A10 Networks (ATEN) Reports Q4 EPS of $0.10, Revenues Beat; Offers Q1 EPS/Revenue Guidance Below Consensus

A10 Networks (NYSE: ATEN) reported Q4 EPS of $0.10, versus $0.05 reported last year. Revenue for the quarter came in at $60.3 million versus the consensus estimate of $51 million.

Fourth Quarter 2019 Financial Summary

• Revenue of $60.3 million, up 14 percent compared with $52.8 million in third quarter 2019
• GAAP gross margin of 77.7 percent; non-GAAP gross margin of 78.5 percent
• GAAP operating expenses of $46.8 million; non-GAAP operating expenses of $39.7 million
• GAAP net income of $0.0 million, or $0.00 per basic and diluted share, compared with GAAP net income of $0.2 million, or $0.00 per basic and diluted share in third quarter of 2019; non-GAAP net income of $7.8 million, or $0.10 per basic and diluted share
• Adjusted EBITDA of $10.0 million, compared with $4.0 million in third quarter 2019

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

“I am thrilled to join A10 Networks at an exciting time for the business,” said Dhrupad Trivedi, president and chief executive officer of A10 Networks. “A10 occupies an attractive area within networking and security, as companies increasingly focus on delivering business outcomes while managing operational complexities from proliferation of IoT, shift to hybrid cloud environments, and ever-increasing complexity of the cybersecurity landscape. Service providers around the world also face the same challenges while getting ready for 5G technology to support many of these consumption trends. Based on our legacy, A10 is well-positioned to help our customers address these emerging themes. We deeply understand their applications and have a strong talent base to support them through these digital transformations. We remain committed to driving growth and improving profitability as demonstrated by our EBITDA performance in the fourth quarter. We believe our focus and commitment to profitable growth will reward our shareholders, customers and employees.”

GUIDANCE:

A10 Networks sees Q1 2020 EPS of $0.01-$0.03, versus the consensus of $0.07. A10 Networks sees Q1 2020 revenue of $51-53 million, versus the consensus of $59.77 million.

For the first quarter of 2020, the company currently expects:

• Revenue in the range of $51 million to $53 million, representing 5 percent year-over-year growth at the high end of the range
• Non-GAAP gross margin in the range of 76 percent to 78 percent
• Non-GAAP operating expenses in the range of $37.5 million to $38.5 million
• Adjusted EBITDA in the range of $3.7 million to $5 million
• Non-GAAP earnings per share in the range of $0.01 to $0.03 using approximately 81 million diluted shares

For earnings history and earnings-related data on A10 Networks (ATEN) click here.

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