A10 Networks, Inc.

Good day and welcome to the ATEN Network's third quarter 2019 conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Chris Mimone, Investor Relations. Please go ahead.

Thank you all for joining us today. This call is being recorded and webcast live and may be accessed for one year via the A10 Networks website, atennetworks.com. Members of ATEN's management team joining me today are Lee Chen, founder and CEO, Chris White, EVP of Worldwide Sales, and Tom Constantino, CFO. Before we begin, I would like to remind you that shortly after the market closed today, ATEN Networks issued a press release announcing its third quarter 2019 financial results. Additionally, ATEN published a presentation along with its prepared comments for this call and supplemental trended financial statements. You may access the press release, presentation, prepared remarks, and trended financial statements on the investor relations section of the company's website. During the course of today's call, management will make forward-looking statements, including statements regarding our projections for our future operating results, including our belief that we will see a sequential increase in revenue during the fourth quarter, increased recurring revenue for 2020, our focus on business optimization and overall profitability, including through a reduction in force, our pursuit of potential alternatives to create shareholder value, our CEO succession plan, the capabilities of our sales team, the refining of our marketing engine, our expectations regarding future opportunities and our ability to execute on those opportunities, our commitment to innovation and bringing new solutions to market, our expectations for future market growth and general growth of our business, the development and performance of our products, our current and future strategies, our beliefs relating to our competitive advantages, anticipated customer benefits from the use of our products, our expectations and priorities with respect to 5G, responses to new security threats, our partnerships with technology providers and sales partnerships, and our ability to penetrate certain markets. These statements are based on current expectations and beliefs as of today, October 29, 2019. These forward-looking statements involve a number of risks and uncertainties, some of which are beyond our control that could cause actual results to differ materially, and you should not rely on them as predictions of future events. A10 disclaims any obligation to update information contained in these forward-looking statements, whether as a result of new information, future events, or otherwise. For a more detailed description of these risks and uncertainties, please refer to our most recent 10Q and 10K. Please note that with the exception of revenue, financial measures discussed today are on a non-GAAP basis and have been adjusted to exclude certain charges. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP and may be different from non-GAAP financial measures presented by other companies. A reconciliation between GAAP and non-GAAP measures can be found in the press release issued today and on the trended quarterly financial statements posted on the company's website. We will provide our current expectations for the fourth quarter of 2019 on a non-GAAP basis. However, we are unable to make available a reconciliation of non-GAAP guidance measures to corresponding GAAP measures on a forward-looking basis due to high variability and low visibility with respect to discharges which are excluded from these non-GAAP measures. Now, I'd like to turn the call over to Li Chen, founder and CEO of A10 Networks.

Thank you, Chris, and thank you all for joining us today. We are pleased to deliver results for third quarter that were in line with revenue expectation for scheduled growth, and better than the guidance range for gross margin and operating expenses that we communicated during our previous earnings call. We delivered the revenue of $52.8 million, non-GAAP gross margin of 78.1%, EBITDA of $4 million, and reported two cents of non-GAAP earnings per share. We believe we will see a further uptake in revenue during Q4. We continue to see strong engagement with customers who are adopting our secure application services for multi-cloud and 5G environments. During my recent visit to Japan and Middle East, many of our customers conveyed optimism about the demand for their 5G services and are planning to build out their 5G transport infrastructures over the next several years. Security remains a top concern for our customers, and our differentiated software-driven security solutions continue to gain traction. During Q3, we announced industry-leading innovation with the Cloud Access Proxy, which provides stronger security, better performance, and the enhanced user experience for software asset service SaaS applications, such as Microsoft Office 365. Through our work with Intel, we were recognized with the Winner's Circle Leader's Board Award for 5G security and NFVI innovations. ATAN's 5G security solution continued to drive a number of significant wins during the quarter. Thunder CFW was adopted at SK Telecom for the world's first 5G commercial service, and we stuck sales for hyperscale virtualized carrier-grade NAT services. In the Middle East, we also secured a $1 million-plus 5G design win with mobile operators. Moving now to strategic topic. On our last earning call, we announced both the formation of a strategy committee of the board of directors, as well as a CEO succession plan. This strategy committee continues to evaluate opportunities to maximize shareholder value. Meanwhile, the search committee continues to evaluate CEO candidates. I remain fully committed to my role as CEO of ATAN Networks and will work closely with the team to help ensure a smooth transition to my successor when that time comes. In summary, I have greater confidence in our ability to navigate effectively through a dynamic business environment closing out this year and heading into 2020. I believe we are in a strong position to continue to drive customer engagement and successes around our core strategic security solutions in 5G and multi-cloud. And there's continuing shift underway with respect to our recurring revenue. We are targeting $100 million in recurring high margin maintenance and subscription revenue in 2020s. With that, I would like to turn the call over to Tom to review the details Of all third quarter financial performance and fourth quarter guidance, Tom?