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A10 Networks (ATEN)
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A10 Networks (ATEN) AI Stock Analysis

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ATEN

A10 Networks

(NYSE:ATEN)

Rating:70Neutral
Price Target:
$19.50
▲(7.32% Upside)
A10 Networks exhibits a solid financial foundation with strong profitability and cash flow management, despite high leverage. Positive earnings call highlights enhance future growth prospects, though technical indicators suggest caution. Valuation seems slightly high, but strategic initiatives could support long-term growth.
Positive Factors
Financial performance
ATEN reported better than expected first quarter results as both products and services revenue rose from the year ago period.
Growth drivers
ATEN is well-positioned to capitalize on growth drivers, including the need to analyze and secure critical AI services and infrastructure.
Revenue growth
The return to revenue growth has helped give A10 Networks' stock a lift in recent months.
Negative Factors
Competition
Competition remains fierce in cybersecurity, and there is not much anticipation for significant cross-sell activity for the newly acquired ThreatX Protect asset.
Operational challenges
Execution has been largely choppy in recent years, and it could take some time before business activity firmly stabilizes.
Service provider business
ATEN's service provider business remains somewhat pressured, and there could be challenges moving upmarket.

A10 Networks (ATEN) vs. SPDR S&P 500 ETF (SPY)

A10 Networks Business Overview & Revenue Model

Company DescriptionA10 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.
How the Company Makes MoneyA10 Networks generates revenue primarily through the sale of its software and hardware products, including application delivery controllers and security solutions. The company operates a revenue model based on direct sales, as well as channel partners and distributors who help extend its market reach. Additionally, A10 Networks offers maintenance and support services, which provide a recurring revenue stream. Strategic partnerships with cloud service providers and enterprises further bolster its revenue by integrating A10's solutions into broader digital transformation initiatives.

A10 Networks Earnings Call Summary

Earnings Call Date:Aug 05, 2025
(Q1-2025)
|
% Change Since: 2.14%|
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Positive
The earnings call reflected a generally positive outlook with strong revenue growth and strategic acquisitions, particularly in the enterprise segment. However, there were noted challenges in the service provider segment and uncertainties related to tariffs and regional market dynamics.
Q1-2025 Updates
Positive Updates
Overall Revenue Growth
A10 Networks reported a 9% increase in revenue year-over-year, with significant contributions from both enterprise and service provider segments.
Enterprise Revenue Surge
Enterprise revenue grew by 18% year-over-year and 12% on a trailing 12-month basis, indicating a strong foundation for future growth.
Strong Cash Position
The company ended the quarter with $355.8 million in cash, cash equivalents, and marketable securities, significantly up from $195.6 million at the end of 2024.
Acquisition of ThreatXProtect
A10 Networks acquired ThreatXProtect, enhancing its cybersecurity portfolio with web application and API protection, a strategic move to expand its enterprise market relevance.
Stable Gross Margin
Gross margin was maintained at 80.9%, aligning with the company's target range of 80% to 82%.
Negative Updates
Service Provider Revenue Volatility
Service provider revenue showed only a modest 3% increase year-over-year, with ongoing quarter-to-quarter volatility.
Impact of Tariff Uncertainty
Customer caution and spending delays were noted due to uncertainties surrounding tariffs and macroeconomic conditions.
Asia Pacific Revenue Decline
Revenue in the Asia Pacific was impacted by strong Q1 performance last year in Japan, indicating a year-over-year decline in this region.
Company Guidance
During the A10 Networks First Quarter 2025 Financial Results call, various metrics were highlighted, showcasing the company's performance and strategic initiatives. A10 Networks reported a 9% year-over-year revenue growth, with enterprise revenue increasing by 18% and service provider revenue by 3%. On a trailing 12-month basis, enterprise revenue grew 12%, indicating a stable foundation for future growth. The company's adjusted EBITDA was $19.5 million, representing 29.5% of revenue, while non-GAAP net income was $15 million, or $0.20 per diluted share. A10 Networks generated $15.2 million in cash from operations and had $355.8 million in cash, cash equivalents, and marketable securities by the end of the quarter. Additionally, the company issued $200 million in convertible senior notes, increasing its long-term debt to $217.7 million. The board approved a quarterly cash dividend of $0.06 per share and initiated a new $75 million share repurchase program. A10 Networks targets gross margins of 80% to 82% and adjusted EBITDA margins of 26% to 28% for the full year.

A10 Networks Financial Statement Overview

Summary
A10 Networks presents a strong financial profile characterized by solid profitability and efficient cash flow management. While there is a slight deceleration in revenue growth, the company maintains robust margins and returns on equity. The balance sheet reveals high leverage, which could be a potential risk, yet the firm’s ability to generate cash and maintain profitability provides a cushion against adverse financial conditions.
Income Statement
75
Positive
A10 Networks demonstrates strong profitability with a healthy gross profit margin of 80.0% and a net profit margin of 18.7% for TTM (Trailing-Twelve-Months). Revenue growth is moderate, showing a 2.1% increase from the previous year. The EBIT margin of 17.0% and EBITDA margin of 19.2% indicate operational efficiency. However, the revenue growth rate has slowed compared to previous years, which could be a concern for future expansion.
Balance Sheet
72
Positive
The company's balance sheet shows a robust equity position with an equity ratio of 32.3%, which represents financial stability. The debt-to-equity ratio is relatively high at 1.11, indicating significant leverage that could pose risks if not managed properly. ROE stands at 25.5%, reflecting strong returns for shareholders. Overall, while leverage is notable, the equity base and asset management are solid.
Cash Flow
78
Positive
A10 Networks displays healthy cash flow management with a free cash flow growth rate of -21.5% from the previous year, reflecting challenges in maintaining cash flow levels despite a high operating cash flow to net income ratio of 1.51. The free cash flow to net income ratio of 1.23 suggests the company generates ample cash relative to its earnings, which is a positive indicator of liquidity.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue276.44M261.70M251.70M280.34M250.04M225.53M
Gross Profit220.39M210.28M203.74M223.51M196.54M175.38M
EBITDA58.90M55.26M47.99M61.76M42.70M24.74M
Net Income51.02M50.14M39.97M46.91M94.89M17.82M
Balance Sheet
Total Assets607.91M432.81M389.81M369.11M393.08M290.81M
Cash, Cash Equivalents and Short-Term Investments367.38M195.56M159.30M150.99M185.04M158.13M
Total Debt218.09M11.94M16.82M16.85M19.32M23.50M
Total Liabilities403.93M200.99M181.93M188.09M184.20M174.84M
Stockholders Equity203.99M231.83M207.88M181.01M208.89M115.97M
Cash Flow
Free Cash Flow70.64M78.22M33.62M55.30M44.93M51.72M
Operating Cash Flow85.23M90.49M44.51M66.10M50.10M55.29M
Investing Cash Flow-47.12M-48.35M13.61M11.09M-38.07M5.20M
Financing Cash Flow137.36M-44.26M-28.85M-88.14M-16.38M-22.95M

A10 Networks Technical Analysis

Technical Analysis Sentiment
Negative
Last Price18.17
Price Trends
50DMA
18.37
Negative
100DMA
17.49
Positive
200DMA
17.76
Positive
Market Momentum
MACD
-0.11
Positive
RSI
40.63
Neutral
STOCH
15.35
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ATEN, the sentiment is Negative. The current price of 18.17 is below the 20-day moving average (MA) of 18.49, below the 50-day MA of 18.37, and above the 200-day MA of 17.76, indicating a neutral trend. The MACD of -0.11 indicates Positive momentum. The RSI at 40.63 is Neutral, neither overbought nor oversold. The STOCH value of 15.35 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ATEN.

A10 Networks Risk Analysis

A10 Networks disclosed 55 risk factors in its most recent earnings report. A10 Networks reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

A10 Networks Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$17.66B27.1020.58%8.94%22.30%
74
Outperform
$1.26B26.995.32%-2.09%76.96%
72
Outperform
$6.13B-25.73%14.29%-14.42%
70
Neutral
$0.0027.2924.36%1.35%4.90%9.91%
64
Neutral
$1.08B78.814.46%11.51%
62
Neutral
£516.80M24.54-6.45%2.78%3.08%-16.36%
51
Neutral
$1.55B-21.26%-0.82%-146.80%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ATEN
A10 Networks
17.79
5.60
45.94%
FFIV
F5 Networks
318.78
132.73
71.34%
NTCT
Netscout Systems
21.39
3.06
16.69%
RDWR
Radware
25.00
3.44
15.96%
VRNT
Verint Systems
20.96
-11.49
-35.41%
VRNS
Varonis Systems
55.09
4.00
7.83%

A10 Networks Corporate Events

Stock BuybackDividendsBusiness Operations and StrategyFinancial Disclosures
A10 Networks Reports Q1 2025 Financial Results
Positive
May 1, 2025

On May 1, 2025, A10 Networks announced its financial results for the first quarter of 2025, reporting a revenue increase of 9% year-over-year to $66.1 million. The company also declared a quarterly dividend of $0.06 per share and introduced a $75 million share repurchase program, reflecting its strategic focus on capital allocation and shareholder returns. Despite macroeconomic volatility, A10 Networks remains well-positioned to outperform the industry, driven by its diversification efforts and recent acquisition of ThreatX Protect, which enhances its capabilities in protecting web applications and APIs.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 02, 2025