A10 Networks, Inc. · NYSE:ATEN
A10 Networks — Q1 2017 Earnings Presentation
21 slides from A10 Networks's earnings presentation, Apr 27, 2017
Slide 1: First Quarter 2017 Financial Results & Commentary
YOUR SECURE APPLICATION SERVICES COMPANY First Quarter 2017 Financial Results & Commentary April 27, 2017 1
Slide 2: Agenda
Agenda Introduction • Maria Riley, Investor Relations Results Overview • Lee Chen, CEO, President and Founder Q1 2017 Financial Results & Q2 2017 Business Outlook • Shiva Natarajan, Interim CFO Q & A • Lee Chen, CEO, President and Founder • Shiva Natarajan, Interim CFO • Ray Smets, EVP – Worldwide S
Slide 3: Cautionary Statements and Disclosures
Cautionary Statements and Disclosures 3 This presentation and the accompanying oral presentation contain “forward-looking” statements that are based on our management’s beliefs and assumptions and on information currently available to management, including continued acceptance of A10’s products in t
Slide 4: Cautionary Statements and Disclosures (non-GAAP)
Cautionary Statements and Disclosures 4 In addition to the U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. The non-GAAP measures have limitations as analytical tools and you should not consider them in isolation or as a substitute for an analysis of our results
Slide 5: Lee Chen, CEO, President and Founder
Lee Chen CEO, President and Founder 5
Slide 6: First Quarter 2017 Summary
First Quarter 2017 Summary First Quarter Revenue of $60.3 M, up 12% y/y • Achieved product revenue of $39.7 M, up 9% y/y • Growth driven by continued demand for our cloud & security solutions across cloud provider, service provider and web-scale customers • 20% y/y growth in Japan • 52% y/y growth i
Slide 7: Recent Customer Engagements
Recent Customer Engagements • Major U.S. based cloud service provider is upgrading their IPv6 infrastructure globally with Thunder 14045 with CGN • A German telecom and IT services provider chose to deploy our Thunder TPS solution for DDoS mitigation • A leading financial institution in Europe is re
Slide 8: Enabling Application Agility
8 Enabling Application Agility ACOS ACOS Application Delivery & Security Appliance & SDN Virtualization / NFV Lightweight ADC Secure Application Services Containers & Microservices On Premise Cloud S TA B I L I T Y & P E R F O R M A N C E A G I L I T Y & F LU I D I T Y ANALYTICS API CONFIGS APPLICAT
Slide 9: A10's Harmony Vision: Any User. Any App. Any Where.
9 ANY USER. ANY APP. ANY WHERE. PRIVATE CLOUD DATA CENTER HACKER DDOS ATTACK HOME OFFICE REMOTE USER PUBLIC CLOUD SAAS CLOUD AVAILABILITY SECURITY VISIBILITY A10’s Harmony Vision
Slide 10: Shiva Natarajan, Interim CFO
Shiva Natarajan Interim CFO 10
Slide 11: Revenue Trend
Revenue Trend QUARTERLY $M $179 $199 $230 2014 2015 2016 ANNUAL $M Annual $48 $51 $57 $54 $57 $55 $64 $60 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2015 2016 11 2017
Slide 12: Revenue Mix
Revenue Mix $ MILLIONS / % REVENUE Product Geography Verticals Numbers may not total to 100% due to rounding. 12
Slide 13: Non-GAAP Gross Profit
Non-GAAP Gross Profit *Non-GAAP rounded financial measures. For reconciliation see Appendix. 13 2015 2016 2017
Slide 14: Summary Financial Results
Summary Financial Results NON-GAAP* FINANCIAL MEASURES ($M) Q1’2016 Q2’2016 Q3’2016 Q4’2016 Q1’2017 Sales & Marketing $24.7 $25.0 $22.6 $25.1 $24.7 Research & Development $13.3 $13.4 $14.0 $13.7 $15.1 General, Administrative & Litigation $6.9 $6.6 $5.6 $6.1 $6.3 Income (Loss) from Operations $(4.0)
Slide 15: Balance Sheet & Cash Flow
Balance Sheet & Cash Flow SELECTED GAAP FINANCIAL MEASURES ($M) Q1’2016 Q2’2016 Q3’2016 Q4’2016 Q1’2017 Cash and Marketable Securities $107.5 $113.7 $116.8 $114.3 $116.2 Accounts Receivable $41.9 $39.3 $48.9 $66.8 $61.8 Deferred Revenue (total) $74.8 $75.8 $83.2 $92.9 $93.1 Cash Flow Provided by (Us
Slide 16: Q2 2017 Business Outlook
Q2 2017 Business Outlook Management will host a conference call to discuss A10’s financial results for its first quarter of 2017 and the current outlook for the second quarter of 2017 on April 27, 2017 at 4:30 p.m. Eastern time / 1:30 p.m. Pacific time. Open to the public, investors may access the c
Slide 17: Question & Answer Session
Question & Answer Session LEE CHEN CEO, President and Founder SHIVA NATARAJAN Interim CFO RAY SMETS EVP Worldwide Sales 17
Slide 18: Non-GAAP Reconciliation – Gross Profit
QUARTERLY Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Gross Profit Margin (GAAP) 75% 75% 76% 77% 77% SBC included in COGS 1% 1% 1% —% —% Gross Profit Margin (Non-GAAP) 76% 76% 77% 78% 77% * SBC = stock-based compensation QUARTERLY ($M) Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Gross Profit (GAAP) $40.6 $42.9 $42.1 $49.5 $46.
Slide 19: Non-GAAP Reconciliation – Expense Items
Non-GAAP Reconciliation – Expense Items $ Millions Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Sales & Marketing (GAAP) $26.8 $26.8 $24.3 $26.5 $26.3 SBC included in Sales & Marketing (2.1) (1.7) (1.7) (1.4) (1.5) Sales & Marketing (Non-GAAP) $24.7 $25.0 $22.6 $25.1 $24.7 R&D (GAAP) $14.8 $14.5 $16.0 $15.5 $17.0
Slide 20: Non-GAAP Reconciliation – Income (Loss) Items
Non-GAAP Reconciliation – Income (Loss) Items $ Millions Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Income (Loss) from Operations (GAAP) $(9.4) $(5.8) $(4.6) $0.6 $(4.3) Stock-Based Compensation 4.6 3.9 4.6 3.8 4.3 Amortization Expense Related to Acquisition — — 0.3 0.3 0.3 Litigation and Settlement 0.8 — — — —
Slide 21: Thank You
Thank You www.a10networks.com