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A10 Networks, Inc. Reports Third Quarter 2014 Financial ResultsSAN JOSE, Calif. --(Business Wire)-- A10 Networks, Inc. (NYSE: ATEN), a technology leader in application networking, today announced financial results for its third quarter ended September 30, 2014. Total revenue for the third quarter was $43.4 million, compared with $39.8 million in the third quarter of 2013. "We are very disappointed with our third quarter financial results and we are committed to improving our execution," said Lee Chen, president and chief executive officer of A10 Networks. "Third quarter revenue was negatively impacted by lower revenue from North America service provider customers, longer than expected close cycles for deals awarded to A10 and a lengthening sales cycle for some select large enterprise deals. Outside of North America most of our regions delivered revenue consistent with or above our expectations. Beyond revenue, higher inventory reserves and write-offs, currency exchange rates and geographic mix caused our gross margin to be below our historical range. On the positive side, we added a record number of new customers in the quarter, including four new customers for our recently launched Thunder TPS solution." A10 Networks third quarter 2014 GAAP net loss was $12.3 million compared with a net loss of $2.7 million in the third quarter of 2013. Non-GAAP net loss for the third quarter of 2014 was $8.8 million, compared with non-GAAP net loss of $1.6 million in the third quarter of 2013. A reconciliation between GAAP and non-GAAP information is contained in the financial statements below. Recent Highlights
Prepared Materials and Conference Call Information A10 Networks has made available a presentation with management's prepared remarks on its third quarter 2014 financial results. These materials are accessible from the "Investors" section of A10 Networks website at investors.a10networks.com. A10 Networks will host a conference call today at 4:30 p.m. Eastern time / 1:30 p.m. Pacific time for analysts and investors to discuss its third quarter of 2014 results and outlook for its fourth quarter of 2014. Open to the public, investors may access the call by dialing +1-719-457-2628 or +1-888-401-4668. A live audio webcast of the conference call will be accessible from the "Investors" section of A10 Networks website at investors.a10networks.com. The webcast will be archived for a period of one year. A telephonic replay of the conference call will be available two hours after the call, will run for five business days, and may be accessed by dialing +1-719-457-0820 or +1-888-203-1112 and entering the passcode 2058257. The press release and supplemental financials will be accessible from A10 Networks website prior to the commencement of the conference call. Forward Looking Statements This press release contains "forward-looking statements," including statements regarding our ability to improve our execution. 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 which may cause actual results to differ include the continued market adoption of our products, our ability to successfully anticipate market needs and opportunities, our timely development of new products and features, any loss or delay of expected purchases by our largest end-customers, our ability to attract and retain new end-customers, continued growth in markets relating to network security, our ability to hire, retain and motivate qualified personnel, the ability of our sales team to execute well, our ability to shorten our close cycles, the ability for our channel partners to sell our products, our ability to achieve or maintain profitability while continuing to invest in our sales, marketing and research and development teams, variations in product mix or geographic locations of our sales, fluctuations in currency exchange rates, risks associated with our significant presence in international markets, the cost and potential outcomes of existing and future litigation, increased cost requirements of being a public company and future sales of substantial amounts of our common stock in the public markets, or the perception that such sales might occur. More information about potential factors that could affect the company's business and financial results is included in our quarterly report on Form 10-Q filed with the SEC on August 4, 2014. These filings are available on the SEC's website at www.sec.gov and the company's website. All forward-looking statements in this press release are based on information available to the company as of the date hereof. We disclaim any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise. Non-GAAP Financial Measures In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures, including non-GAAP net income (loss). 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, exclusive of unusual events or factors that do not directly affect what we consider to be our core operating performance, and are used by the company's management for that purpose. We define non-GAAP net income (loss) as our net income (loss) excluding: (i) stock-based compensation and (ii) amounts paid in settlement of, and other expenses associated with, the Brocade litigation. The change in the company's share count should be considered when comparing net income (loss) per share to prior periods. In connection with its IPO, the company issued 9.0 million shares of common stock and 40.0 million shares of preferred stock converted into common stock. A10 ended the third quarter with 60.0 million shares of common stock outstanding on a weighted average pro forma basis reflecting the full conversion of preferred stock into common stock We have included non-GAAP net income (loss) in this press release. Non-GAAP financial measures are presented for supplemental informational purposes only for understanding the company's operating results. The non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from non-GAAP financial measures presented by other companies. Please see the reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure attached to this release. About A10 Networks A10 Networks (NYSE: ATEN) is a leader in application networking, providing a range of high-performance application networking solutions that accelerate and secure data center applications and networks of thousands of the largest enterprise, service provider and hyper-scale web providers around the world. Founded in 2004, A10 Networks is based in San Jose, Calif., and serves customers globally with offices worldwide. For more information, visit: http://www.a10networks.com A10 Networks, A10 Thunder, vThunder, ACOS, aCloud, and Virtual Chassis are trademarks or registered trademarks of A10 Networks, Inc. in the United States and other countries. All other trademarks are property of their respective owners.
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