Form 8-K - Current report

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

February 6, 2024

Date of Report (Date of earliest event reported)

____________________________________________________________________________

A10 NETWORKS, INC.

(Exact name of the 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)

2300 Orchard Parkway

San Jose, CA 95131

(Address of principal executive offices, including zip code)

(408) 325-8668

(Name and telephone number, including area code, of the person to contact in connection with this report)

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))

____________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common stock, $0.00001 par value per share

ATEN

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition

On February 6, 2024, A10 Networks, Inc. (the “Company”) issued a press release regarding financial results for the quarter ended December 31, 2023. A copy of the press release is furnished herewith as Exhibit 99.1.

Item 7.01 Regulation FD Disclosure

On February 6, 2024, the Company posted on its website (www.a10networks.com) slides regarding the financial results for the quarter ended December 31, 2023. A copy of the slides is attached as Exhibit 99.2 and the information in Exhibit 99.2 is incorporated herein by reference.

The information in Item 2.02, Item 7.01 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. The information in Item 2.02 shall not be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 8.01 Other Events.

On February 6, 2024, the Company announced that its Board of Directors (the “Board”) declared a quarterly dividend. The quarterly dividend, in the amount of $0.06 per share, will be payable, subject to any prior revocation, on March 1, 2024 to stockholders of record on February 16, 2024. Future dividends will be subject to further review and approval by the Board in accordance with applicable law. The Board reserves the right to adjust or withdraw the quarterly dividend in future periods as it reviews A10’s capital allocation strategy from time-to-time.

Forward Looking Statements

Item 8.01 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, including statements regarding the Company’s dividend program. These forward-looking statements involve risks and uncertainties. These forward-looking statements may be identified by terms such as “will,” “may,” “plans,” or the negative of these terms, and similar expressions intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding the anticipated amount, duration, methods, timing and other aspects of our dividend program and any anticipated benefits or value resulting from any such dividends. These statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, any unforeseen need for capital which may require us to divert funds we may have otherwise used for the dividend program, which may in turn negatively impact our ability to administer the quarterly dividends. In addition, the timing and amount of future dividends, if any, will be made as management deems appropriate and will depend on a variety of factors including stock price, market conditions, corporate and regulatory requirements (including applicable securities laws and regulations and the rules of The New York Stock Exchange), any additional constraints related to material inside information the Company may possess, and capital availability. More information regarding these and other risks, uncertainties and factors is contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC, and in other reports filed by the Company with the SEC from time to time. You are cautioned not to unduly rely on these forward-looking statements, which speak only as of the date of this press release. All information in this press release and its attachments is as of the date stated and unless required by law, The Company undertakes no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this press release or to report the occurrence of unanticipated events other than as required by law or regulation.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits


			Exhibit			Description
			99.1			Press release dated February 6 , 202 4 .
			99.2			Slides of A10 Network, Inc. dated February 6 , 202 4 , regarding financial results of the fourth quarter ended Dec ember 3 1 , 2023.

SIGNATURE

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 6, 2024


			A10 NETWORKS, INC.
			By: /s/ Brian Becker
			Brian Becker
			Chief Financial Officer (Principal Accounting and Financial Officer)

EXHIBIT 99.1

A10 Networks Reports Financial Results for the Fourth Quarter of 2023

Company Achieves Revenue Guidance, Maintains Strong Profitability and Business Model

SAN JOSE, Calif., February 6, 2024 -- 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.

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

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
Impairment expense	—		1,000		2,975		1,000
One-time tax planning expense	500		—		500		—
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
Impairment expense	—		0.01		0.04		0.01
One-time tax planning expense	0.01		—		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)


	As of December 31, 2023		As of 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 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%

Q4 2023 Financial Results & Commentary February 6, 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 regarding our 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 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. This presentation and the accompanying oral presentation also include certain non-GAAP financial measures including Non-GAAP gross margin, non-GAAP operating income, non-GAAP net income, non-GAAP operating margin, Adjusted EBITDA and Non-GAAP EPS. Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similarly titles 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 (vi) income tax effect of excluding 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) 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) one-time tax planning expense, (iv) provision for (benefit from) income taxes, (v) stock-based compensation and related payroll tax, (vi) impairment 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. A reconciliation between GAAP and non-GAAP financial measures can be found in the appendix to this document and in the accompanying financial results press release.

Agenda ▪ Q4 and FY2023 Overview ▪ Q4 Financial Performance ▪ FY 2024 Outlook

Q4’23: Expanded Profitability Despite Revenue Headwinds Revenue Overview • Q4 revenue decreased 9.3% year-over-year • Continued challenges from tier-one Service Providers in North America partially offset by strength with Enterprise customers • Enterprise customer revenue up 23%; Service provider customer revenue down 24% Consistent Profitability • Adjusted EBITDA was $23.9 million, or 34.0% of revenue • GAAP EPS of $0.24 • Non-GAAP EPS of $0.25 Key Takeaways • Increased focus on Enterprise customers • Met revenue guidance • Demonstrated earnings power even amidst revenue challenges with record gross margin and Adjusted EBITDA margin ahead of plan despite lower revenue • Security solutions remain in high demand See Appendix for reconciliation to most comparable GAAP financial measures.

Quarterly Revenue & Adjusted EBITDA Operating Income is a Non-GAAP Financial Measure. See Appendix for reconciliation to most comparable GAAP financial measures. $77.6 $57.7 $65.8 $57.8 $70.4 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Revenue, $ Millions $22.9 $15.5 $17.4 $14.4 $23.9 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Adjusted EBITDA, $ Millions $77.6 $70.4 Q4'22 Q4'23 Revenue, $ Millions $22.9 $23.9 Q4'22 Q4'23 Adjusted EBITDA, $ Millions

Full-Year Revenue & Non-GAAP Operating Income Operating Income is a Non-GAAP Financial Measure. See Appendix for reconciliation to most comparable GAAP financial measures. $212.6 $225.5 $250.0 $280.3 $251.7 2019 2020 2021 2022 2023 Revenue, $ Millions $2.6 $35.3 $54.0 $67.0 $61.8 2019 2020 2021 2022 2023 Non-GAAP Operating Income, $ Millions

58% 42% Q4’23 $70.2 million Quarterly Revenue by Customer Vertical 69.2% 56.4% 67.4% 49.7% 58.4% 30.8% 43.6% 32.6% 50.3% 41.6% Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Enterprise Service Provider

Quarterly Revenue by Geography 49% 49% 48% 53% 57% 50% 53% 52% 56% 45% 57% 39% 34% 35% 28% 32% 34% 33% 27% 33% 37% 26% 12% 17% 17% 19% 11% 16% 14% 21% 11% 19% 16% Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 $ Millions Americas APJ EMEA 57% 26% 16% Q4’23 $70.2 million

Consistent Value Creation Business Model Revenue Growth Capital Allocation

Appendix

Financial Performance Trends Numbers may not sum due to rounding. Please refer to the supplemental financials posted in the “Investor Relations” section of the A10 Networks website at investors.a10networks.com Gross Margin %, Operating Margin %, Adjusted EBITDA and EPS are Non-GAAP Financial Measures. See Appendix for reconciliation to most comparable GAAP financial measures. $ Millions (except EPS) Q1’20 Q2’20 Q3’20 Q4’20 FY 2020 Q1’21 Q2’21 Q3’21 Q4’21 FY 2021 Q1’22 Q2’22 Q3’22 Q4’22 FY 2022 Q1’23 Q2’23 Q3’23 Q4’23 FY 2023 Revenue $53.8 $52.5 $56.6 $62.7 $225.5 $54.8 $59.2 $65.4 $70.7 $250.0 $62.7 $68.0 $72.1 $77.6 $280.3 $57.7 $65.8 $57.8 $70.4 $251.7 Non-GAAP Gross Margin % 78.3% 78.8% 77.6% 79.6% 78.6% 78.9% 77.9% 80.4% 80.7% 79.6% 80.2% 80.6% 80.2% 80.3% 80.3% 83.1% 80.2% 81.8% 81.8% 81.7% Non-GAAP Operating Margin % 7.6% 13.8% 17.8% 22.1% 15.6% 19.7% 18.8% 22.2% 24.8% 21.6% 18.6% 23.7% 27.0% 25.5% 23.9% 23.1% 23.1% 20.6% 30.4% 24.6% Adjusted EBITDA (non- GAAP) $7.2 $9.8 $12.5 $16.1 $45.6 $13.0 $13.2 $16.8 $19.4 $62.4 $13.5 $18.0 $21.3 $22.3 $75.1 $15.5 $17.4 $14.4 $23.9 $71.2 Non-GAAP EPS $0.05 $0.09 $0.13 $0.18 $0.44 $0.12 $0.13 $0.17 $0.20 $0.63 $0.13 $0.17 $0.20 $0.24 $0.74 $0.13 $0.19 $0.16 $0.25 $0.73 Ending Cash & Marketable Securities $142.9 $143.4 $159.1 $158.1 $158.1 $161.0 $166.8 $187.5 $185.0 $185.0 $164.7 $166.8 $127.8 $151.0 $151.0 $144.5 $153.9 $169.0 $159.3 $159.3

GAAP to Non-GAAP – Gross Margin and EPS Numbers may not sum due to rounding. EPS data is presented on a basic and diluted basis. Please refer to the supplemental financials posted the “Investor Relations” section of the A10 Networks website at investors.a10networks.com. % of Revenue except EPS Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Dec 31 2022 Dec 31 2023 Gross Margin % - GAAP 79.5% 80.2% 79.5% 79.7% 82.3% 79.5% 80.9% 81.1% 79.7% 80.9% Stock-based compensation 0.7% 0.5% 0.7% 0.5% 0.8% 0.6% 0.9% 0.6% 0.6% 0.7% Gross Margin % - Non-GAAP 80.2% 80.6% 80.2% 80.3% 83.1% 80.2% 81.8% 81.8% 80.3% 81.7% EPS $ - GAAP 0.08$ 0.13$ 0.16$ 0.24$ 0.05$ 0.15$ 0.09$ 0.24$ 0.60$ 0.53$ Stock-based compensation 0.05 0.04 0.05 0.05 0.05 0.05 0.06 0.04 0.18 0.19 One-time tax planning expense - - - - - - - 0.01 - 0.01 Impairment of investment - - - 0.01 - - - - 0.01 - Capitalized project impairment - - - - - - 0.04 - - 0.04 Workforce reduction severance - - - - 0.03 - 0.03 - - 0.06 Cyber incident remediation expense - - - - 0.02 (0.01) - - - 0.01 Tax benefit from amended returns - - - (0.06) - - - - (0.06) - Income tax effect of non-GAAP items (starting Mar-23) - - - - (0.02) (0.00) (0.06) (0.05) - (0.12) EPS $ - Non-GAAP 0.13$ 0.17$ 0.20$ 0.24$ 0.13$ 0.19$ 0.16$ 0.25$ 0.74$ 0.73$ Year Ended

GAAP to Non-GAAP – Operating Income Numbers may not sum due to rounding. Please refer to the supplemental financials posted the “Investor Relations” section of the A10 Networks website at investors.a10networks.com. Q3’23 $ Millions Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Dec 31 2022 Dec 31 2023 Income from operations $ - GAAP 8.0$ 13.1$ 15.7$ 16.3$ 6.2$ 12.3$ 2.2$ 18.0$ 53.1$ 38.6$ Stock-based compensation 3.7 2.9 3.8 3.5 4.0 3.5 4.3 2.9 14.0 14.7 One-time tax planning expense - - - - - - - 0.5 - 0.5 Capitalized project impairment - - - - - - 3.0 - - 3.0 Workforce reduction severance - - - - 1.9 - 2.4 - - 4.3 Cyber incident remediation expense - - - - 1.4 (0.6) - - - 0.7 Income from operations $ - Non-GAAP 11.7$ 16.1$ 19.5$ 19.8$ 13.4$ 15.2$ 11.9$ 21.4$ 67.0$ 61.8$ % of Revenue Income from operations % - GAAP 12.8 % 19.3 % 21.7 % 21.0 % 10.7 % 18.6 % 3.8 % 25.6 % 18.9 % 15.4 % Stock-based compensation 5.9 % 4.3 % 5.3 % 4.6 % 6.9 % 5.4 % 7.5 % 4.1 % 5.0 % 5.8 % One-time tax planning expense —% —% —% —% —% —% —% 0.7 % —% 0.2 % Capitalized project impairment —% —% —% —% —% —% 5.1 % —% —% 1.2 % Workforce reduction severance —% —% —% —% 3.2 % —% 4.2 % —% —% 1.7 % Cyber incident remediation expense —% —% —% —% 2.3 % (0.9)% —% —% —% 0.3 % Income from operations % - Non-GAAP 18.6 % 23.7 % 27.0 % 25.5 % 23.1 % 23.1 % 20.6 % 30.4 % 23.9 % 24.6 % Year Ended

GAAP to Non-GAAP – Adjusted EBITDA Numbers may not sum due to rounding. Please refer to the supplemental financials posted the “Investor Relations” section of the A10 Networks website at investors.a10networks.com. $ Millions Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Dec 31 2022 Dec 31 2023 GAAP net income 6.3$ 10.4$ 12.1$ 18.0$ 4.0$ 11.6$ 6.5$ 17.9$ 46.9$ 40.0$ Exclude: Interest income and other (income) expense, net 0.5 (0.5) 0.4 (0.1) 1.2 (2.5) (2.8) (1.1) 0.4 (5.1) Exclude: Depreciation & amortization expense 1.8 1.9 1.8 2.5 2.1 2.2 2.5 2.5 8.0 9.3 Exclude: Provision (benefit) for income taxes 1.1 3.2 3.1 (1.7) 1.0 3.2 (1.5) 1.2 5.8 3.8 EBITDA 9.8 15.0 17.5 18.7 8.3 14.5 4.7 20.5 61.1 48.0 Exclude: Stock-based compensation 3.7 2.9 3.8 3.5 4.0 3.5 4.3 2.9 14.0 14.7 Exclude: One-time tax planning expense - - - - - - - 0.5 - 0.5 Exclude: Capitalized project impairment - - - - - - 3.0 - - 3.0 Exclude: Workforce reduction severance - - - - 1.9 - 2.4 - - 4.3 Exclude: Cyber incident remediation expense - - - - 1.4 (0.6) - - - 0.7 Adjusted EBITDA - Non-GAAP 13.5$ 18.0$ 21.3$ 22.3$ 15.5$ 17.4$ 14.4$ 23.9$ 75.1$ 71.2$ Year Ended

Cover	Feb. 06, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Feb. 06, 2024
Entity Registrant Name	A10 NETWORKS, INC.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-36343
Entity Tax Identification Number	20-1446869
Entity Address, Address Line One	2300 Orchard Parkway
Entity Address, City or Town	San Jose
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	95131
City Area Code	408
Local Phone Number	325-8668
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock, $0.00001 par value per share
Trading Symbol	ATEN
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Amendment Flag	false
Entity Central Index Key	0001580808