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A10 Networks Reports 15% Organic Growth for Q3 2021

Growth driven by cybersecurity and portfolio transformation; Management expects double-digit growth in Q4

A10 Networks (NYSE: ATEN), a leading provider of secure application services and solutions, today announced financial results for its third quarter ended September 30, 2021.

Third Quarter 2021 Financial Summary

  • Revenue of $65.4 million, up 15% year-over-year.
  • Sales of security products grew 18% year-over-year.
  • Improving commercial execution combined with favorable market conditions drove 47% growth in the Americas year-over-year.
  • Deferred revenue of a record $117.1 million, up 15% year-over-year.
  • GAAP gross margin of 79.8%; non-GAAP gross margin of 80.4% as the company successfully navigated short-term input cost pressures.
  • GAAP net income of $74.9 million (114.6% of revenue), or $0.94 per diluted share, inclusive of a non-recurring tax benefit, compared with net income of $6.5 million, or $0.08 per diluted share in the third quarter of 2020.
  • Non-GAAP net income of $13.7 million (20.9% of revenue), or $0.17 per diluted share, compared with non-GAAP net income of $10.3 million, or $0.13 per diluted share in the third quarter of 2020.
  • Adjusted EBITDA of $16.8 million, representing 25.7% of revenues, compared to $12.5 million in the third quarter of 2020.
  • Cash and cash equivalents as of September 30, 2021 was $187.5 million, up $20.6 million or 12.4% from the $166.8 million at June 30, 2021.
  • Subsequent to the end of the quarter, the Board of Directors declared a quarterly dividend of $0.05 per share, payable on December 15, 2021 to stockholders of record on November 12, 2021. In addition, the Board authorized a new share repurchase program under which the Company may repurchase up to $100 million of its outstanding common stock.

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

“We achieved strong top- and bottom-line results as our security-led solutions are enabling us to capture market share and driving accelerated growth,” said Dhrupad Trivedi, President and Chief Executive Officer of A10 Networks. “Long-term deferred revenue has grown 16% year-over-year, outpacing total revenue growth. Our diversified model is enabling us to successfully navigate regional and logistical challenges, as evidenced by our 15% revenue growth and nearly 26% adjusted EBITDA margin validating the business model transformation. The increasing profitability of our business required us to release our full tax valuation allowance, as we now expect to utilize our entire net operating loss carryforwards in future periods. Our business model positions us to meaningfully drive growth and continue to improve the business model. In addition, the strong, sustainable free cash flow has enabled our Board to return capital to stockholders by declaring a quarterly cash dividend and significantly expanding our share repurchase program.”

Fourth Quarter Outlook and Capital Allocation Strategy

“With a transformed portfolio focused on cybersecurity, improving market conditions and our relentless focus on execution, we are outperforming the industry as well as the expectations we set at the start of the year,” continued Trivedi. “We have solid visibility and confidence in our ability to accelerate growth beyond the previous targets of 6-8%, though we are cognizant of continued supply chain challenges and other global headwinds which could impact quarter-to-quarter performance.”

Based on current visibility, management expects fourth quarter revenue to grow approximately 10% year-over-year with the bottom-line growing at a faster rate than the top-line. Based on our strategy and market traction for our solutions, we expect this positive momentum to sustain into 2022. The company will host an analyst day in Q1 to discuss growth strategy for 2022 and beyond.

In addition, in light of the significant improvement in profitability and A10’s strong balance sheet, the Board of Directors today approved a capital allocation strategy to return capital to stockholders. As part of this, the Board declared a quarterly dividend. The first dividend, in the amount of $0.05 per share, will be payable, subject to any prior revocation, on December 15, 2021 to stockholders of record on November 12, 2021. Future dividends will be subject to further review and approval by the Board in accordance with applicable law. The Board reserves the right to adjust or withdraw the quarterly dividend in future periods as it reviews A10’s capital allocation strategy from time-to-time.

In addition, the Board authorized a new, $100 million share repurchase program under which the Company may repurchase up to $100 million of its outstanding common stock during the next 12 months. Under the share repurchase program, the Company is authorized to repurchase shares of common stock in the open market, privately negotiated transactions, in block trades or a combination of the foregoing. The Board will review the share repurchase program periodically and may authorize adjustment of its term and size. The Company plans to fund repurchases from its existing cash balance.

“These actions demonstrate the Board’s confidence in the Company’s ability to continue to sustainably grow revenues and profits, and signal the Board’s commitment to return capital to stockholders in a meaningful way,” concluded Trivedi.

Conference Call Information

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 third quarter 2021 financial results. Open to the public, interested parties may access the conference call by dialing (844) 792-3728 or (412) 317-5105. A live audio webcast of the conference call will be accessible from the “Investor Relations” section of A10 Network’s website at investors.a10networks.com. The webcast will be archived for at least 90 days. A telephonic replay of the conference call will be available two hours after the conclusion of the live call and will run for seven business days and may be accessed by dialing (877) 344-7529 or (412) 317-0088 and entering the passcode 10160841.

Forward-Looking Statements

This press release contains “forward-looking statements,” including statements regarding our anticipated future financial results, quarterly dividend payments, our expectation that we expect to utilize our entire net operating loss carryforwards in future periods, future growth and continued improvements to our business model, our visibility of our future operations and confidence in our ability to accelerate growth beyond previous targets, and our ability to continue to return capital to stockholders. 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 the impact of the COVID-19 pandemic, and its impact on the timing of customer orders and product shipments; members of our management team or a significant number of our global employee base becoming ill with COVID-19; changes in government regulations and mandates to address COVID-19 that may adversely impact our ability to continue to operate without disruption; a significant decline in global macroeconomic conditions that have an adverse impact on our business and financial results; challenges to our infrastructure because of the number of employees working from remote locations; business interruptions related to our supply chain; our ability to manage our business and expenses if customers cancel or delay orders; 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 maintain or improve our competitive position; competitive and execution risks related to cloud-based computing trends; our ability to attract and retain new end-customers and our largest end-consumers; our ability to maintain and enhance our brand and reputation, changes demanded by our customers in the deployment and payment model for our products; continued growth in markets relating to network security; 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; risks associated with our presence in international markets; weaknesses or deficiencies in our internal control over financial reporting; our ability to timely file periodic reports required to be filed under the Securities Exchange Act of 1934; and other risks that are described in “Risk Factors” in our periodic filings with the Securities and Exchange Commission, including our Form 10-K filed with the Securities and Exchange Commission on March 8, 2021. We do not intend to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

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 tables contain certain non-GAAP financial measures, including non-GAAP net income (loss), non-GAAP net income (loss) per basic and diluted share, non-GAAP gross profit and gross margin, non-GAAP operating income (loss) and operating margin, non-GAAP operating expenses, and Adjusted EBITDA. 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.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

We define non-GAAP net income as our GAAP net income excluding: (i) stock-based compensation and related payroll tax, (ii) amortization expense related to acquisition, (iii) non-recurring expenses associated with the litigation settlement and internal investigation expense, (iv) global distribution center transition expense, (v) non-recurring facilities expense, and (vi) release of deferred tax asset valuation allowance. We define non-GAAP net income per basic and diluted share as our non-GAAP net income divided by our basic and diluted weighted-average shares outstanding. We define non-GAAP gross profit as our GAAP gross profit excluding (i) stock-based compensation and related payroll tax, and (ii) global distribution center transition expense. We define non-GAAP gross margin as our non-GAAP gross profit divided by our GAAP revenue. We define non-GAAP operating income as our GAAP income from operations excluding (i) stock-based compensation and related payroll tax, (ii) amortization expense related to acquisition, (iii) non-recurring expenses associated with the litigation settlement and internal investigation expense, (iv) global distribution center transition expense, and (v) non-recurring facilities expense. We define non-GAAP operating margin as our non-GAAP operating income divided by our GAAP revenue. We define non-GAAP operating expenses as our GAAP operating expenses excluding (i) stock-based compensation and related payroll tax, (ii) amortization expense related to acquisition, (iii) non-recurring expenses associated with the litigation settlement and internal investigation expense, (iv) global distribution center transition expense, and (v) non-recurring facilities expense. We define Adjusted EBITDA as our GAAP net income excluding (i) interest expense (if any), (ii) interest income and other (income) expense, net, (iii) depreciation and amortization expense, (iv) benefit from (provision for) income taxes, (v) stock-based compensation and related payroll tax, (vi) litigation settlement and internal investigation expense, (vii) global distribution center transition expense, and (viii) non-recurring facilities expense.

We have included our non-GAAP net income, non-GAAP gross profit and gross margin, non-GAAP operating income and operating margin, non-GAAP operating expenses and Adjusted EBITDA in this press release. Non-GAAP financial measures are presented for supplemental informational purposes only for understanding the company's operating results.

About A10 Networks

A10 Networks (NYSE: ATEN) provides secure application services and solutions for on-premises, multi-cloud and edge-cloud environments at hyperscale. Our mission is to enable service providers and enterprises to deliver business-critical applications that are secure, available and efficient for multi-cloud transformation and 5G readiness. We deliver better business outcomes that support investment protection, new business models and help future-proof infrastructures, empowering our customers to provide the most secure and available digital experience. Founded in 2004, A10 Networks is based in San Jose, Calif. and serves customers globally. For more information, visit https://www.a10networks.com/ and follow us @A10Networks.

The A10 logo and A10 Networks 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.

 

A10 NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share amounts, on a GAAP Basis)

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

Revenue:

 

 

 

 

 

 

 

Products

$

39,815

 

 

 

$

32,188

 

 

 

$

104,718

 

 

 

$

92,138

 

 

Services

25,545

 

 

 

24,420

 

 

 

74,653

 

 

 

70,734

 

 

Total revenue

65,360

 

 

 

56,608

 

 

 

179,371

 

 

 

162,872

 

 

Cost of revenue:

 

 

 

 

 

 

 

Products

7,859

 

 

 

7,610

 

 

 

23,160

 

 

 

21,095

 

 

Services

5,335

 

 

 

5,513

 

 

 

16,163

 

 

 

15,592

 

 

Total cost of revenue

13,194

 

 

 

13,123

 

 

 

39,323

 

 

 

36,687

 

 

Gross profit

52,166

 

 

 

43,485

 

 

 

140,048

 

 

 

126,185

 

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing

21,354

 

 

 

18,556

 

 

 

60,195

 

 

 

57,653

 

 

Research and development

13,578

 

 

 

13,694

 

 

 

41,050

 

 

 

42,459

 

 

General and administrative

6,931

 

 

 

4,994

 

 

 

17,260

 

 

 

16,126

 

 

Total operating expenses

41,863

 

 

 

37,244

 

 

 

118,505

 

 

 

116,238

 

 

Income from operations

10,303

 

 

 

6,241

 

 

 

21,543

 

 

 

9,947

 

 

Non-operating income (expense):

 

 

 

 

 

 

 

Interest and other income (expense), net

(198

)

 

 

479

 

 

 

(1,493

)

 

 

937

 

 

Total non-operating income (expense), net

(198

)

 

 

479

 

 

 

(1,493

)

 

 

937

 

 

Income before income taxes

10,105

 

 

 

6,720

 

 

 

20,050

 

 

 

10,884

 

 

Benefit from (provision for) income taxes

64,781

 

 

 

(256

)

 

 

64,109

 

 

 

(909

)

 

Net income

$

74,886

 

 

 

$

6,464

 

 

 

$

84,159

 

 

 

$

9,975

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

Basic

$

0.97

 

 

 

$

0.08

 

 

 

$

1.09

 

 

 

$

0.13

 

 

Diluted

$

0.94

 

 

 

$

0.08

 

 

 

$

1.05

 

 

 

$

0.12

 

 

Weighted-average shares used in computing net income per share:

 

 

 

 

 

 

 

Basic

77,149

 

 

 

78,235

 

 

 

76,885

 

 

 

78,158

 

 

Diluted

79,927

 

 

 

80,424

 

 

 

79,803

 

 

 

80,232

 

 

 

A10 NETWORKS, INC.

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME

(unaudited, in thousands, except per share amounts)

 

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

GAAP net income

$

74,886

 

 

 

$

6,464

 

 

$

84,159

 

 

 

$

9,975

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation and related payroll tax

 

4,201

 

 

 

 

3,554

 

 

 

11,433

 

 

 

 

9,870

 

Amortization expense related to acquisition

 

 

 

 

 

253

 

 

 

505

 

 

 

 

759

 

Litigation and investigation expense

 

 

 

 

 

 

 

 

 

 

 

 

30

 

Non-recurring facilities expense

 

 

 

 

 

 

 

 

 

 

 

 

795

 

Global distribution center transition expense

 

(1

)

 

 

 

 

 

 

2,946

 

 

 

 

 

Release of deferred tax asset valuation allowance

 

(65,417

)

 

 

 

 

 

 

(65,417

)

 

 

 

 

Non-GAAP net income

$

13,669

 

 

 

$

10,271

 

 

$

33,626

 

 

 

$

21,429

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.97

 

 

 

$

0.08

 

 

$

1.09

 

 

 

$

0.13

 

Diluted

$

0.94

 

 

 

$

0.08

 

 

$

1.05

 

 

 

$

0.12

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation and related payroll tax

 

0.05

 

 

 

 

0.05

 

 

 

0.14

 

 

 

 

0.13

 

Amortization expense related to acquisition

 

 

 

 

 

 

 

 

0.01

 

 

 

 

0.01

 

Non-recurring facilities expense

 

 

 

 

 

 

 

 

 

 

 

 

0.01

 

Global distribution center transition expense

 

 

 

 

 

 

 

 

0.04

 

 

 

 

 

Release of deferred tax asset valuation allowance

 

(0.82

)

 

 

 

 

 

 

(0.82

)

 

 

 

 

Non-GAAP net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.18

 

 

 

$

0.13

 

 

$

0.44

 

 

 

$

0.27

 

Diluted

$

0.17

 

 

 

$

0.13

 

 

$

0.42

 

 

 

$

0.27

 

Weighted-average shares used in computing non-GAAP net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

77,149

 

 

 

$

78,235

 

 

$

76,885

 

 

 

$

78,158

 

Diluted

$

79,927

 

 

 

$

80,424

 

 

$

79,803

 

 

 

$

80,232

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A10 NETWORKS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands, on a GAAP Basis)

 

 

September 30,

2021

 

December 31,

2020

ASSETS

Current assets:

 

 

 

Cash and cash equivalents

$

85,637

 

 

 

$

83,281

 

 

Marketable securities

101,820

 

 

 

74,851

 

 

Accounts receivable, net of allowances of $540 and $41, respectively

46,784

 

 

 

51,051

 

 

Inventory

19,169

 

 

 

20,730

 

 

Prepaid expenses and other current assets

13,910

 

 

 

12,390

 

 

Total current assets

267,320

 

 

 

242,303

 

 

Property and equipment, net

9,555

 

 

 

7,888

 

 

Goodwill

1,307

 

 

 

1,307

 

 

Intangible assets, net

33

 

 

 

862

 

 

Other non-current assets

96,230

 

 

 

38,451

 

 

Total assets

$

374,445

 

 

 

$

290,811

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

 

 

 

Accounts payable

$

3,755

 

 

 

$

4,851

 

 

Accrued liabilities

28,968

 

 

 

36,930

 

 

Deferred revenue

70,501

 

 

 

65,999

 

 

Total current liabilities

103,224

 

 

 

107,780

 

 

Deferred revenue, non-current

46,616

 

 

 

42,700

 

 

Other non-current liabilities

21,010

 

 

 

24,357

 

 

Total liabilities

170,850

 

 

 

174,837

 

 

Commitments and contingencies

 

 

 

Stockholders' equity:

Common stock, $0.00001 par value: 500,000 shares authorized; 77,508 and 76,346 shares issued and outstanding, respectively

1

 

 

 

1

 

 

Treasury stock, at cost: 6,825 and 5,578 shares, respectively

(48,623

)

 

 

(37,410

)

 

Additional paid-in-capital

440,305

 

 

 

425,534

 

 

Accumulated other comprehensive income

2

 

 

 

98

 

 

Accumulated deficit

(188,090

)

 

 

(272,249

)

 

Total stockholders' equity

203,595

 

 

 

115,974

 

 

Total liabilities and stockholders' equity

$

374,445

 

 

 

$

290,811

 

 

 

A10 NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands, on a GAAP Basis)

 

 

Nine Months Ended

September 30,

 

2021

 

2020

Cash flows from operating activities:

 

 

 

Net income

$

84,159

 

 

 

$

9,975

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

7,044

 

 

 

8,773

 

 

Stock-based compensation

10,848

 

 

 

9,382

 

 

Other non-cash items

(64,631

)

 

 

466

 

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

4,418

 

 

 

10,777

 

 

Inventory

1,438

 

 

 

(810

)

 

Prepaid expenses and other assets

1,905

 

 

 

3,716

 

 

Accounts payable

(1,086

)

 

 

(322

)

 

Accrued and other liabilities

(11,309

)

 

 

(4,297

)

 

Deferred revenue

8,417

 

 

 

861

 

 

Net cash provided by operating activities

41,203

 

 

 

38,521

 

 

Cash flows from investing activities:

 

 

 

Proceeds from sales of marketable securities

5,865

 

 

 

8,330

 

 

Proceeds from maturities of marketable securities

70,870

 

 

 

39,280

 

 

Purchases of marketable securities

(104,732

)

 

 

(39,695

)

 

Purchases of property and equipment

(3,387

)

 

 

(2,549

)

 

Net cash provided by (used in) investing activities

(31,384

)

 

 

5,366

 

 

Cash flows from financing activities:

 

 

 

Proceeds from issuance of common stock under employee equity incentive plans

3,750

 

 

 

6,776

 

 

Repurchase of common stock

(11,213

)

 

 

(13,336

)

 

Net cash used in financing activities

(7,463

)

 

 

(6,560

)

 

Net increase in cash and cash equivalents

2,356

 

 

 

37,327

 

 

Cash and cash equivalents—beginning of period

$

83,281

 

 

 

$

45,742

 

 

Cash and cash equivalents—end of period

$

85,637

 

 

 

$

83,069

 

 

 

 

 

 

A10 NETWORKS, INC.

RECONCILIATION OF GAAP GROSS PROFIT TO NON-GAAP GROSS PROFIT

(unaudited, in thousands, except percentages)

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

GAAP gross profit

$

52,166

 

 

$

43,485

 

 

$

140,048

 

 

$

126,185

 

GAAP gross margin

 

79.8

%

 

 

76.8

%

 

 

78.1

%

 

 

77.5

%

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation and related payroll tax

 

391

 

 

 

459

 

 

 

1,335

 

 

 

1,256

 

Global distribution center transition expense

 

13

 

 

 

 

 

 

538

 

 

 

 

Non-GAAP gross profit

$

52,570

 

 

$

43,944

 

 

$

141,921

 

 

$

127,441

 

Non-GAAP gross margin

 

80.4

%

 

 

77.6

%

 

 

79.1

%

 

 

78.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A10 NETWORKS, INC.

RECONCILIATION OF GAAP TOTAL OPERATING EXPENSES TO

TO NON-GAAP TOTAL OPERATING EXPENSES

(unaudited, in thousands)

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

GAAP total operating expenses

$

41,863

 

 

 

$

37,244

 

 

 

$

118,505

 

 

 

$

116,238

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation and related payroll tax

 

(3,810

)

 

 

 

(3,095

)

 

 

 

(10,098

)

 

 

 

(8,614

)

 

Amortization expense related to acquisition

 

 

 

 

 

(253

)

 

 

 

(505

)

 

 

 

(759

)

 

Litigation and investigation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

(30

)

 

Non-recurring facilities expense

 

 

 

 

 

 

 

 

 

 

 

 

 

(795

)

 

Global distribution center transition expense

 

14

 

 

 

 

 

 

 

 

(2,408

)

 

 

 

 

 

Non-GAAP total operating expenses

$

38,067

 

 

 

$

33,896

 

 

 

$

105,494

 

 

 

$

106,040

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A10 NETWORKS, INC.

RECONCILIATION OF GAAP INCOME FROM OPERATIONS

TO NON-GAAP OPERATING INCOME

(unaudited, in thousands, except percentages)

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

GAAP income from operations

$

10,303

 

 

 

$

6,241

 

 

$

21,543

 

 

$

9,947

 

GAAP operating margin

 

15.8

 

%

 

 

11.0

%

 

 

12.0

%

 

 

6.1

%

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation and related payroll tax

 

4,201

 

 

 

 

3,554

 

 

 

11,433

 

 

 

9,870

 

Amortization expense related to acquisition

 

 

 

 

 

253

 

 

 

505

 

 

 

759

 

Litigation and investigation expense

 

 

 

 

 

 

 

 

 

 

 

30

 

Non-recurring facilities expense

 

 

 

 

 

 

 

 

 

 

 

795

 

Global distribution center transition expense

 

(1

)

 

 

 

 

 

 

2,946

 

 

 

 

Non-GAAP operating income

$

14,503

 

 

 

$

10,048

 

 

$

36,427

 

 

$

21,401

 

Non-GAAP operating margin

 

22.2

 

%

 

 

17.8

%

 

 

20.3

%

 

 

13.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A10 NETWORKS, INC.

RECONCILIATION OF GAAP NET INCOME TO

EBITDA AND ADJUSTED EBITDA (NON-GAAP)

(unaudited, in thousands)

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

GAAP net income

$

74,886

 

 

 

$

6,464

 

 

 

$

84,159

 

 

 

$

9,975

 

 

Exclude: Interest and other (income) expense, net

198

 

 

 

(479

)

 

 

1,493

 

 

 

(937

)

 

Exclude: Depreciation and amortization expense

2,291

 

 

 

2,676

 

 

 

7,044

 

 

 

8,772

 

 

Exclude: Provision for (benefit from) income taxes

(64,781

)

 

 

256

 

 

 

(64,109

)

 

 

909

 

 

EBITDA

12,594

 

 

 

8,917

 

 

 

28,587

 

 

 

18,719

 

 

Exclude: Stock-based compensation and related payroll tax

4,201

 

 

 

3,554

 

 

 

11,433

 

 

 

9,870

 

 

Exclude: Litigation and investigation expense

 

 

 

 

 

 

 

 

 

30

 

 

Exclude: Non-recurring facilities expense

 

 

 

 

 

 

 

 

 

795

 

 

Exclude: Global distribution center transition expense

(1

)

 

 

 

 

 

2,946

 

 

 

 

 

Adjusted EBITDA

$

16,794

 

 

 

$

12,471

 

 

 

$

42,966

 

 

 

$

29,414

 

 

 

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