Q2 2026 A10 Networks Inc Earnings Call

August 5, 2026

Operator: Good afternoon, everyone, and welcome to the A10 Networks Q2 2026 financial results. At this time, all participants have been placed on a listen-only mode, and we will open the floor for questions following the presentation. It is now my pleasure to turn the floor over to your host, Tom Baumann of FNK Investor Relations. Tom, the floor is yours.

Speaker #1: welcome to the A10 Networks second quarter 2026 financial results. At this time, all participants have been placed on a listen-only mode, and we will open the floor for questions following the presentation.

Speaker #1: Relations. Tom, the floor is yours.

Tom Baumann: Thank you. Thank you all for joining us today. This call is being recorded and webcast live and may be accessed for at least 90 days via the A10 Networks website at a10networks.com. Hosting the call today are Dhrupad Trivedi, A10's President and CEO, and CFO, Michelle Caron. Before we begin, I would like to remind you that shortly after the market closed today, A10 Networks issued a press release announcing its Q2 2026 financial results. Additionally, A10 published a presentation, 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.

Speaker #2: Thank you for joining us today. This call is being recorded. Thank you. It is also being webcast live and may be accessed for at least 90 days via the A10 Networks website at a10networks.com.

Speaker #2: Hosting the call today are Dhrupad Trivedi, A10's President and CEO, and CFO, Michelle Caron. Before we begin, I would like to remind you that shortly after the market closed today, A10 Networks issued a press release announcing its second quarter 2026 financial results.

Speaker #2: Additionally, A10 published a presentation supplemental trend financial statements. You may access the press release, presentation, and trend of financial statements on the Investor Relations section of the company's website.

Tom Baumann: Additionally, A10 published a presentation, 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.

Speaker #2: During the course of today's call, management will make forward-looking statements, including statements regarding projections for future operating results, demand industry and customer trends, macroeconomic factors, strategy, potential new products, and solutions, or capital allocation strategy, profitability, expenses and investments, positioning, and/or dividend program.

Tom Baumann: During the course of today's call, management will make forward-looking statements, including statements regarding projections for future operating results, demand, industry and customer trends, macroeconomic factors, strategy, potential new products and solutions, our capital allocation strategy, profitability, expenses, and investments, positioning, and our dividend program. These statements are based on current expectations and beliefs as of today, 5 August 2026. 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 our most recent Form 10-K and quarterly report on Form 10-Q.

Speaker #2: These statements are based on current expectations and beliefs as of today, August 5, 2026. These forward-looking statements involve a number of risks and uncertainties.

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 our most recent Form 10-K and quarterly report on Form 10-Q.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: For a more detailed description of these risks and uncertainties, please refer to our most recent 10-K and quarterly report on Form the exception of revenue, financial measures discussed today are running non-GAAP basis.

Tom Baumann: Please note that with the exception of revenue, financial measures discussed today are on a non-GAAP basis, unless otherwise noted, and may have been adjusted to exclude certain charges. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP and may be different from non-GAAP financial measures presented by other companies. A reconciliation between GAAP and non-GAAP measures can be found in the press release issued today and on the trended quarterly financial statements posted on the company's website at a10networks.com. I'd like to turn the call over to Dhrupad Trivedi, President and CEO of A10 Networks.

Speaker #2: Unless otherwise noted. And may have been adjusted to exclude certain charges. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP and may be different from non-GAAP financial measures presented by other companies.

Speaker #2: A reconciliation between GAAP and non-GAAP measures can be found in the press release issued today, as well as in the trend of quarterly financial statements posted on the company's website at www.a10networks.com.

Tom Baumann: A reconciliation between GAAP and non-GAAP measures can be found in the press release issued today and on the trended quarterly financial statements posted on the company's website at a10networks.com. I'd like to turn the call over to Dhrupad Trivedi, President and CEO of A10 Networks.

Speaker #2: Now, I'd like to turn the call over to Dhrupad Trivedi, President and CEO of A10 Networks.

Speaker #3: Thank you, Tom. And thank you all for joining us today. A10 continues to deliver top and bottom-line growth driven by the increasing relevance of our platform to the demands of next-generation networking.

Dhrupad Trivedi: Thank you, Tom. Thank you all for joining us today. A10 continues to deliver top and bottom-line growth driven by the increasing relevance of our platform to the demands of next-generation networking. From our foundation in advanced traffic management solutions to our more recent focus on integrating security in all our offerings, we have built exactly the platform that today's customers need to address the host of challenges impacting their operations. AI is creating new challenges for customers across the industry, greater traffic volume, expanding security threats, and the need for lower latency. Our focus on next-generation networking, which combines advanced application management with integrated security, represents the future of A10 and increasingly the standard our industry is being held to. Subsequent to the quarter, we announced a significant expansion of our relationship with Microsoft.

Speaker #3: From our foundation, it advanced traffic management solutions to our more recent focus on integrating security, in all our offerings, we have built exactly the platform that today's customers need to address the host of challenges impacting their operations.

Speaker #3: AI is creating new challenges for customers across the industry, greater traffic volume, expanding security threats, and the need for lower latency. Our focus on next-generation networking which combines advanced application management with integrated security represents the future of A10 and increasingly the standard our industry is being held to.

Dhrupad Trivedi: AI is creating new challenges for customers across the industry, greater traffic volume, expanding security threats, and the need for lower latency. Our focus on next-generation networking, which combines advanced application management with integrated security, represents the future of A10 and increasingly the standard our industry is being held to. Subsequent to the quarter, we announced a significant expansion of our relationship with Microsoft.

Speaker #3: Subsequent to the quarter, we announced a significant expansion of our relationship with Microsoft. This agreement reflects a shared commitment to a long-term commitments on both sides.

Dhrupad Trivedi: This agreement reflects a shared commitment to a long-term partnership with mutual performance commitments on both sides. As a result, we are more firmly aligned with the long-term roadmap of this industry leader. It also serves as powerful validation of A10's relevance to the customer and market and speaks to the depth of the relationship we have built over multiple years. We also continue to advance our product roadmap. In June, we acquired TrojAI, an AI security company that helps organizations secure, test, and govern AI applications and agentic workflows. This acquisition adds two layers to our platform, red teaming, which uses AI to probe models and agents for vulnerabilities at build time, as well as real-time protection at runtime. We generated 15.5% revenue growth in Q2 on a year-over-year basis and 14.5% growth year to date.

Speaker #3: As a result, we are more firmly aligned with the long-term roadmap of this industry leader. It also serves as a powerful validation of A10's relevance to the customer and market and speaks to the depth of the relationship we have built over multiple years.

Speaker #3: We also continue to advance our product roadmap. In June, we acquired Troge AI, an AI security company that helps organizations secure, test, and govern AI applications and agentic workflows.

Dhrupad Trivedi: In June, we acquired TrojAI, an AI security company that helps organizations secure, test, and govern AI applications and agentic workflows. This acquisition adds two layers to our platform, red teaming, which uses AI to probe models and agents for vulnerabilities at build time, as well as real-time protection at runtime. We generated 15.5% revenue growth in Q2 on a year-over-year basis and 14.5% growth year to date.

Speaker #3: This acquisition adds two layers to our platform: red teaming, which uses AI to probe models and agents for vulnerabilities at build time, as well as real-time protection at runtime.

Speaker #3: We generated 15.5% revenue growth in the second quarter on a year-over-year basis and 14.5% growth year-to-date. This marked our fourth quarter of double-digit growth in the last five, and as a result, we have increased our full-year outlook to 12% to 14% for the full year, versus previous guidance of 10% to 12%, reflecting continued confidence in the demand environment ahead.

Dhrupad Trivedi: This marked our Q4 of double-digit growth in the last five. As a result, we have increased our full-year outlook to 12% to 14% for the full year versus previous guidance of 10% to 12%, reflecting continued confidence in the demand environment ahead. AI continues to erase the distinction between how enterprises and service providers build their networks. Today, enterprises and service providers face the same workloads, performance demands, and security requirements. We have built our platform for exactly this world. One architecture, one operating model, one security framework across both segments. Through this period of improving demand, our operating discipline has remained constant. We balance targeted investment with EPS expansion, and we delivered on both goals in Q2. Our goal is to convert growth into profitability and cash while continuing to invest in the technical capabilities this demand environment requires.

Speaker #3: AI continues to erase the distinction between how enterprises and service providers build their networks. Today, enterprises and service providers face the same workloads, performance demands, and security requirements.

Speaker #3: We have built our platform for exactly this world: one architecture, one operating model, one security framework across both segments. Through this period of improving demand, our operating discipline has remained constant.

Dhrupad Trivedi: We have built our platform for exactly this world. One architecture, one operating model, one security framework across both segments. Through this period of improving demand, our operating discipline has remained constant. We balance targeted investment with EPS expansion, and we delivered on both goals in Q2. Our goal is to convert growth into profitability and cash while continuing to invest in the technical capabilities this demand environment requires.

Speaker #3: We balance targeted investment with EPS expansion and we delivered on both goals in the second quarter. Our goal is to convert growth into profitability and cash while continuing to invest in the technical capabilities this demand environment requires with earning per share growth exceeding revenue growth, and we remain on track to do just that.

Dhrupad Trivedi: With earnings per share growth exceeding revenue growth, we remain on track to do just that. With that, I'd like to turn the call over to Michelle Caron, our Chief Financial Officer, to review the numbers in more detail.

Speaker #3: With that, I'd like to turn the call over to Michelle Caron, our Chief Financial Officer to review the numbers in more detail.

Speaker #4: Thank you, Dhrupad. As a reminder, with the exception of revenue, all of the metrics discussed on this call are on a non-GAAP basis unless otherwise stated.

Michelle Caron: Thank you, Dhrupad. As a reminder, with the exception of revenue, all of the metrics discussed on this call are 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. Let me now turn to the results. As Dhrupad noted, Q2 results were aligned with our business model goals. We delivered revenue growth of 15.5% to $80.1 million. Year to date, our revenue was $155.1 million, an increase of 14.5%. Turning to mix, product revenue in Q2 was $49 million or 61% of total revenue. While service revenue was $31.1 million or 39% of total revenue. From a product mix perspective, security-led revenue continues to drive product revenue growth and meet our long-term goals as a percentage of total revenue. From a vertical perspective, enterprise customers represented 60% of Q2 revenues.

Speaker #4: A full reconciliation of GAAP to non-GAAP results are provided in our press release and on our website. Let me now turn to the results.

Speaker #4: As Dhrupad noted, Q2 results were aligned with our business model goals. We delivered revenue growth of 15.5% to 80.1 million. Year-to-date, our revenue was $155.1 million, an increase of 14.5%.

Michelle Caron: Year to date, our revenue was $155.1 million, an increase of 14.5%. Turning to mix, product revenue in Q2 was $49 million or 61% of total revenue. While service revenue was $31.1 million or 39% of total revenue. From a product mix perspective, security-led revenue continues to drive product revenue growth and meet our long-term goals as a percentage of total revenue. From a vertical perspective, enterprise customers represented 60% of Q2 revenues.

Speaker #4: Turning to mix, product revenue in the second quarter was $49 million, or 61% of total revenue, while service revenue was $31.1 million, or 39% of total revenue.

Speaker #4: From a product mix perspective, security-led revenue continues to drive product revenue growth and meet our long-term goals as a percentage of total revenue. From a vertical perspective, enterprise customers represented 60% of Q2 revenues.

Speaker #4: On a trailing 12-month basis, enterprise represents approximately half of total revenue, in line with our previously stated corporate goals of driving balanced growth. Service provider spend in the Americas has begun to normalize.

Michelle Caron: On a trailing 12-month basis, enterprise represents approximately half of total revenue, in line with our previously stated corporate goals of driving balanced growth. Service provider spend in the Americas has begun to normalize. EMEA service provider demand was impacted by the geopolitical environment, while Japan, within our APJ region, continues to experience macroeconomic pressures that are impacting spending cycles. We remain confident that our service provider relationships around the world remain a strong foundation for continued growth within international markets. Both verticals align with our strategy and reflect the strength of our offerings supporting AI infrastructure build-outs. From a geographic perspective, our Americas region represented 68% of global revenue. This reflects our deliberate focus on the Americas as a growth region, driven by AI infrastructure build-outs and strength in the enterprise market. Non-GAAP gross margin was 80.3%, in line with our stated goals.

Speaker #4: EMEA service provider demand was impacted by the geopolitical environment, while Japan within our APJ region continues to experience macroeconomic pressures that are impacting spending cycles.

Speaker #4: We remain confident that our service provider relationships around the world remain a strong foundation for continued growth within international markets. Both verticals align with our strategy and reflect the strength of our offerings supporting AI infrastructure build-outs.

Michelle Caron: We remain confident that our service provider relationships around the world remain a strong foundation for continued growth within international markets. Both verticals align with our strategy and reflect the strength of our offerings supporting AI infrastructure build-outs. From a geographic perspective, our Americas region represented 68% of global revenue.

Speaker #4: From a geographic perspective, our Americas region represented 68% of global revenue. This reflects our deliberate focus on the Americas as a growth region, driven by AI infrastructure build-outs and strengths in the enterprise market.

Michelle Caron: This reflects our deliberate focus on the Americas as a growth region, driven by AI infrastructure build-outs and strength in the enterprise market. Non-GAAP gross margin was 80.3%, in line with our stated goals.

Speaker #4: Non-GAAP gross margin was 80.3%, in line with our stated goals. Operating expenses were $43.9 million, as we continued to prioritize investments in AI-facing innovation, next-generation networking, and security.

Michelle Caron: Operating expenses were $43.9 million as we continued to prioritize investments in AI-facing innovation, next-gen networking, and security. Operating margin was 25.5%, resulting in net income of $18.7 million or $0.26 per basic and $0.25 per diluted share, compared to $0.21 in the year-ago period. Q2 diluted weighted share count was 75.7 million shares. We generated $26.9 million in free cash flow in the quarter as the Q1 timing items we noted recovered as expected. On a year-to-date basis, free cash flow was $26.2 million. We continue to expect full-year free cash flow to grow year over year from approximately $65 million in 2025. Adjusted EBITDA was $25.4 million, 30.5% of revenue, consistent with our business model goals. Turning to the balance sheet, cash and marketable securities were $357.3 million as of 30 June, and deferred revenue was $154.8 million.

Speaker #4: Operating margin was 25.5%, resulting in net income of $18.7 million, or $0.26 per basic share and $0.25 per diluted share, compared to $0.21 in the year-ago period.

Speaker #4: Q2 diluted weighted share count was 75.7 million shares. We generated 26.9 million in free cash flow in the quarter, as the Q1 items is the Q1 timing items we noted recovered as expected.

Speaker #4: On a year-to-date basis, free cash flow was 26.2 million. We continue to expect full-year free cash flow to grow year-over-year from approximately 65 million in 2025.

Michelle Caron: On a year-to-date basis, free cash flow was $26.2 million. We continue to expect full-year free cash flow to grow year over year from approximately $65 million in 2025. Adjusted EBITDA was $25.4 million, 30.5% of revenue, consistent with our business model goals. Turning to the balance sheet, cash and marketable securities were $357.3 million as of 30 June, and deferred revenue was $154.8 million.

Speaker #4: Adjusted EBITDA was $25.4 million, or 30.5% of revenue, consistent with our business model goals. Turning to the balance sheet, cash and marketable securities were $357.3 million as of June 30th, and deferred revenue was $154.8 million. We continue to return meaningful capital to shareholders.

Michelle Caron: We continue to return meaningful capital to shareholders. During the quarter, we paid $4.3 million in cash dividends and repurchased $2.4 million worth of shares, returning a total of $6.7 million to shareholders. The board has approved a quarterly cash dividend of $0.06 per share to be paid on 1 September 2026, to shareholders of record on 15 August 2026. The company has $53 million remaining on its 75 million share repurchase authorization. Consistent with the industry, we continue to navigate cost and delivery challenges related to the supply chain. Customer satisfaction and on-time delivery remain our top priorities. The strength of our business model gives us the confidence to raise our EPS outlook even as we navigate near-term cost dynamics. I'll now turn the call back to Dhrupad for an update on our 2026 outlook and closing comments.

Speaker #4: During the quarter, we paid $4.3 million in cash dividends and repurchased $2.4 million worth of shares, returning a total of 6.7 million to shareholders.

Speaker #4: The Board has approved a quarterly cash dividend of $0.06 per share to be paid on September 1, 2026, to shareholders of record as of August 15, 2026.

Speaker #4: The company has $53 million remaining on its $75 million share repurchase authorization. Consistent with the industry, we continue to navigate cost and delivery challenges related to the supply chain.

Michelle Caron: Consistent with the industry, we continue to navigate cost and delivery challenges related to the supply chain. Customer satisfaction and on-time delivery remain our top priorities. The strength of our business model gives us the confidence to raise our EPS outlook even as we navigate near-term cost dynamics. I'll now turn the call back to Dhrupad for an update on our 2026 outlook and closing comments.

Speaker #4: Customer satisfaction and on-time delivery remain our top priorities, and the strength of our business model gives us the confidence to raise our EPS outlook even as we navigate near-term cost dynamics.

Speaker #4: I'll now turn the call back to Dhrupad for an update on our 2026 outlook and closing comments.

Speaker #3: Thank you, Michelle. A10 continues to strengthen its position as a partner of choice for next-generation networks, and we are positioned to benefit from multiple durable, secular catalysts.

Dhrupad Trivedi: Thank you, Michelle. A10 continues to strengthen its position as a partner of choice for next-generation networks. We are positioned to benefit from multiple durable secular catalysts. We continue to invest to enhance our position across our portfolio while preserving profitability and shareholder returns. Based on the results through six months and our visibility ahead, we are increasing our full-year 2026 outlook. We now expect 2026 full-year revenue to increase by 12% to 14% on a year-over-year basis, up from 10% to 12%. EPS growth of 14% to 16%, up from 12% to 14% previously. Operator, you can now open the call up for questions.

Speaker #3: We continue to invest to enhance our position across our portfolio while preserving profitability and shareholder returns. Based on the results through six months and our visibility ahead, we are increasing our full-year 2026 outlook.

Speaker #3: We now expect 2026 full-year revenue to increase by 12 to 14 percent on a year-over-year basis, up from 10 to 12 percent, and EPS growth of 14 to 16 percent, up from 12 to 14 percent previously.

Dhrupad Trivedi: We now expect 2026 full-year revenue to increase by 12% to 14% on a year-over-year basis, up from 10% to 12%. EPS growth of 14% to 16%, up from 12% to 14% previously. Operator, you can now open the call up for questions.

Speaker #3: Operator, you can now open the call up for questions.

Speaker #4: Thank you very much, we're now opening the floor for questions. If you have any questions, you can press star one on your phone keypad now to join the queue.

Operator: Thank you very much. We're now opening the floor for questions. If you have any questions, you can press star one on your phone keypad now to join the queue. We ask that while you're posing your question, you please pick up your handset if you are listening on a speakerphone to provide optimum sound quality. Star one if you would like to ask a question. Please wait a moment whilst we poll for questions. Thank you. Our first question is coming from Gray Powell of BTIG. Gray, your line is live.

Speaker #4: We ask that while you're posing your question, you please pick up your handset if you are listening on the speakerphone to provide optimum sound quality.

Speaker #4: To ask a question, please press star one. Please wait a moment while we poll for questions. Thank you. Our first question is coming from Gray Powell of BTIG.

Speaker #4: Gray, your line is live.

Speaker #1: All right, great. Thanks for taking the question and congratulations on the really strong set of results.

Gray Powell: All right, great. Thanks for taking the question, and congratulations on the really strong set of results.

Speaker #3: Thank you. Thank you.

Dhrupad Trivedi: Thank you.

Speaker #1: Yeah, okay. So on product revenue growth, it's consistently been strong. It's the last 18 months 25% growth in Q2 versus a tough comp last year.

Gray Powell: Yeah. Okay. On product revenue growth, it's consistently been strong. It's the last 18 months, 25% growth in Q2 versus a tough comp last year. I thought that was particularly impressive. Can you maybe talk about how the drivers of growth on the product side have been changing this year versus last year? Just how should we think about the duration of the spending cycle that you're currently benefiting from?

Speaker #1: I thought that was particularly impressive. Can you maybe talk about how the drivers of growth on the product side have been changing this year versus last year?

Speaker #1: And then just how should we think about the duration of the spending cycle that you're currently benefiting from?

Speaker #3: Yeah. No, great question. And I think, as we have said before, when we get new customer or new business product revenue is the lead indicator.

Dhrupad Trivedi: No, great question. I think as we have said before, when we get new customer or new business, product revenue is the lead indicator. Relative to your question, Gray, two things, right? A, over the last several quarters, we have spoken about things that we are strengthening on the commercial side and the product side to be able to better address and win opportunities, including in the enterprise segment, right? That's one aspect of where as we get new business, the product growth is the lead driver and grows faster than service at that point. Second, I would say is we have continued to engage customers with longer-term roadmap and solutions related to what they can do with AI when they actually deploy it in the next two to three years.

Speaker #3: And relative to your question, Gray, two things, right? So A, over the last several quarters, we have spoken about things that we are strengthening on the commercial side and the product side, to be able to better address and win opportunities including in the enterprise segment, right?

Speaker #3: So that's one aspect of where as we get new business, the product growth is the lead driver and grows faster than service at that point.

Dhrupad Trivedi: That's one aspect of where as we get new business, the product growth is the lead driver and grows faster than service at that point. Second, I would say is we have continued to engage customers with longer-term roadmap and solutions related to what they can do with AI when they actually deploy it in the next two to three years.

Speaker #3: Second, I would say is as we have continued to engage customers with longer-term roadmap and solutions related to what they can do with AI when they actually deployed in the next two, three years, that has also naturally led to broader conversations with other products that they could be engaging with us today while they do that.

Dhrupad Trivedi: That has also naturally led to broader conversations with other products that they could be engaging with us today while they do that. I think those two dimensions have helped us drive that product growth a little bit more substantially. Our goal is obviously to continue to maintain that as much as we can.

Speaker #3: So I think those two dimensions have helped us kind of drive that product growth a little bit more substantially. And our goal is obviously to continue to maintain can.

Speaker #1: Okay, that's really helpful. And then just, I guess it's related question. But the last quarter you called out some pull-forward dynamics with your largest customer.

Gray Powell: That's really helpful. I guess it's a related question. The last quarter, you called out some pull-forward dynamics with your largest customer. I guess I was a little bit surprised to see product growth accelerate in Q2. Can you maybe just talk about what surprised you the most in the quarter?

Speaker #1: So I guess that is a little bit surprised to see product growth accelerate in Q2. Can you maybe just talk about what surprised you the most in the quarter?

Speaker #1: And was there any similar pull-forward dynamics in Q2 to what you saw last quarter?

Gray Powell: Was there any similar pull-forward dynamics in Q2 to what you saw last quarter?

Speaker #3: Yeah, no, fair point. And I think maybe a minor subtlety there, right? So the pull-forward dynamic was not sort of a relocation of demand.

Dhrupad Trivedi: Yeah, no, fair point. I think maybe a minor subtlety there. The pull-forward dynamic was not a relocation of demand. It had more to do with supporting a significant project that had a timeline that needed to be completed. When I look at Q2, similarly, I would say, we continue to balance the customer needs and deployment needs. There's no concern that this is demand from outer quarters that's coming into the period, if that's helpful.

Speaker #3: It had more to do with supporting a significant project. That had a timeline that needed to be completed. So when I look at Q2, similarly, I would say, right, we continue to balance the customer needs and deployment needs.

Speaker #3: But there's no concern that this is demand from other quarters that's coming into the period, if that's helpful.

Speaker #1: That's really helpful. Thank you very much.

Gray Powell: That's really helpful. Thank you very much.

Speaker #3: Thanks. Thanks, Gray.

Dhrupad Trivedi: Thanks.

Operator: Thank you very much. Our next question is coming from Christian Schwab of Craig-Hallum Group. Christian, your line is live.

Speaker #4: Thank you very much. And our next question is coming from Christian Schwab of Craig Hallam Group. Christian, your line is live.

Speaker #1: Great, thanks for taking my question. Great quarter and outlook. Can you just give a better description and discussion on the growth drivers which appear to be large degree of increased traffic that is going through the network, particular through enterprises as AI adoption is accelerating?

Christian Schwab: Great. Thanks for taking my question. Great quarter and outlook. Can you just give a better description and discussion on the growth drivers, which appear to be a large degree of increased traffic that is going through the network, in particular, through enterprises as AI adoption is accelerating? Is that also part of the expansion of the Microsoft relationship? In addition to that, as more and more traffic becomes localized on the enterprise, and as enterprise deploy specific AI applications that they'll run dedicated on their networks versus going to the cloud, should we think of that as a meaningful growth driver for you over time?

Speaker #1: Is that also part of the expansion of the Microsoft relationship? And in addition to that, is more and more traffic becomes localized on the enterprise?

Christian Schwab: Is that also part of the expansion of the Microsoft relationship? In addition to that, as more and more traffic becomes localized on the enterprise, and as enterprise deploy specific AI applications that they'll run dedicated on their networks versus going to the cloud, should we think of that as a meaningful growth driver for you over time?

Speaker #1: And is enterprise deploy specific AI applications at the run dedicated on their networks versus going to the cloud? Should we think of that as a meaningful growth driver for you over time?

Speaker #3: Yeah, no, it's great question, Christian. So I think I'll maybe talk about that in three parts, right? So first, as you mentioned, right, our approach is around the notion of helping whatever type of company.

Dhrupad Trivedi: Yeah, I know. Great question, Christian. I think I'll maybe talk about that in three parts. First, as you mentioned, our approach is around the notion of helping whatever type of company uses the product, that when there is more traffic, more complicated traffic, and people are worried about latency, that's a good fit for our solutions, independent of what exact application it may be. Certainly the growth in traffic driven in some part due to AI, which is much more burst traffic, high volume traffic, and different than what we used to see. It results in two parts. One is just managing that traffic efficiently and with low latency. Second is dealing with the new kinds of threats that arise because of the use of AI by not even enterprise, but by everybody on the network.

Speaker #3: Uses the product, that when there is more traffic, more complicated traffic, and people are worried about latency, that's a good fit for our solutions.

Speaker #3: Independent of what exact application may be. So certainly the growth in traffic driven in some part due to AI, which is much more burst traffic, high volume traffic, and different than what we used to see, it results in two parts.

Dhrupad Trivedi: Certainly the growth in traffic driven in some part due to AI, which is much more burst traffic, high volume traffic, and different than what we used to see. It results in two parts. One is just managing that traffic efficiently and with low latency. Second is dealing with the new kinds of threats that arise because of the use of AI by not even enterprise, but by everybody on the network.

Speaker #3: One is just managing that traffic efficiently and with low latency. And second is dealing with the new kinds of threats that arise because of the use of AI by not just enterprises, but by everybody on the network.

Speaker #3: So that is certainly one of the drivers. And I would say we see that as kind of a sustainable thing for several years. Because it's related ultimately not to who is building how many data centers, it's linked to our people using AI, right?

Dhrupad Trivedi: That is certainly one of the drivers, and I would say we see that as a sustainable thing for several years. Because it's related ultimately not to who is building how many data centers. It's linked to our people using AI. I think we all can answer that for ourselves. That's clearly one of the drivers. Second, I think you talked about Microsoft, and obviously we have been partnered with them, and it's been a great customer for us for a long period of time. The expansion is that over the next couple of years timeframe, again, we are more and more aligned on the roadmap that as they build out their own architecture and infrastructure, that we are continuing to be embedded with them in broader areas than we used to before. It's continuing to expand that.

Speaker #3: And I think we all can answer that for ourselves. So that's clearly one of the drivers. Second, I think you talked about Microsoft and it obviously we have been partnered with them and it's been a great customer for us for a long period of time.

Speaker #3: The expansion is that over the next couple of years timeframe, again, we are more and more aligned on the roadmap that as they build out their own architecture and infrastructure, that we are continuing to be embedded with them in broader areas than we used to before, right?

Dhrupad Trivedi: The expansion is that over the next couple of years timeframe, again, we are more and more aligned on the roadmap that as they build out their own architecture and infrastructure, that we are continuing to be embedded with them in broader areas than we used to before. It's continuing to expand that.

Speaker #3: So it's continuing to expand that. At the same time, obviously, we are very focused on ensuring we do our part to help them continue to be successful.

Dhrupad Trivedi: At the same time, obviously, we are very focused on ensuring we do our part to help them continue to be successful. That's simply a reflection and joint commitment from both sides that we want to make it work for an extended period of time. This is just a reflection of that. Ultimately, it has to be that we have to deliver the right technology they need, and we are obviously focused on that from a technical point of view. The last point you mentioned actually is an interesting one.

Speaker #3: So that's simply kind of a reflection and joint commitment from both sides. That we want to make it work for an extended period of time.

Speaker #3: And this is just a reflection of that. And ultimately, it has to be that we have to deliver the right technology they need and we are obviously focused on that from a technical point of view.

Speaker #3: The last point you mentioned actually is an interesting one. So I would say this is not a big demand driver immediately. But certainly in the next two to three years, as you see in the news, large enterprise, particularly chooses to do sometimes their own models or because of sovereign AI reasons in outside of US as well.

Dhrupad Trivedi: I would say this is not a big demand driver immediately, but certainly in the next 2 to 3 years, as you see in the news, large enterprise particularly chooses to do sometimes their own models or because of sovereign AI reasons and outside of US as well, they choose to do actually more things on-prem than even in the cloud. Our solution can go across all of that. As we see uptake in the next 2 to 3 years with enterprise doing more AI, like inference AI and generally, the large ones preferring to do their own, we see that obviously as a strength for us, again based on the nature of our solution and the ability that we have maintained, how we deliver these capabilities in any kind of form factor.

Speaker #3: They choose to do actually more things on-prem than even in the cloud. Our solution can go across all of that. So as we see uptake in the next two, three years with enterprise doing more AI, like inference AI and generally the large ones preferring to do their own, we see that obviously as a strength for us.

Dhrupad Trivedi: As we see uptake in the next 2 to 3 years with enterprise doing more AI, like inference AI and generally, the large ones preferring to do their own, we see that obviously as a strength for us, again based on the nature of our solution and the ability that we have maintained, how we deliver these capabilities in any kind of form factor.

Speaker #3: Again, based on the nature of our solution and the ability that we have maintained how we deliver these capabilities in any kind of form factor.

Speaker #1: Great, thank you for that. I just have one more question. Regarding your first sustainable growth driver: it's more complicated, traffic and latency are— and security threats are a huge issue.

Christian Schwab: Great. Thank you for that. I just have one more question.

Dhrupad Trivedi: Yeah.

Christian Schwab: Regarding your first sustainable growth driver, as more complicated traffic and latency

Christian Schwab: Regarding your first sustainable growth driver, as more complicated traffic and latency security threats are a huge issue. Your success there, can you just remind us who your first or second biggest competitor for those products are?

Christian Schwab: Security threats are a huge issue. Your success there, can you just remind us who your first or second biggest competitor for those products are?

Speaker #1: Your success there can you just remind us who your first or second biggest competitor for those products are?

Speaker #3: I think so I think there's two class of people that we would compete with, right? So one is traditional companies that deliver infrastructure products, obviously are also trying to add similar capabilities.

Dhrupad Trivedi: I think there's two class of people that we would compete with. One is traditional companies that deliver infrastructure products obviously are also trying to add similar capabilities. That would be one category of that. I would say, though, the way we are approaching it, we try to do it based on our differentiation, so we believe we can be competitive. The second part of that, which is an evolving market, is because of the nature of funding, there is a lot of small and startup companies that is trying to compete in those slots. Ultimately, I think one of the factors that plays into it is, if you're a large bank, would you trust your data to an AI with a six-person team? If you do, then the technology has to be really, really good.

Speaker #3: So that would be one category of that, right? And I would say though, the way we are approaching it, we try to do it based on our differentiation.

Speaker #3: So we believe we can be competitive. The second part of that is, which is an evolving market is because of the nature of funding there is a lot of small and startup companies that is trying to compete in those slots.

Dhrupad Trivedi: The second part of that, which is an evolving market, is because of the nature of funding, there is a lot of small and startup companies that is trying to compete in those slots. Ultimately, I think one of the factors that plays into it is, if you're a large bank, would you trust your data to an AI with a six-person team? If you do, then the technology has to be really, really good.

Speaker #3: But ultimately, I think the one of the factors that plays into it is would you trust if you're a large bank, would you trust your data to an AI with a 6% team?

Speaker #3: Right? So I think, and if you do, then the technology has to be really, really good. So I think the balance for us is we overlap with both. The direct competition, I would say, though, would be with companies that do networking and infrastructure, trying to add on AI products and capabilities.

Dhrupad Trivedi: I think the balance for us is we overlap with both. The direct competition, I would say, though, would be with companies that do networking and infrastructure, trying to add on AI products and capabilities.

Speaker #1: Great. Thank you. No other questions. Thank you.

Christian Schwab: Great. Thank you. No other questions. Thank you.

Speaker #3: Thank you, Christian.

Dhrupad Trivedi: Thank you, Krish.

Speaker #2: Thank you very much. And our next question is coming from Hamed Korsand of BWS Financial. Hamed, your line is live.

Operator: Thank you very much. Our next question is coming from Hamed Khorsand of BWS Financial. Hamed, your line is live.

Hamed Khorsand: Hi. First off, were there any pre-buy requirements on the part of Microsoft for the expanded relationship, and how are you going to manage the business given that Microsoft is so large of a percentage of revenue at this point?

Speaker #1: Hi. So, first off, were there any pre-buy requirements on the part of Microsoft for the expanded relationship? And how are you going to manage the business, given that Microsoft is such a large percentage of revenue at this point?

Speaker #3: Yeah. So I think the so I think the agreement that we have is linked to more their demand and us working jointly with them in a much more longer timeframe.

Dhrupad Trivedi: I think the agreement that we have is linked to more their demand and us working jointly with them in a much more longer timeframe. There's no pre-buys or anything like that. It's very much aligned with their business needs, rollout forecasts, and us being much more operationally intertwined than before, as well as the product side. The second part of your question, Hamed, I would say is, if you put aside that and maybe where one or two countries where there's macro issues, our overall business, excluding those factors, is also growing close to double digits. It's not that this is the only place that is growing. Our objective continues to be to increase our relevance more and more in enterprise, obviously including cloud and AI, as well as maintain durability where we should also benefit when service provider CapEx rebounds and does better.

Speaker #3: So there's no pre-buys or anything like that. It's very much aligned with their business needs, rollout forecast, and us being much more operationally intertwined than before.

Speaker #3: As well as the product side. The second part of your question, Hamid, I would say is if you put aside that and maybe where one or two countries where there's macro issues, our overall business, excluding those factors, is also growing close to double digits, right?

Speaker #3: So it's not that this is the only place that is growing. So our objective continues to be to increase our relevance more and more in enterprise.

Dhrupad Trivedi: It's not that this is the only place that is growing. Our objective continues to be to increase our relevance more and more in enterprise, obviously including cloud and AI, as well as maintain durability where we should also benefit when service provider CapEx rebounds and does better.

Speaker #3: Obviously, including cloud and AI. As well as maintain durability where we should also benefit when service provider capex rebounds and does better, right? So we are not losing those slots.

Dhrupad Trivedi: We are not losing those slots. We are maintaining those positions. Obviously, we are taking advantage of the current spending profile of customers by quarter.

Speaker #3: We are maintaining those positions. But obviously, we are taking advantage of the current spending profile of customers by quarter.

Speaker #1: Okay. And then is there is higher drag on earnings because of where memory prices is? Or are you been able to stabilize that?

Hamed Khorsand: Is there a higher drag on earnings because of where memory prices is, or you been able to stabilize that?

Speaker #3: That's a great question. So I think we have been able to maintain it in the last couple of quarters. As people talk about that memory constraint—whether it's supply, or pricing, or a combination—is expected to last for a while, right?

Dhrupad Trivedi: Great question. I think, we have been able to maintain it in the last couple of quarters. As people talk about that memory constraint, whether it's supply or pricing or combined, is expected to last for a while. We are continuing to navigate that, but our bias is customer satisfaction and delivery. If we were forced to make that choice, we'd figure out what to do and still deliver EPS. So far, we have been able to manage that, but it's unknown. Everybody's expecting it to last for many more quarters, we are just staying focused on the customer delivery.

Speaker #3: So we are continuing to navigate that. But our bias is customer satisfaction and delivery. So if we were forced to make that choice, we would figure out what to do and still deliver EPS.

Dhrupad Trivedi: If we were forced to make that choice, we'd figure out what to do and still deliver EPS. So far, we have been able to manage that, but it's unknown. Everybody's expecting it to last for many more quarters, we are just staying focused on the customer delivery.

Speaker #3: But so far, we have been able to manage that. But it's unknown, right? Everybody's expecting it to last for many more quarters. So we are just staying focused on the customer delivery.

Speaker #1: Okay. Thank you.

Hamed Khorsand: Okay. Thank you.

Speaker #3: Thank you, Hamid.

Dhrupad Trivedi: Thank you, Hamed.

Speaker #2: Thank you very much. Our next question is coming from Michael Romanelli of Mizuho Securities. Michael, your line is live.

Operator: Thank you very much. Our next question is coming from Michael Romanelli of Mizuho Securities. Michael, your line is live.

Speaker #1: Great. Hey, guys. Thanks for taking the questions here. Maybe to start off, obviously, the new Microsoft agreement provides some validation around demand and deployment activity.

Michael Romanelli: Great. Hey, guys. Thanks for taking the questions here. Maybe to start off, obviously, the new Microsoft agreement provides some validation around demand and deployment activity, so congrats on that. I guess just looking beyond that relationship, can you talk a little bit about the broader pipeline today, how that compares to perhaps 90 days ago, whether that be size, quality, and visibility, particularly for just the larger enterprise and any AI-related opportunities that you can comment on? Just trying to understand how demand looks for outside of the Microsoft agreement.

Speaker #1: So congrats on that. I guess just looking beyond that relationship, can you talk a little bit about the broader pipeline today, how that compares to perhaps 90 days ago, whether that be size, quality, and visibility?

Michael Romanelli: I guess just looking beyond that relationship, can you talk a little bit about the broader pipeline today, how that compares to perhaps 90 days ago, whether that be size, quality, and visibility, particularly for just the larger enterprise and any AI-related opportunities that you can comment on? Just trying to understand how demand looks for outside of the Microsoft agreement.

Speaker #1: Particularly for just the larger enterprise and any AI-related opportunities that you can comment on, just trying to understand how demand looks for outside of the Microsoft agreement.

Michael Romanelli: Yes.

Dhrupad Trivedi: Yes.

Speaker #1: And then I have a follow-up.

Michael Romanelli: I have a follow-up.

Speaker #3: Sure. Yeah, no, good question. And I'll maybe answer it in two ways. So first is, when we look at our overall pipeline as compared to 90 days ago—and let's say enterprise and SP separately—I would say, on the service provider side, we certainly see slight improvement in the North America market.

Dhrupad Trivedi: Sure, good question. I'll maybe answer it in two ways. First is, when we look at our overall pipeline, compared to 90 days ago, let's say enterprise SP separately, I would say, on the service provider side, we certainly see slight improvement in the North America market. Some of it is the products we sell help them run networks better, cheaper, faster, whether they replace the network or not. We certainly see that as a trend where that pipeline is improving. We expect that to be a contributor more in the future. On the enterprise side, obviously, we have put a lot of effort and, I think because our focus is typically on large enterprise, the sales cycles tend to be six to nine months and are pretty complex. I would say the pipeline is good.

Speaker #3: And some of it is, right, the products we sell helps them run networks better, cheaper, faster. Whether they replace the network or not. So we certainly see that as a trend where that pipeline is improving.

Dhrupad Trivedi: We certainly see that as a trend where that pipeline is improving. We expect that to be a contributor more in the future. On the enterprise side, obviously, we have put a lot of effort and, I think because our focus is typically on large enterprise, the sales cycles tend to be six to nine months and are pretty complex. I would say the pipeline is good.

Speaker #3: And so we expect that to be a contributor more in the future. On the enterprise side, obviously, we have put a lot of effort and I think because of our focus is typically on large enterprise, the sales cycles tend to be six to nine months.

Speaker #3: And are pretty complex. So I would say the pipeline is good. We see kind of the trend being pretty positive as well. But I think we should start seeing the results later this year, early next year, more so than before.

Dhrupad Trivedi: We see the trend being pretty positive as well. I think we should start seeing the results later this year or early next year, more so than before, based on that. The pipeline, compared to 90 days, is definitely better. I would say the quality of deals is better. Obviously, the last part is the most important, which is we are going to execute.

Speaker #3: Based on that, right? So the pipeline compared to 90 days, is definitely better. And I would say the quality of deals is better. So it's obviously the last part is the most important, which is we have to execute.

Speaker #3: So and.

Michael Romanelli: Got it. Okay, fair.

Speaker #1: Okay.

Speaker #3: And the second thing, yeah, and the second thing, Michael, you asked, on the AI side, right, like many companies, we are engaged with a lot of customers, proof of concept, kind of things right now as they are themselves figuring out what to do with AI.

Dhrupad Trivedi: The second thing, Michael, you asked on the AI side. Like many companies, we are engaged with a lot of customers, proof of concept kind of things right now, as they are themselves figuring out what to do with AI. There, I would say our measure of success is more around how many customers are we engaged with, and are we deeply involved with their business problems and how we can solve them.

Speaker #3: So there, I would say our measure of success is more around how many customers are we engaged with and are we deeply involved with kind of their business problems and how we can solve them.

Speaker #1: Got it. Okay, thanks, Drew, for that. That's helpful. And then maybe for my follow-up, congrats on the recent acquisition of Troge AI. I guess, what made this the right asset for A10, and where do you see the strongest fit within the portfolio?

Michael Romanelli: Got it. Okay, thanks, Dhrupad. That's helpful. Then, maybe for my follow-up, congrats on the recent acquisition of TrojAI.

Michael Romanelli: I guess, what made this the right asset for A10 and where do you see the strongest fit within the portfolio? I guess just more broadly, could AI security become a more meaningful growth vector for A10 over time, or should we think of it more as an important capability that enhances the relevance of the existing portfolio? Thanks.

Speaker #1: And I guess, just more broadly, could AI security become a more meaningful growth vector for A10 over time, or should we think of it more as an important capability that enhances the relevance of the existing portfolio?

Speaker #1: Thanks.

Speaker #3: Yeah, no, great question. So, I think first of all, one of the most important things for us in going with Troge was that the team there had developed a very strong technical solution, which was very much in line with the kind of roadmap we were driving towards.

Dhrupad Trivedi: Yeah, no, great question. I think, first of all, I think one of the most important things for us in going with Troj was the team there had developed a very strong technical solution, which was very much in line with the roadmap we were driving towards and somewhat complementary to some other things we were doing. In a way, it was adding that capability to strengthen a portfolio that we can sell standalone, but also as part of broader bundles in the future. I would say the near term, of course, it adds capability to the overall solution for sure. At the same time, the roadmap that we are driving has more to do with native AI solutions that we can bring to market in the next 1 or 2 years that are not even predicated on people using all of our other products.

Speaker #3: And somewhat complementary to some other things we were doing. So, in a way, it was adding that capability to strengthen a portfolio that we can sell standalone, but also as part of broader bundles in the future.

Dhrupad Trivedi: In a way, it was adding that capability to strengthen a portfolio that we can sell standalone, but also as part of broader bundles in the future. I would say the near term, of course, it adds capability to the overall solution for sure. At the same time, the roadmap that we are driving has more to do with native AI solutions that we can bring to market in the next 1 or 2 years that are not even predicated on people using all of our other products.

Speaker #3: I would say the near term, of course, it adds capability to the overall solution for sure. But at the same time, the roadmap that we are driving has more to do with kind of native AI solutions that we can bring to market in the next one or two years that are not even predicated on people using all of our other products, right?

Dhrupad Trivedi: It's more of the first thing today, but it could be both in the future as the market matures.

Speaker #3: So it's more of the first thing today, but it could be both in the future as the market matures.

Dhrupad Trivedi: It's more of the first thing today, but it could be both in the future as the market matures.

Speaker #1: Great. Thank you.

Michael Romanelli: Great. Thank you.

Speaker #3: Yep.

Dhrupad Trivedi: Yep.

Speaker #2: Thank you very much. And our next question is coming from Simon Leopold. Bear with me there. Raymond James, apologies, Simon, your line is live.

Operator: Thank you very much. Our next question is coming from Simon Leopold. Bear with me there. Raymond James. Apologies, Simon. Your line is live.

Speaker #3: That's okay. Wanted to check, historically, you've included Microsoft within your service provider vertical, I believe. I want to confirm that and just verify that that's still how you categorize it.

Simon Leopold: That's okay. Wanted to check. Historically, you've included Microsoft within your service provider vertical, I believe. I want to confirm that and just verify that that's still how you categorize it, just to make sure that, essentially, the shift in mix isn't reflective of recategorization of a customer.

Speaker #3: Just to make sure, that essentially, the sort of shift in mix isn't reflective of recategorization of a customer?

Speaker #4: No, good question and clarification. So Simon, you are correct, historically, we characterize it as service provider. We have not recategorized that portion of the business.

Dhrupad Trivedi: No. Good question and clarification. Simon, you are correct. Historically, we characterize it as service provider. We have not recategorized that portion of the business. As I mentioned before, we are also doing different and new business with Microsoft as well as others. That's where it's sometimes difficult for us to split in that enterprise SP mix because many of our customers, including in Europe, do both. You are correct. There's no historical revenue that has been recategorized, what is sold to them as a service provider is still counted in the service provider segment.

Speaker #4: But as I mentioned before, we are also doing different and new business with Microsoft as well as others. And that's where it's sometimes difficult for us to kind of split in that enterprise SP mix because many of our customers, including in Europe, do both.

Dhrupad Trivedi: That's where it's sometimes difficult for us to split in that enterprise SP mix because many of our customers, including in Europe, do both. You are correct. There's no historical revenue that has been recategorized, what is sold to them as a service provider is still counted in the service provider segment.

Speaker #4: And so you are correct. There's no historical revenue that has been recategorized. And so what is sold to them as a service provider is still counted in the service provider segment.

Speaker #3: So then in the most recent quarter, is there Microsoft business showing up that you do categorize as enterprise?

Simon Leopold: In the most recent quarter, is there Microsoft business showing up that you do categorize as enterprise?

Speaker #4: Yes, correct.

Dhrupad Trivedi: Yes, correct. Based on a completely different product set.

Speaker #3: Based on a completely different product segment. Yeah, based on a completely different product set, correct. Yeah. Okay. That totally now things make so much more sense to me.

Simon Leopold: Oh, fair.

Dhrupad Trivedi: Yeah. Based on a completely different product set. Correct. Yeah.

Simon Leopold: Okay. That totally, now things make so much more sense to me. So helpful. Stepping back, last quarter, you did disclose in the Q that you did have a 37% end customer. Can you give us a similar metric for the June quarter?

Speaker #3: So helpful. So then stepping back, last quarter, you did disclose in the Q that you did have a 37% end customer can you give us a similar metric for the June quarter?

Speaker #4: I think obviously we will come out in the Q, but it will be a similar number. And I think we'll publish the Q next day or two.

Dhrupad Trivedi: I think, obviously, we will come out in the Q, but it will be a similar number. I think we'll publish the Q next day or two. It'll be a similar number, and it's linked to completing the rollout. It will change probably in the future, but as of now, for Q2, it'll be a similar number just for those exact reasons.

Speaker #4: But it'll be a similar number. And it's linked to kind of completing the rollout, right? So it will change probably in the future, but as of now for Q2, it'll be a similar number, just for those exact reasons.

Speaker #3: Okay. And so I guess kind of trying to just put a button on this line of questioning, it looks like service provider excluding Microsoft declined in 2025.

Simon Leopold: Okay. I guess trying to just put a button on this line of questioning, it looks like service provider, excluding Microsoft, declined in 2025, and I think you're talking about it stabilizing.

Speaker #3: And I think you're talking about it stabilizing so if we're trying to think about service provider excluding Microsoft in 2026, we should be thinking about that as similar to the 2025 level.

Simon Leopold: If we're trying to think about service provider excluding Microsoft in 2026-

Simon Leopold: we should be thinking about that as similar to the 2025 level. Is that what you mean by normalizing? I just want to make sure I'm interpreting that commentary correctly.

Speaker #3: Is that what you mean by normalizing? I just want to make sure I'm interpreting that commentary correctly.

Dhrupad Trivedi: Oh. Yeah. I think very good question. I think so. I would say, expecting it to be slightly better than 2025 level. The puts and takes are the North America segment we see as improving. Japan is equal or slightly worse, and Europe is neutral. Between those factors overall, we expect it to be slightly better versus 2025.

Speaker #4: Oh, yeah. So I think very good question. I think so I would say expecting it to be slightly better than 2025 level, and the puts and takes are the North America segment we see as improving.

Speaker #4: Japan is equal or slightly worse. And Europe is neutral, right? So between those factors, overall, we expect it to be slightly better versus 2025.

Speaker #3: Great. Thank you. I appreciate the clarification. Appreciate it.

Simon Leopold: Great. Thank you. Appreciate the clarification. Appreciate it.

Speaker #4: No problem. Thank you.

Dhrupad Trivedi: No problem.

Speaker #3: Thank you. Thanks, Simon.

Simon Leopold: Thank you.

Dhrupad Trivedi: Thank you. Thanks, Alan.

Speaker #2: Thank you very much. Well, we appear to have reached the end of our question and answer session. So I'll now hand back over to the management team for any closing comments.

Operator: Thank you very much. Well, we appear to have reached the end of our question and answer session. I'll now hand back over to the management team for any closing comments.

Speaker #4: Thank you. And thank you to all of our employees, customers, and shareholders for joining us today and for your continued support. I am increasingly confident in our strategic orientation with security, and next-generation networking spending patterns.

Dhrupad Trivedi: Thank you. Thank you to all of our employees, customers, and shareholders for joining us today and for your continued support. I am increasingly confident in our strategic orientation with security and next-generation networking spending patterns. Thank you for your time and attention.

Speaker #4: Thank you for your time and attention.

Speaker #2: Thank you very much, everybody. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful rest of the day.

Operator: Thank you very much, everybody. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful rest of the day. We thank you for your participation.

Q2 2026 A10 Networks Inc Earnings Call

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