Founder, BWS Financial Inc

Hamed Khorsand

Founder

Independent Stock Specific Research

BWS Financial Inc

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Equity Bottom-Up

<ul>
<li>ATEN reported an increase in revenue in the second quarter of 2022 even though the Company faced currency headwinds in Japan. Underlying demand for security is the reason for outperformance</li>
<li>ATEN’s ability to grow revenue and earnings is resulting in an increase in the cash balance, which management has been using to repurchase shares and pay a cash dividend. </li>
<li>Revenue and earnings growth in the second half of the year should support ATEN’s stock reaching our price target in the near term.</li>
</ul>


ATEN reported an increase in revenue in the second quarter of 2022 even though the Company faced currency headwinds in Japan. Underlying demand for security is the reason for outperformance
ATEN’s ability to grow revenue and earnings is resulting in an increase in the cash balance, which management has been using to repurchase shares and pay a cash dividend. 
Revenue and earnings growth in the second half of the year should support ATEN’s stock reaching our price target in the near term.


<ul>
<li>The recent strength in the Dollar is likely to result in second half revenue ending up lower than anticipated</li>
<li>ATEN generated 60% of its revenue in 2021 from outside the USA. The strength in the US Dollar is likely to result in revenue growing at a slower pace </li>
<li>Our new estimates reflect the impact of a stronger Dollar on revenue and expenses. We are currently not expecting demand softness to push results lower</li>
</ul>


The recent strength in the Dollar is likely to result in second half revenue ending up lower than anticipated
ATEN generated 60% of its revenue in 2021 from outside the USA. The strength in the US Dollar is likely to result in revenue growing at a slower pace 
Our new estimates reflect the impact of a stronger Dollar on revenue and expenses. We are currently not expecting demand softness to push results lower


<ul>
<li>ATEN continued to experience double-digit growth in the first quarter by reporting better than expected results. </li>
<li>The security first approach ATEN has taken to its sales efforts started to show its advantages last year and has continued in 2022. </li>
<li>The momentum from the first quarter is resulting in ATEN affirming revenue growth outlook towards the high end of the 10 percent to 12 percent range provided earlier </li>
</ul>


ATEN continued to experience double-digit growth in the first quarter by reporting better than expected results. 
The security first approach ATEN has taken to its sales efforts started to show its advantages last year and has continued in 2022. 
The momentum from the first quarter is resulting in ATEN affirming revenue growth outlook towards the high end of the 10 percent to 12 percent range provided earlier 


<ul>
<li>ATEN reported fourth quarter results beating our estimates and held an investor day to layout the framework for the next few years. </li>
<li>ATEN has continued to benefit from growing demand for security as network traffic has increased</li>
<li>ATEN is forecasting Q1 and 2022 revenue to increase between 10 % and 12 %. ATEN forecasting gross margin of 78% to 80% leads us to raise our 2022 estimates</li>
</ul>


ATEN reported fourth quarter results beating our estimates and held an investor day to layout the framework for the next few years. 
ATEN has continued to benefit from growing demand for security as network traffic has increased
ATEN is forecasting Q1 and 2022 revenue to increase between 10 % and 12 %. ATEN forecasting gross margin of 78% to 80% leads us to raise our 2022 estimates


<ul type="disc"><li>
A10 Networks (ATEN) is benefiting from service providers and enterprises putting cybersecurity as a priority and in doing so has diversified its customer base. Network breaches have become a headline grabbing event this year, which leads to customers making prevention an urgency.</li></ul> <ul type="disc"><li>ATEN reported third quarter revenue of $65.4 million compared to $56.6 million in the year ago period. The revenue performance exceeded our estimate of $63.1 million as we had been expecting revenue growth to remain subdued since ATEN is undergoing a transition to subscription revenue model.</li></ul> <ul type="disc"><li>ATEN was laying the groundwork for the current performance four quarters ago when the Company changed its sales and marketing strategy.</li></ul> <ul type="disc"><li>ATEN revamped its product offering two years ago with a focus to tailor the business more towards software. The subscription model has resulted in ATEN’s long-term deferred revenue rising to $46.6 million compared to $40.1 million in the year ago period.</li></ul> <ul type="disc"><li>Our price target is now $20 from $17.</li></ul>


A10 Networks (ATEN) is benefiting from service providers and enterprises putting cybersecurity as a priority and in doing so has diversified its customer base. Network breaches have become a headline grabbing event this year, which leads to customers making prevention an urgency. ATEN reported third quarter revenue of $65.4 million compared to $56.6 million in the year ago period. The revenue performance exceeded our estimate of $63.1 million as we had been expecting revenue growth to remain subdued since ATEN is undergoing a transition to subscription revenue model. ATEN was laying the groundwork for the current performance four quarters ago when the Company changed its sales and marketing strategy. ATEN revamped its product offering two years ago with a focus to tailor the business more towards software. The subscription model has resulted in ATEN’s long-term deferred revenue rising to $46.6 million compared to $40.1 million in the year ago period. Our price target is now $20 from $17.

United States

A10 Networks Inc. provides computer networking products and security solutions. The Company offers application networking platforms and security products to streamline technology operations, including cloud and service providers and application delivery solutions. A10 serves customers in various industries worldwide.

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A10 Networks (ATEN US)

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