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A10 Networks (ATEN)
NYSE:ATEN
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A10 Networks
(NYSE:ATEN)
Rating:74Outperform
Price Target:
$19.00
▲(10.85%Upside)
Positive Factors
Customer Base Expansion
A10 Networks was successful in gaining more enterprise customers, continuing the trend in diversifying its revenue base away from service.
Earnings Performance
A10 Networks reported better than expected first quarter results as both products and services revenue rose from the year ago period.
Revenue Growth
The return to revenue growth has helped give A10 Networks' stock a lift in recent months.
Negative Factors
Operating Expenses
Management expects opex as a percent of revenue to increase slightly in 2025, implying a slight downtick in EBITDA margins this year.
Service Provider Spending
Management appeared cautiously optimistic on the potential for a sustained turnaround in service provider spending trends and the opportunity to further expand its security portfolio.
A10 Networks (ATEN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.26B
Dividend Yield1.38%
Average Volume (3M)917.01K
Price to Earnings (P/E)26.2
Beta (1Y)1.01
Revenue Growth4.90%
EPS Growth9.91%
CountryUS
Employees481
SectorTechnology
Sector Strength80
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.20
Shares Outstanding72,080,720
10 Day Avg. Volume710,591
30 Day Avg. Volume917,014
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)6.44
Price to Sales (P/S)0.00
P/FCF Ratio20.14
Enterprise Value/Market Cap0.96
Enterprise Value/Revenue1.17
Enterprise Value/Gross Profit5.66
Enterprise Value/Ebitda6.01
Forecast
1Y Price Target
$22.00Price Target Upside28.35% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
A10 Networks Business Overview & Revenue Model
Company DescriptionA10 Networks, Inc. (ATEN) is a leading provider of secure application services and solutions. The company operates within the technology sector, focusing on delivering high-performance application networking, cybersecurity, and cloud solutions. A10 Networks' core products and services include application delivery controllers (ADCs), distributed denial-of-service (DDoS) protection, and network visibility and analytics solutions. These offerings are designed to optimize the security, efficiency, and performance of data centers and cloud infrastructures for enterprises, service providers, and government organizations.
How the Company Makes MoneyA10 Networks generates revenue primarily through the sale of its hardware and software solutions, which include both perpetual licenses and subscription-based models. The company earns money by offering a combination of product sales, including ADCs and DDoS protection appliances, and associated software licenses. Additionally, A10 Networks provides maintenance and support services, which contribute to a recurring revenue stream. Key factors contributing to its earnings include strategic partnerships with global technology distributors and resellers, as well as its ability to innovate and adapt its offerings to meet the evolving needs of the cybersecurity and cloud markets.
A10 Networks Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: 4.51%|
Next Earnings Date:Aug 05, 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
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.75
Positive
Balance Sheet
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.72
Positive
Cash Flow
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.78
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 267.16M | 261.70M | 251.70M | 280.34M | 250.04M | 225.53M | Gross Profit |
| 213.74M | 210.28M | 203.74M | 223.51M | 196.54M | 175.38M | EBIT |
| 45.53M | 43.97M | 38.65M | 53.08M | 33.39M | 17.73M | EBITDA |
| 51.39M | 55.26M | 47.99M | 60.46M | 35.14M | 24.74M | Net Income Common Stockholders |
| 49.96M | 50.14M | 39.97M | 46.91M | 94.89M | 17.82M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 355.84M | 195.56M | 159.30M | 150.99M | 185.04M | 158.13M | Total Assets |
| 606.22M | 432.81M | 389.81M | 369.11M | 393.08M | 290.81M | Total Debt |
| 217.72M | 11.94M | 16.82M | 16.85M | 19.32M | 23.50M | Net Debt |
| -26.12M | -83.19M | -80.42M | -51.13M | -59.61M | -59.78M | Total Liabilities |
| 410.34M | 200.99M | 181.93M | 188.09M | 184.20M | 174.84M | Stockholders Equity |
| 195.88M | 231.83M | 207.88M | 181.01M | 208.89M | 115.97M |
| Cash Flow | Free Cash Flow | ||||
| 61.41M | 78.22M | 33.62M | 55.30M | 44.93M | 51.72M | Operating Cash Flow |
| 75.25M | 90.49M | 44.51M | 66.10M | 50.10M | 55.29M | Investing Cash Flow |
| -83.74M | -48.35M | 13.61M | 11.09M | -38.07M | 5.20M | Financing Cash Flow |
| 129.42M | -44.26M | -28.85M | -88.14M | -16.38M | -22.95M |
A10 Networks Technical Analysis
Positive
17.14
Price Trends
16.63
Positive
18.06
Negative
16.61
Positive
Market Momentum
0.18
Positive
51.59
Neutral
36.01
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ATEN, the sentiment is Positive. The current price of 17.14 is above the 20-day moving average (MA) of 17.13, above the 50-day MA of 16.63, and above the 200-day MA of 16.61, indicating a bullish trend. The MACD of 0.18 indicates Positive momentum. The RSI at 51.59 is Neutral, neither overbought nor oversold. The STOCH value of 36.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $16.46B | 26.90 | 19.89% | ― | 5.61% | 26.65% | |
74 Outperform | $1.26B | 26.19 | 24.36% | 1.38% | 4.90% | 9.91% | |
72 Outperform | $1.02B | 88.99 | 3.78% | ― | 9.54% | ― | |
72 Outperform | $1.03B | 17.69 | 6.35% | ― | -0.13% | 263.78% | |
66 Neutral | $5.32B | ― | -22.21% | ― | 13.34% | 13.71% | |
61 Neutral | $11.51B | 10.19 | -6.93% | 2.94% | 7.57% | -9.20% | |
61 Neutral | $1.68B | ― | -21.26% | ― | -0.82% | -146.80% |
* Technology Sector Average
Performance Comparison
ATEN
A10 Networks
17.14
2.17
14.50%
FFIV
F5 Networks
283.29
115.06
68.39%
NTCT
Netscout Systems
23.38
3.07
15.12%
RDWR
Radware
23.59
3.65
18.30%
VRNT
Verint Systems
17.25
-12.84
-42.67%
VRNS
Varonis Systems
47.19
2.37
5.29%
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
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.