Board Authorizes New Repurchase Plan Based on Sustained Business Performance

SAN JOSE, Calif.: A10 Networks, Inc. (NYSE: ATEN), a leading provider of cybersecurity and infrastructure solutions, today announced financial results for its third quarter ended September 30, 2023.

Third Quarter 2023 Financial Summary

• Revenue of $57.8 million, in-line with preliminary expectations and down $14.3 million year-over-year due to delays related to North American service provider customers’ capital expenditures.
• Enterprise revenue up 7% year-over-year.
• GAAP gross margin of 80.9%; non-GAAP gross margin of 81.8% 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 $6.5 million (representing 11.2% of revenue), or $0.09 per diluted share. Year-to-date, GAAP net income was $22.1 million (12.2% of revenue), or $0.29 per diluted share.
• Non-GAAP net income of $12.0 million (representing 20.8% of revenue), or $0.16 per diluted share (non-GAAP EPS).
• Company repurchased 168,000 shares at an average price of $14.52 for a total of $2.4 million. The Board has also authorized a new repurchase plan for up to $50 million.
• The Board of Directors approved a quarterly cash dividend of $0.06 per share, payable on December 1, 2023 to stockholders of record at the close of business on November 17, 2023.

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

“Our intentional revenue diversification and proven business model is enabling A10 to navigate a challenging period while maintaining profitability, cash generation and the continued return of capital to shareholders,” said Dhrupad Trivedi, President and Chief Executive Officer of A10 Networks. “Growth in enterprise revenue partially offset delays in service provider spending that resulted in a decline in short-term service provider revenue. We continue to believe opportunities have been delayed, not lost, and that the long-term demand for security and network expansion solutions remains robust, supporting our intermediate-term outlook.”

“A10 remains solidly and systemically profitable, and we adjusted our business priorities to maintain solid profitability as we navigate these macro headwinds,” continued Trivedi. “Our year-to-date Adjusted EBITDA margin was 26.1%, in-line with our stated business goals. Our expense management initiatives are focused on preserving our long-term growth investments, enabling us to maintain strong cash generation and advancing security-focused solutions as our customers navigate economic uncertainty and a higher cost of capital.”

Conference Call

Management will host a call at 1:30 p.m. Pacific time (4:30 p.m. Eastern time) today, November 7, 2023, to discuss these results. Interested parties may access the conference call by dialing (833) 470-1428 (toll-free) or (646) 904-5544 and referencing access code: 743487.

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 948753.

Forward-Looking Statements

This press release contains “forward-looking statements,” including statements regarding our quarterly dividend payments and repurchase program, strategy, including with respect to expense management, demand and order pattern challenges, positioning and growth. 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.

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) impairment expense, (iii) cyber incident remediation expense, (iv) workforce reduction expense and (v) income tax effect of excluding non-GAAP items (i) to (iv) 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) cyber incident remediation expense and (iii) workforce reduction expense. We define non-GAAP gross margin as our non-GAAP gross profit divided by our GAAP revenue. We define non-GAAP operating income as our GAAP income from operations excluding (i) stock-based compensation and related payroll tax, (ii) impairment expense, (iii) cyber incident remediation expense and (iv) workforce reduction expense. We define non-GAAP operating margin as our non-GAAP operating income 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) impairment expense, (iii) cyber incident remediation expense and (iv) workforce reduction expense. 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) impairment expense, (vi) workforce reduction expense and (vii) cyber incident remediation 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 secure application services and solutions for on-premises, multi-cloud and edge-cloud environments at hyperscale. Our mission is to enable service providers and enterprises to deliver business-critical applications that are secure, available and efficient for multi-cloud transformation and 5G readiness. We deliver better business outcomes that support investment protection, new business models and help future-proof infrastructures, empowering our customers to provide the most secure and available digital experience. Founded in 2004, A10 Networks is based in San Jose, Calif. and serves customers globally. For more information, visit https://www.a10networks.com/ and follow us @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.

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 September 30,								Nine Months Ended September 30,
	2023				2022				2023				2022
Revenue:
Products	$	30,260			$	45,104			$	100,532			$	123,624
Services		27,515				26,955				80,751				79,080
Total revenue		57,775				72,059				181,283				202,704
Cost of revenue:
Products		6,815				10,191				22,334				28,342
Services		4,194				4,574				12,354				12,747
Total cost of revenue		11,009				14,765				34,688				41,089
Gross profit		46,766				57,294				146,595				161,615
Operating expenses:
Sales and marketing		21,324				21,605				64,526				66,159
Research and development		17,620				14,360				43,250				41,483
General and administrative		5,613				5,661				18,177				17,160
Total operating expenses		44,557				41,626				125,953				124,802
Income from operations		2,209				15,668				20,642				36,813
Non-operating income (expense), net:
Interest income		1,766				432				3,401				736
Other income (expense), net		987				(871	)			653				(1,204	)
Non-operating income (expense), net		2,753				(439	)			4,054				(468	)
Income before provision for income taxes		4,962				15,229				24,696				36,345
Income tax provision (benefit)		(1,507	)			3,116				2,643				7,467
Net income	$	6,469			$	12,113			$	22,053			$	28,878
Net income per share:
Basic	$	0.09			$	0.16			$	0.30			$	0.38
Diluted	$	0.09			$	0.16			$	0.29			$	0.37
Weighted-average shares used in computing net income per share:
Basic		74,526				75,881				74,184				76,191
Diluted		75,807				77,679			If you liked this article and want to stay up to date with news from InnovationOpenLab.com subscribe to ours Free newsletter. Related news Statement From OVMK Asset Management Netherlands Regarding the Recent Publications on THG Plc LatticeFlow partners with CertifAI to become a primary provider of technical AI assessments Ubilite Selected as Finalist for the "Best Wi-Fi Startup" Wi-Fi NOW Award 2023 Shanghai University to Host Finals of the 2024 ASC Student Supercomputer Challenge Mitsubishi Electric, ME Innovation Fund Invests in Hayden AI Technologies, Inc. Quality Built Appoints Gregory F. Rzonca as CEO Clarify Health Announces Leadership Transition DStv, Nando’s, and Cape Aqua Are Among the Winners of the 2023 - 2024 World Branding Awards Last News Metaverse: between fashion, ecommerce and real estate in Italy strong… The European market for the metaverse will generate $119.35 billion in revenue. Companies must make themselves ready. Italy's Space Economy ecosystem looks to the Moon Italian Space Agency is developing a lunar habitation module that could be used in the NASA Artemis Space exploration program Bravo Innovation Hub Palermo: 20 startups selected for acceleration The acceleration program developed by MIMIT selected the best startups for the “New energy, green and clean tech” and “Inclusion, social impact and Health”… Italian system integrator Var Group expands digital security services… With the acquisition of 51% of the South Tyrolean company ICS, the business unit Digital Security will also strengthen its Security Operation Center Most read Italian system integrator Var Group expands digital security services… With the acquisition of 51% of the South Tyrolean company ICS, the business unit Digital Security will also strengthen its Security Operation Center Italy's Space Economy ecosystem looks to the Moon Italian Space Agency is developing a lunar habitation module that could be used in the NASA Artemis Space exploration program Metaverse: between fashion, ecommerce and real estate in Italy strong… The European market for the metaverse will generate $119.35 billion in revenue. Companies must make themselves ready. BrainChip Attracts Former Intel AI Sales Executive to Head Up Sales BrainChip Holdings Ltd (ASX: BRN, OTCQX: BRCHF, ADR: BCHPY), the world’s first commercial producer of ultra-low power, fully digital, event-based, neuromorphic… Newsletter signup Join our mailing list to get weekly updates delivered to your inbox. Sign me up! G11 Media Networks BitCity ChannelCity ImpresaCity SecurityOpenLab GreenCity ImpresaGreen ItalianChannelAwards AgendaIct Home Newsletter Staff Copyright Contact us InnovationOpenLab is a channel of BitCity, a newspaper registered at the court of Como , n. 21/2007 del 11/10/2007- Registration ROC n. 15698 G11 MEDIA S.R.L. Registered office Via NUOVA VALASSINA, 4 22046 MERONE (CO) - P.IVA/C.F.03062910132 Como business register n. 03062910132 - REA n. 293834 CAPITALE SOCIALE Euro 30.000 i.v. Cookie Privacy