A10 Networks, Inc. Q4 FY2025 earnings call

• A10 Networks reported record quarterly and full-year revenue. Fourth quarter revenue was $80.4 million, the largest single quarter ever, with an 8.3% year-over-year increase. Full-year 2025 revenue was $290.6 million, up 11% year over year.
• Security-led solutions were sustainably at 65% of total revenue in Q4 and 72% for the full year 2025, reflecting the importance of security and encrypted traffic.
• Closed wins with a large global data and analytics software provider and a large global airline. The data and analytics provider was dealing with rising encrypted traffic, and A10 was selected for its high-performance solutions. The airline aimed to improve automation and reduce costs, and A10 provided cybersecurity and next-generation networking solutions.
• Invested in R&D, focusing on accelerating AI-related solutions and integrating AI across offerings.
• Non-GAAP gross margin was 80.8% in Q4 and 80.6% for the full year. Adjusted EBITDA for the full year was $86 million, 29.6% of revenue.

Fourth quarter 2025 revenue was $80.4 million, an 8.3% year-over-year increase. Product revenue accounted for 61% of total revenue, and service revenue was 39%. Security-led solutions exceeded 65% of total revenue in Q4. For the full year 2025, revenue reached $290.6 million, up 11% year over year. Security-led solutions made up 72% of total revenue. The Americas region was 64% of global revenue in Q4, with a 30% year-over-year growth. EMEA had a 12% year-over-year growth, while APJ declined due to macroeconomic headwinds such as low GDP growth, persistent inflation, and tariff concerns.

• For 2026, expect full-year top and bottom-line growth, with revenue growth of 10% to 12% over 2025 levels.
• Non-GAAP gross margin is expected to be in line with historical trends and within the 82% goal while navigating input cost pressures.
• Expect to expand net and EBITDA margins and have EPS growth exceed revenue growth.

• Macro-related headwinds such as persistent inflation and the threat of tariffs in some regions.
• Supply environment impacts, including challenges in the memory segment, although A10 has proactive supply management processes in place to mitigate potential impacts.

Q: Gray Powell asked about the sustainability of service provider growth and how AI drives traffic.

A: Dhrupad Trivedi said service provider growth improvement came from cloud-oriented companies and traditional telcos investing in security and network capacity. AI drives traffic, but it's early to quantify the impact on refresh cycles.

Q: Anja Soderstrom inquired about what caused the Q4 outperformance and CapEx spend.

A: Dhrupad Trivedi mentioned better-than-expected service provider spending, growth from new large enterprise customers, and AI infrastructure investment driving CapEx.

Q: Hamed Khorsand asked about guidance visibility and APJ performance.

A: Dhrupad Trivedi said guidance is based on diversified exposure across markets, and APJ's decline was mainly due to macro headwinds in Japan.

Q: Michael Romanelli asked about enterprise growth and new customer sign-ups.

A: Dhrupad Trivedi stated enterprise growth is TTM focused, and new customers are large enterprises operating complex networks.

Q: Hendi Susanto asked about AI categories and Agentic AI.

A: Dhrupad Trivedi discussed AI driving growth in capacity, security, and modernization, and Agentic AI is early with customers focusing on using AI for business goals.