EX-99.1 2 exhibit991pressreleaseq217.htm EXHIBIT 99.1 Exhibit


EXHIBIT 99.1
a10logoa01a11.jpg

A10 Networks Reports Second Quarter 2017 Financial Results

SAN JOSE, Calif., July 27, 2017 -- A10 Networks, Inc. (NYSE: ATEN), a Secure Application Services™ company, today announced financial results for its second quarter ended June 30, 2017.

Second Quarter 2017 Financial Summary
•
Revenue of $53.7 million, compared with $57.1 million in second quarter 2016
•
GAAP net loss of $8.3 million or $0.12 per basic share
•
Non-GAAP net loss of $3.1 million or $0.04 per basic share

A reconciliation between GAAP and non-GAAP information is contained in the financial statements below.

“We are disappointed with our second quarter results as a number of opportunities in our pipeline did not close in the quarter, which impacted our revenue. We are implementing a number of cross-functional actions to improve our execution, increase the effectiveness of our go-to-market activities and support growth for our expanding product portfolio,” said Lee Chen, president and chief executive officer of A10 Networks. “A10 has a deep heritage in ultra-high-performance networks that we are leveraging to expand into new markets - cloud and security. With our marquee customer base and continued innovation, we believe we are establishing a strong foundation to penetrate these faster-growing markets and drive growth and shareholder value."

Prepared Materials and Conference Call Information
A10 Networks has made available a presentation with management’s prepared remarks on its second quarter 2017 financial results and supplemental financial information. These materials are accessible from the “Investor Relations” section of A10 Networks website at investors.a10networks.com.

A10 Networks will host a conference call today at 4:30 p.m. Eastern time / 1:30 p.m. Pacific time for analysts and investors to discuss its second quarter 2017 results and outlook for its third quarter of 2017. Open to the public, investors may access the call by dialing +1-844-792-3728 or +1-412-317-5105. A live audio webcast of the conference call will be accessible from the “Investor Relations” section of A10 Networks website at investors.a10networks.com. The webcast will be archived for a period of one year. A telephonic replay of the conference call will be available one hour after the call, will run for five business days, and may be accessed by dialing +1-877-344-7529 or +1-412-317-0088 and entering the passcode 10109990. The press release and supplemental financials will be accessible from the A10 Networks website prior to the commencement of the conference call.


Forward-Looking Statements
This press release contains “forward-looking statements,” including statements regarding our ability to improve our execution, increase the effectiveness of our go-to-market activities, support growth for our expanding product portfolio, penetrate and expand into the cloud and security markets, and drive growth and shareholder value. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on assumptions that may prove to be incorrect, which could cause




actual results to differ materially from those expected or implied by the forward-looking statements. Factors that may cause actual results to differ include execution risks related to closing key deals and improving our execution, the continued market adoption of our products, our ability to successfully anticipate market needs and opportunities, our timely development of new products and features, our ability to achieve or maintain profitability, any loss or delay of expected purchases by our largest end-customers, our ability to attract and retain new end-customers, our ability to maintain and enhance our brand and reputation, continued growth in markets relating to network security, management and analysis, the success of any future acquisitions or investments in complementary companies, products, services or technologies, the ability of our sales team to execute well, our ability to shorten our close cycles, the ability of our channel partners to sell our products, variations in product mix or geographic locations of our sales and risks associated with our presence in international markets.

Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying table contain certain non-GAAP financial measures, including non-GAAP net loss. Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similarly titled measures presented by other companies.

A10 Networks considers these non-GAAP financial measures to be important because they provide useful measures of the operating performance of the company, exclusive of unusual events or factors that do not directly affect what we consider to be our core operating performance, and are used by the company's management for that purpose. We define non-GAAP net loss as our net loss excluding: (i) stock-based compensation, (ii) amortization expense related to acquisition and (iii) amounts paid in settlement of litigation, and other legal expenses associated with these settlements.

We have included our non-GAAP net loss in this press release. Non-GAAP financial measures are presented for supplemental informational purposes only for understanding the company's operating results. The non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from non-GAAP financial measures presented by other companies. Please see the reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure attached to this release.


About A10 Networks
A10 Networks (NYSE:ATEN) is a Secure Application Services™ company, providing a range of high-performance application networking solutions that help organizations ensure that their data center applications and networks remain highly available, accelerated and secure. Founded in 2004, A10 Networks is based in San Jose, Calif., and serves customers globally with offices worldwide. For more information, visit: www.a10networks.com and @A10Networks.

The A10 logo, A10 Networks, A10 Harmony, Thunder and A10 Lightning and Secure Application Services are trademarks or registered trademarks of A10 Networks, Inc. in the United States and other countries. All other trademarks are the property of their respective owners.

Source: A10 Networks, Inc.

Investor Contact:
Maria Riley
The Blueshirt Group
415-217-7722
investors@a10networks.com





or

Media Contact:
Ben Stricker
A10 Networks
+1-408-325-8616
bstricker@a10networks.com







A10 NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Revenue:
 
 
 
 
 
 
 
Products
$
32,100

 
$
38,797

 
$
71,806

 
$
75,171

Services
21,589

 
18,333

 
42,169

 
35,763

Total revenue
53,689

 
57,130

 
113,975

 
110,934

Cost of revenue:
 

 
 

 
 

 
 

Products
8,070

 
9,804

 
17,854

 
18,502

Services
4,623

 
4,405

 
8,983

 
8,934

Total cost of revenue
12,693

 
14,209

 
26,837

 
27,436

Gross profit
40,996

 
42,921

 
87,138

 
83,498

Operating expenses:
 

 
 

 
 

 
 

Sales and marketing
25,561

 
26,773

 
51,824

 
53,541

Research and development
16,490

 
14,486

 
33,532

 
29,263

General and administrative
6,989

 
7,230

 
14,150

 
13,891

Litigation expense
—

 
202

 
—

 
1,993

Total operating expenses
49,040

 
48,691

 
99,506

 
98,688

Loss from operations
(8,044
)
 
(5,770
)
 
(12,368
)
 
(15,190
)
Other income (expense), net:
 

 
 

 
 

 
 

Interest expense
(64
)
 
(126
)
 
(108
)
 
(252
)
Interest and other income (expense), net
(26
)
 
1,020

 
816

 
1,235

Total other income (expense), net
(90
)
 
894

 
708

 
983

Loss before income taxes
(8,134
)
 
(4,876
)
 
(11,660
)
 
(14,207
)
Provision for income taxes
135

 
59

 
509

 
263

Net loss
$
(8,269
)
 
$
(4,935
)
 
$
(12,169
)
 
$
(14,470
)
Net loss per share:
 

 
 

 
 

 
 

Basic and diluted
$
(0.12
)
 
$
(0.08
)
 
$
(0.18
)
 
$
(0.22
)
Weighted-average shares used in computing net loss per share:
 

 
 

 
 
 
 
Basic and diluted
69,770

 
64,861

 
69,173

 
64,584







A10 NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
(unaudited, in thousands, except per share amounts)

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
GAAP net loss
$
(8,269
)
 
$
(4,935
)
 
$
(12,169
)
 
$
(14,470
)
Stock-based compensation
4,963

 
3,869

 
9,279

 
8,481

Amortization expense related to acquisition
253

 
—

 
505

 
—

Litigation and settlement expense
—

 
—

 
—

 
836

Non-GAAP net loss
$
(3,053
)
 
$
(1,066
)
 
$
(2,385
)
 
$
(5,153
)
Non-GAAP net loss per share:
 
 
 
 
 
 
 
Basic and diluted
$
(0.04
)
 
$
(0.02
)
 
$
(0.03
)
 
$
(0.08
)
Weighted average shares used in computing non-GAAP net loss per share:
 
 
 
 
 
 
 
Basic and diluted
69,770

 
64,861

 
69,173

 
64,584







A10 NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
 
June 30,
2017
 
December 31,
2016
ASSETS
Current Assets:
 
 
 
Cash and cash equivalents
$
46,385

 
$
28,975

Marketable securities
85,773

 
85,372

Accounts receivable, net of allowances
41,370

 
66,755

Inventory
15,385

 
15,070

Prepaid expenses and other current assets
7,336

 
5,137

Total current assets
196,249

 
201,309

Property and equipment, net
8,266

 
8,219

Goodwill and intangible assets
7,218

 
7,940

Other non-current assets
4,930

 
3,870

Total Assets
$
216,663

 
$
221,338

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
 
 
 
Accounts payable
$
8,318

 
$
9,851

Accrued liabilities
25,396

 
31,525

Deferred revenue
61,840

 
61,334

Total current liabilities
95,554

 
102,710

Deferred revenue, non-current
30,671

 
31,574

Other non-current liabilities
794

 
988

Total Liabilities
127,019

 
135,272

Stockholders’ Equity:
 
 
 
Common stock and additional paid-in-capital
344,818

 
328,870

Accumulated other comprehensive loss
(46
)
 
(45
)
Accumulated deficit
(255,128
)
 
(242,759
)
Total Stockholders' Equity
89,644

 
86,066

Total Liabilities and Stockholders' Equity
$
216,663

 
$
221,338







A10 NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
 
Six Months Ended June 30,
 
2017
 
2016
Cash flows from operating activities:
 

 
 

Net loss
$
(12,169
)
 
$
(14,470
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 

Depreciation and amortization
4,332

 
3,717

Stock-based compensation
9,279

 
8,481

Other non-cash items
386

 
1,051

Changes in operating assets and liabilities:
 

 
.

Accounts receivable, net
25,071

 
17,535

Inventory
(2,214
)
 
2,846

Prepaid expenses and other assets
(3,196
)
 
(479
)
Accounts payable
(1,810
)
 
(2,668
)
Accrued liabilities
(5,544
)
 
348

Deferred revenue
(397
)
 
2,960

Other
33

 
(65
)
Net cash provided by operating activities
13,771

 
19,256

Cash flows from investing activities:
 

 
 

Purchases of marketable securities
(47,074
)
 
(92,682
)
Proceeds from sales and maturities of marketable securities
46,542

 
7,609

Purchases of property and equipment
(1,513
)
 
(2,588
)
Payment for acquisition
—

 
(4,380
)
Net cash used in investing activities
(2,045
)
 
(92,041
)
Cash flows from financing activities:
 

 
 

Proceeds from issuance of common stock under employee equity incentive plans
7,207

 
3,350

Repurchase and retirement of common stock
(816
)
 
—

Payment of contingent consideration
(650
)
 
—

Other
(57
)
 
(50
)
Net cash provided by financing activities
5,684

 
3,300

Net increase (decrease) in cash and cash equivalents
17,410

 
(69,485
)
Cash and cash equivalents - beginning of period
28,975

 
98,117

Cash and cash equivalents - end of period
$
46,385

 
$
28,632