A10 Networks, Inc. · NYSE:ATEN
A10 Networks — Q2 2020 Earnings Presentation
18 slides from A10 Networks's earnings presentation, Jul 28, 2020
Slide 1: Q2 2020 Financial Results & Commentary
Q2 2020 Financial Results & Commentary July 28, 2020 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 market trends, the impact of COVID-19 on our business, including demand for our
Slide 3: Agenda
Agenda • Introduction • 2Q Overview • 2Q Financial Performance 3
Slide 4: A10 Core Purpose, Mission and Vision
A10 Core Purpose, Mission and Vision CORE PURPOSE VISION MISSION Enabling a secure To empower our We enable service and available digital customers to providers and world provide the most enterprises to secure and deliver business- available digital critical applications experience that are secure,
Slide 5: Large Installed Base Trusts Us With Their Critical Applications and transition to Cloud
Large Installed Base Trusts Us With Their Critical Applications and transition to Cloud Provide always Protect investments Support seamless Secure multi- Protect networks Simplify IT ops with available application for enterprises and migration to the generational from cyberattacks connected intel, d
Slide 6: Market Trends driving our Solutions
Market Trends driving our Solutions IoT Shift to 5G/4G+ Operational Security Proliferation Cloud Deployment Complexity Threats 6
Slide 7: A10 Advantage – Performance, Flexibility, Security
A10 Advantage – Performance, Flexibility, Security Security Flexible Automation & Performance Technical Stack Form Factor & Analytics @ Scale Support Consolidation Pricing Multi-cloud Lower Capex Future Better Business Trusted Efficiency & Opex Proof Outcomes Advice Simplification without Compromise
Slide 8: Q2'20: Delivering Results
Q2’20: Delivering Results • Delivered strong operating results in Q2 while diligently navigating a rapidly changing economic environment • Year-over-Year growth for: • Revenue • Net Income • Adjusted EBITDA • Diluted EPS • Significantly improved earnings power • Reduced operating expenses • Objectiv
Slide 9: Near-term Expectations
Near-term Expectations • Continue to expect to see some near-term delays related to COVID-19 • Well-equipped to mitigate disruption • Strong pipeline and win rate with lower visibility of order patterns in the next 90-day period related to changing global business environment • Guidance • Continuing
Slide 10: Revenue & Non-GAAP Operating Income (Loss)
Revenue & Non-GAAP Operating Income (Loss) Revenue, $ Millions Revenue, $ Millions $60.3 $52.5 $52.8 $53.8 $52.5 $49.2 $49.2 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q2'19 Q2'20 Non-GAAP Operating Income (Loss), $ Millions Non-GAAP Operating Income (Loss), $ Millions $7.7 $7.2 $7.2 $4.1 $(0.9) $1.8 ($0.9) Q2'1
Slide 11: Revenue by Customer Vertical
Revenue by Customer Vertical $Millions 36% 35% 2Q 2020 45% 41% 42% $52.5 million 42% 64% 65% 58% 55% 59% 58% Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Service and Cloud Providers Enterprise The company adopted ASC 606 accounting standard effective January 1, 2018, all prior periods are based on ASC 605 standard
Slide 12: Revenue by Geography
Revenue by Geography $Millions 13% 12% 12% 11% 15% 9% 2Q 2020 16% 15% 19% 15% $52.5 million 33% 29% 27% 24% 30% 15% 15% 46% 43% 46% 47% 46% 38% 24% Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Americas Japan APAC ex Japan EMEA The company adopted ASC 606 accounting standard effective January 1, 2018, all prior per
Slide 13: Financial Performance Trends
Financial Performance Trends $ Millions (except EPS) 2Q'18 Q3’18 4Q'18 FY 2018 1Q'19 2Q'19 Q3’19 4Q'19 FY 2019 1Q’20 2Q’20 Revenue $60.7 $60.5 $61.8 $232.2 $50.3 $49.2 $52.8 $60.3 $212.6 $53.8 $52.5 Non-GAAP Gross Margin % 78.6% 78.8% 78.2% 78.3% 76.3% 78.0% 78.1% 78.5% 77.8% 78.3% 78.8% Non-GAAP Op
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 Q2'18 Q3'18 Q4'18 FY 2018 Q1'19 Q2'19 Q3'19 Q4'19 FY 2019 Q1'20 Q2'20 Gross Margin % - GAAP 78.3% 78.5% 77.7% 77.7% 75.6% 77.1% 77.4% 77.7% 77.0% 77.4% 78.2% Stock-based compensation 0.3% 0.3% 0.5% 0.7% 0.6% 1.0% 0.6% 0.8% 0.7% 0.9% 0.6
Slide 16: GAAP to Non-GAAP - Operating Income (Loss)
GAAP to Non-GAAP - Operating Income (Loss) $ Millions Q2'18 Q3'18 Q4'18 FY 2018 Q1'19 Q2'19 Q3'19 Q4'19 FY 2019 Q1'20 Q2'20 Income (loss) from operations $ - GAAP $ (3.7) $ (1.6) $ (2.4) $ (27.7) $ (11.0) $ (6.4) $ 0.2 $ 0.1 $ (17.1) $ (0.2) $ 3.9 Stock-based compensation 2.6 2.3 4.0 17.0 3.9 5.0 3.
Slide 17: GAAP to Non-GAAP - Adjusted EBITDA
GAAP to Non-GAAP - Adjusted EBITDA $ Millions Q2'18 Q3'18 Q4'18 FY 2018 Q1'19 Q2'19 Q3'19 Q4'19 FY 2019 Q1'20 Q2'20 GAAP net income (loss) $ (4.5) $ (1.8) $ (1.6) $ (27.6) $ (12.3) $ (5.8) $ 0.2 $ 0.1 $ (17.8) $ (0.3) $ 3.8 Exclude: Interest expense 0.0 0.0 0.0 0.1 0.2 0.0 0.0 0.0 0.2 - 0.0 Exclude:
Slide 18: Thank You
Thank You Investors@a10networks.com Always Secure. Always Available.