ATEN

Image source: The Motley Fool. Wednesday, Aug. 5, 2026 at 4:30 p.m. ET President and Chief Executive Officer - Dhrupad Trivedi Chief Financial Officer - Michelle Caron Operator: Good afternoon, everyone, and welcome to the A10 Networks second quarter 26 financial results. At this time, all participants have been placed in a listen-only mode. And we will open the floor for questions following the presentation. It is now my pleasure to turn the floor over to your host, Tom Baumann of FNK Investor Relations. Tom, the floor is yours. Tom Baumann: Thank you, and thank you all for joining us today. This call is being recorded. And webcast live and may be accessed for at least 90 days via the A10 Networks' website at a10networks.com. Hosting the call today are Dhrupad Trivedi, ATN's president and CEO; and CFO, Michelle Caron. Before we begin, I would like to remind you that shortly after the market closed today, A10 Networks issued a press release announcing its second quarter 26 financial results. Additionally, A10 published a presentation supplemental trend financial statements. You may access the press release, presentation, and trended financial statements on the Investor Relations section of the company's website. During the course of today's call, management will make forward looking statements. Including statements regarding projections for future operating results, demand, industry, and customer trends, macroeconomic factors, strategy, potential new products and solutions, our capital allocation strategy, profitability, expenses and investments, positioning, and our dividend program. These statements are based on current expectations and beliefs as of today 08/05/2026. These forward looking statements involve a number of risks and uncertainties. Some of which are beyond our control that could cause actual results to differ materially and you should not rely on them as predictions of future events. A10 does not intend to update information contained in these forward looking statements whether as a result of new information, future events, or otherwise, unless required by law. For a more detailed description of these risks and uncertainties, please refer to our most recent 10-K and quarterly report on Form 10 Q. Please note that with the exception of revenue, financial measures discussed today are on a non GAAP basis. Unless otherwise noted. It may have been adjusted to exclude certain charges. The non GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP and may be different from non GAAP financial measures presented by other companies. A reconciliation between GAAP and non GAAP measures can be found in the press release issued today and on the trended quarterly financial statements posted on the company's website at www.a10networks.com. Now I would like to turn the call over to Dhrupad Trivedi president and CEO of A10 Networks. Dhrupad Trivedi: Thank you, Tom. And thank you all for joining us today. A10 continues to deliver top and bottom line growth driven by the increasing relevance of our platform to the demands of next generation networking. From our foundation, advanced traffic management solutions, to our more recent focus on integrating security into all our offerings. We have built exactly the platform that today's customers need to address the host of challenges impacting their operations. AI is creating new challenges for customers across the industry. Greater traffic volume, expanding security threats, and the need for lower latency. Our focus on next generation networking which combines advanced application management with integrated security represents the future of A10 and increasingly the standard our industry is being held to. Subsequent to the quarter, we announced a significant expansion of our relationship with Microsoft. This agreement reflects a shared commitment to a long term partnership with mutual performance commitments on both sides. As a result, we are more firmly aligned with the long term road map of this industry leader. It also serves as a powerful validation of A10's relevance to the customer and market and speaks to the depth of the relationship we have built over multiple years. We also continue to advance our product road map. In June, we acquired Troj.ai, AI security company that helps organizations secure, test, and govern AI applications and agentic workflows. This acquisition adds 2 layers to our platform. Red teaming, which uses AI to probe models and agents for vulnerabilities at build time. As well as real time protection at run time. We generated 15% revenue growth in the second quarter on a year over year basis and 14.5% growth year to date. This marked our fourth quarter of double digit growth in the last 5, and as a result, we have increased our full year outlook to 12% to 14% for the full year versus previous guidance of 10% to 12%, reflecting continued confidence in the demand environment ahead. AI continues to erase the distinction between how enterprises and service providers build their networks. Today, enterprises and service providers face the same workloads performance demands, and security requirements. We have built our platform for exactly this world. 1 architecture, 1 operating model, 1 security framework across both segments. Through this period of improving demand, our operating discipline has remained constant. We balanced targeted investment with EPS expansion and we delivered on both goals in the second quarter. Our goal is to convert growth into profitability and cash. While continuing to invest in the technical capabilities this demand environment requires. With earnings per share growth exceeding revenue growth, and we remain on track to do just that. With that, I would like to turn the call over to Michelle Caron. Our chief financial officer, to review the numbers in more detail. Michelle Caron: Thank you, Dhrupad. As a reminder, with the exception of revenue, all of the metrics discussed on this call are on a non GAAP basis. Unless otherwise stated. A full reconciliation of GAAP to non-GAAP results are provided in our press release and on our website. Let me now turn to the results. As Dhrupad noted, Q2 results were aligned with our business model goals. We delivered revenue growth of 15.5% to $80.1 million Year to date, our revenue was $155.1 million an increase of 14.5%. Turning to mix, Product revenue in the second quarter was $49 million or 61% of total revenue, while service revenue was $31.1 million or 39% of total revenue. From a product mix perspective, security-led revenue continues to drive product revenue growth and meet our long term goals as a percentage of total revenue. From a vertical perspective, enterprise customers represented 60% of Q2 revenues. On a trailing 12 month basis, enterprise represents approximately half of total revenue in line with our previously stated corporate goals of driving balanced growth. Service provider spend in the Americas has begun to normalize. EMEA service provider demand was impacted by the geopolitical environment, while Japan within our APJ region continues to experience macroeconomic pressures that are impacting spending cycles. We remain confident that our service provider relationships around the world remain a strong foundation for continued growth within international markets, Both verticals align with our strategy and reflect the strength of our offerings supporting AI infrastructure build out. From a geographic perspective, our Americas region represented 68% of global revenue. This reflects our deliberate focus on the Americas as a growth region driven by AI infrastructure build outs and strength in the enterprise market. Non GAAP gross margin was 80.3%. In line with our stated goals. Operating expenses were $43.9 million as we continue to prioritize investments in AI facing innovation, next gen networking, and security. Operating margin was 25.5%, resulting in net income of $18.7 million or $0.26 per basic and $0.25 per diluted share, compared to $0.21 in the year ago period. Q2 diluted weighted share count was 75.7 million shares, We generated $26.9 million in free cash flow in the quarter, as the Q1 items, as the Q1 timing items we noted recovered as expected? On a year to date basis, free cash flow was $20.2 million We continue to expect full year free cash flow to grow year over year from approximately $65 million in 2025. Adjusted EBITDA was $25.4 million 30.5% of revenue. Consistent with our business model goals. Turning to the balance sheet. Cash and marketable securities were $357.3 million as of June 30, and deferred revenue was $104.8 million We continue to return meaningful capital to shareholders. During the quarter, we paid $4.3 million in cash dividends and repurchased $2.4 million worth of shares, returning a total of $6.7 million to shareholders. The Board has approved a quarterly cash dividend of $0.06 per share to be paid on 09/01/2026, to shareholders of record on 08/15/2026. The company has $53 million remaining on its $75 million share repurchase authorization. Consistent with the industry, we continue to navigate cost and delivery challenges related to the supply chain. Customer satisfaction and on time delivery remain our top priorities, and the strength of our business model gives us the confidence to raise our EPS outlook even as we navigate near term cost dynamics. I will now turn the call back to Dhrupad for an update on our 2026 outlook and closing comments. Dhrupad Trivedi: Thank you, Michelle. A10 continues to strengthen its position as a partner of choice for next generation networks, and we are positioned to benefit from multiple durable secular catalysts. We continue to invest to enhance our position across our portfolio while preserving profitability and shareholder returns. Based on the results through 6 months, and our visibility ahead, we are increasing our full-year 2026 outlook. We now expect 2026 full-year revenue to increase by 12% to 14% on a year over year basis up from 10% to 12%. And EPS growth of 14% to 16% up from 12% to 14% previously. Operator, you can now open the call up for questions. Operator: Thank you very much. We are now opening the floor for questions. If you have any questions, you can press 1 on your phone keypad now to join the queue. We ask that while you are posing your question, you please pick up your handset if you are listening on the speakerphone to provide optimum sound quality. So press 1 if you would like to ask a question. Please wait a moment whilst we poll for questions. Thank you. Our first question is coming from Gray Powell of BTIG. Gray? Your line is live. Gray Powell: Hi. Gray. Thanks for, taking the question, and congratulations on the, really strong set of results. Dhrupad Trivedi: Thank you. Thanks, sir. Gray Powell: Yeah. Okay. So on product revenue growth, it is consistently been strong. it is it is the last 18 months, 25% growth in Q2 versus a tough comp last year. I thought that was particularly impressive. Can you maybe talk about how the drivers of growth on the product side have been changing this year versus last year? Then just how should we think about the duration of the spending cycle that you are currently benefiting from? Dhrupad Trivedi: Yeah. Yeah. No. Gray, good question. And I think, you know, as we said before, when we get new customer or new business, product revenue is the lead indicator. And relative to your question, Gray, 2 things. Right? So a, over the last several quarters, we have spoken about that we are strengthening on the commercial side and the product side. To be able to better address and win opportunities including in the enterprise segment. Right? So that is 1 aspect of where as we get new business, the product growth is the lead driver and grows faster than service at that point. Second, I would say is as we have continued to engage customers, with longer term road map and solutions related to what they can do with AI when they actually deploy it in the next 2-3 years, that has also naturally led to broader conversations with other products that they could be engaging with us today while they do that. So I think those 2 dimensions have helped us kind of drive that product growth a little bit more substantially. And the, you know, goal is obviously to continue to maintain that as much as we can. Gray Powell: Okay. that is that is really helpful. And then just I guess related question. But the last quarter, called out some pull forward dynamics with your largest customer. So I guess I was a little bit surprised to see product growth accelerate in Q2. Can you maybe just talk about what surprised you the most in the quarter? Mhmm. And was there any similar pull forward dynamics in Q2 to what you saw last quarter? Dhrupad Trivedi: Yeah. No. Fair point. And I think, you know, maybe a minor subtlety there. Right? So the pull forward dynamic was not sort of a relocation of demand. It had more to do with supporting a significant project. That had a timeline that needed to be completed. So when I look at Q2, similarly, I would say, right? We continue to balance the customer needs and deployment needs. But there is no concern that this is demand from outer quarters that is coming into the period. if that is helpful. Gray Powell: that is really helpful. Thank you very much. Dhrupad Trivedi: Thanks. Thanks, Gray. Operator: Thank you very much. And our next question is coming from Christian Schwab of Craig-Hallum Group. Christian, your line is live. Christian Schwab: Great. Thanks. Thanks for taking my question. Great quarter and outlook. Can you just give a better description and discussion on the growth drivers, which appear to be you know, a large degree to increased traffic that is going through the network. A particular through enterprises as AI adoption is accelerating? And is that also part of the expansion of the Microsoft relationship? And in addition to that, as more and more traffic becomes localized, on the enterprise. And as enterprise deploy specific AI applications that they will run dedicated on their networks versus going to the cloud Should we think of that as a meaningful growth driver for you over time? Dhrupad Trivedi: Yeah. I know. it is a great question, Christian. So I think I will maybe talk about that in 3 parts. Right? So first, as you mentioned, right, our approach is around the notion of helping whatever type of company uses the product that when there is more traffic more complicated traffic, and people are worried about latency, that is a good fit for our solutions, independent of you know, what exact application may be. So certainly, the growth in traffic driven in some part due to AI, which is much more, you know, burst traffic, high volume traffic, and different than what we used to see it results in 2 parts. 1 is just managing that traffic efficiently and with low latency. And second is, dealing with the new kinds of threats that arise because of the use of AI by even enterprises, but by everybody on the network. So that is certainly 1 of the drivers. And I would say we see that as, you know, kind of a sustainable thing for several years. Because it is related ultimately not to who is building how many data centers. it is linked to are people using AI? Right? And I think we all can answer that for ourselves. So that is clearly 1 of the drivers. Second, I think you talked about Microsoft and, obviously, we have been partnered with them. it is been a great customer for us for a long period of time. The expansion is that over the next couple of years time frame again, we are more and more aligned on the road map that as they build out their own architecture and infrastructure that we are continuing to be embedded with them in broader areas than we used to before. Right? So it is continuing to expand that. At the same time, obviously, we are very focused on ensuring we do our part to help them continue to be successful. So that is simply kind of a reflection and joint commitment from both sides that we want to make it work for an extended period of time, and this is just a reflection of that. And, ultimately, has to be that we have to deliver the right technology they need and we are obviously focused on that from a technical point of view. The last point you mentioned actually is an interesting 1. So I would say this is not a big demand driver immediately, but certainly in the next 2 to 3 years, as you see in the news, large enterprise, particularly chooses to do sometimes their own models, or because of sovereign AI reasons in outside of US as well. They choose to do actually more things on-prem than even in the cloud. Our solution can go across all of that. So as we see uptake in the next 2-3 years with enterprise doing more AI, like inference AI and generally the large ones preferring to do their own. We see that obviously as a strength for us, again, based on the nature of our solution. And the ability that we have maintained how we deliver these capabilities in any kind of form factor. Great. Thank you for that. Christian Schwab: I just have 1 more question. Regarding your first sustainable growth driver. As more complicated traffic and latency is and security threats are a huge issue. Your success there, can you just remind us who your first or second biggest competitor for those products are? Dhrupad Trivedi: I think so there is, I think, 2 class of people that we would compete with. Right? So 1 is traditional companies that deliver infrastructure products, obviously, are also trying to add similar capabilities. So that would be 1 category of that. And I would say, though, the way we are approaching it, we try to do it based on our differentiation. So we believe we can be competitive. The second part of that is, which is an evolving market, is because of the nature of funding there is a lot of small and start up companies that are trying to compete in those slots. But, ultimately, I think 1 of the factors that plays into it is would you trust you know, if you are a large bank, would you trust your data to an AI with a 6-person team? Right? So I think, and if you do, then the technology has to be really, really good. So I think the balance for us is we overlap with both The direct competition, I would say, though, would be with companies that do networking and infrastructure. Trying to add on AI products and capabilities. Great. Thank you. Christian Schwab: No other questions. Dhrupad Trivedi: Thank you. Thanks. Thank you, Christian. Operator: Thank you very much. And our next question is coming from Hamed Khorsand of BWS Financial. Hamed, your line is live. Hamed Khorsand: Hi. So first off, were there any pre buy requirements on the part of Microsoft for the expanded relationship? And how do you are you going to manage the business given that Microsoft is so large of a percentage of revenue at this point? Dhrupad Trivedi: Yeah. So I think the you know, so I think the agreement that we have is linked to more their demand and us working jointly with them in a much more longer time frame. So there is no prebuys or anything like that. it is very much aligned with their business needs, rollout forecast, and us being much more operationally intertwined than before as well as the product side. The second part of your question, Hamed, I would say is, you know, if you put aside that and maybe, you know, where 1 or 2 countries where there is macro issues, our overall business excluding those factors, is also growing close to double digits. Right? So it is not that this is the only place that is growing. So our objective continues to be to increase our relevance more and more in enterprise, obviously, including cloud and AI. As well as maintain durability where we should also benefit when service provider CapEx rebounds and does better. Right? So we are not losing those slots. We are maintaining those positions. But obviously, we are taking advantage of the current spending profile of customers by quarter. Okay. Hamed Khorsand: And then is there you know, a higher drag on earnings because of where memory prices are? Or have you been able to stabilize that? Great question. Dhrupad Trivedi: So I think you know, we have been able to maintain it in the last couple of quarters. As, you know, people talk about that memory constraint, whether it is supply or pricing, or combined, is expected to last for a while. Right? So we are continuing to navigate that. But our bias is customer satisfaction and delivery. So if we were forced to make that choice, you know, we figure out what to do and still deliver EPS. But so far, we have been able to manage that. But it is unknown. Right? Everybody's expecting it to last for many more quarters, so we are just staying focused on the customer delivery. Okay. Hamed Khorsand: Thank you. Dhrupad Trivedi: Thank you, Thank you very much. Operator: Our next question is coming from Michael Romanelli of Mizuho Securities. Michael, your line is live. Michael Romanelli: Great. Hey, guys. Thanks for taking the questions. Maybe to start off, obviously, new Microsoft agreement provides some validation around demand and deployment activity. So congrats on that. I guess just looking beyond that relationship, can you talk a little bit about the broader pipeline today, how that compares to perhaps 90 days ago whether that be size, quality, and visibility, particularly for just the larger enterprise and you know, any AI related opportunities that you can comment on, just trying to understand how demand looks for outside of the Microsoft, agreement. Yep. And then I have a follow-up. Sure. Dhrupad Trivedi: Yeah. No. Good question, and I will maybe answer it in 2 ways. So first is when we look at our overall pipeline, it is compared to 90 days ago and, let's say, enterprise and SP separately, I would say. On the service provider side, we certainly see slight improvement in the North America market. And some of it is, right, that the products we sell, help them run networks better, cheaper, faster. Whether they replace the network or not. So we certainly see that as trend where that pipeline is improving, and so we expect that to be a contributor more in the future. On the enterprise side, obviously, we have put lot of effort and I think because our focus is typically on large enterprise, the sales cycle tend to be 6 to 9 months and are pretty complex. So I would say the pipeline is good. We see kind of the trend being pretty positive as well. But I think we should start seeing the results you know, later this year, early next year, more so than before, based on that. Right? So the pipeline compared to 90 days is definitely better, and I would say the quality of deals is better. So it is obviously, the last part is the most important, which is we are going execute. Got it. Okay. Sounds And as second thing, yeah, and the second thing, Michael, you asked, on the AI side, right, like many companies, we are engaged with a lot of customers on proof-of-concepts, those kinds of things right now, as they are themselves figuring out what to do with AI. So there, I would say our measure of success is more around how many customers are we engaged with, then are we deeply involved with kind of their business problems and how we can solve them. Got it. Okay. Thanks, Dhrupad. that is that is helpful. Michael Romanelli: And then maybe as for my follow-up, congrats on the recent acquisition of Troj.ai. Guess what made this the right asset for A10? And where do you see the strongest fit within the portfolio? And I guess just more broadly, could AI security become a more meaningful growth vector for A10 over time? Or should we think of it more as an important capability that enhances the relevance of the existing portfolio? Thanks. Dhrupad Trivedi: Yeah. No, great question. So I think first of all, I think, you know, 1 of the most important things for us in going with Troj.ai was the team there had developed a very strong technical solution and which was very much in line with kind of the road map we were driving towards. And, somewhat complementary to some other things we were doing. So in a way, it was adding that capability to strengthen a portfolio that we can sell stand alone, but also as part of broader bundles in the future. I would say the near term, of course, it adds capability to the overall solution for sure. But at the same time, the road map that we are driving has more to do with kind of native AI solutions that we can bring to market in the next 1 or 2 years. That are not even predicated on people using all of our other products. Right? So it is more of the first thing today, but it could be both in the future as the market matures. Great. Thank you. Michael Romanelli: Yep. Operator: Thank you very much, And our next question is coming from Simon Leopold of Raymond James. Apologies. Simon, your line is live. Analyst: that is okay. Wanted to check. Historically, you have included Microsoft within your service provider vertical, I believe. I want to confirm that and just verify that is still how you categorize it. Just to make sure that essentially, the sort of shift in mix is not reflective of recategorization of a customer? Dhrupad Trivedi: No. Good question and clarification. So, Simon, you are correct. Historically, we characterize it as service provider. We have not recategorized that portion of the business. But as I mentioned before, we are also doing different and new business with Microsoft and as well as others. And that is where it is, sometimes difficult for us to kind of split in that enterprise SP mix because many of our customers, including in Europe, do both. And so you are correct. there is no historical revenue that has been recategorized. And so what is sold to them as a service provider is still counted in the service provider segment. So then in the most recent quarter, is there Microsoft Business showing up that you do categorize as enterprise? Yes. Correct. based on a completely different product set. Yeah. based on a completely different product set. Correct. Yeah. Okay. That like, totally now things make so much more sense to me. So helpful. So then stepping back last quarter, you did disclose in the Q that you did have a 37% end customer. Can you give us some more metrics for the June quarter? I think, you know, obviously, we will come out in the queue, but it will be a similar number. And I think it will it will you know, we will publish the queue next day or 2. So but it will be a similar number, and it is it is linked to kind of completing the rollout. Right? So it will change probably in the future, but as of now for Q2, it will be a similar number, just for those exact reasons. Okay. And so, I guess, kind of trying to just put a button on this line of questioning. It looks like service provider excluding Microsoft declined in 2025. And I think you are talking about it stabilizing. So Mhmm. If we are trying to think about service provider excluding Microsoft in 2026, We should be thinking about that as similar to the 2025 level. Is that what you mean by normalizing? I just wanna make sure I am interpreting that commentary correctly. Yeah. So I think good very good question. I think so. I would say expecting it to be slightly better than 2025 level. And the puts and takes are the North America segment we see as improving. Japan is equal or slightly worse, and Europe is neutral. Right? So between those factors, overall, we expect it to be slightly better versus 2025. Thank you. Appreciate the clarification. Appreciate it. No problem. Thank you. Thank you. Thanks, Simon. Operator: Thank you very much. Well, we appear to have reached the end of our question and answer session. So I will now hand back over to the management team for any closing comments. Dhrupad Trivedi: Thank you, and thank you to all of our employees, customers and shareholders for joining us today and for your continued support. I am increasingly confident in our strategic orientation with security, and next generation networking spending patterns. Thank you for your time and attention. Operator: Thank you very much, everybody. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful rest of the day. We thank you for your participation. Before you buy stock in A10 Networks, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and A10 Networks wasn’t one of them. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. A10 Networks (ATEN) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

A10 Networks (ATEN) came out with quarterly earnings of $0.25 per share, missing the Zacks Consensus Estimate of $0.26 per share. This compares to earnings of $0.21 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -3.85%. A quarter ago, it was expected that this provider of networking technologies would post earnings of $0.22 per share when it actually produced earnings of $0.24, delivering a surprise of +9.09%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. A10 Networks, which belongs to the Zacks Internet - Software industry, posted revenues of $80.14 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 3.72%. This compares to year-ago revenues of $69.38 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. A10 Networks shares have added about 73.5% since the beginning of the year versus the S&P 500's gain of 13%. While A10 Networks has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for A10 Networks was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.27 on $82.77 million in revenues for the coming quarter and $1.05 on $325.01 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 44% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. VNET Group (VNET), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 18. This provider of carrier-neutral internet data center services is expected to post quarterly loss of $0.06 per share in its upcoming report, which represents a year-over-year change of -500%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. VNET Group's revenues are expected to be $405.24 million, up 19.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report A10 Networks, Inc. (ATEN) : Free Stock Analysis Report VNET Group, Inc. - Unsponsored ADR (VNET) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved 15% revenue growth in Q2, marking the fourth double-digit growth quarter in the last five, driven by the increasing relevance of integrated security and traffic management in AI environments. Expanded the strategic relationship with Microsoft through a long-term agreement featuring mutual performance commitments, aligning A10 more closely with the industry leader's infrastructure roadmap. Observed that AI is blurring the lines between enterprise and service provider network requirements, allowing A10 to leverage a single architecture and operating model across both segments. Acquired Troj.ai to integrate AI security layers, including red teaming and real-time protection, addressing the growing need for governance and vulnerability testing in agentic workflows. Maintained strong operating discipline, resulting in EPS growth exceeding revenue growth despite ongoing supply chain cost and delivery challenges. Noted a deliberate strategic focus on the Americas, which represented 68% of global revenue, fueled by AI infrastructure build-outs and enterprise market strength. Increased full-year 2026 revenue guidance to 12%-14% (up from 10%-12%) and EPS growth to 14%-16% (up from 12%-14%) based on strong visibility and demand. Expects service provider spending in North America to continue normalizing and improving, while anticipating persistent macroeconomic pressures in Japan and geopolitical impacts in EMEA. Anticipates that the shift toward on-premise AI inference and sovereign AI models will serve as a meaningful demand driver for A10's flexible form-factor solutions over the next 2-3 years. Assumes full-year free cash flow will grow year-over-year from the approximately $65 million generated in 2025. Projects that memory price constraints and supply chain volatility will likely persist for several more quarters, requiring continued focus on customer delivery over margin optimization if forced to choose. High customer concentration remains a factor, with one major customer representing approximately 37% of revenue in the quarter due to significant project rollout timelines. Geopolitical instability in EMEA and macroeconomic headwinds in Japan continue to impact international service provider spending cycles. Supply chain challenges related to memory pricing and delivery remain a headwind, though management has successfully navigated these to maintain 80.3% non-GAAP gross margins. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management explained that product revenue is a lead indicator for new business, particularly as they strengthen their commercial presence in the enterprise segment. Growth is being driven by customers engaging in long-term roadmaps for AI deployment, which leads to broader conversations about A10's current product portfolio. Management clarified that recent high volume was not a relocation of future demand, but rather the fulfillment of specific project timelines that needed completion. There is no concern that current performance is borrowing demand from outer quarters. A10 competes against traditional infrastructure companies adding AI features and a wave of startups. Management believes their advantage lies in being an established partner that large institutions, like banks, can trust with complex data compared to small, unproven teams. Historically, Microsoft was categorized as a service provider, but new business involving different product sets is now being categorized under the enterprise segment. This shift reflects the evolving nature of the relationship and the diverse applications of A10's technology within the same large-scale customer.

Interested in A10 Networks, Inc.? Here are five stocks we like better. Strong Q2 performance: Revenue rose 15.5% to $80.1 million, while non-GAAP net income increased to $0.25 per share and free cash flow reached $26.9 million. Growth investments expanded: A10 strengthened its Microsoft partnership and acquired TrojAI to add AI red-teaming and real-time runtime protection capabilities. Full-year outlook raised: The company now expects 2026 revenue growth of 12%–14% and EPS growth of 14%–16%, citing improving enterprise demand and AI-driven networking and security requirements. A10 Networks: Key 5G Infrastructure Stock that's Beating the Market A10 Networks (NYSE:ATEN) reported second-quarter revenue growth of 15.5% as demand for its application networking and security offerings benefited from AI-related traffic, latency and security requirements. The company raised its full-year revenue and earnings outlook, citing results through the first half and visibility into demand. Revenue for the second quarter totaled $80.1 million, while year-to-date revenue reached $155.1 million, up 14.5% from the prior-year period. President and CEO Dhrupad Trivedi said the quarter marked the company’s fourth period of double-digit growth in the past five quarters. → 3 Drone Stocks That Should Soar After the Summer Slump Chief Financial Officer Michelle Caron said product revenue was $49 million, representing 61% of quarterly revenue, while service revenue was $31.1 million, or 39% of revenue. Security-led revenue continued to support product growth, she said. On a non-GAAP basis, A10 Networks reported an 80.3% gross margin and operating expenses of $43.9 million. Operating margin was 25.5%, and net income was $18.7 million, or $0.25 per diluted share, compared with $0.21 per share in the year-earlier quarter. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Adjusted EBITDA was $25.4 million, equal to 30.5% of revenue. The company generated $26.9 million in free cash flow during the quarter, bringing year-to-date free cash flow to $26.2 million. Caron said A10 expects full-year free cash flow to increase from approximately $65 million in 2025. Cash and marketable securities totaled $357.3 million as of June 30, while deferred revenue was $154.8 million. During the quarter, A10 paid $4.3 million in dividends and repurchased $2.4 million of shares, for a total of $6.7 million returned to shareholders. The board approved a quarterly dividend of $0.06 per share, payable Sept. 1 to shareholders of record Aug. 15. The company had $53 million remaining under its $75 million share repurchase authorization. → Jersey Mike's Serves Fresh Gains After IPO Stumble Trivedi said A10 expanded its relationship with Microsoft after the quarter ended. He described the agreement as a long-term partnership that includes mutual performance commitments and closer alignment with Microsoft’s roadmap. He said the agreement did not include pre-buy requirements, and that its economics are tied to Microsoft’s demand, rollout forecasts and a more operationally integrated relationship. A10 has historically categorized Microsoft business as service provider revenue, although Trivedi said some newer Microsoft business is classified in the enterprise category because it involves a different product set. The company also acquired TrojAI in June. Trivedi said the AI security company adds capabilities for red teaming—using AI to test models and agents for vulnerabilities during development—and real-time runtime protection for AI applications and agentic workflows. He characterized the acquisition as a way to strengthen A10’s existing portfolio while providing capabilities that can be sold separately or incorporated into broader offerings. Over the next one to two years, the company expects to pursue AI-focused solutions that are not dependent on customers using all of its existing products. Enterprise customers accounted for 60% of second-quarter revenue, Caron said. On a trailing 12-month basis, enterprise represented about half of total revenue, consistent with A10’s objective of creating balanced growth across enterprise and service provider markets. The Americas accounted for 68% of global revenue, reflecting the company’s focus on the region, AI infrastructure build-outs and enterprise demand. Caron said service provider spending in the Americas has started to normalize, while EMEA demand was affected by geopolitical conditions and Japan faced macroeconomic pressures that have extended spending cycles. During the question-and-answer session, Trivedi said the service provider pipeline in North America showed modest improvement. He said the company expects service provider business excluding Microsoft to be slightly better in 2026 than it was in 2025, with improvement in North America partly offset by conditions in Japan and neutral trends in Europe. Trivedi also said enterprise sales cycles for the company’s large customers generally run six to nine months. The enterprise pipeline has improved compared with 90 days earlier, he said, adding that A10 expects more benefit from that activity later in 2026 and into early 2027. A10 raised its full-year 2026 revenue growth forecast to 12% to 14%, from prior guidance of 10% to 12%. The company now expects earnings per share growth of 14% to 16%, compared with its earlier forecast of 12% to 14%. Trivedi said AI is increasing network traffic volumes, creating more complex and bursty workloads, raising latency requirements and expanding security risks. He said A10’s strategy is centered on providing advanced application management and integrated security across enterprise and service provider environments. The company continues to manage supply-chain cost and delivery challenges, including potential memory supply and pricing constraints. Trivedi said A10 has managed those issues in recent quarters and remains focused on customer satisfaction and on-time delivery while maintaining its earnings objectives. A10 Networks, Inc (NYSE: ATEN), headquartered in San Jose, California, designs and sells networking and security solutions that accelerate application performance and protect data across on-premises, cloud and hybrid environments. Founded in 2004, the company's offerings target enterprises, service providers and cloud operators seeking high availability, secure access and optimized traffic delivery for critical applications. The company's core portfolio includes application delivery controllers (ADCs) for load balancing and traffic management, advanced distributed denial-of-service (DDoS) protection appliances, SSL inspection solutions and carrier-grade NAT (CGNAT) platforms. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "A10 Networks Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Revenue: $80.1 million in Q2 2026, up 15.5% year-over-year; year-to-date revenue of $155.1 million, up 14.5%. Product Revenue: $49 million, representing 61% of total revenue. Service Revenue: $31.1 million, representing 39% of total revenue. Gross Margin: Non-GAAP gross margin of 80.3%. Operating Expenses: $43.9 million in Q2. Operating Margin: 25.5%. Net Income: $18.7 million, or $0.26 per basic share and $0.25 per diluted share, compared to $0.21 in the year-ago period. Free Cash Flow: $26.9 million in Q2; $26.2 million year-to-date. Adjusted EBITDA: $25.4 million, or 30.5% of revenue. Cash and Marketable Securities: $357.3 million as of June 30. Deferred Revenue: $154.8 million. Shareholder Returns: Paid $4.3 million in cash dividends and repurchased $2.4 million worth of shares, totaling $6.7 million returned to shareholders. Full-Year 2026 Outlook: Revenue growth raised to 12%-14% (from 10%-12%); EPS growth raised to 14%-16% (from 12%-14%). Warning! GuruFocus has detected 2 Warning Signs with ATEN. Is ATEN fairly valued? Test your thesis with our free DCF calculator. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. A10 Networks Inc (NYSE:ATEN) delivered strong financial results with 15.5% year-over-year revenue growth in Q2 2026 and 14.5% growth year-to-date, marking the fourth quarter of double-digit growth in the last five. The company raised its full-year 2026 outlook, now expecting revenue growth of 12% to 14% and EPS growth of 14% to 16%, up from previous guidance of 10% to 12% and 12% to 14%, respectively. A10 Networks Inc (NYSE:ATEN) announced a significant expansion of its relationship with Microsoft, which includes mutual performance commitments and aligns the company with the long-term roadmap of this industry leader. The acquisition of TrojAI adds two layers to A10 Networks Inc (NYSE:ATEN)'s platform: red teaming for AI vulnerability probing at build time and real-time protection at runtime, enhancing its AI security portfolio. A10 Networks Inc (NYSE:ATEN) generated strong free cash flow of $26.9 million in Q2, with year-to-date free cash flow at $26.2 million, and continues to return capital to shareholders through dividends and share repurchases. The company's non-GAAP gross margin remained strong at 80.3%, with operating margin at 25.5%, demonstrating solid profitability alongside growth. A10 Networks Inc (NYSE:ATEN) sees improving service provider demand in the Americas and a strong pipeline, with enterprise customers representing 60% of Q2 revenues, reflecting balanced growth across verticals. A10 Networks Inc (NYSE:ATEN) continues to navigate cost and delivery challenges related to the supply chain, particularly around memory prices, which are expected to persist for several quarters. Service provider demand in EMEA was impacted by the geopolitical environment, while Japan within the APJ region continues to experience macroeconomic pressures that are affecting spending cycles. The company's revenue concentration with Microsoft remains high, with the customer expected to represent a similar percentage of revenue in Q2 as the 37% disclosed in the prior quarter. A10 Networks Inc (NYSE:ATEN) faces competition from both traditional infrastructure companies adding AI capabilities and numerous startups in the evolving AI security market. The enterprise sales cycles tend to be long, ranging from six to nine months, which could delay the realization of pipeline opportunities until later this year or early next year. Service provider spend excluding Microsoft is expected to be only slightly better than 2025 levels, with Japan equal or slightly worse and Europe neutral, indicating limited growth in this segment. The company's operating expenses increased to $43.9 million as it prioritizes investments in AI-facing innovation, next-gen networking, and security, which could pressure near-term margins. Q: Can you discuss the drivers of product revenue growth this year versus last year and the expected duration of the current spending cycle?A: Dhrupad Trivedi (CEO) explained that product revenue is the lead indicator for new business wins. Growth is driven by two factors: strengthened commercial and product capabilities to win enterprise opportunities, and deeper customer engagements around long-term AI roadmaps that naturally lead to broader product discussions. He views the AI-driven demand as sustainable for several years, as it is tied to overall AI usage rather than just data center build-outs. Q: Can you provide more detail on the expanded Microsoft relationship and how you will manage the business given Microsoft's large revenue percentage?A: CEO Dhrupad Trivedi clarified that the expanded agreement is linked to Microsoft's demand and a longer-term joint roadmap, with no pre-buy requirements. The partnership involves deeper operational and product alignment. He emphasized that excluding Microsoft and a few macro-affected regions, the rest of the business is also growing close to double-digits, and the company remains focused on increasing enterprise relevance while maintaining service provider positions for when CapEx rebounds. Q: How should we interpret the service provider vertical excluding Microsoft, and is it stabilizing in 2026?A: CEO Dhrupad Trivedi confirmed that service provider revenue excluding Microsoft should be slightly better in 2026 than 2025. The outlook is driven by improving North America trends, while Japan is expected to be equal or slightly worse and Europe neutral. He also confirmed that Microsoft business sold as a service provider is still categorized as such, with no historical recategorization. Q: What made TrojAI the right acquisition, and could AI security become a meaningful growth factor?A: CEO Dhrupad Trivedi stated that TrojAI's strong technical solution aligned well with A10's roadmap and complemented existing efforts. In the near term, it adds capability to the overall portfolio, but the longer-term roadmap includes native AI solutions that can be sold standalone within the next one to two years, potentially making AI security both an enhancement and a standalone growth driver. Q: Were there any pull-forward dynamics in Q2 similar to last quarter, and what surprised you most?A: CEO Dhrupad Trivedi clarified that last quarter's pull-forward was related to supporting a significant project timeline, not a relocation of demand. In Q2, there were no similar concerns about demand being pulled from future quarters. The company continues to balance customer deployment needs without shifting demand from outer periods. Q: How does the broader pipeline compare to 90 days ago, particularly for enterprise and AI-related opportunities?A: CEO Dhrupad Trivedi noted that the service provider pipeline is slightly improving in North America, driven by products that help run networks more efficiently. On the enterprise side, sales cycles are six to nine months, and the pipeline is better with improved deal quality, with results expected later this year or early next year. For AI, the company is engaged in many proof-of-concept projects as customers figure out their AI strategies. Q: Is there a higher drag on earnings due to memory prices, and have you stabilized that?A: CEO Dhrupad Trivedi acknowledged that memory supply and pricing constraints are expected to last for several quarters. The company has managed to maintain margins in recent quarters, prioritizing customer satisfaction and delivery. If forced to choose, they would find ways to deliver EPS while navigating the cost dynamics. Q: Can you confirm the Microsoft customer concentration percentage for the June quarter?A: CEO Dhrupad Trivedi indicated that the percentage will be similar to last quarter's 37% when the 10-Q is published. This is linked to completing the rollout, and the percentage is expected to change in the future as the relationship evolves. Q: Who are your primary competitors for AI-related traffic management and security products?A: CEO Dhrupad Trivedi identified two competitor classes: traditional infrastructure companies adding AI capabilities, and smaller startups in the evolving market. He emphasized that trust is a key factor for large enterprises, and A10's differentiation lies in its ability to deliver reliable technology across both networking and AI security, competing primarily with companies trying to add AI products to their networking infrastructure. Q: Is there Microsoft business in the enterprise vertical this quarter, and how is it categorized?A: CEO Dhrupad Trivedi confirmed that new Microsoft business based on a completely different product set is being categorized as enterprise revenue. This explains the shift in vertical mix, as the company is expanding its relationship with Microsoft beyond traditional service provider offerings. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Continued Execution in the Americas, Including Next-Generation Networking Demand, Drives 14.5% Year-to-Date Revenue Growth SAN JOSE, Calif., August 05, 2026--(BUSINESS WIRE)--A10 Networks, Inc. (NYSE: ATEN), a leading provider of secure application services and solutions, today announced financial results for its second quarter ended June 30, 2026. Second Quarter 2026 Financial Summary Quarterly revenue of $80.1 million, a 15.5% year-over-year increase. Revenue for the first six months of 2026 was $155.1 million compared to $135.5 million for the first six months of 2025, an increase of approximately 14.5%. GAAP gross margin of 79.1%; non-GAAP gross margin of 80.3%. GAAP net income of $8.9 million, or $0.12 per diluted share, non-GAAP net income of $18.7 million, or $0.25 per diluted share. Non-GAAP Adjusted EBITDA of $24.4 million, representing 30.5% of revenue. The Company returned $6.7 million to investors, having repurchased 86,115 shares during the quarter at an average price of $27.63 per share for a total of $2.4 million and having paid $4.3 million in cash dividends in the quarter. The Board of Directors approved a quarterly cash dividend of $0.06 per share, payable September 1, 2026 to stockholders of record at the close of business on August 17, 2026. As of June 30, 2026, A10 had $357.3 million in cash, cash equivalents, and marketable securities. A reconciliation between GAAP and non-GAAP information is contained in the financial statements below. "A10 continued to solidify its strategic position as a leader in security-focused next-generation networking solutions supporting AI-related infrastructure, driving another quarter of double-digit revenue growth and sustained cash generation," said Dhrupad Trivedi, President and Chief Executive Officer of A10 Networks. "The growing network traffic demands, increasing complexity, and A10’s competitive position at the intersection of traffic management and security continues to resonate in the marketplace. With an expanded portfolio, including our acquisition of TrojAI in June, we believe A10 has positioned itself as a vendor of choice for next-generation networking running critical applications." "We are deepening our engagement with leaders defining the AI infrastructure market. Our new agreement with Microsoft reflects a successful, long-standing relationship and stands as a powerful validation of the value we jointly deliver. The agreement is structured over a multi-year period, aligning both parties’ interests as deployment continues to scale," continued Trivedi. "We believe it pairs our opportunity with Microsoft's scaled AI deployment, further solidifying our position as a partner of choice for the world's most demanding AI workloads, while establishing a durable, forward-looking foundation for a mutually beneficial relationship in the years ahead." "Our model has continued to convert growth into increased profitability, cash generation, and the return of capital to shareholders," Trivedi added. "We have increased our full-year outlook based on the performance in the first half of 2026 and our visibility into the remainder of the year." Outlook Management is updating their previous guidance to the following based on first-half performance and demand outlook: Full-year revenue growth of 12-14% over the prior year, an increase from previous guidance of 10-12% growth. EPS growth of 14-16% growth year-over-year, an increase from the 12-14% growth in previous guidance. Conference Call Management will host a call at 1:30 p.m. Pacific time (4:30 p.m. Eastern time) today, Wednesday, August 5, 2026, to discuss these results. Interested parties may access the conference call by dialing (888) 506-0062 (toll-free) or (973) 528-0011 (international) and referencing access code: 338698. A live audio webcast of the conference call will be accessible from the "Investor Relations" section of A10 Network’s website at investors.a10networks.com. The webcast will be archived for one year. A telephonic replay of the conference call will be available until August 19, 2026 and may be accessed by dialing (877) 481-4010 (toll-free) or (919) 882-2331 (international) and entering the passcode: 54248. Forward-Looking Statements This press release contains "forward-looking statements," including statements regarding dividends and capital return, demand and market trends, strategy and competitive positioning, our commercial partnerships and agreements (including our agreement with Microsoft), financial performance and profitability, supply chain management, and 2026 financial guidance. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on assumptions that may prove to be incorrect, which could cause actual results to differ materially from those expected or implied by the forward-looking statements. Factors that may cause actual results to differ include any unforeseen need for capital which may require us to divert funds we may have otherwise used for the dividend program or stock repurchase program, which may in turn negatively impact our ability to administer the quarterly dividends or the repurchase of our common stock; a significant decline in global macroeconomic or political conditions that have an adverse impact on our business and financial results; an expansion of adversarial global trade dynamics or other changes to international trade regulations; business interruptions related to our supply chain; our ability to manage our business and expenses if customers cancel or delay orders; execution risks related to closing key deals and improving our execution; the continued market adoption of our products; our ability to successfully anticipate market needs and opportunities; our timely development of new products and features; our ability to achieve or maintain profitability; any loss or delay of expected purchases by our largest end-customers; our ability to maintain or improve our competitive position; competitive and execution risks related to cloud-based computing trends; our ability to attract and retain new end-customers and our largest end-consumers; our ability to maintain and enhance our brand and reputation; changes demanded by our customers in the deployment and payment model for our products; continued growth rates in markets relating to network security; the success of any future acquisitions or investments in complementary companies, products, services or technologies; the ability of our sales team to execute well; our ability to shorten our close cycles; the ability of our channel partners to sell our products; variations in product mix or geographic locations of our sales; risks associated with our presence in international markets; weaknesses or deficiencies in our internal control over financial reporting; our ability to timely file periodic reports required to be filed under the Securities Exchange Act of 1934; and other risks that are described in "Risk Factors" in our periodic filings with the Securities and Exchange Commission, including our Form 10-K filed with the Securities and Exchange Commission on February 25, 2026. We do not intend to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Non-GAAP Financial Measures In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), we refer to certain non-GAAP financial measures, including non-GAAP net income, non-GAAP net income per basic and diluted share (or non-GAAP EPS), non-GAAP gross profit and gross margin, non-GAAP operating expenses, non-GAAP operating income and operating margin, Adjusted EBITDA and Adjusted EBITDA margin. Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similarly titled measures presented by other companies. A10 Networks considers these non-GAAP financial measures to be important because they provide useful measures of the operating performance of the company by excluding certain items that, while they may recur, can vary significantly in amount and timing or are not directly indicative of ongoing operational trends, and are used by the company’s management to evaluate operating performance, prepare budgets and forecasts, and assess performance relative to peer companies. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. We define non-GAAP net income as our GAAP net income excluding: (i) stock-based compensation and related payroll tax, (ii) acquisition-related expense, (iii) amortization of acquired intangible assets, (iv) amortization of debt issuance costs, (v) certain legal expense, (vi) tax planning expense and (vii) income tax effect of non-GAAP items (i) to (vi) listed above. We define non-GAAP net income per basic and diluted share as our non-GAAP net income divided by our basic and diluted weighted-average shares outstanding. We define non-GAAP gross profit as our GAAP gross profit excluding (i) stock-based compensation and related payroll tax and (ii) amortization of acquired intangible assets. We define non-GAAP gross margin as our non-GAAP gross profit divided by our GAAP revenue. We define non-GAAP operating expenses as our GAAP operating expenses excluding (i) stock-based compensation and related payroll tax, (ii) acquisition-related expense, (iii) amortization of acquired intangible assets, (iv) certain legal expense and (v) tax planning expense. We define non-GAAP operating income as our GAAP income from operations excluding (i) stock-based compensation and related payroll tax, (ii) acquisition-related expense, (iii) amortization of acquired intangible assets, (iv) certain legal expense and (v) tax planning expense. We define non-GAAP operating margin as our non-GAAP operating income divided by our GAAP revenue. We define Adjusted EBITDA as our GAAP net income excluding (i) interest and other income, net, (ii) depreciation and amortization expense, (iii) provision for income taxes, (iv) stock-based compensation and related payroll tax, (v) acquisition-related expense, (vi) certain legal expense and (vii) tax planning expense. We define Adjusted EBITDA margin as our Adjusted EBITDA divided by our GAAP revenue. Non-GAAP financial measures are presented for supplemental informational purposes only for understanding the company's operating results. About A10 Networks A10 Networks (NYSE: ATEN) delivers secure application and network solutions designed to protect, optimize, and scale business-critical systems across on-premises, hybrid cloud, and edge environments. Our portfolio is designed to enable large enterprises, service providers, and cloud platforms worldwide to achieve performance, reliability, and protection against cyber threats, while preparing their networks for the demands of AI and next-generation applications. Founded in 2004 and headquartered in San Jose, California, A10 Networks serves over 7,000 global customers. For more information, visit A10networks.com and follow us at A10Networks. The A10 logo and A10 Networks are trademarks or registered trademarks of A10 Networks, Inc. in the United States and other countries. All other trademarks are the property of their respective owners. Source: A10 Networks, Inc. Net income and earnings per share excluding adjustments are non-GAAP financial measures presented as supplemental financial measures to enable a user of the financial information to understand the impact of these adjustments on reported results and to facilitate comparison of operating results across reporting periods. These financial measures should not be considered an alternative to net income, operating income, cash flows provided by operating activities, or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP. Our adjusted net income and earnings per share may not be comparable to similarly titled measures of another company because companies may not all calculate adjusted net income and earnings per share in the same manner. View source version on businesswire.com: https://www.businesswire.com/news/home/20260805375587/en/ Contacts Investor Contact: Rob Fink / Tom BaumannFNK IR646.809.4048 / [email protected] David SchroederVP, Corporate [email protected]

Palantir Technologies Inc. (PLTR) came out with quarterly earnings of $0.41 per share, beating the Zacks Consensus Estimate of $0.35 per share. This compares to earnings of $0.16 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +17.14%. A quarter ago, it was expected that this company would post earnings of $0.29 per share when it actually produced earnings of $0.33, delivering a surprise of +13.79%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Palantir Technologies, which belongs to the Zacks Internet - Software industry, posted revenues of $1.94 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 7.16%. This compares to year-ago revenues of $1 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Palantir Technologies shares have lost about 30.8% since the beginning of the year versus the S&P 500's gain of 9.4%. While Palantir Technologies has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Palantir Technologies was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.38 on $2 billion in revenues for the coming quarter and $1.48 on $7.69 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the bottom 44% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, A10 Networks (ATEN), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 5. This provider of networking technologies is expected to post quarterly earnings of $0.26 per share in its upcoming report, which represents a year-over-year change of +23.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. A10 Networks' revenues are expected to be $77.27 million, up 11.4% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Palantir Technologies Inc. (PLTR) : Free Stock Analysis Report A10 Networks, Inc. (ATEN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The market for A10 Networks, Inc.'s (NYSE:ATEN) shares didn't move much after it posted weak earnings recently. We think that the softer headline numbers might be getting counterbalanced by some positive underlying factors. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. In high finance, the key ratio used to measure how well a company converts reported profits into free cash flow (FCF) is the accrual ratio (from cashflow). In plain english, this ratio subtracts FCF from net profit, and divides that number by the company's average operating assets over that period. This ratio tells us how much of a company's profit is not backed by free cashflow. As a result, a negative accrual ratio is a positive for the company, and a positive accrual ratio is a negative. That is not intended to imply we should worry about a positive accrual ratio, but it's worth noting where the accrual ratio is rather high. To quote a 2014 paper by Lewellen and Resutek, "firms with higher accruals tend to be less profitable in the future". Over the twelve months to March 2026, A10 Networks recorded an accrual ratio of -0.11. That implies it has good cash conversion, and implies that its free cash flow solidly exceeded its profit last year. Indeed, in the last twelve months it reported free cash flow of US$51m, well over the US$44.6m it reported in profit. A10 Networks' free cash flow actually declined over the last year, which is disappointing, like non-biodegradable balloons. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. As we discussed above, A10 Networks has perfectly satisfactory free cash flow relative to profit. Because of this, we think A10 Networks' earnings potential is at least as good as it seems, and maybe even better! And it's also good to see that its earnings per share have improved a bit over the last three years. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. While it's really important to consider how well a company's statutory earnings represent its true earnings power, it's also worth taking a look at what analysts are forecasting for the future. Luckily, you can check out what analysts are forecasting by clicking here. Today we've zoomed in on a single data point to better understand the nature of A10 Networks' profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

A10 Networks, Inc. (NYSE:ATEN) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat forecasts, with revenue of US$75m, some 3.3% above estimates, and statutory earnings per share (EPS) coming in at US$0.17, 28% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. After the latest results, the seven analysts covering A10 Networks are now predicting revenues of US$324.3m in 2026. If met, this would reflect a solid 8.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 20% to US$0.74. In the lead-up to this report, the analysts had been modelling revenues of US$321.9m and earnings per share (EPS) of US$0.67 in 2026. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the nice gain to earnings per share expectations following these results. Check out our latest analysis for A10 Networks The consensus price target rose 13% to US$28.50, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on A10 Networks, with the most bullish analyst valuing it at US$32.00 and the most bearish at US$25.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth. Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting A10 Networks' growth to accelerate, with the forecast 11% annualised growth to the end of 2026 ranking favourably alongside historical growth of 3.1% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 16% per year. So it's clear that despite the acceleration in growth, A10 Networks is expected to grow meaningfully slower than the industry average. The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards A10 Networks following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving. With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple A10 Networks analysts - going out to 2028, and you can see them free on our platform here. You can also see our analysis of A10 Networks' Board and CEO remuneration and experience, and whether company insiders have been buying stock. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.