8-K
A10 Networks, Inc. (ATEN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________________________________
FORM 8-K
____________________________________________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
February 1, 2022
Date of Report (Date of earliest event reported)
____________________________________________________________________________
A10 NETWORKS, INC.
(Exact name of the registrant as specified in its charter)
____________________________________________________________________________
| Delaware | 001-36343 | 20-1446869 |
|---|---|---|
| (State or Other Jurisdiction of Incorporation or Organization) | (Commission File Number) | (I.R.S. Employer Identification Number) |
2300 Orchard Parkway
San Jose, CA 95131
(Address of principal executive offices, including zip code)
(408) 325-8668
(Name and telephone number, including area code, of the person to contact in connection with this report)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
____________________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, $0.00001 par value per share | ATEN | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On February 1, 2022, A10 Networks, Inc. (the “Company”) issued a press release regarding financial results for the quarter ended December 31, 2021. A copy of the press release is furnished herewith as Exhibit 99.1.
The information in this Item 2.02 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information in this Item 2.02 shall not be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit | Description |
|---|---|
| 99.1 | Press release datedFebruaryatenq12022exhibit991.htm1, 2022. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: February 1, 2022
| A10 NETWORKS, INC. |
|---|
| By: /s/ Brian Becker |
| Brian Becker |
| Chief Financial Officer (Principal Accounting and Financial Officer) |
Document
EXHIBIT 99.1
A10 Networks Reports 13% Organic Growth for Q4 2021,
Driving Double-Digit Annual Growth
Growth driven by cybersecurity and portfolio transformation; Management expects double digit growth in 2022 Company to discuss trends, differentiators and long-term outlook at Investor Day on February 2
SAN JOSE, Calif., February 1, 2022 -- A10 Networks (NYSE: ATEN), a leading provider of cybersecurity and infrastructure solutions, today announced financial results for its fourth quarter ended December 31, 2021. Management will discuss these results and its longer-term strategy at an investor day scheduled for February 2, 2022. To register, learn more about the event, and review attendance options, please visit the A10 Investor Day page at www.a10networks.com/analyst-day.
Fourth Quarter 2021 Financial Summary
•Record Revenue of $70.7 million, up 12.8% year-over-year.
•Sales of security products grew 22.2% year-over-year.
•Improving commercial execution combined with favorable market conditions drove 26.3% growth in the Americas year-over-year.
•Deferred revenue of a record $121.6 million, up 11.9% year-over-year.
•GAAP gross margin of 79.9%; non-GAAP gross margin of 80.7% as the company successfully navigated short-term input cost pressures.
•GAAP net income of $10.7 million (15.2% of revenue), or $0.13 per diluted share, compared with net income of $7.8 million, or $0.10 per diluted share in the fourth quarter of 2020.
•Non-GAAP net income of $16.4 million (23.3% of revenue), or $0.20 per diluted share, compared with non-GAAP net income of $13.9 million, or $0.18 per diluted share in the fourth quarter of 2020.
•Adjusted EBITDA of $19.4 million, representing 27.5% of revenues, compared to $16.1 million in the fourth quarter of 2020.
Full-Year 2021 Financial Summary
•Record Revenue of $250.0 million, up 10.9% year-over-year.
•GAAP gross margin of 78.6%; non-GAAP gross margin of 79.6%.
•GAAP net income of $94.9 million (37.9% of revenue) inclusive of a $65.4 million non-recurring tax benefit recorded in the third quarter, or $1.19 per diluted share, compared with net income of $17.8 million, or $0.22 per diluted share last year.
•Non-GAAP net income of $50.1 million, or $0.63 per diluted share, compared with non-GAAP net income of $35.4 million, or $0.44 per diluted share, last year.
•Adjusted EBITDA of $62.4 million, representing 25.0% of revenues, compared to $45.6 million last year.
•Cash and cash equivalents and marketable securities as of December 31, 2021 was $185.0 million, up $26.9 million from $158.1 million at December 31, 2020.
•Subsequent to the end of the quarter, the Board of Directors declared a quarterly dividend of $0.05 per share, payable on March 1, 2022, to stockholders of record on February 15, 2022.
•For the full-year, the Company repurchased 1.7 million shares at an average price of $10.64 per share.
A reconciliation between GAAP and non-GAAP information is contained in the financial statements below.
“We are capturing market share and delivering growth that outpaces the overall market due to rapidly accelerating demand for our security-led solutions, as cyber threats continue to increase across the globe,” said Dhrupad Trivedi, President and Chief Executive Officer of A10 Networks. “As a result, we delivered record product sales and accelerating recurring revenue. Long-term deferred revenue increased 13.6% in the quarter, outpacing total revenue growth, and our security solutions grew more than 22%, demonstrating our strong position in the cybersecurity ecosystem. Increasingly, we are converting this growth into improving market position while returning capital to shareholders through a stock buyback and a cash dividend. With durable tailwinds driving industry leading growth and a proven business model, we have significant momentum and look forward to elaborating on this position in our investor day presentation tomorrow.”
First Quarter and Full-Year 2022 Outlook
Based on current visibility, management expects revenue to grow approximately 10-12% year-over-year, both in the first quarter of 2022 and for the full-year. The Company expects to maintain its current business model.
Investor Day
In lieu of a conference call, management will host an investor day at 11 a.m. ET (8 a.m. PT) on Wednesday, February 2, 2022. This event will be hosted live at A10’s Executive Briefing Center in San Jose and will be available simultaneously via webcast. During this presentation, management will discuss its longer-term financial model. To register, learn more about the event (including a detailed agenda), and review the in-person and virtual attendance options, please visit the A10 Investor Day page at www.a10networks.com/analyst-day.
Forward-Looking Statements
This press release contains “forward-looking statements,” including statements regarding our anticipated future financial results, capturing market share, growth accelerating demand, increasing cyber threats, return of capital to shareholders and our positioning. 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 effects of the COVID-19 global pandemic on the Company and its business, and on the business of its business partners and customers; unanticipated changes in the markets in which the Company operates; the effects of the current macroeconomic climate (especially in light of the ongoing adverse effects of the COVID-19 global pandemic); 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, and 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, non-GAAP net income per basic and diluted share, non-GAAP gross profit and gross margin, non-GAAP operating income and operating margin, non-GAAP operating expenses, Adjusted EBITDA and free cash flow. 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 define free cash flow as net cash provided by operations less capital expenditures.
We have included certain of these non-GAAP measures 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.
Investor Contact:
Rob Fink
FNK IR
646.809.4048
aten@fnkir.com
Brian Becker
Chief Financial Officer
investors@a10networks.com
Source: A10 Networks, Inc.
A10 NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts, on a GAAP Basis)
| Three Months Ended December 31, | Year Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||
| Revenue: | ||||||||
| Products | $ | 43,680 | $ | 37,738 | $ | 148,398 | $ | 129,876 |
| Services | 26,991 | 24,917 | 101,644 | 95,651 | ||||
| Total revenue | 70,671 | 62,655 | 250,042 | 225,527 | ||||
| Cost of revenue: | ||||||||
| Products | 9,460 | 8,014 | 32,620 | 29,109 | ||||
| Services | 4,722 | 5,447 | 20,885 | 21,039 | ||||
| Total cost of revenue | 14,182 | 13,461 | 53,505 | 50,148 | ||||
| Gross profit | 56,489 | 49,194 | 196,537 | 175,379 | ||||
| Operating expenses: | ||||||||
| Sales and marketing | 25,456 | 20,079 | 85,651 | 77,732 | ||||
| Research and development | 13,027 | 15,604 | 54,077 | 58,063 | ||||
| General and administrative | 6,161 | 5,725 | 23,421 | 21,851 | ||||
| Total operating expenses | 44,644 | 41,408 | 163,149 | 157,646 | ||||
| Income from operations | 11,845 | 7,786 | 33,388 | 17,733 | ||||
| Non-operating income (expense): | ||||||||
| Interest and other income (expense), net | (253) | 469 | (1,746) | 1,406 | ||||
| Total non-operating income (expense), net | (253) | 469 | (1,746) | 1,406 | ||||
| Income before income taxes | 11,592 | 8,255 | 31,642 | 19,139 | ||||
| Benefit from (provision for) income taxes | (864) | (414) | 63,245 | (1,323) | ||||
| Net income | $ | 10,728 | $ | 7,841 | $ | 94,887 | $ | 17,816 |
| Net income per share: | ||||||||
| Basic | $ | 0.14 | $ | 0.10 | $ | 1.23 | $ | 0.23 |
| Diluted | $ | 0.13 | $ | 0.10 | $ | 1.19 | $ | 0.22 |
| Weighted-average shares used in computing net income per share: | ||||||||
| Basic | 77,548 | 76,638 | 77,046 | 77,776 | ||||
| Diluted | 80,316 | 78,775 | 80,037 | 80,019 |
A10 NETWORKS, INC.
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME
(unaudited, in thousands, except per share amounts)
| Three Months Ended December 31, | Year Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||
| GAAP net income | $ | 10,728 | $ | 7,841 | $ | 94,887 | $ | 17,816 |
| Non-GAAP adjustments: | ||||||||
| Stock-based compensation and related payroll tax | 3,598 | 2,947 | 15,031 | 12,817 | ||||
| Amortization expense related to acquisition | — | 252 | 505 | 1,011 | ||||
| Litigation and investigation expense | — | — | — | 30 | ||||
| Non-recurring facilities expense | — | — | — | 795 | ||||
| Global distribution center transition expense | 2,117 | 2,884 | 5,063 | 2,884 | ||||
| Release of deferred tax asset valuation allowance | — | — | (65,417) | — | ||||
| Non-GAAP net income | $ | 16,443 | $ | 13,924 | $ | 50,069 | $ | 35,353 |
| GAAP net income per share: | ||||||||
| Basic | $ | 0.14 | $ | 0.10 | $ | 1.23 | $ | 0.23 |
| Diluted | $ | 0.13 | $ | 0.10 | $ | 1.19 | $ | 0.22 |
| Non-GAAP adjustments: | ||||||||
| Stock-based compensation and related payroll tax | 0.04 | 0.04 | 0.19 | 0.16 | ||||
| Amortization expense related to acquisition | — | — | 0.01 | 0.01 | ||||
| Non-recurring facilities expense | — | — | — | 0.01 | ||||
| Global distribution center transition expense | 0.03 | 0.04 | 0.06 | 0.04 | ||||
| Release of deferred tax asset valuation allowance | — | — | (0.82) | — | ||||
| Non-GAAP net income per share: | ||||||||
| Basic | $ | 0.21 | $ | 0.18 | $ | 0.65 | $ | 0.45 |
| Diluted | $ | 0.20 | $ | 0.18 | $ | 0.63 | $ | 0.44 |
| Weighted-average shares used in computing non-GAAP net income per share: | ||||||||
| Basic | 77,548 | 76,638 | 77,046 | 77,776 | ||||
| Diluted | 80,316 | 78,775 | 80,037 | 80,019 |
A10 NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except par value, on a GAAP Basis)
| December 31,<br><br>2021 | December 31,<br><br>2020 | |||
|---|---|---|---|---|
| ASSETS | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 78,925 | $ | 83,281 |
| Marketable securities | 106,117 | 74,851 | ||
| Accounts receivable, net of allowances of $543 and $41, respectively | 61,795 | 51,051 | ||
| Inventory | 22,462 | 20,730 | ||
| Prepaid expenses and other current assets | 14,720 | 12,390 | ||
| Total current assets | 284,019 | 242,303 | ||
| Property and equipment, net | 10,692 | 7,888 | ||
| Goodwill | 1,307 | 1,307 | ||
| Intangible assets, net | — | 862 | ||
| Other non-current assets | 97,067 | 38,451 | ||
| Total assets | $ | 393,085 | $ | 290,811 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 6,852 | $ | 4,851 |
| Accrued liabilities | 36,101 | 36,930 | ||
| Deferred revenue | 73,132 | 65,999 | ||
| Total current liabilities | 116,085 | 107,780 | ||
| Deferred revenue, non-current | 48,499 | 42,700 | ||
| Other non-current liabilities | 19,613 | 24,357 | ||
| Total liabilities | 184,197 | 174,837 | ||
| Commitments and contingencies | ||||
| Stockholders' equity: | ||||
| Common stock, $0.00001 par value: 500,000 shares authorized; 77,423 and 76,346 shares issued and outstanding, respectively | 1 | 1 | ||
| Treasury stock, at cost: 7,294 and 5,578 shares, respectively | (55,677) | (37,410) | ||
| Additional paid-in-capital | 446,035 | 425,534 | ||
| Dividends paid | (3,880) | — | ||
| Accumulated other comprehensive income | (229) | 98 | ||
| Accumulated deficit | (177,362) | (272,249) | ||
| Total stockholders' equity | 208,888 | 115,974 | ||
| Total liabilities and stockholders' equity | $ | 393,085 | $ | 290,811 |
A10 NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands, on a GAAP Basis)
| Year Ended December 31, | ||||
|---|---|---|---|---|
| 2021 | 2020 | |||
| Cash flows from operating activities: | ||||
| Net income | $ | 94,887 | $ | 17,816 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||
| Depreciation and amortization | 8,907 | 11,303 | ||
| Stock-based compensation | 14,422 | 12,310 | ||
| Other non-cash items | (63,719) | 1,066 | ||
| Changes in operating assets and liabilities: | ||||
| Accounts receivable | (11,025) | 2,346 | ||
| Inventory | (1,826) | 543 | ||
| Prepaid expenses and other assets | (903) | 1,141 | ||
| Accounts payable | 1,995 | (2,683) | ||
| Accrued and other liabilities | (5,573) | 3,909 | ||
| Deferred revenue | 12,932 | 7,535 | ||
| Net cash provided by operating activities | 50,097 | 55,286 | ||
| Cash flows from investing activities: | ||||
| Proceeds from sales of marketable securities | 6,865 | 9,051 | ||
| Proceeds from maturities of marketable securities | 88,790 | 57,707 | ||
| Purchases of marketable securities | (128,554) | (57,992) | ||
| Purchases of property and equipment | (5,171) | (3,564) | ||
| Net cash provided by (used in) investing activities | (38,070) | 5,202 | ||
| Cash flows from financing activities: | ||||
| Proceeds from issuance of common stock under employee equity incentive plans | 5,764 | 9,591 | ||
| Repurchase of common stock | (18,267) | (32,540) | ||
| Payments for dividends | (3,880) | — | ||
| Net cash used in financing activities | (16,383) | (22,949) | ||
| Net increase (decrease) in cash and cash equivalents | (4,356) | 37,539 | ||
| Cash and cash equivalents—beginning of period | $ | 83,281 | $ | 45,742 |
| Cash and cash equivalents—end of period | $ | 78,925 | $ | 83,281 |
A10 NETWORKS, INC.
RECONCILIATION OF GAAP GROSS PROFIT TO NON-GAAP GROSS PROFIT
(unaudited, in thousands, except percentages)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||||||
| GAAP gross profit | $ | 56,489 | $ | 49,194 | $ | 196,537 | $ | 175,379 | ||||
| GAAP gross margin | 79.9 | % | 78.5 | % | 78.6 | % | 77.8 | % | ||||
| Non-GAAP adjustments: | ||||||||||||
| Stock-based compensation and related payroll tax | 398 | 385 | 1,733 | 1,641 | ||||||||
| Global distribution center transition expense | 117 | 307 | 655 | 307 | ||||||||
| Non-GAAP gross profit | $ | 57,004 | $ | 49,886 | $ | 198,925 | $ | 177,327 | ||||
| Non-GAAP gross margin | 80.7 | % | 79.6 | % | 79.6 | % | 78.6 | % |
A10 NETWORKS, INC.
RECONCILIATION OF GAAP TOTAL OPERATING EXPENSES
TO NON-GAAP TOTAL OPERATING EXPENSES
(unaudited, in thousands)
| Three Months Ended December 31, | Year Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||
| GAAP total operating expenses | $ | 44,644 | $ | 41,408 | $ | 163,149 | $ | 157,646 |
| Non-GAAP adjustments: | ||||||||
| Stock-based compensation and related payroll tax | (3,200) | (2,562) | (13,298) | (11,176) | ||||
| Amortization expense related to acquisition | — | (252) | (505) | (1,011) | ||||
| Litigation and investigation expense | — | — | — | (30) | ||||
| Non-recurring facilities expense | — | — | — | (795) | ||||
| Global distribution center transition expense | (2,000) | (2,577) | (4,408) | (2,577) | ||||
| Non-GAAP total operating expenses | $ | 39,444 | $ | 36,017 | $ | 144,938 | $ | 142,057 |
A10 NETWORKS, INC.
RECONCILIATION OF GAAP INCOME FROM OPERATIONS
TO NON-GAAP OPERATING INCOME
(unaudited, in thousands, except percentages)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||||||
| GAAP income from operations | $ | 11,845 | $ | 7,786 | $ | 33,388 | $ | 17,733 | ||||
| GAAP operating margin | 16.8 | % | 12.4 | % | 13.4 | % | 7.9 | % | ||||
| Non-GAAP adjustments: | ||||||||||||
| Stock-based compensation and related payroll tax | 3,598 | 2,947 | 15,031 | 12,817 | ||||||||
| Amortization expense related to acquisition | — | 252 | 505 | 1,011 | ||||||||
| Litigation and investigation expense | — | — | — | 30 | ||||||||
| Non-recurring facilities expense | — | — | — | 795 | ||||||||
| Global distribution center transition expense | 2,117 | 2,884 | 5,063 | 2,884 | ||||||||
| Non-GAAP operating income | $ | 17,560 | $ | 13,869 | $ | 53,987 | $ | 35,270 | ||||
| Non-GAAP operating margin | 24.8 | % | 22.1 | % | 21.6 | % | 15.6 | % |
A10 NETWORKS, INC.
RECONCILIATION OF GAAP NET INCOME TO
EBITDA AND ADJUSTED EBITDA (NON-GAAP)
(unaudited, in thousands)
| Three Months Ended December 31, | Year Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||
| GAAP net income | $ | 10,728 | $ | 7,841 | $ | 94,887 | $ | 17,816 |
| Exclude: Interest and other (income) expense, net | 253 | (469) | 1,746 | (1,406) | ||||
| Exclude: Depreciation and amortization expense | 1,863 | 2,531 | 8,907 | 11,303 | ||||
| Exclude: Provision for (benefit from) income taxes | 864 | 414 | (63,245) | 1,323 | ||||
| EBITDA | 13,708 | 10,317 | 42,295 | 29,036 | ||||
| Exclude: Stock-based compensation and related payroll tax | 3,598 | 2,947 | 15,031 | 12,817 | ||||
| Exclude: Litigation and investigation expense | — | — | — | 30 | ||||
| Exclude: Non-recurring facilities expense | — | — | — | 795 | ||||
| Exclude: Global distribution center transition expense | 2,117 | 2,884 | 5,063 | 2,884 | ||||
| Adjusted EBITDA | $ | 19,423 | $ | 16,148 | $ | 62,389 | $ | 45,562 |