A10 Networks, Inc. · NYSE:ATEN
A10 Networks — Q3 2021 Earnings Presentation
18 slides from A10 Networks's earnings presentation, Oct 28, 2021
Slide 1: Q3 2021 Financial Results & Commentary
Q3 2021 Financial Results & Commentary Dhrupad Trivedi, Brian Becker, CEO CFO October 28, 2021 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 our strategy, expectations for the fourth quarter of 2021, including as to reve
Slide 3: Agenda
Agenda ▪ Introduction ▪ Q3 Overview ▪ Q3 Financial Performance ▪ Q4 Outlook 3
Slide 4: A10 At-a-Glance
A10 At-a-Glance Large installed base and best-in-class solutions aligned Key Financials with secular tailwinds • Delivering solutions for managing data growth with integrated security • Geographically diversified with a global presence • Directly aligned with trends in cybersecurity, 5G and cloud su
Slide 5: Q3'21: Strong Execution, Capturing Share
Q3’21: Strong Execution, Capturing Share • Growth and diversification • Revenue grew 15% YoY • Deferred revenue reaches a record $117.1 million • Record profitability • Quarterly net income increased 33% year-over-year • Adjusted EBITDA improved by $4.3 million, or 35% year-over-year • Continued exe
Slide 6: Quarterly Recurring Revenue
Quarterly Recurring Revenue $120.0 $ Millions $29.0 $28.2 $28.4 $27.3 $25.5 $25.7 $4.3 $24.8 $4.6 $4.3 $24.4 $3.3 $23.4 $23.8 $2.3 $23.1 $22.9 $23.3 $3.0 $22.1 $2.7 $2.4 $1.3 $1.6 $1.6 $21.3 $1.8 $2.2 $1.2 $1.0 $31.0 $23.6 $24.1 $24.0 $24.7 $22.4 $22.5 $23.4 $21.8 $21.7 $21.1 $21.2 $21.7 $22.2 $20.3
Slide 7: Quarterly Revenue & Non-GAAP Operating Income
Quarterly Revenue & Non-GAAP Operating Income Revenue, $ Millions Revenue, $ Millions $65.4 $65.4 $62.7 $56.6 $59.2 $56.6 $54.8 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q3'20 Q3'21 Non-GAAP Operating Income, $ Millions Non-GAAP Operating Income, $ Millions $13.9 $14.5 $14.5 $10.8 $11.1 $10.0 $10.0 Q3'20 Q4'20
Slide 8: Quarterly Revenue by Customer Vertical
Quarterly Revenue by Customer Vertical Q3’21 40.5% 40.0% 38.0% 39.1% 35.3% $65.4 million 64.7% 60.0% 62.0% 60.9% 59.5% 35% 65% Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Enterprise Service Provider 8
Slide 9: Security vs Non-Security Product Mix and Growth
Security vs Non-Security Product Mix and Growth 35% Non-Security Product 4 Market Growth : +Single-Digit Growth 50% 56% 65% Security Product 4 Market Growth : 50% +Double-Digit Growth 44% 1 2 3 2018-2020 2021 Future 1. 2018-2020 Average Annual Product mix and volume 2. Management’s estimate 3. Proje
Slide 10: Quarterly Revenue by Geography
Quarterly Revenue by Geography $ Millions 11% 15% 14% 14% 15% 12% 17% Q3’21 9% $65.4 million 13% 13% 15% 15% 12% 10% 33% 26% 25% 24% 17% 24% 30% 32% 10% 49% 24% 47% 46% 48% 49% 49% 39% 43% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Americas Japan APAC ex Japan EMEA 10
Slide 11: Quarterly Revenue & Non-GAAP Operating Income
Quarterly Revenue & Non-GAAP Operating Income Revenue, $ Millions Non-GAAP Operating Income, $ Millions $65.4 $14.5 $10.0 $56.6 Q3'20 Q3'21 Q3'20 Q3'21 Operating Profit is a Non-GAAP Financial Measure. See Appendix for reconciliation to most comparable GAAP financial measures. 11
Slide 12: Financial Performance Trends
Financial Performance Trends $ Millions (except EPS) Q1'19 Q2'19 Q3’19 Q4'19 FY 2019 Q1’20 Q2’20 Q3’20 Q4’20 FY 2020 Q1’21 Q2’21 Q3’21 Revenue $50.3 $49.2 $52.8 $60.3 $212.6 $53.8 $52.5 $56.6 $62.7 $225.5 $54.8 $59.2 $65.4 Non-GAAP Gross Margin % 76.3% 78.0% 78.1% 78.5% 77.8% 78.3% 78.8% 77.6% 79.6%
Slide 13: Q4'2021 Outlook
Q4'2021 Outlook • Revenue growth of approximately 10% • We expect to grow our bottom-line faster than our top line 13
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 Q1'20 Q2'20 Q3'20 Q4'20 FY 2020 Q1'21 Q2'21 Q3'21 Gross Margin % - GAAP 77.4% 78.2% 76.8% 78.5% 77.8% 77.2% 77.0% 79.8% Stock-based compensation 0.9% 0.6% 0.8% 0.6% 0.7% 1.2% 0.5% 0.6% Global distribution center transition expense 0.0%
Slide 16: GAAP to Non-GAAP — Operating Income (Loss)
GAAP to Non-GAAP — Operating Income (Loss) $ Millions Q1'20 Q2'20 Q3'20 Q4'20 FY 2020 Q1'21 Q2'21 Q3'21 Income (loss) from operations $ - GAAP $ (0.2) $ 3.9 $ 6.2 $ 7.8 $ 17.7 $ 4.0 $ 7.2 $ 10.3 Stock-based compensation 3.2 3.1 3.6 2.9 12.8 4.6 2.6 4.2 Litigation and Investigation expense (recovery)
Slide 17: GAAP to Non-GAAP — Adjusted EBITDA
GAAP to Non-GAAP — Adjusted EBITDA $ Millions Q1'20 Q2'20 Q3'20 Q4'20 FY 2020 Q1'21 Q2'21 Q3'21 GAAP net income (loss) $ (0.3) $ 3.8 $ 6.5 $ 7.8 $ 17.8 $ 2.7 $ 6.6 $ 74.9 Exclude: Interest expense - 0.0 - - 0.0 - - - Exclude: Interest income and other (income) expense, net (0.2) (0.2) (0.5) (0.5) (1
Slide 18: Thank You
Thank You Investors@A10networks.com Always Secure. Always Available.