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1. Company Snapshot

1.a. Company Description

A10 Networks, Inc.provides networking solutions in the Americas, Japan, other Asia Pacific, and EMEA countries.The company offers Thunder Application Delivery Controller (ADC) that provides advanced server load balancing; Lightning ADC, a cloud-native software-as-a-service platform to boost the delivery and security of applications and microservices; and Thunder Carrier Grade Networking product, which offers standards-compliant address and protocol translation services for service provider networks.


It also provides Thunder Threat Protection System (TPS) for the protection of networks and server resources against massive distributed denial of service attacks; Thunder Secure Sockets Layer (SSL) Insight solution that decrypts SSL-encrypted traffic and forwards it to a third-party security device for deep packet inspection; and Thunder Convergent Firewall, which addresses various critical security capabilities in one package by consolidating various security and networking functions in a single appliance.In addition, the company offers intelligent management and automation tools comprising harmony controller that provides intelligent management, automation, and analytics for secure application delivery in multi-cloud environment; and aGalaxy TPS, a multi-device network management solution.A10 Networks, Inc.


delivers its solutions on optimized hardware appliances, bare metal software, containerized software, virtual appliances, and cloud-native software.It serves cloud providers; service providers include cloud, telecommunications, and multiple system and cable operators; government organizations; and enterprises in the technology, industrial, retail, financial, gaming, and education industries.The company markets its products through sales organizations, as well as distribution channel partners, including distributors, value added resellers, and system integrators.


A10 Networks, Inc.was incorporated in 2004 and is headquartered in San Jose, California.

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1.b. Last Insights on ATEN

A10 Networks' recent performance was driven by strong Q4 2024 earnings, beating estimates with $0.31 per share, up from $0.25 per share a year ago. Revenue grew 5% to $74.2 million, with enterprise revenue increasing 8% year-over-year and service provider revenue growing 4%. Strong gross margins of 80.7% and robust cash flow further supported the company's financial performance. Additionally, the company's focus on cybersecurity and infrastructure solutions, including a shift towards a more stable business model, suggests a positive outlook for the company.

1.c. Company Highlights

2. A10 Networks' Q3 2025 Earnings: Strong Growth and Expanding Margins

A10 Networks reported a robust third quarter, with revenue growing 12% year-over-year to $74.7 million, driven by a 17% increase in product revenue and a 6% rise in service revenue. EBITDA margins expanded to 29.3%, and non-GAAP operating margin grew to 24.7%. Earnings per share (EPS) came in at $0.23, beating estimates of $0.21. The company's strong financial performance was underscored by its ability to drive growth through its strategic positioning around trusted infrastructure, cybersecurity, and AI capabilities.

Publication Date: Nov -23

📋 Highlights
  • Revenue Growth:: Q3 2025 revenue rose 12% YoY to $74.7M, with product revenue up 17% and service revenue up 6%.
  • EBITDA Expansion:: EBITDA margins reached 29.3%, and non-GAAP operating margin hit 24.7%, driven by cost discipline.
  • AI Infrastructure Impact:: Americas revenue surged 25% TTM, fueled by AI infrastructure investments and cybersecurity solutions.
  • Cash Flow & Share Repurchases:: Generated $22.8M in operational cash flow and repurchased $11M in shares, reflecting financial strength.
  • Service Provider Growth:: Tier 2 service providers contributed significant growth, with solutions avoiding full infrastructure replacement.

Regional Growth and AI-Driven Investments

Revenue from the Americas increased 25% on a trailing 12-month basis, driven by investments in AI infrastructure. The EMEA region also saw strong performance, although this was largely driven by a single large project that culminated in the quarter. Going forward, the company expects a more normalized growth rate in the region. As new CFO Michelle Caron noted, the company's focus on financial discipline and profitable growth is expected to drive continued expansion.

Valuation and Growth Prospects

With a P/E Ratio of 23.94 and an EV/EBITDA multiple of 20.93, the market appears to be pricing in a significant level of growth for A10 Networks. Analysts estimate revenue growth of 8.2% for next year, which is in line with the company's target growth rate of 8% to 10% for 2025. The company's ROIC of 8.97% and ROE of 24.14% suggest a strong ability to generate returns on invested capital.

AI-Related Deployments and Security-Led Revenue

A10 Networks' growth is driven by AI-related deployments, security-led revenue, and a strong alignment with AI infrastructure build-out. The company aims to maintain 65% of revenue from security-led solutions and is working to create a clearer view of its product revenue tied to AI. The majority of the company's service provider growth improvement is related to AI build-out, and the company sees opportunities in AI, particularly in traffic and security.

Services Revenue Growth and Dividend Yield

Services revenue growth is expected to accelerate as product revenue grows, driven by 1-year service or support contracts. The company also declared a quarterly cash dividend of $0.06 per share, resulting in a dividend yield of 1.43%. With a Free Cash Flow Yield of 5.96%, the company appears to be generating significant cash flows, which should support its growth initiatives and returns to shareholders.

3. NewsRoom

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Teacher Retirement System of Texas Cuts Stock Position in A10 Networks, Inc. $ATEN

Nov -05

Source: defenseworld.net

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A10 Networks (ATEN) Q3 Earnings and Revenues Top Estimates

Nov -05

Source: zacks.com

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A10 Networks, Inc. (ATEN) Q3 2025 Earnings Call Transcript

Nov -04

Source: seekingalpha.com

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A10 Networks Reports Financial Results for the Third Quarter of 2025

Nov -04

Source: businesswire.com

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A10 Networks to Announce Third Quarter 2025 Financial Results on November 4, 2025

Oct -07

Source: businesswire.com

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A10 Networks Announces CFO Transition

Sep -05

Source: businesswire.com

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A10 Networks, Inc. (ATEN) Q2 2025 Earnings Call Transcript

Aug -06

Source: seekingalpha.com

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A10 Networks (ATEN) Q2 Earnings and Revenues Beat Estimates

Aug -05

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.88%)

6. Segments

Secure Application Solutions

Expected Growth: 5%

A10 Networks' Secure Application Solutions growth is driven by increasing demand for cloud-based security, rising adoption of 5G networks, and growing need for DDoS protection. Additionally, the shift towards digital transformation, IoT expansion, and stringent regulatory requirements contribute to the segment's growth.

Post Contract Support

Expected Growth: 7%

A10 Networks' Post Contract Support growth is driven by increasing demand for secure application services, expansion into new markets, and strategic partnerships. The company's focus on 5G and cloud adoption, as well as its strong presence in the service provider and enterprise segments, contribute to its 7% growth.

7. Detailed Products

Thunder Application Delivery Controller (ADC)

A10 Networks' Thunder ADC is a software-based application delivery controller that provides load balancing, traffic management, and application security for data centers and cloud environments.

Thunder SSL Insight (SSLi)

A10 Networks' Thunder SSLi is a decryption and inspection solution that provides visibility into encrypted traffic, enabling organizations to detect and prevent cyber threats.

Thunder Convergent Firewall (CFW)

A10 Networks' Thunder CFW is a converged firewall solution that provides advanced security features, including firewall, VPN, and intrusion prevention, in a single platform.

Thunder Threat Protection System (TPS)

A10 Networks' Thunder TPS is a threat protection system that provides advanced threat detection and prevention capabilities, including DDoS protection and malware detection.

Harmony Controller

A10 Networks' Harmony Controller is a centralized management and orchestration platform that provides visibility, automation, and analytics for A10 Networks' products.

8. A10 Networks, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

A10 Networks, Inc. faces moderate threat from substitutes due to the presence of alternative products and services in the market.

Bargaining Power Of Customers

A10 Networks, Inc. has a diverse customer base, which reduces the bargaining power of individual customers.

Bargaining Power Of Suppliers

A10 Networks, Inc. relies on a few key suppliers for components and services, which gives them some bargaining power.

Threat Of New Entrants

The network security and application delivery controller markets are highly competitive, and new entrants can easily disrupt the market.

Intensity Of Rivalry

The network security and application delivery controller markets are highly competitive, with many established players, leading to intense rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 7.49%
Debt Cost 3.95%
Equity Weight 92.51%
Equity Cost 9.59%
WACC 9.17%
Leverage 8.09%

11. Quality Control: A10 Networks, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
A10 Networks

A-Score: 5.4/10

Value: 2.5

Growth: 6.3

Quality: 7.3

Yield: 2.0

Momentum: 7.5

Volatility: 6.7

1-Year Total Return ->

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PaySign

A-Score: 4.9/10

Value: 3.4

Growth: 6.4

Quality: 7.9

Yield: 0.0

Momentum: 9.5

Volatility: 2.0

1-Year Total Return ->

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Couchbase

A-Score: 4.9/10

Value: 6.2

Growth: 5.1

Quality: 5.5

Yield: 0.0

Momentum: 9.0

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Payoneer Global

A-Score: 4.6/10

Value: 4.8

Growth: 9.0

Quality: 7.4

Yield: 0.0

Momentum: 2.0

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Int'l Money Express

A-Score: 4.3/10

Value: 7.4

Growth: 7.7

Quality: 6.8

Yield: 0.0

Momentum: 2.0

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Sterling Check

A-Score: 3.4/10

Value: 3.2

Growth: 7.1

Quality: 2.7

Yield: 0.0

Momentum: 5.0

Volatility: 2.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

17.77$

Current Price

17.77$

Potential

-0.00%

Expected Cash-Flows