A10 Networks (NYSE: ATEN), a provider of intelligent and
automated cybersecurity solutions, today announced preliminary
financial results for the quarter and six months ended June 30,
2018.
Second Quarter 2018 Financial
Summary
- Revenue of $60.7 million grew 12%
year-over-year
- GAAP net loss of $4.5 million, or $0.06
per share
- Non-GAAP net income of $1.6 million, or
$0.02 per share
First Half 2018 Financial
Summary
- Revenue of $109.9 million, compared
with $117.9 million in the first half of 2017
- GAAP net loss of $24.2 million, or
$0.33 per share
- Non-GAAP net loss of $5.5 million, or
$0.07 per share
A reconciliation between GAAP and non-GAAP information is
contained in the financial statements below.
“We have made steady progress across our key initiatives
including strengthening our team, increasing our pace of
innovation, and targeting our R&D investments in cloud,
security and 5G. While our first quarter was impacted by our sales
transformation, we were pleased to see improved momentum in the
second quarter,” said Lee Chen, president and chief executive
officer of A10 Networks. “There are a number of trends in the
market that play to A10's strengths that we believe present many
opportunities for growth over the long-term. We are focused as a
management team and believe we are on the right path to continue to
improve our execution and drive growth.”
Prepared Materials and Conference Call Information
A10 Networks has made available a presentation with management’s
prepared remarks on its preliminary second quarter and first half
2018 financial results. These materials are accessible from the
“Investor Relations” section of the 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 second quarter and first half 2018 results and outlook
for its third quarter of 2018. Open to the public, investors may
access the call by dialing +1-844-792-3728 or +1-412-317-5105. A
live audio webcast of the conference call will be accessible from
the “Investor Relations” section of the 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 +1-877-344-7529 or
+1-412-317-0088 and entering the passcode 10123380. The press
release and supplemental financials will be accessible from the
“Investor Relations” section of the 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 improve our
execution, take advantage of trends in the market, and drive growth
and shareholder value. 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 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 attract and retain new end-customers, our ability to
maintain and enhance our brand and reputation, 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 and risks associated with our
presence in international markets.
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 table 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 loss
excluding: (i) stock-based compensation, (ii) amortization expense
related to acquisition and (iii) legal expenses associated with the
litigation and internal investigation.
We have included our 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 provider of intelligent and
automated cybersecurity solutions, providing a portfolio of
high-performance secure application solutions that enable
intelligent automation with machine learning to ensure
business-critical applications are secure and always available.
Founded in 2004, A10 Networks is based in San Jose, Calif., and
serves customers in more than 80 countries with offices worldwide.
For more information, visit: www.a10networks.com and @A10Networks.
The A10 logo, A10 Networks, A10 Thunder and A10 5G-GiLAN 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.
A10 NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(unaudited, in thousands, except per
share amounts)
Three Months EndedJune 30, Six Months
EndedJune 30, 2018 2017 2018
2017 Revenue: Products $ 39,224 $ 32,828 $ 67,373 $
76,526 Services 21,489 21,145 42,523 41,381
Total revenue 60,713 53,973 109,896
117,907 Cost of revenue: Products 9,080 8,265 16,189 18,767
Services 4,107 4,535 8,882 8,776 Total
cost of revenue 13,187 12,800 25,071 27,543
Gross profit 47,526 41,173 84,825
90,364 Operating expenses: Sales and marketing 25,788 25,561
52,692 51,824 Research and development 15,572 16,490 34,369 33,532
General and administrative 9,858 6,852 21,452
14,499 Total operating expenses 51,218 48,903
108,513 99,855 Loss from operations (3,692 ) (7,730 )
(23,688 ) (9,491 ) Non-operating income (expense): Interest expense
(32 ) (64 ) (65 ) (108 ) Interest and other income (expense), net
(429 ) (26 ) 137 816 Total non-operating income
(expense), net (461 ) (90 ) 72 708 Loss before income
taxes (4,153 ) (7,820 ) (23,616 ) (8,783 ) Provision for income
taxes 379 135 586 509 Net loss $ (4,532
) $ (7,955 ) $ (24,202 ) $ (9,292 ) Net loss per share: Basic and
diluted $ (0.06 ) $ (0.11 ) $ (0.33 ) $ (0.13 ) Weighted-average
shares used in computing net loss per share: Basic and diluted
72,707 69,770 73,486 69,173
A10 NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (Continued)
(unaudited, in thousands, except per
share amounts)
Three Months EndedJune 30, Six Months
EndedJune 30, 2018 2017 2018
2017 GAAP net loss $ (4,532 ) $ (7,955 ) $ (24,202 )
$ (9,292 ) Stock-based compensation 2,571 4,963 10,722 9,279
Amortization expense related to acquisition 253 253 505 505
Litigation and investigation expense 3,282 — 7,500
— Non-GAAP net income (loss) $ 1,574 $ (2,739
) $ (5,475 ) $ 492 Non-GAAP net income (loss) per share:
Basic and diluted $ 0.02 $ (0.04 ) $ (0.07 ) $ 0.01
Weighted average shares used in computing non-GAAP net income
(loss) per share: Basic 72,707 69,770 73,486
69,173 Diluted 74,634 69,770 73,486
74,177
A10 NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited, in thousands)
June 30, 2018 December 31, 2017
ASSETS Current Assets: Cash and cash equivalents $ 40,567 $
46,567 Marketable securities 86,820 84,567 Accounts receivable, net
of allowances 50,370 48,266 Inventory 14,965 17,577 Prepaid
expenses and other current assets 13,977 6,825 Total
current assets 206,699 203,802 Property and equipment, net 8,676
9,913 Goodwill 1,307 1,307 Intangible assets 4,469 5,190 Other
non-current assets 7,555 4,646 Total Assets $ 228,706
$ 224,858
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities: Accounts payable $ 6,234 $ 9,033 Accrued
liabilities 25,154 21,835 Deferred revenue 64,907 61,858
Total current liabilities 96,295 92,726 Deferred revenue,
non-current 33,176 32,779 Other non-current liabilities 760
967 Total Liabilities 130,231 126,472
Stockholders’ Equity: Common stock and additional paid-in-capital
367,526 355,534 Accumulated other comprehensive loss (221 ) (123 )
Accumulated deficit (1) (268,830 ) (257,025 ) Total Stockholders'
Equity 98,475 98,386 Total Liabilities and
Stockholders' Equity $ 228,706 $ 224,858 (1)
The adoption of ASU 2014-09, Revenue from Contracts with Customers
(Topic 606) in the first quarter of 2018 resulted in a reduction to
the accumulated deficit balance of $12.4 million as of January 1,
2018.
A10 NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(unaudited, in thousands)
Six Months EndedJune 30, 2018
2017 Cash flows from operating activities: Net loss $
(24,202 ) $ (9,292 ) Adjustments to reconcile net loss to net cash
provided by operating activities: Depreciation and amortization
4,103 4,332 Stock-based compensation 10,722 9,279 Other non-cash
items 63 386 Changes in operating assets and liabilities: Accounts
receivable, net (2,243 ) 20,984 Inventory 1,993 (1,593 ) Prepaid
expenses and other assets (1,700 ) (3,112 ) Accounts payable (3,035
) (1,810 ) Accrued liabilities 3,163 (5,544 ) Deferred revenue
7,447 108 Other 117 33 Net cash provided by (used in)
operating activities (3,572 ) 13,771 Cash flows from
investing activities: Proceeds from sales of marketable securities
13,863 14,228 Maturities of marketable securities 30,669 32,314
Purchases of marketable securities (46,890 ) (47,074 ) Purchases of
property and equipment (1,289 ) (1,513 ) Net cash used in investing
activities (3,647 ) (2,045 ) Cash flows from financing activities:
Proceeds from issuance of common stock under employee equity
incentive plans 1,269 7,207 Repurchases and retirement of common
stock — (816 ) Payment of contingent consideration — (650 ) Other
(50 ) (57 ) Net cash provided by financing activities 1,219
5,684 Net increase (decrease) in cash and cash equivalents
(6,000 ) 17,410 Cash and cash equivalents - beginning of period
46,567 28,975 Cash and cash equivalents - end of
period $ 40,567 $ 46,385
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180830005640/en/
Investor Contact:The Blueshirt GroupMaria Riley &
Chelsea Lish415-217-7722investors@a10networks.com
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