Upload
others
View
4
Download
0
Embed Size (px)
Citation preview
CONFIDENTIAL | DO NOT DISTRIBUTE 1.1
NEEDHAM GROWTH CONFERENCE
JANUARY 2019
Reliable Security Always
CONFIDENTIAL | DO NOT DISTRIBUTE 2.2
CAUTIONARY STATEMENTS & DISCLOSURES
This presentation and the accompanying oral presentation contain “forward-looking” statements that are based on our management’s beliefs and
assumptions, including statements regarding our projections for our future operating results, our expectations for future revenue growth, profitability and
market opportunities, the performance of our products, our future strategies, our ability to penetrate certain markets, expec ted product launches and the
general growth of our business.
Forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause our actual results to
differ materially from those anticipated or implied by our forward-looking statements. These factors include, but are not limited to, successfully executing our
strategies, market adoption of our products, successfully anticipating market needs and opportunities, timely development of new products and features,
achieving or maintaining profitability, loss or delay of expected purchases, attracting and retaining new end-customers, maintaining and enhancing our brand
and reputation, growth in markets relating to network security, the success of any future acquisitions or investments, our ab ility to shorten our close cycle, the
ability of our channel partners to sell our products, our presence in international markets, and other factors described in our quarterly reports on Form 10-Q,
annual reports on Form 10-K and other filings made with the Securities and Exchange Commission, to which your attention is directed. We assume no
responsibility for the accuracy and completeness of the forward-looking statements and disclaim any obligation to update information contained in these
forward-looking statements.
This presentation and the accompanying oral presentation also include certain non-GAAP financial measures. Non-GAAP financial measures have limitations
as analytical tools and you should not consider them in isolation or as a substitute for an analysis of our results under U.S . GAAP. Definitions of our non-
GAAP financial measures and a reconciliation between GAAP and non-GAAP financial measures can be found in the appendix to this document. A
reconciliation of non-GAAP guidance measures to corresponding GAAP measures on a forward-looking basis is not available due to high variability and low
visibility with respect to the charges which are excluded from these non-GAAP measures.
CONFIDENTIAL | DO NOT DISTRIBUTE 3.3
RELIABLE
SECURITY
ALWAYS
THE A10 VISION
Enabling intelligent
automation to ensure
business critical applications
are reliable, secure and
available always
3
CONFIDENTIAL | DO NOT DISTRIBUTE 5.5
APPLICATION DELIVERY
Advanced Core Operating System (ACOS)
Secure
Application
Services
Platform
SECURITY
SECURITY 5G CLOUD
Thunder TPSDDoS Protection
HYPERSCALE FLEXIBLE SOLUTIONS
Thunder
SSLiSSL Visibility
Thunder CFWConverged Firewall
Thunder ADCApp Delivery
Controller
Thunder CGNIPv4 Preservation
CONFIDENTIAL | DO NOT DISTRIBUTE 6.6
<1msLatency in 5G
is critical for new use
cases3
20GbpsDownlink cell site video1
100XMore devices connected
per km2
Source: Network World, Ericsson, GSMA
5G: A MAJOR TRANSFORMATION
CONFIDENTIAL | DO NOT DISTRIBUTE 7.7
125BIoT devices could be
weaponized by 2030
ESCALATING SECURITY THREATS
4XGrowth in size of average
DDoS attack over 2 years
29%Of Internet traffic from
botnets
Source: SecurityIntelligence.com, IHS Markit, SC Magazine
CONFIDENTIAL | DO NOT DISTRIBUTE 8.8
928cloud apps on average per
enterprise2
5 Cloudson average per enterprise1
135MOffice 365 users
worldwide3
MULTICLOUD MIGRATION
1. Rightscale ; 2. Symantec ; 3. Reuters
CONFIDENTIAL | DO NOT DISTRIBUTE 9.9
A10’s Offerings for 4G and 5G
Evolved
Packet coreGi-LAN
(IP Services)
MEC
(Edge Cloud)
CGN
Visibility
250 SP
Customers
Internet
L4/L7
Firewall
Roaming
Firewall
GTP
Director
CGN Gi/SGi
Firewall
CGN Visibility TPS
CONFIDENTIAL | DO NOT DISTRIBUTE 10.10
A10: Well-Positioned in 5G
• A10’s proven strength in hyper-scalability, low latency, security and CGN
consolidation, and AI-driven automation
• Strong anti-DDoS attack solutions and integrated security and CGN analytic
platform
• High-end hardware and SDN/NFV/container solutions
• Strong presence with global service providers
• Partners are important. Ericsson & NEC are strong partners
Scale, performance, low latency, security,
extreme reliability and automation
CONFIDENTIAL | DO NOT DISTRIBUTE 11.11
5G IS TRANSFORMATIVE:
A Large and Growing Market
$-
$500.00
$1,000.00
$1,500.00
$2,000.00
$2,500.00
2018 2019 2020 2021 2022 2023
DO
LL
AR
S (
M)
Aggregate TAM Aggregate SAM
CAGR for TAM:
~13%
CAGR for SAM:
~50%
CONFIDENTIAL | DO NOT DISTRIBUTE 12.12
CFW
SSLi
TPS
Carrier Class
FirewallURL
Filtering
SSL
Decryption/Encryption
Multi-Vector
DDoS Protection
Traffic
Steering)
High-performance Security Solutions
Ease-of-use
Application
FirewallSecure Web
GatewayIntegrated
Security
Third-party Security Solutions
Integration
CONFIDENTIAL | DO NOT DISTRIBUTE 13.13
The company adopted ASC 606 accounting standard effective January 1, 2018, all prior periods are based on ASC 605 standard
Represents Security Product Revenue as a % of total Product Revenue.
SECURITY TRANSFORMATION IS UNDERWAY
8%
92%
2014
Security ADC, CGN
26%
74%
2017
Security ADC, CGN
+30%
2018 Goal
Security ADC, CGN
CONFIDENTIAL | DO NOT DISTRIBUTE 14.14
135,000,000 USERS 6,000,000 ORGANIZATIONS 48,000,000 USERS
RELIABLE SECURITY AT SCALE
14
40 DATA CENTERS
36 GLOBAL REGIONS
CONFIDENTIAL | DO NOT DISTRIBUTE 15.15
MULTI-CLOUD DC:
Performance, Agile, Flexible & Automation
SSL SECURITYO365 CLOUD/HCADC
ANY PLATFORM
BARE METAL
VIRTUAL
CONTAINER
APPLIANCE
PERPETUAL
FLEXPOOL
SUBSCRIPTION
ANYWAY
On-premises,
Cloud
CONFIDENTIAL | DO NOT DISTRIBUTE 16.16
HARMONY CONTROLLER:
Multi-cloud orchestrator
Simple Integrated Intelligent Automation
ACTIONABLEINTEGRATED
REAL-TIMEMODERN
On-premises,
Cloud
CONFIDENTIAL | DO NOT DISTRIBUTE 17.17
HARMONY CONTROLLER:
Unprecedented Control & Visibility
Descriptive Analytics
• Health Status
• Logs & Events
PERFORMANCE
MONITORING
Diagnostic Analytics
• Per-App metrics
• Trend Analysis
FASTER
TROUBLESHOOTING
ADC
SSLi
DC Firewall
Carrier Firewall, CGN
O365...
INTEGRATED
Prescriptive Analytics
• Policy updates
• Behavior Analysis
• Correlation
ACTIONALBE
INSIGHTS
CONFIDENTIAL | DO NOT DISTRIBUTE 18.18
59%Enterprise, Cloud
10 of Top 10Telecom Operators
8 of Top 12Video Gaming Companies
5 of Top 10Media Companies
2 of Top 3 Cloud Providers
20 of Top 50Fortune Global 500
PROTECTING MAJOR BUSINESSES GLOBALLY
41%Service Provider
Enterprise/Service Provider revenue mix is as of 3Q18.
>6,500 customers as of 3Q18
CONFIDENTIAL | DO NOT DISTRIBUTE 19.19
New TeamOperational
Excellence
A10’s EVOLUTION: BEYOND TECH LEADERSHIP
KPI focus
Go-to-market excellence
Profitable growth
Disciplined investing
Tom Constantino, CFO
Western Digital, HP, Operational
excellence focused
Chris White, EVP Sales
Proofpoint, 10 years security
Gunter Reiss, VP, WW Marketing
Ericsson
Technology
Vision
Standalone products to
solutions focused
Controller architecture with
machine learning
Built in security with analytics
and enhanced automation
Part
ners
Re
se
llers
CONFIDENTIAL | DO NOT DISTRIBUTE 21.21
FINANCIAL PERFORMANCE HIGHLIGHTS
$ Millions (except EPS)
Income Statement Summary: Q318 Q317 Q318 YTD Q317 YTD
Revenue $ 60.5 $ 62.0 $ 170.4 $ 179.9
Gross Margin % 78.8% 78.3% 78.4% 77.6%
Operating Margin % 4.2% 4.9% (1.4)% 1.9%
EPS $ 0.03 $ 0.03 $ (0.04) $ 0.04
Balance Sheet & Cash Flow Summary: Q318 Q317 Q318 YTD Q317 YTD
Cash & Marketable Security $ 123.6 $ 123.9 $ 123.6 $ 123.9
Accounts Receivable $ 51.1 $ 49.1 $ 51.1 $ 49.1
Deferred Revenue $ 94.9 $ 90.4 $ 94.9 $ 90.4
Debt - - - -
Free Cash Flow $ (3.9) $ (6.5) $ (7.8) $ 5.8
Numbers may not sum due to rounding. Please refer to the supplemental financials posted the “Investor Relations” section of the A10 Networks website at investors.a10networks.com
Gross Margin, Operating Margin and EPS are Non-GAAP Financial Measures. See Appendix for reconciliation to most comparable GAAP financial measures.
The company adopted ASC 606 accounting standard effective January 1, 2018, all prior periods are based on ASC 605 standard.
CONFIDENTIAL | DO NOT DISTRIBUTE 22.22
RETURN TO REVENUE GROWTH
The company adopted ASC 606 accounting standard effective January 1, 2018, all prior periods are based on ASC 605 standard.
$142
$180$196
$227 $235
$180 $170
2013 2014 2015 2016 2017 YTD 2017 YTD 2018
$Millions
CONFIDENTIAL | DO NOT DISTRIBUTE 23.23
PRODUCT AND SERVICE REVENUE
The company adopted ASC 606 accounting standard effective January 1, 2018, all prior periods are based on ASC 605 standard.
79%75% 69%
67% 64%
65% 62%
21%
25%31%
33% 36%
35%38%
2013 2014 2015 2016 2017 YTD 2017 YTD 2018
$Millions
Product Service
$170
$235$227
$196$180
$142
$180
CONFIDENTIAL | DO NOT DISTRIBUTE 24.24
47%46% 44% 42% 46%
46%40%
53%
54%56%
58%54%
54%60%
2013 2014 2015 2016 2017 YTD 2017 YTD 2018
$Millions
SP Enterprise
REVENUE BY CUSTOMER VERTICAL
The company adopted ASC 606 accounting standard effective January 1, 2018, all prior periods are based on ASC 605 standard.
$170
$235$227
$196$180
$142
$180
CONFIDENTIAL | DO NOT DISTRIBUTE 25.25
REVENUE BY GEOGRAPHY
The company adopted ASC 606 accounting standard effective January 1, 2018, all prior periods are based on ASC 605 standard.
48%48%
53% 51% 49%51%
46%
28%
26%18%
23% 22%
21%23%
11%
10%12%
13% 14%
15%16%8%
11%
14%
10% 12%
10%12%
5%
5%
3%
3%3%
3%3%
2013 2014 2015 2016 2017 YTD 2017 YTD 2018
$Millions
United States Japan APAC ex Japan EMEA Other
$170
$235$227
$196$180
$142
$180
CONFIDENTIAL | DO NOT DISTRIBUTE 26.26
Lee Chen
Founder & CEO
THE A10 LEADERSHIP TEAM
Chris White
EVP, WW Sales
Raj Jalan
CTO
Rob Cochran
VP, General Counsel
Tom Constantino
CFO
Gunter Reiss
VP, WW Marketing &
BD
Todd Kleppe
VP, Global Operations
Eric Kwok
VP, WW Support
Laurie Buzzell
VP, WW HR
CONFIDENTIAL | DO NOT DISTRIBUTE 29.29
Q318 Q317 Q318 YTD Q317 YTD
Gross Margin % - GAAP 78.5% 77.6% 77.6% 77.0%
Stock-based compensation 0.3 0.6 0.7 0.6
Gross Margin % – Non-GAAP 78.8% 78.3% 78.4% 77.6%
$ Millions
GAAP to NON-GAAP
Numbers may not sum due to rounding. Please refer to the supplemental financials posted the “Investor Relations” section of the A10 Networks website at investors.a10networks.com
The company adopted ASC 606 accounting standard effective January 1, 2018, all prior periods are based on ASC 605 standard.
EPS $ – GAAP $ (0.02) $ (0.03) $ (0.36) $ (0.17)
Stock-based compensation 0.03 0.06 0.18 0.19
Litigation and investigation expense (benefit) 0.02 - 0.12 -
Amortization expense related to acquisition - - 0.01 0.01
EPS $ – Non-GAAP $ 0.03 $ 0.03 $ (0.04) $ 0.04
CONFIDENTIAL | DO NOT DISTRIBUTE 30.30
Q318 Q317 Q318 YTD Q317 YTD
Total operating expenses $ – GAAP $ 49.1 $ 49.9 $ 157.6 $ 149.7
Stock-based compensation (2.1) (4.1) (11.8) (12.8)
Litigation and investigation expense (benefit) (1.5) - (9.0) -
Amortization expense related to acquisition (0.3) (0.3) (0.8) (0.8)
Total operating expenses $ – Non-GAAP $ 45.1 $ 45.5 $ 136.0 $ 136.2
$ Millions
GAAP to NON-GAAP
Numbers may not sum due to rounding. Please refer to the supplemental financials posted the “Investor Relations” section of the A10 Networks website at investors.a10networks.com
The company adopted ASC 606 accounting standard effective January 1, 2018, all prior periods are based on ASC 605 standard.
Total operating expenses %– GAAP 81% 80% 92% 83%
Stock-based compensation (4) (7) (7) (7)
Litigation and investigation expense (benefit) (3) - (5) -
Amortization expense related to acquisition - - - -
Total operating expenses % – Non-GAAP 75% 73% 80% 76%
% of Revenue
CONFIDENTIAL | DO NOT DISTRIBUTE 31.31
Q318 Q317 Q318 YTD Q317 YTD
Loss from operations $ – GAAP $ (1.6) $ (1.7) $ (25.3) $ (11.2)
Stock-based compensation 2.3 4.5 13.1 13.8
Litigation and investigation expense (benefit) 1.5 - 9.0 -
Amortization expense related to acquisition 0.3 0.3 0.8 0.8
Income (loss) from operations $ – Non-GAAP $ 2.5 $ 3.1 $ (2.4) $ 3.4
GAAP to NON-GAAP
Numbers may not sum due to rounding. Please refer to the supplemental financials posted the “Investor Relations” section of the A10 Networks website at investors.a10networks.com
The company adopted ASC 606 accounting standard effective January 1, 2018, all prior periods are based on ASC 605 standard.
Loss from operations %– GAAP (3)% (3)% (15)% (6)%
Stock-based compensation 4 7 8 8
Litigation and investigation expense (benefit) 3 - 5 -
Amortization expense related to acquisition - - - -
Income (loss) from operations % – Non-GAAP 4% 5% (1)% 2%
$ Millions
% of Revenue
CONFIDENTIAL | DO NOT DISTRIBUTE 32.32
GAAP to NON-GAAP
2013 2014 2015 2016 2017
Gross Margin % - GAAP 76.4% 76.1% 75.3% 76.1% 77.4%
Stock-based compensation 0.2 0.6 0.7 0.5 0.6
Gross Margin % - Non-GAAP 76.6% 76.7% 76.1% 76.5% 77.9%
Loss from operations $ - GAAP $ (22.8) $ (30.3) $ (40.3) $ (20.6) $ (10.4)
Stock-based compensation 4.3 12.4 16.9 16.9 17.2
Litigation and investigation expense (benefit) 7.3 (7.0) 0.7 0.8 -
Amortization expense related to acquisition - - - 0.5 1.0
Income (loss) from operations $ - Non-GAAP $ (11.2) $ (24.9) $ (22.8) $ (2.3) $ 7.8
$Millions
Numbers may not sum due to rounding. Please refer to the supplemental financials posted the “Investor Relations” section of the A10 Networks website at investors.a10networks.com
The company adopted ASC 606 accounting standard effective January 1, 2018, all prior periods are based on ASC 605 standard.