A10 Networks, Inc.

Good afternoon and welcome to the ATEN Network's fourth quarter and year 2019 financial results 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 your telephone keypad. Please note, this event is being recorded. I would now like to turn the conference over to Chris Omoni, Investor Relations for A10 Networks. Please go ahead.

Thanks, Chad, and thank you all for joining us today. This call is being recorded in Webcast Live and may be accessed for one year via the A10 Networks website, atennetworks.com. Members of A10's management team joining me today are Drupad Trivedi, President and CEO, 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 fourth quarter 2019 financial results. Additionally, ATEN published a presentation and supplemental trended financial statements. You may access the press release, presentation, 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, our focus on driving organic growth, business optimization and overall profitability, the strength and capabilities of our talent base, our unique position to help our customers, our belief that we can continue to build upon customer momentum going forward, 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 the 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 use of our products, our expectations and priorities with respect to 5G, and our investment in our product roadmap and channel partnerships in our enterprise vertical. These statements are based on current expectations and beliefs as of today, February 11, 2020. 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 results. 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 first quarter of 2020 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 the charters which are excluded from these non-GAAP measures. Now, I would like to turn the call over to Drupal Trivedi, President and CEO of 810 Networks.

Thank you, Chris, and thank you all for joining today. I am thrilled to join ATEN Networks at an exciting time for the business. ATEN occupies an attractive area within networking and security as companies increasingly focus on delivering business outcomes while managing the operational complexities from proliferation of IoT, shift to hybrid cloud environments, and ever-increasing complexity of the cybersecurity landscape. Service providers around the world also face the same challenges while getting ready for 5G technology to support many of these consumption trends. Based on our legacy, A10 is well positioned to help our customers address these emerging themes. We deeply understand their applications and have a strong talent base to support them through these digital transformations. 8N services a loyal and enviable customer base who are industry leaders, and we are committed to enabling the success of our customers. We are pleased to report fourth quarter revenue of $60.3 million, which represents 14% sequential growth. For the full year, 8N reported $212.6 million in total revenue, recurring revenue increased from $91 million in 2018 to $95 million in 2019. In Q4, the revenue strength was driven by solid quarter-over-quarter growth in all of our main geographic regions. We saw the most strength from our service provider clients in Japan, South Korea, and the Middle East, who are the furthest along in supporting 5G rollouts. In addition to driving organic growth, the management team is focused on operational excellence to drive profitability as we grow the business. We finished the fourth quarter with our highest ever adjusted EBITDA of $10 million, beating our guidance range and representing an improvement of 105% over the prior year quarter. This resulted in non-gap earnings of 10 cents per share during the fourth quarter, also above the high end of our guidance range. Tom will give further detail on our financial performance during his remarks. Q4 marked continued momentum in the market surrounding 5G-related opportunities. We announced our Orion 5G Security Suite, which brings our customers an integrated version of the highest performing network security, scalability, agility, and analytics. This solution is directly helping our customers deploy 5G or get ready for it with their existing 4G networks efficiently. The 8N solution, virtual or physical, results in lower latency, larger scale, higher reliability, and lower total cost of ownership. We are pleased with the level of customer interest in this offering, building upon our leadership in deploying high-performing, secure 5G networks for our service provider clients in South Korea, Japan, and Middle East. We begin 2020 with more than 10 active 5G deployments around the world. While we are encouraged by this level of activity, it is important to remember what a massive undertaking it is for service providers to execute their 5G rollouts. And supporting those deployments takes considerable time, capex budgets, and technical effort to fully materialize. In Q4, we benefited from a sizable order from our largest web giant customer in North America. While we continue to have a strong market position with all of our existing WebGiant customers, we are also dependent on their investment cycles, which can last multiple years and result in variable demand levels. Our enterprise vertical continues to improve with focus on enhancing commercial execution. Our install base is strong. We entered 2020 supporting over 50,000 installations with over 500,000 apps running on 8N technology. We are a top three ADC supplier and see meaningful growth opportunities as our install base moves to multi-cloud infrastructures. We also continue to invest in the product roadmap and channel partnerships that will further enhance execution in this space. We added a total of 840 new customers in 2019 and believe that we can continue to build upon that momentum going forward with strong focus on improving execution in all areas. To that end, I'm proud to be able to highlight some signature recent wins. First, a large mobile network operator and repeat A10 customer in South Korea selected A10 for its GI land solution supporting secure 5G services and network address translation in its core network operation center and mobile edge cloud covering approximately 7 million subscribers by the end of 2020. Second, a major airline in Latin America selected ATAN's virtual ADC software technology and management platform to support its migration of workloads to the Oracle Cloud Infrastructure and to help manage a multi-cloud network environment for air-to-earth communications. ATAN was selected because of its certification as an Oracle Cloud Infrastructure Partner and its ability to achieve the rigorous performance requirements. As we begin 2020, we have a strong product roadmap and focus on commercial execution to build upon our install base, as well as add new customers. Service providers and enterprise customers are addressing different business goals, and we will continue to adapt our solutions and expertise to help them win. Tom, over to you.