What A10 Networks (ATEN) Said on Its Q3 Earnings Call

A10 Networks (NYSE:ATEN) raised its 2026 revenue growth outlook after reporting record third-quarter revenue, as demand for networking and security products grew both from its largest customer and across the rest of its business.

The company expects full-year revenue growth of approximately 16%, up from its previous forecast of 12% to 14%. It also set a longer-term target of $500 million in annual revenue through organic growth and $2 in annual non-GAAP earnings per share for fiscal 2029.

President and CEO Dhrupad Trivedi said the higher outlook reflected year-to-date performance, demand visibility and the current supply environment. He said demand from A10’s largest customer remained healthy and stable, while the forecast also implied fourth-quarter year-over-year growth across the rest of the business.

Record Revenue and Higher Profit

Third-quarter revenue rose 22.6% from a year earlier to $91.5 million. For the first nine months of 2026, revenue increased 17.4% to $246.7 million, CFO Michelle Caron said.

Product revenue was $58.5 million, or 64% of the quarterly total, while service revenue was $33 million, or 36%. Caron said security-led revenue continued to drive product growth and represented 65% of total revenue.

On a non-GAAP basis, gross profit reached a record $73.3 million, with a gross margin of 80%. Operating expenses were $47.8 million, and operating margin was 27.8%. Non-GAAP net income was $23.6 million, or $0.31 per diluted share, compared with $0.23 per diluted share a year earlier.

Adjusted earnings before interest, taxes, depreciation and amortization were $29.5 million, or 32% of revenue. Free cash flow reached a quarterly record, Caron said, without providing a quarterly figure on the call. Year-to-date free cash flow rose 18% to $57.5 million.

AI and Security Demand

Trivedi said rising network traffic and the use of artificial intelligence are increasing demand for A10’s networking and security products. He pointed to a Fortune 50 financial services company using A10’s AI Firewall to protect employee access to public AI tools and govern traffic in applications.

Approximately 800 enterprise agentic AI applications at that customer are connected to A10’s GuardRail solution, with roughly 50,000 sessions routed through the solutions each day under customized policies, Trivedi said. He also cited a global information and analytics provider using A10’s AI red-teaming capability to test models and applications for vulnerabilities.

Revenue excluding A10’s largest customer grew at a double-digit rate in the quarter, while revenue in Europe, the Middle East and Africa, and in the Asia-Pacific and Japan region also grew by double-digit percentages, Trivedi said. He told analysts that the business outside the largest customer could support double-digit growth going forward, though supply constraints could require the company to prioritize customers over the next four to six quarters.

Caron said enterprise customers accounted for 58% of third-quarter revenue and about half of revenue over the trailing 12 months. Service provider spending in the Americas had begun to normalize but remained below historical levels, she said.

Outlook and Shareholder Returns

For 2026, A10 expects non-GAAP diluted earnings of $1.08 to $1.10 per share, representing growth of 20% to 22%, and an adjusted EBITDA margin above 30%. The company maintained its expectation for full-year free cash flow of $74 million to $77 million, up from approximately $64 million a year earlier.

A10 ended September with $360.4 million in cash and marketable securities and $157 million in deferred revenue. During the quarter, it paid $4.4 million in dividends and repurchased $23 million of shares. The board approved a quarterly dividend of $0.06 per share, payable Dec. 1 to shareholders of record on Nov. 16.

About A10 Networks (NYSE:ATEN)

A10 Networks, Inc is a cybersecurity and networking company that provides solutions designed to improve the availability, performance, and security of applications and digital services. Its offerings help organizations manage application traffic, protect networks from cyberattacks, and support secure access across data centers, private clouds, public clouds, and hybrid environments.

The company’s portfolio includes application delivery controllers, distributed denial-of-service (DDoS) protection, secure application services, carrier-grade networking solutions, and centralized management and analytics tools.