A10 Networks, Inc. · NYSE:ATEN
A10 Networks — Q1 2020 Earnings Presentation
21 slides from A10 Networks's earnings presentation, May 9, 2020
Slide 1: Q1 2020 Financial Results & Commentary
Q1 2020 Financial Results & Commentary May 7, 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 the impact of COVID-19 on our business, including demand for our products and n
Slide 3: Agenda
Agenda • Introduction • 1Q Overview and Business Update • 1Q 2020 Financial Results 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 and transition to Cloud
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: Q1'20 Overview
Q1’20 Overview • Responding to COVID-19 • Delivering Results • Near Term Expectations • Result of Operations 8
Slide 9: Responding to COVID-19 Environment
Responding to COVID-19 Environment • Priority • Protecting the health and safety of our employees • And our global community • Catalyst • Increasing demand for bandwidth as a result of work from home / shelter in place mandates • Increasing need for the critical communications infrastructure solutio
Slide 10: Q1'20: Delivering Results
Q1’20: Delivering Results • Delivered strong operating results in Q1 while diligently navigating a rapidly changing economic environment • Exceeded high end of Q1 guidance for: • Revenue • Adjusted EBITDA • Diluted EPS • Met Opex (middle of range) guidance • Met gross margin (high-end of range) guid
Slide 11: Near-term Expectations
Near-term Expectations • 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 • Temporaril
Slide 12: Revenue & Non-GAAP Operating Income (Loss)
Revenue & Non-GAAP Operating Income (Loss) The company adopted ASC 606 accounting standard effective January 1, 2018, all prior periods are based on ASC 605 standard. Operating Profit is a Non-GAAP Financial Measure. See Appendix for reconciliation to most comparable GAAP financial measures. 12
Slide 13: Revenue by Customer Vertical
Revenue by Customer Vertical $52.8 1Q 2020 $50.3 $49.2 $53.8 million 35% 65% The company adopted ASC 606 accounting standard effective January 1, 2018, all prior periods are based on ASC 605 standard. 13
Slide 14: Revenue by Geography
Revenue by Geography $50.3 $49.2 $52.8 The company adopted ASC 606 accounting standard effective January 1, 2018, all prior periods are based on ASC 605 standard. 14
Slide 15: Financial Performance Highlight Trends
Financial Performance Highlight Trends $ Millions (except EPS) 1Q'18 2Q'18 Q3’18 4Q'18 FY 2018 1Q'19 2Q'19 Q3’19 4Q'19 FY 2019 1Q’20 Revenue $49.2 $60.7 $60.5 $61.8 $232.2 $50.3 $49.2 $52.8 $60.3 $212.6 $53.8 Non-GAAP Gross Margin % 77.7% 78.6% 78.8% 78.2% 78.3% 76.3% 78.0% 78.1% 78.5% 77.8% 78.3% N
Slide 16: Appendix
Appendix 16
Slide 17: GAAP to Non-GAAP
GAAP to Non-GAAP #DIV/0! #DIV/0! #DIV/0! % of Revenue except EPS Q1'18 Q2'18 Q3'18 Q4'18 FY 2018 Q1'19 Q2'19 Q3'19 Q4'19 FY 2019 Q1'20 Gross Margin % - GAAP 75.8% 78.3% 78.5% 77.7% 77.7% 75.6% 77.1% 77.4% 77.7% 77.0% 77.4% Stock-based compensation 1.8% 0.3% 0.3% 0.5% 0.7% 0.6% 1.0% 0.6% 0.8% 0.7% 0.
Slide 18: GAAP to Non-GAAP
GAAP to Non-GAAP 69.467 73.933 74.321 $ Millions Q1'18 Q2'18 Q3'18 Q4'18 FY 2018 Q1'19 Q2'19 Q3'19 Q4'19 FY 2019 Q1'20 Total operating expenses $ - GAAP $ 57.3 $ 51.2 $ 49.1 $ 50.4 $ 208.0 $ 49.0 $ 44.3 $ 40.7 $ 46.8 $ 180.8 $ 41.8 Stock-based compensation (7.3) (2.4) (2.1) (3.7) (15.4) (3.6) (4.6)
Slide 19: GAAP to Non-GAAP
GAAP to Non-GAAP 2.765 0.701 0.619 $ Millions Q1'18 Q2'18 Q3'18 Q4'18 FY 2018 Q1'19 Q2'19 Q3'19 Q4'19 FY 2019 Q1'20 Income (loss) from operations $ - GAAP $ (20.0) $ (3.7) $ (1.6) $ (2.4) $ (27.7) $ (11.0) $ (6.4) $ 0.2 $ 0.1 $ (17.1) $ (0.2) Stock-based compensation 8.2 2.6 2.3 4.0 17.0 3.9 5.0 3.5
Slide 20: GAAP to Non-GAAP
GAAP to Non-GAAP $ Millions Q1'18 Q2'18 Q3'18 Q4'18 FY 2018 Q1'19 Q2'19 Q3'19 Q4'19 FY 2019 Q1'20 GAAP net income (loss) $ (19.7) $ (4.5) $ (1.8) $ (1.6) $ (27.6) $ (12.3) $ (5.8) $ 0.2 $ 0.1 $ (17.8) $ (0.3) Exclude: Interest expense 0.0 0.0 0.0 0.0 0.1 0.2 0.0 0.0 0.0 0.2 - Exclude: Interest incom
Slide 21: Thank You
Thank You Investors@a10networks.Com Always Secure. Always Available.