F5 CEO: We've No Telco Worries

SEATTLE (TheStreet) -- F5 Networks(FFIV) reaped the benefits of strong service provider spending in its first-quarter results, despite recent concerns about the sector from networking giant Juniper(JNPR) .

"It was solid, it was definitely solid," said F5 Networks CEO John McAdam, identifying telecom firms and services providers as big growth drivers for his company. Customers, he added, are aggressively building high-speed networks. "It's clearly 4G driving demand and the competitive nature of having to have a 4G solution moving forward."

The Seattle-based firm's bullishness serves as a stark contrast to Juniper, which cut its fourth-quarter earnings forecast earlier this month, citing weakness in the U.S. service provider market.

Telecom companies and service providers accounted for around 23% of F5's total revenue during the quarter, which is more than usual, according to the F5 CEO. "I think that our business is going to be robust in service providers in 2012," he said. "Overall, our pipeline is very strong."

McAdam explained that service providers are increasingly looking to run voice and data services over a single LTE network, as well as opening their wallets for security technology.

In particular, the CEO held up F5's Viprion hardware as a success story. Sales of Viprion, which helps companies deliver applications across networks, have tripled compared to the same period last year, he said.

Jayson Noland, an analyst at Robert W. Baird, also noted F5's strength amongst service providers. "Telco is a key driver -- it has been the largest customer segment for a few quarters," he explained, in a note released on Thursday. "F5 management argued that despite delays in capex spending, its solutions are becoming a higher IT priority -- we are already modeling 28% year-over-year growth in this vertical."