A10 Networks' Earnings and Revenue Analysis

A10 Networks reported strong earnings, but investors are underwhelmed. The company's accrual ratio shows good cash conversion, with free cash flow of $71m, significantly higher than reported profit of $51m. However, unusual items worth $5m boosted profit, which may not be sustainable. Analysts forecast future profitability, with an interactive graph available.

A10 Networks, Inc. (NYSE:ATEN) reported strong financial results for the second quarter of 2025, with earnings per share (EPS) of $0.21, exceeding expectations of $0.20 [1]. The company's President and CEO, Dhrupad Trivedi, highlighted the company's alignment with the evolving cybersecurity landscape and the strategic focus on AI and cybersecurity trends, which have driven growth and profitability.

The company's revenue increased by 15% year-over-year to $69.4 million, with service provider revenue growing by 14% and enterprise revenue increasing by 8% [1]. Gross margin remained at 80%, and adjusted EBITDA was $19.7 million, reflecting 28.3% of revenue. Non-GAAP net income for the quarter was $15.5 million, or $0.21 per diluted share [1].

However, investors were underwhelmed by the company's performance. The company's accrual ratio showed good cash conversion, with free cash flow of $71 million, significantly higher than the reported profit of $51 million [1]. This discrepancy can be attributed to unusual items worth $5 million that boosted profit, which may not be sustainable in the future.

Analysts forecast future profitability for A10 Networks, with an interactive graph available to visualize these projections. Despite the strong earnings, investors remain cautious due to the potential impact of unusual items on future profitability and the company's ability to maintain its growth trajectory in a volatile market.

References:
[1] https://www.insidermonkey.com/blog/a10-networks-inc-nyseaten-q2-2025-earnings-call-transcript-1585557/