A10 Networks, Inc. · NYSE:ATEN
A10 Networks — Q4 2018 Earnings Presentation
27 slides from A10 Networks's earnings presentation, Feb 7, 2019
Slide 1: 4Q and Year 2018 Financial Results Conference Call
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Slide 2: Maria Riley, Investor Relations
Maria Riley, Investor Relations Thank you all for joining us today. This call is being recorded and webcast live and may be accessed for one year via the A10 Networks website, www.a10networks.com. Members of A10's management team joining me today are, Lee Chen, Founder & CEO; Tom Constantino, CFO; a
Slide 3: Forward-looking statements
During the course of today’s call, management will make forward-looking statements, including statements regarding our projections for our future operating results, the capabilities of our sales team, our expectations regarding future opportunities and our ability to execute on those opportunities,
Slide 4: Non-GAAP financial measures
Please note that with the exception of revenue, financial measures discussed today are on a non-GAAP basis and have been adjusted to exclude certain charges. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP
Slide 5: Lee Chen, Founder & CEO
Lee Chen, Founder & CEO Thank you, Maria and thank you all for joining us to discuss our fourth quarter and year 2018 results. We delivered a solid quarter and are pleased with our continued momentum in security, 5G and multi- cloud. Revenue increased 11 percent year-over-year to 61.8 million dollar
Slide 6: Building momentum in security solutions
We have been investing in security and believe we are building momentum in the market with our highly scalable and intelligent automation driven software-based security solutions. We believe our performance, scalability and software-based solutions position us to grow in the hyper-scale converged se
Slide 7: 5G market opportunity for security solutions
5G is an exciting market opportunity for our security solutions. We believe our stronghold in the service provider segment and the high-performance and scalability of our solutions position us extremely well to meet the evolving security and performance needs of our 5G customers. Building upon our t
Slide 8: Partnerships with key technology providers, NEC
We have partnered with key technology providers to develop a product roadmap that will expand the capabilities of our 5G solutions to further propel our point position in this large and growing opportunity. In the fourth quarter, we expanded our partnership with NEC to now include the integration of
Slide 9: Partnership with Microsoft Azure
I’m also excited to announce that we have partnered with Microsoft Azure to provide our cloud-native ADC solution, including our Harmony Controller vThunder ADC and Lightning ADC on the Microsoft Azure Marketplace. The flexibility and convenience of multi-cloud comes with its challenges, and our Har
Slide 10: Sales transformation
I would now like to spend a moment on our sales transformation, which was a major priority for us in 2018. We made good progress during the quarter. We improved sales productivity by 7 percent year- over-year and were pleased to see double-digit product revenue growth in North America, Japan, APAC a
Slide 11: New customer engagements
We are building a strong funnel of opportunities for our security, 5G and multi-cloud solutions. Our win rate remains high and in total we added 162 new customers in the quarter. Let me share with you some recent customer engagements: • A multinational retailer based in the U.S. looking to redesign
Slide 12: 2019 top priorities
Looking into 2019, our top priorities for the year will be to drive growth in security, 5G and Multi- Cloud. In security, we expect to build on the momentum we have generated with our Thunder CFW solution and further drive sales for our Thunder TPS and SSLi solutions. Our goal is to grow security pr
Slide 13: Financial results conference call
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Slide 14: Tom Constantino, CFO: revenue
Tom Constantino, CFO Thank you Lee. Fourth quarter revenue increased 11 percent year-over-year to 61.8 million dollars, compared with 55.5 million dollars in the same period last year. For the year, we generated revenue of 232.2 million dollars, compared with 235.4 million dollars in 2017. ATEN – 4Q
Slide 15: Product and service revenue
Fourth quarter product revenue increased 18 percent year-over-year to 39.0 million dollars, bringing our total product revenue for the year to 144.7 million dollars, or 62 percent of total revenue. Security product revenue grew 36% over last year and contributed to 38 percent of total product revenu
Slide 16: Revenue by geography
Moving to our revenue from a geographic standpoint, for the fourth quarter revenue from United States increased 10 percent year-over-year to 25.7 million dollars, compared with 23.4 million dollars in the same period last year. In Japan, revenue was 16.2 million dollars, an increase of 21 percent ye
Slide 17: Revenue by customer vertical
We are changing the way we disclose our revenue by customer vertical in order to provide more transparency into our exposure to Web Giant and Cloud customer revenue, which was previously primarily accounted for in Enterprise revenue. We will now report three customer verticals: Service Provider, Ent
Slide 18: Gross margin, headcount and operating expenses
We delivered fourth quarter total gross margin of 78.2 percent, and our total gross margin for the year was 78.3 percent, an increase of 40 basis points from last year. Fourth quarter product gross margin was 76.8 percent, an increase of 140 basis points from Q4 of 2017. Our year-over-year improveme
Slide 19: Long-term model and target operating margin
Before moving to our outlook for the first quarter, I would like to make a couple comments regarding our long-term model and path to achieve it. We will continue to focus on the growth areas of our market: security, 5G and multi-cloud; further improvements in our go-to-market transformation and cont
Slide 20: First quarter 2019 outlook
Moving on to our outlook for the first quarter. We currently expect first quarter revenue to be in the range of 49 million to 53 million dollars. We expect gross margin to be in the 77 to 79 percent range and operating expenses to be between 44 million and 45 million dollars. We expect our non-GAAP
Slide 21: ATEN – 4Q and Year 2018 Financial Results Conference Call – Thursday, Feb. 7,
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