Slide 1: Q3 2023 Financial Results & Commentary
Q3 2023 Financial Results & Commentary November 7, 2023
Slide 2: Cautionary Statements & Disclosures
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, routes to market, technical differe
Slide 3: Agenda
Agenda ▪ Q3 and YTD Overview ▪ Q3 Financial Performance ▪ FY 2023 Outlook
Slide 4: Q3'23: Continued Profitability, Revenue Headwinds
Q3’23: Continued Profitability, Revenue Headwinds Revenue Overview • Q3 revenue decreased 20% year-over-year • Continued challenges from tier-one Service Providers in North America partially offset by strength with Enterprise customers Consistent Profitability • Adjusted EBITDA was $14.4 million, or
Slide 5: Quarterly Revenue & Adjusted EBITDA
Quarterly Revenue & Adjusted EBITDA Revenue, $ Millions Revenue, $ Millions $77.6 $72.1 $72.1 $65.8 $57.7 $57.8 $57.8 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q3'22 Q3'23 Adjusted EBITDA, $ Millions Adjusted EBITDA, $ Millions $22.9 $21.3 $21.3 $17.4 $15.5 $14.4 $14.4 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q3'22 Q3'23
Slide 6: Quarterly Revenue by Customer Vertical
Quarterly Revenue by Customer Vertical Q3’23 $57.7 million 30.8% 32.6% 37.6% 43.6% 50.0% 69.2% 67.4% 62.4% 56.4% 50.0% 50.0% 50.0% Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Enterprise Service Provider
Slide 7: Quarterly Revenue by Geography
Quarterly Revenue by Geography $ Millions 11% 11% Q3’23 12% 14% 17% 17% 19% 16% 21% 19% $57.7 million 32% 33% 39% 28% 34% 33% 34% 35% 27% 37% 19% 45% 57% 56% 37% 49% 49% 48% 53% 50% 53% 52% 45% Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Americas APJ EMEA
Slide 8: Consistent Value Creation
Consistent Value Creation Revenue Business Capital Growth Model Allocation
Slide 9: Appendix
Appendix 9 ©2023 A10 Networks, Inc. All rights reserved.
Slide 10: Financial Performance Trends
Financial Performance Trends $ Millions (except EPS) FY FY FY Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Q4’22 Q1’23 Q2’23 Q3’23 2020 2021 2022 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 Non-GAAP Gross
Slide 11: GAAP to Non-GAAP – Gross Margin and EPS
GAAP to Non-GAAP – Gross Margin and EPS % of Revenue except EPS Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Gross Margin % - GAAP 79.5% 80.2% 79.5% 79.7% 82.3% 79.5% 80.9% Stock-based compensation 0.7% 0.5% 0.7% 0.5% 0.8% 0.6% 0.9% Gross Margin % - Non-GAAP 80.2% 80.6% 80.2% 80.3% 83.1% 80.2% 81.8% EP
Slide 12: GAAP to Non-GAAP – Operating Income
GAAP to Non-GAAP – Operating Income $ Millions Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Income from operations $ - GAAP $ 8.0 $ 13.1 $ 15.7 $ 16.3 $ 6.2 $ 12.3 $ 2.2 Stock-based compensation 3.7 2.9 3.8 3.5 4.0 3.5 4.3 Capitalized project impairment - - - - - - 3.0 Workforce reduction severance - -
Slide 13: GAAP to Non-GAAP – Adjusted EBITDA
GAAP to Non-GAAP – Adjusted EBITDA $ Millions Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 GAAP net income $ 6.3 $ 10.4 $ 12.1 $ 18.0 $ 4.0 $ 11.6 $ 6.5 Exclude: Interest income and other (income) expense, net 0.5 (0.5) 0.4 (0.1) 1.2 (2.5) (2.8) Exclude: Depreciation & amortization expense 1.8 1.9 1.8