UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.00001 par value ATEN New York Stock Exchange Form 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission fil ...

Financial Data and Key Metrics Changes - The company reported revenue of $49.2 million for Q2 2019, a 19% decrease compared to $60.7 million in the same period last year, primarily due to a decline in bookings from a major web giant account in North America [23] - Non-GAAP gross margin for Q2 was 78.0%, an increase of 175 basis points from the previous quarter but a decrease of 57 basis points year-over-year [25] - Non-GAAP operating loss was just under $1 million, an improvement from a loss of $5.9 million in the prior quarter [26] Business Line Data and Key Metrics Changes - Product revenue was $26.8 million, representing 54% of total revenue, while service revenue was $22.4 million, or 46% of total revenue [23] - Security product revenue grew 8% year-over-year, reaching 34% of total product revenue in Q2 [23] Market Data and Key Metrics Changes - Revenue from North America decreased 50% year-over-year to $15.3 million, while Japan saw revenue increase by 26% to $14.9 million [23] - Strong double-digit year-over-year product revenue growth was reported in Japan, EMEA, and Latin America, with triple-digit growth in South Korea driven by 5G wins [16] Company Strategy and Development Direction - The company is focusing on growth and innovation in security, 5G, and multi-cloud solutions, with a strong emphasis on expanding its addressable market [15] - A new global reseller agreement with Dell EMC and a partnership with Oracle Cloud Marketplace were established to enhance go-to-market strategies [18][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that large deals in North America were pushed into future quarters, impacting Q2 revenue performance, but expressed optimism about the pipeline and future growth [16][35] - The company expects third-quarter revenue to be in the range of $50 million to $54 million, with sequential growth anticipated in the fourth quarter [27] Other Important Information - The CEO announced plans for retirement, indicating a transition to new leadership while expressing confidence in the company's future [8][9] - The company added 215 new customers in Q2, the highest level in 14 quarters, and secured significant wins in various sectors [20] Q&A Session Summary Question: How is the new distribution now working out? - The partnership with Arrow is progressing but slowly, with a handful of additional new partners added in Q2, and expectations for improvement in the second half of the year [29] Question: What is the EMC Dell partnership? - The partnership includes the entire product portfolio, primarily targeting the enterprise market, with some crossover into federal, healthcare, and government sectors [31] Question: Can you provide more color about the customer pipeline? - The pipeline shows improvement in Q3, especially in 5G platforms internationally, with strong security pipeline growth anticipated in the second half [35]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-36343 A10 NETWORKS, INC. (Exact Name of Registrant as Specified in its Charter) | --- | --- | --- | |-------|------------------ ...

A10 Networks, Inc. (NYSE:ATEN) Q1 2019 Earnings Conference Call April 25, 2019 4:30 PM ET Company Participants Maria Riley - IR Lee Chen - Founder, CEO, President & Chairman Christopher White - EVP, Worldwide Sales Tom Constantino - EVP & CFO Conference Call Participants Mark Kelleher - D.A. Davidson & Co. Catharine Trebnick - Dougherty & Company Operator Good day and welcome to the A10 Networks First Quarter 2019 Financial Results Conference Call. [Operator Instructions]. Please note, this event is being r ...

Part I [Business](index=6&type=section&id=Item%201.%20Business) A10 Networks provides secure application solutions and services for cloud providers, service providers, and enterprises - The company's business is driven by industry trends such as the increased adoption of multi-cloud applications, rising complexity of network infrastructure, the growing importance of automation, and the proliferation of DDoS attacks and encrypted threats[15](index=15&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk) - A10's product portfolio consists of six secure application solutions and two intelligent management tools, available in various form factors including hardware, virtual, and cloud-native software[26](index=26&type=chunk)[29](index=29&type=chunk) - The core technology is the Advanced Core Operating System (ACOS), a proprietary software platform optimized for multi-core CPUs, which enables high performance and scalability for its products[48](index=48&type=chunk)[49](index=49&type=chunk) Key Financial and Customer Metrics (2016-2018) | Metric | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | | **Total Revenue** | $232.2M | $235.4M | $227.3M | | **Gross Margin** | 77.7% | 77.4% | 76.1% | | **Net Loss** | ($27.6M) | ($10.8M) | ($22.4M) | | **Top 10 Customer Revenue %** | 37% | 35% | 36% | - The company faces competition from traditional ADC vendors like **F5 Networks** and **Citrix**, cloud-based ADC services, CGN product vendors like **Cisco** and **Juniper**, and DDoS protection providers like **Arbor Networks** and **Radware**[63](index=63&type=chunk) - A10 outsources its hardware manufacturing to partners including Lanner Electronics and AEWIN Technologies, allowing it to reduce costs and adjust to demand[68](index=68&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from material weaknesses in internal controls, intense competition, customer concentration, and international operations - The company has identified **material weaknesses in its internal control over financial reporting** as of December 31, 2018, and 2017, concluding that its disclosure controls and procedures were not effective[80](index=80&type=chunk)[81](index=81&type=chunk) - A10 faces intense competition from larger, well-established companies such as **F5 Networks**, **Citrix Systems**, **Cisco Systems**, and **Juniper Networks**, which have greater resources[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) - A significant portion of revenue comes from a limited number of large end-customers, with the top ten accounting for **37% of total revenue in 2018**[123](index=123&type=chunk)[124](index=124&type=chunk) - International sales constitute a significant portion of revenue (**55% in 2018**), exposing the company to risks such as currency fluctuations, trade restrictions, and political instability[148](index=148&type=chunk)[149](index=149&type=chunk)[152](index=152&type=chunk) - The company outsources hardware manufacturing to third parties, primarily in Taiwan, creating risks related to **supply chain disruption**, quality control, and product costs[170](index=170&type=chunk)[171](index=171&type=chunk) - Enhanced U.S. tariffs on imports from China, effective September 2018, are expected to **increase costs** and could negatively impact business[166](index=166&type=chunk) - The company will lose its "emerging growth company" status effective December 31, 2019, which will **increase compliance costs**, particularly related to the Sarbanes-Oxley Act[272](index=272&type=chunk)[273](index=273&type=chunk) [Unresolved Staff Comments](index=41&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved comments from the SEC staff - None[287](index=287&type=chunk) [Properties](index=42&type=section&id=Item%202.%20Properties) The company leases its corporate headquarters in San Jose, California, and other offices globally - The corporate headquarters is a leased space of **79,803 square feet** in San Jose, California, under a lease agreement expiring on January 31, 2020[289](index=289&type=chunk) - The company maintains additional leased offices in various international locations, including China, Japan, the United Kingdom, the Netherlands, Taiwan, Korea, Singapore, and India[289](index=289&type=chunk) [Legal Proceedings](index=42&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings arising in the ordinary course of business - The company evaluates legal proceedings and records a liability when a loss is probable and reasonably estimable, with further details in Note 6 of the financial statements[290](index=290&type=chunk)[291](index=291&type=chunk) [Mine Safety Disclosures](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[292](index=292&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=43&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NYSE, and a $20.0 million share repurchase program expired unused in 2018 - The company's common stock is listed on the New York Stock Exchange under the symbol **"ATEN"**[294](index=294&type=chunk) - A share repurchase program for up to **$20.0 million**, authorized in October 2017, expired in October 2018 without any shares being repurchased[296](index=296&type=chunk) [Selected Financial Data](index=44&type=section&id=Item%206.%20Selected%20Financial%20Data) This section presents five years of selected financial data, showing fluctuating revenue and consistent net losses Selected Consolidated Financial Data (2014-2018) | (in thousands, except per share) | 2018 | 2017 | 2016 | 2015 | 2014 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $232,223 | $235,429 | $227,297 | $196,285 | $179,507 | | **Gross Profit** | $180,327 | $182,111 | $172,884 | $147,883 | $136,570 | | **Net Loss** | $(27,617) | $(10,751) | $(22,391) | $(41,897) | $(35,870) | | **Net Loss Per Share** | $(0.38) | $(0.15) | $(0.34) | $(0.67) | $(0.74) | | **Total Assets** | $235,876 | $224,858 | $216,733 | $189,892 | $186,980 | | **Total Stockholders' Equity** | $103,883 | $98,386 | $82,752 | $78,205 | $96,565 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 1% revenue decrease and a widened net loss in 2018, driven by lower product sales and investigation costs [Overview](index=45&type=section&id=Overview) The company derives revenue from products and services across service provider, enterprise, and web giant customer verticals Revenue by Geography (2016-2018) | Region | 2018 % | 2017 % | 2016 % | | :--- | :--- | :--- | :--- | | United States | 45% | 49% | 51% | | Japan | 24% | 22% | 23% | | Other | 31% | 29% | 26% | Revenue by Customer Vertical (2016-2018) | Vertical | 2018 % | 2017 % | 2016 % | | :--- | :--- | :--- | :--- | | Service Providers | 43% | 47% | 48% | | Enterprises | 39% | 39% | 41% | | Web Giants | 18% | 14% | 11% | [Results of Operations](index=47&type=section&id=Results%20of%20Operations) Total revenue decreased 1% in 2018 while net loss widened significantly due to a 41% increase in G&A expenses Revenue Comparison (2017 vs 2018) | (in thousands) | 2018 | 2017 | Change (%) | | :--- | :--- | :--- | :--- | | **Products Revenue** | $144,682 | $149,903 | (3.5)% | | **Services Revenue** | $87,541 | $85,526 | 2.4% | | **Total Revenue** | $232,223 | $235,429 | (1.4)% | Profitability Comparison (2017 vs 2018) | (in thousands) | 2018 | 2017 | Change (%) | | :--- | :--- | :--- | :--- | | **Gross Profit** | $180,327 | $182,111 | (1.0)% | | **Loss from Operations** | $(27,679) | $(10,372) | (166.9)% | | **Net Loss** | $(27,617) | $(10,751) | (156.9)% | - The increase in General and Administrative expenses in 2018 was primarily driven by **$8.6 million in fees** related to an internal investigation[355](index=355&type=chunk) - The adoption of ASC 606 in 2018 resulted in a **$2.6 million increase** in products revenue for the year[317](index=317&type=chunk)[321](index=321&type=chunk) [Liquidity and Capital Resources](index=55&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with sufficient resources to meet cash needs for the next 12 months Cash Flow Summary (in thousands) | Activity | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | | **Operating Activities** | $(2,694) | $14,314 | $18,778 | | **Investing Activities** | $(6,876) | $(5,142) | $(96,355) | | **Financing Activities** | $3,624 | $8,420 | $8,435 | - As of December 31, 2018, the company had cash and cash equivalents of **$40.6 million** and marketable securities of **$87.8 million**[367](index=367&type=chunk) - The company has a **$25.0 million** revolving credit facility with Silicon Valley Bank, with no outstanding balance as of December 31, 2018[371](index=371&type=chunk)[373](index=373&type=chunk) Contractual Obligations as of Dec 31, 2018 (in thousands) | Obligation Type | Total | Less than 1 Year | 1 to 3 Years | | :--- | :--- | :--- | :--- | | Operating leases & other | $7,335 | $3,907 | $3,428 | | Purchase commitments | $19,296 | $19,296 | $0 | | **Total** | **$26,631** | **$23,203** | **$3,428** | [Critical Accounting Policies and Estimates](index=58&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant judgments, particularly for inventory valuation and revenue recognition - Key estimates are required for inventory valuation, where management assesses future demand and market conditions to identify **excess and obsolete products**[394](index=394&type=chunk) - Revenue recognition requires significant judgment, especially in allocating the transaction price to multiple performance obligations based on their **standalone selling prices (SSP)**[399](index=399&type=chunk)[400](index=400&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=59&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks are foreign currency exposure from Japanese yen revenue and interest rate risk on its investment portfolio - The company is exposed to foreign currency risk, as a significant portion of its revenue, particularly from Japan, is denominated in **Japanese yen**[406](index=406&type=chunk) - Interest rate risk primarily relates to the company's portfolio of marketable securities, which had a fair value of **$87.8 million** as of December 31, 2018[411](index=411&type=chunk) Interest Rate Sensitivity of Marketable Securities (as of Dec 31, 2018) | Change in Interest Rates | Hypothetical Fair Value (in thousands) | | :--- | :--- | | -100 BPS | $88,274 | | **Current Fair Value** | **$87,754** | | +100 BPS | $87,234 | [Financial Statements and Supplementary Data](index=61&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section includes the audited consolidated financial statements, the independent auditor's report, and accompanying notes [Report of Independent Registered Public Accounting Firm](index=62&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte & Touche LLP issued an unqualified audit opinion on the company's consolidated financial statements - The auditor, Deloitte & Touche LLP, provided an **unqualified opinion** on the financial statements[416](index=416&type=chunk)[421](index=421&type=chunk) - The report explicitly notes the change in accounting principle for revenue from contracts with customers (**ASC 606**) adopted in 2018[417](index=417&type=chunk) [Consolidated Financial Statements](index=63&type=section&id=Consolidated%20Financial%20Statements) The financial statements present the company's financial position, showing total assets of $235.9 million and a net loss of $27.6 million for 2018 Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2018 | Dec 31, 2017 | | :--- | :--- | :--- | | **Total Current Assets** | $214,939 | $203,802 | | **Total Assets** | $235,876 | $224,858 | | **Total Current Liabilities** | $97,367 | $92,726 | | **Total Liabilities** | $131,993 | $126,472 | | **Total Stockholders' Equity** | $103,883 | $98,386 | Consolidated Statement of Operations Highlights (in thousands) | Account | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | | **Total Revenue** | $232,223 | $235,429 | $227,297 | | **Gross Profit** | $180,327 | $182,111 | $172,884 | | **Loss from Operations** | $(27,679) | $(10,372) | $(20,570) | | **Net Loss** | $(27,617) | $(10,751) | $(22,391) | [Notes to Consolidated Financial Statements](index=68&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the adoption of ASC 606, ongoing legal proceedings, and significant tax attributes - The adoption of new revenue standard ASC 606 on January 1, 2018, resulted in a cumulative-effect adjustment that reduced the opening accumulated deficit by **$12.4 million**[479](index=479&type=chunk) - The company is subject to an ongoing private investigation by the **SEC** regarding possible violations of securities laws, but cannot predict the outcome or estimate a possible range of loss[526](index=526&type=chunk) - As of December 31, 2018, the company had U.S. federal net operating loss carryforwards of **$185.0 million** and state net operating loss carryforwards of **$75.3 million**, subject to a full valuation allowance[565](index=565&type=chunk)[566](index=566&type=chunk) - In 2018, two distribution channel partners, Customer A and Customer B, accounted for **14%** and **10%** of total revenue, respectively[471](index=471&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=93&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants - None[587](index=587&type=chunk) [Controls and Procedures](index=93&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective due to material weaknesses in internal control - Management concluded that disclosure controls and procedures were **not effective** as of December 31, 2018, due to material weaknesses in internal control over financial reporting[590](index=590&type=chunk) - The material weaknesses relate to the **control environment**, **monitoring activities**, and **revenue recognition**, and continue to be present as of December 31, 2018[595](index=595&type=chunk) - **Remediation actions** are underway, including reinforcing compliance, hiring new personnel, enhancing training, and implementing improved policies[597](index=597&type=chunk)[598](index=598&type=chunk)[599](index=599&type=chunk) [Other Information](index=95&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[605](index=605&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=96&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Required information is incorporated by reference from the 2019 Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2019 Annual Meeting of Stockholders[607](index=607&type=chunk) [Executive Compensation](index=96&type=section&id=Item%2011.%20Executive%20Compensation) Required information is incorporated by reference from the 2019 Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2019 Annual Meeting of Stockholders[608](index=608&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=96&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Required information is incorporated by reference from the 2019 Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2019 Annual Meeting of Stockholders[608](index=608&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=96&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Required information is incorporated by reference from the 2019 Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2019 Annual Meeting of Stockholders[609](index=609&type=chunk) [Principal Accountant Fees and Services](index=96&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Required information is incorporated by reference from the 2019 Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2019 Annual Meeting of Stockholders[610](index=610&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=97&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the documents filed as part of the Annual Report, including financial statements and exhibits - This section contains a list of the consolidated financial statements and all exhibits filed with the report, as required by Item 601 of Regulation S-K[612](index=612&type=chunk)[614](index=614&type=chunk) [Form 10-K Summary](index=100&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company indicates that there is no Form 10-K summary provided - None[618](index=618&type=chunk)

A10 Networks, Inc. (NYSE:ATEN) Q4 2018 Earnings Conference Call February 7, 2019 4:30 PM ET Company Participants Maria Riley – Investor Relations Lee Chen – Founder and Chief Executive Officer Tom Constantino – Chief Financial Officer Chris White – Executive Vice President-Worldwide Sales Conference Call Participants Mark Kelleher – D.A. Davidson Zack Turcotte – Dougherty Operator Good afternoon, and welcome to the A10 Networks Fourth Quarter and Year 2018 Financial Results Conference Call. All participants ...