A10 Networks(US:ATEN)2019-07-30 22:31Financial 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]