Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________________________________________

FORM 8-K

____________________________________________________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

February 10, 2015

____________________________________________________________________________

A10 NETWORKS, INC.

(Exact name of registrant as specified in its charter)

____________________________________________________________________________



Delaware	001-36343	20-1446869
(State or Other Jurisdiction of Incorporation or Organization)	(Commission File Number)	(I.R.S. Employer Identification Number)

3 West Plumeria Drive

San Jose, CA 95134

(Address of principal executive offices, including zip code)

(408) 325-8668

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On February 10, 2015, A10 Networks, Inc. (the “Company”) issued a press release regarding financial results for the fourth quarter ended December 31, 2014. The Company also posted on its website (www.a10networks.com) slides with accompanying prepared remarks regarding such financial results. Copies of the press release and slides with accompanying prepared remarks by the Company are attached as Exhibits 99.1 and 99.2, respectively, and the information in Exhibits 99.1 and 99.2 is incorporated herein by reference.

The information in Item 2.02 and Item 9.01 in this Current Report on Form 8-K and the exhibits attached hereto shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.



Exhibit	Description
99.1	Press release, dated February 10, 2015, regarding financial results of A10 Networks, Inc. for the fourth quarter ended December 31, 2014.
99.2	Slides with accompanying prepared remarks of A10 Networks, Inc., dated February 10. 2015, regarding financial results of the fourth quarter ended December 31, 2014.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 10, 2015



	By: /s/ Greg Straughn
	Greg Straughn
	Chief Financial Officer (Principal Accounting and Financial Officer)

EXHIBIT 99.1

A10 Networks, Inc. Reports Fourth Quarter and Year 2014 Financial Results

SAN JOSE, Calif., February 10, 2015 -- A10 Networks, Inc. (NYSE: ATEN), a technology leader in application networking, today announced financial results for its fourth quarter and year ended December 31, 2014.

Total revenue for the fourth quarter was $45.2 million, compared with $42.2 million in the fourth quarter of 2013. Total revenue for the year 2014 was $179.5 million, an increase of 27 percent, compared with $141.7 million reported for the year 2013.

“Overall, the team executed well in the fourth quarter, delivering strong sequential bookings growth and adding over 280 new customers - a new record for A10,” said Lee Chen, president and chief executive officer of A10 Networks. “We launched several new products in the quarter, including the ACOS 4.0 platform that has leading programmability, enhanced application support and manageability that enables important advanced features such as SSL Insight. We remain confident in our ability to grow our business by capitalizing on our unique competitive advantages, expanding our strategic partnerships and continuing to further strengthen our technology leadership.”

A10 Networks fourth quarter 2014 GAAP net loss was $16.0 million, compared with a GAAP net loss of $5.6 million in the fourth quarter of 2013. The company reported GAAP net loss of $34.7 million for the year 2014, compared with a GAAP net loss of $27.1 million for the year 2013.

Non-GAAP net loss for the fourth quarter of 2014 was $12.0 million, compared with non-GAAP net loss of $4.2 million in the fourth quarter of 2013. Non-GAAP net loss for 2014 was $29.3 million, compared with a Non-GAAP net loss of $15.5 million for the year 2013.

A reconciliation between GAAP and non-GAAP information for the 2014 and 2013 fourth quarters and years is contained in the financial statements below.

Recent Highlights

•

Launched the ACOS 4.0 platform, the most significant release since the launch of the 64-bit version of ACOS. New features include A10 Harmony, an architecture that lays the foundation of a rapid services integration platform for enterprise, cloud, and service provider networks, as well as other key enhancements including Secure Interconnect IPsec VPN, SSL Insight, Application Access Management (AAM) and Web Application Firewall (WAF).


•	Integrated Thunder ADCs with Cisco’s Application Centric Infrastructure (ACI) fabric, enabling enterprises to automatically provision application delivery and security services into the Cisco Application Policy Infrastructure Controller (APIC), significantly increasing both speed and business agility, all at a reduced cost.


•	Released Thunder TPS 3.1, leveraging the new functionality in ACOS 4.0 and including a fully programmable policy engine, new advanced DDoS mitigation capabilities, and granular Layer 4-7 control to enable best-in-class mitigation.

Prepared Materials and Conference Call Information

A10 Networks has made available a presentation with management’s prepared remarks on its fourth quarter and year 2014 financial results. These materials are accessible from the “Investors” section of A10 Networks website at investors.a10networks.com.

A10 Networks will host a conference call today at 4:30 p.m. Eastern time / 1:30 p.m. Pacific time for analysts and investors to discuss its fourth quarter and year 2014 results and outlook for its first quarter of 2015. Open to the public, investors may access the call by dialing +1-719-325-2361 or +1-888-438-5491. A live audio webcast of the conference call will be accessible from the “Investors” section of A10 Networks website at investors.a10networks.com. The webcast will be archived for a period of one year. A telephonic replay of the conference call will be available two hours after the call, will run for five business days, and may be accessed by dialing +1-719-457-0820 or +1-888-203-1112 and entering the passcode 3719783. The press release and supplemental financials will be accessible from A10 Networks website prior to the commencement of the conference call.

Forward Looking Statements

This press release contains “forward-looking statements,” including statements regarding our ability to grow our business and anticipated benefits from new platform and product introductions. 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 which may cause actual results to differ include the continued market adoption of our products, our ability to successfully anticipate market needs and opportunities, our timely development of new products and features, any loss or delay of expected purchases by our largest end-customers, our ability to attract and retain new end-customers, continued growth in markets relating to network security, our ability to hire, retain and motivate qualified personnel, the ability of our sales team to execute well, our ability to shorten our close cycles, the ability for our channel partners to sell our products, our ability to achieve or maintain profitability while continuing to invest in our sales, marketing and research and development teams, variations in product mix or geographic locations of our sales, fluctuations in currency exchange rates, risks associated with our significant presence in international markets, the cost and potential outcomes of existing and future litigation, increased cost requirements of being a public company and future sales of substantial amounts of our common stock in the public markets, or the perception that such sales might occur, and litigation risks and costs.

More information about potential factors that could affect the company's business and financial results is included in our quarterly report on Form 10-Q filed with the SEC on November 7, 2014. These filings are available on the SEC's website at www.sec.gov and the company’s website.

All forward-looking statements in this press release are based on information available to the company as of the date hereof. We disclaim any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise.

Non-GAAP Financial Measures

In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures, including non-GAAP net income (loss). 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. We define non-GAAP net income (loss) as our net income (loss) excluding: (i) stock-based compensation and (ii) amounts paid in settlement of, and other expenses associated with, the Brocade litigation. The change in the company’s share count should be considered when comparing net income (loss) per share to prior periods. In connection with its IPO, the company issued 9.0 million shares of common stock and 40.0 million shares of preferred stock converted into common stock. A10 ended the fourth quarter of 2014 with 61.0 million shares of common stock outstanding on a weighted average pro forma basis reflecting the full conversion of preferred stock into common stock.

We have included non-GAAP net income (loss) in this press release. Non-GAAP financial measures are presented for supplemental informational purposes only for understanding the company's operating results. The non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from non-GAAP financial measures presented by other companies. Please see the reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure attached to this release.

About A10 Networks

A10 Networks (NYSE: ATEN) is a leader in application networking, providing a range of high-performance application networking solutions that help organizations ensure that their data center applications and networks remain highly available, accelerated, and secure. Founded in 2004, A10 Networks is based in San Jose, Calif., and serves customers globally with offices worldwide. For more information, visit: http://www.a10networks.com

A10 Networks, A10 Thunder, A10 Harmony and ACOS are trademarks or registered trademarks of A10 Networks, Inc. in the United States and other countries. All other trademarks are property of their respective owners.

Investor Contact:

The Blueshirt Group

Maria Riley, 415-217-7722

investors@a10networks.com

Media Contact:

A10 Networks

Karen Richardson, 408-592-4663

karenr@a10networks.com

Source: A10 Networks, Inc.

A10 NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share amounts)



	Three Months Ended December 31,						Years Ended December 31,
	2014			2013			2014			2013
Revenue:
Products	$	32,346		$	33,449		$	134,486		$	112,045
Services	12,856			8,751			45,021			29,693
Total revenue	45,202			42,200			179,507			141,738
Cost of revenue:
Products	7,429			8,815			31,084			25,284
Services	3,362			2,329			11,853			8,112
Total cost of revenue	10,791			11,144			42,937			33,396
Gross profit	34,411			31,056			136,570			108,342
Operating expenses:
Sales and marketing	26,648			21,168			96,837			70,756
Research and development	14,487			8,723			49,903			33,348
General and administrative	6,903			4,343			22,938			15,556
Litigation expense (benefit)	266			1,638			(2,837		)	11,525
Total operating expenses	48,304			35,872			166,841			131,185
Loss from operations	(13,893		)	(4,816		)	(30,271		)	(22,843		)
Other income (expense), net:
Interest expense	(124		)	(50		)	(1,028		)	(1,495		)
Interest income and other income (expense), net	(1,241		)	(681		)	(1,914		)	(2,118		)
Total other income (expense), net	(1,365		)	(731		)	(2,942		)	(3,613		)
Loss before provision for income taxes	(15,258		)	(5,547		)	(33,213		)	(26,456		)
Provision for income taxes	760			54			1,507			640
Net loss	(16,018		)	(5,601		)	(34,720		)	(27,096		)
Accretion of redeemable convertible preferred stock dividend	—			(1,194		)	(1,150		)	(1,982		)
Net loss per share attributable to common stockholders:	$	(16,018	)	$	(6,795	)	$	(35,870	)	$	(29,078	)
Net loss per share attributable to common stockholders:	$	(0.26	)	$	(0.71	)	$	(0.74	)	$	(3.14	)
Weighted-average shares used in computing net loss per share attributable to common stockholders	60,990			9,585			48,682			9,262

A10 NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)

(Unaudited, in thousands, except per share amounts)



	Three Months Ended December 31,						Years Ended December 31,
	2014			2013			2014			2013
Other Financial Measures / GAAP to Non-GAAP Reconciliation
GAAP net loss	$	(16,018	)	$	(5,601	)	$	(34,720	)	$	(27,096	)
Stock-based compensation	4,045			1,402			12,359			4,282
Brocade litigation expense (benefit)	—			44			(6,973		)	7,317
Non-GAAP net loss	$	(11,973	)	$	(4,155	)	$	(29,334	)	$	(15,497	)
Non-GAAP net loss per share, basic and diluted	$	(0.20	)	$	(0.08	)	$	(0.51	)	$	(0.31	)
Weighted average shares used in computing Non-GAAP net loss per share, basic and diluted (1)	60,990			49,582			57,887			49,259

(1) Non-GAAP share counts assume preferred stock was outstanding at 12-31-2012 (as-if converted basis)

A10 NETWORKS, INC.

Reconciliation of Selected GAAP to Non-GAAP Financial Measures

(Unaudited, in thousands)



	Three Months Ended December 31,		Years Ended December 31,
	2014	2013	2014	2013
Weighted average shares used in computing GAAP net loss per share, basic and diluted (1)	60,990	9,585	48,682	9,262
Preferred stock adjustment	—	39,997	9,205	39,997
Weighted average shares used in computing Non-GAAP net loss per share, basic and diluted (1)	60,990	49,582	57,887	49,259

(1) Non-GAAP share counts assume preferred stock was outstanding at 12-31-2012 (as-if converted basis)

A10 NETWORKS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)



	December 31, 2014			December 31, 2013
ASSETS
Current Assets:
Cash and cash equivalents	$	91,905		$	20,793
Accounts receivable, net of allowances	54,003			37,704
Inventory, net	20,701			17,166
Prepaid expenses and other current assets	4,732			3,056
Total current assets	171,341			78,719
Property and equipment, net	10,780			9,801
Other long-term assets	4,859			5,274
Total Assets	$	186,980		$	93,794
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	8,994		$	9,228
Accrued liabilities	22,290			15,514
Accrued litigation expenses	145			10,407
Deferred revenue, current	39,256			28,448
Total current liabilities	70,685			63,597
Revolving credit facility	—			20,000
Deferred revenue, long-term	17,964			12,784
Other long-term liabilities	1,766			6,118
Total Liabilities	90,415			102,499
Redeemable convertible preferred stock	—			81,426
Convertible preferred stock	—			44,749
STOCKHOLDERS’ EQUITY (DEFICIT)
Common stock and additional paid-in capital	278,350			12,185
Accumulated deficit	(181,785		)	(147,065		)
Total Stockholders' Equity (Deficit)	96,565			(134,880		)
Total Liabilities, Redeemable Convertible Preferred Stock, Convertible Preferred Stock And Stockholders' Equity (Deficit)	$	186,980		$	93,794

A10 NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)



	Years Ended December 31,
	2014			2013
Cash flows from operating activities:
Net loss	$	(34,720	)	$	(27,096	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	10,121			7,080
Stock-based compensation	12,359			4,282
Gain on settlement of contractual liability	(6,993		)	—
Provision for doubtful accounts and sales returns	935			1,788
Changes in fair value of convertible preferred stock warrant liability	—			2
Changes in operating assets and liabilities:
Accounts receivable, net	(17,281		)	(15,549		)
Inventory	(8,914		)	(8,489		)
Prepaid expenses and other assets	(3,017		)	1,588
Accounts payable	903			2,495
Accrued liabilities	6,724			2,133
Accrued litigation expenses	(6,066		)	(6,797		)
Deferred revenue	15,989			13,525
Other	(578		)	(95		)
Net cash provided by (used in) operating activities	(30,538		)	(25,133		)
Cash flows from investing activities:
Purchases of property and equipment	(6,100		)	(2,993		)
Net cash used in investing activities	(6,100		)	(2,993		)
Cash flows from financing activities:
Proceeds from initial public offering, net of offering costs	121,017			(656		)
Proceeds from issuance of Series D redeemable convertible preferred stock, net of issuance costs	—			79,444
Principal payments on convertible promissory note in relation to settlement of litigation	—			(70,000		)
Proceeds from revolving credit facility	—			33,988
Principal payments on revolving credit facility	(20,000		)	(20,000		)
Principal payments on term loan	—			(631		)
Proceeds from exercise of convertible preferred stock warrants	—			813
Proceeds from issuance of common stock under employee equity incentive plans, net of repurchases	7,030			2,392
Other	(297		)	(298		)
Net cash provided by financing activities	107,750			25,052
Net increase in cash and cash equivalents	71,112			(3,074		)
Cash and cash equivalents—beginning of period	20,793			23,867
Cash and cash equivalents—end of period	$	91,905		20,793

A10 Networks – Q4 and Year 2014 Financial Results 2/10/2015 1 | P a g e

A10 Networks – Q4 and Year 2014 Financial Results 2/10/2015 2 | P a g e Maria Thank you all for joining us today. I am pleased to welcome you to A10 Networks fourth quarter and year 2014 financial results conference call. This call is being recorded and webcast live and may be accessed for 90 days via the A10 Networks website, www.a10networks.com. Joining me today are A10’s Founder & CEO, Lee Chen; A10’s CFO, Greg Straughn; and our VP of Global Sales, Ray Smets. Before we begin, I would like to remind you that shortly after the market closed today, A10 Networks issued a press release announcing its fourth quarter and year 2014 financial results. Additionally, A10 published a presentation along with its prepared comments for this call and supplemental trended financial statements. You may access the press release, presentation with prepared comments, and trended financial statements on the investor relations section of the company’s website www.a10networks.com.

A10 Networks – Q4 and Year 2014 Financial Results 2/10/2015 3 | P a g e During the course of today’s call, management will make forward-looking statements, including statements regarding our projections for our first quarter operating results, our expectations for future revenue growth and improved operating margin and the growth of our business generally. These statements are based on current expectations and beliefs as of today, February 10, 2015. A10 disclaims any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise. These forward-looking statements involve a number of risks and uncertainties, some of which are beyond our control that could cause actual results to differ materially. We disclaim any obligation to update these forward-looking statements as a result of future events or otherwise. For a more detailed description of these risks and uncertainties, please refer to our most recent 10-Q filed on November 7th.

A10 Networks – Q4 and Year 2014 Financial Results 2/10/2015 4 | P a g e Please note that with the exception of revenue, financial measures discussed today are on a non-GAAP basis and have been adjusted to exclude certain charges. A reconciliation between GAAP and non- GAAP measures can be found in the press release issued today and on the trended quarterly financial statements posted on the company’s website. We will provide our current expectations for the first quarter of 2015 on a non-GAAP basis. However, we will not make available a reconciliation of non-GAAP guidance measures to corresponding GAAP measures on a forward-looking basis due to high variability and low visibility with respect to the charges, which are excluded from these non-GAAP measures. Before I turn the call over to Lee, I’d like to announce that management will present at the Morgan Stanley Technology, Media & Telecom Conference on March 3rd in San Francisco. Now I would like to turn the call over to Lee for opening remarks.

A10 Networks – Q4 and Year 2014 Financial Results 2/10/2015 5 | P a g e

A10 Networks – Q4 and Year 2014 Financial Results 2/10/2015 6 | P a g e Overall, the team executed well during the quarter. We delivered revenue of 45.2 million dollars, slightly above the high end of our guidance of 41 million to 45 million dollars. Our deferred revenue grew 12% sequentially and 39% year-over-year. Our non-GAAP gross margin rebounded to 77.2% from 73.6% last quarter. We reported a non-GAAP net loss of approximately 12 million dollars or a loss of 20 cents per share, in line with our guidance of 14 cents to 20 cents per share.

A10 Networks – Q4 and Year 2014 Financial Results 2/10/2015 7 | P a g e Looking at our topline results, service provider spending improved sequentially in North America, however, we are maintaining our near term cautious view for the service provider vertical. In the enterprise, we continued to make progress in expanding our presence by both landing new accounts and expanding within our existing customer base. Sequentially, enterprise revenue declined approximately 11%, reflecting a longer sales cycle for large deals, while our enterprise pipeline continued to grow nicely, and overall, our win rate for the quarter increased. In total, we added over 280 new customers in the quarter and we now serve approximately 3,900 customers.

A10 Networks – Q4 and Year 2014 Financial Results 2/10/2015 8 | P a g e A few fourth quarter customer engagements I would like to highlight include:  A hosting services provider selected our Thunder TPS solution to protect their customers from the ever-increasing number of DDoS attacks. In this network, we are replacing a longstanding incumbent and beat several vendors in a bake-off. Our deep packet inspection capabilities and superior performance were key factors to expanding our footprint within this existing customer’s network.  A large international financial institution that is building a new data center selected our Thunder ADC for server load balancing and DDoS protection.  Following a security breach, a domestic government agency deployed our Thunder ADC for advanced SSL Insight, extending their security capabilities.  And, an internet content provider based in Japan purchased our newest Thunder 100GB solution for a critically important part of their network. This customer needed a very high performing ADC for layer 4-7, SSL offload and CGN.

A10 Networks – Q4 and Year 2014 Financial Results 2/10/2015 9 | P a g e All in all, the fourth quarter shaped up as we expected generally, and although 2014 had its challenges, during the year we believe we made solid progress toward executing our strategic plan. A few of our notable accomplishments for the year include:  Growing our team by 20% and our customer base by 34%, adding nearly 1,000 new customers,  Growing our 2014 revenue by 27%, well above the growth of our market,  Growing our annual revenue in the US by 25%, in China by 43%, and in EMEA by 59%,  Growing our enterprise revenue by 30%,  Expanding our security solutions with the launch of TPS and several advanced ADC security features such as SSL Insight, advanced cryptographics and enhancements to our application access management and WAF capabilities,  Enhancing our firewall and DDoS capabilities in our CGN solution,  And, increasing our channel engagement programs resulting in a 33% increase in channel led deals since the beginning of 2014.

A10 Networks – Q4 and Year 2014 Financial Results 2/10/2015 10 | P a g e These results were made possible by the hard work of the A10 team and by the power of our ACOS platform, which we continue to evolve and expand. In late Q4, we launched ACOS 4.0 -- our most significant release since ACOS was first introduced. Our newly released platform has open standards- based programmability, enhanced application support and manageability that enables important advanced features such as SSL Insight, WAF and Application Access Management. ACOS 4.0 also includes A10 Harmony, an architecture that enables rapid SDN and NFV integration for enterprise, cloud, and service provider networks. The ACOS platform is the foundation for A10 to expand our current product offerings including new functions and modules for our Thunder ADC as well as to move into new product areas. Leveraging the advanced policy engine in ACOS 4.0, we released Thunder TPS 3.1, which includes a fully programmable policy engine, new advanced DDoS mitigation capabilities and granular Layer 4-7 control to enable best-in-class mitigation. The release of TPS 3.1 five months after our initial TPS product demonstrates our ability to leverage new programmability in ACOS across our solution platform to bring new modules and functions to market quickly. We also recently announced the integration of our Thunder ADCs with the Cisco ACI fabric, enabling enterprises to automatically and quickly provision application delivery and security services in a shared infrastructure. The combined solution integrates more advanced A10 Thunder ADC and security functionality such as service chaining, WAF, SSL Insight and GSLB with the Cisco ACI. Our high performance Thunder product suite continues to gain momentum in the market driven by our high performance, SSL and security features as well as our ability to integrate with other leading-edge networking and security providers. A10 addresses some of today’s most critical application and security challenges. As cyber attacks grow in size and sophistication -- the manageability, scalability and flexibility of the network becomes even more important. Our ACOS based Thunder platform enables open, programming interface with the ability to easily scale from megabit to terabit of throughput and delivers 2-5 times the performance of our competitors. We remain optimistic about the opportunities we see ahead. Looking into 2015, we will focus on leveraging the significant investments in our engineering team, technology platform, and go to market activities that we made last year. Our goal is to continue to build on this foundation in order to drive top-line growth while improving our operating margin. We remain confident in our ability to grow our business capitalizing on our competitive advantages, expanding our strategic partnerships, and continuing to strengthen our technology leadership. With that, I’d like to turn the call over to Greg to review the details of our fourth quarter financial performance and first quarter guidance.

A10 Networks – Q4 and Year 2014 Financial Results 2/10/2015 11 | P a g e

A10 Networks – Q4 and Year 2014 Financial Results 2/10/2015 12 | P a g e Fourth quarter revenue grew 7% year-over year and 4% quarter-over-quarter to 45.2 million dollars. Our full year revenue was 179.5 million dollars, up 27% from 2013. Fourth quarter product revenue totaled 32.3 million dollars, down 3% from the prior year and up 2% from Q3, representing 72% of fourth quarter revenue. Service revenue was 12.9 million dollars, up 47% year- over-year and 9% from Q3, and accounted for 28% of revenue. Deferred revenue grew 39% year-over- year and 12% sequentially, reaching a record 57.2 million dollars, driven primarily by the strong growth in our installed base and end customer count.

A10 Networks – Q4 and Year 2014 Financial Results 2/10/2015 13 | P a g e In total, fourth quarter revenue from the United States was 20.5 million dollars, representing approximately 45% of fourth quarter revenue. This compares with 20.4 million dollars in the third quarter and 20.6 million dollars in the fourth quarter of 2013. Fourth quarter revenue from Japan represented 22% of total revenue and grew 19% year-over-year and 2% on a sequential basis, despite a 10% sequential and 14% year-over-year, decrease in the Yen. Revenue from APAC (excluding Japan) declined 9% year-over-year and 13% from Q3, representing 12% of revenue. Sales generated from EMEA reached a record high of 6.2 million dollars, an increase of 14% over Q4 of the prior year and 27% over Q3 and represented 14% of total revenue. Our enterprise and service provider revenue split this quarter was 52% and 48% of total revenue, respectively. Revenue from enterprise customers totaled 23.5 million dollars, a decline of 11% from the prior quarter and 8% below Q4 2013. Service provider revenue was 21.7 million dollars, rising 27% from the prior quarter and 30% from the fourth quarter of 2013. Moving beyond revenue, all further metrics discussed on this call are on a non-GAAP basis, unless expressly stated otherwise.

A10 Networks – Q4 and Year 2014 Financial Results 2/10/2015 14 | P a g e We delivered a fourth quarter total gross margin of 77.2%, up 363 basis points from Q3. Services gross margin came in at 77.2%, a decline of 11 basis points compared with the prior quarter. As expected, our product gross margin rebounded to 77.2% compared with the 72.2% margin we reported last quarter.

A10 Networks – Q4 and Year 2014 Financial Results 2/10/2015 15 | P a g e We ended the quarter with staff of 759, relatively in line with Q3 and up from 630 at the end of Q4 last year, an increase of 20.5%. In Q4 Sales and marketing expense was 24.9 million dollars, compared with 23.0 million dollars in Q3. This increase was partially driven by end of year sales commissions and bonuses as top performing sales staff exceeded their quotas. On a percentage basis, sales and marketing expense was 55% of revenue as we continue to grow our sales and marketing team to further build and expand our reach. In Q4 R&D expense totaled 13.1 million dollars or 29% of revenue, compared with 11.2 million dollars and 25.8% in Q3. Fourth quarter combined G&A and litigation expense was approximately 6.8 million dollars or 15% of total revenue, compared with 5.6 million dollars or 13% of revenue in Q3. This increase was primarily related to additions to our bad debt reserve, in some of our international regions. In total, fourth quarter non-GAAP operating expenses were 44.7 million dollars. Fourth quarter non- GAAP operating loss was 9.8 million dollars, compared with 7.8 million dollars in the third quarter. Our non-GAAP net loss in the fourth quarter was 12.0 million dollars or 20 cents per share, compared with a net loss of 8.8 million dollars or 15 cents per share in Q3. The depreciation in the Yen during Q4 negatively impacted results by 1.6 million dollars or approximately 2 cents per share. Basic and diluted weighted outstanding shares for the quarter were approximately 61 million shares. Our non-GAAP net loss for the year was 29.3 million dollars or 51 cents per share, compared with a non-GAAP net loss of 15.5 million dollars in 2013 or 31 cents per share.

A10 Networks – Q4 and Year 2014 Financial Results 2/10/2015 16 | P a g e Moving to the balance sheet, at December 31, 2014 we had 91.9 million dollars in total cash and equivalents. During the quarter cash used for operations was 17.0 million dollars, reflecting an 11.5 million dollar increase in accounts receivables from the prior quarter. Combined Cash plus AR was down 3.7 million dollars, compared to 3.0 million dollars in Q3. We ended Q4 with 54.0 million dollars of net accounts receivable, compared with the Q3’14 balance of 42.5 million dollars. Average days sales outstanding were 96 days, up from 86 days in the prior quarter. The majority of this increase was driven by a large amount of maintenance renewals in the month of December. These amounts are reflected in AR, but revenue is recognized over 12 or more months.