Q1 2024 Financial Results & Commentary April 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 regardingour 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 ...

Financial Data and Key Metrics Changes - First quarter revenue was $60.7 million, an increase of 5.2% year-over-year [15] - Gross margin in the first quarter was 81.9%, in line with the stated goals of 80% to 82% [16] - Non-GAAP net income for the quarter was $12.7 million, or $0.17 per diluted share, compared to $9.9 million, or $0.13 per diluted share in the year-ago quarter [17] - Adjusted EBITDA was $13.9 million for the quarter, representing 22.9% of revenue [16] Business Line Data and Key Metrics Changes - Product revenue for the quarter was $30.1 million, representing 50% of total revenue, while services revenue was $30.6 million, also 50% of total revenue [15] - First quarter recurring revenue increased 13% compared to the first quarter last year, and deferred revenue increased nearly 10% [15] - Revenue from service providers was up 16% year-over-year in the quarter [10] Market Data and Key Metrics Changes - Strong growth was observed in the APJ region, indicating a positive trend in that market [10] - Enterprise revenue growth continues to outpace overall revenue growth on a trailing 12-month basis [10] Company Strategy and Development Direction - The company is focusing on enhancing cybersecurity capabilities and developing more flexible consumption models for enterprise customers [12] - Investments are being made in both enterprise-facing sales and marketing teams and R&D to strengthen capabilities targeting the enterprise segment [11] - The company aims to maintain gross margins of 80% to 82% and adjusted EBITDA margins of 26% to 28% [13][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining profitability and delivering value to shareholders while investing in innovation [14] - The company anticipates that enterprise sales in the second quarter will be better than the first quarter, with meaningful improvement expected in the second half of the year [11] - Management noted that while sales cycles have elongated, they are not seeing deterioration in business conditions compared to previous quarters [30] Other Important Information - The company continues to buy back stock and has a cash flow that more than funds buybacks and dividends [14][18] - The Board approved a quarterly cash dividend of $0.6 per share to be paid on June 3, 2024 [18] Q&A Session Summary Question: What inning is the company in regarding changes in the sales team? - Management indicated they are in the second or third inning of seeing results from changes made to the sales team [22] Question: How are conversations regarding pricing power going? - Management stated that while there are inflationary cost pressures, they focus on operational efficiency rather than driving margins through price increases [24] Question: What are the capital allocation priorities? - The first priority is investing in organic growth, followed by balancing dividends and buybacks, and finally considering inorganic opportunities [26][27] Question: Is the business at an inflection point? - Management noted that while they are cautious about using the term "inflection point," they see trends improving compared to the previous year [30] Question: What happened in Q1 regarding service provider and enterprise revenue? - Management explained that enterprise revenue faced a tough comparison due to a strong Q1 last year, while service provider revenue showed recovery after delayed spending [33] Question: What is the investment focus in the sales process? - The focus is on technical capabilities for service providers and hiring experienced sales personnel for the enterprise segment [39] Question: What percentage of revenue comes from new customers? - Approximately 20% of revenue comes from new customers, with the majority being from existing customers [41] Question: What are the priorities for service provider investments? - Investments related to capacity and security are top priorities, while modernization projects are more likely to be delayed [52] Question: What is the penetration rate of security solutions among the customer base? - Management indicated that while they do not have specific data, there is significant opportunity for growth in security solutions among existing customers [54] Question: How has the exchange rate impacted Q1 results? - There was a modest impact from the Japanese yen exchange rate, but it was not significant enough to disclose [59]

A10 Networks (ATEN) came out with quarterly earnings of $0.17 per share, beating the Zacks Consensus Estimate of $0.15 per share. This compares to earnings of $0.13 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 13.33%. A quarter ago, it was expected that this provider of networking technologies would post earnings of $0.27 per share when it actually produced earnings of $0.25, delivering a surprise of -7.41%.Over the last fo ...

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) A10 Networks reported Q1 2024 revenue of $60.7 million, a 5.2% YoY increase, with significant growth in GAAP and Non-GAAP net income and EPS Q1 2024 Key Financial Metrics (YoY Comparison) | Financial Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $60.7M | $57.7M | +5.2% YoY | | **GAAP Gross Margin** | 81.1% | 82.3% | -1.2 p.p. | | **Non-GAAP Gross Margin** | 81.9% | 83.1% | -1.2 p.p. | | **GAAP Net Income** | $9.7M | $4.0M | +142.5% YoY | | **Non-GAAP Net Income** | $12.7M | $9.9M | +28.3% YoY | | **GAAP Diluted EPS** | $0.13 | $0.05 | +160.0% YoY | | **Non-GAAP Diluted EPS** | $0.17 | $0.13 | +30.8% YoY | [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Dhrupad Trivedi emphasized successful market navigation through diversification, enterprise growth, and continued focus on security and R&D investments - Successfully navigated market volatility, with diversification enabling the company to address near-term fluctuations in the Service Provider segment[3](index=3&type=chunk) - Investments in the enterprise market are yielding results, with deferred revenue growing faster than overall revenue, indicating positive buying behavior from enterprise customers[3](index=3&type=chunk) - Security solutions remain a strategic focus, accounting for **61% of consolidated revenue** in the quarter[3](index=3&type=chunk) - The company maintains solid profitability while increasing R&D investments to address evolving customer needs, including AI solutions[3](index=3&type=chunk) [Shareholder Returns](index=1&type=section&id=Shareholder%20Returns) A10 Networks returned **$7.5 million** to shareholders in Q1 2024 through share repurchases and cash dividends, with a **$0.06 per share** dividend approved Q1 2024 Capital Return Summary | Activity | Amount | Details | | :--- | :--- | :--- | | **Share Repurchases** | $3.0M | 230,500 shares at an average price of $13.19 | | **Cash Dividends Paid** | $4.5M | - | | **Total Returned** | $7.5M | - | - The Board of Directors approved a quarterly cash dividend of **$0.06 per share**, payable on June 3, 2024[2](index=2&type=chunk) [Financial Statements (GAAP)](index=5&type=section&id=Financial%20Statements%20(GAAP)) GAAP financial statements for Q1 2024 show increased revenue and net income, stable balance sheet assets and liabilities, and improved operating cash flow [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2024 total net revenue increased to **$60.7 million**, with gross profit at **$49.2 million** and net income significantly rising to **$9.7 million** Q1 2024 vs Q1 2023 Income Statement Highlights (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Total net revenue** | $60,675 | $57,691 | | Products Revenue | $30,069 | $31,182 | | Services Revenue | $30,606 | $26,509 | | **Gross profit** | $49,231 | $47,475 | | **Income from operations** | $7,213 | $6,167 | | **Net income** | $9,726 | $3,958 | | **Diluted EPS** | $0.13 | $0.05 | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2024, total assets reached **$395.7 million**, with **$122.9 million** in cash, stable liabilities, and increased stockholders' equity Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $122,909 | $97,244 | | **Total current assets** | $276,098 | $271,824 | | **Total assets** | $395,658 | $389,809 | | **Total current liabilities** | $112,860 | $111,069 | | **Total liabilities** | $181,349 | $181,933 | | **Total stockholders' equity** | $214,309 | $207,876 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 2024 net cash from operations significantly improved to **$32.4 million**, with **$7.4 million** used in financing, ending with **$122.9 million** cash Q1 2024 vs Q1 2023 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $32,444 | $(846) | | **Net cash provided by investing activities** | $643 | $5,367 | | **Net cash used in financing activities** | $(7,422) | $(3,973) | | **Net increase in cash and cash equivalents** | $25,665 | $548 | | **Cash and cash equivalents—end of period** | $122,909 | $68,519 | [Reconciliation of GAAP to Non-GAAP Measures](index=6&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) Non-GAAP measures provide a clearer view of core operating performance by excluding specific items, with detailed reconciliations for key financial metrics - The company uses non-GAAP measures to provide a view of operating performance exclusive of unusual events or factors not directly affecting core operations[7](index=7&type=chunk) - Key adjustments to GAAP figures include stock-based compensation, restructuring expenses, cyber incident remediation expenses, and their income tax effects[9](index=9&type=chunk) [Net Income Reconciliation](index=6&type=section&id=Net%20Income%20Reconciliation) Q1 2024 Non-GAAP net income was **$12.7 million** (**$0.17 per diluted share**), adjusted primarily for stock-based compensation and tax effects GAAP to Non-GAAP Net Income Reconciliation (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **GAAP net income** | $9,726 | $3,958 | | Stock-based compensation | $3,989 | $3,970 | | Restructuring expense | $— | $1,861 | | Cyber incident remediation | $— | $1,353 | | Income tax-effect | $(970) | $(1,215) | | **Non-GAAP net income** | $12,745 | $9,927 | [Gross Profit and Operating Expenses Reconciliation](index=9&type=section&id=Gross%20Profit%20and%20Operating%20Expenses%20Reconciliation) Q1 2024 Non-GAAP gross profit was **$49.7 million** (**81.9% margin**), while Non-GAAP operating expenses increased to **$38.5 million** GAAP to Non-GAAP Gross Profit Reconciliation (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **GAAP gross profit** | $49,231 | $47,475 | | **Non-GAAP gross profit** | $49,702 | $47,964 | | **Non-GAAP gross margin** | 81.9% | 83.1% | GAAP to Non-GAAP Operating Expenses Reconciliation (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **GAAP total operating expenses** | $42,018 | $41,308 | | **Non-GAAP total operating expenses** | $38,500 | $34,613 | [Operating Income Reconciliation](index=10&type=section&id=Operating%20Income%20Reconciliation) Q1 2024 Non-GAAP operating income was **$11.2 million** (**18.5% margin**), a decrease from Q1 2023 due to higher expenses GAAP to Non-GAAP Operating Income Reconciliation (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **GAAP income from operations** | $7,213 | $6,167 | | **Non-GAAP operating income** | $11,202 | $13,351 | | **Non-GAAP operating margin** | 18.5% | 23.1% | [EBITDA and Adjusted EBITDA Reconciliation](index=11&type=section&id=EBITDA%20and%20Adjusted%20EBITDA%20Reconciliation) Q1 2024 Adjusted EBITDA was **$13.9 million**, reconciled from GAAP net income with standard and non-GAAP adjustments GAAP Net Income to Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **GAAP net income** | $9,726 | $3,958 | | EBITDA | $9,905 | $8,273 | | **Adjusted EBITDA** | $13,894 | $15,457 | [Other Information](index=1&type=section&id=Other%20Information) This section provides supplementary information including conference call details, forward-looking statement disclaimers, and a business overview [Conference Call Information](index=1&type=section&id=Conference%20Call%20Information) Details for the April 30, 2024, investor conference call, including dial-in and webcast information, are provided for results discussion - Management hosted a conference call on April 30, 2024, to discuss the financial results, with details provided for live access and replay[4](index=4&type=chunk) [Forward-Looking Statements](index=1&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements on strategy and growth, subject to risks detailed in the company's SEC filings - The report contains forward-looking statements regarding strategy, growth, and profitability, which are subject to known and unknown risks and uncertainties[5](index=5&type=chunk) - Readers are advised to consult the "Risk Factors" section in the company's periodic SEC filings for a comprehensive list of potential risks[6](index=6&type=chunk)

The Zacks Communication-Network Software industry players like Frontier Communications (FYBR) , A10 Networks (ATEN) and Weave Communications (WEAV) are gaining from the ongoing digitalization efforts that include a shift to cloud computing and the rapid deployment of 5G-based networks. The strong demand for network security benefits industry participants as a secure environment is required to run cloud-based applications. Industry players are leveraging AI and machine learning to develop security solutions, ...

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | |----------------------------------------------------------------|------------------------------------------------------------------------------------------------------------- ...

A10 Networks (ATEN) came out with quarterly earnings of $0.25 per share, missing the Zacks Consensus Estimate of $0.27 per share. This compares to earnings of $0.24 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -7.41%. A quarter ago, it was expected that this provider of networking technologies would post earnings of $0.13 per share when it actually produced earnings of $0.16, delivering a surprise of 23.08%.Over the last fo ...

A10 Networks, Inc. (NYSE:ATEN) Q4 2023 Results Conference Call February 6, 2024 4:30 PM ET Company Participants Tom Bauman - FNK Investor Relations Dhrupad Trivedi - President and CEO Brian Becker - Chief Financial Officer Conference Call Participants Christian Schwab - Craig-Hallum Capital Anja Soderstrom - Sidoti Hamed Khorsand - BWS Financial Hendi Susanto - Gabelli Funds Operator Good afternoon, and thank you all for joining. I would like to welcome you all to the A10 Networks Fourth Quarter and Full Ye ...