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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-1446869
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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3 West Plumeria Drive
San Jose, California
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95134
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(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer
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¨
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Accelerated filer
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¨
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||||
Non-accelerated filer
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x
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(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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A10 Networks, Inc.
Quarterly Report on Form 10-Q
For the Three And Six Months Ended June 30, 2015
TABLE OF CONTENTS
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Page
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June 30,
2015 |
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December 31,
2014 |
||||
ASSETS
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|||||||
Current Assets:
|
|
|
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||||
Cash and cash equivalents
|
$
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96,197
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$
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91,905
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Accounts receivable, net of allowances of $2,519 and $3,246 as of June 30, 2015 and December 31, 2014
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46,165
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54,003
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Inventory
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17,653
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20,701
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Prepaid expenses and other current assets
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5,031
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4,732
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Total current assets
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165,046
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171,341
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Property and equipment, net
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9,253
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10,780
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Other long-term assets
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4,484
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4,859
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Total Assets
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$
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178,783
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$
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186,980
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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|||||||
Current Liabilities:
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||||
Accounts payable
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$
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6,089
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$
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8,994
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Accrued liabilities
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20,897
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22,435
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||
Deferred revenue, current
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45,271
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39,256
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Total current liabilities
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72,257
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70,685
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Deferred revenue, non-current
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20,508
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17,964
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|
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Other non-current liabilities
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1,425
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1,766
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|
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Total Liabilities
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94,190
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90,415
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|
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Commitments and contingencies (Note 5)
|
|
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||||
Stockholders' Equity:
|
|||||||
Common stock, par value $0.00001 — 500,000 shares authorized as of June 30, 2015 and December 31, 2014; 62,397 and 61,377 shares issued and outstanding as of June 30, 2015 and December 31, 2014
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1
|
|
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1
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|
||
Additional paid-in capital
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290,088
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278,349
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Accumulated deficit
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(205,496
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)
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(181,785
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)
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Total Stockholders' Equity
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84,593
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96,565
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|
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Total Liabilities And Stockholders' Equity
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$
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178,783
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$
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186,980
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Three Months Ended
June 30, |
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Six Months Ended
June 30, |
||||||||||||
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2015
|
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2014
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2015
|
|
2014
|
||||||||
Revenue:
|
|
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||||
Products
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$
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33,331
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$
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34,122
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$
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63,847
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$
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70,539
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Services
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14,205
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11,010
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27,706
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20,338
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||||
Total revenue
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47,536
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45,132
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91,553
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|
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90,877
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|
||||
Cost of revenue:
|
|
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|
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||||
Products
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7,909
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|
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7,410
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14,972
|
|
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14,837
|
|
||||
Services
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3,692
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2,930
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7,415
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5,556
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||||
Total cost of revenue
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11,601
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10,340
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22,387
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20,393
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|
||||
Gross profit
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35,935
|
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34,792
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69,166
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70,484
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|
||||
Operating expenses:
|
|
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||||
Sales and marketing
|
24,962
|
|
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23,975
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|
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49,484
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|
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45,538
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|
||||
Research and development
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13,671
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|
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11,869
|
|
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27,980
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|
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23,074
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|
||||
General and administrative
|
5,703
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|
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5,531
|
|
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13,230
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|
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10,894
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|
||||
Litigation expense (benefit)
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1,025
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(5,859
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)
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1,470
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(4,013
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)
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||||
Total operating expenses
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45,361
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35,516
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92,164
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75,493
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|
||||
Loss from operations
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(9,426
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)
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(724
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)
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(22,998
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)
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(5,009
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)
|
||||
Other income (expense), net:
|
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|
|
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||||
Interest expense
|
(104
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)
|
|
(125
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)
|
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(231
|
)
|
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(712
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)
|
||||
Interest income and other income (expense), net
|
(216
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)
|
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(138
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)
|
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(189
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)
|
|
(163
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)
|
||||
Total other income (expense), net
|
(320
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)
|
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(263
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)
|
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(420
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)
|
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(875
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)
|
||||
Loss before provision for income taxes
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(9,746
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)
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(987
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)
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(23,418
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)
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(5,884
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)
|
||||
Provision for income taxes
|
231
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|
|
309
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|
|
293
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|
|
514
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|
||||
Net loss
|
(9,977
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)
|
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(1,296
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)
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(23,711
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)
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(6,398
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)
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||||
Accretion of redeemable convertible preferred stock dividend
|
—
|
|
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—
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|
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—
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|
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(1,150
|
)
|
||||
Net loss attributable to common stockholders
|
$
|
(9,977
|
)
|
|
$
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(1,296
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)
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$
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(23,711
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)
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$
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(7,548
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)
|
Net loss per share attributable to common stockholders:
|
|
|
|
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|
|
|
|
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|
||||
Basic
|
$
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(0.16
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)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.38
|
)
|
|
$
|
(0.21
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)
|
Diluted
|
$
|
(0.16
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.38
|
)
|
|
$
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(0.21
|
)
|
Weighted-average shares used in computing net loss per share attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
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|
||||
Basic
|
61,945
|
|
|
59,711
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|
|
61,690
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|
|
36,712
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|
||||
Diluted
|
61,945
|
|
|
59,711
|
|
|
61,690
|
|
|
36,712
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|
|
Six Months Ended
June 30, |
||||||
|
2015
|
|
2014
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net loss
|
$
|
(23,711
|
)
|
|
(6,398
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
4,673
|
|
|
4,738
|
|
||
Stock-based compensation
|
8,638
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|
|
4,776
|
|
||
Gain on settlement of contractual liability
|
—
|
|
|
(6,993
|
)
|
||
Other non cash items
|
273
|
|
|
(61
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable, net
|
7,723
|
|
|
(2,644
|
)
|
||
Inventory
|
1,861
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|
|
(4,265
|
)
|
||
Prepaid expenses and other assets
|
44
|
|
|
(2,860
|
)
|
||
Accounts payable
|
(3,048
|
)
|
|
2,105
|
|
||
Accrued liabilities
|
(1,619
|
)
|
|
3,632
|
|
||
Accrued litigation expenses
|
60
|
|
|
(6,119
|
)
|
||
Deferred revenue
|
8,559
|
|
|
4,610
|
|
||
Other
|
24
|
|
|
(239
|
)
|
||
Net cash provided by (used in) operating activities
|
3,477
|
|
|
(9,718
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Purchases of property and equipment
|
(1,811
|
)
|
|
(3,791
|
)
|
||
Net cash used in investing activities
|
(1,811
|
)
|
|
(3,791
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from issuance of common stock under employee equity incentive plans, net of repurchases
|
2,626
|
|
|
2,658
|
|
||
Proceeds from initial public offering, net of offering costs
|
—
|
|
|
122,312
|
|
||
Principal payments on revolving credit facility
|
—
|
|
|
(20,000
|
)
|
||
Other
|
—
|
|
|
(153
|
)
|
||
Net cash provided by financing activities
|
2,626
|
|
|
104,817
|
|
||
Net increase in cash and cash equivalents
|
4,292
|
|
|
91,308
|
|
||
Cash and cash equivalents—beginning of period
|
91,905
|
|
|
20,793
|
|
||
Cash and cash equivalents—end of period
|
$
|
96,197
|
|
|
$
|
112,101
|
|
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
|
|
|
|
|
|
||
Inventory transfers to property and equipment
|
$
|
1,187
|
|
|
$
|
2,891
|
|
Costs related to the initial public offering included in accounts payable and accrued liabilities
|
$
|
—
|
|
|
$
|
1,424
|
|
Accretion of Series D redeemable convertible preferred stock
|
$
|
—
|
|
|
$
|
1,150
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||
Customers
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Customer A
|
|
*
|
|
*
|
|
*
|
|
14%
|
Customer B
|
|
*
|
|
*
|
|
*
|
|
10%
|
Customer C
|
|
*
|
|
10%
|
|
*
|
|
*
|
Customer D
|
|
14%
|
|
*
|
|
*
|
|
*
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||
|
Level I
|
|
Total
|
|
Level I
|
|
Total
|
||||||||
Financial Assets
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
41,062
|
|
|
$
|
41,062
|
|
|
$
|
51,047
|
|
|
$
|
51,047
|
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
Raw materials
|
$
|
7,807
|
|
|
$
|
9,922
|
|
Finished goods
|
9,846
|
|
|
10,779
|
|
||
Total inventory
|
$
|
17,653
|
|
|
$
|
20,701
|
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
Equipment
|
$
|
32,800
|
|
|
$
|
30,486
|
|
Software
|
3,415
|
|
|
3,197
|
|
||
Furniture and fixtures
|
862
|
|
|
860
|
|
||
Leasehold improvements
|
2,270
|
|
|
1,780
|
|
||
Construction in progress
|
94
|
|
|
201
|
|
||
Property and equipment, gross
|
39,441
|
|
|
36,524
|
|
||
Less: accumulated depreciation and amortization
|
(30,188
|
)
|
|
(25,744
|
)
|
||
Total property and equipment, net
|
$
|
9,253
|
|
|
$
|
10,780
|
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
Deferred revenue:
|
|
|
|
||||
Products
|
$
|
4,529
|
|
|
$
|
2,379
|
|
Services
|
61,250
|
|
|
54,841
|
|
||
Total deferred revenue
|
65,779
|
|
|
57,220
|
|
||
Less: current portion
|
(45,271
|
)
|
|
(39,256
|
)
|
||
Long-term portion
|
$
|
20,508
|
|
|
$
|
17,964
|
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
Accrued compensation and benefits
|
$
|
13,677
|
|
|
$
|
14,447
|
|
Accrued tax liabilities
|
3,162
|
|
|
2,554
|
|
||
Other
|
4,058
|
|
|
5,434
|
|
||
Total accrued liabilities
|
$
|
20,897
|
|
|
$
|
22,435
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Stock-based compensation by type of award:
|
|
|
|
|
|
|
|
||||||||
Stock options
|
$
|
1,503
|
|
|
$
|
1,712
|
|
|
$
|
2,979
|
|
|
$
|
3,397
|
|
Restricted stock units
|
2,130
|
|
|
36
|
|
|
4,065
|
|
|
36
|
|
||||
Employee stock purchase plan
|
372
|
|
|
1,258
|
|
|
1,594
|
|
|
1,343
|
|
||||
Total stock-based compensation
|
$
|
4,005
|
|
|
$
|
3,006
|
|
|
$
|
8,638
|
|
|
$
|
4,776
|
|
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation by category of expense:
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
$
|
342
|
|
|
$
|
216
|
|
|
$
|
813
|
|
|
$
|
301
|
|
Sales and marketing
|
1,873
|
|
|
1,457
|
|
|
3,939
|
|
|
2,341
|
|
||||
Research and development
|
1,273
|
|
|
944
|
|
|
2,858
|
|
|
1,407
|
|
||||
General and administrative
|
517
|
|
|
389
|
|
|
1,028
|
|
|
727
|
|
||||
|
$
|
4,005
|
|
|
$
|
3,006
|
|
|
$
|
8,638
|
|
|
$
|
4,776
|
|
|
Number of Shares Underlying Outstanding Options
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value
|
|||||
Outstanding as of December 31, 2014
|
11,084
|
|
|
$
|
5.18
|
|
|
7.9
|
|
|
||
Granted
|
408
|
|
|
$
|
4.84
|
|
|
|
|
|
|
|
Exercised
|
(370
|
)
|
|
$
|
2.59
|
|
|
|
|
|
|
|
Canceled (1)
|
(702
|
)
|
|
$
|
7.51
|
|
|
|
|
|
|
|
Outstanding as of June 30, 2015
|
10,420
|
|
|
$
|
5.10
|
|
|
7.6
|
|
$
|
21,583
|
|
Vested and expected to vest as of June 30, 2015
|
9,927
|
|
|
$
|
5.06
|
|
|
7.5
|
|
$
|
20,871
|
|
Vested and exercisable as of June 30, 2015
|
5,358
|
|
|
$
|
4.14
|
|
|
6.3
|
|
$
|
15,136
|
|
|
Six Months Ended
June 30,
|
||||||
|
2015
|
|
2014
|
||||
Total fair value of options granted
|
$
|
869
|
|
|
$
|
7,536
|
|
Weighted average fair value of options granted
|
$
|
2.13
|
|
|
$
|
5.96
|
|
Intrinsic value of options exercised
|
$
|
1,066
|
|
|
$
|
8,818
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Expected term (in years)
|
4.8
|
|
5.5
|
|
4.8
|
|
5.5
|
Risk-free interest rate
|
1.71%
|
|
1.73%
|
|
1.60%
|
|
1.73%
|
Expected volatility
|
50%
|
|
45%
|
|
50%
|
|
47%
|
Dividend rate
|
—%
|
|
—%
|
|
—%
|
|
—%
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Weighted Average Remaining Contractual Life (in years)
|
|
Aggregated Intrinsic Value
|
|||||
Outstanding as of December 31, 2014
|
2,388
|
|
|
$
|
8.97
|
|
|
|
|
|
||
Granted
|
936
|
|
|
$
|
5.20
|
|
|
|
|
|
||
Released
|
(50
|
)
|
|
$
|
12.05
|
|
|
|
|
|
||
Canceled
|
(283
|
)
|
|
$
|
9.33
|
|
|
|
|
|
||
Outstanding as of June 30, 2015
|
2,991
|
|
|
$
|
7.70
|
|
|
2.5
|
|
$
|
19,263
|
|
|
Three and Six Months Ended
June 30,
|
||
|
2015
|
|
2014
|
Expected term (in years)
|
1.2
|
|
1.4
|
Risk-free interest rate
|
0.32%
|
|
0.24%
|
Expected volatility
|
40%
|
|
31%
|
Dividend rate
|
—%
|
|
—%
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Basic and diluted net loss per share attributable to common stockholders
|
|
|
|
|
|
|
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net loss attributable to common stockholders
|
$
|
(9,977
|
)
|
|
$
|
(1,296
|
)
|
|
$
|
(23,711
|
)
|
|
$
|
(7,548
|
)
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding - basic
|
61,945
|
|
|
59,711
|
|
|
61,690
|
|
|
36,712
|
|
||||
Effect of dilutive potential common shares from stock options and restricted stock units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Weighted-average shares outstanding - diluted
|
61,945
|
|
|
59,711
|
|
|
61,690
|
|
|
36,712
|
|
||||
Net loss per share attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
$
|
(0.16
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.38
|
)
|
|
$
|
(0.21
|
)
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30, |
||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Stock options, restricted stock units and employee stock purchase plan
|
11,058
|
|
|
9,994
|
|
|
11,063
|
|
|
9,965
|
|
Common stock subject to repurchase
|
90
|
|
|
311
|
|
|
90
|
|
|
311
|
|
|
11,148
|
|
|
10,305
|
|
|
11,153
|
|
|
10,276
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
United States
|
$
|
27,448
|
|
|
$
|
26,215
|
|
|
$
|
50,306
|
|
|
$
|
44,428
|
|
Japan
|
6,618
|
|
|
8,471
|
|
|
15,458
|
|
|
25,775
|
|
||||
Asia Pacific, excluding Japan
|
5,545
|
|
|
4,370
|
|
|
10,131
|
|
|
8,675
|
|
||||
EMEA
|
6,831
|
|
|
3,925
|
|
|
13,055
|
|
|
8,065
|
|
||||
Other
|
1,094
|
|
|
2,151
|
|
|
2,603
|
|
|
3,934
|
|
||||
Total revenue
|
$
|
47,536
|
|
|
$
|
45,132
|
|
|
$
|
91,553
|
|
|
$
|
90,877
|
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
United States
|
$
|
8,290
|
|
|
$
|
9,702
|
|
Asia Pacific, excluding Japan
|
1,872
|
|
|
1,724
|
|
||
Other
|
265
|
|
|
351
|
|
||
Total property and equipment, net and intangible assets, net
|
$
|
10,427
|
|
|
$
|
11,777
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
our ability to maintain an adequate rate of revenue growth;
|
•
|
our business plan and our ability to effectively manage our growth;
|
•
|
costs associated with defending intellectual property infringement and other claims;
|
•
|
our ability to attract and retain end-customers;
|
•
|
our ability to further penetrate our existing customer base;
|
•
|
our ability to displace existing products in established markets;
|
•
|
our ability to expand our leadership position in next-generation application delivery and server load balancing solutions;
|
•
|
our ability to timely and effectively scale and adapt our existing technology;
|
•
|
our ability to innovate new products and bring them to market in a timely manner;
|
•
|
our ability to expand internationally;
|
•
|
the effects of increased competition in our market and our ability to compete effectively;
|
•
|
the effects of seasonal trends on our results of operations;
|
•
|
our expectations concerning relationships with third parties;
|
•
|
the attraction and retention of qualified employees and key personnel;
|
•
|
our ability to maintain, protect, and enhance our brand and intellectual property; and
|
•
|
future acquisitions of or investments in complementary companies, products, services or technologies.
|
|
Three Months Ended
June 30,
|
|
|
|
|
|||||||||||||||
|
2015
|
|
2014
|
|
Increase (Decrease)
|
|||||||||||||||
|
Amount
|
|
Percent of Total Revenue
|
|
Amount
|
|
Percent of Total Revenue
|
|
Amount
|
|
Percent
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Products
|
$
|
33,331
|
|
|
70.1
|
%
|
|
$
|
34,122
|
|
|
75.6
|
%
|
|
$
|
(791
|
)
|
|
(2.3
|
)%
|
Services
|
14,205
|
|
|
29.9
|
|
|
11,010
|
|
|
24.4
|
|
|
3,195
|
|
|
29.0
|
|
|||
Total revenue
|
47,536
|
|
|
100.0
|
|
|
45,132
|
|
|
100.0
|
|
|
2,404
|
|
|
5.3
|
|
|||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Products
|
7,909
|
|
|
16.6
|
|
|
7,410
|
|
|
16.4
|
|
|
499
|
|
|
6.7
|
|
|||
Services
|
3,692
|
|
|
7.8
|
|
|
2,930
|
|
|
6.5
|
|
|
762
|
|
|
26.0
|
|
|||
Total cost of revenue
|
11,601
|
|
|
24.4
|
|
|
10,340
|
|
|
22.9
|
|
|
1,261
|
|
|
12.2
|
|
|||
Gross profit
|
35,935
|
|
|
75.6
|
|
|
34,792
|
|
|
77.1
|
|
|
1,143
|
|
|
3.3
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Sales and marketing
|
24,962
|
|
|
52.5
|
|
|
23,975
|
|
|
53.1
|
|
|
987
|
|
|
4.1
|
|
|||
Research and development
|
13,671
|
|
|
28.8
|
|
|
11,869
|
|
|
26.3
|
|
|
1,802
|
|
|
15.2
|
|
|||
General and administrative
|
5,703
|
|
|
12.0
|
|
|
5,531
|
|
|
12.3
|
|
|
172
|
|
|
3.1
|
|
|||
Litigation expense (benefit)
|
1,025
|
|
|
2.2
|
|
|
(5,859
|
)
|
|
(13.0
|
)
|
|
6,884
|
|
|
(117.5
|
)
|
|||
Total operating expenses
|
45,361
|
|
|
95.4
|
|
|
35,516
|
|
|
78.7
|
|
|
9,845
|
|
|
27.7
|
|
|||
Loss from operations
|
(9,426
|
)
|
|
(19.8
|
)
|
|
(724
|
)
|
|
(1.6
|
)
|
|
(8,702
|
)
|
|
1,201.9
|
|
|||
Other income (expense), net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
(104
|
)
|
|
(0.2
|
)
|
|
(125
|
)
|
|
(0.3
|
)
|
|
21
|
|
|
(16.8
|
)
|
|||
Interest income and other income (expense), net
|
(216
|
)
|
|
(0.5
|
)
|
|
(138
|
)
|
|
(0.3
|
)
|
|
(78
|
)
|
|
56.5
|
|
|||
Total other income (expense), net
|
(320
|
)
|
|
(0.7
|
)
|
|
(263
|
)
|
|
(0.6
|
)
|
|
(57
|
)
|
|
21.7
|
|
|||
Loss before provision for income taxes
|
(9,746
|
)
|
|
(20.5
|
)
|
|
(987
|
)
|
|
(2.2
|
)
|
|
(8,759
|
)
|
|
887.4
|
|
|||
Provision for income taxes
|
231
|
|
|
0.5
|
|
|
309
|
|
|
0.7
|
|
|
(78
|
)
|
|
(25.2
|
)
|
|||
Net loss
|
$
|
(9,977
|
)
|
|
(21.0
|
)%
|
|
$
|
(1,296
|
)
|
|
(2.9
|
)%
|
|
$
|
(8,681
|
)
|
|
669.8
|
%
|
|
Six Months Ended
June 30, |
|
|
|
|
|||||||||||||||
|
2015
|
|
2014
|
|
Increase (Decrease)
|
|||||||||||||||
|
Amount
|
|
Percent of Total Revenue
|
|
Amount
|
|
Percent of Total Revenue
|
|
Amount
|
|
Percent
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Products
|
$
|
63,847
|
|
|
69.7
|
%
|
|
$
|
70,539
|
|
|
77.6
|
%
|
|
$
|
(6,692
|
)
|
|
(9.5
|
)%
|
Services
|
27,706
|
|
|
30.3
|
|
|
20,338
|
|
|
22.4
|
|
|
7,368
|
|
|
36.2
|
|
|||
Total revenue
|
91,553
|
|
|
100.0
|
|
|
90,877
|
|
|
100.0
|
|
|
676
|
|
|
0.7
|
|
|||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Products
|
14,972
|
|
|
16.4
|
|
|
14,837
|
|
|
16.4
|
|
|
135
|
|
|
0.9
|
|
|||
Services
|
7,415
|
|
|
8.1
|
|
|
5,556
|
|
|
6.1
|
|
|
1,859
|
|
|
33.5
|
|
|||
Total cost of revenue
|
22,387
|
|
|
24.5
|
|
|
20,393
|
|
|
22.4
|
|
|
1,994
|
|
|
9.8
|
|
|||
Gross profit
|
69,166
|
|
|
75.5
|
|
|
70,484
|
|
|
77.6
|
|
|
(1,318
|
)
|
|
(1.9
|
)
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Sales and marketing
|
49,484
|
|
|
54.0
|
|
|
45,538
|
|
|
50.1
|
|
|
3,946
|
|
|
8.7
|
|
|||
Research and development
|
27,980
|
|
|
30.6
|
|
|
23,074
|
|
|
25.4
|
|
|
4,906
|
|
|
21.3
|
|
|||
General and administrative
|
13,230
|
|
|
14.5
|
|
|
10,894
|
|
|
12.0
|
|
|
2,336
|
|
|
21.4
|
|
|||
Litigation expense (benefit)
|
1,470
|
|
|
1.6
|
|
|
(4,013
|
)
|
|
(4.4
|
)
|
|
5,483
|
|
|
(136.6
|
)
|
|||
Total operating expenses
|
92,164
|
|
|
100.7
|
|
|
75,493
|
|
|
83.0
|
|
|
16,671
|
|
|
22.1
|
|
|||
Loss from operations
|
(22,998
|
)
|
|
(25.1
|
)
|
|
(5,009
|
)
|
|
(5.5
|
)
|
|
(17,989
|
)
|
|
359.1
|
|
|||
Other income (expense), net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
(231
|
)
|
|
(0.3
|
)
|
|
(712
|
)
|
|
(0.8
|
)
|
|
481
|
|
|
(67.6
|
)
|
|||
Interest income and other income (expense), net
|
(189
|
)
|
|
(0.2
|
)
|
|
(163
|
)
|
|
(0.2
|
)
|
|
(26
|
)
|
|
16.0
|
|
|||
Total other income (expense), net
|
(420
|
)
|
|
(0.5
|
)
|
|
(875
|
)
|
|
(1.0
|
)
|
|
455
|
|
|
(52.0
|
)
|
|||
Loss before provision for income taxes
|
(23,418
|
)
|
|
(25.6
|
)
|
|
(5,884
|
)
|
|
(6.5
|
)
|
|
(17,534
|
)
|
|
298.0
|
|
|||
Provision for income taxes
|
293
|
|
|
0.3
|
|
|
514
|
|
|
0.6
|
|
|
(221
|
)
|
|
(43.0
|
)
|
|||
Net loss
|
$
|
(23,711
|
)
|
|
(25.9
|
)%
|
|
$
|
(6,398
|
)
|
|
(7.0
|
)%
|
|
$
|
(17,313
|
)
|
|
270.6
|
%
|
|
Three Months Ended
June 30,
|
|
Increase (Decrease)
|
||||||||||
|
2015
|
|
2014
|
|
Amount
|
|
Percent
|
||||||
Revenue:
|
|
|
|
|
|
|
|
||||||
Products
|
$
|
33,331
|
|
|
$
|
34,122
|
|
|
$
|
(791
|
)
|
|
(2)%
|
Services
|
14,205
|
|
|
11,010
|
|
|
3,195
|
|
|
29
|
|||
Total revenue
|
$
|
47,536
|
|
|
$
|
45,132
|
|
|
$
|
2,404
|
|
|
5%
|
Revenue by geographic location:
|
|
|
|
|
|
|
|
|
|
||||
United States
|
$
|
27,448
|
|
|
$
|
26,215
|
|
|
$
|
1,233
|
|
|
5%
|
Japan
|
6,618
|
|
|
8,471
|
|
|
(1,853
|
)
|
|
(22)
|
|||
Asia Pacific, excluding Japan
|
5,545
|
|
|
4,370
|
|
|
1,175
|
|
|
27
|
|||
EMEA
|
6,831
|
|
|
3,925
|
|
|
2,906
|
|
|
74
|
|||
Other
|
1,094
|
|
|
2,151
|
|
|
(1,057
|
)
|
|
(49)
|
|||
Total revenue
|
$
|
47,536
|
|
|
$
|
45,132
|
|
|
$
|
2,404
|
|
|
5%
|
|
Six Months Ended
June 30,
|
|
Increase (Decrease)
|
||||||||||
|
2015
|
|
2014
|
|
Amount
|
|
Percent
|
||||||
Revenue:
|
|
|
|
|
|
|
|
||||||
Products
|
$
|
63,847
|
|
|
$
|
70,539
|
|
|
$
|
(6,692
|
)
|
|
(9)%
|
Services
|
27,706
|
|
|
20,338
|
|
|
7,368
|
|
|
36
|
|||
Total revenue
|
$
|
91,553
|
|
|
$
|
90,877
|
|
|
$
|
676
|
|
|
1%
|
Revenue by geographic location:
|
|
|
|
|
|
|
|
|
|
|
|||
United States
|
$
|
50,306
|
|
|
$
|
44,428
|
|
|
$
|
5,878
|
|
|
13%
|
Japan
|
15,458
|
|
|
25,775
|
|
|
(10,317
|
)
|
|
(40)
|
|||
Asia Pacific, excluding Japan
|
10,131
|
|
|
8,675
|
|
|
1,456
|
|
|
17
|
|||
EMEA
|
13,055
|
|
|
8,065
|
|
|
4,990
|
|
|
62
|
|||
Other
|
2,603
|
|
|
3,934
|
|
|
(1,331
|
)
|
|
(34)
|
|||
Total revenue
|
$
|
91,553
|
|
|
$
|
90,877
|
|
|
$
|
676
|
|
|
1%
|
|
Three Months Ended
June 30,
|
|
Increase (Decrease)
|
||||||||||
|
2015
|
|
2014
|
|
Amount
|
|
Percent
|
||||||
Cost of revenue:
|
|
|
|
|
|
|
|
||||||
Products
|
$
|
7,909
|
|
|
$
|
7,410
|
|
|
$
|
499
|
|
|
7%
|
Services
|
3,692
|
|
|
2,930
|
|
|
762
|
|
|
26
|
|||
Total cost of revenue
|
$
|
11,601
|
|
|
$
|
10,340
|
|
|
$
|
1,261
|
|
|
12%
|
|
Six Months Ended
June 30,
|
|
Increase (Decrease)
|
||||||||||
|
2015
|
|
2014
|
|
Amount
|
|
Percent
|
||||||
Cost of revenue:
|
|
|
|
|
|
|
|
||||||
Products
|
$
|
14,972
|
|
|
$
|
14,837
|
|
|
$
|
135
|
|
|
1%
|
Services
|
7,415
|
|
|
5,556
|
|
|
1,859
|
|
|
33
|
|||
Total cost of revenue
|
$
|
22,387
|
|
|
$
|
20,393
|
|
|
$
|
1,994
|
|
|
10%
|
|
Three Months Ended
June 30,
|
|
|
||||||||||||||
|
2015
|
|
2014
|
|
Increase (Decrease)
|
||||||||||||
|
Amount
|
|
Gross Margin
|
|
Amount
|
|
Gross Margin
|
|
Amount
|
|
Gross Margin
|
||||||
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Products
|
$
|
25,422
|
|
|
76.3%
|
|
$
|
26,712
|
|
|
78.3%
|
|
$
|
(1,290
|
)
|
|
(2.0)%
|
Services
|
10,513
|
|
|
74.0
|
|
8,080
|
|
|
73.4
|
|
2,433
|
|
|
0.6
|
|||
Total gross profit
|
$
|
35,935
|
|
|
75.6%
|
|
$
|
34,792
|
|
|
77.1%
|
|
$
|
1,143
|
|
|
(1.5)%
|
|
Six Months Ended
June 30,
|
|
|
||||||||||||||
|
2015
|
|
2014
|
|
Increase (Decrease)
|
||||||||||||
|
Amount
|
|
Gross Margin
|
|
Amount
|
|
Gross Margin
|
|
Amount
|
|
Gross Margin
|
||||||
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Products
|
$
|
48,875
|
|
|
76.6%
|
|
$
|
55,702
|
|
|
79.0%
|
|
$
|
(6,827
|
)
|
|
(2.4)%
|
Services
|
20,291
|
|
|
73.2
|
|
14,782
|
|
|
72.7
|
|
5,509
|
|
|
0.5
|
|||
Total gross profit
|
$
|
69,166
|
|
|
75.5%
|
|
$
|
70,484
|
|
|
77.6%
|
|
$
|
(1,318
|
)
|
|
(1.9)%
|
|
Three Months Ended
June 30,
|
|
Increase (Decrease)
|
||||||||||
|
2015
|
|
2014
|
|
Amount
|
|
Percent
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|||
Sales and marketing
|
$
|
24,962
|
|
|
$
|
23,975
|
|
|
$
|
987
|
|
|
4%
|
Research and development
|
13,671
|
|
|
11,869
|
|
|
1,802
|
|
|
15
|
|||
General and administrative
|
5,703
|
|
|
5,531
|
|
|
172
|
|
|
3
|
|||
Litigation expense (benefits)
|
1,025
|
|
|
(5,859
|
)
|
|
6,884
|
|
|
(117)
|
|||
Total operating expenses
|
$
|
45,361
|
|
|
$
|
35,516
|
|
|
$
|
9,845
|
|
|
28%
|
|
Six Months Ended
June 30,
|
|
Increase (Decrease)
|
||||||||||
|
2015
|
|
2014
|
|
Amount
|
|
Percent
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|||
Sales and marketing
|
$
|
49,484
|
|
|
$
|
45,538
|
|
|
$
|
3,946
|
|
|
9%
|
Research and development
|
27,980
|
|
|
23,074
|
|
|
4,906
|
|
|
21
|
|||
General and administrative
|
13,230
|
|
|
10,894
|
|
|
2,336
|
|
|
21
|
|||
Litigation expense (benefit)
|
1,470
|
|
|
(4,013
|
)
|
|
5,483
|
|
|
(137)
|
|||
Total operating expenses
|
$
|
92,164
|
|
|
$
|
75,493
|
|
|
$
|
16,671
|
|
|
22%
|
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
Cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
3,477
|
|
|
$
|
(9,718
|
)
|
Investing activities
|
(1,811
|
)
|
|
(3,791
|
)
|
||
Financing activities
|
2,626
|
|
|
104,817
|
|
||
Net increase in cash and cash equivalents
|
$
|
4,292
|
|
|
$
|
91,308
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
•
|
We added a control activity where we will consult with technical accounting experts to review and analyze the impact of new or unusual accounting transactions and the adoption of new accounting standards that may have a material impact on our consolidated financial statements.
|
•
|
We strengthened our processes in the area of equity administration and equity accounting, which included the review, redesign and documentation of our policies and procedures; implementation of additional review and reconciliation controls, and expanded the use of software based solutions to handle certain aspects of accounting for stock-based compensation related to the 2014 Purchase Plan.
|
•
|
fluctuations in and timing of purchases from, or loss of, large customers;
|
•
|
the budgeting cycles and purchasing practices of end-customers;
|
•
|
our ability to attract and retain new end-customers;
|
•
|
changes in demand for our products and services, including seasonal variations in customer spending patterns or cyclical fluctuations in our markets;
|
•
|
our reliance on shipments at the end of our quarters;
|
•
|
variations in product mix or geographic locations of our sales, which can affect the revenue we realize for those sales;
|
•
|
the timing and success of new product and service introductions by us or our competitors;
|
•
|
our ability to increase the size of our distribution channel and to maintain relationships with important distribution channel partners;
|
•
|
the effect of currency exchange rates on our revenue and expenses;
|
•
|
the cost and potential outcomes of existing and future litigation;
|
•
|
the effect of discounts negotiated by our largest end-customers for sales or pricing pressure from our competitors;
|
•
|
changes in the growth rate of the application networking market or changes in market needs;
|
•
|
inventory write downs, which may be necessary for our older products when our new products are launched and adopted by our end-customers; and
|
•
|
our third-party manufacturers’ and component suppliers’ capacity to meet our product demand forecasts on a timely basis, or at all.
|
•
|
Companies that sell products in the traditional ADC market. In the ADC market, we compete against other companies that are well established in this market, including F5 Networks, Inc., Brocade, Cisco Systems, Inc., Citrix Systems, Inc., and Radware Ltd.;
|
•
|
Companies that sell CGN products. Our purpose-built CGN solution competes primarily against products originally designed for other networking purposes, such as edge routers and security appliances from vendors such as Alcatel-Lucent USA Inc., Cisco Systems, Inc. and Juniper Networks, Inc.; and
|
•
|
Companies that sell traditional DDoS mitigation products. We are a new entrant into the DDoS market and first publicly launched our DDoS detection and mitigation solution, TPS, in January 2014. We believe our principal competitors in this market are Arbor Networks, Inc., a subsidiary of Danaher Corporation, and Radware.
|
•
|
longer operating histories;
|
•
|
the capacity to leverage their sales efforts and marketing expenditures across a broader portfolio of products and services at a greater range of prices;
|
•
|
the ability to incorporate functionality into existing products to gain business in a manner that discourages users from purchasing our products, including through selling at zero or negative margins, product bundling or closed technology platforms;
|
•
|
broader distribution and established relationships with distribution channel partners in a greater number of worldwide locations;
|
•
|
access to larger end-customer bases;
|
•
|
the ability to use their greater financial resources to attract our research and development engineers as well as other employees of ours;
|
•
|
larger intellectual property portfolios; and
|
•
|
the ability to bundle competitive offerings with other products and services.
|
•
|
greater difficulty in enforcing contracts and accounts receivable collection and longer collection periods;
|
•
|
increased expenses incurred in establishing and maintaining office space and equipment for our international operations;
|
•
|
greater difficulty in recruiting local experienced personnel, and the costs and expenses associated with such activities;
|
•
|
general economic and political conditions in these foreign markets;
|
•
|
economic uncertainty around the world, including continued economic uncertainty as a result of sovereign debt issues in Europe;
|
•
|
management communication and integration problems resulting from cultural and geographic dispersion;
|
•
|
risks associated with trade restrictions and foreign legal requirements, including the importation, certification, and localization of our products required in foreign countries;
|
•
|
greater risk of unexpected changes in regulatory practices, tariffs, and tax laws and treaties;
|
•
|
the uncertainty of protection for intellectual property rights in some countries;
|
•
|
greater risk of a failure of foreign employees to comply with both U.S. and foreign laws, including antitrust regulations, the U.S. Foreign Corrupt Practices Act, and any trade regulations ensuring fair trade practices; and
|
•
|
heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements.
|
•
|
the expenditure of significant financial and product development resources in efforts to analyze, correct, eliminate, or work around errors or defects, to address and eliminate vulnerabilities, or to identify and ramp up production with third-party providers;
|
•
|
an increase in warranty claims, or an increase in the cost of servicing warranty claims, either of which would adversely affect our gross margins;
|
•
|
expenditures of significant financial and product development resources in efforts to analyze, correct, eliminate or work around errors and defects or to address and eliminate vulnerabilities;
|
•
|
loss of existing or potential end-customers or distribution channel partners;
|
•
|
delayed or lost revenue;
|
•
|
delay or failure to attain market acceptance;
|
•
|
indemnification obligations under our agreements with resellers, distributors and/or end-customers;
|
•
|
an increase in warranty claims compared with our historical experience or an increased cost of servicing warranty claims, either of which would adversely affect our gross margin; and
|
•
|
litigation, regulatory inquiries, or investigations that may be costly and harm our reputation.
|
•
|
future earnings being lower than anticipated in countries where we have lower statutory tax rates and higher than anticipated earnings in countries where we have higher statutory tax rates. or
|
•
|
examinations by US federal, state or foreign jurisdictions that disagree with interpretations of tax rules and regulations in regards to positions taken on tax filings
|
•
|
announcements of new products, services or technologies, commercial relationships, acquisitions or other events by us or our competitors;
|
•
|
price and volume fluctuations in the overall stock market from time to time;
|
•
|
significant volatility in the market price and trading volume of technology companies in general and of companies in our industry;
|
•
|
fluctuations in the trading volume of our shares or the size of our public float;
|
•
|
actual or anticipated changes or fluctuations in our results of operations;
|
•
|
whether our results of operations meet the expectations of securities analysts or investors;
|
•
|
actual or anticipated changes in the expectations of investors or securities analysts;
|
•
|
litigation or investigations involving us, our industry, or both;
|
•
|
regulatory developments in the United States, foreign countries or both;
|
•
|
general economic conditions and trends;
|
•
|
major catastrophic events;
|
•
|
sales of large blocks of our common stock; or
|
•
|
departures of key personnel.
|
•
|
a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors;
|
•
|
the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preference and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;
|
•
|
the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;
|
•
|
a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;
|
•
|
the requirement that a special meeting of stockholders may be called only by the chairman of our board of directors, our Chief Executive Officer, our secretary, or a majority vote of our board of directors, which could
|
•
|
the requirement for the affirmative vote of holders of at least 66-2/3% of the voting power of all of the then-outstanding shares of the voting stock, voting together as a single class, to amend the provisions of our restated certificate of incorporation relating to the issuance of preferred stock and management of our business or our bylaws, which may inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited takeover attempt;
|
•
|
the ability of our board of directors, by majority vote, to amend the bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and
|
•
|
advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or not to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.
|
•
|
|
|
A10 NETWORKS, INC.
|
|
By: /s/ Lee Chen
|
|
Lee Chen
|
|
Chief Executive Officer and President
(Principal Executive Officer)
|
|
By: /s/ Greg Straughn
|
|
Greg Straughn
|
|
Chief Financial Officer
(Principal Accounting and Financial Officer)
|
Exhibit
Number
|
|
Description
|
10.1
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
*
|
|
32.2
|
*
|
|
101.INS
|
|
XBRL Instant Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Extension Calculation Linkbase Document
|
101.DEF
|
|
XBRL Extension Definition Linkbase Document
|
101.LAB
|
|
XBRL Extension Labels Linkbase Document
|
101.PRE
|
|
XBRL Extension Presentation Linkbase Document
|
|
*
|
The certifications attached as Exhibit 32.1 and 32.2 that accompany this Quarterly Report on Form 10‑Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of A10 Networks, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10‑Q, irrespective of any general incorporation language contained in such filing.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of A10 Networks, Inc. for the quarter ended
June 30, 2015
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(c)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
August 6, 2015
|
By: /s/ Lee Chen
|
|
|
Lee Chen
|
||
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of A10 Networks, Inc. for the quarter ended
June 30, 2015
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(c)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
August 6, 2015
|
By: /s/ Greg Straughn
|
|
|
Greg Straughn
|
||
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
August 6, 2015
|
By: /s/ Lee Chen
|
|
|
Lee Chen
|
||
|
President and Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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August 6, 2015
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By: /s/ Greg Straughn
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Greg Straughn
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Chief Financial Officer
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