A10 Networks, Inc.

Good afternoon. Welcome to APEN Network's third quarter 2020 financial results conference call. Our participants will be in listen-only mode. Should you need assistance, please signal the conference specialist by pressing star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please know that this event is being recorded. I would now like to turn the conference over to Rob Fink. Please go ahead.

Thank you, Operator, and thank you all for joining us today. Today's call is being hosted by ATEM's management team, TruPed Trivedi, President and CEO, and Brian Becker, Interim CFO. Before we begin, I'd like to remind you that shortly after the market closed today, ATEM Networks issued a press release announcing its third quarter 2020 financial results. Additionally, ATEN published a presentation and supplemental trended financial statement. You may access the press release presentation and trended financial statement 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 regarded to projections for future operating results, continued reductions in operating expenses, continued efforts to improve operational efficiency, focus on driving growth, business optimization, and overall profitability, our belief that we can continue to build upon customer momentum going forward, expectations regarding future opportunities, and the ability to execute on those opportunities, the expectations for future market growth and the general growth of business, the development and performance of its products, and anticipated customer benefits from use of products and expectations and priorities with respect to 5G. These statements are based on current expectations and beliefs as of today, October 27, 2020. These forward-looking statements involve a number of risks and uncertainties, some of which are beyond the company's control, such as the potential impact of COVID-19 on its business and operations that could cause actual results to differ materially, and you should not rely on them as predictions for future events. 810 does not intend 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 the company's 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 include 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 they 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. With all that said, I'd like to turn the call over to Drupad Trivedi, President and CEO of ATEM Networks. Drupad, the call is yours.

Thank you, Rob, and thank you all for joining us today. This quarter was, I think, the culmination of our business transformation to date. It has been approximately one year since I joined ATEN as the CEO. In the first quarter after my appointment in Q4 2019, ATEN reported negative organic growth and roughly break children's operating income with operating expenses of $46.8 million on a gap basis, inclusive of $2.5 million of restructuring expenses. As a company, we have significantly revamped the growth potential and earning power by reducing annual operating expenses by 23.3 million and reallocating resources to the best market opportunities. This, combined with improved commercial execution and focus on business outcomes for our customers, positions us for sustained performance into the future. An evolving number of new routes to market with focus on solution selling will allow us to reach broader set of customers efficiently and in line with market tailwinds. This quarter, we reported our third consecutive quarter of greater than 6% organic growth in spite of COVID-19 headwinds. We accomplished this while simultaneously cutting costs. In fact, our operating expense baseline is between $34 and $35 million on a non-GAAP basis, reflecting an approximate 25% reduction in our steady-state cost structure over the past two years, enabling improved and record profitability. I think it's important to take a step back and look at the progress we have made to establish an efficient, profitable organization. Today, ATEN is on a much more solid footing. We generated 10 million in operating income in the third quarter, 12.5 million in adjusted EBITDA, and 10 million in net income. We have a strong balance sheet with 159.1 million in cash and consistent growing profitability. Effectively, we have removed significant risk from our model and position ATEN for long-term sustainable growth building upon our long history. And with our strong consistent free cash flow, we are positioned to implement an aggressive share repurchase plan. Networks across the globe are being stressed with unprecedented usage and increasing demand for bandwidth capacity underscoring the need for critical communications infrastructure combined with the ability to navigate ever-increasing volume and sophistication of cyber attacks. The macro tailwinds of cloud computing, Internet of Things, growth in data, and convergence of networks directly align with our value proposition to customers and enables them to achieve better ROI, security, and flexibility, thereby positioning them to deliver better service levels to their customers. Many of our customers are looking for solutions that help them manage their existing infrastructure while they continue to migrate parts of their infrastructure to the cloud. Our solutions are now tailored to support them to achieve their business goals in an on-prem, cloud, or hybrid environment. This provides investment protection as well as a much more flexible approach to navigating uncertain times. Increasingly, we are winning business with a differentiated solutions-based approach. ATEN is an enabler of technology and solutions that facilitate secure network expansion and added capacity. We offer multiple product capabilities unified by a common management and analytics platform, which ultimately helps customers with best-in-class features combined with reduced operating complexities. This is especially valuable while they are also dealing with rapidly changing budget priorities and addressing skill gaps in areas like cybersecurity. Another risk mitigating for our business transformation is diversification. We have always had significant geographic diversity, a competitive advantage and strategic differentiator with roughly half of our business in regions outside of United States. We have diversity in our end market verticals with exposure to cloud providers, service providers, large enterprise, and mid-enterprise customers. During Q3, demand in Japan improved as expected after a strong COVID-19 impact in Q2. Like most companies, we saw headwinds in the Americas related to delays and push-outs resulting from the pandemic. Once again, this mix demonstrated the importance of geographic diversity. As a result, our operating results in Q3 were generally in line with expectations, with solid growth and improving profitability as we continue to navigate a rapidly changing economic environment. The environment remains highly fluid, with sales cycles elongated by the COVID-19 pandemic and the timing of projects varying due to process delays at customers and business lockdown, while ATEN continues to execute. Overall Q3 revenue was $56.6 million, up 7.1% year-over-year. This growth combined with continued focus on productivity yielded record GAAP net income of $6.5 million and record adjusted EBITDA of $12.5 million. With that, I'd like to welcome and turn the call over to Brian Becker, Brian has served as our Vice President of Finance and Corporate Controller for two years, and he was appointed Interim CFO in September. Brian?