false000158080800015808082024-07-302024-07-30


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________________________________

FORM 8-K
____________________________________________________________________________

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934

July 30, 2024
Date of Report (Date of earliest event reported)
____________________________________________________________________________
A10 Logo JPEG.jpg
A10 NETWORKS, INC.
(Exact name of the registrant as specified in its charter)
____________________________________________________________________________
Delaware001-3634320-1446869
(State or Other Jurisdiction of Incorporation or Organization)(Commission File Number)(I.R.S. Employer Identification Number)

2300 Orchard Parkway
San Jose, CA 95131
(Address of principal executive offices, including zip code)

(408) 325-8668
(Name and telephone number, including area code, of the person to contact in connection with this report)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
____________________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common stock, $0.00001 par value per shareATENNew York Stock Exchange




Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐


Item 2.02    Results of Operations and Financial Condition

On July 30, 2024, A10 Networks, Inc. (the “Company”) issued a press release regarding financial results for the quarter ended June 30, 2024. A copy of the press release is furnished herewith as Exhibit 99.1.

Item 7.01    Regulation FD Disclosure

On July 30, 2024, the Company posted on its website (www.a10networks.com) slides regarding the financial results for the quarter ended June 30, 2024. A copy of the slides is attached as Exhibit 99.2 and the information in Exhibit 99.2 is incorporated herein by reference.

The information in Item 2.02, Item 7.01 and Item 9.01 in this Current Report on Form 8-K and the exhibits attached hereto shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. The information in Item 2.02 shall not be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 8.01    Other Events.

On July 30, 2024, the Company announced that its Board of Directors (the “Board”) approved a quarterly dividend. The quarterly dividend, in the amount of $0.06 per share, will be payable, subject to any prior revocation, on September 3, 2024 to stockholders of record on August 15, 2024. Future dividends will be subject to further review and approval by the Board in accordance with applicable law. The Board reserves the right to adjust or withdraw the quarterly dividend in future periods as it reviews the Company’s capital allocation strategy from time-to-time.

Forward Looking Statements

Item 8.01 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, including statements regarding the Company’s dividend program. These forward-looking statements involve risks and uncertainties. These forward-looking statements may be identified by terms such as “will,” “may,” “plans,” or the negative of these terms, and similar expressions intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding the anticipated amount, duration, methods, timing and other aspects of our dividend program and any anticipated benefits or value resulting from any such dividends. These statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, any unforeseen need for capital which may require us to divert funds we may have otherwise used for the dividend program, which may in turn negatively impact our ability to administer the quarterly dividends. In addition, the timing and amount of future dividends, if any, will be made as management deems appropriate and will depend on a variety of factors including stock price, market conditions, corporate and regulatory requirements (including applicable securities laws and regulations and the rules of The New York Stock Exchange), any additional constraints related to material inside information the Company may possess, and capital availability. More information regarding these and other risks, uncertainties and factors is contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC, and in other reports filed by the Company with the SEC from time to time. You are cautioned not to unduly rely on these forward-looking statements, which speak only as of the date of this press release. All information in this press release and its attachments is as of the date stated and unless required by law, The Company undertakes no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this press release or to report the occurrence of unanticipated events other than as required by law or regulation.




Item 9.01    Financial Statements and Exhibits

(d) Exhibits





SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: July 30, 2024
A10 NETWORKS, INC.
By: /s/ Brian Becker
Brian Becker
Chief Financial Officer (Principal Accounting and Financial Officer)



EXHIBIT 99.1
a10logo.jpg
A10 Networks Reports Financial Results for the Second Quarter of 2024

Company Maintains Solid Profitability

SAN JOSE, Calif., July 30, 2024 -- A10 Networks, Inc. (NYSE: ATEN), a leading provider of cybersecurity and infrastructure solutions, today announced financial results for its second quarter ended June 30, 2024. 

Second Quarter 2024 Financial Summary

•Revenue of $60.1 million, compared to $65.8 million in the second quarter of 2023. Revenue for the first six months of 2024 was $120.8 million, compared to $123.5 million for the first half of 2023.

•GAAP gross margin of 80.0%; non-GAAP gross margin of 80.9% as a result of continued focus on operational execution of business model goals in spite of near-term volatility in the market.

•GAAP net income of $9.5 million (15.8% of revenue), or $0.13 per diluted share, compared to net income of $11.6 million (17.7% of revenue) or $0.15 per diluted share in the second quarter of 2023.

•Non-GAAP net income of $13.2 million (22.0% of revenue), or $0.18 per diluted share (non-GAAP EPS) compared to non-GAAP net income of $14.5 million (22.1% of revenue) or $0.19 per diluted share in the second quarter of 2023.

•The Company returned $16.3 million to investors, having repurchased 844 thousand shares at an average price of $14.02 per share for a total of $11.8 million and having paid $4.5 million in cash dividends in the quarter.

•The Board of Directors approved a quarterly cash dividend of $0.06 per share, payable September 3, 2024, to stockholders of record at the close of business on August 15, 2024.


A reconciliation between GAAP and non-GAAP information is contained in the financial statements below.

“Consistent with our prior comments and expectations, the North American service provider market remains volatile, impacting our quarter-to-quarter visibility,” commented Dhrupad Trivedi, A10 Network’s President and Chief Executive Officer. “While elongated sales cycles have slowed service provider revenue, we continue to believe that we have not lost those customer opportunities to competitors or cancellations, and demand for our security-led solutions remains robust. The Enterprise segment continues to grow in line with our stated strategy. During the second quarter, Enterprise revenue increased 25% and year-to-date, Enterprise revenue was up 7%. We continue to increase our research and development investments, focused on enterprise-targeted solutions and capitalizing on AI-driven market potential, to better position A10 to capture growth opportunities in the future.”

“Despite the macro challenges, we continued to deliver bottom-line results in-line with expectations while returning significant capital to shareholders,” added Trivedi. “We believe our business model enables solid and consistent profitability, and our revenue diversification positions A10 to navigate challenging market conditions.”

Conference Call
Management will host a call at 1:30 p.m. Pacific time (4:30 p.m. Eastern time) today, Tuesday, July 30, 2024, to discuss these results. Interested parties may access the conference call by dialing (833) 470-1428 (toll-free) or (404) 975-4839 and referencing access code: 707454.

A live audio webcast of the conference call will be accessible from the “Investor Relations” section of A10 Network’s website at investors.a10networks.com. The webcast will be archived for at least 90 days. A telephonic replay of the conference call will be available two hours after the conclusion of the live call and will run for seven days and may be accessed by dialing (866) 813-9403 (toll-free) or (929) 458-6194 and entering the passcode 793093.

Forward-Looking Statements
This press release contains “forward-looking statements,” including statements regarding our quarterly dividend payments and stock repurchase program, strategy, growth, customer opportunities, demand, positioning, profitability, revenue and expectations for 2024, market trends, investments and return of capital. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on assumptions that may prove to be incorrect, which could cause actual results to differ materially from those expected or implied by the forward-looking statements. Factors that may cause actual results to differ include any unforeseen need for capital which may require us to divert funds we may have otherwise used for the dividend program or stock repurchase program, which may in turn negatively impact our ability to administer the quarterly dividends or the repurchase of our common stock; a significant decline in global macroeconomic or political conditions that have an adverse impact on our business and financial results; business interruptions related to our supply chain; our ability to manage our


business and expenses if customers cancel or delay orders; execution risks related to closing key deals and improving our execution; the continued market adoption of our products; our ability to successfully anticipate market needs and opportunities; our timely development of new products and features; our ability to achieve or maintain profitability; any loss or delay of expected purchases by our largest end-customers; our ability to maintain or improve our competitive position; competitive and execution risks related to cloud-based computing trends; our ability to attract and retain new end-customers and our largest end-consumers; our ability to maintain and enhance our brand and reputation; changes demanded by our customers in the deployment and payment model for our products; continued growth in markets relating to network security; the success of any future acquisitions or investments in complementary companies, products, services or technologies; the ability of our sales team to execute well; our ability to shorten our close cycles; the ability of our channel partners to sell our products; variations in product mix or geographic locations of our sales; risks associated with our presence in international markets; weaknesses or deficiencies in our internal control over financial reporting; our ability to timely file periodic reports required to be filed under the Securities Exchange Act of 1934; and other risks that are described in “Risk Factors” in our periodic filings with the Securities and Exchange Commission, including our Form 10-K filed with the Securities and Exchange Commission on February 29, 2024. We do not intend to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), we refer to certain non-GAAP financial measures, including non-GAAP net income, non-GAAP net income per basic and diluted share (or non-GAAP EPS), non-GAAP gross profit and gross margin, non-GAAP operating income and operating margin, non-GAAP operating expenses, Adjusted EBITDA and Adjusted EBITDA margin. Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similarly titled measures presented by other companies.

A10 Networks considers these non-GAAP financial measures to be important because they provide useful measures of the operating performance of the company, exclusive of unusual events or factors that do not directly affect what we consider to be our core operating performance and are used by the company's management for that purpose.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

We define non-GAAP net income as our GAAP net income excluding: (i) stock-based compensation and related payroll tax, (ii) restructuring expense, (iii) cyber incident remediation expense, (iv) one-time tax planning expense, (v) one-time legal expense and (vi) income tax effect of non-GAAP items (i) to (v) listed above. We define non-GAAP net income per basic and diluted share as our non-GAAP net income divided by our basic and diluted weighted-average shares outstanding. We define non-GAAP gross profit as our GAAP gross profit excluding (i) stock-based compensation and related payroll tax, (ii) restructuring expense and (iii) cyber incident remediation expense. We define non-GAAP gross margin as our non-GAAP gross profit divided by our GAAP revenue. We define non-GAAP operating expenses as our GAAP operating expenses excluding (i) stock-based compensation and related payroll tax, (ii) restructuring expense, (iii) cyber incident remediation expense, (iv) one-time tax planning expense and (v) one-time legal expense. We define non-GAAP operating income as our GAAP income from operations excluding (i) stock-based compensation and related payroll tax, (ii) restructuring expense, (iii) cyber incident remediation expense, (iv) one-time tax planning expense and (v) one-time legal expense. We define non-GAAP operating margin as our non-GAAP operating income divided by our GAAP revenue. We define Adjusted EBITDA as our GAAP net income excluding (i) interest and other (income) expense, net, (ii) depreciation and amortization expense, (iii) provision for income taxes, (iv) stock-based compensation and related payroll tax, (v) restructuring expense, (vi) cyber incident remediation expense, (vii) one-time tax planning expense and (viii) one-time legal expense. We define Adjusted EBITDA margin as our Adjusted EBITDA divided by our GAAP revenue.

Non-GAAP financial measures are presented for supplemental informational purposes only for understanding the company's operating results.

About A10 Networks
A10 Networks (NYSE: ATEN) provides security and infrastructure solutions for on-premises, hybrid cloud, and edge-cloud environments. Our 7000+ customers span global large enterprises and communications, cloud and web service providers who must ensure business-critical applications and networks are secure, available, and efficient. Founded in 2004, A10 Networks is based in San Jose, Calif. and serves customers globally. For more information, visit A10networks.com and follow us at A10Networks.

The A10 logo and A10 Networks are trademarks or registered trademarks of A10 Networks, Inc. in the United States and other countries. All other trademarks are the property of their respective owners.









Investor Contact:
Rob Fink / Tom Baumann
FNK IR
646.809.4048 / 646.349.6641
aten@fnkir.com


Brian Becker
Chief Financial Officer
investors@a10networks.com

Source: A10 Networks, Inc.


A10 NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts, on a GAAP Basis)

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Net revenue:
Products$29,533 $39,090 $59,602 $70,272 
Services30,563 26,727 61,169 53,236 
Total net revenue60,096 65,817 120,771 123,508 
Cost of net revenue:
Products6,813 9,436 13,612 15,519 
Services5,225 4,027 9,870 8,160 
Total cost of net revenue12,038 13,463 23,482 23,679 
Gross profit48,058 52,354 97,289 99,829 
Operating expenses:
Sales and marketing19,453 20,868 40,667 43,202 
Research and development14,737 13,965 28,800 25,630 
General and administrative5,952 5,255 12,693 12,564 
Total operating expenses40,142 40,088 82,160 81,396 
Income from operations7,916 12,266 15,129 18,433 
Non-operating income, net:
Interest income1,761 662 3,442 1,635 
Other income (expense), net1,306 1,884 3,632 (334)
Non-operating income, net3,067 2,546 7,074 1,301 
Income before provision for income taxes10,983 14,812 22,203 19,734 
Provision for income taxes1,507 3,186 3,001 4,150 
Net income $9,476 $11,626 $19,202 $15,584 
Net income per share:
Basic$0.13 $0.16 $0.26 $0.21 
Diluted$0.13 $0.15 $0.25 $0.21 
Weighted-average shares used in computing net income per share:
Basic74,366 74,017 74,401 74,009 
Diluted75,497 75,428 75,432 75,512 


A10 NETWORKS, INC.
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME
(unaudited, in thousands, except per share amounts)

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
GAAP net income$9,476 $11,626 $19,202 $15,584 
Non-GAAP items:
Stock-based compensation and related payroll tax4,309 3,527 8,298 7,497 
Restructuring expense— — — 1,861 
Cyber incident remediation expense (recovery)— (621)— 732 
One-time tax planning expense400 — 400 — 
One-time legal expense71 — 71 — 
Income tax-effect of non-GAAP items(1,046)(3)(2,017)(1,218)
Total non-GAAP items3,734 2,903 6,752 8,872 
Non-GAAP net income$13,210 $14,529 $25,954 $24,456 
GAAP net income per share:
Basic$0.13 $0.16 $0.26 $0.21 
Diluted$0.13 $0.15 $0.25 $0.21 
Non-GAAP items:
Stock-based compensation and related payroll tax0.05 0.05 0.11 0.10 
Restructuring expense— 0.01 — 0.02 
Cyber incident remediation expense (recovery)— (0.01)— 0.01 
One-time tax planning expense0.01 — 0.01 — 
One-time legal expense— — — — 
Income tax-effect of non-GAAP items(0.01)— (0.03)(0.02)
Total non-GAAP items0.05 0.04 0.09 0.12 
Non-GAAP net income per share:
Basic$0.18 $0.20 $0.35 $0.33 
Diluted$0.18 $0.19 $0.34 $0.32 
Weighted average shares used in computing net income per share:
Basic74,366 74,017 74,401 74,009 
Diluted75,497 75,428 75,432 75,512 


Net income and earnings per share excluding adjustments are non-GAAP financial measures presented as supplemental financial measures to enable a user of the financial information to understand the impact of these adjustments on reported results. These financial measures should not be considered an alternative to net income, operating income, cash flows provided by operating activities, or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP. Our adjusted net income and earnings per share may not be comparable to similarly titled measures of another company because companies may not all calculate adjusted net income and earnings per share in the same manner.



A10 NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except par value, on a GAAP Basis)

June 30,
2024		December 31,
2023
ASSETS
Current assets:
Cash and cash equivalents$77,457 $97,244 
Marketable securities99,682 62,056 
Accounts receivable, net of allowances of $676 and $405, respectively57,395 74,307 
Inventory25,212 23,522 
Prepaid expenses and other current assets15,301 14,695 
Total current assets275,047 271,824 
Property and equipment, net34,012 29,876 
Goodwill 1,307 1,307 
Deferred tax assets, net62,327 62,725 
Other non-current assets24,477 24,077 
Total assets$397,170 $389,809 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$5,642 $7,024 
Accrued liabilities27,398 21,388 
Deferred revenue81,993 82,657 
Total current liabilities115,033 111,069 
Deferred revenue, non-current57,963 58,677 
Other non-current liabilities9,817 12,187 
Total liabilities182,813 181,933 
Stockholders' equity:
Common stock, $0.00001 par value: 500,000 shares authorized; 89,580 and 89,003 shares issued and 73,860 and 74,359 shares outstanding, respectively1 1 
Treasury stock, at cost: 15,720 and 14,644 shares, respectively(165,785)(150,909)
Additional paid-in-capital497,520 486,958 
Dividends paid(46,562)(37,619)
Accumulated other comprehensive income (loss)465 (71)
Accumulated deficit(71,282)(90,484)
Total stockholders' equity214,357 207,876 
Total liabilities and stockholders' equity$397,170 $389,809 
 
 



A10 NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands, on a GAAP Basis)
 
 
Six Months Ended June 30,
20242023
Cash flows from operating activities:
Net income$19,202 $15,584 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization5,507 4,307 
Stock-based compensation8,105 7,214 
Other non-cash items(403)(270)
Changes in operating assets and liabilities:
Accounts receivable16,695 3,698 
Inventory(3,318)(1,705)
Prepaid expenses and other assets(541)3,827 
Accounts payable(2,859)(1,460)
Accrued liabilities3,640 (17,094)
Deferred revenue(1,378)4,621 
Net cash provided by operating activities44,650 18,722 
Cash flows from investing activities:
Proceeds from sales of marketable securities22,536 42,252 
Proceeds from maturities of marketable securities47,699 44,532 
Purchases of marketable securities(106,293)(44,680)
Capital expenditures(6,414)(5,065)
Net cash provided by (used in) investing activities(42,472)37,039 
Cash flows from financing activities:
Proceeds from issuance of common stock under employee equity incentive plans1,854 2,559 
Repurchase of common stock(14,876)(6,230)
Payments for dividends(8,943)(8,880)
Net cash used in financing activities(21,965)(12,551)
Net increase (decrease) in cash and cash equivalents(19,787)43,210 
Cash and cash equivalents—beginning of period97,244 67,971 
Cash and cash equivalents—end of period$77,457 $111,181 
Non-cash investing and financing activities:
Transfers between inventory and property and equipment$1,628 $959 
Purchases of property and equipment included in accounts payable$1,477 $1,134 



A10 NETWORKS, INC.
RECONCILIATION OF GAAP GROSS PROFIT TO NON-GAAP GROSS PROFIT
(unaudited, in thousands, except percentages)

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
GAAP gross profit$48,058 $52,354 $97,289 $99,829 
GAAP gross margin80.0 %79.5 %80.6 %80.8 %
Non-GAAP adjustments:
Stock-based compensation and related payroll tax563 417 1,034 861 
Restructuring expense— — — 42 
Cyber incident remediation expense— — — 3 
Non-GAAP gross profit$48,621 $52,771 $98,323 $100,735 
Non-GAAP gross margin80.9 %80.2 %81.4 %81.6 %



A10 NETWORKS, INC.
RECONCILIATION OF GAAP TOTAL OPERATING EXPENSES
TO NON-GAAP TOTAL OPERATING EXPENSES
(unaudited, in thousands)
 
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
GAAP total operating expenses$40,142 $40,088 $82,160 $81,396 
Non-GAAP adjustments:
Stock-based compensation and related payroll tax(3,746)(3,110)(7,264)(6,636)
Restructuring expense— — — (1,819)
Cyber incident remediation recovery (expense)— 621 — (729)
One-time tax planning expense(400)— (400)— 
One-time legal expense(71)— (71)— 
Non-GAAP total operating expenses$35,925 $37,599 $74,425 $72,212 
 



A10 NETWORKS, INC.
RECONCILIATION OF GAAP INCOME FROM OPERATIONS
TO NON-GAAP OPERATING INCOME
(unaudited, in thousands, except percentages)

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
GAAP income from operations$7,916 $12,266 $15,129 $18,433 
GAAP operating margin13.2 %18.6 %12.5 %14.9 %
Non-GAAP adjustments:
Stock-based compensation and related payroll tax4,309 3,527 8,298 7,497 
Restructuring expense— — — 1,861 
Cyber incident remediation expense (recovery)— (621)— 732 
One-time tax planning expense400 — 400 — 
One-time legal expense71 — 71 — 
Non-GAAP operating income$12,696 $15,172 $23,898 $28,523 
Non-GAAP operating margin21.1 %23.1 %19.8 %23.1 %



A10 NETWORKS, INC.
RECONCILIATION OF GAAP NET INCOME TO
EBITDA AND ADJUSTED EBITDA (NON-GAAP)
(unaudited, in thousands, except percentages)

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
GAAP net income$9,476 $11,626 $19,202 $15,584 
GAAP net income margin15.8 %17.7 %15.9 %12.6 %
Exclude: Interest and other (income) expense, net(3,067)(2,546)(7,074)(1,301)
Exclude: Depreciation and amortization2,815 2,202 5,507 4,308 
Exclude: Provision for income taxes1,507 3,186 3,001 4,150 
EBITDA10,731 14,468 20,636 22,741 
Exclude: Stock-based compensation and related payroll tax4,309 3,527 8,298 7,497 
Exclude: Restructuring expense— — — 1,861 
Exclude: Cyber incident remediation expense (recovery)— (621)— 732 
Exclude: One-time tax planning expense400 — 400 — 
Exclude: One-time legal expense71 — 71 — 
Adjusted EBITDA$15,511 $17,374 $29,405 $32,831 
Adjusted EBITDA margin25.8 %26.4 %24.3 %26.6 %



Q2 2024 Financial Results & Commentary July 30, 2024

 
Cautionary Statements & Disclosures This presentation and the accompanying oral presentation contain “forward-looking” statements that are based on our management’s beliefs and assumptions, including statements regarding our future financial performance, strategy, demand, positioning, capital allocation strategy and value creation, and market and technology trends. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on assumptions that may prove to be incorrect, which could cause actual results to differ materially from those expected or implied by the forward-looking statements. Factors that may cause actual results to differ include any unforeseen need for capital which may require us to divert funds we may have otherwise used for the dividend program or stock repurchase program, which may in turn negatively impact our ability to administer the quarterly dividends or the repurchase of our common stock; a significant decline in global macroeconomic or political conditions that have an adverse impact on our business and financial results; business interruptions related to our supply chain; our ability to manage our business and expenses if customers cancel or delay orders; execution risks related to closing key deals and improving our execution; the continued market adoption of our products; our ability to successfully anticipate market needs and opportunities; our timely development of new products and features; our ability to achieve or maintain profitability; any loss or delay of expected purchases by our largest end-customers; our ability to maintain or improve our competitive position; competitive and execution risks related to cloud-based computing trends; our ability to attract and retain new end-customers and our largest end-consumers; our ability to maintain and enhance our brand and reputation; changes demanded by our customers in the deployment and payment model for our products; continued growth in markets relating to network security; the success of any future acquisitions or investments in complementary companies, products, services or technologies; the ability of our sales team to execute well; our ability to shorten our close cycles; the ability of our channel partners to sell our products; variations in product mix or geographic locations of our sales; risks associated with our presence in international markets; weaknesses or deficiencies in our internal control over financial reporting; our ability to timely file periodic reports required to be filed under the Securities Exchange Act of 1934; and other risks that are described in “Risk Factors” in our periodic filings with the Securities and Exchange Commission, including our Form 10-K filed with the Securities and Exchange Commission on February 27, 2023. We do not intend to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. This presentation and the accompanying oral presentation also include certain non-GAAP financial measures including Non-GAAP gross margin, non-GAAP operating income, non-GAAP net income, non-GAAP operating margin, Adjusted EBITDA and Non-GAAP EPS. Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similarly titles measures presented by other companies. A10 Networks considers these non-GAAP financial measures to be important because they provide useful measures of the operating performance of the company, exclusive of unusual events or factors that do not directly affect what we consider to be our core operating performance and are used by the company’s management for that purpose. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. We define non-GAAP net income as our GAAP net income excluding: (i) stock-based compensation and related payroll tax, (ii) restructuring expense, (iii) cyber incident remediation expense, (iv) one-time tax planning expense, (v) one-time legal expense, (vi) capitalized project impairment expense and (vii) income tax effect of non-GAAP items (i) to (vi) listed above. We define non-GAAP net income per basic and diluted share as our non-GAAP net income divided by our basic and diluted weighted-average shares outstanding. We define non-GAAP gross profit as our GAAP gross profit excluding (i) stock-based compensation and related payroll tax, (ii) restructuring expense and (iii) cyber incident remediation expense. We define non-GAAP gross margin as our non-GAAP gross profit divided by our GAAP revenue. We define non-GAAP operating expenses as our GAAP operating expenses excluding (i) stock-based compensation and related payroll tax, (ii) restructuring expense, (iii) cyber incident remediation expense, (iv) one-time tax planning expense and (v) one-time legal expense. We define non-GAAP operating income as our GAAP income from operations excluding (i) stock-based compensation and related payroll tax, (ii) restructuring expense, (iii) cyber incident remediation expense, (iv) one-time tax planning expense, (v) one-time legal expense and (vi) capitalized project impairment expense . We define non-GAAP operating margin as our non-GAAP operating income divided by our GAAP revenue. We define Adjusted EBITDA as our GAAP net income excluding (i) interest and other (income) expense, net, (ii) depreciation and amortization expense, (iii) provision for income taxes, (iv) stock-based compensation and related payroll tax, (v) restructuring expense, (vi) cyber incident remediation expense, (vii) one-time tax planning expense, (viii) one-time legal expense and (ix) capitalized project impairment expense. We define Adjusted EBITDA margin as our Adjusted EBITDA divided by our GAAP revenue. A reconciliation between GAAP and non-GAAP financial measures can be found in the appendix to this document and in the accompanying financial results press release.

 
Agenda ▪ Q2 2024 Overview ▪ Q2 Financial Performance ▪ FY 2024 Outlook

 
Q2’24: Enterprise Improvement; Profitability In-Line Revenue Overview • Q2 revenue decreased 8.7% year-over-year • Enterprise: up 25% • Service Provider: down 25% Consistent Profitability • Non-GAAP gross margins of 80.9% • GAAP EPS of $0.13 compared to $0.15 in Q2’23 • Non-GAAP EPS of $0.18 compared to $0.19 in Q2’23 Key Takeaways • Profitability in-line with consensus • Revenue headwinds largely isolated to the North American Service Provider segment • Continue to strengthen our position with enterprise customers; well-aligned with service provider customer investment plans • Security solutions remain in high demand See Appendix for reconciliation to most comparable GAAP financial measures.

 
Quarterly Revenue & Adjusted EBITDA Operating Income is a Non-GAAP Financial Measure. See Appendix for reconciliation to most comparable GAAP financial measures. $65.8 $57.8 $70.4 $60.7 $60.1 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Revenue, $ Millions $17.4 $14.4 $23.9 $13.9 $15.5 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Adjusted EBITDA, $ Millions $65.8 $60.1 Q2'23 Q2'24 Revenue, $ Millions $17.4 $15.5 Q2'23 Q2'24 Adjusted EBITDA, $ Millions

 
56% 44% Q2’24 $60.1 million Quarterly Revenue by Customer Vertical 67.4% 49.7% 58.4% 62.0% 55.5% 32.6% 50.3% 41.6% 38.0% 44.5% Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Enterprise Service Provider

 
Quarterly Revenue by Geography 53% 57% 50% 53% 52% 56% 45% 57% 45% 51% 28% 32% 34% 33% 27% 33% 37% 26% 41% 32% 19% 11% 16% 14% 21% 11% 19% 16% 14% 17% Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 $ Millions Americas APJ EMEA 51% 32% 17% Q2’24 $60.1 million

 
Consistent Value Creation Business Model Revenue Growth Capital Allocation

 
Appendix

 
Financial Performance Trends Numbers may not sum due to rounding. Please refer to the supplemental financials posted in the “Investor Relations” section of the A10 Networks website at investors.a10networks.com Gross Margin %, Operating Margin %, Adjusted EBITDA and EPS are Non-GAAP Financial Measures. See Appendix for reconciliation to most comparable GAAP financial measures. $ Millions (except EPS) Q1’21 Q2’21 Q3’21 Q4’21 FY 2021 Q1’22 Q2’22 Q3’22 Q4’22 FY 2022 Q1’23 Q2’23 Q3’23 Q4’23 FY 2023 Q1’24 Q2’24 Revenue $54.8 $59.2 $65.4 $70.7 $250.0 $62.7 $68.0 $72.1 $77.6 $280.3 $57.7 $65.8 $57.8 $70.4 $251.7 $60.7 $60.1 Non-GAAP Gross Margin % 78.9% 77.9% 80.4% 80.7% 79.6% 80.2% 80.6% 80.2% 80.3% 80.3% 83.1% 80.2% 81.8% 81.8% 81.7% 81.9% 80.9% Non-GAAP Operating Margin % 19.7% 18.8% 22.2% 24.8% 21.6% 18.6% 23.7% 27.0% 25.5% 23.9% 23.1% 23.1% 20.6% 30.4% 24.6% 18.5% 21.1% Adjusted EBITDA (non-GAAP) $13.0 $13.2 $16.8 $19.4 $62.4 $13.5 $18.0 $21.3 $22.3 $75.1 $15.5 $17.4 $14.4 $23.9 $71.2 $13.9 $15.5 Non-GAAP EPS $0.12 $0.13 $0.17 $0.20 $0.63 $0.13 $0.17 $0.20 $0.24 $0.74 $0.13 $0.19 $0.16 $0.25 $0.73 $0.17 $0.18 Ending Cash & Marketable Securities $161.0 $166.8 $187.5 $185.0 $185.0 $164.7 $166.8 $127.8 $151.0 $151.0 $144.5 $153.9 $169.0 $159.3 $159.3 $182.1 $177.1

 
GAAP to Non-GAAP – Gross Margin and EPS Numbers may not sum due to rounding. EPS data is presented on a basic and diluted basis. Please refer to the supplemental financials posted the “Investor Relations” section of the A10 Networks website at investors.a10networks.com.

 
GAAP to Non-GAAP – Operating Income Numbers may not sum due to rounding. Please refer to the supplemental financials posted the “Investor Relations” section of the A10 Networks website at investors.a10networks.com. Q3’23

 
GAAP to Non-GAAP – Adjusted EBITDA Numbers may not sum due to rounding. Please refer to the supplemental financials posted the “Investor Relations” section of the A10 Networks website at investors.a10networks.com.

 
v3.24.2
Cover
Jul. 30, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jul. 30, 2024
Entity Registrant Name A10 NETWORKS, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-36343
Entity Tax Identification Number 20-1446869
Entity Address, Address Line One 2300 Orchard Parkway
Entity Address, City or Town San Jose
Entity Address, State or Province CA
Entity Address, Postal Zip Code 95131
City Area Code 408
Local Phone Number 325-8668
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, $0.00001 par value per share
Trading Symbol ATEN
Security Exchange Name NYSE
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001580808
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