A10 Networks, Inc. · NYSE:ATEN
A10 Networks — Q4 2020 Earnings Presentation
19 slides from A10 Networks's earnings presentation, Feb 9, 2021
Slide 1: Q4 and FY 2020 Financial Results & Commentary
Q4 and FY 2020 Financial Results & Commentary February 9, 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 regardingour positioning, global business environment, strategy, including portfolio mana
Slide 3: Agenda
Agenda • Introduction • 4Q Overview • 4Q Financial Performance • FY2020 Financial Performance 3
Slide 4: A10 at a Glance
A10 at a Glance Enabling a Secure and Available Digital World IoT Shift to 5G Operational Security Proliferation Cloud Deployment Complexity Threats $225M $109M 78.6% 7,800+ 2020 NON-GAAP DEFERRED REV CUSTOMERS 2020 GROSS MARGIN AS OF 12/31 REVENUE $158M CASH & MARKETABLE $0 SECURITIES DEBT AS OF 12
Slide 5: Near-term Expectations
Near-term Expectations • Continue to effectively manage the business • Well-equipped to mitigate disruption • Sustainable win rate with lower visibility of order patterns in the next 90-day period related to changing global business environment • Increasing focus on portfolio management • Deliver in
Slide 6: Quarterly Recurring Revenue
$120.0 Quarterly Recurring Revenue $28.2 $28.4 $0.7 $1.0 $25.5 $24.4 $24.8 $3.9 $3.3 $23.7 $0.8 $23.0 $23.4 $23.4 $0.6 $22.9 $1.2 $2.2 $22.1 $0.4 $21.4 $0.4 $2.1 $0.5 $0.8 $0.7 $1.2 $1.1 $0.4 $0.8 $1.3 $1.4 $1.0 $0.4 $0.8 $0.7 $23.6 $24.1 $21.8 $21.7 $21.7 $22.4 $22.2 $22.5 $20.3 $20.9 $21.1 $21.2 Q
Slide 7: Quarterly Revenue & Non-GAAP Operating Income
Quarterly Revenue & Non-GAAP Operating Income Revenue, $ Millions Revenue, $ Millions $62.7 $62.7 $60.3 $60.3 $56.6 $53.8 $52.5 Q4'19 Q4'20 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Non-GAAP Operating Income, $ Millions Non-GAAP Operating Income, $ Millions $13.9 $13.9 $10.3 $7.8 $7.1 $7.8 $4.0 Q4'19 Q1'20 Q2'2
Slide 8: Quarterly Revenue by Customer Vertical
Quarterly Revenue by Customer Vertical $Millions 36% 35% 4Q 2020 42% 40% 40% $62.7 million 40% 64% 65% 60% 60% 58% 60% Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Service and Cloud Providers Enterprise 9
Slide 9: Quarterly Revenue by Geography
Quarterly Revenue by Geography $Millions 12% 11% 15% 14% 14% 4Q 2020 9% $62.7 million 15% 15% 13% 15% 33% 27% 30% 14% 24% 32% 13% 43% 30% 46% 47% 46% 43% 39% Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Americas Japan APAC ex Japan EMEA 10
Slide 10: Annual Revenue & Non-GAAP Operating Income
Annual Revenue & Non-GAAP Operating Income Revenue, $ Millions Non-GAAP Operating Income, $ Millions $35.3 $225.5 Up 6% Up 14X $212.6 $2.0 FY2019 FY2020 FY2019 FY2020 Operating Income is a Non-GAAP Financial Measure. See Appendix for reconciliation to most comparable GAAP financial measures. 11
Slide 11: Annual Revenue by Customer Vertical
Annual Revenue by Customer Vertical $Millions FY2020 43% 42% 39% $225.5 million 39% 57% 58% 61% 61% FY2018 FY2019 FY2020 Service and Cloud Providers Enterprise 12
Slide 12: Annual Revenue by Geography
Annual Revenue by Geography $Millions 12% 13% 13% 16% 13% FY2020 17% $225.5 million 24% 30% 28% 13% 13% 44% 48% 42% 44% 30% FY2018 FY2019 FY2020 Americas Japan APAC ex Japan EMEA 13
Slide 13: Quarterly and Full-Year Cash Flows
Quarterly and Full-Year Cash Flows (in millions) (in millions) 2.7M shares purchased @ Cash Flows Q4-20 an avg price of Cash Flows FY2020 $7.11 per 250.0 250 share . 200.0 200 10 0.2 2.8 5 16.8 19.2 33 150.0 150 55 100.0 100 159.1 158.1 158 50.0 130 50 - - Cash & Cash Operations Investing Financing
Slide 14: Financial Performance Trends
Financial Performance Trends $ Millions (except EPS) 1Q'19 2Q'19 Q3’19 4Q'19 FY 2019 1Q’20 2Q’20 3Q’20 4Q’20 FY2020 Revenue $50.3 $49.2 $52.8 $60.3 $212.6 $53.8 $52.5 $56.6 $62.7 $225.5 Non-GAAP Gross Margin % 76.3% 78.0% 78.1% 78.5% 77.8% 78.3% 78.8% 77.6% 79.6% 78.6% Non-GAAP Operating Margin % (1
Slide 15: Appendix
Appendix 16
Slide 16: GAAP to Non-GAAP - Gross Margin and EPS
GAAP to Non-GAAP - Gross Margin and EPS % of Revenue except EPS Q1'19 Q2'19 Q3'19 Q4'19 FY 2019 Q1'20 Q2'20 Q3'20 Q4'20 FY 2020 Gross Margin % - GAAP 75.6% 77.1% 77.4% 77.7% 77.0% 77.4% 78.2% 76.8% 78.5% 77.8% Stock-based compensation 0.6% 1.0% 0.6% 0.8% 0.7% 0.9% 0.6% 0.8% 0.6% 0.7% Global portfoli
Slide 17: GAAP to Non-GAAP - Operating Income (Loss)
GAAP to Non-GAAP - Operating Income (Loss) $ Millions Q1'19 Q2'19 Q3'19 Q4'19 FY 2019 Q1'20 Q2'20 Q3'20 Q4'20 FY 2020 Income (loss) from operations $ - GAAP $ (11.0) $ (6.4) $ 0.2 $ 0.1 $ (17.1) $ (0.2) $ 3.9 $ 6.2 $ 7.8 $ 17.7 Stock-based compensation 3.9 5.0 3.5 4.3 16.8 3.2 3.1 3.6 2.9 12.8 Litig
Slide 18: GAAP to Non-GAAP - Adjusted EBITDA
GAAP to Non-GAAP - Adjusted EBITDA $ Millions Q1'19 Q2'19 Q3'19 Q4'19 FY 2019 Q1'20 Q2'20 Q3'20 Q4'20 FY 2020 GAAP net income (loss) $ (12.3) $ (5.8) $ 0.2 $ 0.1 $ (17.8) $ (0.3) $ 3.8 $ 6.5 $ 7.8 $ 17.8 Exclude: Interest expense 0.2 0.0 0.0 0.0 0.2 - 0.0 - - 0.0 Exclude: Interest income and other (
Slide 19: Thank You
Thank You Investors@a10networks.com Always Secure. Always Available.