A10 Networks, Inc. · NYSE:ATEN
A10 Networks — Q2 2017 Earnings Presentation
20 slides from A10 Networks's earnings presentation, Jul 27, 2017
Slide 1: Second Quarter 2017 Financial Results & Commentary
YOUR SECURE APPLICATION SERVICES COMPANY Second Quarter 2017 Financial Results & Commentary July 27, 2017
Slide 2: Agenda
Agenda Introduction • Maria Riley, Investor Relations Results Overview • Lee Chen, CEO, President and Founder Q2 2017 Financial Results & Q3 2017 Business Outlook • Tom Constantino, CFO Q & A • Lee Chen, CEO, President and Founder • Tom Constantino, CFO • Ray Smets, EVP – Worldwide Sales 2
Slide 3: Cautionary Statements and Disclosures
3 Cautionary Statements and Disclosures This presentation and the accompanying oral presentation contain “forward-looking” statements that are based on our management’s beliefs and assumptions and on information currently available to management, including statements regarding our projections for ou
Slide 4: Cautionary Statements and Disclosures (Non-GAAP)
4 Cautionary Statements and Disclosures In addition to the U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. The non-GAAP measures have limitations as analytical tools and you should not consider them in isolation or as a substitute for an analysis of our results
Slide 5: Lee Chen, CEO, President and Founder
Lee Chen CEO, President and Founder
Slide 6: Second Quarter 2017 Summary
Second Quarter 2017 Summary Second Quarter Revenue of $53.7 M, a decline of 6% y/y • Revenue was below initial guidance range as a number of opportunities in our pipeline did not close in the timeframe we had expected – primarily in the U.S. and to a lesser degree in Japan • Product revenue was $32.
Slide 7: Security Solutions
7 Security Solutions O N P RE MI S E CLO UD Harmony Controller Management Analytics, Configuration aGalaxy Centralized Management Reporting, Control SSLi CFW TPS SECURITY • DDoS Mitigation • Detection, traffic baselining, auto- learning • SSL visibility • Policy Enforcement • Dynamic web category cl
Slide 8: Any User. Any App. Any Where.
8 ANY USER. ANY APP. ANY WHERE. PRIVATE CLOUD DATA CENTER HACKER DDOS ATTACK HOME OFFICE REMOTE USER PUBLIC CLOUD SAAS CLOUD AVAILABILITY SECURITY VISIBILITY Harmony Controller
Slide 9: Tom Constantino, CFO
Tom Constantino CFO 9
Slide 10: Revenue Trend
Revenue Trend QUARTERLY $M $179 $199 $230 2014 2015 2016 ANNUAL $M Annual $51 $57 $54 $57 $55 $64 $60 $54 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 10 2017
Slide 11: Revenue Mix
Revenue Mix $ MILLIONS / % REVENUE Product Geography Verticals Numbers may not total to 100% due to rounding. 11
Slide 12: Non-GAAP Gross Profit
Non-GAAP Gross Profit *Non-GAAP rounded financial measures. For reconciliation see Appendix. 12
Slide 13: Summary Financial Results
Summary Financial Results NON-GAAP* FINANCIAL MEASURES ($M) Q1’2016 Q2’2016 Q3’2016 Q4’2016 Q1’2017 Q2’2017 Sales & Marketing $24.7 $25.0 $22.6 $25.1 $24.7 $23.7 Research & Development $13.3 $13.4 $14.0 $13.7 $15.1 $14.4 General, Administrative & Litigation $6.9 $6.6 $5.6 $6.1 $6.3 $6.1 Income (Loss
Slide 14: Balance Sheet & Cash Flow
Balance Sheet & Cash Flow SELECTED GAAP FINANCIAL MEASURES ($M) Q1’2016 Q2’2016 Q3’2016 Q4’2016 Q1’2017 Q2’2017 Cash and Marketable Securities $107.5 $113.7 $116.8 $114.3 $116.2 $132.2 Accounts Receivable $41.9 $39.3 $48.9 $66.8 $61.8 $41.4 Deferred Revenue (total) $74.8 $75.8 $83.2 $92.9 $93.1 $92.
Slide 15: Q2 2017 Business Outlook
Q2 2017 Business Outlook Management will host a conference call to discuss A10’s financial results for its second quarter of 2017 and the current outlook for the third quarter of 2017 on July 27, 2017 at 4:30 p.m. Eastern time / 1:30 p.m. Pacific time. Open to the public, investors may access the ca
Slide 16: Question & Answer Session
Question & Answer Session LEE CHEN CEO, President and Founder TOM CONSTANTINO CFO RAY SMETS EVP Worldwide Sales 16
Slide 17: Non-GAAP Reconciliation – Gross Profit
Non-GAAP Reconciliation – Gross Profit QUARTERLY Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Q2’17 Gross Profit Margin (GAAP) 75% 75% 76% 77% 77% 76% SBC* included in COGS 1% 1% 1% —% —% 1% Gross Profit Margin (Non-GAAP) 76% 76% 77% 78% 77% 77% * SBC stands for stock-based compensation. QUARTERLY ($M) Q1’16 Q2’16
Slide 18: Non-GAAP Reconciliation – Expense Items
Non-GAAP Reconciliation – Expense Items $ Millions Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Q2’17 Sales & Marketing (GAAP) $26.8 $26.8 $24.3 $26.5 $26.3 $25.6 SBC included in Sales & Marketing (2.1) (1.7) (1.7) (1.4) (1.5) (1.9) Sales & Marketing (Non-GAAP) $24.7 $25.0 $22.6 $25.1 $24.7 $23.7 R&D (GAAP) $14.8
Slide 19: Non-GAAP Reconciliation – Income (Loss) Items
Non-GAAP Reconciliation – Income (Loss) Items $ Millions Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Q2’17 Income (Loss) from Operations (GAAP) $(9.4) $(5.8) $(4.6) $0.6 $(4.3) $(8.0) Stock-Based Compensation 4.6 3.9 4.6 3.8 4.3 5.0 Amortization Expense Related to Acquisition — — 0.3 0.3 0.3 0.3 Litigation and Se
Slide 20: Thank You
Thank You www.a10networks.com