Q1 2024 A10 Networks Inc Earnings Call

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Elliot: Hello, and welcome to A10 Networks' first quarter 2024 financial results. My name is Elliot, and I'll be coordinating your call today. If you would like to register a question during today's event, please press star followed by one on your telephone keypad. I would now like to hand over to Tom Baumann with FNK-IR. The floor is yours. Please go ahead.

Hello, and welcome to the Aten networks first quarter 'twenty to 'twenty four financial results. My name is Andrew and I'll be caused Mike Nichols.

If you would like to register your question James Please press Star followed by one on your telephone keypad.

I would now like to hand over to Tom Baumann with F. N K I off the floor is yours. Please go ahead.

Okay.

Tom Baumann: Thank you all for joining us today. This call is being recorded in webcast slides and may be accessed for at least 90 days via the A10 Networks website, a10networks.com. Before we begin, I would like to remind you that shortly after the market closed today, A10 Networks issued a press release announcing its first quarter 2020 financial results.

Tom Baumann: Thank you all for joining US today. This call is being recorded and webcast slides may be accessed for at least 90 days via the Aten networks website H N that works Dot com.

Tom Baumann: Additionally, A10 published a presentation and supplemental trended financial statements. You may access the press release, the presentation, and the 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 projections for future operating results. Hamed Khorsand, Gray Powell, Christian Schwab, Anja Soderstrom, Rob Fink, Tom Baumann, Hendi Susanto, Brian Becker, Dhrupad Trivedi, A10 Networks Inc. Our expenses and investments, our positioning, our repurchase and dividend programs, and our These statements are based on current expectations and beliefs as of today, April 30th, 2024.

Tom Baumann: Hosting the call today.

Tom Baumann: Sure Betty.

Tom Baumann: <unk>, President and CEO and CFO, Brian Becker.

Tom Baumann: 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 does not intend to update information contained in these forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law. For a more detailed description of these risks and uncertainties, please refer to the most recent 10K.

Tom Baumann: Before we begin I would like to remind you that shortly after the market closed today Aten networks issued a press release announcing its first quarter 2020 towards financial results.

Tom Baumann: 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.

Tom Baumann: During the course of today's call.

Tom Baumann: It is what will make forward looking statements, including statements regarding projections for future operating results, including timing, including our potential revenue growth industry and customer trends our capital allocation strategy.

Tom Baumann: Like it changed constraints and expectations expenses and investments are positioning.

Tom Baumann: Purchase and dividend programs and our market share.

Tom Baumann: These statements are based on current expectations and beliefs as of today.

Tom Baumann: April 30th 2024.

Tom Baumann: These forward looking statements involve a number of risks and uncertainties.

Tom Baumann: All 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.

Tom Baumann: <unk> does not intend to update information contained in these forward looking statements, whether as a result of new information future events or otherwise unless required by law.

Tom Baumann: A more detailed description of these risks and uncertainties. Please refer to our most recent 10-K.

Tom Baumann: 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 metrics presented by other companies. A reconciliation between GAAP and non-GAAP measures can be found in the press release issued today and in the trended quarterly financial statements posted on the company's website. Now, I would like to turn the call over to Dhrupad Trivedi, President and CEO of A10.

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 may be different from non-GAAP financial metric.

Presented by other companies and.

Tom Baumann: A reconciliation between GAAP and non-GAAP measures can be found in the press release issued today.

Tom Baumann: And on the trended quarterly financial statements posted on the company's website.

Tom Baumann: Now I would like to turn the call over to Jupiter Trivedi, President and CEO of Aten networks.

Tom Baumann: Yeah.

Dhrupad Trivedi: Thank you Tom.

Dhrupad Trivedi: And thank you all for joining us today. This was a solid quarter for A10 with strong profitability and revenue results that demonstrate continued demand for our solution. I am proud of the way our team has responded to a volatile economic environment, driving efficiency throughout our organization and enabling us to do what we told investors we would do, even as sales cycles elongate and certain buying decisions are made. Once again, our differentiation is benefiting our business, enabling us to drive growth.

Dhrupad Trivedi: And thank you all for joining us today.

Dhrupad Trivedi: This was a solid quarter 40, then with strong profitability and revenue results that demonstrate continued demand for our solution.

Dhrupad Trivedi: I am proud of the way our team has responded to a volatile economic environment.

Dhrupad Trivedi: Driving efficiency throughout our organization and enabling us to do what we told investors, we would do even that sales cycle elongate and certain buying decisions are delayed.

Dhrupad Trivedi: Once again, our differentiation is benefitting our business, enabling us to drive growth.

Dhrupad Trivedi: Our customers need higher throughput in networks, especially in the age of AI. They also need to enhance their security posture amidst a growing array of cyber challenges, including new challenges from AI. Buying decisions may be delayed, and agreements require additional approvals, but these investments are typically not optional because they directly address revenue generation or risk management for our customers. Of note, our revenue from service providers was up 16% year-over-year in the quarter. The slower service provider spending of the last few quarters is not reflective of competitive losses, nor does it suggest any longer term trends relative to demand for A10 products.

Dhrupad Trivedi: Our customers need higher throughput in networks, especially in the age of the eye.

Dhrupad Trivedi: Our customers also need to enhance their security posture amidst a growing cyber challenges in delivering new challenges from AI tools.

Dhrupad Trivedi: Buying decisions may be delayed and agreement to acquire additional approvals, but these investments are typically not optional.

Dhrupad Trivedi: They directly address revenue generation or risk management for all of our customers.

Dhrupad Trivedi: Of note our revenue from service provider was up 16% year over year in the quarter.

Dhrupad Trivedi: The slower service provider spending over the last few quarters is not reflective of competitive losses.

Dhrupad Trivedi: Nor does it suggest any longer term trends.

Dhrupad Trivedi: There's good demand for <unk> products.

Dhrupad Trivedi: As investments are greenlit, we are benefiting. During Q1, we saw strong growth in our APJ region as an example of this pattern. On a trailing 12-month basis, enterprise revenue growth continues to outpace overall revenue growth. As we have said, A10 solutions are designed into customer workflows, and we are a key part of CAPEX's plan. On a full year basis, we expect enterprise revenue growth to outpace overall revenue

Dhrupad Trivedi: As investments are green lit we are benefiting.

Dhrupad Trivedi: During Q1, we saw strong growth in our E. P. J D. Then as an example of this battle.

Yeah.

Dhrupad Trivedi: On a trailing 12 month basis enterprise revenue growth continues to outpace overall revenue growth.

Dhrupad Trivedi: As we have said <unk> solutions are designed into customer workflows, and we are a key part of Capex plans.

Dhrupad Trivedi: On a full year basis, we expect enterprise revenue growth.

Our base overall revenue growth.

Dhrupad Trivedi: We have been investing both in terms of our enterprise-facing sales and marketing team and in terms of R&D to strengthen our capabilities to effectively target the enterprise sector. These investments are expanding our pipeline, and we are confident that enterprise sales in the second quarter will be better than in the first quarter. And we believe the second half of the year will be a meaningful improvement compared to the first half. As we increasingly align our solution to consumption trends in this market, we expect to see growth in deferred revenue, building a stronger recurring base for revenue in the future.

Dhrupad Trivedi: We have been investing both in terms of our enterprise facing sales and marketing team and in terms of R&D.

Dhrupad Trivedi: To strengthen our capabilities to effectively target the enterprise segment.

Dhrupad Trivedi: These investments are expanding our pipeline and we are confident that enterprise sales in the second quarter will be better than the first quarter and we believe the second half of the year will be a meaningful improvement compared to the first half.

Dhrupad Trivedi: As we increasingly align our solution to conduct share trends in this market.

Dhrupad Trivedi: Expect to see growth in deferred revenue building a stronger recurring base for revenue in the future.

Dhrupad Trivedi: Turning to our R&D initiatives, these investments continue to be focused on two key areas: enhanced cyber security capabilities and more flexible and efficient consumption models for enterprise customers. We are growing our use of AI, particularly in our security applications, in addition to bringing network insight. A10 has been using machine learning and AI for years. But as technology continues to evolve and improve, we continue to remain at the leading edge of utilizing it to provide the best solutions.

Dhrupad Trivedi: Turning to our R&D initiatives.

Dhrupad Trivedi: These investments continue to be focused on two key areas.

Dhrupad Trivedi: Enhanced cyber security capabilities.

Dhrupad Trivedi: And more flexible and efficient consumption models for enterprise customers.

Dhrupad Trivedi: We are growing our use of AI, particularly in our security applications. In addition to bringing network insights.

Dhrupad Trivedi: <unk> has been using machine learning and AI for years, but as the technology continues to evolve and improve we continue to remain at the leading edge of utilizing it to provide the best solutions.

Dhrupad Trivedi: The machine learning component is already contributing to faster recognition of new threats and important capabilities as cyber attacks become increasingly sophisticated. We continue to work closely on aligning our product roadmaps with our strong customer base, who are leading the infrastructure transformation to enable new types of traffic and threats with the adoption of AI in the network.

Dhrupad Trivedi: The machine learning component is already contributing to faster recognition of new threats.

Dhrupad Trivedi: And important capability cyber attacks become increasingly sophisticated.

Dhrupad Trivedi: We continue to work closely on aligning our product roadmaps with our strong customer base, who is leading the infrastructure transformation to enable.

Dhrupad Trivedi: New types of traffic and tracks with adoption of AI in their networks.

Dhrupad Trivedi: We are actively driving productivity to support our strategic objectives. Our commitment to achieving stated goals of 80% to 82% gross margin and 26% to 28% EBITDA margin remains on plan. In the first quarter, our gross margin continued to exceed 80 percent, showcasing our sustained operations efficiency. Non-GAAP earnings per share were in line with expectations adjusted for foreign currency. A10's consistent ability to meet profitability targets amidst revenue challenges underscores the resilience of our business model.

We are actively driving productivity to support our strategic objectives.

Dhrupad Trivedi: Our commitment to achieving stated goals of 80% to 82% gross margin and 26% to 28% EBITDA margin remains on plan.

In the first quarter, our gross margin continued to exceed 80% showcasing of our sustained operations efficient.

Dhrupad Trivedi: non-GAAP earnings per share was in line with expectations adjusted for foreign currency.

<unk> consistent ability to meet the profitability targets amidst revenue challenges underscores the resilience of our business model.

Dhrupad Trivedi: Looking ahead, we are confident in our ability to maintain profitability and deliver value to our shareholders through capital returns while we continue to invest in innovation. The results of the first quarter position us to achieve our full-year business model objectives, including gross margins of 80 to 82 percent, adjusted EBITDA margins of 26 to 28 percent, and single-digit growth in full-year non-GAAP EPS. We continue to buy back stock, and our cash flow more than funds our buybacks and dividends. With that, I'd like to turn the call over to Brian for a detailed review of the quarter. Brian. Thank you, Dhrupad.

Dhrupad Trivedi: Looking ahead, we are confident in our ability to maintain profitability and deliver value to our shareholders through capital returns, while we continue to invest in innovation.

Dhrupad Trivedi: The results of the first quarter position us to achieve our full year business model objectives in <unk>.

Dhrupad Trivedi: <unk> gross margins of 80% to 82% adjusted EBITDA margins of 26% to 28% and single digit growth in full year non-GAAP EPS.

Dhrupad Trivedi: We continue to buy back stock and our cash flow more than funds, our buyback and dividend.

Dhrupad Trivedi: With that I'd like to turn the call over to Brian for a detailed review of the quarter Brian.

Brian Becker: Thank you <unk>.

Brian Becker: Excuse me.

Brian Becker: First quarter revenue was $60.7 million, an increase of 5.2% year-over-year. However, as Dhrupad described, sales cycles have elongated, and the quarter-to-quarter volatility in both service provider and enterprise sectors continues to be high.

Brian Becker: First quarter revenue was $60 7 million, an increase of five 2% year over year as <unk> described sales cycles have elongated in a quarter to quarter volatility in both service provider enterprise sectors continued to be high.

Brian Becker: Product revenue for the quarter was $30.1 million, representing 50% of total revenue. Services revenue was $30.6 million, or 50% of total revenue. First quarter recurring revenue increased 13% compared to the first quarter last year, and deferred revenue increased nearly 10%, demonstrating stronger product... sales for the past two quarters, and continued demand for enterprise solutions, validating our confidence that we are not losing opportunities to competitors. As you can see on our balance sheet, our deferred revenue is $140.9 million as of March 31, 2024, up 9.7% year-over-year.

Brian Becker: Product revenue for the quarter was $30 1 million, representing 50% of total revenue.

Brian Becker: Services revenue was $30 6 million or 50% of total revenue first.

Brian Becker: First quarter recurring revenue increased 13% compared to the first quarter last year and deferred revenue increased nearly 10% demonstrating stronger product.

Brian Becker: Sales for the past two quarters and continued demand for our enterprise solutions validating our confidence that we are not losing opportunities to competitors.

Brian Becker: As you can see on our balance sheet, our deferred revenue was $140 9 million as of March 31, 2024 up nine 7% year over year.

Brian Becker: With the exception of revenue, all the metrics discussed in this call are on a non-GAAP basis unless otherwise stated. A full reconciliation of GAAP to non-GAAP results is provided in our press release and on our website. Gross margin in the first quarter was 81.9%, in line with our stated goals of 80% to 82% and up slightly from the last three quarters.

With the exception of revenue all of the metrics discussed on this call on a non-GAAP basis, unless otherwise stated a full reconciliation of GAAP to non-GAAP results are provided in our press release and on our website.

Brian Becker: Gross margin in the first quarter was 81, 9% in line with our stated goals of 80% to 82% and up slightly from the last three quarters adjusted.

Brian Becker: Adjusted EBITDA was $13.9 million for the quarter, representing 22.9% of revenue; on a trailing 12-month basis, adjusted EBITDA was $28 million, in line with our stated goal of 26 to 28% of revenue. Non-GAAP net income for the quarter was $12.7 million, or $0.17 per diluted share, compared to $9.9 million, or $0.13 per diluted share in the year-ago quarter. Diluted weighted shares used for computing non-GAAP EPS for the first quarter were approximately 75.3 million shares compared to 75.5 million shares in the year-ago quarter.

Brian Becker: Adjusted EBITDA was $13 9 million for the quarter, representing 22, 9% of revenue on a trailing 12 month basis. Adjusted EBITDA was 28% of revenue in line with our stated goal of 26% to 28% of revenue.

Brian Becker: non-GAAP net income for the quarter was $12 7 million or <unk> 17 per diluted share compared to $9 9 million or <unk> 13 per diluted share in the year ago quarter.

Brian Becker: Diluted weighted shares used for computing non-GAAP EPS for the first quarter were approximately $75 3 million shares compared to $75 5 million shares in the year ago quarter.

Brian Becker: On a GAAP basis, net income for the quarter was $9.7 million, or $0.13 per diluted share, more than doubling our net income of $4 million, or $0.05 per diluted share, in the year-ago quarter. During the quarter, we generated $32.4 million in cash from operations. While Q1 had the one-time benefit of better timing of receivables, we expect the full-year cash flow to be in excess of $60 million for 2025. Turning to the balance sheet, as of March 31st, 2024, we had $182.1 million in total cash, cash equivalents, and marketable securities, compared to $159.3 million at the end of 2023. During the quarter, we paid $4.5 million in cash dividends and used $3 million in share repurchase. We also continue to carry no debt.

Brian Becker: On a GAAP basis net income for the quarter was $9 7 million or <unk> 13 per diluted share more than doubling our net income of 4 million or <unk> <unk> per diluted per diluted share in the year ago quarter.

Brian Becker: During the quarter, we generated $32 4 million in cash from operations. While Q1 had one time benefit of better timing of receivables. We expect the full year cash flow to be in excess of $60 million for 2024.

Brian Becker: Turning to the balance sheet as of March 31, 2024, we had $182 $1 million in total cash cash equivalents in marketable securities.

Brian Becker: To $159 3 million at the end of 2023.

Brian Becker: During the quarter, we paid $4 5 million in cash dividends.

Brian Becker: And used $3 million in share repurchases.

Brian Becker: We also continue to carry no debt.

Brian Becker: The board has approved a quarterly cash dividend of $0.06 per share to be paid on June 3, 2024 to shareholders of record on May 15, 2024. As discussed during our last call, the board approved a new $50 million share purchase plan in November. Inclusive of share repurchases, we returned $7.5 million of capital to shareholders during the quarter. We expect 2024 revenue and EPS growth in the single digits in line with market expectations. We continue to target gross margins of 80 to 82 percent and adjusted EBITDA margins of 26 to 28 percent on a full year basis. I'll turn the call back over to Dhrupad for closing comments.

Brian Becker: The board has approved a quarterly cash dividend of <unk> <unk> per share paid on June three 2024 to shareholders of record on May 15th 2024.

As discussed during our last call the board approved a new $50 million share repurchase plan in November.

Brian Becker: Inclusive of share repurchases, we returned $7 5 million of capital to shareholders during the quarter.

We expect 2020 for revenue and EPS growth in the single digits in line with market expectations.

Brian Becker: We continue to target gross margins of 80% to 82% and adjusted EBITDA margins of 26% to 8% on a full year basis.

Speaker Change: I will turn the call back over to <unk> for closing comments.

Speaker Change: Okay.

Speaker Change: Thank you Brian.

Dhrupad Trivedi: A10 maintains an enviable position, aligned with trends related to the need for cybersecurity and the demands for increased throughput and lower latency. We are investing to strengthen our position with enterprise customers, and we are well-aligned with service provider customers' investment plans. Our business model enables consistent profitability and cash generation, and we are returning meaningful capital to shareholders while investing in innovation for future growth. Operator, you can now open the call up for questions.

Speaker Change: <unk> maintains an enviable position align with trends related to the need for cyber security and the demand for increased throughput and lower latency.

Speaker Change: We are investing to strengthen our position with enterprise customers and we are well aligned with service provider customer investment plans.

Speaker Change: Our business model has enabled consistent profitability and cash generation and we are returning meaningful capital to shareholders, while investing in innovation for future growth.

Speaker Change: Operator, you can now open the call up for questions.

Speaker Change: Okay.

Operator: Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If you would like to withdraw your question, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. The first question comes from Anja Soderstrom with Sidoti. Your line is open, please go ahead.

Speaker Change: Thank you if you would like to ask a question. Please press star followed by one on your telephone keypad. If you would like to withdraw your question. Please press star followed by chicken.

Speaker Change: When preparing to ask a question please I'm showing it devices on mute locally.

Speaker Change: First question comes from Andrew <unk> with Sidoti. Your line is open. Please go ahead.

Alex Hantman: Thank you and good afternoon. This is Alex Hantman on behalf of Anja.

Andrew: Thank you and good afternoon. This is Alex happening on for Amit Thanks for taking questions.

Alex Hantman: Thanks for taking questions. My first question. Hi there. You mentioned that sales cycles have elongated. Curious, you know, what inning you think you're in in terms of seeing results from changes in the sales team?

Andrew: My first question.

Alex: Hi, there.

Mentioned that sales cycles have elongated.

Alex: Yes.

Alex: Anything you think you're at your end in terms of seeing results from changes in the sales team.

Dhrupad Trivedi: Yeah, so I think You know, I would say, certainly, as you know, we made significant changes and investments in our go-to-market about two years ago and one year ago as well. And I would say, you know, a typical sales cycle is six to nine months at any time, at least close to six in an enterprise sale as well, and a little bit longer on the service provider side. So, as the new processes and people ramp up fully, and you factor in the sales cycle time, I would say, right, we are probably somewhere like, or the second authority name of that.

Speaker Change: Yes, so I think.

Speaker Change: I would say certainly as you know we made significant changes and investment in our go to market about two years ago, and one year ago, as well and I would say no.

Speaker Change: The sales cycle is six to nine months.

Speaker Change: Anytime at least close to six and an enterprise sale as well.

Speaker Change: A little bit longer for service provider side, so as the new processes and people ramp up fully and you factor in the sales cycle time, I would say, we are probably somewhere like in that.

Speaker Change: Or second or third inning of that.

Dhrupad Trivedi: Great, thank you for the context. And just curious, you know, how are the conversations going? Do you feel like you still have pricing power in this environment?

Speaker Change: Great. Thank you for the context.

Speaker Change: Curious how are the conversations going on do you feel like you still have pricing power in this environment.

Dhrupad Trivedi: I think there are two factors that go into it, right? So, certainly, it is well understood and accepted that there is broad inflationary cost pressure on input costs. I don't think that's necessarily a huge issue to the degree that, you know, we work with our customers to understand that. It's typically, you know, a very collaborative conversation. And beyond that, I think, you know, our focus is to not necessarily drive our margin through price but more to drive it through efficiency and operational gains, right? So, balancing, obviously, inflationary cost pressure, we look to find that balance where we are also not discouraging customer investment.

Speaker Change: I think thats too to do factors that go into it right. So certainly it is well understood and accepted that that is broad inflationary cost pressure.

Speaker Change: On input costs I don't think that's new.

Speaker Change: Necessarily a huge issue.

Speaker Change: To the degree that.

Speaker Change: We.

Speaker Change: Work with our customers to understand that.

Typically very collaborative conversation and beyond that I think our focus is to.

Speaker Change: Not necessarily dry or margin through price, but more to drive it through efficiency and operational gains right. So.

Speaker Change: So balancing obviously inflationary cost pressure.

Speaker Change: Look to find that balance where we are also not discouraging customer investment.

Dhrupad Trivedi: Got you. Thank you for the context. Last question from me, just around capital allocation priorities. Could you talk a little bit more about how you're thinking about that and maybe even add some context around future room for buyback?

Speaker Change: Got you. Thank you for the context last question for me just around.

Speaker Change: On capital allocation priorities.

Speaker Change: Could you talk a little bit more about how youre thinking about that and maybe even add some context.

Speaker Change: Around future room for buybacks.

Dhrupad Trivedi: Sure. So I mean, you know, the way we talk about it, right? Our first priority is continuing to invest in organic growth of the business. And you can see, for example, even in Q1, we increased our investment in R&D because we think that's important for us to ensure that, right, we continue to provide the best solution. So, our first priority is funding organic growth.

Speaker Change: Sure. So I mean, I think the way we talk about it right is our first priority is continuing to.

Speaker Change: Invest in organic growth of the business and you can see for example, even in Q1, we increased our investment in R&D.

Speaker Change: We think that's important for us to ensure that we continue to provide the best solution. So first priority is funding organic growth.

Dhrupad Trivedi: The second priority is, you know, we find a balance between dividend and buyback on return to shareholders, right? And certainly, we have active buyback programs that we exercise and utilize, but obviously, with constraints on volume and trading and all of that. So, we continue to look at that as a lever available to us, and historically, in the last few years, we have utilized most of the buyback, but not in a monthly manner, but in a more, you know, adjustable manner.

Speaker Change: Our second priority is we find a balance between dividend then.

Speaker Change: Buyback on return to shareholders side then.

Speaker Change: Secondly, we have active buyback program that could be exercised and utilized.

Speaker Change: But subject to obviously.

Speaker Change: Constraints on volume in trading and all of that so we continue to look at that as a lever available to us and historically you're right in the last few years, we have utilized most of the buyback.

Speaker Change: But not.

Speaker Change: Monthly manner, but in a more.

Speaker Change: Just terrible manner. So that's the second and obviously the authority.

Dhrupad Trivedi: So that's the second, and obviously, the third is given that we have no debt and continue to be a healthy cash generation business in the current market. And even before, we always look for inorganic opportunities that help us accelerate our strategy, but our business plan and customer engagement are not dependent on or predicated on us doing that, right? So, that would be a means for us to accelerate strategy but do it in a thoughtful way that also does not dilute our business model goals in the long run.

Speaker Change: Given that we have no debt.

Speaker Change: <unk> continued to be healthy cash generation business.

Speaker Change: In the current market that even before we always look for inorganic opportunities that help us accelerate our strategy.

Speaker Change: Our business plan and customer engagements are not.

Speaker Change: Dependent on ready are predicated on us doing that right. So that would be a means.

Speaker Change: For us to accelerate strategy.

Speaker Change: And do it in a thoughtful way that also does not dilute our business model goes into long term.

Okay. Thank.

Alex Hantman: Thank you. Very helpful color there. Appreciate all the context.

Speaker Change: Thank you very helpful color there appreciate all the context.

Speaker Change: Thank you.

Operator: We now turn to Gray Powell with BTIG. Your line is open, please go ahead.

Speaker Change: We now turn to Gray Powell with <unk>. Your line is open. Please go ahead.

Gray Wilson Powell: Great, thanks for taking the questions and congratulations on the good results. So, okay, so, yeah, maybe I'm reading between the lines too much, but it seems like your tone's a lot better today than it was last quarter and maybe for much of 2023. Do you feel like your business has hit an inflection point here? And just, you know, can you maybe talk about how you feel about the quality of your pipeline and just your ability to call the business today versus, you know, calling it 6-12 months ago?

Gray Wilson Powell: Great. Thanks for taking the questions.

Gray Wilson Powell: Congratulations on the good results.

Gray Wilson Powell: Thanks.

Gray Wilson Powell: No.

Okay. So maybe I am reading between the lines too much but it seems like your tone is a lot better today than it was last quarter.

Gray Wilson Powell: Maybe for much of 2023.

Gray Wilson Powell: Do you feel like your business has hit an inflection point here and just can you maybe talk about how you feel about the quality of your pipeline and just your ability to call the business today versus call. It six to 12 months ago.

Gray Wilson Powell: Yeah.

Dhrupad Trivedi: Yeah, great question. So I think you are correct, Gray. I would say that compared to 6 to 12 months ago, certainly, we are not seeing things deteriorating. I'm nervous to use the word like an inflection point, but I would say from a trend perspective, we certainly see things not getting as bad as we saw in the last two, three, four quarters, if you will, right, and in terms of volatility. So we definitely see that as a phenomenon where activity that may be sporadic, but we certainly see our customers more engaged on actual projects right in the pipeline and plans. Now does that flex plus minus one or two quarters? Maybe, but certainly, I would say from a trend perspective that we are certainly not worse than Q4 or worse than Q3 last year.

Speaker Change: Yeah, Great question. So I think you are correct Gray I would say that.

Speaker Change: <unk> six or 12 months ago.

Speaker Change: Certainly we are not seeing things.

Speaker Change: Your rating.

Speaker Change: Im nervous to use words like inflection point, but I would say from a trend perspective, we certainly see things not getting.

As bad as we saw in the <unk>.

Speaker Change: 234 quarters, if you will right in terms of the volatility so.

Speaker Change: We definitely see that as a phenomenon where.

Speaker Change: <unk> that is.

Activity that may be sporadic.

Speaker Change: But we certainly see our customers more engaged on actual project side and the pipeline and plans now.

Speaker Change: Now does that flex plus minus one or two quarters maybe.

Speaker Change: But certainly I would say from a trend perspective.

Speaker Change: We are certainly not worse than Q4 of what than Q3 last year.

Speaker Change: Understood.

Gray Wilson Powell: Okay, very helpful. And then I answered this to some extent in the prepared remarks. The combined results were better than what we're looking for. It's definitely good to see the growth, you know, return to positive territory. I was a little confused about the mix.

Speaker Change: Okay very helpful and then.

Speaker Change: You answered this to some extent in the prepared remarks, the combined results were better than what we're looking for.

Speaker Change: It's definitely good to see the growth returned to positive territory.

I was a little confused on the mix.

Gray Wilson Powell: So the service provider was much stronger than expected. It looks like that happened in APJ, but Enterprise declined.

Speaker Change: So service provider was much stronger than expected it looks like that happened in AP Jay.

Speaker Change: Enterprise declined.

Dhrupad Trivedi: Can you just sort of, I mean, you talked about the mix for the year; can you just kind of talk about what happened in Q1 or just, yeah, can you help us explain the underlying trends there? Yeah. Yeah. Yeah. Yeah. Yeah.

Can you just sort of I mean, you talked about the mix for the year can you just kind of talk about what happened in Q1 or just.

Speaker Change: Can you help us explain the underlying trends there.

Dhrupad Trivedi: Yeah, absolutely, a good question. So I think, first, you know, maybe enterprise, right? So for us, if you look at our enterprise segment, what's the service provider on a little bit longer period, like trailing 12 months, the enterprise business is still in positive growth territory compared to many others. And the service provider is obviously negative, right? So that's one data point. The second data point I would say is that Q1 of last year had an unusually strong enterprise quarter.

AP Jay: Yes, absolutely good question, so I think.

Jay: First maybe enterprise right. So for US if you look at our enterprise.

Jay: <unk>, what's the service provider on a little bit longer period like trailing 12 month enterprise business is still in positive growth territory compared to many others and service providers, obviously negative right. So that's one data point.

Data point I would say is that.

Q1 of last year.

Jay: Had an unusually strong enterprise quarter.

Dhrupad Trivedi: And I think that obviously made the Q1 to Q1 comparison maybe a little bit more challenging, right? Because in the enterprise segment, typically, Q4 is very strong, and Q1 drops off. And I think a little bit of that Q1 to Q1 comparison is a function of last year's jumping off point, right? So that's the second data point.

Jay: And.

And I think that obviously made the Q1 to Q1 come back maybe a little bit more challenging right because in the enterprise segment. Typically Q4 is that a strong Q1 drops off.

And.

Jay: So I think a little bit of that Q1 to Q1 is a function of last year jumping off point right. So thats second data point and third I would say is our expectation from the year.

Dhrupad Trivedi: And third, I would say our expectation for the year is based on when we look at our pipeline and funnel for enterprise versus service provider, we certainly feel that it supports the comments that we expect that to continue to recover and overall grow faster than revenue. As it relates to service provider, I think you are correct about the phenomenon I mentioned in the prepared comment. In the last two, three years, right, we have had customers where they waited or delayed on adding costs, even though there was a clear need for capacity.

Jay: Is based on when we look at our pipeline and funnel for enterprise versus service provider.

Jay: Certainly feel that it supports the comments that we expect that to continue to recover and.

Jay: Overall grow faster than revenue.

Jay: As it relates to service provider I think Youre correct.

Jay: To the phenomenon I mentioned in the prepared comment.

Jay: In the last two the customers were.

Jay: They had vacated are delayed on adding cost even though there was a clear need for capacity and I think we saw some of that.

Dhrupad Trivedi: And I think we saw some of that get realized in Q1. But that doesn't necessarily mean that it's going to be the case every quarter in that region. But that's an example of where it's, you know, the customer wants to use more product but was delaying spending, and it happened in Q1. So that's more a function of sort of that. Global SP spending patterns are not exactly very predictable, but because of our geographic exposure, it kind of netted out for us.

Jay: Get realized in Q1.

Jay: That doesn't necessarily mean, that's going to be the case every quarter in that region.

Jay: But that's an example of where the.

Jay: The customer wants to use more product, but what's delaying spending and it happened in Q1, So that's more.

Jay: And then outside of that global SD spending back on being not exactly very predictable, but because of our geographic exposure.

Speaker Change: Net that out for us.

Gray Wilson Powell: Okay. That's very helpful, Culler. Thank you very much.

Speaker Change: Understood. Okay. That's very helpful color. Thank you very much.

Speaker Change: Thanks, Rick.

Yeah.

Operator: Our next question comes from Hamed Khorsand with BWS Financial. Your line is open. Please go ahead.

Speaker Change: Our next question comes from Hamed <unk> with <unk> financial your line is open. Please go ahead.

Hamed Khorsand: Hi, so the first question I have is, could you just talk about...

Hamed: Hi, So first question I had was.

Hamed Khorsand: Could you just talk about your investment in the sales process, where you're focused on, and why you're not getting any kind of return as far as your service provider side goes? Are you under-investing in the sales process, or are the customers just not interested, they're just not buying anything?

Could you just talk about.

Your investment in the sales process, where youre focused on.

Hamed: And why.

Speaker Change: You're not getting any kind of.

Speaker Change: Return as far as your service provider side goes are you under investing in the sales process or just customers just don't care, if they're just not buying anything.

Speaker Change: We're buying very little.

Dhrupad Trivedi: Yeah, so I think, thank you, Ahmed. I think if I understand the question correctly, right, I would say the phenomenon is different for us. So the service provider for us is existing customers around the world. And, you know, we are, in many cases, 10, 10 plus years customers in many four or five. And so these are not customers where we are trying to prospect the customer, understand the account, find ways to get in. These are customers where we see them every week, every month.

Speaker Change: Yeah. So.

Thank you Amit I think if I understand the question correctly that I would say the phenomenon is different for us so.

Speaker Change: Service provider for us is existing customers around the world.

Speaker Change: And in.

Speaker Change: In many cases.

Speaker Change: 10, 10, plus years customers in many four five and so these are not customers.

Speaker Change: Where we are trying to prospect the customer understand the account and find ways to get into <unk> customers, where we see them every week every month.

Dhrupad Trivedi: We are deeply aligned with them on their network planning and rollout, and support once they are deployed. So the investment there is more in our technical capabilities to support them well, to invest in engineering projects that are aligned with the direction they want to go in the future, and to be seen as the company that is solving their business problems, right? So the investment there is more in keeping your customers engaged and happy and doing things for them that increase their kind of business value.

Speaker Change: We are deeply aligned with them on that network planning and rollout and support.

Speaker Change: Once they are deployed so the investment that is more on our technical capabilities to support them well.

Speaker Change: To invest in engineering projects that are aligned with the direction. They want to go in the future.

Speaker Change: And being seen as.

Speaker Change: The company that is solving their business problems so that.

Speaker Change: The investment that is more on.

Speaker Change: Keeping your customers.

Speaker Change: Engaged and happy when doing things for them that increase there kind of a business value on the enterprise side, it's a little different phenomenon because of our relative presence in the market.

Dhrupad Trivedi: On the enterprise side, it's a little different phenomenon because of our relative presence in the market. Our investments are more around hiring people with enterprise sales experience, more experience selling security solutions, and more experience selling to CIOs. And there, obviously, we have an existing customer base, but it's more about acquiring and adding new, meaningful customers, right? So it's a different type of investment. It's a different phenomenon. I would say there's no – we basically look at it as every sort of account, whether it's service provider or enterprise, has its own unique profile and needs, and we find the right resource mix for that, right? And then on the enterprise side, it's, in addition to that, bringing in new customers.

Speaker Change: <unk>.

Speaker Change: Our investments are more around hiring people with enterprise sales experian more experience selling security solutions more experience selling to <unk>.

Speaker Change: And there are.

Speaker Change: Obviously, if you are an existing customer base, but it's more about acquiring and adding new meaningful customer sites. So it's a different type of investment it's a different phenomenon.

Speaker Change: I would say Theres no.

Speaker Change: We basically look at it as every sort of account, whether it's service provider enterprise has its own unique profile and needs and.

Speaker Change: We find the right resource mix for that.

Speaker Change: And then on the enterprise side. Its in addition to that bringing.

Speaker Change: Bringing in new customers.

Hamed Khorsand: And could you provide any kind of data as to what new customers represent to you as far as revenue is concerned?

Speaker Change: And could you provide any kind of data those too.

What new customers represent to you as far as revenue is concerned.

Dhrupad Trivedi: I think we don't publish that data, but typically, so typically between service provider and enterprise combined, 80% of our revenue is probably existing customers. And probably roughly 20% is new customers or new business. And probably that percentage is higher within enterprise. We can follow up.

Speaker Change: I think we don't publish that data but.

Speaker Change: <unk>.

Speaker Change: So typically between service provider.

Speaker Change: And enterprise combined basis, 80% of our revenue is probably existing customers.

Speaker Change: And probably roughly <unk> of new customers on new business, and probably that percentages higher within enterprise, we can follow up separately on that.

Hamed Khorsand: Okay, great. And then any particular reason why service providers remain, you know, you know, as far as it's soft and characterizes a little bit here? I guess you're in security. I mean, security should be the last, you know, investment they should be skimming.

Speaker Change: Okay, Great and then.

Speaker Change: Any particular reason why service provider remains.

As far as the soft.

Speaker Change: Characterize it a little bit there.

Speaker Change: I guess youre in security or security should be lost.

Speaker Change: The investment they should be screaming.

Dhrupad Trivedi: Yeah, no, fair. So, you know, and I think we noted, right, our security in the Q1 period for us continued to be more than 60% of revenue. So we do think that's true. I think that in the service provider case, like every other company has talked about, in North America, particularly the macro environment is causing them to be much, much more cautious than ever before. So, while we are discussing specific projects and kinds of engagement, they continue to.

Speaker Change: Yeah, No fair, so and I think we noted data security in Q1 period for us continued to be more than 60% of revenue. So we do think thats true.

I think that in service provider like every other company has talked about.

Speaker Change: In North America, particularly the macro environment.

Speaker Change: Is causing them to be much much more cautious than ever before so while we are discussing specific projects and.

Speaker Change: Kind of engagements they continue to be.

Speaker Change: On the kind of timing of when they spend right so that.

Dhrupad Trivedi: That's just the reality of it. And I think we see, even when it's security-led, there is probably faster traction with enterprise customers or service providers who are running their own networks. So their needs are a little bit different. But I would say our security growth within service providers is probably a much bigger part of SP growth, more so than them just building new networks.

Speaker Change: That's just the reality of it and I think we see that.

Speaker Change: Even when it security led.

Speaker Change: That is probably faster traction with enterprise customers, what's the service providers, who are running their own network sites, so that needs a little bit different, but but I would say our security growth didn't service providers is is probably the much bigger part of SP growth.

Speaker Change: More so than them just building new networks site, so and certainly that was the case in Q1.

Speaker Change: Okay, great. Thank you.

Speaker Change: Thank you Amit.

Speaker Change: Okay.

Hamed Khorsand: Okay, great. Thank you. Thank you, Hamed. We now turn to Christian Schwab with Craig Hammond. Your line is open. Please go ahead.

Speaker Change: Now turning to Christian Schwab with Craig Hallum. Your line is open. Please go ahead.

Operator: Thanks. My first question is...

Speaker Change: Thanks.

Christian David Schwab: Question is regarding this elongate the sales cycle second or third inning.

Assuming that we're kind of at the end of this by the end of 'twenty. Four you know can we return to double digit growth in 'twenty five.

Christian David Schwab: Yeah, no, good question. And maybe, Christian, I think just to maybe decouple the two concepts, right?

Yes. Good question, and then maybe Chris and I think just to maybe decoupled two concepts right. The question. Originally before was on the sales transformation, where you are right and I think I was answering that question as being in the second authority names of us being able to fully leverage that new capability.

Dhrupad Trivedi: So the question originally was about the sales transformation where you are, right? And I think I was answering that question as being in the second or third inning of us being able to fully leverage that new capability. In terms of the timing, I would say that it is our assumption and our model as well that as we continue to improve our position in enterprise segments and then SP spending returns to a more normalized level, it should bring us back to that growth level.

Christian David Schwab: In terms of the timing.

Christian David Schwab: I would say that is our assumption in our model as well that.

Christian David Schwab: We continue to improve our position on enterprise segments.

Christian David Schwab: As this and then SP spending returns to more normalized level it should bring us back to that growth level, yes.

Speaker Change: Fantastic no other questions. Thank you.

Speaker Change: Thank you Chris.

Operator: Our next question comes from Hendi Susanto with Gabelli Funds. Your line is open, please go ahead.

Speaker Change: Our next question comes from Hendi <unk> with Gabelli funds. Your line is open. Please go ahead.

Hendi Susanto: Good afternoon, Dhrupad and Brian. I have several questions.

Hendi: Good afternoon drew pattern, Brian I have several questions.

Hendi Susanto: Hi Hendi. My first question...

Hendi: Yes, Andy.

Hendi Susanto: My first question: service revenue grew 15%. I think that is impressive. Could you share more color on the strength of service growth and how much of that can be attributed to security solutions?

Hendi: My first question.

Hendi: Revenue grew 15% I think that is impressive could you share more color on the strength of surface growth and how much of that can be attributed to a security solution.

Hendi: Aye.

Dhrupad Trivedi: I think that if you look at our year-over-year growth and you look at security solutions as a percent of revenue, certainly that's probably slightly higher, but I think, more importantly, having those solutions is enabling us to open the door to broader conversations, which also lead to sales of other products, right? So I think if we look at what is as a result of driving those solutions and engaging customers in that way, that is probably a pretty meaningful driver of that.

Hendi: Think that if you look at our year over year growth.

Hendi: When you look at security solutions as a percent of revenue.

Hendi: Certainly thats, probably slightly higher but I think more importantly.

Hendi: <unk>.

Hendi: Having those solutions is enabling us to open the door to broader conversations which also leads to sales of other products right. So.

Hendi: I think if you look at what is.

Hendi: As a result of <unk>.

Driving those solutions and engaging customers in that way.

Speaker Change: That is probably yes.

Speaker Change: Any meaningful driver of that growth.

Hendi Susanto: And Dhrupad, the presentation mentioned service provider customer investment plans. Could you share more insight and light, let's say, among different service provider investment plans, which investment plans are the higher priority ones, which one can be postponed independently, and which one cannot be postponed?

Speaker Change: I see.

What are the precipitation mentioned surface provider customer investment plans.

Speaker Change: Could you share more.

Speaker Change: Could you share more insight and light let's.

Speaker Change: Let's say among like different service provider investment clients.

Speaker Change: At first when parents are the highest priority ones, which one can be postponed indefinitely, and which one cannot be postponed.

Dhrupad Trivedi: Yeah, I think, you know, I would probably think of it as three categories, right? So, where it is something related to them needing to add capacity or products to help actually generate or maintain revenue. That is usually their number one priority. I think where it relates to making their network more resilient and more secure, it's, you know, close to number one, right? So those two are the categories that they would typically hold off as long as they can, but they cannot do that forever.

Speaker Change: Yes, I think.

Speaker Change: <unk>.

Speaker Change: I would say probably think of it as three categories right. So.

Speaker Change: There it is something related to them needing to add capacity or product to help act.

Speaker Change: Actually generator maintained revenue that is usually.

Speaker Change: Number one priority.

Speaker Change: I think we're at the late two making that network more resilient and more secure.

Speaker Change: Close to number one right. So those two are the categories that they would typically have.

Speaker Change: As long as they can but they cannot do that forever.

I think.

Dhrupad Trivedi: I think you know, industry-wide, when you look at solutions that are more about rebuilding completely new types of networks, changing how you do, you know, applications, things like that are the ones that have the highest risk of being delayed because they are not directly in line of operations; they are more in line of sort of modernization.

Speaker Change: Industry wide when you look at.

Speaker Change: Solutions that are more about.

Speaker Change: The building completely new type of net or changing how you do applications things like that.

Speaker Change: Are the ones that have the highest risk of being delayed because they are not directly in line of operations that are more in line of sort of modernization.

Hendi Susanto: That's very helpful, Dhrupad. And Dhrupad, any insight into the penetration rate of security solutions among your customer install base, like qualitatively speaking, how much the install base still has not adopted security solutions, or in other words, how much more opportunity is out there for penetration among your install base?

Speaker Change: That's really helpful to put in there.

Speaker Change: Insight into.

Speaker Change: Penetration rate of security solution. Among your customer is full base like qualitatively speaking.

Speaker Change: How much.

Speaker Change: How much more of your.

Speaker Change: Installed base still has not.

Speaker Change: <unk> Securities.

Speaker Change: Security solutions or in other words.

Speaker Change: How much more opportunity out there.

Speaker Change: For our penetration among or useful info base.

Speaker Change: Base.

Dhrupad Trivedi: Yeah, I think that's difficult to quantify, but I'll give you the reason why, right? So I think there are two reasons why people spend more on security. One is that they are doing something today, and they realize they need to do more, right? So it's not that they don't do anything, but they need to do more.

Speaker Change: Yes, I think that's difficult to quantify but I'll give you. The reason why right. So I think there are two reasons why people spend more on security and one is that doing something today and they realize they need to do more right. So it's not that they don't do anything but they need to do more.

Dhrupad Trivedi: And second, when people hear about public breaches and incidents, it oftentimes prompts them to do something when they were not doing anything, right? So in the first case, it's an expansion of demand. In the second case, it's actually creation of demand, right? And I would say certainly with our existing customers.

Speaker Change: And second is when people hear about kind of public breaches and incidents.

Speaker Change: It oftentimes prompt them to do something when they were not doing anything right. So in the first case, it's an expansion of demand in the second case, it actually creation of demand right.

Speaker Change: I would say certainly with our existing customers.

Dhrupad Trivedi: There's no quantitative benchmark that says you must spend, you know, X percent on security. So it depends on the vertical, like a financial firm is going to spend more. And it depends on the kind of scale of the company and their own. Hamed Khorsand, Gray Powell, Christian Schwab, Anja Soderstrom, Rob Fink, Tom Baumann, Hendi Susanto, Brian Becker, Dhrupad Trivedi, A10 Networks Inc.

Speaker Change: There is no quantitative benchmark that says you must spend X percent on securities. So it depends on the vertical.

Speaker Change: Our financial form is going to spend more.

Speaker Change: And it depends on kind of the scale of the company and their own.

<unk> water.

Speaker Change: So, but having said that I think certainly for a company of our size, we think thats already meaningful opportunity for us for many years to come.

Hendi Susanto: Yeah, and then, Dhrupad, if I look at the list of A10 network solutions, let's say within security and then within hybrid cloud solutions, and then look back, let's say like 12 months ago, which one has gained more momentum? Or in other words, which one offers more potential upside this year?

Speaker Change: Okay, and then if I look at the list of Aten networks solutions, let's say with the security and then within hybrid cloud solutions.

Speaker Change: And then looking back, let's say like 12 months ago, which one has gained a stronger momentum or in other words to each one.

Speaker Change: I'll first like more potential upside this year.

Dhrupad Trivedi: I think that probably, Hendi, I would rate both of them as the main things we are trying to do, and that's why our R&D and everything is aligned that way. So I think what we are doing in terms of supporting more hybrid infrastructure, which is on-premises plus cloud, which, you know, is becoming more popular, is directly going to help us, right, with growth in enterprise as well as some service providers.

Speaker Change: I think that probably had the out rate both of them as the main things. We are trying to do and that's why our R&D and everything is aligned that way. So I think what we are doing in terms of supporting more hybrid infrastructure, which is on brand plus cloud.

Speaker Change: Which.

Speaker Change: More and more is becoming more popular.

Speaker Change: Is it actually going to help us with growth in enterprise as well as some service providers and I think what we are doing in security is.

Dhrupad Trivedi: And I think what we are doing in security with new capabilities is much broader. It's SPI and enterprise, and it's every region. So I would say those are the two main investment areas for us, which, you know, hopefully you can see are 100% aligned with where we are investing.

Speaker Change: The new capabilities is much broader based its SDN enterprise and its every region.

Speaker Change: So I would say those are the two main investment areas for us.

Speaker Change: Rich.

Speaker Change: Hopefully you can see our 100% aligned with where we are investing so.

Hendi Susanto: And then one more question, Brian, is there any impact on the Japanese Yen exchange rates in Q1 or any anticipated impacts?

Speaker Change: Yes.

Speaker Change: And then one more questions.

Speaker Change:

Speaker Change: Brian is there any impact of Japanese yen exchange rates in Q1 any anticipated impact.

Brian Becker: Yeah, you know, there's a couple of points to make about that. I mean, as everyone has seen, the Japanese yen declined over the quarter, starting out at the little 140s exchange rate to the U.S. dollar and going up to the 150s, and even today it's trading higher. You know, we don't really plan our budget based on U.S. dollar outcomes, and so our Japanese team continues to meet plan. There was some FX adjustment, but, you know, we don't really disclose that because it can swing both ways, and, you know, we typically will cover gaps or take the benefit, you know, as it comes through other regions and or, you know, to help offset other risks. But yeah, modest impact in the quarter in terms of revenue, but nothing to speak of, and then you probably see in the OI&E line that there was some pickup in FX just based on our hedged receivable.

Speaker Change: Yes.

Brian Becker: There is a couple of points to make about that.

Brian Becker: No one has seen the Japanese yen decline over the quarter, starting out $140 exchange rate to the U S dollar to $1 50, and even today, it's hard trading higher.

Brian Becker: We don't really plan are.

Brian Becker: Budget based on U S dollar outcome and so our Japanese team continues to meet plan. There was some FX adjustment, but we don't really disclose that because it can swing both ways.

Brian Becker: We typically will cover gaps or take the benefit as it comes through other regions <unk>.

Brian Becker: To help offset other risks, but modest impact in the quarter in terms of revenue, but nothing to speak of and then we probably see in the R&D line. There was some pickup in FX just based on our hedged receivables.

Hendi Susanto: Thank you, Brian. Thank you, Dhrupad.

Speaker Change: I see thank you Brian Thank you Rupert.

Speaker Change: Thank you Andy.

Dhrupad Trivedi: This concludes our Q&A. I'll now hand it back to Dhrupad Trivedi for final remarks.

Speaker Change: This concludes our Q&A I'll now hand back to Truecar traumatic for final remarks.

Speaker Change: Okay.

Dhrupad Trivedi: Thank you and thank you to all of our shareholders for joining us today and for your support, and thanks to all the A10 employees around the world that continue to help drive our business forward.

Truecar: Thank you.

Truecar: And thank you to all of our shareholders for joining us today and for your support and thanks to all the <unk> employees around the world that continue to help drive our business forward. Thank you.

Operator: Ladies and gentlemen, today's call is now concluded. We'd like to thank you for your participation. You may now disconnect your lines.

Speaker Change: Ladies and gentlemen, today's call is now concluded wed like to thank you for your participation you may now disconnect your lines.

Speaker Change: [music].

Speaker Change: <unk>.

Speaker Change: [music].

Speaker Change: Okay.