ATEN A10 Networks Inc

Company Achieves Revenue Guidance, Maintains Strong Profitability and Business Model

A10 Networks, Inc. (NYSE: ATEN), a leading provider of cybersecurity and infrastructure solutions, today announced financial results for its fourth quarter ended December 31, 2023.

Fourth Quarter 2023 Financial Summary

• Revenue of $70.4 million, in-line with guidance and down $7.2 million (9.3%) year-over-year due to market conditions related to North American service provider customers’ capital expenditures. Sequentially, revenue increased 21.9%, reflecting delayed orders from the third quarter as expected.
• Enterprise revenue increased 22.6% year-over-year.
• GAAP gross margin of 81.1%; 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 $17.9 million (representing 25.4% of revenue), or $0.24 per diluted share, compared to net income of $18.0 million (23.2% of revenue) or $0.24 per diluted share in the fourth quarter of 2022.
• Non-GAAP net income of $18.5 million (representing 26.2% of revenue), or $0.25 per diluted share (non-GAAP EPS) compared to non-GAAP net income of $18.4 million (23.7% of revenue) or $0.24 per diluted share in the fourth quarter of 2022.
• The Company repurchased 656,000 shares at an average price of $11.14 for a total of $7.3 million. The Company has $49.7 million remaining on this authorization. The Company also paid $4.4 million in cash dividends.
• The Board of Directors approved a quarterly cash dividend of $0.06 per share, payable on March 1, 2024 to stockholders of record at the close of business on February 16, 2024.

Full-Year 2023 Financial Summary

• Revenue of $251.7 million, down $28.6 million (10.2%) year-over-year.
• Enterprise revenue increased 8.6% year-over-year.
• GAAP gross margin of 80.9% vs. 79.7% in 2022; non-GAAP gross margin of 81.7% vs. 80.3% in 2022.
• GAAP net income of $40.0 million (representing 15.9% of revenue), or $0.53 per diluted share.
• Adjusted EBITDA margin of 28.3% vs. 26.8% in 2022.
• Non-GAAP net income of $54.9 million (representing 21.8% of revenue), or $0.73 per diluted share (non-GAAP EPS).

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

“Continued strong demand for our solutions and shift to focus on Enterprise customers partially mitigated broadly reported headwinds with Service Provider customers related to depressed capital expenditures and longer sales cycles,” said Dhrupad Trivedi, President and Chief Executive Officer of A10 Networks. Revenue from enterprise customers increased 8.6% on a full year basis.

“Simultaneously, A10 continues to deliver solid execution and we believe our business model positions us to navigate this challenging period better than others,” continued Trivedi. “We maintained our target gross margin level of 80 – 82% and EBITDA margin of 26 – 28% despite the revenue challenges, demonstrating our proven ability to allocate resources to the best strategic opportunities for future growth while driving operating efficiencies We were able to deliver flat full year EPS on a constant-currency basis in spite of a challenging macro environment. Over the last three years, we have delivered Adjusted EBITDA growth of 14%. We expect to grow our non-GAAP EPS in 2024 compared to 2023, enabling us to continue investing in future innovative solutions and returning capital to shareholders.”

Conference Call

Management will host a call at 1:30 p.m. Pacific time (4:30 p.m. Eastern time) today, February 6, 2024, to discuss these results. Interested parties may access the conference call by dialing (833) 470-1428 (toll-free) or (404) 975-4839 and referencing access code: 619931.

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 829707.

Forward-Looking Statements

This press release contains “forward-looking statements,” including statements regarding our quarterly dividend payments and repurchase program, strategy, growth, customer opportunities, profitability, and expectations for 2024, including as to non-GAAP EPS, investments and return of capital. 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) one-time tax planning expense, (iv) cyber incident remediation expense, (v) workforce reduction expense, (vi) income tax benefit from amended returns and (vii) income tax effect of non-GAAP items (i) to (vi) 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) one-time tax planning expense, (iv) cyber incident remediation expense and (v) 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) one-time tax planning expense, (iv) cyber incident remediation expense and (v) 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 (benefit from) income taxes, (iv) stock-based compensation and related payroll tax, (v) impairment expense, (vi) one-time tax planning expense, (vii) workforce reduction expense, (viii) cyber incident remediation expense and (ix) global distribution center transition 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 security and infrastructure solutions for on-premises, hybrid cloud, and edge-cloud environments. Our 7000+ customers span global large enterprises and communications, cloud and web service providers who must ensure business-critical applications and networks are secure, available, and efficient. Founded in 2004, A10 Networks is based in San Jose, Calif. and serves customers globally. For more information, visit A10networks.com and follow us at 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 December 31,

Years Ended December 31,

 

 

2023

 

 

2022

 

 

2023

 

2022

 

Revenue:

 

 

 

 

Products

$

40,550

 

$

49,577

 

$

141,082

$

173,201

 

Services

 

29,867

 

 

28,057

 

 

110,618

 

107,137

 

Total revenue

 

70,417

 

 

77,634

 

 

251,700

 

280,338

 

Cost of revenue:

 

 

 

 

Products

 

9,134

 

 

11,793

 

 

31,468

 

40,135

 

Services

 

4,140

 

 

3,950

 

 

16,494

 

16,697

 

Total cost of revenue

 

13,274

 

 

15,743

 

 

47,962

 

56,832

 

Gross profit

 

57,143

 

 

61,891

 

 

203,738

 

223,506

 

Operating expenses:

 

 

 

 

Sales and marketing

 

21,450

 

 

22,351

 

 

85,976

 

88,511

 

Research and development

 

11,979

 

 

16,916

 

 

55,229

 

58,398

 

General and administrative

 

5,708

 

 

6,358

 

 

23,885

 

23,518

 

Total operating expenses

 

39,137

 

 

45,625

 

 

165,090

 

170,427

 

Income from operations

 

18,006

 

 

16,266

 

 

38,648

 

53,079

 

Non-operating income (expense):

 

 

 

 

Interest income

 

1,677

 

 

568

 

 

5,078

 

1,304

 

Interest and other income (expense), net

 

(584

)

 

(464

)

 

69

 

(1,667

)

Total non-operating income (expense), net

 

1,093

 

 

104

 

 

5,147

 

(363

)

Income before income taxes

 

19,099

 

 

16,370

 

 

43,795

 

52,716

 

Provision for (benefit from) income taxes

 

1,182

 

 

(1,660

)

 

3,825

 

5,808

 

Net income

$

17,917

 

$

18,030

 

$

39,970

$

46,908

 

Net income per share:

 

 

 

 

Basic

$

0.24

 

$

0.25

 

$

0.54

$

0.62

 

Diluted

$

0.24

 

$

0.24

 

$

0.53

$

0.60

 

Weighted-average shares used in computing net income per share:

 

 

 

 

Basic

 

74,288

 

 

73,560

 

 

74,210

 

75,528

 

Diluted

 

74,972

 

 

75,392

 

 

75,550

 

77,751

 

A10 NETWORKS, INC. RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME (unaudited, in thousands, except per share amounts)

 

 

Three Months Ended December 31,

 

Years Ended December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

GAAP net income

$

17,917

 

 

$

18,030

 

 

$

39,970

 

 

$

46,908

 

Non-GAAP items:

 

 

 

 

 

 

 

Stock-based compensation and related payroll tax

 

2,922

 

 

 

3,546

 

 

 

14,674

 

 

 

13,969

 

One-time tax planning expense

 

500

 

 

 

—

 

 

 

500

 

 

 

—

 

Impairment expense

 

—

 

 

 

1,000

 

 

 

2,975

 

 

 

1,000

 

Workforce reduction expense

 

—

 

 

 

—

 

 

 

4,298

 

 

 

—

 

Cyber incident remediation expense

 

—

 

 

 

—

 

 

 

732

 

 

 

—

 

Income tax benefit from amended returns

 

—

 

 

 

(4,176

)

 

 

—

 

 

 

(4,176

)

Income tax-effect of non-GAAP items (1)

 

(2,872

)

 

 

—

 

 

 

(8,230

)

 

 

—

 

Total non-GAAP items

 

550

 

 

 

370

 

 

 

14,949

 

 

 

10,793

 

Non-GAAP net income (1)(2)

$

18,467

 

 

$

18,400

 

 

$

54,919

 

 

$

57,701

 

 

 

 

 

 

 

 

 

GAAP net income per share:

 

 

 

 

 

 

 

Basic

$

0.24

 

 

$

0.25

 

 

$

0.54

 

 

$

0.62

 

Diluted

$

0.24

 

 

$

0.24

 

 

$

0.53

 

 

$

0.60

 

Non-GAAP items:

 

 

 

 

 

 

 

Stock-based compensation and related payroll tax

 

0.04

 

 

 

0.05

 

 

 

0.19

 

 

 

0.18

 

One-time tax planning expense

 

0.01

 

 

 

—

 

 

 

0.01

 

 

 

—

 

Impairment expense

 

—

 

 

 

0.01

 

 

 

0.04

 

 

 

0.01

 

Workforce reduction expense

 

—

 

 

 

—

 

 

 

0.06

 

 

 

—

 

Cyber incident remediation expense

 

—

 

 

 

—

 

 

 

0.01

 

 

 

—

 

Income tax benefit from amended returns

 

—

 

 

 

(0.06

)

 

 

—

 

 

 

(0.05

)

Income tax-effect of non-GAAP items (1)

 

(0.04

)

 

 

—

 

 

 

(0.11

)

 

 

—

 

Total non-GAAP items

 

0.01

 

 

 

—

 

 

 

0.20

 

 

 

0.14

 

 

 

 

 

 

 

 

 

Non-GAAP net income per share: (1)(2)

 

 

 

 

 

 

 

Basic

$

0.25

 

 

$

0.25

 

 

$

0.74

 

 

$

0.76

 

Diluted

$

0.25

 

 

$

0.24

 

 

$

0.73

 

 

$

0.74

 

Weighted average shares used in computing net income per share:

 

 

 

 

 

 

 

Basic

 

74,288

 

 

 

73,560

 

 

 

74,210

 

 

 

75,528

 

Diluted

 

74,972

 

 

 

75,392

 

 

 

75,550

 

 

 

77,751

(1) 

 

For 2023, we adopted presenting non-GAAP net income impacted for the income tax effect of excluding non-GAAP items. In the three and twelve months ended December 31, 2023, the income tax effect represents a non-GAAP profit before tax rate of 18.0%. For the three months ended December 31, 2022, the income tax effect of excluding non-GAAP items would be $889 thousand and non-GAAP net income adjusted for the income tax effect of excluding non-GAAP items would be $17,511 thousand, representing a $0.01 decrease in reported non-GAAP net income per share in the table above. The income tax effect of $889 thousand represents a non-GAAP profit before tax rate of 4.3%. For the twelve months ended December 31, 2022, the income tax effect of excluding non-GAAP items would be $6,765 thousand and non-GAAP net income adjusted for the income tax effect of excluding non-GAAP items would be $50,936 thousand, representing a $0.09 decrease in reported non-GAAP net income per share in the table above. The income tax effect of $6,765 thousand represents a non-GAAP profit before tax rate of 10.0%.

 

(2)

 

Net income and earnings per share excluding adjustments are non-GAAP financial measures presented as supplemental financial measures to enable a user of the financial information to understand the impact of these adjustments on reported results. These financial measures should not be considered an alternative to net income, operating income, cash flows provided by operating activities, or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP. Our adjusted net income and earnings per share may not be comparable to similarly titled measures of another company because companies may not all calculate adjusted net income and earnings per share in the same manner.

A10 NETWORKS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in thousands, except par value, on a GAAP Basis)

 

 

December 31, 2023

 

December 31, 2022

ASSETS

Current assets:

 

 

 

Cash and cash equivalents

$

97,244

 

 

$

67,971

 

Marketable securities

 

62,056

 

 

 

83,018

 

Accounts receivable, net of allowances of $405 and $32, respectively

 

74,307

 

 

 

72,928

 

Inventory

 

23,522

 

 

 

19,693

 

Prepaid expenses and other current assets

 

14,695

 

 

 

13,381

 

Total current assets

 

271,824

 

 

 

256,991

 

Property and equipment, net

 

29,876

 

 

 

19,743

 

Goodwill

 

1,307

 

 

 

1,307

 

Deferred tax assets, net

 

62,725

 

 

 

63,183

 

Other non-current assets

 

24,077

 

 

 

27,881

 

Total assets

$

389,809

 

 

$

369,105

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

 

 

 

Accounts payable

$

7,024

 

 

$

6,725

 

Accrued and other liabilities

 

21,388

 

 

 

37,183

 

Deferred revenue, current

 

82,657

 

 

 

74,340

 

Total current liabilities

 

111,069

 

 

 

118,248

 

Deferred revenue, non-current

 

58,677

 

 

 

52,652

 

Other non-current liabilities

 

12,187

 

 

 

17,193

 

Total liabilities

 

181,933

 

 

 

188,093

 

 

 

 

 

Stockholders' equity:

Common stock, $0.00001 par value: 500,000 shares authorized; 89,003 and 87,123 shares issued and 74,359 and 73,738 shares outstanding, respectively

 

1

 

 

 

1

 

Treasury stock, at cost: 14,645 and 13,384 shares, respectively

 

(150,909

)

 

 

(134,934

)

Additional paid-in-capital

 

486,958

 

 

 

466,927

 

Dividends paid

 

(37,619

)

 

 

(19,802

)

Accumulated other comprehensive loss

 

(71

)

 

 

(726

)

Accumulated deficit

 

(90,484

)

 

 

(130,454

)

Total stockholders' equity

 

207,876

 

 

 

181,012

 

Total liabilities and stockholders' equity

$

389,809

 

 

$

369,105

 

A10 NETWORKS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands, on a GAAP Basis)

 

 

Years Ended December 31,

 

 

2023

 

 

 

2022

 

Cash flows from operating activities:

 

 

 

Net income

$

39,970

 

 

$

46,908

 

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

 

 

Depreciation and amortization

 

9,346

 

 

 

7,381

 

Stock-based compensation

 

14,081

 

 

 

13,331

 

Provision for doubtful accounts and sales returns

 

(699

)

 

 

(36

)

Other non-cash items

 

(628

)

 

 

793

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

(679

)

 

 

(10,065

)

Inventory

 

(6,302

)

 

 

2,035

 

Prepaid expenses and other assets

 

(1,850

)

 

 

1,627

 

Accounts payable

 

(2,999

)

 

 

103

 

Accrued and other liabilities

 

(20,801

)

 

 

(1,338

)

Deferred revenue

 

14,342

 

 

 

5,361

 

Net cash provided by operating activities

 

43,781

 

 

 

66,100

 

Cash flows from investing activities:

 

 

 

Proceeds from sales of marketable securities

 

57,432

 

 

 

6,252

 

Proceeds from maturities of marketable securities

 

61,583

 

 

 

71,045

 

Purchases of marketable securities

 

(93,778

)

 

 

(55,411

)

Purchases of property and equipment

 

(10,896

)

 

 

(10,799

)

Net cash provided by investing activities

 

14,341

 

 

 

11,087

 

Cash flows from financing activities:

 

 

 

Proceeds from issuance of common stock under employee equity incentive plans

 

4,943

 

 

 

7,038

 

Repurchases of common stock

 

(15,975

)

 

 

(79,257

)

Payments for dividends

 

(17,817

)

 

 

(15,922

)

Net cash used in financing activities

 

(28,849

)

 

 

(88,141

)

Net increase (decrease) in cash and cash equivalents

 

29,273

 

 

 

(10,954

)

Cash and cash equivalents—beginning of period

 

67,971

 

 

 

78,925

 

Cash and cash equivalents—end of period

$

97,244

 

 

$

67,971

 

 

 

 

 

Non-cash investing and financing activities:

 

 

 

Transfers between inventory and property and equipment

$

2,473

 

 

$

733

 

Purchases of property and equipment included in accounts payable

$

3,298

 

 

$

230

 

A10 NETWORKS, INC. RECONCILIATION OF GAAP GROSS PROFIT TO NON-GAAP GROSS PROFIT (unaudited, in thousands, except percentages)

 

 

Three Months Ended December 31,

 

Years Ended December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

GAAP gross profit

$

57,143

 

 

$

61,891

 

 

$

203,738

 

 

$

223,506

 

GAAP gross margin

 

81.1

%

 

 

79.7

%

 

 

80.9

%

 

 

79.7

%

 

 

 

 

 

 

 

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

Stock-based compensation and related payroll tax

 

441

 

 

 

414

 

 

 

1,814

 

 

 

1,662

 

Workforce reduction expense

 

—

 

 

 

—

 

 

 

42

 

 

 

—

 

Cyber incident remediation expense

 

—

 

 

 

—

 

 

 

3

 

 

 

—

 

Non-GAAP gross profit

$

57,584

 

 

$

62,305

 

 

$

205,597

 

 

$

225,168

 

Non-GAAP gross margin

 

81.8

%

 

 

80.3

%

 

 

81.7

%

 

 

80.3

%

A10 NETWORKS, INC. RECONCILIATION OF GAAP TOTAL OPERATING EXPENSES TO NON-GAAP TOTAL OPERATING EXPENSES (unaudited, in thousands)

 

 

Three Months Ended December 31,

 

Years Ended December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

GAAP total operating expenses

$

39,137

 

 

$

45,625

 

 

$

165,090

 

 

$

170,427

 

 

 

 

 

 

 

 

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

Stock-based compensation and related payroll tax

 

(2,481

)

 

 

(3,132

)

 

 

(12,860

)

 

 

(12,307

)

Impairment expense

 

—

 

 

 

—

 

 

 

(2,975

)

 

 

—

 

One-time tax planning expense

 

(500

)

 

 

—

 

 

 

(500

)

 

 

—

 

Workforce reduction expense

 

—

 

 

 

—

 

 

 

(4,256

)

 

 

—

 

Cyber incident remediation expense

 

—

 

 

 

—

 

 

 

(729

)

 

 

—

 

Non-GAAP total operating expenses

$

36,156

 

 

$

42,493

 

 

$

143,770

 

 

$

158,120

 

A10 NETWORKS, INC. RECONCILIATION OF GAAP INCOME FROM OPERATIONS TO NON-GAAP OPERATING INCOME (unaudited, in thousands, except percentages)

 

 

Three Months Ended December 31,

 

Years Ended December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

GAAP income from operations

$

18,006

 

 

$

16,266

 

 

$

38,648

 

 

$

53,079

 

GAAP operating margin

 

25.6

%

 

 

21.0

%

 

 

15.4

%

 

 

18.9

%

 

 

 

 

 

 

 

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

Stock-based compensation and related payroll tax

 

2,922

 

 

 

3,546

 

 

 

14,674

 

 

 

13,969

 

Impairment expense

 

—

 

 

 

—

 

 

 

2,975

 

 

 

—

 

One-time tax planning expense

 

500

 

 

 

—

 

 

 

500

 

 

 

—

 

Workforce reduction expense

 

—

 

 

 

—

 

 

 

4,298

 

 

 

—

 

Cyber incident remediation expense

 

—

 

 

 

—

 

 

 

732

 

 

 

—

 

Non-GAAP operating income

$

21,428

 

 

$

19,812

 

 

$

61,827

 

 

$

67,048

 

Non-GAAP operating margin

 

30.4

%

 

 

25.5

%

 

 

24.6

%

 

 

23.9

%

A10 NETWORKS, INC. RECONCILIATION OF GAAP NET INCOME TO EBITDA AND ADJUSTED EBITDA (NON-GAAP) (unaudited, in thousands)

 

 

Three Months Ended December 31,

 

Years Ended December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

GAAP net income

$

17,917

 

 

$

18,030

 

 

$

39,970

 

 

$

46,908

 

 

$

94,887

 

GAAP net income margin

 

25.4

%

 

 

23.2

%

 

 

15.9

%

 

 

16.7

%

 

 

37.9

%

 

 

 

 

 

 

 

 

 

 

Exclude: Interest and other (income) expense, net

 

(1,093

)

 

 

(104

)

 

 

(5,147

)

 

 

363

 

 

 

1,746

 

Exclude: Depreciation and amortization

 

2,501

 

 

 

2,473

 

 

 

9,346

 

 

 

8,012

 

 

 

8,907

 

Exclude: Provision for (benefit from) income taxes

 

1,182

 

 

 

(1,660

)

 

 

3,825

 

 

 

5,808

 

 

 

(63,245

)

EBITDA

 

20,507

 

 

 

18,739

 

 

 

47,994

 

 

 

61,091

 

 

 

42,295

 

Exclude: Stock-based compensation and related payroll tax

 

2,922

 

 

 

3,546

 

 

 

14,674

 

 

 

13,969

 

 

 

15,031

 

Exclude: Impairment expense

 

—

 

 

 

—

 

 

 

2,975

 

 

 

—

 

 

 

—

 

Exclude: One-time tax planning expense

 

500

 

 

 

—

 

 

 

500

 

 

 

—

 

 

 

—

 

Exclude: Workforce reduction expense

 

—

 

 

 

—

 

 

 

4,298

 

 

 

—

 

 

 

—

 

Exclude: Cyber incident remediation expense

 

—

 

 

 

—

 

 

 

732

 

 

 

—

 

 

 

—

 

Exclude: Global distribution center transition expense

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

5,063

 

Adjusted EBITDA

$

23,929

 

 

$

22,285

 

 

$

71,173

 

 

$

75,060

 

 

$

62,389

 

Adjusted EBITDA margin

 

34.0

%

 

 

28.7

%

 

 

28.3

%

 

 

26.8

%

 

 

25.0

%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240206359101/en/

Investor Contact: Rob Fink / Tom Baumann FNK IR 646.809.4048 / 646.349.6641 aten@fnkir.com

Brian Becker Chief Financial Officer investors@a10networks.com