensive application firewall solution in the market, the highest performing datacenter firewall solution for protecting large scale web-based applications and industry-leading access and policy management solutions. I believe that F5 continues to be well positioned to capitalize on major market trends. Our platforms deliver an array of intelligence services for enterprises, service providers and clouds. Our customers use F5 technology at strategic points of control to consolidate functions on our platforms and to design and deploy our dynamic networks to efficiently deal with the ever increasing challenges presented by the growth in video traffic, evolving and more sophisticated security threats and adoption of mobile devices. Our product roadmap contains several growth drivers including a comprehensive product refresh of all our appliances which will deliver a very significant price performance advantage to our customers. In addition, performance of our virtual additions for all high provider platforms will be tripled. We also are building an eight floor VIPRION chassis solution which will leverage the centaur blades released in Q3 and set a new buyer for layers four to seven performance, so ADC functions including security and optimization. The next major release of TMOS contains significant software deliverables including DPI, DPAC Inspection functionality for the service provider market as well as a market leading layer three to layer seven firewall solution. This integrated firewall will be a module available across all F5 platforms allowing customers to consolidate the current firewall infrastructure while provided unprecedented performance and slight stability by allowing security policies to be applied at the network and the application levels. The DPI functionality will be another strategic offering for the service provider market. We now have a broad portfolio of solutions for the service provider market including our recently acquired diameter signaling product for the management of 4G LTE and IMS network, our carrier grade NAT and IPv 6 capability and the speeding functionality derived from a sophisticated iRules running on TMOS. We will also introduce significant updates to our virtualizations and management products which will make it easier for customers to adopt hybrid cloud architectures and optimize the delivery of web based applications. We continue to focus on delivering to our customers as many application layer decisions per second as possible and using that knowledge to drive orchestration applications both real and virtual within and across data centers. We believe this capability generate significant value and benefits to our customers and clearly differentiate our technology from that of our competitors. Many companies in this market talk about performance just from a throughput perspective or intelligence at the application there. F5 not only provides the highest bandwidth, but also is the only ADC vendor to deliver application intelligence at network speeds and beyond. As traffic and applications continue to become more web centric, I believe the market is rapidly moving towards F5 sweet spot. Our world class connection and transaction processing capabilities combined with high speed pattern matching and purpose built hardware enable F5 to deliver advanced solutions for optimization, security and application delivery for many years to come. As far as the outlook is concerned Andy indicated we expect to see sequential growth this quarter. There is no doubt that we experienced a cautious spending environment last quarter and we expect that caution to continue into this quarter. Even with these economic headwinds, I remain very confident about the future prospects for F5. Our technology leadership is as strong as it has ever been under our product roadmap will extend that leadership. We will continue to invest in hiring world class people to take advantage of the growth opportunities in our core ADC market and to enable us to further exploit new expanding market opportunities in the employee based architectures to security market and the service provider market. I would like to take this opportunity to thank the entire F5 team and their partners and look forward to the continued support throughout the year. We will now hand the call over for Q&A.

(Operator Instructions) And our first question comes from Ehud Gelblum from Morgan Stanley. Your line is open. Ehud Gelblum - Morgan Stanley: A couple of questions. Can you, with the new versions of TMOS coming out now, do you anticipate any new hardware platforms coming out as well. Do you anticipate the new hardware platforms to gain more share than otherwise would have or see some sort of an upgrade across the product portfolio because it would be necessary to get the EPI working and then some of the other features in the new versions of TMOS or is it more of a minor upgrade on TMOS?

This is John and maybe Karl could speak up to me, but this is very significant in my opinion. In two fronts, first of all, the actual, we are doing appliances refresh. That’s a number of significant new products and we are going to see performance increases in those appliances to the tune of about that five times the current performance of the existing systems. So we expect that to definitely create some good growth refresh opportunities and market share with that. We very, very doubted it in doing that. And then, along with that, we’re also coming out with a new version of TMOS that’s got a software functionality with things like the firewall through layer three to layer seven firewall product so the things are going to be very, very competitive along with functionality for the SP provider like DPI. So we really believe they are revenue generating type capabilities.

Yeah, we start looking, by the way this is Karl, if we start looking at some of the functionality and the impact with DPI, we have a whole new classification engine that’s been built up into the core of TMOS. So that’s a very significant change and that we’ve done a lot of other under the hood changes in TMOS, spot other requirements in the search for other markets such as very specific targeted iRules, we have done some other work there with productizing some of the carrier grade NAT features, a lot of focus on IPv 6 and carrying that forwards. So there is a lot of work has been done there. And obviously on the security, a lot of the development that has been there has been extending essentially what's been done in the past are really productizing things and adding capabilities around the rules and Having a new rule saying which in other things that can be applied not only at the network layer but at the application layer as well and having these things all tied together cleanly in a management framework. So it is a very complete, a very big upgrade to what we had previously. Ehud Gelblum - Morgan Stanley: As a follow-up the verticals seemed to move around a little bit obviously Telco and Tech were down some, is some of the trepidation going to next quarter obviously it is on a big macro basis but can we, it is accurate to say that you are more obviously worried but more concerned about some of those verticals like Telco and Tech that came down I know you except Telco to come down with very strong last quarter but does it look as though those will stay weak going to next quarter is that one of the main drivers behind the despite the more conservative guidance?

No I would say its more overall macro has been specifically in the verticals. I mean typically our verticals move around depending on project and we don’t see any significant deterioration and any of the verticals obviously technology has been doing somewhat for they have been quite often you know instead of having layer seven type capabilities and made it done some of them do their own work but that's been a pretty slow process so nothing really changing in the verticals.

And then our next question comes from Jess Lubert with Wells Fargo Securities your line is open. Jess Lubert - Wells Fargo Securities: Question and a clarification, for the question can you talk about some of the demand trends you experienced in Europe it actually looks like the business performed fairly well from the sequential one in year-over-year perspective, would like to get some additional details regarding where you saw the strength? Where you saw the weakness in the region and how you are thinking about your guidance for the September quarter and then for the clarification I was hoping you could discuss how much revenue you received from Traffix in the period?

Yeah, so in terms of Europe it was probably you would expect you know so areas like the UK where we are very strong and France, Germany, the key geographies were pretty solid. Europe has been very out in the lead in terms of security sales as well. That has helped a lot and to be fair it was a pretty easy comparison just as the same quarter and a year ago but generally we are very, very happy with the things that have been performing. In terms of Traffix yes we did revenue, it wasn’t significant, what I could, you know we really view that as part of our ADCs. We are not going to be giving that out. I think the message I gave last quarter and that's still the same as we will see some revenue at Traffix next quarter as we did this quarter however we really think that the major opportunity is fiscal 2013. Jess Lubert - Wells Fargo Securities: John for the September quarter, do you expect Europe to be up sequentially?

We haven't got through each geography on that.

Yeah, Jess we don't guide by geography. So I think in our overall guidance we are taking the European market in the macro into consideration and as usual putting guidance out there that we forget about.

Our next question comes from Subu Subrahmanyan. Your line is open. Subu Subrahmanyan - The Juda Group: I wanted to ask a question on service versus product revenues if you look at growth of the product revenues or lack there are, how do you expect the trend going forward given the significant difference on a sequential basis and also if I could follow-up on the different verticals looking out is there one vertical that causes you to be more concerned especially the question was asked on Telco if I could ask again it was down more than expected as a percentage of revenue?

On Telco, Telco was doing as we expected probably may be slightly better than we expected but not a lot better so it’s pretty much within the realms of what we are looking at.

And then in terms of your original question the product revenue versus service site, obviously product revenue is our main priority in product revenue growth and at 41% service is higher than we have seen it or probably want to see it and I think as we drive forward and given the guidance that we put out there we may see that stay in the same range but over time obviously our goal is to get the product revenue up.

Your next question comes from Sanjiv Wadhwani with Stifel Nicolaus. Your line is open. Sanjiv Wadhwani - Stifel Nicolaus: Thanks so much. Just one clarification and then a question. John your financial services vertical actually performed very well which kind of seems counter intuitive given the environment, can you just talk about what might be going on over there? And then question is, as far as the progression of the quarter can you just talk about if kind of things weakened as the quarter is progressing month over month to any sort of clarification that would be helpful? Thanks.

The linearity of the quarter was pretty similar to other quarters. It was, we did say in our opening remarks that we did definitely experienced the macro environment there, but it was pretty similar, there wasn’t a significant I mean there was some backend loading and no question about that.

Yeah, I think just add to that. I think if you look at our month three, it was a little higher than we would expect, but I think the bigger message is in the deal flow. It was more backend loaded within that month that we would comfortable with. And one thing I would like to add in there is of the backlog where it’s a backlog less than one, it’s interesting to note that that was really roughly 1%. So not a significant amount down, but as we do reported, I wanted to put it out there that it was down.

And then just to answer the question on the financial vertical, we did expect the financial vertical to go up. Again, it’s similar to what I said in the previous answer and its very project oriented and very pipeline oriented in terms of how we do that verticals or not, while we made the comments that we made, so it was. Actually Dave Feringa, whose just been recently promoted, I am sure you’ve seen the Executive VP of worldwide sales. Previously we’ve been doing 50% of our business with North America for the last seven years; he might want to comment on some of the financial. Not on each of the customers, but some of the deals that we did.

Yeah, we saw some very, very large deals across all theaters last quarter and specifically in the Americas, we saw two very, very significant deals. One from a very large bank, who has also been telling people that they need to grow with to reduce costs to adjust their self to their new revenue models and they actually invested close to $5 million with us in the refresh opportunity to consolidate. And then we had another very large financial institution in the DC area that also, was actually a competitive replacement that also invested almost $3 million worth or so. Even in kind of tough times for that vertical, they’re spending money where they can see, they can gain lots of efficiencies. So, I think that was a good reason why we had a good quarter in the finance vertical.

Actually you can figure that when we talk finance, we absolutely talk globally. So this type of trend is happen all the time globally.

Absolutely, we had big deals in Asia-Pac and in Europe as well.

And our next question comes from Paul Mansky with Cantor Fitzgerald. Your line is open. Paul Mansky - Cantor Fitzgerald: On the headcount front, I think we were targeting about 125 in the quarter, you did a 100 and we’re looking at 125 again for the next quarter. I know you guys have puts and takes relative to hitting the bogey on any given quarter, but should we read anything into that 100 versus 125 as it relates to maybe how long do you think the kind of the macro pressures might persist?

You know, definitely as we went through the quarter, we talk a lot about how we manage expenses as we’re watching the quarter unfold and as we both mentioned in our scripts in this tougher macro environment as we watch the size up, we got more cautious with our hiring. But did continue to hire and as we look at next quarter with what we think we’ll achieve in terms of revenue as you’ve seen in the guidance put out there, we think we can absorb the 125. But what I would like to highlight in these comments is that we do want to keep hiring because we want to invest in growth and we see the opportunity there, but as we’ve said over and over again, we will invest in a way that protects our operating margin and we’re committed to the 38% levels. So I think you won’t see our behavior change in how we manage the business week in and week out. Paul Mansky - Cantor Fitzgerald: And then if I could just follow up, historically you did a really good job of managing the product cycle. However, as you think about timing of the generation of TMOS in conjunction with obviously your sweeping appliance refresh, is there any concern relative to maybe demand push out around the timing of those two things happening to be coinciding a little bit more tightly than historical?

No, we again, I always have been asked that question for almost about 10 years; it should be and I don’t want to come over this complacent, but I feel really, really positive the way we can manage the new products coming in. And typically in any case the products, the existing products have refreshed or often redeployed and so we don’t often see that; and I don’t think there us going to be an issue there. The key for us is to actually get the roadmap on track and get these growth opportunities early as soon as possible.

And our next question comes from Jayson Noland with Robert Baird. Your line is open. Jayson Noland - Robert Baird: Okay thanks. John just your previous comment on sales turnover did that cause any challenges or confusion through the quarter?

I don’t think we talk at all about sales turnover; obviously Mark Anderson moved on and that was a shame, but with Dave, he has been running North America has moved in and we have also replaced Dave by an internal recruitment as well. So the things are basically moving, frankly we are not really missing a beat there, but we didn’t comment on earlier so I don’t you heard that. Jayson Noland - Robert Baird: I was referring to at the executive level there that’s what I….

Oh, I am sorry, okay. Jayson Noland - Robert Baird: On security from my question, you know congratulations on the progress and I guess the question is do you have what you need or can you develop it organically or should we expect some M&A there?

Well, we are developing a law organically and we have a law already in the portfolio that I mentioned, but there's, you know the stuff that's coming in the next TMOS solution is very, very important. And then we are always looking across the market for the increased opportunities, but absolutely one of the things that we've been debating internally and just how do we do it is in October and certainly in November the Analyst Day, we are going to say that we have given you much more visibility to the security sales that we’ve got. It’s not trivial because it’s very subjective in nature, but we are going to put a lot of effort into that and I think most people will be pretty impressed by the rate of growth that we are seeing for security.

Our next question comes from Rohit Chopra with Wedbush. Rohit Chopra - Wedbush: John I am going to ask you another question, you have probably been asked a lot of times, but given the new version of TMOS has a lot more capability in it, classification engine and what not. How far back can you go as far as compatibility; in other words, would you expect a greater upgrade at the base with this new version of TMOS? And the other question I just want to ask you about competition, there is a little bit more competition out there I thought maybe you could comment on that and who you are seeing and what's going on?

Yes, hi Rohit this is Karl. I just wanted to mention, so in terms of software when we come out with new versions we make that available on all of our hardware platforms to the extent that they are able to accept it. So multiple generations of platforms typically could be upgraded to the latest releases, they may not run all features because whatever limitations they have, but we generally make most available. And that's no different for any large release that we are doing; you know this upcoming release is no different than any of the other releases that we've done in the past with regards to that.

Yeah, typically what we see there is obviously we see customers being cautious with the new release itself where and exactly the same with nine, 10 and 11 we will see the same coming again. Having said that, one of the drivers to really speed up customers tends to be specific functionality, so if a customer is really specific in terms of the need and what they can benefit from say DPI they will go at it faster, but that will be a pretty natural process.

Right, and with our chassis based products too, the nice thing there is that a lot of our customers are feature proof; that is if they need more capacity for the new features for example they are able to just add blades to the system quite easily, so that's already built into that.

Rohit, this is Dan Matte, so on the competitive environment front, in the macro stories we haven't seen really big changes. We've picked up some share actually across the core ADC market, we've seen actually great growth in our virtual additions as well, so I think we are being pretty disruptive on that side of things. Also on the security side with the performance of our datacenter firewall and sales on that front, again we think we are being pretty disruptive in that market. We look at our win rates as reported by our sales team, continue to be extremely high out there; so overall I think we are sitting quite well.

And our next question comes from Catharine Trebnick with Northland Securities. Your line is open. Catharine Trebnick - Northland Securities: My question is your used cases for the carrier space, can you go through those? And the other one would be are there any regions you are seeing, any carrier softness over other regions? Thanks.

Yeah this is Karl. We have a number of different areas, used cases that is in the service provider, everything from Carrier Grade NAT, IPv6 like I mentioned earlier doing things with in their managed services environment, web hosting those types of things. Optimization, we help optimize video delivery of content or web applications that they are handling. Again, with the signaling traffic we help to scale that for example we can scale diameter set and radius; we also now with our Traffix acquisition we now have a full signaling -- we call it our [SPC] release, we have now a full standard signaling capability and routing capability there. So there is a lot of areas that we were leveraged in this and again like John said earlier they tend to be project oriented, but it’s a pretty big footprint there. With the new upcoming DPI functionality we are hoping to expand that footprint and consolidate a lot of functionality that exist in platforms that tend to be around us. Catharine Trebnick - Northland Securities: Alright quick, another just a quick question follow-on. I did not hear when the TMOS version with DPI would be released, could you repeated the timeframe?

Yeah we said at the end of this year. Catharine Trebnick - Northland Securities: Okay. And then do you have any data that’s now underway with the DPI technology?

Yeah we have, we have had as I have mentioned before in the previous calls we have beta versions out for a while at different various stages of development process the customers been looking at.

And our next question comes from Simon Leopold with Raymond James. Your line is open. Simon Leopold - Raymond James: Great, thank you very much. I wanted to just get a little bit of more clarification particularly on the financial vertical discussion; quite a big number in what’s a tough environment. Are there any metrics you can give us in terms of the largest deal size or concentration and really what I am trying to get at is to understand the sustainability versus the lumpiness of that particular vertical? And then in terms of the question, I am wondering if you could talk a little bit more about the concept of virtualizing the ADC function in terms of kind of the timeframe of when that could be deployed, particularly by the technology vertical which might be early adopters and what that would mean for your product portfolio and your business over, let's say, three to five years?

On the last one, I am not sure of it is three to five years because that’s, I don’t want to make that prediction when it's so far out. But in terms of the virtual ADC, we have now probably got the largest array of solutions out there from a software-only perspective in terms of the ADC type solutions. In other words, a core LTE product, virtual as well as all the modules as well, security modules, optimization modules. And that’s been going extremely well. It’s still a small proportion of our business, but a very fast, high percentage growing portion. We see a lot of hybrid sales. So we will see sales for the software version as well as the system version and the beauty is that we can manage them similarly. So the customer can mix and match depending on the area and you’re right, cloud is probably the main area of opportunity there. But in terms of going three to five years, that’s a bit tough.

And Simon, this is Dan. So while we’re not prognosticating on the size of that portion of the market. Fortunately there are others who do and so the target for the virtualized part of the market, it runs about roughly 10% of the overall market sort of about in that timeframe that you’re talking about. And so what we’re doing about it, as John said, the sales of our virtual additions are going really well. We’re giving our customers versions of our products that they can inject in to cloud providers themselves. We’ve also started our cloud licensing programs. So using the cloud vendors as more of a channel for us, so they can take that functionality if you will and rent it to their customers on an ongoing basis. So that's really tapping into a customer base that otherwise it will be more difficult for us to address.

And then just going back to the financial vertical. I mean there's numbers in the financial vertical. Obviously weighed by percents over time, but have been very resilient and have been very resilient even through the 2009 time scale when that was probably at its lowest ebb from an opportunity perspective. So I think it is very sustainable. I think it is going to be one of our three key verticals for the foreseeable future. Brian White - Topeka Capital Markets: And any indication of the concentration or where there several very large projects or anything like that?

No I mean Dave obviously talked about some of the projects, but nothing of the ordinary. They tend to be reasonably big in nature, but they are very common as well and I've said a couple of times, they are global as well.

I mean and just adding on to that, Dave mentioned a couple of larger deals on the financial vertical, but putting it in perspective, broadly our average orders sizes is just above a 100,000. So I think though we do win very significant figure dollar deals on average, our average order size is just above a 100,000. So I think that helps put it in perspective.

Our next question comes from Brian White from Topeka Capital Markets. Your line is open Brian White - Topeka Capital Markets: And John when did you start to pick up signs of increased caution with customers?

We look at our business weekly and you're never really sure until you get into that last month and then obviously in the last couple of weeks as when it becomes very specific, where you can start to see committed deals being non-committed, that's typically the process that we see. Brian White - Topeka Capital Markets: Okay and I know you didn’t want to talk about you know the weakest market in September quarter but what do you think is going to be the strongest market in September quarter?

Yeah, again we don't guide the verticals so when we look at that pretty broadly and then take that into the guidance that we put out there. I mean the key things we look you know I would say this a number of times but its definitely the pipeline, its definitely the factor pipeline in other words the pipeline that's pretty mature and has got very, very good chance of closing and then the assumed close rates and obviously in this environment we think we are being sufficiently cautious on the closer rate. Brian White - Topeka Capital Markets: You don't think there's any change in the competitive landscape, this is all macro caution?

There's always some change in it, but I think it's been a significant versus macro? No.

Our next question comes from Kent Schofield with Goldman Sachs. Your line is open. Kent Schofield - Goldman Sachs: Can you talk a little bit about increasing the performance availability on the software ADC side, some of the cloud features and then how that plays out with selling into some of those technology customers that are doing some of their own work. Thank you.

Sure, so Kent, this is Dan Matte, it's a couple of things, so one with the virtual additions themselves, we are going to be increasing the performance. We think we already have great performance within our virtual additions but we will crank that up even more. Another aspect that we are working on to is allowing people to stream multiple versions of those together and act as one coherent unit, so as we think about many of these larger players and think about having a totally software defined data center if you will so everything looks the same inside of it, you are changing the personality of the devices solely by software. We think that we’ve got a very interesting way to help them do that and utilize our software from that perspective. The other piece that I mentioned to is different go-to-market models as well. So we think there are other ways to exploit better get our products into what I have called the serverless generation so people coming up with new companies who are not likely to build their own data centers or purchase servers or anything like that, they are just going to be renting infrastructure from various players out there we just want to make sure we have got that covered. And then also we recognized that people have different ways of adopting cloud technology and whether they are doing it internally in private clouds as I said, the serverless generation purely in a public or those in between with hybrid. So we definitely have technology coming that allows people to use as much or as little as both of those are simultaneously use both as they would like and make it seamless so that the cloud is just another resource that they are able to drop on. Kent Schofield - Goldman Sachs: And then you mentioned the high attach of software modules. Is that a level that you think it’s where is going to be or do you think with the coming products that’s that you could see higher attach going forward?

I think we can see higher attach. It’s a number of things I mean, I mentioned security the application firewalls is a very good example. And the access policy manager for access. They have two very, very strong momentum modules right now. As we add more modules like DPI, like the bigger function firewall is coming I think you will see a more module connect and then the other thing that’s critical as sales execution in this area sales and SE and service execution where not just, we started off with North America being the leader. But we are now seeing areas like Japan and the rest of APAC and Europe also doing extremely well with the modules and realizing it’s a differentiator. And then the fact that we have our Viprion chassis solutions ideal for building more and more modules on the one platform. So I do, I think it’s a great strategy and it should increase the tax rate.

And our next question comes from Ryan Hutchinson with Lazard Capital Markets. Your line is open. Ryan Hutchinson - Lazard Capital Markets: I have somewhat of a follow-up on just the overall security strategy and John you touched on the prepared remarks. Maybe it’s question for Dan or Erik if he is there but I just wanted to understand where we are headed here. You clearly are looking to build out a comprehensive solution. You’re covering some aspects of it but I just wanted to get, where are we in 12 to 24 months? Do we cover network protocol, app and access security and is Project Topaz does that fulfill the needs or is there more to come beyond that and I guess the real question is who ultimately are we going to be competing with? Thanks.

So this is Manny Rivelo. So Ryan, let me answer that question. A couple of things, first of all, we have two major use cases if you will. One of them is really around, what I would call unified access and around unified access is the whole concept of ensuring that we know who the user is and we contextually can create an identity of that user, identifying the who, what, when, where and how of what that users try to do and then enable them to access those services, whether they be on network or off network. So that’s a very strong in this case. We’ve been getting a lot of market share there and not just recently it was reported by Infonetics where we moved to the position number two from market share perspective. The other use case everyone working a lot which is around Project Topaz is really where the firewall defending your applications and that is a layer three to layer seven firewall technology, high performance, high throughput, high connection count, high, high concurrent connection and what that basically has is everything from Layer 3 DDoS protection to all the way to application on ability protection, all wrapped up in one solution set and that by all means is a product that we currently have in the market, wildly successful with that market and we’re going to continue to create further integration with Project Topaz in the next software release. So when you think about the competitors across those two different markets, on one end, we’re competing against identity bridges and vendors of that size, and the data center firewall, we’re competing against Juniper, Cisco, Palo Alto, but to be perfectly frank, none of those companies have focused on a web solution set. So although they are competitors, they’re not really the right solution to the market at this time.

The other thing I will add. You asked the question about the next 12, 24 months. Obviously, this is a starting point. We’ve got others, and we have some other significant things we are building into the platform itself such as like DDoS adding significantly to our hardware capabilities there. A lot of security features in ASM, you know things in the future we’re looking at malware prevention. There is a lot of factors that we can go after, but once we have this footprint, this capability and this performance, you know that’s the big enabler.

Okay. Thank you very much for joining us and we look forward to speaking with you all again next quarter. I’ll see on the road sometime soon. Thank you.

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