A10 Networks, Inc. · NYSE:ATEN
A10 Networks — Q2 2020 Earnings Presentation
19 slides from A10 Networks's earnings presentation, Jul 28, 2020
Slide 1: Q2 2020 Financial Results & Commentary
Q2 2020 Financial Results & Commentary July 28, 2020 Always Secure. Always Available.
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 market trends, the impact of COVID-19 on our business, including demand for our
Slide 3: Agenda
Agenda • Introduction • 2Q Overview • 2Q Financial Performance 3
Slide 4: A10 Core Purpose, Mission and Vision
A10 Core Purpose, Mission and Vision CORE PURPOSE VISION MISSION Enabling a secure To empower our We enable service and available digital customers to providers and world provide the most enterprises to secure and deliver business- available digital critical applications experience that are secure,
Slide 5: Large Installed Base Trusts Us With Their Critical Applications
Large Installed Base Trusts Us With Their Critical Applications and transition to Cloud Provide always Protect investments Support seamless Secure multi- Protect networks Simplify IT ops with available application for enterprises and migration to the generational from cyberattacks connected intel, d
Slide 6: Market Trends driving our Solutions
Market Trends driving our Solutions IoT Shift to 5G/4G+ Operational Security Proliferation Cloud Deployment Complexity Threats 6
Slide 7: A10 Advantage – Performance, Flexibility, Security
A10 Advantage – Performance, Flexibility, Security Security Flexible Automation & Performance Technical Stack Form Factor & Analytics @ Scale Support Consolidation Pricing Multi-cloud Lower Capex Future Better Business Trusted Efficiency & Opex Proof Outcomes Advice Simplification without Compromise
Slide 8: Q2'20: Delivering Results
Q2’20: Delivering Results • Delivered strong operating results in Q2 while diligently navigating a rapidly changing economic environment • Year-over-Year growth for: • Revenue • Net Income • Adjusted EBITDA • Diluted EPS • Significantly improved earnings power • Reduced operating expenses • Objectiv
Slide 9: Near-term Expectations
Near-term Expectations • Continue to expect to see some near-term delays related to COVID-19 • Well-equipped to mitigate any related disruption • Strong pipeline and win rate with lower visibility of order patterns in the next 90-day period related to changing global business environment • Guidance
Slide 10: Revenue & Non-GAAP Operating Income (Loss)
Revenue & Non-GAAP Operating Income (Loss) Revenue, $ Millions Revenue, $ Millions $60.3 $53.8 $49.2 $52.5 $49.2 $52.8 $52.5 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q2'19 Q2'20 Non-GAAP Operating Income (Loss), $ Millions Non-GAAP Operating $7.7 $7.2 Income (Loss), $ Millions $4.1 $7.2 $(0.9) $1.8 ($0.9) Q2'1
Slide 11: Revenue by Customer Vertical
Revenue by Customer Vertical $Millions 36% 35% 2Q 2020 45% 41% 42% $52.5 million 42% 64% 65% 58% 55% 59% 58% Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Service and Cloud Providers Enterprise The company adopted ASC 606 accounting standard effective January 1, 2018, all prior periods are based on ASC 605 standard
Slide 12: Revenue by Geography
Revenue by Geography $Millions 13% 12% 12% 11% 15% 2Q 2020 $52.5 million 9% 15% 19% 16% 15% 33% 29% 27% 24% 15% 30% 15% 46% 46% 47% 46% 24% 38% 43% Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Americas Japan APAC ex Japan EMEA The company adopted ASC 606 accounting standard effective January 1, 2018, all prior per
Slide 13: Financial Performance: Quarter Trends
Financial Performance: 8 Quarter Trends $ Millions (except EPS) 2Q'18 Q3’18 4Q'18 FY 2018 1Q'19 2Q'19 Q3’19 4Q'19 FY 2019 1Q’20 2Q’20 Revenue $60.7 $60.5 $61.8 $232.2 $50.3 $49.2 $52.8 $60.3 $212.6 $53.8 $52.5 Non-GAAP Gross Margin % 78.6% 78.8% 78.2% 78.3% 76.3% 78.0% 78.1% 78.5% 77.8% 78.3% 78.8%
Slide 14: Appendix
Appendix 14
Slide 15: GAAP to Non-GAAP - Gross Margin and EPS
GAAP to Non-GAAP - Gross Margin and EPS % of Revenue except EPS Q2'18 Q3'18 Q4'18 FY 2018 Q1'19 Q2'19 Q3'19 Q4'19 FY 2019 Q1'20 Q2'20 Gross Margin % - GAAP 78.3% 78.5% 77.7% 77.7% 75.6% 77.1% 77.4% 77.7% 77.0% 77.4% 78.2% Stock-based compensation 0.3% 0.3% 0.5% 0.7% 0.6% 1.0% 0.6% 0.8% 0.7% 0.9% 0.6
Slide 16: GAAP to Non-GAAP - Operating Expenses
GAAP to Non-GAAP - Operating Expenses $ Millions Q2'18 Q3'18 Q4'18 FY 2018 Q1'19 Q2'19 Q3'19 Q4'19 FY 2019 Q1'20 Q2'20 Total operating expenses $ - GAAP $ 51.2 $ 49.1 $ 50.4 $ 208.0 $ 49.0 $ 44.3 $ 40.7 $ 46.8 $ 180.8 $ 41.8 $ 37.2 Stock-based compensation ( 2.4) ( 2.1) ( 3.7) ( 15.4) ( 3.6) ( 4.6)
Slide 17: GAAP to Non-GAAP - Operating Income
GAAP to Non-GAAP - Operating Income $ Millions Q2'18 Q3'18 Q4'18 FY 2018 Q1'19 Q2'19 Q3'19 Q4'19 FY 2019 Q1'20 Q2'20 Income (loss) from operations $ - GAAP $ ( 3.7) $ ( 1.6) $ ( 2.4) $ ( 27.7) $ ( 11.0) $ ( 6.4) $ 0.2 $ 0.1 $ ( 17.1) $ ( 0.2) $ 3.9 Stock-based compensation 2.6 2.3 4.0 17.0 3.9 5.0 3
Slide 18: GAAP to Non-GAAP - Adjusted EBITDA
GAAP to Non-GAAP - Adjusted EBITDA $ Millions Q2'18 Q3'18 Q4'18 FY 2018 Q1'19 Q2'19 Q3'19 Q4'19 FY 2019 Q1'20 Q2'20 GAAP net income (loss) $ ( 4.5) $ ( 1.8) $ ( 1.6) $ ( 27.6) $ ( 12.3) $ ( 5.8) $ 0 .2 $ 0 .1 $ ( 17.8) $ ( 0.3) $ 3 .8 Exclude: Interest expense 0 .0 0 .0 0 .0 0 .1 0 .2 0 .0 0 .0 0 .0
Slide 19: Thank You
Thank You Investors@a10networks.Com Always Secure. Always Available.