A10 Networks, Inc. · NYSE:ATEN

A10 Networks — Investor Day (February 2022)

120 slides from A10 Networks's investor day presentation, Feb 2, 2022

Slide 1: 2022 Investor Day
2022 Investor Day February 2, 2022
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, routes to market, technical differentiation, expansion opportunit
Slide 3: Agenda
Agenda Dhrupad Trivedi, President & CEO Evolution, Execution, Acceleration Fernando Montenegro, Senior Principal Analyst, Cybersecurity – Omdia Trends and Threats for Enterprise and Security Matt Bruening, EVP of Worldwide Sales & Marketing Delivering Better Business Outcomes for Customers Tina Stew
Slide 4: Evolution, Execution, Acceleration
Evolution, Execution, Acceleration Dhrupad Trivedi President & CEO
Slide 5: Evolution, Execution, Acceleration
Evolution, Execution, Acceleration • Evolution from a legacy • Focused on cybersecurity • Accelerating growth by high-performance hardware and infrastructure solutions capitalizing on large, global company with decreasing that are aligned with the installed base with our growth potential and limited
Slide 6: A10 Mission
A10 Mission Enabling business-critical networks that are secure, available and efficient
Slide 7: From 2014 to 2019…
From 2014 to 2019… Established: Achieved: Built: Developed: industry leadership technical differentiation IP portfolio around highly engaged for A10’s through low latency, IT infrastructure global customer base high-performance high throughput and cybersecurity ADC integrated platforms
Slide 8: 2020 Marked a Critical Inflection Point
2020 Marked a Critical Inflection Point A10 underwent a business transformation leveraging our historical strengths and strong customer base Secular Tailwinds Cybersecurity Infrastructure Achieved organic growth Set a foundation Shifted to strategic Accelerated focus on and profitability despite for
Slide 9: Positioning Us for Profitable Growth in 2021 and Beyond…
Positioning Us for Profitable Growth in 2021 and Beyond… 10.9% 6.0% ~3.4% 2014-2019 1 2020 2021 Organic Growth % 2021 Records 25.0% 20.2% Revenue ~0.9% 2014-2019 2 2020 2021 $250M EBITDA % $0.63 EBITDA EPS ~($0.43) $0.26 $62M $0.63 3 2014-2019 2020 2021 Non-GAAP EPS Note: All figures Non-GAAP; 1. 20
Slide 10: A10 Networks Recognized in 2021 Gartner Hype Cycle Reports
A10 Networks Recognized in 2021 Gartner Hype Cycle Reports for 5G Network Security and TLS Decryption • A10 Networks Named as a Sample Vendor in • A10 Networks Named as a Sample Vendor in 2021 2021 Gartner® Hype Cycle™ reports for 5G Gartner® Hype Cycle™ report for TLS Network Security (1),(2) Decry
Slide 11: Capitalizing on Higher Growth Markets with Portfolio Evolution
Capitalizing on Higher Growth Markets with Portfolio Evolution 1 2019 20211 Market Expected Size Growth Rate4 DDoS/SSLi Standalone DDoS/SSLi Standalone ADC Product Revenue ADC 14% 19% Category TAM Next 3 Years 26% 43% Carrier-Class DDoS / SSLi $2.2B2 12-14% Firewall/CGN Carrier-Class Firewall/CGN Ca
Slide 12: Portfolio Evolution Creates Opportunity for Multiple Expansion
Portfolio Evolution Creates Opportunity for Multiple Expansion Forward EV/Sales 1 Forward EV/EBITDA 1 6.0x 21.6x 13.7x 3.7x A10 Peer Group A10 Peer Group Peer group includes F5, Akamai Technologies, Radware, Fortinet, and VMWare; 1.Using closing price as of 1/31/2022, 2022 consensus estimates for re
Slide 13: Driving Balanced Outcomes for Employees, Customers and Investors
Driving Balanced Outcomes for Employees, Customers and Investors A10 is committed to: • Being an environmentally responsible member of our global community • Fostering a diverse, inclusive, and safe environment for our employees and customers alike • Maintaining strong governance that maintains an e
Slide 14: Acceleration: Foundation for Balanced and Durable Growth
Acceleration: Foundation for Balanced and Durable Growth
Slide 15: Capitalize on Large Installed Base for Growth
Capitalize on Large Installed Base for Growth 2021 Net Product Enable customers to deploy Revenue Retention Rate1 hybrid solutions on-premises 7,000+ 118% and in the cloud Customers of firms surveyed listed on- NPRR: % of product 85% premises as a critical part of their hybrid cloud strategy2 21 of
Slide 16: A10's Hybrid Solutions
A10’s Hybrid Solutions Support Digital Transformation Initiatives and Enhance Security Threat Intel A10 A10 App Delivery Public Cloud Solutions Management API Gateway & Security Plane ZTNA Web Traffic/APIs GSLB SSL Acceleration On-Prem / Bot, App App Delivery Attacks CGN Private Cloud Secure Access
Slide 17: 5G Network Security Challenges
5G Network Security Challenges 5G latency and Fragmentation of security time-to-mitigation market solutions 10x millisecond Over 900 5G devices improvement on announced, versus single average versus 4G1 digits in 20192 Higher TCO with dedicated 5G use cases significantly security solution increase c
Slide 18: A10 5G Network Security Solutions
A10 5G Network Security Solutions Providing highly scalable security solutions for 5G networks A10 Networks Thunder TPS: automated multi-vector DDoS protection solution, ensuring business service availability at any scale or type of network A10 Networks Thunder CFW provides exceptionally high firewa
Slide 19: Delivering Better Business Outcomes
Delivering Better Business Outcomes A10 provides cybersecurity and infrastructure solutions that deliver better business outcomes Cloud Service Enterprises for customers across multiple Providers Providers geographies and verticals
Slide 20: A10 Networks Security and Infrastructure Portfolio
A10 Networks Security and Infrastructure Portfolio Machine Learning A10 Harmony Controller Data Analytics Central Management & Analytics Threat Intelligence Advanced Load IPv4 & IPv6 TLS/SSL Converged DDoS Protection Balancing Gateways Inspection Firewall Thunder TPS Thunder ADC Thunder CGN Thunder
Slide 21: Emergence of Zero Trust Security Framework
Emergence of Zero Trust Security Framework Data ‘Never Trust, Always Verify’ Security has evolved from • Zero Trust eliminates implicit trust Applications Network perimeter-based defense to • Every device, user, network and a new paradigm application flow is secured • Removes excessive access Indust
Slide 22: A10's Differentiators
A10’s Differentiators Unified product architecture delivers lower latency, higher throughput and higher scalability State-of-the-art cybersecurity with machine learning detects and remediates complex, high-volume attacks Supports multiple security and IT infrastructure categories with optimized CAPE
Slide 23: Survey Results: A10 Value Creation
Survey Results: A10 Value Creation “How much did your A10 product help in these areas?” Dramatically increases performance, and substantially saves OPEX and CAPEX Performance 86% Lower OPEX 68% Lower CAPEX 65% Consistently rated as superior in features, Over 50% or 75% 25% to 49% 10% to 24% 10% or l
Slide 24: Global Go-to-Market Transformation Accelerating Solution Adoption
Global Go-to-Market Transformation Accelerating Solution Adoption Cross-functional Collaboration Solution Portfolio Strategy Partner Traction Shift to Go-to-Market Motion Sales Alignment Outcome-driven Aligned with Expanded Approach Market Opportunity Relationships
Slide 25: Security-led Portfolio Driving Growth
Security-led Portfolio Driving Growth Security Product 3 Market Growth : 65% +Double-digit Growth 50% 44% Non-Security Product 3 Market Growth : 56% 50% 35% +Single-digit Growth 1 2018-2020 2021 Future 2 1. 2018-2020 average annual product mix and volume; 2. Management’s estimate of projected produc
Slide 26: Revenue Diversification
Revenue Diversification Geography Vertical Revenue Type EMEA North APAC America Service Enterprise Services 2019 Provider Products Diversification Japan based on geography, vertical, and EMEA APAC North America Enterprise Services 2020 Service revenue type Japan Provider Products provides growth dur
Slide 27: Targeting Rule of 40 Business Model
Targeting Rule of 40 Business Model 2014-20191 2020 2021 Q4’21 Revenue Growth % 3.4% 6.1% 10.9% 12.8% Gross Margin % 77.2% 78.6% 79.6% 80.7% OPEX % 80.8% 63.0% 58.0% 55.8% EBITDA % 0.4% 20.2% 25.0% 27.5% Revenue Growth % 3.8% 26.3% 35.9% 40.3% + EBITDA % • Robust balance sheet with low capex require
Slide 28: Evolution, Execution, Acceleration
Evolution, Execution, Acceleration • Evolution from a legacy • Focused on cybersecurity • Accelerating growth by high-performance hardware and infrastructure solutions capitalizing on large, global company with decreasing that are aligned with the installed base with our growth potential and limited
Slide 29: Cybersecurity Market Update
Cybersecurity Market Update Fernando Montenegro Senior Principal Analyst, Cybersecurity – Omdia
Slide 30: 2022 Outlook: Trends and Threats For Enterprise and Security
2022 Outlook: Trends and Threats For Enterprise and Security Fernando Montenegro Senior Principal Analyst, Cybersecurity askananalyst@omdia.com © 2022 Omdia Brought to you by Informa Tech
Slide 31: Copyright notice and disclaimer
Copyright notice and disclaimer © 2022 Omdia. All rights reserved. For Omdia clients’ use only. These slides are subject to Omdia copyright and are being provided to Omdia clients only. You are free to redistribute the slides internally within your organization in the form as made available by Omdia
Slide 32: Today's presenter
Today’s presenter Fernando Montenegro Senior Principal Analyst, Cybersecurity Omdia Fernando is a Senior Principal Analyst on Omdia’s cybersecurity research team, based in Toronto, Canada. He focuses on the Infrastructure Security Intelligence Service, which provides vendors, service providers, and
Slide 33: Agenda
Agenda Enterprise 2022 Setting the 2021: A quick Trends Next steps scene recap Trends & challenges overview Omdia Cybersecurity One heck of a year – Challenges beyond “just” Key Security Trends A new approach? Ecosystem again ransomware Page 33Classification: General Information © 2022 Omdia 2022 Ou
Slide 35: Setting the scene: Omdia Cybersecurity Ecosystem
Setting the scene: Omdia Cybersecurity Ecosystem Information security protects the confidentiality, integrity, and availability (CIA) of information Cybersecurity focuses on a subset of information security, protecting the confidentiality, integrity, and availability of digital information Page 35Cl
Slide 37: Cybersecurity #4 on WEF “clear and present dangers” list
Cybersecurity #4 on WEF “clear and present dangers” list SHORT-TERM RISKS (0-2 YEARS) 1. Infectious diseases 58% (Societal) 2. Livelihood crises 55.1% (Societal) 3. Extreme weather events 52.7% (Environmental) 4. Cybersecurity failure 39% (Technological) Source: World Economic Forum Global Risk Repo
Slide 38: Ransomware and supply chain attacks all year round…
Ransomware and supply chain attacks all year round… Page 38Classification: General Information © 2022 Omdia 2022 Outlook: Trends and Threats For Enterprise and Security
Slide 40: Pressure from multiple directions to stay secure
Pressure from multiple directions to stay secure Cyberattacks Creation of digital capability is significantly more important or more important for 73% of Regulation Innovation organizations Source: Omdia IT Enterprise Insights Oct-2021, n=4757 EU NIS Directive Resilience Keeping the digital lights o
Slide 41: Security challenges from every direction
Security challenges from every direction Coming up for 165,000 entries on the US National Vulnerabilities Database (NVD) Vulnerabilities Understanding, identifying, and managing the user community is Far from dead, ransomware had a huge User evermore complex community Ransomware resurgence in 2020-2
Slide 42: Ransomware: The scourge continues
Ransomware: The scourge continues • The severity of problems has been overlooked or dismissed by organizations within every market since its creation. • Visibility is the fundamental component to any security strategy, and many organizations remain blind • Organizations must take it upon themselves
Slide 43: Security is the most important measure used to determine cloud success
Digital Enterprise Services Insights: Global Cybersecurity Services (Cloud, Edge, MSSP) 2021–22 | August 2021 Security is the most important measure globally used to determine the success of cloud services • Cloud security is a nonnegotiable need and the chief measure that most What are the top two
Slide 44: Managing security incidents, securing new technologies, and budget constraints
Digital Enterprise Services Insights: Global Cybersecurity Services (Cloud, Edge, MSSP) 2021–22 | August 2021 Managing security incidents, securing new technologies, and budget constraints are CISOs’ most common challenges globally • Digital improvements to business What are your organization's top
Slide 45: Top three challenges in cybersecurity – by industry
Top three challenges in cybersecurity – by industry Manufacturing, transport and logistics Government Banking, Finance and Insurance Securing new technologies and platforms Securing new technologies and platforms Skills shortages (attracting & retaining 15% 15% 19% (e.g. cloud, AI, edge, IoT) (e.g.
Slide 46: Key technology patterns: Zero Trust
Key technology patterns: Location is a factor BYOD Zero Trust Remote User In-office User User • ‘Never Trust, Always Verify’ Network LOGICAL boundary Access • Zero Trust eliminates implicit trust –Network location Anomalous traffic dropped Traffic Inspection –Initial authentication –Unlimited access
Slide 47: Key technology patterns: Hybrid/Multi-Cloud
Key technology patterns: Hybrid/Multi-Cloud CSP2 • Virtually every medium/large organization operates (Custom services) in hybrid mode: cloud provider(s) plus existing CSP1 DCs/colo. (strategic CSP3 sourcing) (M&A) • Multi-cloud is an emergent property: a reality at organizational, not at the projec
Slide 49: Management of security, identity, privacy at the top of IT trends
Management of security, identity, privacy at the top of IT trends Page 49Classification: General Information © 2022 Omdia 2022 Outlook: Trends and Threats For Enterprise and Security
Slide 50: Security investment plans
Security investment plans Globally, 32% of organizations plan strategic investment in managed security services, a further 37% plan minor investment Other key areas include: • Cloud Security • Security Operations • Network security (firewalls and DDoS prevention) • Identity and Access Management Pag
Slide 51: Top-level trends across the Omdia Cybersecurity Ecosystem
Top-level trends across the Omdia Cybersecurity Ecosystem Identity, Enterprise Infrastructure Security Data Security Authentication, Security IoT Security Security Operations Access Management New data security The consumerization of The changing workplace Quality of outcomes in The emphasis of risk
Slide 53: Cybersecurity as a business partner
Cybersecurity as a business partner “Cybersecurity teams must be recognized as strategic partners in technology and the business decision- making process” Page 53Classification: General Information © 2022 Omdia 2022 Outlook: Trends and Threats For Enterprise and Security
Slide 54: Maintain every aspect of the CISO Balancing Act
Maintain every aspect of the CISO Balancing Act Customers and Board and Regulators CIO C-level Compliance, Support Enterprise Risk Management Securing enterprise IT and subject-level expertise (Technology, Processes, Operations) CISO Driving Security Culture, Product Security Leadership Aligning to
Slide 55: Key recommendations
Digital Enterprise Services Insights: Global Cybersecurity Services (Cloud, Edge, MSSP) 2021–22 | August 2021 Key recommendations Vendors and Service Providers Enterprise and government 1. Be prepared to address key customer needs: The reality for most 1. Build organizational structure to support in
Slide 56: Thank you
Thank you Fernando Montenegro Senior Principal Analyst Cybersecurity askananalyst@omdia.com @OmdiaHQ @OmdiaCyber @fsmontenegro Page 56Classification: General Information © 2022 Omdia 2022 Outlook: Trends and Threats For Enterprise and Security
Slide 57: Thank You
Thank You Disclaimer The Omdia research, data and information referenced herein (the “Omdia Materials”) are the copyrighted property of Informa Tech and its subsidiaries or affiliates (together “Informa Tech”) or its third party data providers and represent data, research, opinions, or viewpoints pu
Slide 58: Achieving Better Business Outcomes for Customers
Achieving Better Business Outcomes for Customers Matt Bruening EVP, Global Sales and Marketing
Slide 59: “When the customer comes first, the customer will last.”
“When the customer comes first, the customer will last.” —Robert Half
Slide 60: A10 Selling Approach
A10 Selling Approach Create Customer Value with A10’s Differentiators Unified product architecture The sales experience is the The sales environment has single largest driver for changed and is becoming customer loyalty increasingly complex State-of-the-art cybersecurity 2021 Net Product Features Cu
Slide 61: Better Business Outcomes Customer Success Stories
Better Business Outcomes Customer Success Stories
Slide 62: Better Business Outcomes Customer Success Stories
Better Business Outcomes Customer Success Stories
Slide 63: Better Business Outcomes Customer Success Stories
Better Business Outcomes Customer Success Stories
Slide 64: Transforming the Go-to-Market Strategy
Transforming the Go-to-Market Strategy Tina Stewart VP, Commercial Marketing
Slide 65: A CIO's New Reality = Business Shifts
Global Go-to-Market Transformation A CIO’s New Reality = Business Shifts • Service delivery • Continuous remote working/uptime • Reinforce cybersecurity – attacks Up 3x+ • Customer-centric delivery model • Restructuring • Rebuild supply chain • New digital transformation plans • Elastic staffing pro
Slide 66: Accelerating Solution Adoption
Global Go-to-Market Transformation Accelerating Solution Adoption Cross-functional Collaboration Solution Portfolio Strategy Partner Traction Shift to Go-to-Market Motion Sales Alignment Outcome-driven Aligned with Expanded Approach Market Opportunity Relationships Awareness Consideration Decision P
Slide 67: Cross-functional Outcome-driven Approach
Global Go-to-Market Transformation Cross-functional Outcome-driven Approach • Time to Value Customer • Repeatable Outcomes • Enterprise • Service Provider Market Customer • Cloud Segmentation Experience Digitized Approach • Formalized Training • Consistent Engagement • Sales and Marketing Automation
Slide 68: Service Provider – Aligned to Market Opportunity
Global Go-to-Market Transformation Service Provider – Aligned to Market Opportunity Cable Telcos 1 Billion+ Tier 1 wireline carriers Tier 1 MSO Subscribers connected U.S., Europe, LATAM, Asia Broadband Regional and rural 5G Tier 1 mobile carriers Institutions Universities, private 5G, 270+ Service P
Slide 69: Enterprise – Aligned to Market Opportunity
Global Go-to-Market Transformation Enterprise – Aligned to Market Opportunity 17+ Security Cloud-native Financial Partnerships Global DDoS Securing and ensuring Protection at Scale low-latency trading Enabling Zero Trust Architectures Gaming Healthcare Education 1 Billion+ Reliable Enabling doctors
Slide 70: Sales Alignment with Expanded Partnerships
Global Go-to-Market Transformation Sales Alignment with Expanded Partnerships Cloud Partners Technology Partners & Integrations Solution & SI Partners
Slide 71: Sales Alignment with Expanded Partnerships
Global Go-to-Market Transformation Sales Alignment with Expanded Partnerships Secure Decrypt Zone Multi-layered Security Analytics & Ease of Use Zero Trust Architecture and Security Partnerships
Slide 72: Transition to Hybrid Cloud in the Enterprise
Global Go-to-Market Transformation Journey Transition to Hybrid Cloud in the Enterprise Public Cloud Private Cloud SDN & Automation
Slide 73: Industry Recognition for Solution Innovation
Industry Recognition for Solution Innovation RSA: Most Innovative Application IT Central Station: Intel Network Builders: Frost & Sullivan: Digital Resiliency Solution Application Delivery 5G & NFVi Best Practices Customer Value Peer Award Innovation Leadership Award Interop Tokyo: People’s Choice R
Slide 74: A10 Advantage: Security
A10 Advantage: Security Rich Groves Director of Security Research
Slide 75: The Attack Surface is Growing
The Attack Surface is Growing • There is a steady growth in connectivity and digital transformation • Cloud adoption is on the rise • Cloud infrastructure has become cheaper and easier • Enterprise reliance on SaaS has increased • IOT growth over 1 billion devices YoY • Cameras, Smart Plugs, Lights,
Slide 76: The Rise in Cybersecurity Threats
The Rise in Cybersecurity Threats • Increase in cyberattacks launched by state actors and criminals for quick financial gains Vulnerabilities (CVE) Found Per Year • Ransomware – the tool of choice for most criminals • White and blackhat developers are incentivized 20,141 18,325 to create new exploit
Slide 77: The Latest Example – Apache Log4j
The Latest Example – Apache Log4j A10 releases guidance to A10 observed DDoS customers on how to attacks being launched by Disclosure (12/9/2021) block the infection Log4j enabled bots Researchers and cyber A10 detected viral spread criminals begin scanning of DDoS-focused malware the internet for a
Slide 78: DDoS Attacks and Weapons Continue to Grow
DDoS Attacks and Weapons Continue to Grow 15 million DDoS Weapons Tracked Amplification attacks 44 thousand observed in a month (12/2021)
Slide 79: AI/ML Defenses Empower Zero Trust Security
AI/ML Defenses Empower Zero Trust Security DDoS Defense with Zero-day Automated Protection (ZAP) Industry’s Fastest Automated Response to DDoS Attacks Spoofed Packet Filtering Request Distinct Content Pattern Reflector Distinct Content DDoS Bot Machine Learning-based Pattern Pattern Detection Protec
Slide 80: The A10 Networks Zero Trust Strategy
The A10 Networks Zero Trust Strategy ‘Never Trust, Always Verify’ • Zero Trust eliminates implicit trust • Minimizes excessive access and attack surface • A10 security solutions enable and enhance Zero Trust • Critical encrypted threat visibility and protection • Automated zero-day DDoS protection •
Slide 81: A10 Advantage: Infrastructure
A10 Advantage: Infrastructure Terry Young Director of Service Provider Product Marketing
Slide 82: Communities Leap Forward with Rural Broadband
Communities Leap Forward with Rural Broadband “ If you’re not moving forward, you’re falling back.” — Sam Waterson “A Leap Forward”, Photo by Katrina Boone
Slide 83: A10 Provides Critical Functions Across Service Provider Landscape
A10 Provides Critical Functions Across Service Provider Landscape Cable Telcos 1 Billion+ Tier 1 wireline carriers Tier 1 MSO Subscribers connected U.S., Europe, LATAM, Asia Broadband Regional and rural 5G Tier 1 mobile carriers Institutions Universities, private 5G, 270+ Service Provider wireline a
Slide 84: A10 Secures the Heart of Service Provider Networks
A10 Secures the Heart of Service Provider Networks, Regardless of Access Technology Access Core Packet Core MEC IT Data Center (Edge Cloud) Central Office Internet MSO
Slide 85: The Digital Divide in the U.S. – The Race to Close the Gap
The Digital Divide in the U.S. – The Race to Close the Gap “…in the most rural markets in America, less than 20 percent of households have a broadband connection. ” — Eddie Hold President, NPD Connected Intelligence Map Source: The NPD Group Inc., Connected Intelligence, Rural America and Technology
Slide 86: Billions Allocated to Close the Gap
Billions Allocated to Close the Gap “ Emergency Broadband Connect America Fund Benefit 5G Fund …in the mostforrural Phase II Affordable Connectivity Rural America Program markets in America, less than 20 percent $1.5B $14B $9B of households have a broadband 2018 2020-2021 connection. 2020 ” — Eddie
Slide 87: Billions Allocated to Close the Gap
Billions Allocated to Close the Gap FCC Rural Digital “ Emergency Broadband Connect America Fund Opportunity Benefit Fund 5G Fund …in the mostforrural Phase II Affordable Connectivity Rural America Program markets in America, $1.5B $20.4B $14B $9B less than 20 percent of households have a broadband
Slide 88: Billions Allocated to Close the Gap
Billions Allocated to Close the Gap Infrastructure Investment and Jobs Act “…in the most rural markets in America, less than 20 percent $1.2T of households have a broadband connection. ” — Eddie Hold 2021 President, NPD Connected Intelligence
Slide 89: Fragmented Industry – Islands of Connectivity
Fragmented Industry – Islands of Connectivity ILECs, LECs, CLECs, MNOs Electric Cooperatives and Tribal Private/Public Partnerships Technology-defined Local Communities, Rural Cloud Initiative Service Areas Counties, Cities MS Airband Business models for connectivity, core networking, and funding ne
Slide 90: Subscriber Expectations have Risen
Subscriber Expectations have Risen “ The demands on ISPs to deliver exceptional connectivity services to consumers and businesses have never been greater. Changing consumer lifestyle, work, and entertainment patterns in the wake of the COVID-19 crisis have shifted the market for broadband services c
Slide 91: Security is No Longer a “Nice to Have”
Security is No Longer a “Nice to Have” Critical Services Vulnerable Rural Population Public Safety Tele-medicine 2.4 Tb/s 15M 2021 Largest DDoS Attack Education Elderly DDoS Weapons Broadband Households <10 Gbps 69% of Enterprise 79% concerned and privacy about security 35% experienced a data securi
Slide 92: IPv4 and IPv6 will Co-exist for Years
IPv4 and IPv6 will Co-exist for Years Every Connected Device “ Each customer wants Needs an IP Address connectivity to many possible points, and even if 80% of the internet traffic is over IPv6, nearly every customer will still have numerous IPv4-only sites that they wish to reach ” — John Curran, P
Slide 93: IPv4 Demand is High, Supply Uncertain, and Costs Rising
IPv4 Demand is High, Supply Uncertain, and Costs Rising IPv4 Acquisition Cost Trends Regional ISPs Surveyed ?? Existing IPv4 $40-$59 52% Pool Exhausted in 1-3 Years $25 $18 $17 $6 10,000 $590,000+ 2015 2018 2019 2020 Jul-21 Future New Subscribers For IPv4 Addresses A10 Networks: “Insights 2022: Rura
Slide 94: Regional FTTH Provider Extends IPv4 Investment for Growth
Regional FTTH Provider Extends IPv4 Investment for Growth Desired Subscriber Growth 71,000 55,000 • Goal: FTTH buildout to 11,000 more subscribers • Five-year subscriber growth • Cost of IPv4 – over $500k Runs out of IPv4
Slide 95: Regional FTTH Provider Extends IPv4 Investment for Growth
Regional FTTH Provider Extends IPv4 Investment for Growth CGNAT Enables Oversubscription • Goal: FTTH buildout to 11,000 more subscribers 32 1 • Five-year subscriber growth Private Public IPv4 IPv4 • Cost of IPv4 – over $500k Savings with Thunder CGN +$400K A10 Networks CGN_IPv4 Cost Estimator analy
Slide 96: A10 Recommendations to Industry
A10 Recommendations to Industry • Drive Innovation Across Business Models • Funding / partnership is just the first step • Technology – access and core network • New services and customers • Prioritize Security Investment with Partner • Double down on basic cybersecurity hygiene • Upgrade DDoS prote
Slide 97: Driving Financial Success
Driving Financial Success Brian Becker CFO
Slide 98: Agenda
Agenda Q4 2021 Earnings Recap Q4 and Full Year 2021 Results and Commentary Financial Priorities Looking Ahead Key Metrics, Revenue Growth, Profitability, Capital Allocation Strategy Financial Outlook Q1 and Full Year 2022 and Longer-Term View
Slide 100: Q4'21: Continued Business Momentum
Q4’21: Continued Business Momentum Growth Highlights • Revenue of $70.7M, up 13% year-over-year, led by the Americas which grew 26% driven by security • Deferred revenue reaches a record $121.6 million, up 12% versus exiting 2020 Record Profitability • Adjusted EBTIDA was a record of $19.4 million o
Slide 101: FY'21: Return to Growth with Record Financials
FY’21: Return to Growth with Record Financials Growth Highlights • Revenue of $250.0 million, up 11% year-over-year, driven by the Americas which increased by 23% • Annual recurring revenue increased 18% year-over-year • Service Provider revenue up 15% year-over-year • Deferred revenue reaches a rec
Slide 102: Annual Revenue, Adjusted EBITDA and EPS
Annual Revenue, Adjusted EBITDA and EPS Revenue, $ Millions EBITDA as a Percent of Revenue 25.0% 27.5% 6.5% 3.3% $250.0 20.2% 25.8% $70.7 $235.4 $232.2 5.5% $225.5 $62.7 $212.6 2017 2018 2019 2020 2021 Q4'20 Q4'21 $0.20 Diluted non-GAAP Earnings Per Share $0.63 $0.44 $0.18 $0.10 $0.01 $0.03 Q4'20 Q4
Slide 103: Financial Priorities Looking Ahead
Financial Priorities Looking Ahead
Slide 104: Focus on Creating Value for Shareholders
Focus on Creating Value for Shareholders Revenue Business Capital Growth Model Allocation
Slide 105: Robust Revenue Growth
Robust Revenue Growth Revenue Growth Product Revenue1 Annual Recurring Revenue2 Total Revenue $97.2 $148.4 $250.0 $82.6 $225.5 $129.9 $67.7 $212.6 $121.9 2019 2020 2021 2019 2020 2021 2019 2020 2021 Product Revenue and Annual Recurring Revenue are leading indicators of Total Revenue Growth 1. Exclud
Slide 106: Growing Deferred Revenue
Growing Deferred Revenue Revenue Growth $ Millions $121.6 $108.7 $101.1 $48.5 $42.7 $38.9 $73.1 $62.2 $66.0 2019 2020 2021 Short-term Long-term
Slide 107: Consistent Gross Margins
Consistent Gross Margins Business Model Gross Margin Percentage 80% - 82% 79.6% 78.3% 78.6% 78% - 80% Continued operational 77.8% 77.0% efficiencies and favorable product mix shift result in strong gross margins 2017 2018 2019 2020 2021 2022 2024+
Slide 108: Demonstrated Operating Leverage
Demonstrated Operating Leverage Business Model EBITDA, $ Millions EBITDA as a % of Revenue 25.0% $62.4 20.2% $45.6 5.5% 3.3% $11.6 $7.7 2018 2019 2020 2021
Slide 109: Capital Allocation Goals
Capital Allocation Goals Capital Allocation Organic Investments to support continued growth • Accelerated focus on technical differentiation including cybersecurity and hybrid solutions Return Value to Investors • $100M share repurchase plan, introduction of dividend in 2021 Monitor for selective gr
Slide 111: Q1 and Full Year 2022 Outlook
Q1 and Full Year 2022 Outlook • Revenue growth of approximately 10-12% • Continued investment in strategic priorities for growth • Maintain business model
Slide 112: Financial Goals
Financial Goals Mid-term (2022-2023) Long-term (2024+) 10-12% Total Revenue CAGR 12-15% Annual Recurring Revenue CAGR 12%+ Total Revenue CAGR Product Revenue Growth Greater than 65%+ Security-Led Revenue as a Percent Total Revenue Growth of Total Revenue Revenue 65% Security-Led Revenue as a Percent
Slide 113: Evolution, Execution, Acceleration
Evolution, Execution, Acceleration • Evolution from a legacy • Focused on cybersecurity • Accelerating growth by high-performance hardware and infrastructure solutions capitalizing on large, global company with decreasing that are aligned with the installed base with our growth potential and limited
Slide 115: Quarterly Revenue by Customer Vertical
Quarterly Revenue by Customer Vertical Q4’21 40.0% 38.0% 39.1% 35.3% 36.7% $70.7 million 64.7% 63.3% 60.0% 62.0% 60.9% 37% 63% Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Enterprise Service Provider
Slide 116: Quarterly Revenue by Geography
Quarterly Revenue by Geography $ Millions 11% 15% 14% 14% 15% 12% 17% 17% Q4’21 9% $70.7 million 13% 13% 15% 15% 12% 10% 11% 33% 26% 25% 24% 24% 17% 24% 30% 32% 11% 48% 24% 47% 46% 48% 49% 49% 48% 39% 43% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Americas Japan APAC ex Japan EMEA
Slide 117: 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 Q4’21 FY 2021 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 $70.7 $250.0 Non-GAAP Gross Margin % 76.3% 78.0% 78.1% 78.5% 77
Slide 118: GAAP to Non-GAAP – Gross Margin and EPS
GAAP to Non-GAAP – Gross Margin and EPS Numbers may not sum due to rounding. EPS data is presented on a basic and diluted basis. Please refer to the supplemental financials posted the “Investor Relations” section of the A10 Networks website at investors.a10networks.com.
Slide 119: GAAP to Non-GAAP – Operating Income (Loss)
GAAP to Non-GAAP – Operating Income (Loss) Numbers may not sum due to rounding. Please refer to the supplemental financials posted the “Investor Relations” section of the A10 Networks website at investors.a10networks.com.
Slide 120: GAAP to Non-GAAP – Adjusted EBITDA
GAAP to Non-GAAP – Adjusted EBITDA Numbers may not sum due to rounding. Please refer to the supplemental financials posted the “Investor Relations” section of the A10 Networks website at investors.a10networks.com.

A10 Networks — Investor Day (February 2022) on 6ix

A10 Networks — Investor Day (February 2022)

Slide 1: 2022 Investor Day

Slide 2: Cautionary Statements & Disclosures

Slide 3: Agenda

Slide 4: Evolution, Execution, Acceleration

Slide 5: Evolution, Execution, Acceleration

Slide 6: A10 Mission

Slide 7: From 2014 to 2019…

Slide 8: 2020 Marked a Critical Inflection Point

Slide 9: Positioning Us for Profitable Growth in 2021 and Beyond…

Slide 10: A10 Networks Recognized in 2021 Gartner Hype Cycle Reports

Slide 11: Capitalizing on Higher Growth Markets with Portfolio Evolution

Slide 12: Portfolio Evolution Creates Opportunity for Multiple Expansion

Slide 13: Driving Balanced Outcomes for Employees, Customers and Investors

Slide 14: Acceleration: Foundation for Balanced and Durable Growth

Slide 15: Capitalize on Large Installed Base for Growth

Slide 16: A10's Hybrid Solutions

Slide 17: 5G Network Security Challenges

Slide 18: A10 5G Network Security Solutions

Slide 19: Delivering Better Business Outcomes

Slide 20: A10 Networks Security and Infrastructure Portfolio

Slide 21: Emergence of Zero Trust Security Framework

Slide 22: A10's Differentiators

Slide 23: Survey Results: A10 Value Creation

Slide 24: Global Go-to-Market Transformation Accelerating Solution Adoption

Slide 25: Security-led Portfolio Driving Growth

Slide 26: Revenue Diversification

Slide 27: Targeting Rule of 40 Business Model

Slide 28: Evolution, Execution, Acceleration

Slide 29: Cybersecurity Market Update

Slide 30: 2022 Outlook: Trends and Threats For Enterprise and Security

Slide 31: Copyright notice and disclaimer

Slide 32: Today's presenter

Slide 33: Agenda

Slide 34: Setting the scene

Slide 35: Setting the scene: Omdia Cybersecurity Ecosystem

Slide 36: 2021: A quick recap

Slide 37: Cybersecurity #4 on WEF “clear and present dangers” list

Slide 38: Ransomware and supply chain attacks all year round…

Slide 39: Enterprise trends and challenges

Slide 40: Pressure from multiple directions to stay secure

Slide 41: Security challenges from every direction

Slide 42: Ransomware: The scourge continues

Slide 43: Security is the most important measure used to determine cloud success

Slide 44: Managing security incidents, securing new technologies, and budget constraints

Slide 45: Top three challenges in cybersecurity – by industry

Slide 46: Key technology patterns: Zero Trust

Slide 47: Key technology patterns: Hybrid/Multi-Cloud

Slide 48: 2022 Trends to Watch: Overview

Slide 49: Management of security, identity, privacy at the top of IT trends

Slide 50: Security investment plans

Slide 51: Top-level trends across the Omdia Cybersecurity Ecosystem

Slide 52: Next steps

Slide 53: Cybersecurity as a business partner

Slide 54: Maintain every aspect of the CISO Balancing Act

Slide 55: Key recommendations

Slide 56: Thank you

Slide 57: Thank You

Slide 58: Achieving Better Business Outcomes for Customers

Slide 59: “When the customer comes first, the customer will last.”

Slide 60: A10 Selling Approach

Slide 61: Better Business Outcomes Customer Success Stories

Slide 62: Better Business Outcomes Customer Success Stories

Slide 63: Better Business Outcomes Customer Success Stories

Slide 64: Transforming the Go-to-Market Strategy

Slide 65: A CIO's New Reality = Business Shifts

Slide 66: Accelerating Solution Adoption

Slide 67: Cross-functional Outcome-driven Approach

Slide 68: Service Provider – Aligned to Market Opportunity

Slide 69: Enterprise – Aligned to Market Opportunity

Slide 70: Sales Alignment with Expanded Partnerships

Slide 71: Sales Alignment with Expanded Partnerships

Slide 72: Transition to Hybrid Cloud in the Enterprise

Slide 73: Industry Recognition for Solution Innovation

Slide 74: A10 Advantage: Security

Slide 75: The Attack Surface is Growing

Slide 76: The Rise in Cybersecurity Threats

Slide 77: The Latest Example – Apache Log4j

Slide 78: DDoS Attacks and Weapons Continue to Grow

Slide 79: AI/ML Defenses Empower Zero Trust Security