A10 Networks, Inc. · NYSE:ATEN
A10 Networks — Q3 2017 Earnings Presentation
21 slides from A10 Networks's earnings presentation, Oct 26, 2017
Slide 1: Third Quarter 2017 Financial Results & Commentary
1. Your Secure Application Services Company Third Quarter 2017 Financial Results & Commentary October 26, 2017
Slide 2: Agenda
2. Agenda Introduction • Maria Ri ley , Investor Relat ions Results Overview • Lee Chen, CEO, Pres ident and Founder Q3 2017 Financial Results & Q4 2017 Business Outlook • Tom Constant ino , CFO Q&A • Lee Chen, CEO, Pres ident and Founder • Tom Constant ino , CFO
Slide 3: Cautionary Statements and Disclosures
3. Cautionary Statements and Disclosures 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 statements regarding our projections for o
Slide 4: Cautionary Statements and Disclosures
4. Cautionary Statements and Disclosures 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: CEO, President and Founder Lee Chen
5. CEO, President and Founder Lee Chen
Slide 6: Third Quarter 2017 Summary
6. Third Quarter 2017 Summary Third quarter revenue increased 12% y/y to reach $61.4 Million • Driven by: • Solid demand and the team’s improved execution • Strength with our marquee service provider customers • Product revenue grew 12% y/y to $39.4 M, or 64% of total revenue • Achieved strong produ
Slide 7: Recent Customer Engagements
7. Recent Customer Engagements • Won a large deal with a mobi le provider in the U.S. , where we continued to expand our footprint and replaced the incumbent ADC vendor with our ThunderADC and ThunderSSLi solut ions; customer contr ibuted 14% of Q3 revenue • Closed a seven-f igure deal with leading
Slide 8: Security Solutions
8. Security Solutions O N P R E M I S E C L O U D Harmony Controller Management Analytics, Configuration aGalaxy Centralized Management Reporting, Control SSLi CFW TPS SECURITY • DDoS Mitigation • Detection, traffic baselining, auto- learning • SSL visibility • Policy Enforcement • Dynamic web categ
Slide 9: Harmony Controller
9. Harmony Controller ANY USER. ANY APP. ANY WHERE. PRIVATE CLOUD DATA CENTER HACKER DDOS ATTACK HOME OFFICE REMOTE USER PUBLIC CLOUD SAAS CLOUD AVAILABILITY SECURITY VISIBILITY
Slide 10: CFO Tom Constantino
10. CFO Tom Constantino
Slide 11: Revenue Trend
11. Revenue Trend QUARTERLY $M $179 $199 $230 2014 2015 2016 ANNUAL $M Annual $51 $57 $54 $57 $55 $64 $60 $54 $61 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2015 2016 2017
Slide 12: Revenue Mix
12. Revenue Mix $ MILLIONS / % REVENUE Product Geography Verticals Numbers may not total to 100% due to rounding.
Slide 13: Non-GAAP Gross Profit
13. Non-GAAP Gross Profit *Non-GAAP rounded financial measures. For reconciliation see Appendix. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% $- $10 $20 $30 $40 $50 $60 $70 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 $ M ill io ns Product GP $ Service GP $ Total GM %
Slide 14: Summary Financial Results
14. Summary Financial Results NON-GAAP* FINANCIAL MEASURES ($M) Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Q2’17 Q3’17 Sales & Marketing $24.7 $25.0 $22.6 $25.1 $24.7 $23.7 $25.2 Research & Development $13.3 $13.4 $14.0 $13.7 $15.1 $14.4 $14.2 General, Administrative & Litigation $6.9 $6.6 $5.6 $6.1 $6.3 $6.1 $6
Slide 15: Balance Sheet & Cash Flow
15. Balance Sheet & Cash Flow SELECTED GAAP FINANCIAL MEASURES ($M) Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Q2’17 Q3’17 Cash and Marketable Securities $107.5 $113.7 $116.8 $114.3 $116.2 $132.2 $123.9 Accounts Receivable $41.9 $39.3 $48.9 $66.8 $61.8 $41.4 $49.9 Deferred Revenue (total) $74.8 $75.8 $83.2 $92.9
Slide 16: Q4 2017 Business Outlook
16. Q4 2017 Business Outlook Management will host a conference call to discuss A10’s financial results for its third quarter of 2017 and the current outlook for the fourth quarter of 2017 on October 26, 2017 at 4:30 p.m. Eastern time / 1:30 p.m. Pacific time. Open to the public, investors may access
Slide 17: Questions & Answer Session
17. Questions & Answer Session LEE CHEN CEO, President and Founder TOM CONSTANTINO CFO
Slide 18: Non-GAAP Reconciliation – Gross Profit
18. Non-GAAP Reconciliation – Gross Profit QUARTERLY Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Q2’17 Q3’17 Gross Profit Margin (GAAP) 75% 75% 76% 77% 77% 76% 78% SBC* included in COGS 1% 1% 1% —% —% 1% 1% Gross Profit Margin (Non-GAAP) 76% 76% 77% 78% 77% 77% 78% * SBC stands for stock-based compensation. QUART
Slide 19: Non-GAAP Reconciliation – Expense Items
19. Non-GAAP Reconciliation – Expense Items $ Millions Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Q2’17 Q3’17 Sales & Marketing (GAAP) $26.8 $26.8 $24.3 $26.5 $26.3 $25.6 $26.9 SBC included in Sales & Marketing (2.1) (1.7) (1.7) (1.4) (1.5) (1.9) (1.7) Sales & Marketing (Non-GAAP) $24.7 $25.0 $22.6 $25.1 $24.7 $
Slide 20: Non-GAAP Reconciliation – Income (Loss) Items
20. Non-GAAP Reconciliation – Income (Loss) Items $ Millions Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Q2’17 Q3’17 Income (Loss) from Operations (GAAP) $(9.4) $(5.8) $(4.6) $0.6 $(4.3) $(8.0) $(2.1) Stock-Based Compensation 4.6 3.9 4.6 3.8 4.3 5.0 4.5 Amortization Expense Related to Acquisition — — 0.3 0.3 0.3
Slide 21: Thank You
| THANK YOU