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 in 2025.
• GAAP gross profit was $72.1 million (78.7% margin) and non-GAAP gross profit was $73.3 million (80.0% margin).
• GAAP income from operations was $18.3 million, while 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.
• The company returned $27.4 million to investors, consisting of $23.0 million in share repurchases (879,000 shares at an average price of $26.18) and $4.4 million in cash dividends.
• As of September 30, 2026, the company held $360.4 million in cash, cash equivalents, and marketable securities.
• Deferred revenue increased to $157.0 million total ($88.8 million current, $68.2 million non-current) from $142.8 million total ($80.8 million current, $62.0 million non-current) as of December 31, 2025.
• Long-term debt, net, stood at $219.9 million as of September 30, 2026, compared to $218.8 million at the end of 2025.

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 exceed 30%.
• Non-GAAP diluted EPS for 2026 is guided between $1.08 and $1.10, representing 20-22% growth over 2025, up from 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 growth was supported by broad-based customer demand, with revenue from customers other than the largest customer growing double digits year-over-year.
• Demand drivers include 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, with management focused on translating revenue growth into higher gross profit dollars and operating leverage.
• The company's business model enabled record non-GAAP operating and net income levels.
• 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 repurchase programs, adverse global macroeconomic or political conditions, and expansion of adversarial global trade dynamics.
• Risks include business interruptions related to the supply chain, customer order cancellations or delays, and execution risks related to closing key deals.
• Potential risks involve the continued market adoption of products, timely development of new features, and the ability to maintain competitive positioning amidst cloud-based computing trends.
• Specific risks include loss or delay of expected purchases by the largest end-customers and variations in product mix or geographic sales locations.

Management Commentary and Tone

• CEO Dhrupad Trivedi stated that third-quarter revenue hit record levels supported by broad-based demand and that non-GAAP EPS grew faster than revenue.
• Management emphasized a priority on supporting customers deploying AI while capturing demand and protecting long-term earnings power.
• The tone was confident, citing progress, expanding global opportunity, and continued execution as reasons for setting long-term targets.

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 repurchased 879,000 shares during the quarter.
• An acquisition-related expense of $173,000 was recorded for the quarter, and $34.1 million was spent on acquisitions (net of cash acquired) for the first nine months of 2026.
• Goodwill increased to $47.3 million from $15.1 million as of December 31, 2025.
• Inventory increased to $36.4 million from $18.0 million as of December 31, 2025.
• A live audio webcast of the earnings conference call is available at investors.a10networks.com.