A10 Networks — Third Quarter 2026 Earnings Summary

Financial Performance:

• Quarterly revenue reached $91.5 million, a 22.6% year-over-year increase; revenue for the first nine months of 2026 was $246.7 million, up 17.4% from $210.2 million in the same period of 2025.
• GAAP gross profit was $72.1 million (78.7% margin); non-GAAP gross profit was $73.3 million (80.0% margin).
• GAAP income from operations was $18.3 million; non-GAAP income from operations was $25.5 million.
• GAAP net income was $17.2 million ($0.23 per diluted share); non-GAAP net income was $23.6 million ($0.31 per diluted share).
• Non-GAAP Adjusted EBITDA was $29.5 million, representing a 32.2% margin of revenue.
• Cash, cash equivalents, and marketable securities totaled $360.4 million as of September 30, 2026.
• The company returned $27.4 million to investors, including $23.0 million for the repurchase of 879,000 shares at an average price of $26.18, and $4.4 million in cash dividends.
• Deferred revenue increased to $157.0 million ($88.8 million current, $68.2 million non-current) as of September 30, 2026, compared to $142.8 million at year-end 2025.
• Long-term debt, net, stood at $219.9 million as of September 30, 2026.

Guidance and Future Outlook:

• Full-year 2026 revenue growth guidance was raised to approximately 16%, compared to prior guidance of 12-14%.
• Non-GAAP Adjusted EBITDA margin for 2026 is expected to be in excess of 30%.
• Non-GAAP diluted EPS for 2026 is guided to be between $1.08 and $1.10, representing 20-22% growth over 2025, compared to prior guidance of 14-16% growth.
• Long-term targets include $500 million in annual revenue through organic growth and $2.00 in annual non-GAAP EPS by fiscal year 2029.
• The long-term revenue target implies a 14% compound annual growth rate and incorporates the accounting impact of a warrant agreement with the company's largest customer.

Business Segments and Product Lines:

• Revenue from customers other than the largest customer grew double digits year-over-year in the third quarter.
• Demand is being driven by rising network traffic volumes, expanding AI deployments, and increasingly complex security requirements.
• The company serves over 7,000 global customers across on-premises, hybrid cloud, and edge environments.

Market and Competitive Landscape:

• The industry is navigating supply challenges while demand for networking and security solutions expands due to AI and security needs.
• The company's combined revenue growth and adjusted EBITDA margin exceeded the "rule of 40."

Risks and Challenges:

• Forward-looking statements note risks including unforeseen capital needs that could impact dividend or stock repurchase programs.
• Risks include significant declines in global macroeconomic or political conditions, expansion of adversarial global trade dynamics, and supply chain business interruptions.
• Potential risks involve customer order cancellations or delays, execution risks in closing deals, market adoption rates, and competitive risks related to cloud-based computing trends.
• Risks also include the ability to attract and retain customers, maintain brand reputation, manage product deployment/payment model changes, and maintain profitability.

Management Commentary and Tone:

• CEO Dhrupad Trivedi stated that third-quarter revenue increased to record levels supported by broad-based customer demand, enabling record non-GAAP operating and net income levels.
• Management expressed confidence in setting long-term targets due to progress, expanding global opportunity, and continued execution.
• The priority remains supporting customers deploying AI while capturing demand and protecting long-term earnings power.

Other Key Points:

• The Board of Directors approved a quarterly cash dividend of $0.06 per share, payable December 1, 2026, to stockholders of record on November 16, 2026.
• The company acquired businesses totaling $34.1 million in cash and $5.0 million in common stock consideration during the first nine months of 2026.
• Inventory increased to $36.4 million as of September 30, 2026, from $18.0 million at December 31, 2025.
• Goodwill increased to $47.3 million as of September 30, 2026, from $15.1 million at December 31, 2025.
• Net cash provided by operating activities for the first nine months of 2026 was $65.3 million.
• Net cash used in investing activities for the first nine months of 2026 was $21.5 million, primarily due to purchases of marketable securities and acquisitions.
• Net cash used in financing activities for the first nine months of 2026 was $39.2 million, driven by stock repurchases and dividend payments.