Financial Data and Key Metrics Changes - A10 Networks reported first quarter revenue of $66.1 million, reflecting a 9% year-over-year increase [12] - Non-GAAP net income for the quarter was $15 million, or $0.20 per diluted share, compared to $12.7 million, or $0.17 per diluted share in the same quarter last year [15] - Gross margin for the first quarter was 80.9%, consistent with the company's target range of 80% to 82% [15] - Adjusted EBITDA was $19.5 million, representing 29.5% of revenue [15] Business Line Data and Key Metrics Changes - Enterprise revenue grew by 18% year-over-year, while service provider revenue increased by 3% [6][12] - On a trailing twelve-month basis, enterprise revenue increased by 12%, indicating a solid foundation for future growth [6] - Product revenue accounted for 54% of total revenue, while services revenue made up 46% [13] Market Data and Key Metrics Changes - North America showed relatively strong performance, while Asia Pacific results were impacted by a strong Q1 last year due to large infrastructure projects in Japan [13] - Overall market conditions have improved and stabilized, with service provider customer growth driven by demand for greater data center capacity [6][11] Company Strategy and Development Direction - A10 Networks is focusing on expanding its presence and capabilities with enterprise customers, particularly through the acquisition of ThreatX Protect to enhance its cybersecurity portfolio [8][10] - The company aims to address non-discretionary security and capacity requirements, positioning itself to benefit from the rise of AI and its associated demands [6][10] - A10 Networks continues to target gross margins of 80% to 82% and adjusted EBITDA margins of 26% to 28% for the full year [18] Management's Comments on Operating Environment and Future Outlook - Management noted that while there may be delays in order timing due to market conditions, these are expected to be temporary [6] - The company remains optimistic about its strategic position and believes it is well-positioned to outpace the market in terms of revenue growth and profitability as conditions stabilize [11][20] Other Important Information - Total deferred revenue increased by 8% to $152.7 million, reflecting confidence from customers in A10's solutions [14] - The company ended the quarter with $355.8 million in cash, cash equivalents, and marketable securities, significantly up from $195.6 million at the end of 2024 [16] Q&A Session Summary Question: Impact of tariffs on customer conversations - Management indicated that there is caution among customers regarding macroeconomic conditions, but spending patterns are not completely frozen [25][27] Question: Visibility on AI data center initiatives - Management noted that they have reasonable visibility into large AI build-outs, but companies are modulating their plans based on financials [28][29] Question: Anticipated revenue growth - Management expressed comfort with expectations of high single-digit revenue growth for the year, pending macroeconomic shifts [34] Question: Competitive landscape in AI-driven product portfolio - Management stated that competitive dynamics remain similar, with partnerships evolving as service providers build out AI data centers [35] Question: Growth in enterprise revenue - Management clarified that the growth in enterprise revenue was influenced by a soft Q1 last year, with multiple customers contributing to the increase [39] Question: Caution among service provider customers - Management acknowledged broad-based caution among service provider customers, although some are more aggressive in their spending [40][41] Question: Sales and marketing expenses - Management indicated that the decrease in sales and marketing expenses was a strategic decision to manage costs while investing in R&D [42] Question: Full year EBITDA target - Management remains confident in achieving an EBITDA margin of 26% to 28% despite potential fluctuations in input costs [46][47] Question: Diversification of contract manufacturing partners - Management is actively working on diversifying manufacturing partners to build a more resilient supply chain [49][50] Question: Exchange rate impacts - Management noted that while exchange rates can pose revenue risks, project timelines are typically not heavily influenced by short-term fluctuations [51][53] Question: Product refresh outlook - Management clarified that product refresh cycles are part of normal business operations and do not indicate a significant change in customer outlook [58][59] Question: Tariff impact on pricing negotiations - Management stated that any tariff impact would require discussions with customers to determine how to share the burden, but specifics are uncertain until more information is available [61][62]

Financial Performance - Revenue for Q1 2025 was $66.1 million, representing a 9% increase year-over-year from $60.7 million in Q1 2024[6] - GAAP net income for Q1 2025 was $9.5 million, or $0.13 per diluted share, compared to $9.7 million, or $0.13 per diluted share, in Q1 2024[6] - Non-GAAP net income for Q1 2025 was $15.0 million, or $0.20 per diluted share, compared to $12.7 million, or $0.17 per diluted share, in Q1 2024[6] - GAAP gross margin was 79.7%, while non-GAAP gross margin was 80.9%[6] - The company reported a total operating income of $8.8 million for Q1 2025, up from $7.2 million in Q1 2024[15] - Non-GAAP gross profit increased to $53.5 million in Q1 2025, up from $49.7 million in Q1 2024, indicating an 8% growth[21] - Non-GAAP operating income rose to $16.1 million, compared to $11.2 million in Q1 2024, showing a 44% increase[25] - Adjusted EBITDA for Q1 2025 was $19.5 million, up from $13.9 million in Q1 2024, representing a 40% increase[27] - The company reported a GAAP operating margin of 13.3% for Q1 2025, up from 11.9% in Q1 2024[25] Cash Flow and Assets - Cash and cash equivalents rose significantly to $243.8 million, compared to $95.1 million at the end of 2024, marking a 156% increase[20] - Total assets increased to $606.2 million as of March 31, 2025, up from $432.8 million at the end of 2024, representing a 40% growth[18] - Total liabilities increased to $410.3 million as of March 31, 2025, compared to $201.0 million at the end of 2024, a 103% rise[18] - Cash flows from operating activities decreased to $17.2 million in Q1 2025, down from $32.4 million in Q1 2024, a decline of 47%[20] Shareholder Returns - The company returned $51.4 million to investors, including $47.0 million from share repurchases and $4.4 million in cash dividends[6] - A new $75 million share repurchase program was authorized by the Board of Directors[6] Strategic Initiatives - The acquisition of ThreatX Protect, completed in February 2025, enhances the company's capabilities in protecting web applications and APIs[3] - The company completed an acquisition costing $19.1 million during the quarter, contributing to its strategic expansion efforts[20] Market Outlook - The company expects growth to outpace the broader industry despite potential near-term demand impacts from global trade dynamics[3] - Service provider spending patterns may remain uneven due to macroeconomic volatility and trade policy impacts[3]

Financial Performance - Q1 2025 revenue increased by 9% year-over-year[9] - Enterprise revenue was up 18%[9] - Service provider revenue increased by 3%[9] - Non-GAAP gross margins were 80.9% in Q1 2025[9] - Non-GAAP EPS was $0.20, compared to $0.17 in Q1 2024[9] - Q1 2025 revenue reached $66.1 million, compared to $60.7 million in Q1 2024[11, 13] - Adjusted EBITDA for Q1 2025 was $19.5 million, compared to $13.9 million in Q1 2024[13, 15] Balance Sheet - Cash and cash equivalents totaled $243.8 million as of March 31, 2025, compared to $95.1 million as of December 31, 2024[23] - Marketable securities were $112.0 million as of March 31, 2025, compared to $100.4 million as of December 31, 2024[23] - Long-term debt was $217.7 million[23] Revenue by Geography - Americas accounted for 51% of revenue in Q1 2025[18] - APJ (Asia Pacific and Japan) accounted for 28% of revenue in Q1 2025[18] - EMEA (Europe, Middle East, and Africa) accounted for 21% of revenue in Q1 2025[18]

Company Overview - A10 Networks, Inc. (NYSE: ATEN) is scheduled to report its Q1 '25 earnings on May 1 after market close [1] Investment Strategy - The company is positioned for long-term investment, focusing on a mix of growth, value, and dividend-paying stocks, with a particular emphasis on value [1]

Revenue Performance - Total revenue for 2024 was $261.7 million, representing a 4% increase from $251.7 million in 2023[264]. - Products revenue decreased by $1.3 million, or 1%, to $139.8 million in 2024, primarily due to lower demand from service provider and enterprise customers in the Americas and EMEA regions[270]. - Services revenue increased by $11.3 million, or 10%, to $121.9 million in 2024, driven by increased post contract support (PCS) sales in the APJ region[271]. - The Americas region generated $134.4 million, or 51% of total revenue, a 1% increase compared to 2023, mainly due to higher services revenue from enterprise customers[272]. - The APJ region contributed $87.2 million, or 33% of total revenue, reflecting a 12% increase compared to 2023, driven by higher demand from service provider customers[273]. - EMEA region revenue was $40.2 million, or 16% of total revenue, a 3% decrease from 2023, primarily due to lower products revenue from service provider customers[274]. Profitability - Income from operations increased by $5.3 million, or 13.8%, to $44.0 million in 2024[264]. - Net income for 2024 was $50.1 million, a 25.4% increase from $40.0 million in 2023[264]. - Gross profit for 2024 was $210,277 thousand, with a gross margin of 80.4%, down from 80.9% in 2023, primarily due to a 1.7% decrease in services gross margin[281][282]. - Operating expenses increased by 1% from $165,090 thousand in 2023 to $166,309 thousand in 2024, with research and development expenses rising by 5%[284]. Cash Flow and Liquidity - Cash provided by operating activities was $90,492 thousand in 2024, significantly up from $44,514 thousand in 2023, driven by net income of $50,100 thousand[304][306]. - As of December 31, 2024, the company had cash and cash equivalents of $95.1 million and marketable securities of $100.4 million, indicating strong liquidity[296]. - Cash used in investing activities for the year ended December 31, 2024, was $48.4 million, primarily due to purchases of marketable securities totaling $142.8 million and capital expenditures of $12.3 million, partially offset by proceeds from maturities and sales of marketable securities totaling $106.6 million[308]. - Cash used in financing activities for the year ended December 31, 2024, was $44.3 million, primarily for stock repurchases of $30.1 million and cash dividends of $17.8 million, partially offset by $3.6 million from common stock issuances[310]. Investments and Acquisitions - The company acquired ThreatX Protect in February 2025, enhancing its cybersecurity portfolio with WAAP protection[261]. - The company recorded $5.3 million in investment gains in 2024, compared to an immaterial loss in 2023, indicating improved investment performance[293]. - The investment portfolio as of December 31, 2024, had a fair market value of $100.4 million, with a hypothetical 10% change in interest rates expected to have no material impact on its fair value[320]. Research and Development - Research and development expenses increased by $2.5 million in 2024, focusing on cybersecurity and AI technologies[288]. Tax and Foreign Exchange - The provision for income tax increased to $8.0 million in 2024 from $3.8 million in 2023, reflecting higher taxable income[294]. - The company recorded net foreign exchange gains of $2.1 million in 2024 and $0.1 million in 2023, indicating fluctuations in foreign currency exchange rates[319]. - The company has a hedging program to mitigate foreign currency risk, particularly with revenue contracts primarily in U.S. Dollars and costs in local currencies[317]. Revenue Recognition - Revenue is derived from products and services, with significant contributions from hardware, software licenses, and post-contract support services[314]. - The company utilizes multiple performance obligations in contracts, requiring significant judgment to allocate revenue based on standalone selling prices[315].

Company Overview - A10 Networks, Inc. (NYSE: ATEN) specializes in cybersecurity and infrastructure solutions, which are essential for ensuring smooth network operations across on-premises setups, hybrid cloud environments, and edge computing [1] Research Principles - Grassroots Trading emphasizes providing objective, unbiased, and balanced research, supported by solid data and free from emotional influences or company preferences [1] - The focus is primarily on small- to mid-cap companies, offering compelling investment insights on often overlooked opportunities [1] - The research also includes periodic identification of potential opportunities in large- and mega-cap companies, broadening the coverage of dynamic equity markets [1]

Q4 2024 Financial Results & Commentary February 4, 2025 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 ...

Financial Data and Key Metrics Changes - A10 Networks reported fourth quarter revenue of $74.2 million, an increase of 5.4% year-over-year, with enterprise revenue growing 8% and service provider revenue increasing 4% [22][23] - For the full year, revenue was $261.7 million, up 4% year-over-year, with non-GAAP net income of $64.8 million or $0.86 per diluted share, compared to $54.9 million or $0.73 per diluted share last year [28][30] - Gross margin for the fourth quarter was 80.7%, aligning with the target range of 80% to 82% [25][31] Business Line Data and Key Metrics Changes - Service provider revenue was up 2.5% for the year, recovering from a nearly 8% decline in the first half [12][22] - Revenue from enterprise customers grew faster at 6% for the year, compared to the consolidated revenue growth of 4% [13][22] - Security-led revenue increased 6% for the quarter and 9% for the year, representing 63% of total revenue [16][28] Market Data and Key Metrics Changes - A10 Networks experienced growth in all key regions, including North America, Asia Pacific, Japan, and EMEA, with North America showing a positive trend after previous softness [17][18] - The company noted a consistent demand in EMEA and Japan, with North America beginning to normalize [18][22] Company Strategy and Development Direction - A10 Networks is focusing on expanding its presence in the enterprise market while continuing to serve service providers, particularly in AI data center development [8][10] - The company aims to drive 65% of its revenue from security-led solutions, with a current representation of 63% [17][28] - Investments in R&D are expected to enhance the cybersecurity sector and align with AI trends, with new products in Bot Protection, DDoS mitigation, and GPU-based AI infrastructure [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth in enterprise customers and a recovering service provider market, despite potential short-term volatility [8][12] - The company anticipates a positive trajectory for 2025, with expectations to exceed the long-term growth target of 10% to 12% [60][61] - Management acknowledged external factors such as interest rates and tariffs that could impact future performance [60][61] Other Important Information - A10 Networks ended the year with nearly $200 million in cash and marketable securities, maintaining no debt [20][30] - The Board approved a quarterly cash dividend of $0.06 per share, with ongoing share repurchase programs [31] Q&A Session Summary Question: How did seasonality in Q4 compare to previous years? - Management noted that Q4 seasonality was consistent with previous years, but there was less of a budget flush phenomenon this time [39][40] Question: What new products are coming up this year? - New products include enhancements in DDoS detection, bot management, and AI-oriented solutions, expected to roll out in the second half of the year [45][48] Question: What is the current state of AI revenue? - Management indicated that current products are being used for AI applications, but specific revenue figures will need to be clarified in future quarters [56][58] Question: What is the outlook for OpEx in 2025? - OpEx is expected to increase slightly due to investments in cybersecurity and infrastructure products, while maintaining long-term gross margin and EBITDA targets [62][65] Question: Are there any impacts from tariffs? - Management acknowledged that they are not impervious to tariff impacts but have strategies in place to mitigate these challenges [90][92]

分组1 - A10 Networks reported quarterly earnings of $0.31 per share, exceeding the Zacks Consensus Estimate of $0.25 per share, and showing an increase from $0.25 per share a year ago, resulting in an earnings surprise of 24% [1] - The company achieved revenues of $74.2 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 4.97%, compared to $70.42 million in the same quarter last year [2] - A10 Networks has outperformed the S&P 500 with a 7.1% increase in shares since the beginning of the year, while the S&P 500 gained 1.9% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.23 on revenues of $61.72 million, and for the current fiscal year, it is $0.91 on revenues of $274.37 million [7] - The Zacks Industry Rank for Communication - Network Software is in the bottom 31% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Revenue Performance - Revenue for Q4 2024 was $74.2 million, a 5% increase from $70.4 million in Q4 2023[6] - Full-year 2024 revenue reached $261.7 million, a 4% increase from $251.7 million in 2023[6] - Enterprise revenue grew 8% year-over-year, while service provider revenue increased by 4%[6] Profitability Metrics - GAAP net income for Q4 2024 was $18.3 million, representing 24.7% of revenue, compared to $17.9 million (25.4% of revenue) in Q4 2023[6] - Non-GAAP net income for Q4 2024 was $23.0 million (30.9% of revenue), up from $18.5 million (26.2% of revenue) in Q4 2023[6] - Adjusted EBITDA for Q4 2024 was $27.3 million, representing 36.8% of revenue, compared to $24.0 million (34.0% of revenue) in Q4 2023[6] - GAAP net income for Q4 2024 was $18,301, compared to $17,917 in Q4 2023, representing a 2.1% increase[20] - Non-GAAP net income for Q4 2024 was $22,955, up from $18,467 in Q4 2023, reflecting a 24.0% growth[20] - Adjusted EBITDA for the year ended December 31, 2024, was $74,532 million, up from $71,173 million in 2023, reflecting an adjusted EBITDA margin of 28.5%[31] - GAAP income from operations for the year ended December 31, 2024, was $43,968 million, compared to $38,648 million in 2023, with an operating margin of 16.8%[29] - EBITDA for the year ended December 31, 2024, was $55,261 million, an increase from $47,994 million in 2023[31] Expenses and Liabilities - GAAP total operating expenses for Q4 2024 were $40,910, compared to $39,137 in Q4 2023, a 4.5% increase[27] - Non-GAAP total operating expenses for 2024 were $149,149, up from $143,770 in 2023, reflecting a 3.7% increase[27] - Total liabilities rose to $200,986 in 2024 from $181,933 in 2023, an increase of 10.5%[22] - Stock-based compensation and related payroll tax for Q4 2024 amounted to $4,811 million, significantly higher than $2,922 million in Q4 2023[29] - The company reported a workforce reduction expense of $1,075 million in 2024, compared to $4,298 million in the previous year[29] Cash and Investments - The company completed Q4 2024 with cash and investments of $195.6 million, up from $159.3 million at the end of 2023[6] - Cash flows from operating activities for 2024 were $90,492, significantly higher than $44,514 in 2023, representing a 103.5% increase[24] Assets and Equity - Total current assets increased to $307,288 in 2024 from $271,824 in 2023, marking a 13.0% rise[22] - Total stockholders' equity increased to $231,829 in 2024 from $207,876 in 2023, a growth of 11.5%[22] Future Outlook - The company plans to launch new security solutions in 2025, leveraging several years of R&D investment[5] - A10 Networks anticipates ongoing normalization of spending from service provider customers in 2025[5] Gross Profit - GAAP gross profit for 2024 was $210,277, compared to $203,738 in 2023, indicating a 3.0% increase[25] - Non-GAAP gross profit for 2024 reached $212,388, up from $205,597 in 2023, a growth of 3.4%[25] Operating Margins - The company experienced a decrease in GAAP operating margin from 25.6% in Q4 2023 to 24.8% in Q4 2024[29] - Non-GAAP operating margin for the year ended December 31, 2024, was 24.2%, slightly down from 24.6% in 2023[29] - Non-GAAP operating income reached $24,282 million in Q4 2024, compared to $21,428 million in Q4 2023, with a non-GAAP operating margin of 32.7%[29] Impairment Expenses - The company did not incur any impairment expenses in 2024, contrasting with $2,975 million in 2023[29]