A10 Networks (ATEN) Financials

A10 Networks Q2 2025 Financial Highlights:

• Operating revenue reached $69.38 million, showing stability compared to recent quarters.
• Gross profit improved to $54.7 million, indicating effective management of cost of revenue ($14.67 million).
• Net income was $10.54 million, translating into basic earnings per share of $0.15 and diluted EPS of $0.14.
• Operating expenses were relatively high at $44.4 million, driven by marketing ($20.96 million) and R&D ($16.26 million), reflecting continued investment in growth and innovation.
• Strong cash and equivalents position at $252.9 million with additional short-term investments of $114.5 million, supporting liquidity.
• Total liabilities stand at $403.9 million, with significant long-term debt of $218.1 million which could impact financial flexibility.

Trend Analysis over Last Four Years:

• Revenue showed growth from approximately $57.7 million in Q1 2023 to $69.4 million in Q2 2025, indicating steady top-line expansion over the period.
• Gross profit consistently increased from about $47.4 million in early 2023 to over $54.7 million in Q2 2025, supporting improved profitability despite increasing operating costs.
• Operating expenses have grown substantially, with sales, general & administrative, marketing, and R&D expenses rising, which pressures margins and operating income (e.g., operating income was $8.8 million in Q1 2024 and $10.3 million in Q2 2025, fluctuating but not growing proportionally with expenses).
• Net income has been variable but generally positive, with a range from $3.96 million in early 2023 to over $10 million in recent quarters, suggesting improving earnings power but some volatility.
• Net cash from operating activities has fluctuated, including negative cash flow in Q1 2023 (-$846,000), reflecting some operational and working capital challenges.
• Significant capital expenditures and investments have been ongoing, consistent with growth and modernization initiatives.
• Strong repurchases of common equity and dividends indicate returning capital to shareholders, but also reduce cash reserves and potentially limit reinvestment capacity.
• A10 Networks maintains substantial liquidity, with cash plus short-term investments generally above $150 million across recent quarters.
• The company carries considerable debt, with long-term debt around $217-218 million in recent periods, which requires monitoring for refinancing and interest expense risks.
• Book equity remains healthy, around $200 million most recently, providing a solid equity cushion relative to total assets ($608 million in Q2 2025).

Summary: A10 Networks has demonstrated steady revenue and gross profit growth over the past few years, supported by investment in R&D and marketing expenses. The company maintains a strong liquidity buffer but faces rising operating costs and significant debt load, which could impact future margins and financial flexibility. Earnings have improved recently, indicating potential for continued profitability enhancements. Investors should monitor the company's ability to control expenses while sustaining growth and managing debt.