A10 Networks

Annual Report
2025
A10 Networks, Inc.

A10 Headquarters
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or registered trademarks of A10 Networks, Inc. in the United States and other countries. 
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responsibility for any inaccuracies in this document.  

A10 Networks reserves the right to change, modify, transfer, or otherwise revise 
this publication without notice. For the full list  of trademarks, visit: 
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ANNUAL REPORT   |   2025
A10 Networks
2300 Orchard Pkwy, 
San Jose, CA 95131

Phone:	+1 (408) 325-8668
Fax: +1 (408) 325-8666
A10Networks.com

Letter from the CEO, 
Dhrupad Trivedi
To Our Stockholders
2025 was a strong year for A10 Networks and our results represented a meaningful 
step forward in the continued evolution of our strategy and market position.
We delivered record revenue and record profitability, reflecting strategic agility, 
disciplined execution, focused investment, and the strength of our business model 
in a dynamic macroeconomic environment. These results demonstrate our ability to 
adapt, compete, and grow while maintaining operational rigor.
The technology landscape continues to rapidly transform. Artificial intelligence 
is reshaping data center architectures, increasing east-west traffic flows, 
expanding the attack surface, and elevating the importance of high-performance 
infrastructure. Enterprises and service providers are converging toward operating 
environments where performance, resilience, and protection must operate 
together. As outlined in our recent Investor Day, the infrastructure market has 
evolved from a centralized era to a distributed era and now to an intelligent era. 
Through these changes, we have focused on strengthening A10’s differentiation 
and expertise, which is now more relevant than ever before. In fact, next-generation 
networks and security solutions are leading growth drivers for our business while 
we continue to help legacy networking customers achieve the best 
economic returns.
Security is embedded across our portfolio so that performance and protection are 
delivered simultaneously at scale. This architectural approach differentiates A10 
and reinforces our role as a trusted partner for customers operating mission-critical 
networks. This is evidenced by our global customer base who continue to trust us 
with their most demanding networks.
Operational discipline remained central to our performance. While spending 
patterns in certain segments remained variable, our expanding enterprise solutions 
and diversified customer base supported balanced growth. We continued to invest 
in research and development while maintaining strong profitability and returning 
capital to stockholders through our dividend and share repurchase programs.
Looking ahead, our priorities remain clear:
Drive solutions for next-generation networks – Continue to deepen our 
relationships with customers to solve their increasingly complex challenges across 
their distributed and AI-driven environments.
ANNUAL REPORT   |   2025

Forward-looking Statements 
We have included in this letter “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933. These 
forward-looking statements may be identified by terms such as anticipate, believe, foresee, expect, remain, may, will, provide, could 
and should and the negative of these terms or other similar expressions. These forward-looking statements include, but are not 
limited to, statements regarding industry trends, our company vision, positioning, strategy, focus, growth, delivering shareholder value 
and economic outlook. 
Forward-looking statements are subject to known and unknown risks and uncertainties and are based on assumptions that may 
prove to be incorrect, which could cause actual results to differ materially from those expected or implied by the forward-looking 
statements. Factors that may cause actual results to differ include the risks discussed in “Risk Factors” in our filings with the 
Securities and Exchange Commission, including our annual report on Form 10-K and quarterly reports on Form 10-Q. We expressly 
disclaim any obligation to update or alter our forward-looking statements, whether as a result of new information, future events or 
otherwise, except as required by applicable law.
Strengthen and scale our security portfolio – Enhance the depth of capabilities 
and expertise across network and application security to address the evolving 
threat landscape.
Lead in AI-ready infrastructure across all solution areas – Deliver solutions that 
secure, optimize, and enable AI applications and modern data center environments.
Maintain operational excellence – Preserve disciplined cost management, strong 
margins, and durable cash generation balanced with top-line growth.
We enter 2026 from a position of optimism based on our recent wins and market 
momentum, with a focused strategy, differentiated technology, and a continued 
commitment to delivering long-term shareholder value.
Thank you for your continued trust and support.
Dhrupad Trivedi
President, Chief Executive Officer and Chairperson
A10 Networks
ANNUAL REPORT   |   2025

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
□
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2025
OR
□
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
Commission file number: 001-36343
A10 NETWORKS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware
20-1446869
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
2300 Orchard Parkway, San Jose, California 95131
(Address of Principal Executive Offices and Zip Code)
(408) 325-8668
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol
Name of Each Exchange on Which Registered
Common Stock, $.00001 Par Value
ATEN
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒No □
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes □No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities ExchangeAct of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes ☒No □
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒
No □
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of ‘‘large accelerated filer,’’‘‘accelerated filer,’’‘‘smaller reporting company,’’and ‘‘emerging growth company’’in
Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
□
Non-accelerated filer
□
Smaller reporting company
□
Emerging growth company
□
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □
Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-OxleyAct (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit
report. ☒
If securities are registered pursuant to Section 12(b) of theAct, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. □
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by
any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). □
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes □No ☒
The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant as of June 30, 2025 (the last business day of the registrant’s
most recently completed second fiscal quarter) was approximately $1,377.6 million, based upon the closing sale price of such stock on the New York Stock
Exchange. Solely for purposes of this disclosure, shares of common stock held by executive officers and directors of the Registrant as of such date, as well as shares
held by entities affiliated with our executive officers and directors, have been excluded because such persons may be deemed to be affiliates. This determination of
executive officers and directors as affiliates is not necessarily a conclusive determination for any other purposes.
As of February 19, 2026, the number of outstanding shares of the registrant’s common stock, $0.00001 par value per share, was 71,724,984.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive Proxy Statement for the 2026 Annual Stockholders’ Meeting, which the registrant expects to file with the Securities and
Exchange Commission within 120 days of December 31, 2025, are incorporated by reference into Part III (Items 10, 11, 12, 13 and 14) of thisAnnual Report on Form 10-K.

[THIS PAGE INTENTIONALLY LEFT BLANK]

A10 NETWORKS, INC.
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2025
TABLE OF CONTENTS
Page
Note Regarding Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Risk Factor Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
PART I
Item 1.
Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Item 1A.
Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15
Item 1B.
Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
42
Item 1C.
Cybersecurity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
42
Item 2.
Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
43
Item 3.
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
43
Item 4.
Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
45
Item 6.
[Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
46
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . .
47
Item 7A.
Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
55
Item 8.
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
57
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . .
92
Item 9A.
Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
92
Item 9B.
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
93
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections . . . . . . . . . . . . . . . . . . . . . .
93
PART III
Item 10.
Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
94
Item 11.
Executive Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
94
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
94
Item 13.
Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . .
94
Item 14.
Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
94
PART IV
Item 15.
Exhibits, Financial Statement Schedules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95
Item 16.
Form 10-K Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
98
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
99
1

NOTE REGARDING FORWARD-LOOKING STATEMENTS
The Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words
‘‘believe,’’‘‘may,’’‘‘will,’’‘‘potentially,’’‘‘estimate,’’‘‘continue,’’‘‘anticipate,’’‘‘intend,’’‘‘could,’’‘‘would,’’‘‘project,’’
‘‘plan,’’‘‘expect,’’and similar expressions that convey uncertainty of future events or outcomes are intended to identify
forward-looking statements.
These forward-looking statements include, but are not limited to, statements concerning the following:
•
our ability to provide customers with improved benefits relating to their existing products and applications;
•
our ability to maintain an adequate rate of revenue growth and other factors contributing to such growth;
•
our ability to successfully anticipate market needs and opportunities;
•
our strategy, business plan and our ability to effectively manage our growth and business operations;
•
our plans to strengthen our sales efforts;
•
our expectations with respect to recognizing revenue related to remaining performance obligations;
•
our expectations with respect to demand for our products and services;
•
our plans to introduce new products;
•
our investment plans, including with respect to our sales and marketing organization, distribution channel
programs and increasing awareness of our solutions on a global basis;
•
loss or delay of expected purchases by our largest end-customers;
•
our ability to further penetrate our existing customer base;
•
our ability to displace existing products in established markets;
•
continued growth in markets relating to our networking and network security;
•
our ability to timely and effectively scale and adapt our existing technology;
•
our ability to innovate new products and bring them to market in a timely manner;
•
our ability to conduct business internationally and any related impact on profitability;
•
the effects of increased competition in our market and our ability to compete effectively;
•
the effects of seasonal trends on our results of operations;
•
our expectations concerning relationships with third parties;
•
our expectations with respect to the realization of our tax assets and our unrecognized tax benefits;
•
our plans with respect to the repatriation of our earnings from our foreign operations;
•
the attraction, retention and growth of qualified employees and key personnel;
•
our ability to maintain profitability while continuing to invest in our sales, marketing, product development,
distribution channel partner programs and research and development teams;
•
our expectations regarding our future costs and expenses;
•
our expectations with respect to liquidity position and future capital requirements;
•
our exploration of strategic alternatives;
•
variations in product mix or geographic locations of our sales;
•
our stock repurchase program and our quarterly cash dividends;
•
our accounting policies and estimates;
•
our expectations regarding our properties and related costs;
•
fluctuations in currency exchange rates;
•
taxes and tariffs affecting us;
•
changes in regulations and laws impacting our operations;
2

•
increased cost requirements of being a public company, including related to environmental, social and
governance matters, and future sales of substantial amounts of our common stock in the public markets;
•
the cost and potential outcomes of litigation;
•
our ability to protect against or adequately remedy security breaches in a timely or capital efficient manner;
•
our ability to maintain, protect, and enhance our brand and intellectual property;
•
future acquisitions of or investments in complementary companies, products, services or technologies; and
•
our ability to effectively integrate operations of entities we have acquired or may acquire.
These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those
described in ‘‘Risk Factors’’ and elsewhere in this Annual Report on Form 10-K. Moreover, we operate in a very
competitive and rapidly changing environment, and new risks continually emerge. It is not possible for our management
to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those contained in any forward-looking
statements we may make. Important factors that could cause our actual results and financial condition to differ
materially from those indicated in the forward-looking statements include, among others, the following: execution risks
related to closing key deals and improving our execution; the continued market adoption of our products; our ability to
successfully anticipate market needs and opportunities; our timely development of new products and features; our
ability to maintain profitability; any loss or delay of expected purchases by our largest end-customers; our ability to
maintain or improve our competitive position; competitive and execution risks related to cloud-based computing trends;
our ability to attract and retain new end-customers and our largest end-consumers; our ability to maintain and enhance
our brand and reputation; changes demanded by our customers in the deployment and payment model for our products;
continued growth in markets relating to networking and network security; the success of any future acquisitions or
investments in complementary companies, products, services or technologies; the ability of our sales and other teams
to execute well; our ability to shorten our close cycles; the ability of our channels and resellers to sell our products;
variations in product mix or geographic locations of our sales; risks associated with our presence in international
markets; any unforeseen need for capital which may require us to divert funds we may have otherwise used for the
dividend program or stock repurchase program; a significant decline in global macroeconomic or political conditions
that have an adverse impact on our business and financial results; business interruptions or interference related to our
supply chain; changes in law or regulatory matters; our ability to manage our business and expenses if customers cancel
or delay orders; weaknesses or deficiencies in our internal control over financial reporting; and our ability to timely file
periodic reports required to be filed under the Securities Exchange Act of 1934, as well as other risks identified in the
‘‘Risk Factors’’ section of this Report.
In light of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in
this Annual Report on Form 10-K may not occur and actual results could differ materially and adversely from those
anticipated or implied in the forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events.Although we believe that the
expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results,
levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved
or occur. Any forward-looking statements made by us in this report speak only as of the date of this report, and we do
not intend to update these forward-looking statements after the filing of this report, except as required by law.
Our investor relations website is located at https://investors.A10networks.com. We use our investor relations
website, our company blog (https://www.a10networks.com/blog) and our corporate X (formerly Twitter) account
(https://x.com/A10Networks) to post important information for investors, including news releases, analyst
presentations, and supplemental financial information, and as a means of disclosing material non-public information
and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor our
investor relations website, our company blog and our corporate Twitter account, in addition to following press releases,
SEC filings and public conference calls and webcasts. We also make available, free of charge, on our investor relations
website under ‘‘SEC Filings,’’ourAnnual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on
Form 8-K and amendments to these reports as soon as reasonably practicable after electronically filing or furnishing
those reports to the United States Securities and Exchange Commission (the ‘‘SEC’’).
3

RISK FACTOR SUMMARY
Risks Related to Our Business, Operations and Industry
•
anticipating market needs and opportunities, and market adoption of our products;
•
timely development and deployment of new products and features;
•
maintaining profitability;
•
variability in our operating costs and results;
•
our reliance on shipments at the end of the quarter;
•
intense competition and maintaining or improving our competitive position;
•
cloud-based computing trends;
•
maintaining and enhancing our brand and reputation;
•
a limited number of end-customers comprise a significant portion of revenue;
•
changes demanded by customers in our deployment and payment models;
•
large end-customers demanding more favorable terms and conditions;
•
fluctuations in our gross margin;
•
significant revenue from international sources;
•
risks associated with continued expansion of our international operations;
•
hiring, retaining and motivating qualified personnel;
•
exploration of strategic alternatives;
•
adverse economic conditions resulting in reduced technology spending;
•
our dependence on third-party manufacturers;
•
limited supply sources, supply shortages and changes;
•
real or perceived defects, errors or vulnerabilities in our operations, products or services;
•
warranty claims, returns, liability and defects;
•
undetected software and hardware errors;
•
use of open source software;
•
impact of AI generated or enabled software;
•
interoperability challenges with systems developed by others;
•
prevention of inventory excesses or shortages;
•
our ability to sell products dependent on quality support and services;
•
maintaining high-quality support and services;
•
product conformity with industry standards, legal and compliance related requirements;
•
our dependence on third-party or other information technology systems;
•
potential future acquisitions;
•
credit risk of distribution channels and customers;
•
risk of cyber-attacks and other information or security breaches; and
•
earthquakes, fires, power outages, floods, criminal activities, acts of war and terrorism.
4

Risks Related to Intellectual Property, Litigation, Laws and Regulations
•
enhanced U.S. tariffs, import/export restrictions, Chinese regulations and countermeasures taken by affected
countries or other trade barriers;
•
litigation and claims regarding our intellectual property rights;
•
protecting our intellectual property rights;
•
protecting and securing confidentiality of data, trade secrets and personally identifiable information;
•
costs of protecting against or otherwise addressing security breaches;
•
adequacy of protection of personal data;
•
sales to governmental organizations;
•
compliance with governmental laws and regulations;
•
governmental export and import controls;
•
environmental laws and regulations;
•
limitations on use of net operating loss carryforwards;
•
changes in law, including tax laws or regulations or, adverse outcomes to tax return examinations;
•
changes in generally accepted accounting principles;
•
our ability to maintain effective internal controls;
•
our charter and Delaware law could discourage takeover attempts leading to management entrenchment;
•
certain stockholder actions governed by the Court of Chancery of the State of Delaware; and
•
increasing attention on sustainability, human capital, governance and other corporate responsibility matters.
Risks Related to Capitalization and Financial Markets
•
fluctuations in foreign currency exchange rates;
•
our ability to raise additional funds and stockholder dilution;
•
volatility of the price of our common stock;
•
reports by security and industry analysts;
•
changes to our dividend program; and
•
our stock repurchase programs.
Risks Related to Our Convertible Indebtedness
•
issuance of shares of our common stock;
•
our ability to raise funds necessary to repurchase our convertible notes;
•
delay or prevention of an otherwise beneficial takeover of us; and
•
conversion of our convertible notes could impair our financial position and liquidity.
5

PART I
Item 1. Business
Overview
We are a global provider of secure application and network infrastructure solutions that enable enterprises and
service providers to deliver high-performance, reliable, and protected digital services across on-premises, hybrid cloud,
and distributed environments.
Our solutions are designed to operate in mission-critical environments where availability, scalability, low latency,
and security are essential. We provide integrated capabilities spanning application delivery, traffic management,
distributed denial of service (‘‘DDoS’’) protection, application and application programming interfaces (‘‘API’’)
security, and centralized management. Our portfolio is built on a unified software architecture that allows customers to
deploy consistent performance and security policies across physical, virtual, containerized, and cloud-native
environments.
We serve customers worldwide across industries including telecommunications, technology, financial services,
public sector, industrial, retail, gaming, and education. Our service provider customers rely on our solutions to support
large-scale network infrastructure and deliver connectivity and managed services. Our enterprise customers use our
solutions to secure and optimize business-critical applications, modernize hybrid architectures, and address
increasingly complex cybersecurity requirements, including those associated with artificial intelligence (‘‘AI’’)
enabled workloads.
We generate revenue primarily from the sale of secure networking and cybersecurity solutions and related
maintenance and support services. Our offerings are delivered through a combination of direct sales and channel
partners. Customers typically purchase maintenance and support alongside initial deployments and renew those
services over time. We are continuing to expand subscription, term-based, and software-focused offerings to support
recurring revenue growth and flexible customer consumption models.
In February 2025, we acquired the assets and key personnel of ThreatX Protect, expanding our cybersecurity
portfolio with cloud-delivered web application and API protection capabilities. This acquisition supports our strategy
to strengthen our position in enterprise security and application protection markets.
Industry Trends and Customer Requirements
Digital transformation continues to increase reliance on applications and APIs as core business infrastructure. As
organizations modernize their technology environments, application architectures are becoming more distributed,
hybrid, and cloud-integrated. At the same time, threat landscapes are evolving in scale and sophistication. These
dynamics are reshaping performance, security, and operational requirements across enterprise and service provider
environments.
AI-Driven Infrastructure Evolution. The rapid adoption of artificial intelligence technologies, including
generative AI and large language models, is introducing new infrastructure demands. AI-enabled applications
increase traffic concurrency, intensify east-west traffic flows within data centers, and introduce new security
considerations related to data exposure, prompt-based interactions, and API-driven workflows. Organizations are
seeking infrastructure capable of supporting AI workloads while maintaining performance, reliability, and policy
enforcement across environments.
Hybrid and Multi-Cloud Architectures. Enterprises and service providers increasingly operate across
combinations of on-premises data centers, private clouds, and public cloud environments. Applications may
originate in traditional infrastructure and migrate to the cloud over time, while new applications are often
cloud-native from inception. This hybrid reality requires consistent traffic management, visibility, and security
controls across deployment models, supported by centralized management and flexible form factors.
Escalating Cybersecurity Threats. Cybersecurity threats continue to grow in frequency, scale, and complexity.
Distributed denial of service attacks, application-layer attacks, bot-driven abuse, API exploitation, and threats
embedded in encrypted traffic require advanced detection and mitigation capabilities. The widespread adoption of
TLS and SSL encryption has improved privacy but has also increased the need for efficient inspection and policy
enforcement without degrading user experience. Organizations require solutions that combine performance and
security at scale.
6

Operational Complexity and Automation. As networks and application environments grow more complex,
organizations are prioritizing automation, orchestration, and analytics to improve operational efficiency.
Centralized management, predictive insights, and programmable interfaces help customers simplify deployment,
reduce total cost of ownership, and respond more rapidly to performance or security anomalies. Integrated
platforms that unify performance and security services are increasingly favored over point solutions.
Service Provider Network Evolution. Service providers continue to modernize core and edge network
infrastructure to support increasing bandwidth consumption, higher connection densities, IPv6 migration, and the
delivery of value-added services. As operators expand fiber and mobile networks and introduce new digital
offerings, they require scalable, high-throughput infrastructure capable of supporting large session volumes while
maintaining performance and security. In addition, many service providers are increasingly embedding security
capabilities into their offerings, including managed DDoS and application protection services for enterprise
customers.
These dynamics create demand for solutions that combine carrier-grade scalability, traffic management, and
integrated security within programmable, operationally efficient platforms.
These evolving requirements across enterprise and service provider markets are driving demand for integrated solutions
that unify application delivery, infrastructure scalability, and cybersecurity within a common architecture.
Product Portfolio
Our product portfolio is designed to deliver secure, high-performance networking for enterprises and service
providers operating across on-premises, hybrid cloud, and edge environments.We focus on outcomes customers require
in production environments, including low latency at scale, always-on reliability, embedded security, and operational
simplicity through automation and centralized control.
Consistent with how we operate and go to market, we organize our portfolio around three core solution areas,
supported by a unified control plane and common architecture.
Three Core Solution Areas
1.
Legacy Networking
Our legacy networking solutions support large-scale service provider and enterprise environments where performance,
scale, and reliability are essential.Acore capability in this area is carrier-grade address and protocol translation, which
enables customers to extend IPv4 networks, support migration to IPv6, and manage subscriber or device growth while
maintaining service continuity. These solutions are commonly deployed in high-throughput networks and are designed
to provide resilient, standards-based traffic processing with operational stability.
Representative capabilities include carrier-grade NAT and related translation services, high scale session
management, policy controls, and visibility required to operate in complex networks.
2.
Next-Generation Networking
Our next-generation networking solutions focus on application delivery and traffic management for modern data
center, hybrid cloud, and distributed architectures. These solutions help customers ensure application availability,
optimize performance, and apply consistent traffic policies across environments as applications become more
distributed and API-driven. In many customer deployments, application delivery also serves as an enforcement
point for performance and security policies in the data path, helping reduce operational complexity while
maintaining low latency.
Representative capabilities include server load balancing, high availability, application traffic steering, global load
distribution, SSL/TLS acceleration and offload, and application-level observability and policy controls.
3.
Network Security (A10 Defend)
Security is embedded across our portfolio and is also delivered through dedicated security solutions designed to
protect applications,APIs, and infrastructure from modern cyber threats. Our network security capabilities support
both enterprises and service providers with solutions that help defend against volumetric and application-layer
DDoS attacks, protect web applications and APIs, mitigate automated threats such as bots, and improve
operational outcomes through centralized orchestration and actionable threat intelligence.
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Representative capabilities include DDoS detection and mitigation, orchestration and workflow automation,
threat intelligence and blocklisting, converged network security functions delivered in the data path, and
cloud-delivered WAAP (web application andAPI) capabilities, including web application firewall, bot protection,
Layer 7 DDoS protection, and API protection.
Unified Control Plane, Architecture, and Policy
Our solutions are built on a unified product architecture and are centrally managed through a control plane that
provides policy management, automation, and analytics. This common foundation is intended to help customers
operate performance, availability, and security as a single system across hybrid environments and deployment models.
Product Families and Delivery Models
We deliver our capabilities through integrated product families that span secure application delivery, traffic
management, and infrastructure security, as well as our A10 Defend security portfolio.
Our solutions are available in multiple form factors and deployment models, including:
•
Purpose-built hardware appliances
•
Software deployed on customer-selected hardware
•
Virtual appliances
•
Containerized software
•
Cloud-native and SaaS-delivered offerings (where applicable)
Historically, a significant portion of our revenue has been derived from proprietary software embedded in
optimized hardware and licensed on a perpetual basis.As customer preferences evolve toward hybrid architectures and
more flexible procurement models, we are increasingly delivering our solutions through term-based licenses,
subscription offerings, software-only deployments, and cloud marketplace transactions.
We offer a range of commercial models designed to align with customer deployment preferences and budgeting
cycles. These include perpetual licenses, term licenses, subscription-based pricing, pay-as-you-go models in certain
cloud environments, and flexible consumption-based arrangements that allow customers to allocate and reallocate
licensed capacity across applications, clouds, and data centers. These consumption options are intended to support
operational agility while improving capacity planning and workload portability in hybrid environments.
Underlying Technology
Since our inception, our solutions have been recognized for high performance, scalability, and reliability in large
and demanding enterprise and service provider environments. Our products are built on our proprietaryAdvanced Core
Operating System, or ACOS, which provides a unified software foundation across our networking and security
portfolio. ACOS is designed to support integrated performance, security, automation, and analytics capabilities within
a single architectural framework.
The ACOS platform is optimized for modern computing environments and is engineered to efficiently process
high volumes of application and network traffic while maintaining consistent availability and low latency. Its
architecture enables scalable traffic management, embedded security enforcement, and centralized policy control
across physical, virtual, containerized, and cloud deployments. This common foundation allows us to deliver consistent
functionality across deployment models and adapt to evolving infrastructure requirements, including hybrid and
AI-driven environments.
Performance and Scalability Architecture. Our platform is engineered to efficiently distribute traffic processing
across multi-core processing environments, enabling horizontal and vertical scaling as customer throughput
requirements grow. The architecture is designed to minimize processing bottlenecks, optimize resource utilization,
and maintain consistent application performance under varying traffic conditions.
We leverage a combination of software optimization techniques and, where appropriate, hardware acceleration
technologies to enhance throughput, reduce latency, and improve overall system efficiency. This design approach
allows our solutions to support high concurrency, large session volumes, and performance-sensitive workloads in
enterprise data centers and service provider networks.
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Integrated Networking and Security Services. Our platform provides a modular and extensible software
framework that supports application delivery, traffic management, and security services within a common
operating environment. By operating in the data path, our solutions can apply performance and security policies in
real time without requiring separate infrastructure layers.
The platform includes capabilities that support multi-tenancy, automation, and programmability through
standards-based interfaces and APIs. This enables integration with customer orchestration systems and supports
deployment across physical, virtual, containerized, and cloud-native environments.
Reliability and Operational Resilience. Our software architecture is designed to enhance reliability and reduce
operational risk. A modular design framework isolates functional components, which helps limit the impact of
updates or configuration changes and supports continuous improvement and feature expansion. The platform
supports centralized configuration management, analytics, and policy enforcement to improve visibility and
operational control.
Intellectual Property. We have developed proprietary technologies that support high-performance traffic
processing, scalability, and integrated security. We also maintain a portfolio of patents and other intellectual
property protections covering aspects of our architecture and implementation.
Support and Services
Customer support and service are core components of our value proposition and have been since our founding. We
provide global technical support and maintenance services designed to help customers deploy, operate, and optimize
our solutions in mission-critical environments. Our support organization includes technical professionals with domain
expertise across our networking and security portfolio and works closely with engineering to facilitate timely issue
resolution and continuous product improvement.
Our support offerings include installation assistance, technical support, hardware repair and replacement, software
updates, online tools, and training services. Customers typically purchase maintenance and support in conjunction with
initial product deployments and renew those services over time. We believe the quality and responsiveness of our
support organization are important factors in customer retention and long-term relationships.
All customers receive standard warranty support for 90 days following product purchase. We offer tiered
maintenance programs that provide varying levels of response times and service coverage, with contract terms
generally ranging from one to five years. The average maintenance contract term is approximately 21 months.
Maintenance contracts are invoiced at the time of initial hardware purchase and are generally non-cancellable during the
contract term. Software updates are provided to customers with an active maintenance agreement on a when-and-if-
available basis. Maintenance and support services are typically renewed through the same sales channel as the original
purchase.
We operate technical support centers in the United States, Japan, India, and the Netherlands to provide global coverage.
For customers requiring advanced DDoS protection support, we offer enhanced service options that include access
to specialized security response resources and threat intelligence services designed to assist with rapid mitigation of
active attacks and evolving threat patterns.
Customers
Our customers operate across a broad range of industries, including telecommunications, technology, financial
services, public sector, industrial, retail, gaming, and education. We support organizations that manage mission-critical
applications, high-availability networks, and performance-sensitive digital services where uptime, security, and
scalability are essential.
Our solutions are deployed in environments that require continuous availability and protection of business-critical
traffic, including large enterprise data centers, hybrid and cloud infrastructures, and service provider networks.
Customers rely on our capabilities to help deliver resilient application experiences, manage large-scale traffic volumes,
and protect infrastructure from evolving cyber threats.
During the years ended December 31, 2025, 2024, and 2023, purchases from our 10 largest end-customers
accounted for approximately 40%, 38%, and 33% of our total revenue, respectively.
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A substantial portion of our revenue is from sales of our products and services through distribution channels, such
as resellers and distributors. During the years ended December 31, 2025, 2024 and 2023, sales through a single
distribution channel represented 29%, 20% and 19% of our total revenue, respectively.
Competition
The markets in which we operate are highly competitive and continue to evolve as organizations modernize
application architectures, adopt hybrid and cloud environments, expandAPI usage, and increase focus on cybersecurity
resilience. The growing importance of security, distributed application delivery, modernized networks, and AI-driven
workloads has broadened the competitive landscape and introduced new categories of competitors.
We compete across application delivery, network infrastructure, and security markets, where customers
increasingly seek integrated solutions that combine performance, availability, and protection within unified platforms.
Our ability to deliver multiple capabilities through a common architecture and centralized management framework
allows customers to reduce operational complexity and streamline deployment across physical, virtual, and cloud
environments.
We do not consider any of these markets to include a single dominant company, nor do we consider the markets to
be fragmented. Our main competitors fall into the following categories:
•
Providers of network and infrastructure security solutions, including DDoS protection and related services,
such as Arbor Networks Inc, a subsidiary of NetScout Systems, Radware Ltd, and F5;
•
Vendors of application delivery and traffic management solutions, including F5, NetScaler from Cloud
Software Group, and VMware offerings within Broadcom;
•
Network equipment and security vendors offering firewall, routing, and carrier-grade infrastructure
solutions, including Cisco Systems, Hewlett Packard Enterprise (division f/k/a Juniper Networks, Inc.), and
Fortinet Inc.;
•
Cloud-based security and application protection providers offering WAAP and related services, including
Akamai, Cloudflare, Imperva, and Amazon Web Services; and
•
Emerging vendors and specialized security providers addressing API protection, bot mitigation, and AI-
related security use cases.
Competition in our markets is based on a number of factors, including:
•
Performance, scalability, and reliability in mission-critical environments;
•
Breadth and integration of networking and security capabilities;
•
Effectiveness in detecting and mitigating evolving cybersecurity threats;
•
Flexibility across deployment models, including on-premises, hybrid, and cloud;
•
Total cost of ownership and operational simplicity;
•
Quality of customer support and service;
•
Brand reputation and customer relationships; and
•
Ability to attract and retain skilled technical and sales talent.
We believe our unified architecture, performance heritage, and integrated security capabilities position us to
compete effectively across these markets.
Sales and Marketing
Sales
Our high-touch sales force engages customers directly and through distribution channels. Our sales team is
comprised of inside sales and field sales personnel who are organized by geography and maintain sales presence in
23 countries as of December 31, 2025, including in the following countries and regions: United States, Western Europe,
the Middle East, Japan, Taiwan, South Korea, Southeast Asia and Latin America. Our sales organization includes sales
engineers with deep technical domain expertise who are responsible for pre-sales technical support, solutions
10

engineering, proof-of-concept work and technical training for our distribution channels. Our sales team is also
comprised of a channel sales organization that is expanding our market reach through resellers. We may continue to
grow our sales headcount, including in geographies where we currently do not have a sales presence.
Some customer sales are originated and completed by our Original Equipment Manufacturer (‘‘OEM’’) and
distribution channels with little or no direct engagement by our sales personnel. We fulfill nearly all orders globally
through our distribution channels, which include distributors, value added resellers and system integrators. Revenue
fulfilled through our distribution channels accounted for 96%, 94% and 95% of our total revenue for the years ended
December 31, 2025, 2024 and 2023, respectively.
Marketing
Our strategy is focused on driving greater demand for our products and services, and enabling sales to win as that
demand broadens. Our marketing drives global demand generation campaigns, as well as additional awareness and
demand via joint marketing campaigns worldwide. Our marketing also drives global awareness through industry
analyst engagement, media outreach, blogs, social media and events.
Manufacturing
We outsource the manufacturing of our hardware products to original design manufacturers. This approach allows
us to benefit from the scale and experience of our manufacturing partners to reduce our costs, overhead and inventory
while allowing us to adjust more quickly to changing customer demand. Our manufacturers are Lanner Electronics Inc.
(‘‘Lanner’’), AEWIN Technologies Co., Ltd. (‘‘AEWIN’’) and iBase. These companies manufacture and assemble our
hardware products using design specifications, quality assurance programs and standards established and owned or
licensed by us. Our manufacturers procure components and assemble our products based on our demand forecasts and
purchase orders. These forecasts represent our estimates of future demand for our products based on historical trends
and analysis from our sales and product management functions as adjusted for overall market conditions.
We have agreements with Lanner with an initial term of one year and AEWIN with an initial term of six years
pursuant to which they manufacture, assemble, and test our products. Each agreement automatically renews for
successive one-year terms unless either party gives notice that they do not want to renew. We do not have any long-term
manufacturing contracts that guarantee fixed capacity or pricing. Quality assurance and testing is performed at our San
Jose, Taiwan and Japan distribution centers, as well as at our manufacturers’ locations. We warehouse and deliver our
products out of our San Jose warehouse for the Americas and direct from Taiwan for APJ and EMEA. We outsource
delivery to a third-party logistics provider for deliveries in Japan.
Backlog
Backlog represents orders confirmed with a purchase order for products to be shipped to customers with approved
credit status. Orders may be subject to cancellation, rescheduling by customers and product specification changes by
customers.Although we believe that the backlog orders are firm, purchase orders may be canceled or rescheduled by the
customer prior to shipment without significant cost. For these reasons, we believe that our product backlog at any given
date is not a reliable indicator of future revenues.
For the years ended December 31, 2025, 2024 and 2023, our total revenue was $290.6 million, $261.7 million, and
$251.7 million, respectively, and our gross margin was 79.3%, 80.4%, and 80.9%, respectively. We had net income of
$42.1 million, $50.1 million and $40.0 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Intellectual Property
We rely on a combination of patent, copyright, trademark and trade secret laws, and restrictions on disclosure to protect
our intellectual property rights. As of December 31, 2025, we had 211 United States (‘‘U.S.’’) patents issued, 2 U.S. patent
applications pending, 77 overseas patents issued and 7 overseas patent applications pending. Our issued U.S. patents,
excluding 10 patents that we acquired, expire between 2026 and 2043. Our issued overseas patents, excluding 2 patents that
we acquired, expire between 2026 and 2037. Our future success depends in part on our ability to protect our proprietary rights
to the technologies used in our principal products. Despite our efforts to protect our proprietary rights, unauthorized parties
may attempt to copy aspects of our products or to obtain and use trade secrets or other information that we regard as
proprietary. In addition, the laws of some foreign countries do not protect our proprietary rights as fully as do the laws of the
U.S.Anyissuedpatentmaynotpreserveourproprietaryposition,andcompetitorsorothersmaydeveloptechnologiessimilar
to or superior to our technology. Our failure to enforce and protect our intellectual property rights could harm our business,
operating results and financial condition.
11

We license software from third parties for development of, or integration into, our products, including proprietary
and open source software. We pursue registration of our trademarks and domain names in the U.S. and other
jurisdictions. See Part I, Item 1A. Risk Factors included in thisAnnual Report on Form 10-K for additional information
regarding the risks associated with protecting our intellectual property.
Human Capital
As of December 31, 2025, we had 494 full-time employees, including 219 engaged in research and development and
customersupport,220insalesandmarketingand55ingeneralandadministrativeandotheractivities.Noneofouremployees
isrepresentedbyalaborunionorisapartytoanycollectivebargainingarrangementinconnectionwithhisorheremployment
with us. We have never experienced any work stoppages, and we consider our relations with our employees to be good.
Corporate Responsibility
Our mission is to enable business-critical networks that are secure, available and efficient. In our rapidly
expanding digital economy, this has never been more relevant and critical. Our customers rely on us to help them drive
better business outcomes now and into the future.
With our mission in mind, we are committed to maintaining the highest standards of ethics and corporate governance,
and to fostering a customer and partner ecosystem. These standards are described in our Code of Business Conduct and
Ethics, which can be accessed at https://investors.a10networks.com/corporate-responsibility/default.aspx. We believe these
practiceswilldeliverthehighestvalueforouremployees,customers,partnersandstockholders.Ourglobalfootprintprovides
an additional level of sustainability for business performance, and we drive this responsibility across all our global locations.
We use as a guide the code of conduct policies set forth by the Responsible Business Alliance, the world’s largest
industry coalition dedicated to corporate social responsibility in global supply chains, and we expect all of our suppliers
to do so as well. The alliance sets standards and practices for a social, environmentally sustainable, and ethical supply
chains. Our supply chain has sustained audits based on the Validated Assessment Program.
Further, we have established standards and practices to which our Board of Directors, executives and employees
are obligated to adhere, as outlined on our website under Corporate Responsibility.
Sustainability
We are committed to business practices that preserve the environment, recognizing its fundamental role in
sustaining our society and economy. We are committed to meeting and strive to exceed all legal and compliance
requirements
related to our people, products, and operations.Additionally, we aim to deliver products and services that minimize
environmental impact across our entire value chain.
•
Environmental Sustainability Policy: We have adopted an Environmental Sustainability Policy, which can be
accessed on our corporate website: https://investors.a10networks.com.
•
Ongoing Environmental Initiatives: We continuously evaluate environmental initiatives to further develop
our corporate policies and objectives. One such initiative is a sustainability project focused on reducing
carbon emissions. We have engaged a sustainability expert and established 2019 as the baseline year for our
10-year carbon reduction plan. This strategy aligns with the 1.5˚C initiative scope protocols.
•
Sustainable Facilities & Energy Efficiency: Our corporate headquarters in San Jose, California, complies
with the California Building Energy Efficiency Standards (Title 24) to reduce wasteful and unnecessary
energy consumption. We have also planned for increased use of renewable energy in partnership with PG&E.
Additionally, we provide EV charging stations for employees and visitors and facilitate recycling and proper
disposal of e-waste, in accordance with local requirements.
•
Conflict Minerals Supply Chain Policy: Under our Conflict Minerals Supply Chain Policy, which can be
viewed at https://investors.a10networks.com/corporate-responsibility/default.aspx, we expect our suppliers
to comply with our standards for responsible sourcing of minerals from conflict-affected and high-risk areas.
Suppliers must cooperate with our due diligence inquiries, information requests, and certifications to meet
reporting and disclosure obligations and ensure they do not knowingly contribute to local conflict or human
rights abuses.
12

We work with our contract manufacturers and suppliers to maintain compliance with, for example, RoHS, REACH
and WEEE in the European Union (‘‘EU’’) and elsewhere across the globe for other such environmental requirements.
The Company’s Conflict Minerals Supply Chain Policy as well as our Code of Business Conduct and Ethics outlines our
practices and procedures with respect to human rights to ensure participants in our supply chain do not knowingly
contribute to local conflict or human rights abuses. We expect our suppliers to comply with our policy on responsible
sourcing of minerals from conflict-affected and high-risk areas and to cooperate with our diligence inquiries and
requests for information and certification as may be required by us to comply with reporting and disclosure obligations
to which we are subject from time to time.
Workplace Standards
We are committed to providing a work environment that is free of discrimination and harassment. We are an
equal-opportunity employer.We make employment decisions on the basis of a person’s qualifications, as well as our business
needs, while complying with our statement against discrimination. We believe in the richness and quality of a working
environment that is informed by people from all walks of life and strive to create a genuinely inclusive environment.
We are committed to ensuring our team members are treated with fairness, dignity and respect. We believe that a
cooperative work environment, based on trust and mutual respect, is essential to our success. We embrace the diversity
of our workforce and celebrate the creative value added by individuals with differing backgrounds. We expressly
prohibit intimidation, hostility, harassment, discrimination and other inappropriate behavior. Furthermore, we expect
employees to conduct themselves in a professional and dignified manner at all times; in doing so, we seek to avoid
making employees feel uncomfortable at work.
As new employees join us, they learn more about our policies and culture through orientation and onboarding, our
Employee Handbook, Code of Business Conduct and Ethics, and compliance trainings. They are also given access to
our StatementAgainst Discrimination and are expected to comply with it. These all provide guidance on how we expect
to operate in order to foster equity and inclusion across our company.
We are an equal opportunity employer and a Vietnam Era Veterans’ Readjustment Assistance Act (‘‘VEVRAA’’)
federal subcontractor. All qualified applicants receive consideration for employment without regard to race, color,
religion, sex, sexual orientation, gender identity, national origin, disability status, protected veteran status, or any other
characteristic protected by law. We also comply with all applicable state and local laws governing nondiscrimination in
employment.
We use as a guide the code of conduct policies set forth by the Responsible Business Alliance, the world’s largest
industry coalition dedicated to corporate social responsibility in global supply chains, and we expect all of our suppliers
to do so as well. Our Code of Business Conduct and Ethics and our Statements Against Discrimination and Modern
Slavery can be found on our corporate website at https://investors.A10networks.com within the ‘‘Governance -
Governance Documents’’ section.
Total Rewards
We offer an attractive mix of compensation and benefit plans to support our employees and their families’physical,
mental, and financial well-being. We believe that we employ a fair and merit-based total compensation system for our
employees and offer a variable bonus plan for eligible employees. Employees are generally eligible for medical, dental,
vision and other comprehensive benefits, most of which become effective on their start date. Below are some of the
types of health and wellness related benefits offered to employees:
•
Medical, dental and vision insurance;
•
Retirement plan with Company matching contribution feature;
•
Flexible Spending Accounts for medical expenses, childcare, parking and transit;
•
Health Savings Account (with employer contribution);
•
Life insurance;
•
Short & long-term disability;
•
Paid time off and leave of absences; and
•
Employee assistance program
13

Employees have an opportunity for financial inclusion at A10 Networks with an ownership interest in our
company. There are several programs that provide employees with the ability to own our stock. Generally, more than
75% of our employees participates in at least one of our stock programs. During their tenure with our company, most
employees have an opportunity to receive an equity award, either upon hire and/or during an annual review process to
recognize those with significant impact on achieving our goals. Most employees, whether part or full time, also have the
ability to participate in our Employee Stock Purchase Plan (‘‘ESPP’’). Participants in the ESPP may purchase our stock
at a 15% discount to market price. We believe our discounted stock purchase program helps to build an ownership
mentality amongst participating employees.
Health, Safety and Wellness
We are committed to maintaining a healthy, safe, and secure work environment that protects our employees and the
public from harm. We use a multi-faceted approach to ensure the health and safety of our employees, from our Code of
Business Conduct and Ethics to our policies governing the way we act within and outside of our company. We comply
with applicable health, safety, and environmental laws as well as related company policies and procedures. We have a
zero-tolerance policy against aggressive behavior, violence, direct and indirect threats, harassment, intimidation, and
possession of weapons on company property. Moreover, we strive to conduct our everyday business activities in an
environmentally sustainable way through wellness programs and webinars through our health insurance providers.
Governance
OurBoardofDirectorsbelievesthatourboardshouldbeadiversebody,andourNominatingandCorporateGovernance
Committee considers a broad range of backgrounds and experiences when selecting nominees for our board. Sixty percent of
our directors currently self-identify as being from one or multiple diverse groups, including gender.
We continuously review and improve our corporate governance guidelines in response to changing requirements
and feedback from employees, customers, partners, vendors and stockholders. The Nominating and Corporate
Governance Committees of the Board of Directors, consisting entirely of independent directors, evaluates the
appropriate governance practices as defined by law and industry best practice and takes those recommendations to the
Board of Directors. Currently, four of five Board members are independent.
We engage with an independent audit firm to ensure the Company complies with relevant requirements such as the
2002 Sarbanes-Oxley Act.
The Company’s governance and code of conduct policies are outlined in the Code of Business Conduct and Ethics,
Corporate Governance Guidelines, Whistleblower Policy and the Employee Handbook. Employees may submit
concerns to generalcounsel@a10networks.com or via the Company’s third-party hotline as noted the Employee
Handbook.
Corporate Information
A10 Networks, Inc. was incorporated in the State of California in 2004 and subsequently reincorporated in the
State of Delaware in March 2014. Our website is located at www.A10networks.com, and our investor relations website
is located at https://investors.A10networks.com. The following filings are available through our investor relations
website after we file them with the SEC: Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K, as well as any amendments to such reports and all other filings pursuant to Section 13(a) or 15(d)
of the Securities Act. These filings are also available for download free of charge on our investor relations website.
Additionally, copies of materials filed by us with the SEC may be accessed at the SEC’s website at www.sec.gov.
We announce material information to the public about the Company, our products and services and other matters
through a variety of means, including our website (www.A10networks.com), the investor relations section of our
website (https://investors.A10networks.com), press releases, filings with the Securities and Exchange Commission,
public conference calls, and social media, including our corporate X (formerly Twitter) account (@A10Networks) and
our corporate Facebook page (https://www.facebook.com/a10networks). Information provided includes press releases
and other information about financial performance, information on environmental, social and governance and details
related to the Company’s annual meeting of stockholders. The contents of our website and social media contents are not
intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we
file with the SEC, and any references to our websites are intended to be inactive textual references only. We encourage
investors and others to review the information we make public in these locations, as such information could be deemed
to be material information. Please note that this list may be updated from time to time.
14

Item 1A.
RISK FACTORS
Investing in our common stock involves a high degree of risk. You should carefully consider the risks and
uncertainties described below, together with all of the other information contained in this report and in our other public
filings. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties
that we are unaware of, or that we currently believe are not material, may also become important factors that affect us.
If any of the following risks occur, our business, financial condition, operating results, and prospects could be
materially harmed. In that event, the trading price of our common stock could decline, perhaps significantly. The order
of presentation is not necessarily indicative of the level of risk that each factor poses to us.
Risks Related to Our Business, Operations and Industry
If we do not successfully anticipate market needs and opportunities or if the market does not continue to adopt our
application delivery solutions, our business, financial condition and results of operations could be significantly
harmed.
The application delivery market is rapidly evolving and difficult to predict. Technologies, customer requirements,
security threats and industry standards are constantly changing.As a result, we must anticipate future market needs and
opportunities and then develop new products or enhancements to our current products that are designed to address those
needs and opportunities, and we may not be successful in doing so.
We continuously seek to enhance and improve our solutions we make available to our customers. However, even
if we are able to anticipate, develop and commercially introduce new products and enhancements that address the
market’s needs and opportunities, there can be no assurance that new products or enhancements will achieve
widespread market acceptance. For example, organizations that use other conventional or first-generation application
delivery solutions for their needs may believe that these solutions are sufficient. In addition, as we launch new product
offerings, organizations may not believe that such new product offerings offer any additional benefits as compared to
the existing application delivery solutions that they currently use. Accordingly, organizations may continue allocating
their IT budgets for existing application solutions and may not adopt our solutions, regardless of whether our solutions
can offer superior performance or security.
If we fail to anticipate market needs and opportunities or if the market does not continue to adopt our application
delivery solutions, then market acceptance and sales of our current and future application delivery solutions could be
substantially decreased or delayed, we could lose customers, and our revenue may not grow or may decline.Any of such
events would significantly harm our business, financial condition and results of operations.
Our success depends on our timely development of new products and features to address rapid technological changes
and evolving customer requirements. If we are unable to timely develop and successfully introduce new products and
features that adequately address these changes and requirements, our business and operating results could be
adversely affected.
Changes in application software technologies, data center and communications hardware, networking software
and operating systems, and industry standards, as well as our end-customers’ continuing business growth, result in
evolving application networking needs and requirements. Our continued success depends on our ability to identify,
develop and introduce in a timely and successful manner, new products and new features for our existing products that
meet these needs and requirements.
Our future plans include significant investments in research and development and related product opportunities.
Developing our products and related enhancements is time-consuming and expensive. We have made significant
investments in our research and development team in order to address these product development needs. Our
investments in research and development may not result in significant design and performance improvements or
marketable products or features, or may result in products that are more expensive than anticipated. We may take longer
to generate revenue, or generate less revenue, than we anticipate from our new products and product enhancements. We
believe that we must continue to dedicate a significant amount of resources to our research and development efforts to
maintain our competitive position.
We continuously seek to enhance and improve our solutions. However, if we are unable to develop new products
and features to address technological changes and new customer requirements in the application networking or security
markets, or if our investments in research and development do not yield the expected benefits in a timely manner, our
business and operating results could be adversely affected.
15

We have experienced net losses in the past and may not maintain profitability in future periods. If we cannot
maintain profitability, our financial performance will be harmed and our business may suffer.
We may not be able to increase our quarterly revenue or maintain profitability in the future or on a consistent basis,
and we may incur significant losses in the future for a number of possible reasons, including our inability to develop
products that achieve market acceptance, general economic conditions, increasing competition, decreased growth in the
markets in which we operate, regulatory or other governmental actions over which we have no control, or our failure for
any reason to capitalize on growth opportunities. Additionally, we may encounter unforeseen operating expenses,
difficulties, complications, delays and other unknown factors that may result in losses in future periods. If these losses
exceed our expectations or our revenue growth expectations are not met in future periods, our financial performance
will be harmed and our stock price could be volatile or decline.
Our operating results have varied and are likely to continue to vary significantly from period to period and may be
unpredictable, which could cause the trading price of our common stock to decline.
Our operating results, in particular, revenue, margins and operating expenses, have fluctuated in the past, and we
expect this will continue, which makes it difficult for us to predict our future operating results. The timing and size of
sales of our products are highly variable and difficult to predict and can result in significant fluctuations in our revenue
from period to period. This is particularly true of sales to our largest end-customers, such as service providers, enterprise
customers and governmental organizations, who typically make large and concentrated purchases and for whom close
or sales cycles can be long, as a result of their complex networks and data centers, as well as requests that may be made
for customized features. Our quarterly results may vary significantly based on when these large end-customers place
orders with us and the content of their orders.
Our operating results may also fluctuate due to a number of other factors, many of which are outside of our control
and may be difficult to predict. In addition to other risks listed in this ‘‘Risk Factors’’section, factors that may affect our
operating results include:
•
fluctuations in and timing of purchases from, or loss of, large customers;
•
the budgeting cycles and purchasing practices of end-customers;
•
changes in end-customer preferences, practices or personnel;
•
our ability to attract and retain new end-customers;
•
our ability to provide and enhance efficient operations;
•
changes in demand for our products and services, including seasonal variations in customer spending patterns
or cyclical fluctuations in our markets;
•
our reliance on shipments at the end of our quarters;
•
variations in product mix or geographic locations of our sales, which can affect the revenue we realize for
those sales;
•
the timing and success of new product and service introductions by us or our competitors;
•
our ability to increase the size of our distribution channel and to maintain relationships with important
distribution channels;
•
our ability to improve our overall sales productivity and successfully execute our marketing strategies;
•
the effect of currency exchange rates on our revenue and expenses;
•
changes in legal requirements, our compliance obligations and/or relevant tax schemas;
•
the cost and potential outcomes of existing and future litigation;
•
expenses related to our facilities, networks, and network operations;
•
the effect of discounts negotiated by our largest end-customers for sales or pricing pressure from our
competitors;
•
changes in the growth rate of the application networking or security markets or changes in market needs;
16

•
inventory write downs, which may be necessary for our older products when our new products are launched
and adopted by our end-customers;
•
our ability to expand internationally and domestically; and
•
our third-party manufacturers’and component suppliers’capacity to meet our product demand forecasts on a
timely basis, or at all.
Any one of the factors above or the cumulative effect of some of these factors may result in significant fluctuations
in our financial and other operating results. This variability and unpredictability could result in our failure to meet our
or our investors’ or securities analysts’ revenue, margin or other operating results expectations for a particular period,
resulting in a decline in the trading price of our common stock.
Reliance on shipments at the end of the quarter could cause our revenue for the applicable period to fall below
expected levels.
As a result of end-customer buying patterns and the efforts of our sales force and distribution channels to meet or
exceed their sales objectives, we have historically received a substantial portion of purchase orders and generated a
substantial portion of revenue during the last few weeks of each quarter. We may be able to recognize such revenue in
the quarter received, however, only if all of the requirements of revenue recognition are met by the end of the quarter.
Any significant interruption in our information technology systems, which manage critical functions such as order
processing, revenue recognition, financial forecasts, inventory and supply chain management, could result in delayed
order fulfillment and thus decreased revenue for that quarter. If expected revenue at the end of any quarter is delayed for
any reason, including the failure of anticipated purchase orders to materialize (including delays by our customers or
potential customers in consummating such purchase orders), our third-party manufacturers’ inability to manufacture
and ship products prior to quarter-end to fulfill purchase orders received near the end of the quarter, our failure to
manage inventory to meet demand, our inability to release new products on schedule, any failure of our systems related
to order review and processing, or any delays in shipments or achieving specified acceptance criteria, our revenue for
that quarter could fall below our, or our investors’ or securities analysts’ expectations, resulting in a decline in the
trading price of our common stock. For example, in 2023, we experienced longer sales cycles and customer uncertainty
that resulted in delayed orders. These circumstances normalized in 2024.
We face intense competition in our market, especially from larger, well-established companies, and we may lack
sufficient financial or other resources to maintain or improve our competitive position.
The application networking and security markets are intensely competitive, and we expect competition to increase
in the future. To the extent that we sell our solutions in adjacent markets, we expect to face intense competition in those
markets as well. We believe that our main competitors fall into the following categories:
•
Companies that sell products in the traditional ADC market such as F5 Networks, Inc. (‘‘F5 Networks’’) and
Citrix Systems, Inc. (‘‘Citrix Systems’’);
•
Companies that sell open source, software-only, cloud-based ADC services, such as Avi Networks Inc.
(‘‘Avi Networks’’), NGINX Inc. (‘‘NGINX’’), and HAProxy Technologies, Inc. (‘‘HAProxy’’) as well as
many startups;
•
Companies that sell CGN products, which were originally designed for other networking purposes, such as
edge routers and security appliances from vendors like Cisco Systems, Inc. (‘‘Cisco Systems’’),
Hewlett Packard Enterprise (division f/k/a Juniper Networks, Inc. (‘‘Juniper Networks’’)) and Fortinet, Inc.
(‘‘Fortinet’’);
•
Companies that sell traditional DDoS protection products, such as Arbor Networks, Inc., a subsidiary of
NetScout Systems, Inc. (‘‘Arbor Networks’’) and Radware, Ltd. (‘‘Radware’’);
•
Companies that sell SSL decryption and inspection products, such as Symantec Corporation (through its
acquisition of Blue Coat Systems Inc. in 2016) and F5 Networks; and
•
Companies
that
sell
certain
network
security
products,
including
Secure
Web
Gateways,
SSL Insight/SSL Intercept, data center firewalls and Office 365 proxy solutions.
Many of our competitors are substantially larger and have greater financial, technical, research and development,
sales and marketing, manufacturing, distribution and other resources and greater name recognition. In addition, some
17

of our larger competitors have broader products offerings and could leverage their customer relationships based on their
other products. Potential customers who have purchased products from our competitors in the past may also prefer to
continue to purchase from these competitors rather than change to a new supplier regardless of the performance, price
or features of the respective products. We could also face competition from new market entrants, which may include our
current technology partners. As we continue to expand globally, we may also see new competitors in different
geographic regions. Such current and potential competitors may also establish cooperative relationships among
themselves or with third parties that may further enhance their resources.
Many of our existing and potential competitors enjoy substantial competitive advantages, such as:
•
longer operating histories;
•
the capacity to leverage their sales efforts and marketing expenditures across a broader portfolio of products
and services at a greater range of prices including through selling at zero or negative margins;
•
the ability to incorporate functionality into existing products to gain business in a manner that discourages
users from purchasing our products, including through product bundling or closed technology platforms;
•
broader distribution and established relationships with distribution channels in a greater number of
worldwide locations;
•
access to larger end-customer bases;
•
the ability to use their greater financial resources to attract our research and development engineers as well as
other employees of ours;
•
larger intellectual property portfolios; and
•
the ability to bundle competitive offerings with other products and services.
Our ability to compete will depend upon our ability to provide a better solution than our competitors at a
competitive price. We may be required to make substantial additional investments in research and development,
marketing and sales in order to respond to competition, and there is no assurance that these investments will achieve any
returns for us or that we will be able to compete successfully in the future. We also expect increased competition if our
market continues to expand. Moreover, conditions in our market could change rapidly and significantly as a result of
technological advancements or other factors.
In addition, current or potential competitors may be acquired by third parties that have greater resources available.
As a result of these acquisitions, our current or potential competitors might take advantage of the greater resources of
the larger organization to compete more vigorously or broadly with us. In addition, continued industry consolidation
might adversely impact end-customers’ perceptions of the viability of smaller and even medium-sized networking
companies and, consequently, end-customers’ willingness to purchase from companies like us.
As a result, increased competition could lead to fewer end-customer orders, price reductions, reduced margins and
loss of market share.
Cloud-based computing trends present competitive and execution risks.
We are experiencing an industry-wide trend of customers considering transitioning from purely on-premise
network architectures to a computing environment that may utilize a mixture of existing solutions and various new
cloud-based solutions. Concurrently with this transition, pricing and delivery models are also evolving. Many
companies in our industry, including some of our competitors, are developing and deploying cloud-based solutions for
their customers. In addition, the emergence of new cloud infrastructures and AI or other tools may enable new
companies to compete with our business. These new competitors may include large cloud providers who can provide
their own ADC functionality as well as smaller companies targeting applications that are developed exclusively for
delivery in the cloud. We are dedicating significant resources to develop and offer our customers new cloud-based
solutions and are training our sales teams as necessary to adapt to market trends.Also, some of our largest customers are
cloud providers that utilize our existing solutions, and we believe that as cloud infrastructures continue to grow our
existing solutions may provide benefits to other cloud providers. While we believe our expertise and dedication of
resources to developing new cloud-based solutions, together with the benefits that our existing solutions offer cloud
providers, represent advantages that provide us with a strong foundation to compete, it is uncertain whether our efforts
to develop new cloud-based and related solutions or our efforts to market and sell our existing solutions to cloud
18

providers will attract the customers or generate the revenue necessary to successfully compete in this new business
model. Nor is it clear when or in what manner this new business model will evolve, and this uncertainty may delay
purchasing decisions by our customers or prospective customers. Whether we are able to successfully compete depends
on our execution in a number of areas, including maintaining the utility, compatibility and performance of our software
on the growing assortment of cloud computing platforms and the enhanced interoperability requirements associated
with orchestration of cloud computing environments. We will also need to enhance and develop the infrastructure
necessary to support the delivery of these services as well as the skills of our personnel who sell, provide and maintain
them. Any failure to adapt to these evolving trends may reduce our revenue or operating margins and could have a
material adverse effect on our business, results of operations and financial condition.
If we are not able to maintain and enhance our brand and reputation, our business and operating results may be
harmed in tangible or intangible ways.
We believe that maintaining and enhancing our brand and reputation are critical to our relationships with and our
ability to attract, new end-customers, technology partners and employees. The successful promotion of our brand will
depend largely upon our ability to continue to develop, offer and maintain high-quality products and services, our
marketing and public relations efforts, and our ability to differentiate our products and services successfully from those
of our competitors. Our brand promotion activities may not be successful and may not yield increased revenue. In
addition, extension of our brand to products and uses different from our traditional products and services may dilute our
brand, particularly if we fail to maintain the quality of products and services in these new areas. We have in the past, and
may in the future, become involved in litigation and/or operational difficulties that could negatively affect our brand. If
we do not successfully maintain and enhance our brand and reputation, our growth rate may decline, we may have
reduced pricing power relative to competitors with stronger brands or reputations, and we could lose end-customers or
technology partners, all of which would harm our business, operating results and financial condition.
A limited number of our end-customers, including service providers, make large and concentrated purchases that
comprise a significant portion of our revenue. Any loss or delay of expected purchases by our largest end-customers
could adversely affect our operating results.
As a result of the nature of our target market and the current stage of our development, a substantial portion of our
revenue in any period comes from a limited number of large end-customers, including service providers. During the
years ended December 31, 2025, 2024 and 2023, purchases by our ten largest end-customers accounted for
approximately 40%, 38% and 33% of our total revenue, respectively. The composition of the group of these ten largest
end-customers changes from period to period, but often includes service providers and enterprise customers. During the
years ended December 31, 2025, 2024 and 2023, service providers accounted for approximately 60%, 57% and 58%,
of our total revenue, respectively, and enterprise customers accounted for approximately 40%, 43% and 42% of our total
revenue, respectively.
Sales to these large end-customers have typically been characterized by large but irregular purchases with long
initial sales cycles. After initial deployment, subsequent purchases of our products typically have a more compressed
sales cycle. The timing of these purchases and of the requested delivery of the purchased product is difficult to predict.
As a consequence, any acceleration or delay in anticipated product purchases by or requested deliveries to our largest
end-customers could materially affect our revenue and operating results in any quarter and cause our revenue and
operating results to fluctuate from quarter to quarter.
We cannot provide any assurance that we will be able to sustain or increase our revenue from our largest
end-customers nor that we will be able to offset any absence of significant purchases by our largest end-customers in
any particular period with purchases by new or existing end-customers in that or subsequent periods. We expect that
sales of our products to a limited number of end-customers will continue to contribute materially to our revenue for the
foreseeable future. The loss of, or a significant delay or reduction in purchases by, a small number of end-customers
could have a material adverse effect on our consolidated financial position, results of operations or cash flows.
Our business could be adversely impacted by changes demanded by our customers in the deployment and payment
models for our products.
Our customers have traditionally demanded products deployed in physical, appliance-based on-premise data
centers that are paid in full at the time of purchase and include perpetual licenses for our software products. While these
products remain central to our business, new deployment and payment models are emerging in our industry that may
provide some of our customers with additional technical, business agility and flexibility options. These new models
19

include cloud-based applications provided as SaaS and software subscription licenses where license and service fees are
ratable and correlate to the type of service used, the quantity of services consumed or the length of time of the
subscription. These models have accounting treatments that may require us to recognize revenue ratably over an
extended period of time. If a substantial portion of our customers transition from on-premise-based products to such
cloud-based, consumption and subscription-based models, this could adversely affect our operating results and could
make it more difficult to compare our operating results during such transition period with our historical operating
results.
Some of our large end-customers demand favorable terms and conditions from their vendors and may request price
or other concessions from us. As we seek to sell more products to these end-customers, we may agree to terms and
conditions that may have an adverse effect on our business.
Some of our large end-customers have significant purchasing power and, accordingly, may request from us and
receive more favorable terms and conditions, including lower prices than we typically provide. As we seek to sell
products to this class of end-customer, we may agree to these terms and conditions, which may include terms that reduce
our gross margin and have an adverse effect on our business.
Our gross margin may fluctuate from period to period based on the mix of products sold, the geographic location of
our customers, price discounts offered, required inventory write downs and exchange rate fluctuations.
Our gross margin may fluctuate from period to period in response to a number of factors, such as the mix of our
products sold and the geographic locations of our sales. Our products tend to have varying gross margins in different
geographic regions. We also may offer pricing discounts from time to time as part of a targeted sales campaign or as a
result of pricing pressure from our competitors. In addition, our larger end-customers may negotiate pricing discounts
in connection with large orders they place with us. The sale of our products at discounted prices could have a negative
impact on our gross margin. We also must manage our inventory of existing products when we introduce new products.
If we are unable to sell the remaining inventory of our older products prior to or following the launch of such new
product offerings, we may be forced to write down inventory for such older products, which could also negatively affect
our gross margin. Our gross margin may also vary based on international currency exchange rates. In general, our sales
are denominated in U.S. Dollars; however, in Japan they are denominated in JapaneseYen. Changes in the exchange rate
between the U.S. Dollar and the Japanese Yen has, in the past, and may in the future affect our actual revenue and gross
margin. Changes in foreign exchange rates, especially between the U.S. Dollar and the Japanese Yen, could impact the
purchasing decisions of our customers.
We generate a significant amount of revenue from sales to distributors, resellers, and end-customers outside of the
United States, and we are therefore subject to a number of risks that could adversely affect these international
sources of our revenue.
A significant portion of our revenue is generated in international markets, including Japan, Western Europe,
Taiwan and South Korea. During the years ended December 31, 2025, 2024, and 2023, approximately 45%, 55% and
55% of our total revenue, respectively, was generated from customers located outside of the U.S. If we are unable to
maintain or continue to grow our revenue in these markets, our financial results may suffer.
As a result, we must hire and train experienced personnel to staff and manage our foreign operations. To the extent
that we experience difficulties in recruiting, training, managing and retaining an international staff, and specifically
sales management and sales personnel, we may experience difficulties in sales productivity in foreign markets. We also
seek to enter into distributor and reseller relationships with companies in certain international markets where we do not
have a local presence. If we are not able to maintain successful distributor relationships internationally or recruit
additional companies to enter into distributor relationships, our future success in these international markets could be
limited. Business practices in the international markets that we serve may differ from those in the U.S. and may require
us in the future to include terms in customer contracts other than our standard terms. To the extent that we may enter into
customer contracts in the future that include non-standard terms, our operating results may be adversely impacted.
20

We have a significant presence in international markets and plan to continue to expand our international
operations, which exposes us to a number of risks that could negatively affect our future business.
We have personnel in numerous countries including in the following countries and regions: the U.S.,
Western Europe, India, the Middle East, Japan, Taiwan, South Korea, Southeast Asia and Latin America. As we
maintain our international operations, we are subject to a number of risks, including the following:
•
greater difficulty in enforcing contracts and accounts receivable collection and possible longer collection
periods;
•
increased expenses incurred in establishing and maintaining office space and equipment for our international
operations;
•
greater difficulty in recruiting local experienced personnel, and the costs and expenses associated with such
activities;
•
general economic and political conditions in these foreign markets;
•
economic uncertainty around the world, including continued economic uncertainty as a result of sovereign
debt issues in Europe, the United Kingdom’s exit from the European Union (commonly referred to as
‘‘Brexit’’), the war between Russia and Ukraine, and tensions between China and Taiwan;
•
management communication and integration problems resulting from cultural and geographic dispersion;
•
risks associated with trade restrictions and foreign legal requirements, including the importation,
certification, and localization of our products required in foreign countries;
•
greater risk of unexpected changes in regulatory practices, tariffs, and tax laws and treaties;
•
the uncertainty of protection for intellectual property rights in some countries;
•
greater risk of a failure of foreign employees to comply with both U.S. and foreign laws, including antitrust
regulations, relevant accounting standards the U.S. Foreign Corrupt Practices Act (‘‘FCPA’’), and any trade
regulations ensuring fair trade practices; and
•
heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent
sales arrangements that may impact financial results and result in restatements of, or irregularities in,
financial statements.
Because of our worldwide operations, we are also subject to risks associated with compliance with applicable
anticorruption laws. One such applicable anticorruption law is the FCPA, which generally prohibits U.S. companies and
their employees and intermediaries from making payments to foreign officials for the purpose of obtaining or keeping
business, securing an advantage, or directing business to another, and requires public companies to maintain accurate
books and records and a system of internal accounting controls. Under the FCPA, U.S. companies may be held liable for
actions taken by directors, officers, employees, agents, or other strategic or local partners or representatives. As such,
if we or our intermediaries, such as resellers and other channels and distributors, fail to comply with the requirements
of the FCPAor similar legislation, governmental authorities in the U.S. and elsewhere could seek to impose civil and/or
criminal fines and penalties which could have a material adverse effect on our business, operating results and financial
condition.
Our success depends on our key personnel and our ability to hire, retain and motivate qualified product development,
sales, marketing and finance personnel.
Our success depends to a significant degree upon the continued contributions of our key management, product
development, sales, marketing and finance personnel, many of whom may be difficult to replace. The complexity of our
products, their integration into existing networks and ongoing support of our products requires us to retain highly
trained technical services, customer support and sales personnel with specific expertise related to our business.
Competition for qualified technical services, customer support, engineering and sales personnel in our industry is
intense, because of the limited number of people available with the necessary technical skills and understanding of our
products. Our ability to recruit and hire these personnel is harmed by tightening labor markets, particularly in the
engineering field, in several of our key geographic hiring areas. We may not be successful in attracting, integrating, or
21

retaining qualified personnel to fulfill our current or future needs, nor may we be successful in keeping the qualified
personnel we currently have. Our ability to hire and retain these personnel may be adversely affected by volatility or
reductions in the price of our common stock, since these employees are generally granted equity-based awards.
Our future performance also depends on the continued services and continuing contributions of certain employees
and members of senior management to execute on our business plan and to identify and pursue new opportunities and
product innovations. Our senior management team, significant employees with technical expertise, and product and
sales managers, among others, are critical to the development of our technology and the future vision and strategic
direction of our company. The loss of their services could significantly delay or prevent the achievement of our
development and strategic objectives, which could adversely affect our business, financial condition, and operating
results.
There can be no assurance that our exploration of strategic alternatives will result in any transaction being
consummated, and speculation and uncertainty regarding the outcome of our exploration of strategic alternatives
may adversely impact our business.
On July 30, 2019, we announced that our Board of Directors had formed a Strategy Committee tasked and
empowered with overseeing and executing specific activities directed to increasing stockholder value. No assurance
can be given that a strategic transaction will be consummated in the near term or at all. In addition, speculation and
uncertainty regarding our exploration of strategic alternatives may cause or result in:
•
disruption of our business;
•
distraction of our management and employees;
•
difficulty in recruiting, hiring, motivating, and retaining talented and skilled personnel;
•
difficulty in maintaining or negotiating and consummating new, business or strategic relationships or
transactions;
•
increased stock price volatility; and
•
increased costs and advisory fees.
If we are unable to mitigate these or other potential risks related to the uncertainty caused by our exploration of
strategic alternatives, it may disrupt our business or adversely impact our revenue, operating results, and financial
condition.
Adverse general economic conditions or reduced information technology spending may adversely impact our
business.
A substantial portion of our business depends on the demand for information technology by large enterprises and
service providers, the overall economic health of our current and prospective end-customers and the continued growth
and evolution of the Internet. The timing of the purchase of our products is often discretionary and may involve a
significant commitment of capital and other resources. Volatility in the global economic market or other effects of
global or regional economic weakness, including limited availability of credit, a reduction in business confidence and
activity, deficit-driven austerity measures that continue to affect governments and educational institutions, and other
difficulties may affect one or more of the industries to which we sell our products and services. If economic conditions
in the U.S., Europe and other key markets for our products continue to be volatile in response to geopolitical
developments, macroeconomic trends, or otherwise, and do not improve, or those markets experience a prolonged
downturn, many end-customers may delay or reduce their IT spending. From time to time this causes reductions in sales
of our products and services, longer sales cycles, slower adoption of new technologies and increased price competition.
Any of these events would likely harm our business, operating results and financial condition. In addition, there can be
no assurance that IT spending levels will increase following any recovery.
We are dependent on third-party manufacturers, and changes to those relationships, expected or unexpected, may
result in delays or disruptions that could harm our business.
We outsource the manufacturing of our hardware components to third-party original design manufacturers who
assemble these hardware components to our specifications. Our primary manufacturers are Lanner and AEWIN, each
of which is located in Taiwan. Deterioration of international relations including but not limited to those between
Taiwan and China, the resulting actions taken by either country, and other factors affecting the political or economic
22

conditions of Taiwan in the future, could cause disruption to the manufacturing of our hardware components, which
could materially adversely affect our business, financial condition and results of operations and the market price and the
liquidity of our shares. Our reliance on these third-party manufacturers reduces our control over the manufacturing
process and exposes us to risks, including reduced control over quality assurance, product costs, and product supply and
timing. Any manufacturing or other form of disruption at these manufacturers, including but not limited to disruptions
due to tensions with China, could severely impair our ability to fulfill orders. In addition, the ongoing global supply
chain issues are expected to continue and may adversely impact our suppliers to a degree that could materially impact
us. Our reliance on outsourced manufacturers also may create the potential for infringement or misappropriation of our
intellectual property rights or confidential information. If we are unable to manage our relationships with these
manufacturers effectively, or if these manufacturers suffer delays or disruptions for any reason, experience increased
manufacturing lead-times, experience capacity constraints or quality control problems in their manufacturing
operations, or fail to meet our future requirements for timely delivery, our ability to ship products to our end-customers
would be severely impaired, and our business and operating results would be seriously harmed.
These manufacturers typically fulfill our supply requirements on the basis of individual orders. We do not have
long-term contracts with our manufacturers that guarantee capacity, the continuation of particular pricing terms, or the
extension of credit limits.Accordingly, they are not obligated to continue to fulfill our supply requirements, which could
result in supply shortages, and the prices we are charged for manufacturing services could be increased on short notice.
In addition, our orders may represent a relatively small percentage of the overall orders received by our manufacturers
from their customers. As a result, fulfilling our orders may not be considered a priority by one or more of our
manufacturers in the event the manufacturer is constrained in its ability to fulfill all of its customer obligations in a
timely manner.
Although the services required to manufacture our hardware components may be readily available from a number
of established manufacturers, it is time-consuming and costly to qualify and implement such relationships. If we are
required to change manufacturers, whether due to an interruption in one of our manufacturers’ businesses, quality
control problems or otherwise, or if we are required to engage additional manufacturers, our ability to meet our
scheduled product deliveries to our customers could be adversely affected, which could cause the loss of sales to
existing or potential customers, delayed revenue or an increase in our costs that could adversely affect our gross margin.
Because some of the key components in our products come from limited sources of supply, we are susceptible to
supply shortages or supply changes, which could disrupt or delay our scheduled product deliveries to our
end-customers and may result in the loss of sales and end-customers.
Our products incorporate key components, including certain integrated circuits that we and our third-party
manufacturers purchase on our behalf from a limited number of suppliers, including some sole-source providers. In
addition, the lead times associated with these and other components of our products can be lengthy and preclude rapid
changes in quantities and delivery schedules. Moreover, long-term supply and maintenance obligations to our
end-customers increase the duration for which specific components are required, which may further increase the risk we
may incur component shortages or the cost of carrying inventory. If we are unable to obtain a sufficient quantity of these
components in a timely manner for any reason, sales and/or shipments of our products could be delayed or halted, which
would seriously affect present and future sales and cause damage to end-customer relationships, which would, in turn,
adversely affect our business, financial condition and results of operations.
Our component suppliers change their selling prices frequently in response to market trends, including industry-
wide increases in demand, and because we do not necessarily have contracts with these suppliers, we are susceptible to
price fluctuations related to raw materials and components. If we are unable to pass component price increases along to
our end-customers or maintain stable pricing, our gross margin and operating results could be negatively impacted.
Furthermore, poor quality in sole-sourced components or certain other components in our products could also result in
lost sales or lost sales opportunities. If the quality of such components does not meet our standards or our end-
customers’ requirements, if we are unable to obtain components from our existing suppliers on commercially
reasonable terms, or if any of our sole source providers cease to continue to manufacture such components or to remain
in business, we could be forced to redesign our products and qualify new components from alternate suppliers. The
development of alternate sources for those components can be time-consuming, difficult and costly, and we may not be
able to develop alternate or second sources in a timely manner. Even if we are able to locate alternate sources of supply,
we could be forced to pay for expedited shipments of such components or our products at dramatically increased costs.
23

Real or perceived defects, errors, or vulnerabilities in our products or services or the failure of our products or
services to block a threat or prevent a security breach could harm our reputation and adversely impact our results of
operations.
Because our products and services are complex, they have contained and may contain design or manufacturing defects
orerrorsthatarenotdetecteduntilaftertheircommercialreleaseanddeploymentbyourcustomers.Evenifwediscoverthose
weaknesses,wemaynotbeabletocorrectthempromptly,ifatall.Defectsmaycauseourproductstobevulnerabletosecurity
attacks, cause them to fail to help secure networks, or temporarily interrupt end-customers’networking traffic. Furthermore,
our products may fail to detect or prevent malware, viruses, worms or similar threats for any number of reasons, including our
failure to enhance and expand our platform to reflect industry trends, new technologies and new operating environments, the
complexity of the environment of our end-customers and the sophistication of malware, viruses and other threats. Data
thieves and hackers are increasingly sophisticated, often affiliated with organized crime or state-sponsored groups, and may
operate large-scale and complex automated attacks. The techniques used to obtain unauthorized access or to sabotage
networkschangefrequentlyandmaynotberecognizeduntillaunchedagainstatarget.Additionally,asawell-knownprovider
of enterprise security solutions, our networks, products, and services could be targeted by attacks specifically designed to
disruptourbusinessandharmourreputation.Suchanattackcouldresultinadditionalexpenseincurredinconnectionwiththe
response, investigation, mitigation and remediation in response. For example, in January 2023, we identified a cybersecurity
incident in our corporate IT infrastructure (not related to any of our products or solutions used by customers) (the ‘‘Cyber
Incident’’). Upon detecting the Cyber Incident, we launched an investigation and engaged the services of cybersecurity
experts and advisors, incident response professionals and external counsel to support the investigation. As our products are
adopted by an increasing number of enterprises and governments, it is possible that the individuals and organizations behind
advancedattackswillfocusonfindingwaystodefeatourproducts.Inaddition,defectsorerrorsinourupdatestoourproducts
could result in a failure of our services to effectively update end-customers’ products and thereby leave our end-customers
vulnerable to attacks. Our data centers and networks may experience technical failures and downtime, may fail to distribute
appropriate updates, or may fail to meet the increased requirements of a growing installed end-customer base, any of which
could temporarily or permanently expose our end-customers’networks, leaving their networks unprotected against security
threats. Our end-customers may also misuse or wrongly configure our products or otherwise fall prey to attacks that our
products cannot protect against, which may result in loss or a breach of business data, data being inaccessible due to a
‘‘ransomware’’ attack, or other security incidents. For all of these reasons, we may be unable to anticipate all data security
threats or provide a solution in time to protect our end-customers’ networks. If we fail to identify and respond to new and
increasingly complex methods of attack and to update our products to detect or prevent such threats in time to protect our
end-customers’critical business data, our business, operating results and reputation could suffer.
If any companies or governments that are publicly known to use our platform are the subject of a cyber-attack that
becomes publicized, our other current or potential channel partners or end-customers may look to our competitors for
alternatives to our products. Real or perceived security breaches of our end-customers’networks could cause disruption
or damage to their networks or other negative consequences and could result in negative publicity to us, damage to our
reputation, declining sales, increased expenses and end-customer relations issues. To the extent potential end-customers
or industry analysts believe that the occurrence of any actual or perceived failure of our products to detect or prevent
malware, viruses, worms or similar threats is a flaw or indicates that our products do not provide significant value, our
reputation and business could be harmed.
Any real or perceived defects, errors, or vulnerabilities in our products, or any failure of our products to detect a
threat, could result in:
•
a loss of existing or potential end-customers or channels;
•
delayed or lost revenue;
•
a delay in attaining, or the failure to attain, market acceptance;
•
the expenditure of significant financial and product development resources in efforts to analyze, correct,
eliminate, or work around errors or defects, to address and eliminate vulnerabilities, to remediate harms
potentially caused by those vulnerabilities, or to identify and ramp up production with third-party providers;
•
an increase in warranty claims, or an increase in the cost of servicing warranty claims, either of which would
adversely affect our gross margins;
•
harm to our reputation or brand; and
•
litigation, regulatory inquiries, or investigations that may be costly and further harm our reputation.
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Although we maintain cybersecurity liability coverage that may cover certain liabilities in connection with a
security breach such as the Cyber Incident, we cannot be certain that our insurance coverage will be adequate for
liabilities actually incurred, that insurance will continue to be available to use on commercially reasonable terms, or at
all, or that any insurer will not deny coverage as to any future claim. The successful assertion of one or more large claims
against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including
premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse
effect on our business, including our financial condition, results of operation and reputation.
Our business is subject to the risks of warranty claims, product returns, product liability, and product defects.
Real or perceived errors, failures or bugs in our products could result in claims by end-customers for losses that
they sustain. If end-customers make these types of claims, we may be required, or may choose, for customer relations
or other reasons, to expend additional resources in order to help correct the problem. Historically, the amount of
warranty claims has not been significant, but there are no assurances that the amount of such claims will not be material
in the future. Liability provisions in our standard terms and conditions of sale, and those of our resellers and distributors,
may not be enforceable under some circumstances or may not fully or effectively protect us from customer claims and
related liabilities and costs, including indemnification obligations under our agreements with resellers, distributors or
end-customers. The sale and support of our products also entail the risk of product liability claims. We maintain
insurance to protect against certain types of claims associated with the use of our products, but our insurance coverage
may not adequately cover any such claims. In addition, even claims that ultimately are unsuccessful could result in
expenditures of funds in connection with litigation and divert management’s time and other resources.
Undetected software or hardware errors may harm our business and results of operations.
Our products may contain undetected errors or defects when first introduced or as new versions are released. We
have experienced these errors or defects in the past in connection with new products and product upgrades. We expect
that these errors or defects will be found from time to time in new or enhanced products after commencement of
commercial distribution. These problems have in the past and may in the future cause us to incur significant warranty
and repair costs, divert the attention of our engineering personnel from our product development efforts and cause
significant customer relations problems. We may also be subject to liability claims for damages related to product errors
or defects. While we carry insurance policies covering this type of liability, these policies may not provide sufficient
protection should a claim be asserted. A material product liability claim may harm our business and results of
operations.
Any errors, defects or vulnerabilities in our products could result in:
•
expenditures of significant financial and product development resources in efforts to analyze, correct,
eliminate or work around errors and defects or to address and eliminate vulnerabilities;
•
loss of existing or potential end-customers or distribution channels;
•
delayed or lost revenue;
•
delay or failure to attain market acceptance;
•
indemnification obligations under our agreements with resellers, distributors and/or end-customers;
•
an increase in warranty claims compared with our historical experience or an increased cost of servicing
warranty claims, either of which would adversely affect our gross margin; and
•
litigation, regulatory inquiries, or investigations that may be costly and harm our reputation.
Our use of open source software and position regarding the potential use of generative AI in our products could
negatively affect our ability to sell our products and subject us to possible litigation.
We incorporate open source software such as the Linux operating system kernel into our products. We have
implemented a formal open source use policy, including written guidelines for use of open source software and business
processes for approval of that use. We have developed and implemented our open source policies according to industry
practice; however, best practices in this area are subject to change, because there is little reported case law on the
interpretation of material terms of many open source licenses. We are in the process of reviewing our open source use
and our compliance with open source licenses and implementing remediation and changes necessary to comply with the
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open source licenses related thereto. While we do not currently utilize software generated byAI tools in our products we
may at some point choose to do so, and, if we do, we will likely treat AI generated code as a form of open source
software. We cannot guarantee that our use of open source software has been, and will be, managed effectively for our
intended business purposes and/or compliant with applicable open source licenses. We may face legal action by third
parties seeking to enforce their intellectual property rights related to our use of such software. Failure to adequately
manage open source license compliance and our use of open source orAI generated software may result in unanticipated
obligations regarding our products and services, such as a requirement that we license proprietary portions of our
products or services on unfavorable terms, that we make available source code for modifications or derivative works we
created based upon, incorporating or using open source software, that we license such modifications or derivative works
under the terms of the particular open source license and/or that we redesign the affected products or services, which
could result, for example, in a loss of intellectual property rights, or delay in providing our products and services. From
time to time, there have been claims against companies that distribute or use third-party open source or other software
in their products and services, asserting that the open source or AI generated software or its combination with the
products or services infringes third parties’patents or copyrights, or that the companies’distribution or use of the open
source software does not comply with the terms of the applicable licenses. Use of certain open source or AI generated
software can lead to greater risks than use of warranted third-party commercial software, as open source licensors and
AI generated software generally do not provide warranties or controls on the origin of such software. From time to time,
there have been claims against companies that use open source or AI generated software in their products, challenging
the ownership of rights in such open source or AI generated software. As a result, we could also be subject to suits by
parties claiming ownership of rights in such software and so challenging our right to use such software in our products.
If any such claims were asserted against us, we could be required to incur significant legal expenses defending against
such a claim. Further, if our defenses to such a claim were not successful, we could be, for example, subject to
significant damages, be required to seek licenses from third parties in order to continue offering our products and
services without infringing such third party’s intellectual property rights, be required to re-engineer such products and
services, or be required to discontinue making available such products and services if re-engineering cannot be
accomplished on a timely or successful basis. The need to engage in these or other remedies could increase our costs or
otherwise adversely affect our business, operating results and financial condition.
Our products must interoperate with operating systems, software applications and hardware that are developed by
others and if we are unable to devote the necessary resources to ensure that our products interoperate with such
software and hardware, we may fail to increase, or we may lose market share and we may experience a weakening
demand for our products.
Our products must interoperate with our end-customers’ existing infrastructure, specifically their networks,
servers, software and operating systems, which may be manufactured by a wide variety of vendors and original
equipment manufacturers.As a result, when problems occur in a network, it may be difficult to identify the source of the
problem. The occurrence of software or hardware problems, whether caused by our products or another vendor’s
products, may result in the delay or loss of market acceptance of our products. In addition, when new or updated
versions of our end-customers’software operating systems or applications are introduced, we must sometimes develop
updated versions of our software so that our products will interoperate properly. We may not accomplish these
development efforts quickly, cost-effectively or at all. These development efforts require capital investment and the
devotion of engineering resources. If we fail to maintain compatibility with these applications, our end-customers may
not be able to adequately utilize our products, and we may, among other consequences, fail to increase, or we may lose
market share and experience a weakening in demand for our products, which would adversely affect our business,
operating results and financial condition.
We license technology from third parties, and our inability to maintain those licenses could harm our business.
Many of our products include proprietary technologies licensed from third parties. In the future, it may be necessary to
renew licenses for third party technology or obtain new licenses for other technology.These third-party licenses may not
be available to us on acceptable terms, if at all. As a result, we could also face delays or be unable to make changes to
our products until equivalent technology can be identified, licensed or developed and integrated with our products. Such
delays or an inability to make changes to our products, if it were to occur, could adversely affect our business, operating
results and financial condition. The inability to obtain certain licenses to third-party technology, or litigation regarding
the interpretation or enforcement of license agreements and related intellectual property issues, could have a material
adverse effect on our business, operating results and financial condition.
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Failure to prevent excess inventories or inventory shortages could result in decreased revenue and gross margin and
harm our business.
We purchase products from our manufacturers outside of, and in advance of, reseller or end-customer orders,
which we hold in inventory and sell. We place orders with our manufacturers based on our forecasts of our
end-customers’requirements and forecasts provided by our distribution channel partners. These forecasts are based on
multiple assumptions, each of which might cause our estimates to be inaccurate, affecting our ability to provide
products to our customers. There is a risk we may be unable to sell excess products ordered from our manufacturers.
Inventory levels in excess of customer demand may result in obsolete inventory and inventory write-downs. The sale of
excess inventory at discounted prices could impair our brand image and have an adverse effect on our financial
condition and results of operations. Conversely, if we underestimate demand for our products, or if our manufacturers
fail to supply products we require at the time we need them, we may experience inventory shortages. Inventory
shortages might delay shipments to resellers, distribution channels and customers and cause us to lose sales. These
shortages may diminish the loyalty of our distribution channels or customers.
The difficulty in forecasting demand also makes it difficult to estimate our future financial condition and results of
operations from period to period. A failure to accurately predict the level of demand for our products could adversely
affect our total revenue and net income, and we are unlikely to forecast such effects with any certainty in advance.
Our sales cycles can be long and unpredictable, primarily due to the complexity of our end-customers’ networks
and data centers and the length of their budget cycles. As a result, our sales and revenue are difficult to predict and may
vary substantially from period to period, which may cause our operating results to fluctuate significantly.
The timing of our sales is difficult to predict because of the length and unpredictability of our products’ sales
cycles.Asales cycle is the period between initial contact with a prospective end-customer and any sale of our products.
Our sales cycle, in particular to our large end-customers, may be lengthy due to the complexity of their networks and
data centers. Because of this complexity, prospective end-customers generally consider a number of factors over an
extended period of time before committing to purchase our products. End-customers often view the purchase of our
products as a significant and strategic decision that can have important implications on their existing networks and data
centers and, as a result, require considerable time to evaluate, test and qualify our products prior to making a purchase
decision and placing an order to ensure that our products will successfully interoperate with our end-customers’
complex network and data centers. Additionally, the budgetary decisions at these entities can be lengthy and require
multiple organization reviews. The length of time that end-customers devote to their evaluation of our products and
decision-making process varies significantly. The length of our products’ sales cycles typically ranges from three to
12 months but can be longer for our large end-customers. In addition, the length of our close or sales cycle can be
affected by the extent to which customized features are requested, in particular in our large deals.
For all of these reasons, it is difficult to predict whether a sale will be completed or the particular fiscal period in
which a sale will be completed, both of which contribute to the uncertainty of our future operating results. If our close
or sales cycles lengthen, our revenue could be lower than expected, which would have an adverse impact on our
operating results and could cause our stock price to decline.
Our ability to sell our products is highly dependent on the quality of our support and services offerings, and our
failure to offer high-quality support could have a material adverse effect on our business, revenue and results of
operations.
We believe that our ability to provide consistent, high quality customer service and technical support is a key factor
in attracting and retaining end-customers of all sizes and is critical to the deployment of our products. When support is
purchased our end-customers depend on our support organization to provide a broad range of support services,
including on-site technical support, 24-hour support and shipment of replacement parts on an expedited basis. If our
support organization or our distribution channels do not assist our end-customers in deploying our products effectively,
succeed in helping our end-customers resolve post-deployment issues quickly, or provide ongoing support, it could
adversely affect our ability to sell our products to existing end-customers and could harm our reputation with potential
end-customers. We currently have technical support centers in the U.S., Japan, India and the Netherlands. As we
continue to expand our operations internationally, our support organization will face additional challenges, including
those associated with delivering support, training and documentation in languages other than English.
We typically sell our products with maintenance and support as part of the initial purchase, and a substantial
portion of our support revenue comes from renewals of maintenance and support contracts. Our end-customers have no
obligation to renew their maintenance and support contracts after the expiration of the initial period. If we are unable to
27

provide high quality support, our end-customers may elect not to renew their maintenance and support contracts or to
reduce the product quantity under their maintenance and support contracts, thereby reducing our future revenue from
maintenance and support contracts.
Our failure or the failure of our distribution channels to maintain high-quality support and services could have a
material and adverse effect on our business, revenue and operating results.
We depend on growth in markets relating to network security, management and analysis, and lack of growth or
contraction in one or more of these markets could have a material adverse effect on our results of operations and
financial condition.
Demand for our products is linked to, among other things, growth in the size and complexity of network
infrastructures and the demand for networking technologies addressing the security, management and analysis of such
infrastructures. These markets are dynamic and evolving. Our future financial performance will depend in large part on
continued growth in the number of organizations investing in their network infrastructure and the amount they commit
to such investments. If this demand declines, our results of operations and financial condition would be materially and
adversely affected. Segments of the network infrastructure industry have in the past experienced significant economic
downturns. Furthermore, the market for network infrastructure may not continue to grow at historic rates, or at all. The
occurrence of any of these factors in the markets relating to network security, management and analysis could materially
and adversely affect our results of operations and financial condition.
Because we recognize subscription revenue from our customers over the term of their agreements, downturns or
upturns in sales of our subscription-based offerings will not be immediately reflected in our operating results and may
adversely affect our revenue in the future.
We recognize subscription revenue over the term of our customer agreements.As a result, most of our subscription
revenue arises from agreements entered into during previous periods. A shortfall in orders for our subscription-based
solutions in any one period would most likely not significantly reduce our subscription revenue for that period, but
could adversely affect the revenue contribution in future periods. In addition, we may be unable to quickly reduce our
cost structure in response to a decrease in these orders. Accordingly, the effect of downturns in sales of our
subscription-based solutions will not be fully reflected in our operating results until future periods. A subscription
revenue model also makes it difficult for us to rapidly increase our revenue through additional subscription sales in any
one period, as revenue is generally recognized over a longer period.
Our business and operations have experienced growth in certain prior periods and may experience rapid growth at
certain times in the future, and if we do not effectively manage any future growth or are unable to sustain and improve
our controls, systems and processes, our operating results will be adversely affected. In certain prior periods, we have
significantly increased the number of our employees and independent contractors. As we hire new employees and
independent contractors and expand into new locations outside the U.S., we are required to comply with varying local
laws for each of these new locations. We anticipate that further expansion of our infrastructure and headcount will be
required. Our growth has placed, and will continue to place, a significant strain on our administrative and operational
infrastructure and financial resources. Our ability to manage our operations and growth across multiple countries will
require us to continue to refine our operational, financial and management controls, human resource policies, and
reporting systems and processes. We need to continue to improve our internal systems, processes, and controls to
effectively manage our operations and growth. We may not be able to successfully implement improvements to these
systems, processes and controls in an efficient or timely manner. In addition, our systems and processes may not prevent
or detect all errors, omissions or fraud. We may experience difficulties in managing improvements to our systems,
processes, and controls or in connection with third-party software, which could impair our ability to provide products
or services to our customers in a timely manner, causing us to lose customers, limit us to smaller deployments of our
products, increase our technical support costs, or damage our reputation and brand. Furthermore, given our growth and
size, our management team may lack oversight on certain side agreements between sales personnel and customers. Our
failure to improve our systems and processes, or their failure to operate in the intended manner, may result in our
inability to manage the growth of our business and to accurately forecast our revenue, expenses, and earnings, or to
prevent certain losses, any of which may harm our business and results of operations. We may not be able to sustain or
develop new distributor and reseller relationships, and a reduction or delay in sales to significant distribution channel
partners could hurt our business.
We sell our products and services through multiple distribution channels in the U.S. and internationally. We may
not be able to increase our number of distributor or reseller relationships or maintain our existing relationships.
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Recruiting and retaining qualified distribution channels and training them on our technologies requires significant time
and resources. These distribution channels may also market, sell and support products and services that are competitive
with ours and may devote more resources to the marketing, sales and support of such competitive products. Our sales
channel structure could subject us to lawsuits, potential liability and reputational harm if, for example, any of our
distribution channels misrepresent the functionality of our products or services to end-customers or violate laws or our
corporate policies. If we are unable to establish or maintain our sales channels or if our distribution channels are unable
to adapt to our future sales focus and needs, our business and results of operations will be harmed.
Our products must conform to industry standards in order to be accepted by end-customers in our markets.
Generally, our products comprise only a part of a data center. The servers, network, software and other components
and systems of a data center must comply with established industry standards in order to interoperate and function
efficiently together. We depend on companies that provide other components of the servers and systems in a data center
to support prevailing industry standards. Often, these companies are significantly larger and more influential in driving
industry standards than we are. Some industry standards may not be widely adopted or implemented uniformly, and
competing standards may emerge that may be preferred by our end-customers. If larger companies do not support the
same industry standards that we do, or if competing standards emerge, market acceptance of our products could be
adversely affected and we may need to incur substantial costs to conform our products to such standards, which could
harm our business, operating results and financial condition.
We are dependent on various information technology systems, and failures of or interruptions to those systems could
harm our business.
Many of our business processes depend upon our information technology systems, the systems and processes of
third parties, and on interfaces with the systems of third parties. If those systems fail or are interrupted, or if our ability
to connect to or interact with one or more networks is interrupted, our processes may function at a diminished level or
not at all. This could harm our ability to ship or support our products, and our financial results may be harmed.
In addition, reconfiguring or upgrading our information technology systems or other business processes in
response to changing business needs may be time-consuming and costly and is subject to risks of delay or failed
deployment. To the extent this impacts our ability to react timely to specific market or business opportunities, our
financial results may be harmed. Future acquisitions we may undertake may not result in the financial and strategic
goals that are contemplated at the time of the transaction.
Future acquisitions we may undertake may not result in the financial and strategic goals that are contemplated at the
time of the transaction.
We may make future acquisitions of complementary companies, products or technologies. For example, in
February 2025 we acquired the assets and key personnel of ThreatX Protect. With respect to any acquisitions we have
or may undertake, we may find that the acquired businesses, products or technologies do not further our business
strategy as expected, that we paid more than what the assets are later worth or that economic conditions change, all of
which may generate future impairment charges. Acquisitions may be viewed negatively by customers, financial
markets or investors. There may be difficulty integrating the operations and personnel of an acquired business, and we
may have difficulty retaining the key personnel of an acquired business. We may also have difficulty in integrating
acquired technologies or products with our existing product lines.Any integration process may require significant time
and resources, and we may not be able to manage the process successfully. Our ongoing business and management’s
attention may be disrupted or diverted by transition or integration issues and the complexity of managing
geographically and culturally diverse locations. We may have difficulty maintaining uniform standards, controls,
procedures and policies across locations. We may experience significant problems or liabilities associated with product
quality, technology and other matters.
Our inability to successfully operate and integrate future acquisitions appropriately, effectively and in a timely
manner, or to retain key personnel of any acquired business, could have a material adverse effect on our revenue, gross
margin and expenses.
We are exposed to the credit risk of our distribution channels and end-customers, which could result in material
losses and negatively impact our operating results.
Most of our sales are on an open credit basis, with typical payment terms ranging from 30 to 90 days depending on
local customs or conditions that exist in the sale location. If any of the distribution channels or end-customers
responsible for a significant portion of our revenue becomes insolvent or suffers a deterioration in its financial or
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business condition and is unable to pay for our products, our results of operations could be harmed. The sales price of
our products and subscriptions may decrease, which may reduce our gross profits and adversely impact our financial
results. The sales prices for our products and subscriptions may decline for a variety of reasons, including competitive
pricing pressures, discounts, a change in our mix of products and subscriptions, anticipation of the introduction of new
products or subscriptions, or promotional programs. Competition continues to increase in the market segments in which
we participate, and we expect competition to further increase in the future, thereby leading to increased pricing
pressures. Larger competitors with more diverse product and service offerings may reduce the price of products or
subscriptions that compete with ours or may bundle them with other products and subscriptions.Additionally, although
we price our products and subscriptions worldwide in U.S. Dollars (except in Japan), currency fluctuations in certain
countries and regions may negatively impact actual prices that distribution channels and end-customers are willing to
pay in those countries and regions. Furthermore, we anticipate that the sales prices and gross profits for our products will
decrease over product life cycles. We cannot guarantee that we will be successful in developing and introducing new
offerings with enhanced functionality on a timely basis, or that our product and subscription offerings, if introduced,
will enable us to maintain our prices and gross profits at levels that will allow us to achieve and maintain profitability.
Our business is subject to the risks of earthquakes, fire, power outages, floods, and other catastrophic events, and to
interruption by man-made problems such as acts of war and terrorism.
Asignificant natural disaster, such as an earthquake, fire, a flood, or significant power outage could have a material
adverse impact on our business, operating results, and financial condition. Our corporate headquarters are located in the
San Francisco BayArea, a region known for seismic activity. In addition, our two primary manufacturers are located in
Taiwan, which is near major earthquake fault lines and subject to typhoons during certain times of the year. In the event
of a major earthquake or typhoon, or other natural or man-made disaster, our manufacturers in Taiwan may face
business interruptions, which may impact quality assurance, product costs, and product supply and timing. In the event
our or our service providers’information technology systems or manufacturing or logistics abilities are hindered by any
of the events discussed above, shipments could be delayed, resulting in missed financial targets, such as revenue and
shipment targets, and our operations could be disrupted, for the affected quarter or quarters. In addition, large-scale
cybersecurity attacks, acts of war or terrorism, global pandemics such as the COVID-19 pandemic or other geo-political
unrest could cause disruptions in our business or the business of our supply chain, manufacturers, logistics providers,
channels, or end-customers or the economy as a whole. Any disruption in the business of our supply chain,
manufacturers, logistics providers, channels or end-customers that impacts sales at the end of a quarter could have a
significant adverse impact on our quarterly results. All of the aforementioned risks may be further increased if the
disaster recovery plans for us and our suppliers prove to be inadequate. To the extent that any of the above should result
in delays or cancellations of customer orders, or the delay in the manufacture, deployment or shipment of our products,
our business, financial condition and operating results would be adversely affected.
Risks Related to Intellectual Property, Litigation, Laws and Regulations
Enhanced U.S. tariffs, import/export restrictions, Chinese regulations, countermeasures taken by affected countries
or other trade barriers may have a negative effect on global economic conditions, financial markets and our
business.
There is currently significant uncertainty about the future relationship between the U.S. and various other
countries, including China, with respect to trade policies, treaties, tariffs and taxes. The current U.S. administration has
imposed a range of tariff actions on U.S. trading partners. In April 2025, acting under the International Economic
Emergency Powers Act (‘‘IEEPA’’), the Trump administration temporarily increased IEEPA tariffs on Chinese imports
to 145% (reduced back to 30% in May 2025) and set a baseline 10% tariff applicable to almost every country, with
exemptions for certain products. InAugust 2025, the United States increased reciprocal tariffs on many trading partners
to individually-set levels, subject again to certain exemptions. On January 20, 2026, the U.S. Supreme Court held in
Learning Resources v. Trump that IEEPA did not authorize the President to impose tariffs. The White House
subsequently released an Executive Order terminating all IEEPA-based duties. However, the Trump Administration
moved immediately to impose new duties under Section 122 of the Trade Act, which authorizes a 15% duty to address
‘‘balance of payments’’ issues for up to 150 days. The Administration has also indicated that it will initiate new trade
investigations under Section 301 of the Trade Act to backfill the IEEPA duties for individual trading partners that the
Supreme Court declared unlawful.
Ongoing trade investigations, including investigations under Section 232 of the Trade Expansion Act and
Section 301 of the TradeAct, could also lead to greater restrictions on international trade and further increases in tariffs
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on goods imported into the U.S. An investigation by the U.S. Trade Representative (‘‘USTR’’) into Chinese legacy
semiconductors resulted in deferred tariffs, which will not take effect until 2027. In January 2026, the Trump
Administration announced that the U.S. Department of Commerce (‘‘Commerce’’) had concluded its investigation into
semiconductors and derivative articles, among other actions. The TrumpAdministration opted to impose limited duties
on semiconductor articles meeting certain narrow technical characteristics, with exclusions available for most domestic
applications.
OnAugust 1, Commerce imposed 50% duties under Section 232 on certain articles of copper and copper derivative
products, followed by Section 232 duties on imports of wood products in September. Commerce continues to
investigate the national security impact of imports of myriad other products, including polysilicon and pharmaceuticals,
with decisions likely to be made in 2026. Further, the U.S. continues to negotiate and enter into trade agreement
frameworks with various countries, which may result in lower tariffs on those trading partners. The status of these trade
agreements in the wake of the Supreme Court’s ruling on IEEPAtariffs remains unclear, as IEEPAwas the predicate for
the tariff rates set in the trade framework agreements. Meanwhile, China and the U.S. continue to engage in trade
negotiations following a mutual de-escalation and pause of certain tariffs, export controls, and other trade actions in
November 2025.
Although A10’s supply chain does not depend exclusively upon imports from China, an increase in tariffs
generally will cause our costs to increase, which could narrow the profits we earn from sales of products requiring such
materials and/or compel us to increase our prices to customers. Furthermore, while we are not presently aware of duties
applicable to digital services, if trade restrictions or barriers are placed on our products by foreign governments, the
prices for such products may increase, which may result in the loss of customers and harm to our business, financial
condition and results of operations. There can be no assurance that we will not experience a disruption in business
related to these or other changes in trade practices and the process of changing suppliers in order to mitigate any such
tariff costs could be complicated, time consuming and costly.
Furthermore, the U.S. tariffs may cause customers to delay orders as they evaluate where to take delivery of our
products in connection with their efforts to mitigate their own tariff exposure. Such delays create forecasting difficulties
for us and increase the risk that orders might be canceled or never be placed. Current or future tariffs may also negatively
impact our customers’ revenue, thereby causing an indirect negative impact on our sales. Any reduction in customers’
revenue, and/or any apprehension among distributors and customers of a possible reduction in such revenue, could
cause an indirect negative impact on our own sales.As noted, the current U.S. administration has taken a variety of tariff
actions against other countries, and other countries such as China have at times responded with retaliatory tariffs and
non-tariff measures as trade negotiations continue. Certain of these tariffs have been struck down by the courts, while
the Administration relies on new, untested authorities. The duration and magnitude of these tariffs and other trade
disruptions remains uncertain and could lead to economic decline in affected countries, which could negatively impact
purchases of our products. Moreover, an increase in the cost of our products due to tariffs or other trade actions could
cause us to be impacted to a greater degree than our competitors who are based in countries that are not subject to tariffs,
placing us at a disadvantage. Simply put, future U.S. tariffs on imports and retaliatory tariffs could increase the cost of,
and reduce demand for, our products, which may materially adversely affect our results of operations.
Additionally, the current uncertainty about the future relationship between the U.S. and other countries with
respect to the trade policies, treaties, taxes, sanctions, government regulations and tariffs makes it difficult to plan for
the future. New developments in these areas, or the perception that any of them could occur, may have a material
adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce
global trade and, in particular, trade between these nations and the U.S. Any of these factors could depress economic
activity and restrict our access to suppliers or customers and have a material adverse effect on our business, financial
condition and results of operations and affect our strategy. Given the uncertainty of further developments related to
tariffs, international trade agreements and policies we can give no assurance that our business, financial condition and
operating results would not be adversely affected.
We have been, may presently be, or in the future may be, a party to litigation and claims regarding intellectual
property rights, resolution of which has been and may in the future be time-consuming, expensive and adverse to us,
as well as require a significant amount of resources to prosecute, defend, or make our products non-infringing.
Our industry is characterized by the existence of a large number of patents and by increasingly frequent claims and
related litigation based on allegations of infringement or other violations of patent and other intellectual property rights.
In the ordinary course of our business, we have been and may presently be in disputes and licensing discussions with
others regarding their patents and other claimed intellectual property and proprietary rights. Intellectual property
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infringement and misappropriation lawsuits and other claims are subject to inherent uncertainties due to the complexity
of the technical and legal issues involved, and we cannot be certain that we will be successful in defending ourselves
against such claims or in concluding licenses on reasonable terms or at all.
We may have fewer issued patents than some of our major competitors, and therefore may not be able to utilize our
patent portfolio effectively to assert defenses or counterclaims in response to patent infringement claims or litigation
brought against us by third parties. Further, litigation may involve patent holding companies or other adverse patent
owners that have no relevant products revenue and against which our potential patents may provide little or no
deterrence. In addition, many potential litigants have the capability to dedicate substantially greater resources than we
can to enforce their intellectual property rights and to defend claims that may be brought against them. We expect that
infringement claims may increase as the number of product types and the number of competitors in our market
increases. Also, to the extent we gain greater visibility, market exposure and competitive success, we face a higher risk
of being the subject of intellectual property infringement claims.
If we are found in the future to infringe the proprietary rights of others, or if we otherwise settle such claims, we
could be compelled to pay damages or royalties and either obtain a license to those intellectual property rights or alter
our products such that they no longer infringe. Any license could be very expensive to obtain or may not be available
at all. Similarly, changing our products or processes to avoid infringing the rights of others may be costly, time-
consuming or impractical. Alternatively, we could also become subject to an injunction or other court order that could
prevent us from offering our products. Any of these claims, regardless of their merit, may be time-consuming, result in
costly litigation and diversion of technical and management personnel, or require us to cease using infringing
technology, develop non-infringing technology or enter into royalty or licensing agreements.
Many of our commercial agreements require us to indemnify our end-customers, distributors and resellers for
certain third-party intellectual property infringement actions related to our technology, which may require us to defend
or otherwise become involved in such infringement claims, and we could incur liabilities in excess of the amounts we
have received for the relevant products and/or services from our end-customers, distributors or resellers. These types of
claims could harm our relationships with our end-customers, distributors and resellers, may deter future end-customers
from purchasing our products or could expose us to litigation for these claims. Even if we are not a party to any litigation
between an end-customer, distributor or reseller, on the one hand, and a third party, on the other hand, an adverse
outcome in any such litigation could make it more difficult for us to defend our intellectual property rights in any
subsequent litigation in which we are a named party.
We may not be able to adequately protect our intellectual property, and if we are unable to do so, our competitive
position could be harmed, or we could be required to incur significant expenses to enforce our rights.
We rely on a combination of patent, copyright, trademark and trade secret laws, and contractual restrictions on
disclosure of confidential and proprietary information, to protect our intellectual property. Despite the efforts we take
to protect our intellectual property and other proprietary rights, these efforts may not be sufficient or effective at
preventing their unauthorized use. In addition, effective trademark, patent, copyright and trade secret protection may
not be available or cost-effective in every country in which we have rights. There may be instances where we are not
able to protect intellectual property or other proprietary rights in a manner that maximizes competitive advantage. If we
are unable to protect our intellectual property and other proprietary rights from unauthorized use, the value of those
assets may be reduced, which could negatively impact our business.
We also rely in part on confidentiality and/or assignment agreements with our technology partners, employees,
consultants, advisors and others. These protections and agreements may not effectively prevent disclosure of our
confidential information and may not provide an adequate remedy in the event of unauthorized disclosure. In addition,
others may independently discover our trade secrets and intellectual property information we thought to be proprietary,
and in these cases we would not be able to assert any trade secret rights against those parties. Despite our efforts to
protect our intellectual property, unauthorized parties may attempt to copy or otherwise obtain and use our intellectual
property or technology. Monitoring unauthorized use of our intellectual property is difficult and expensive. We have not
made such monitoring a priority to date and will not likely make this a priority in the future. We cannot be certain that
the steps we have taken or will take will prevent misappropriation of our technology, particularly in foreign countries
where the laws may not protect our proprietary rights as fully as in the U.S.
If we fail to protect our intellectual property adequately, our competitors might gain access to our technology, and
our business might be harmed. In addition, even if we protect our intellectual property, we may need to license it to
competitors, which could also be harmful. For example, as a result of the settlement of an intellectual property matter,
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we have already licensed all of our issued patents, pending applications, and future patents and patent applications that
we may acquire, obtain, apply for or have a right to license to Broadcom, Inc. until May 2025, for the life of each such
patent. In addition, we might incur significant expenses in defending our intellectual property rights.Any of our patents,
copyrights, trademarks or other intellectual property rights could be challenged by others or invalidated through
administrative process or litigation.
We may in the future initiate claims or litigation against third parties for infringement of our proprietary rights or
to establish the validity of our proprietary rights. Any litigation, whether or not resolved in our favor, could result in
significant expense to us and divert the efforts of our management and technical personnel, as well as cause other claims
to be made against us, which might adversely affect our business, operating results and financial condition.
Failure to protect and ensure the confidentiality and security of data, trade secrets and personally identifiable
information (‘‘PII’’) could lead to legal liability, adversely affect our reputation and have a material adverse effect
on our operating results, business and reputation.
We may collect, store and use certain confidential information in the course of providing our services, and we have
invested in preserving the security of this data. While the Cyber Incident we experienced in January 2023 did not result
in material degradation of our systems, it did expose a vulnerability in our security measures which we believe has been
corrected. We may also outsource operations to third-party service providers to whom we transmit certain confidential
data. There are no assurances that any security measures we have in place, or any additional security measures that our
subcontractors may have in place, will be sufficient to protect this confidential information from unauthorized security
breaches. While the Cyber Incident did not have a material impact on the Company, it did result in additional expense
incurred in connection with the investigation.
We cannot assure you that, despite the implementation of these security measures, including enhanced security
measures as a result of the Cyber Incident, we will not be subject to additional security incidents or other data breaches
or that this data will not be compromised. We have and may be required to expend significant capital and other resources
to protect against security incidents and remedy breaches or to alleviate problems caused by security breaches, or to pay
penalties as a result of such breaches. Despite our implementation of security measures, techniques used to obtain
unauthorized access or to sabotage systems change frequently and may not be recognized until launched against a target,
as was the case in the Cyber Incident. As a result, we may be unable to anticipate these techniques or implement
adequate preventative measures to protect this data. In addition, security breaches can also occur as a result of
non-technical issues, including intentional or inadvertent breaches by our employees or service providers or by other
persons or entities with whom we have commercial relationships. Any compromise or perceived compromise of our
security could damage our reputation with our end-customers, and could subject us to significant liability, as well as
regulatory action, including financial penalties, which could significantly adversely affect our brand, results of
operations, financial condition, business and prospects.
We have incurred, and expect to continue to incur, significant costs to protect against or remedy security breaches.
We may incur significant additional costs in the future to address problems caused by any actual or perceived
security breaches.
Breaches of our security measures or those of our third-party service providers, or other security incidents, has and
could result in: unauthorized access to our sites, networks and systems; unauthorized access to, misuse or
misappropriation of information, including personally identifiable information, or other confidential or proprietary
information of ourselves or third parties; viruses, worms, spyware or other malware being served from our sites,
networks or systems; deletion or modification of content or the display of unauthorized content on our sites;
interruption, disruption or malfunction of operations; costs relating to notification of individuals, or other forms of
breach remediation; deployment of additional personnel and protection technologies; response to governmental
investigations and media inquiries and coverage; engagement of third-party experts and consultants; litigation,
regulatory investigations, prosecutions, and other actions; and other potential liabilities. In response to the Cyber
Incident, we launched an investigation and engaged the services of cybersecurity experts and advisors, incident
response professionals and external counsel to support the investigation. While the Cyber Incident did not have a
material impact on the Company, it did result in additional expense incurred in connection with the investigation.
Security incidents that occur or are believed to have occurred could damage our reputation and brand, could cause our
business to suffer, could require us to expend significant capital and other resources to alleviate problems caused by
such actual or perceived breaches, could expose us to a risk of loss, litigation or regulatory action and possible liability,
and could impair our ability to operate our business, including our ability to provide maintenance and support services
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to our distribution channels and end-customers. If current or prospective resellers and end-customers believe that our
systems and solutions do not provide adequate security for their businesses’needs, our business and our financial results
could be harmed. Additionally, future actual, potential or anticipated attacks may cause us to incur increasing costs,
including costs to deploy additional personnel and protection technologies, train employees and engage third-party
experts and consultants.
Anumber of our employees are currently working from home or other remote locations. There are additional risks
and challenges associated with having a large portion of our workforce working remotely, and our IT systems may
experience additional stress as a result. There is also increased risk of breaches to our network. While the Company has
implemented a variety of security measures to address these heightened risks, including, but not limited to, advanced
firewalls and firewall policy improvements, enhanced access controls, improved monitoring, network management and
incident management and response process, and prioritization of our cybersecurity committee to continuously evaluate
and strengthen our security posture, there can be no assurance that such measures will prevent breaches. Any such
breaches could negatively impact our reputation and business as set forth above.
Although we maintain privacy, data breach and network security liability insurance, we cannot be certain that our
coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on
economically reasonable terms, or at all. Any actual or perceived compromise or breach of our security measures, or
those of our third-party service providers, or any unauthorized access to, misuse or misappropriation of personally
identifiable information, channel partners’or end-customers information, or other information, could violate applicable
laws and regulations, contractual obligations or other legal obligations and cause significant legal and financial
exposure, adverse publicity and a loss of confidence in our security measures, any of which could have an material
adverse effect on our business, financial condition and operating results.
Our failure to adequately protect personal data could have a material adverse effect on our business.
Awide variety of provincial, state, national, foreign, and international laws and regulations apply to the collection, use,
retention, protection, disclosure, transfer, and other processing of personal data. These data protection, privacy and cyber
resilience-related laws and regulations continue to evolve, are increasingly being tested in courts, and remain subject to
ongoing governmental review and reform. Such laws may result in ever-increasing regulatory and public scrutiny and
escalating levels of enforcement and sanctions. For example, the European Union’s General Data Protection Regulation, or
GDPR, which took effect back in May 2018, has caused EU data protection requirements to be more stringent and provides
forgreaterpenalties.TheUnitedKingdomenactedlegislationthatsubstantiallyimplementstheGDPR,andhassinceenacted
legislationwhichamendscertainaspectsoftheUKGDPRwhichmayfurtherdivergeUKrequirementsfromthoseapplicable
in the European Union. In addition, the European Union has proposed amendments to aspects of the GDPR as part of its
proposed ‘‘Digital Omnibus’’ legislative package, which remains subject to negotiation and has not yet been adopted.
Because the GDPR and related UK data protection laws may be subject to new or changing interpretations by courts and
regulators, as well as legislative modification or reform, our interpretation of the law and efforts to comply with the rules and
regulations of the law may be challenged or ruled invalid. Noncompliance with the GDPR can trigger regulatory fines of up
to €20 million or 4% of global annual revenues, whichever is higher, in the most serious cases and/or legal claims. In the
European Union, various cyber resilience related laws (for example the EU Cyber ResilienceAct, Network and Information
Systems Directive 2, and the Digital Operational Resilience Act) have been enacted and will apply in phases, included
through Member State implementing measures and secondary legislation specifying certain technical and reporting
requirements. These frameworks essentially oblige those doing business in the EU/UK to implement robust cybersecurity
standards with respect to the products and services they provide, and aspects of these laws, including breach reporting
requirements, are also subject to proposed amendments under the EU’s Digital Omnibus initiative. In the United Kingdom,
cybersecurity and resilience obligations arise under, among other laws, the UK Network and Information Systems
Regulations 2018 (as amended), the Product Security and Telecommunications InfrastructureAct 2022, and financial sector
resilience frameworks. The UK government has also proposed reforms to its cyber resilience regime, which may expand the
scope of regulated entities and enhance incident reporting and supervisory powers.The EU has also enacted a comprehensive
law regulating the development and use of AI systems (the EU AI Act). The EU AI Act imposes enhanced requirements on
certain ‘‘high-risk’’AI systems, including obligations relating to risk management, data governance, documentation, human
oversightandconformityassessments,andalsoestablishestransparencyobligationsthatapplytoabroadrangeofAIsystems.
The EU AI Act is expected to be supplemented by implementing measures and guidance, and aspects of the framework are
subject to proposed amendments under a broader AI-related legislative ‘‘Omnibus’’ initiative. The timing and content of
certain European Commission guidance has been delayed, creating additional uncertainty regarding implementation
expectations. Breaches of such laws could also lead to significant fines and legal claims, and allegations of breach could lead
34

to significant investigative or defense related costs. Similarly, California recently enacted the California Consumer Privacy
Act (which was then amended by the California Privacy RightsAct) (‘‘CCPA’’) which, among other things, requires covered
companies to provide new disclosures to California consumers and affords such consumers new rights including not sharing
personal information upon the consumer’s request and opt-out provisions for the sales of consumer’s personal information.
Inaddition,atleast18otherU.S.stateshaveenactedcomprehensiveprivacylegislationsthatregulatesthecollection,use,and
sale of personal information, and other states have enacted sectoral privacy laws and introduced bills regarding
comprehensive privacy laws, and these privacy laws might not be compatible with either the GDPR or the CCPA or may
require us to undertake additional practices. At a minimum, these U.S. state comprehensive and sectoral privacy laws may
require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to
comply. Further, U.S. states have passed or introduced legislations regulating the development and deployment or AI and
automateddecisionmakingtechnologiesacrossdifferentsectorsandinsomeinstanceshavepassedorintroducedlegislations
or regulations that apply across sectors. Our failure to comply with applicable laws and regulations, or to protect such data,
could result in enforcement action against us, including significant investigatory costs, fines, imprisonment of company
officials and public censure (in the most serious, criminal cases, in certain jurisdictions), claims for damages by end-
customers and other affected persons and entities, damage to our reputation and loss of goodwill (both in relation to existing
andprospectivechannelpartnersandend-customers),andotherformsofinjunctiveoroperations-limitingrelief,anyofwhich
could have a material adverse effect on our operations, financial performance, and business. Evolving and changing
definitions of personal data and personal information, within the EU, the U.S., and elsewhere, especially relating to
classification of Internet Protocol (‘‘IP’’) addresses, machine identification, location data, biometric data and other
information, may limit or inhibit our ability to operate or expand our business, including limiting strategic partnerships that
may involve the sharing of data. We may be required to expend significant resources to modify our solutions and otherwise
adapt to these changes, which we may be unable to do on commercially reasonable terms or at all, and our ability to develop
new solutions and features could be limited. These developments could harm our business, financial condition and results of
operations. Even if not subject to legal challenge, the perception of privacy concerns, whether or not valid, may harm our
reputation and inhibit adoption of our products by current and prospective end-customers.
Our sales to governmental organizations are subject to a number of challenges and risks.
We sell to governmental organization end-customers. Sales to governmental organizations are subject to a number
of challenges and risks. Selling to governmental organizations can be highly competitive, expensive and time
consuming, often requiring significant upfront time and expense without any assurance that these efforts will generate
a sale. We have not yet received security clearance from the U.S. government, which prevents us from being able to sell
directly for certain governmental uses. There can be no assurance that such clearance will be obtained, and failure to do
so may adversely affect our operating results. Governmental organization demand and payment for our products may
be impacted by public sector budgetary cycles and funding authorizations, with funding reductions or delays adversely
affecting public sector demand for our products. Governmental organizations may have statutory, contractual or other
legal rights to terminate contracts with our distributors and resellers for convenience or due to a default, and any such
termination may adversely impact our future operating results.
Failure to comply with governmental laws and regulations could harm our business.
Our business is subject to regulation by various federal, state, local and foreign governmental entities, including
agencies responsible for monitoring and enforcing employment and labor laws, workplace safety, product safety,
environmental laws, consumer protection laws, anti-bribery laws, import/export controls,AI, data privacy laws, federal
securities laws, and tax laws and regulations. In certain jurisdictions, these regulatory requirements may be more
stringent than those in the U.S. Noncompliance or perceived noncompliance with applicable regulations or
requirements could subject us to investigations, sanctions, mandatory product recalls, enforcement actions,
disgorgement of profits, fines, damages, civil and criminal penalties or injunctions. If any governmental sanctions are
imposed, or if we do not prevail in any possible civil or criminal litigation, our business, operating results, and financial
condition could be materially adversely affected. In addition, responding to any action will likely result in a significant
diversion of management’s attention and resources and an increase in professional fees. Enforcement actions and
sanctions could harm our business, operating results and financial condition.
We are subject to governmental export and import controls that could subject us to liability or impair our ability to
compete in international markets.
Our products are subject to U.S. export controls and may be exported outside the U.S. only with the required level
of export license or through an export license exception because we incorporate encryption technology into our
products. In addition, various countries regulate the import of certain encryption technology and have enacted laws that
35

could limit our ability to distribute our products or our end-customers’ ability to implement our products in those
countries. Changes in our products or changes in export and import regulations may create delays in the introduction of
our products in international markets, prevent our end-customers with international operations from deploying our
products throughout their global systems or, in some cases, prevent the export or import of our products to certain
countries altogether. Any change in export or import regulations or related legislation, shift in approach to the
enforcement or scope of existing regulations, lapse in our ability to respond to them or obtain necessary approvals and
import certifications, or change in the countries, persons or technologies targeted by such regulations, could result in
decreased use of our products by, or in our decreased ability to export or sell our products to, existing or potential
end-customers with international operations.Any decreased use of our products or limitation on our ability to export or
sell our products would likely adversely affect our business, operating results and financial condition.
If we fall out of compliance with, or are deemed to be in violation of, any applicable export or import regulations,
we may incur penalties and face other consequences that could harm our sales process and financial results.
We are subject to various environmental laws and regulations that could impose substantial costs upon us.
Our company must comply with local, state, federal, and international environmental laws and regulations in the
countries in which we do business. We are also subject to laws which restrict certain hazardous substances, including lead,
used in the construction of our products, such as the European Union Restriction on the Use of Hazardous Substances in
electrical and electronic equipment directive. We are also subject to the European Union Directive, known as the Waste
Electrical and Electronic Equipment Directive (‘‘WEEE Directive’’), which requires producers of certain electrical and
electronic equipment to properly label products, register as a WEEE producer, and provide for the collection, disposal and
recycling of waste electronic products. Failure to comply with these environmental directives and other environmental laws
could result in the imposition of fines and penalties, inability to sell covered products in certain countries, the loss of revenue,
or subject us to third-party property damage or personal injury claims, or require us to incur investigation, remediation or
engineering costs. Our operations and products will be affected by future environmental laws and regulations, but we cannot
predict the ultimate impact of any such future laws and regulations at this time.
Our ability to use our net operating loss carryforwards may be subject to limitation and may result in increased
future tax liability to us.
Generally, a change of more than 50% in the ownership of a corporation’s stock, by value, over a three-year period
constitutes an ownership change for U.S. federal income tax purposes. An ownership change may limit a company’s
ability to use its net operating loss carryforwards attributable to the period prior to such change. In the event we have
undergone an ownership change under Section 382 of the Internal Revenue Code, if we earn net taxable income, our
ability to use our pre-change net operating loss carryforwards to offset U.S. federal taxable income may become subject
to limitations, which could potentially result in increased future tax liability to us.
Changes in tax laws or regulations or adverse outcomes resulting from examination of our income or other tax
returns could adversely affect our operating results and financial condition.
We are subject to income taxes and other taxes in the U.S. and various foreign jurisdictions. Our domestic and
international tax liabilities will be subject to the allocation of income and expenses in differing jurisdictions. Our future
effective tax rates could be subject to volatility or adversely affected by a number of factors, including:
•
changes in the valuation of our deferred tax assets and liabilities;
•
expiration of, or detrimental changes in, research and development tax credit laws;
•
tax effects of stock-based compensation;
•
costs related to intercompany restructurings;
•
changes in tax laws, regulations, accounting principles or interpretations thereof;
•
future earnings being lower than anticipated in countries where we have lower statutory tax rates and higher
than anticipated earnings in countries where we have higher statutory tax rates; and/or
•
examinations by U.S. federal, state, local or foreign jurisdictions that disagree with interpretations of tax rules
and regulations and the resulting positions we have taken in tax filings.
As our business grows, we are required to comply with increasingly complex taxation rules and practices. We are
subject to tax in multiple U.S. tax jurisdictions and foreign tax jurisdictions due to our international operations. The
36

development of our tax strategies requires additional expertise and may impact how we conduct our business. Our
future effective tax rates could be unfavorably affected by changes in, or interpretations of, tax rules and regulations in
the jurisdictions in which we do business or changes in the valuation of our deferred tax assets and liabilities.
Furthermore, we provide for certain tax liabilities that involve significant judgment. We are subject to the examination
of our tax returns by federal, state, local and foreign tax authorities, which could focus on our intercompany transfer
pricing methodology as well as other matters. If our tax strategies are ineffective or we are not in compliance with
domestic and international tax laws, our financial position, operating results and cash flows could be adversely affected.
In addition, from time to time the U.S., foreign, state and local governments make substantive changes to tax rules,
including tax policies and rates, that apply to businesses and stockholders. Such substantive changes could adversely
impact our operations and financial results.
Our reported financial results may be adversely affected by changes in accounting principles generally accepted in
the United States.
Generally accepted accounting principles (‘‘GAAP’’) in the U.S. are subject to interpretation by the Financial
Accounting Standards Board (‘‘FASB’’), the SEC and various bodies formed to promulgate and interpret appropriate
accounting principles. A change in these principles or interpretations could have a significant effect on our reported
financial results and could affect the reporting of transactions completed before the announcement of a change. See
Note 1 Description of Business and Summary of Significant Accounting Policies of the notes to consolidated financial
statements included in Part II, Item 8 of this Annual Report on Form 10-K for the effect of new accounting
pronouncements on our consolidated financial statements. Any difficulties in implementing these pronouncements
could cause us to fail to meet our financial reporting obligations, which could result in regulatory discipline and harm
investors’ confidence in us.
If we are unable to maintain effective internal controls over financial reporting, investor confidence may be
adversely affected, which in turn would negatively affect the value of our common stock.
We have, in the past, and may, in the future, conclude that our internal control over financial reporting is not
effective. We have identified significant deficiencies and material weaknesses in the past that has resulted in a
restatement of certain of our financial reports. If any new internal control procedures which may be adopted or our
existing internal control procedures are deemed inadequate, or if we identify additional material weaknesses in our
disclosure controls or internal controls over financial reporting in the future, we will be unable to assert that our internal
controls are effective. If we are unable to do so, or if we are required to restate our consolidated financial statements as
a result of ineffective internal control over financial reporting, or if our auditors are unable to attest on the effectiveness
of our internal controls, we could lose investor confidence in the accuracy and completeness of our financial reports,
which would cause the price of our common stock to decline.
Our charter documents and Delaware law could discourage takeover attempts and lead to management
entrenchment.
Our restated certificate of incorporation and bylaws contain provisions that could delay or prevent a change in
control of our company. These provisions could also make it difficult for stockholders to elect directors that are not
nominated by the current members of our Board of Directors or take other corporate actions, including effecting
changes in our management. These provisions include:
•
the ability of our Board of Directors to issue shares of preferred stock and to determine the price and other
terms of those shares, including preference and voting rights, without stockholder approval, which could be
used to significantly dilute the ownership of a hostile acquirer;
•
the exclusive right of our Board of Directors to elect a director to fill a vacancy created by the expansion of
our Board of Directors or the resignation, death or removal of a director, which prevents stockholders from
being able to fill vacancies on our Board of Directors;
•
a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an
annual or special meeting of our stockholders;
•
the requirement that a special meeting of stockholders may be called only by the chairman of our Board of
Directors, our Chief Executive Officer, our president (in the absence of a chief executive officer), or a
majority vote of our Board of Directors, which could delay the ability of our stockholders to force
consideration of a proposal or to take action, including the removal of directors;
37

•
the ability of our Board of Directors, by majority vote, to amend the bylaws, which may allow our Board of
Directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to
amend the bylaws to facilitate an unsolicited takeover attempt; and
•
advance notice procedures with which stockholders must comply to nominate candidates to our Board of
Directors or not to propose matters to be acted upon at a stockholders’meeting, which may discourage or deter
a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or
otherwise attempting to obtain control of us.
In addition, as a Delaware corporation, we are subject to Section 203 of the Delaware General Corporation Law.
These provisions may prohibit large stockholders, in particular those owning 15% or more of our outstanding voting
stock, from merging or combining with us for a certain period of time.
Our bylaws designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain
types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ability
to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.
Our bylaws provide that, unless we consent in writing to an alternative forum, the Court of Chancery of the State
of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any
action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or
our stockholders, any action arising pursuant to any provision of the Delaware General Corporate Law (‘‘DGCL’’), our
certificate of incorporation or our bylaws, or any action asserting a claim that is governed by the internal affairs doctrine,
in each case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as
defendants therein and the claim not being one which is vested in the exclusive jurisdiction of a court or forum other than
the Court of Chancery or for which the Court of Chancery does not have subject matter jurisdiction. This exclusive
forum provision does not apply to suits brought to enforce a duty or liability created by the Securities Exchange Act of
1934. It could apply, however, to a suit that falls within one or more of the categories enumerated in the exclusive forum
provision and asserts claims under the Securities Act of 1933, as amended, or the Securities Act, inasmuch as
Section 22 of the Securities Act, creates concurrent jurisdiction for federal and state courts over all suits brought to
enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. There is uncertainty
as to whether a court would enforce this provision with respect to claims under the SecuritiesAct, and our stockholders
will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations
thereunder.
This choice of forum provision may limit our stockholders’ability to bring a claim in a judicial forum that it finds
favorable for disputes with us or our directors, officers, employees or agents, which may discourage such lawsuits
against us and our directors, officers, employees and agents even though an action, if successful, might benefit our
stockholders. Stockholders who do bring a claim in the Court of Chancery could face additional litigation costs in
pursuing any such claim, particularly if they do not reside in or near Delaware. The Court of Chancery may also reach
different judgments or results than would other courts, including courts where a stockholder considering an action may
be located or would otherwise choose to bring the action, and such judgments or results may be more favorable to us
than to our stockholders. Alternatively, if a court were to find this provision of our bylaws inapplicable to, or
unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs
associated with resolving such matters in other jurisdictions, which could have a material adverse effect on our business,
financial condition or results of operations.
Increasing attention on sustainability, human capital, governance and other corporate responsibility matters may
have a negative impact on our business, impose additional costs on us, and expose us to additional risks.
Companies are facing increasing attention from investors, customers, partners, consumers and other stakeholders
relating to sustainability, human capital and governance matters, including environmental stewardship, social
responsibility and workplace conduct. In addition, organizations that provide information to investors on corporate
governance and related matters have developed ratings processes for evaluating companies on their approach to these
matters. Such ratings are used by some investors to inform their investment and voting decisions. Unfavorable ratings
may lead to negative investor sentiment toward the Company, which could have a negative impact on our stock price
and our access to and costs of capital.
We have established corporate social responsibility programs aligned with our business objectives and applicable
legal and regulatory requirements. An overview of these programs can be found on our corporate website at
38

https://investors.A10networks.com within the ‘‘Governance - Governance Documents’’ section. These programs
reflect our current initiatives and are not guarantees that we will be able to achieve them. Our ability to successfully
execute these initiatives and accurately report our progress presents numerous operational, financial, legal, reputational
and other risks, many of which are outside our control, and all of which could have a material negative impact on our
business. Additionally, the implementation of these initiatives imposes additional costs on us. If our initiatives fail to
satisfy investors, customers, partners and our other stakeholders, our reputation, our ability to sell products and services
to customers, our ability to attract or retain employees, and our attractiveness as an investment, business partner or
acquirer could be negatively impacted. Similarly, our failure or perceived failure to pursue or fulfill our goals, targets
and objectives or to satisfy various reporting standards within the timelines we announce, or at all, could also have
similar negative impacts and expose us to government enforcement actions and private litigation.
Risks Related to Capitalization and Financial Markets
We are exposed to fluctuations in currency exchange rates, which could negatively affect our results of operations.
Our consolidated results of operations, financial position and cash flows are subject to fluctuations due to changes
in foreign currency exchange rates. Historically, the majority of our revenue contracts are denominated in U.S. Dollars,
with the most significant exception being Japan, where we invoice primarily in the Japanese Yen. Our expenses are
generally denominated in the currencies in which our operations are located, which is primarily in the Americas and
EMEA. Revenue resulting from selling in local currencies and costs incurred in local currencies are exposed to foreign
currency exchange rate fluctuations that can affect our operating income. The currency exchange impact of the foreign
exchange rates on our net income was $0.3 million unfavorable during the year ended December 31, 2025. The currency
exchange impact of the foreign exchange rates on our net income was $2.1 million and $0.1 million favorable during the
years ended December 31, 2024 and 2023, respectively. As exchange rates vary, our operating income may differ from
expectations. We deploy normal and customary hedging practices that are designed to proactively mitigate such
exposure. The use of such hedging activities may not offset any, or more than a portion, of the adverse financial effects
of unfavorable movements in currency exchange rates over the limited time the hedges are in place and would not
protect us from long term shifts in currency exchange rates.
We may need to or may elect to raise additional funds in future private or public offerings, and such funds may not
be available on acceptable terms, if at all. If we do raise additional funds, existing stockholders will suffer dilution.
We may need to raise additional funds in private or public offerings, and these funds may not be available to us
when we need them or on acceptable terms, if at all. We may also elect to raise additional funds to help us pursue our
business or strategic objectives. If we raise additional funds through further issuances of equity or convertible debt
securities, you could suffer significant dilution, and any new equity securities we issue could have rights, preferences
and privileges superior to those of our then-existing capital stock. Any debt financing secured by us in the future could
involve restrictive covenants relating to our capital raising activities and other financial and operational matters, that
may make it more difficult for us to obtain additional capital and to pursue business opportunities. If we cannot raise
additional funds when we need them, our business and prospects could fail or be materially and adversely affected.
The price of our common stock has been and may continue to be volatile, and the value of your investment could
decline.
Technology stocks have historically experienced high levels of volatility. The trading price of our common stock
has been and is likely to continue to be volatile and subject to fluctuations in response to many factors, some of which
are beyond our control and may not be related to our operating performance. These fluctuations could cause you to lose
all or part of your investment in our common stock. Factors that could cause fluctuations in the trading price of our
common stock include the following:
•
announcements of new products, services or technologies, commercial relationships, acquisitions or other
events by us or our competitors;
•
price and volume fluctuations in the overall stock market from time to time;
•
significant volatility in the market price and trading volume of technology companies in general and of
companies in our industry;
•
fluctuations in the trading volume of our shares or the size of our public float;
39

•
actual or anticipated changes or fluctuations in our results of operations;
•
whether our results of operations meet the expectations of securities analysts or investors;
•
actual or anticipated changes in the expectations of investors or securities analysts;
•
litigation or investigations involving us, our industry, or both;
•
regulatory developments in the U.S., foreign countries or both;
•
general economic conditions and trends;
•
major catastrophic events, including pandemics, acts of terrorism or war, or other events affecting the global
economy, and the responses thereto;
•
cyber-attacks and other information or security breaches;
•
sales of large blocks of our common stock; or
•
departures of key personnel.
In addition, if the market for technology stocks or the stock market in general experiences a loss of investor
confidence, the trading price of our common stock could decline for reasons unrelated to our business, results of
operations or financial condition. The trading price of our common stock might also decline in reaction to events that
affect other companies in our industry even if these events do not directly affect us. In the past, following periods of
volatility in the market price of a company’s securities, securities class action litigation has often been brought against
that company. The price of our common stock has been highly volatile since our initial public offering in March 2014.
We have experienced securities class action and related derivative litigation and SEC investigations. Future securities
litigation, including any related shareholder derivative litigation, or investigations could result in substantial costs and
divert our management’s attention and resources from our business. This could have a material adverse effect on our
business, results of operations and financial condition.
If securities or industry analysts do not publish research or reports about our business, or publish inaccurate or
unfavorable research reports about our business, our share price and trading volume could decline.
The market for our common stock, to some extent, depends on the research and reports that securities or industry
analysts publish about us or our business. If analysts covering us should downgrade our share value or change their
opinion of our share value, our share price would likely decline. If analysts should cease coverage of our company or
fail to regularly publish reports on us based on current publicly available information, we could lose visibility in the
financial markets, which would cause our share price or trading volume to decline.
Areduction in or suspension or elimination of our dividend payments could have a negative effect on our stock price.
On October 28, 2021, we announced that our Board of Directors approved a capital allocation strategy for our
stockholders.As part of this strategy, the Board of Directors began declaring quarterly cash dividends. The declaration,
amount and timing of any cash dividends are subject to capital availability and determinations by our Board of Directors
that cash dividends are in the best interest of our stockholders and are in compliance with all respective laws and our
agreements applicable to the declaration and payment of cash dividends. Our ability to pay dividends will depend upon,
among other factors, our cash flows from operations, our available capital and potential future capital requirements as
well as our results of operations, financial condition and other factors beyond our control that our Board of Directors
may deem relevant. A reduction in or suspension or elimination of our dividend payments could have a negative effect
on our stock price.
There is no assurance that the existence of a stock repurchase program will result in repurchases of our common
stock or enhance long term stockholder value, and repurchases, if any, could affect our stock price and increase its
volatility and will diminish our cash reserves.
On October 28, 2021, we announced that our Board of Directors approved a capital allocation strategy for our
stockholders. As part of this strategy, the Company announced on May 1, 2025, that its Board of Directors had
authorized a new, non-expiring stock repurchase program under which the Company may repurchase up to $75 million
of its outstanding common stock. Under the Company’s stock repurchase programs, we may repurchase shares in the
open market, privately negotiated transactions, in block trades or a combination of the foregoing. We are not obligated
40

under the stock repurchase program to repurchase any specific number or dollar amount of shares of common stock, and
we may modify, suspend or discontinue the stock repurchase program at any time. Our management and Board will
determine the timing and amount of any repurchase in its discretion based on a variety of factors, such as the market
price of our common stock, corporate requirements, general market economic conditions and legal requirements. The
Company plans to fund repurchases from its existing cash balance and cash provided by operating activities.
Repurchases pursuant to our current stock repurchase program or any other stock repurchase program we adopt in
the future could affect our stock price and increase its volatility and will reduce the market liquidity for our stock. The
existence of a stock repurchase program could also cause our stock price to be higher than it would be in the absence of
such a program. Additionally, these repurchases will diminish our cash reserves, which could impact our ability to
pursue possible future strategic opportunities and acquisitions and would result in lower overall returns on our cash
balances. For example, in September 2022 and in November 2024, we entered into Common Stock Repurchase
Agreements with entities affiliated with Summit Partners whereby the Company purchased shares of its common stock.
There can be no assurance that any additional stock repurchases will, in fact, occur, or, if they occur, that they will
enhance stockholder value. Although the stock repurchase programs are intended to enhance long term stockholder
value, short-term stock price fluctuations could reduce their effectiveness.
Risks Related to Our Convertible Indebtedness
The issuance of shares of our common stock could depress the trading price of our common stock.
We have the right to elect to settle conversion of the 2030 Notes (as defined below) either entirely in cash or in
combination of cash and shares of common stock. Our election to convert the 2030 Notes into common stock may
further dilute the economic and voting rights of our existing stockholders and/or reduce the market price of our common
stock. In addition, the market’s expectation that conversions may occur could depress the trading price of our common
stock even in the absence of actual conversions. Moreover, the expectation of conversions could encourage the short
selling of our common stock, which could place further downward pressure on the trading price of our common stock.
In addition, our issuance of additional shares of common stock will dilute the ownership interests of our existing
common stockholders.
We may be unable to raise the funds necessary to repurchase the 2030 Notes for cash following a fundamental
change or to pay the cash amounts due upon maturity or conversion of the 2030 Notes, and our future indebtedness
may limit our ability to repurchase the 2030 Notes or to pay any cash amounts due upon their maturity or conversion.
Noteholders may, subject to a limited exception, require us to repurchase their 2030 Notes following a
‘‘fundamental change’’(which is defined in the 2030 Notes Indenture (as defined below) to include certain change-of-
control events and the delisting of our common stock) at a cash repurchase price generally equal to the principal amount
of the 2030 Notes to be repurchased, plus accrued and unpaid interest, if any. Upon maturity of the 2030 Notes, we must
pay their principal amount and accrued and unpaid interest in cash, unless they have been previously repurchased,
redeemed or converted. In addition, all conversions of the 2030 Notes will be settled into solely cash, or a combination
of cash and shares of common stock. While we expect to have sufficient cash and marketable securities to fulfill our
repurchase or conversion obligations if and when due, we may not have enough available cash or be able to obtain
financing at the time we are required to repurchase the 2030 Notes or pay any cash amounts due upon their maturity or
conversion. In addition, applicable law, regulatory authorities and the agreements governing our future indebtedness
may restrict our ability to repurchase the 2030 Notes or to pay the cash amounts due upon their maturity or conversion.
Our failure to repurchase 2030 Notes or to pay any cash amounts due upon their maturity or conversion when required
will constitute a default under the indenture governing the 2030 Notes. Adefault under the 2030 Notes Indenture or the
fundamental change itself could also lead to a default under agreements governing our other or future indebtedness,
which may result in that other or future indebtedness becoming immediately payable in full. If repayment of the related
indebtedness were to be accelerated after an applicable notice or grace periods, we may not have sufficient funds to
satisfy all amounts due under the 2030 Notes, any other indebtedness, repurchase such notes or make cash payments
upon conversion of such notes, if applicable.
Provisions in the 2030 Notes Indenture could delay or prevent an otherwise beneficial takeover of us.
Certain provisions in the 2030 Notes and the 2030 Notes Indenture could make a third-party attempt to acquire us
more difficult or expensive. For example, if a takeover constitutes a fundamental change, then noteholders will have the
right to require us to repurchase their 2030 Notes for cash. In addition, if a takeover constitutes a make-whole
41

fundamental change, then we may be required to temporarily increase the conversion rate for the 2030 Notes. In either
case, and in other cases, our obligations under the 2030 Notes and the 2030 Notes Indenture could increase the cost of
acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in
a transaction that noteholders or holders of our common stock may view as favorable.
The conversion of 2030 Notes could impair our financial position and liquidity.
Because we must settle at least a portion of our conversion obligation for the 2030 Notes in cash, the conversion
of 2030 Notes could materially and adversely affect our financial position and liquidity. Before December 1, 2029,
noteholders will have the right to convert their 2030 Notes only upon the occurrence of certain events. From and after
December 1, 2029, noteholders may convert their 2030 Notes at any time at their election until the close of business on
the second scheduled trading day immediately before the maturity date. However, many of the conditions that permit
the conversion of 2030 Notes before December 1, 2029 are beyond our control. We could be required to expend a
significant amount of cash to settle conversions, which could significantly harm our financial position and liquidity.
Item 1B.
Unresolved Staff Comments
None.
Item 1C.
Cybersecurity
Cybersecurity Risk Management and Strategy
We have established processes to assess, identify, and manage significant risks from cybersecurity threats as part
of our broader enterprise-wide risk management system and processes, which is overseen by our Board of Directors and
our Audit Committee, along with our executive management. Our cybersecurity policies, standards, processes, and
practices are part of our information security management program, which is aligned to ISO 27001, an international
standard to manage information security. ISO 27001 is published by the International Organization for Standardization
(ISO), the world’s largest developer of voluntary standards, and the International Electrotechnical Commission (IEC).
Our information technology (‘‘IT’’) cybersecurity team, led by our Head of Information Security, is tasked with
monitoring and assessing cybersecurity and operational risks related to information security and system disruption. The
team employs measures designed to protect against, detect, and respond to cybersecurity threats, and has implemented
processes and procedures aligned with our information security management system. These include:
•
Enterprise-wide security framework and cybersecurity standards;
•
Cybersecurity awareness and training programs;
•
Security assessments and monitoring:
•
Restricted physical access to critical areas, servers and network equipment;
•
Cyber incident response, crisis management, business continuity and disaster recovery plans; and
•
Third-party IT vendor risk management process to identify, assess, and manage risks presented by our IT
vendors and business partners.
Our IT cybersecurity team maintains an incident response plan designed to respond to potential cybersecurity
threats, such as security breaches and cyber-attacks, and to protect and preserve the confidentiality, integrity, and
continued availability of information owned by, or in the care of, the Company. Our incident response plan coordinates
the activities that we take to prepare for, detect, respond to, and recover from cybersecurity incidents, which include
processes to triage, assess severity for, escalate significant cybersecurity incidents to our global crisis management plan,
contain, investigate, and remediate the incident, as well as to comply with potentially applicable legal obligations and
mitigate brand and reputational damage. We conduct tabletop exercises for tactical response readiness, perform regular
security scans of our environment both from an external and internal perspective, as well as work with a qualified
third-party vendor to perform penetration tests of our environment. These penetration tests are focused on specific
objectives to assist us in managing our cybersecurity threat risks. Any identified risks are included in our overall risk
management program, which we validate on a regular basis.
We conduct organization-wide cybersecurity training and compliance exercises in connection with our
information security program. This training consists of educational material and compliance testing administered to,
42

and completed by, all of our employees on an annual basis, which is tracked and recorded throughout the year. Results
are shared with executive management, the Audit Committee, and the Board of Directors. Additionally, employee
phishing tests are regularly conducted.
Our processes also address cybersecurity threat risks associated with our use of third-party service providers,
including those in our supply chain or who have access to our customer and employee data or our systems. Third-party
risks are included within our Enterprise Risk Management Assessment framework. In addition, cybersecurity
considerations affect the selection and oversight of our third-party service providers. We perform diligence on
third parties that have access to our systems, data or facilities that house such systems or data, and continually monitor
cybersecurity threat risks identified through such diligence.
In our risk factors, we describe whether and how risks from identified cybersecurity threats, including as a result
of any previous cybersecurity incidents, have significantly affected or are reasonably likely to significantly affect us,
including our business strategy, results of operations, or financial condition. See our risk factor disclosures at Item 1Aof
this Annual Report on Form 10-K.
Cybersecurity Governance
Our Board of Directors, executive management and Audit Committee are actively engaged in the oversight of
IT risk management, including cybersecurity risk. Executive management and the Audit Committee share
responsibility for overseeing our risk exposure to information security, cybersecurity, and data protection, as well as the
steps management has taken to monitor and control such exposure. The Board of Directors, executive management and
the Audit Committee receive quarterly reports on IT controls and information security. Additionally, on at least an
annual basis, the Audit Committee reviews and discusses with management our policies and programs with respect to
the oversight of IT risk and cybersecurity threats.
Oversight for assessing and managing cybersecurity risk is performed by our IT cybersecurity team, with
additional oversight performed by our Human Resources, Internal Audit and Legal Departments. Our executive
management is briefed at least quarterly from these teams. Members of the Board of Directors, Audit Committee, and
executive management are also encouraged to regularly engage in ad hoc conversations with management on
cybersecurity-related news events and discuss any updates to our cybersecurity risk management and strategy
programs.
Our executive management, the Audit Committee, and the Board of Directors are notified of any significant
cybersecurity incidents through an escalation process that is established in our incident response plan and incorporated
into our disclosure controls and procedures. Additionally, we maintain a third-party vendor relationship which is
available to the team for on-demand incident response and investigation, as needed.
Our IT cybersecurity team is led by our Head of Information Security, Sean Pike. Mr. Pike has over 25 years of
experience leading and scaling cybersecurity practices across regulated industry and critical infrastructure. Most
recently, he served as Chief Information Security Officer at Business Wire, where he was responsible for transforming
the security and compliance organizations to meet the needs of a globally distributed SaaS newswire. Prior to Business
Wire, Mr. Pike held leadership positions at VMware, IDC, and Nielsen Radio. His work at the Company includes
aligning cybersecurity, product security, and security compliance initiatives to business goals. Mr. Pike holds a Juris
Doctor in law from Syracuse University and a M.S. in telecommunications and network management from Syracuse
University.
Item 2.
Properties
Our corporate headquarters is located in San Jose, California, where we currently lease 116,381 square feet of
space under a lease agreement that expires on July 31, 2027. We also lease space for offices internationally and for sales
offices in locations throughout the U.S. and various international locations, including, among others, Japan, the UK, the
Netherlands, Taiwan, South Korea and India. We believe that our current facilities are adequate to meet our current
needs.
Item 3.
Legal Proceedings
We have been and may currently be involved in various legal proceedings, the outcomes of which are not within
our complete control or may not be known for prolonged periods of time. Management is required to assess the
probability of loss and amount of such loss, if any, in preparing our consolidated financial statements. We evaluate the
43

likelihood of a potential loss from legal proceedings to which we are a party. We record a liability for such claims when
a loss is deemed probable and the amount can be reasonably estimated. Significant judgment may be required in the
determination of both probability and whether an exposure is reasonably estimable. Our judgments are subjective based
on the status of the legal proceedings, the merits of our defenses and consultation with in-house and outside legal
counsel. As additional information becomes available, we reassess the potential liability related to pending claims and
may revise our estimates. Due to the inherent uncertainties of the legal processes in the multiple jurisdictions in which
we operate, our judgments may be materially different than the actual outcomes, which could have material adverse
effects on our business, financial conditions and results of operations.
Additional information with respect to this Item may be found in Note 9 Commitments and Contingencies, in the
notes to consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K, which is incorporated
by reference.
Item 4.
Mine Safety Disclosures
Not applicable.
44

PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
Market for Registrant’s Common Equity
Our common stock has been quoted on the New York Stock Exchange (‘‘NYSE’’) under the symbol ‘‘ATEN.’’
In October 2021, our Board of Directors approved the initiation of a regular quarterly cash dividend on our
common stock. The first dividend, in the amount of $0.05 per share of common stock outstanding, was paid in
December 2021, and on November 1, 2022, the Board of Directors increased the dividend amount to $0.06 per share.
We currently anticipate that we will continue to pay comparable quarterly cash dividends in the future. However, the
payment, amount and timing of future dividends remain within the discretion of our Board of Directors and will depend
on our results of operations, financial condition, cash requirements, and other factors.
There were approximately 37 stockholders of record on February 19, 2026. Because many shares of our common
stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of
stockholders represented by these holders of record.
Company Stock Performance
The following graph compares the cumulative total return on our common stock, the Russell 2000 Index, the
NYSE Technology Index and the S&P 600 Index. The graph assumes $100 was invested on December 31, 2020 in our
common stock and each index and all dividends were reinvested. The historic stock price performance is not necessarily
indicative of future stock price performance.
Comparison Of Cumulative Total Return
Among A10 Networks, Inc., Russell 2000 Index,
NYSE Technology Index and S&P 600 Index
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
$220
$240
$260
12/31/2025
12/31/2024
12/31/2023
12/31/2022
12/31/2021
12/31/2020
x
     A 10 Networks, Inc.
Russell 2000 Index
NYSE Technology Index
S&P 600 Index
Issuer Purchases of Equity Securities
On May 1, 2025, the Company announced its Board of Directors had authorized a new, non-expiring stock
repurchase program under which the Company may repurchase up to $75 million of its outstanding common stock. As
of December 31, 2025, the Company had $53.4 million available to repurchase shares under this program. Under the
45

stock repurchase program, we may repurchase shares of common stock in the open market, privately negotiated
transactions, in block trades or a combination of the foregoing. We are not obligated under the stock repurchase program
to repurchase any specific number or dollar amount of shares of common stock, and we may modify, suspend or
discontinue the stock repurchase program at any time. Our management and Board will determine the timing and
amount of any repurchase in its discretion based on a variety of factors, such as the market price of our common stock,
corporate requirements, general market economic conditions and legal requirements. The Company plans to fund
repurchases from its existing cash balance and cash provided by operating activities.
Share repurchase activity during the three months ended December 31, 2025 was as follows (in thousands, except
per share amounts):
Periods
Total Number of
Shares Purchased
Average Price
Paid Per Share(1)
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs
Approximate Dollar
Value of Shares That
May Yet Be Purchased
Under the Plans or
Programs(2)
October 1 - 31, 2025 . . . . . . . . . . . . . . . . .
—
$
—
—
November 1 - 30, 2025 . . . . . . . . . . . . . . .
392
$16.99
392
December 1 - 31, 2025 . . . . . . . . . . . . . . .
14
$18.12
14
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . .
406
$53,393
(1)
Average price paid per share includes broker commission fees, if applicable.
(2)
The $53.4 million in the table above represents the amount available to repurchase shares under the authorized repurchase program as of
December 31, 2025. The Company’s stock repurchase program does not obligate it to acquire any specific number of shares. Shares may be
repurchased in privately negotiated and/or open market transactions and by withholding shares in connection with vesting equity awards held
by certain employees, including under plans complying with Rule 10b5-1 under the Exchange Act.
Unregistered Sales of Equity Securities
None.
Item 6.
[Reserved]
46

Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations (‘‘MD&A’’) should be
read in conjunction with our consolidated financial statements and related notes included elsewhere in this document.
In addition to historical information, the MD&A contains forward-looking statements that involve risks and
uncertainties. These forward-looking statements include, but are not limited to, those matters discussed under the
heading ‘‘Forward-looking Statements.’’ Our actual results could differ materially from those anticipated by these
forward-looking statements due to various factors, including, but not limited to, those set forth under Item 1A. Risk
Factors of this Annual Report on Form 10-K and elsewhere in this document.
This section of this Annual Report on Form 10-K generally discusses fiscal 2025 and 2024 items and year-to-year
comparisons between fiscal 2025 and 2024. Discussions of fiscal 2024 items and year-to-year comparisons between
fiscal 2024 and 2023 that are not included in this Annual Report on Form 10-K can be found in ‘‘Management’s
Discussion and Analysis of Financial Condition and Results of Operations’’in Part II, Item 7 of the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on February 25, 2025.
Overview
We are a global provider of secure application and network solutions that protect, optimize, and scale business-
critical systems across on-premises, hybrid cloud, and edge environments. Our network infrastructure and security
products are designed to enable large enterprises, service providers, and cloud platforms worldwide to deliver
performance, reliability, and protection against cyber threats, while preparing their networks for the demands of
artificial intelligence (‘‘AI’’) and next-generation applications.
We sell our solutions globally to service providers and enterprises who are looking to modernize and secure their
digital infrastructure and application. Our service provider customers rely on scalable, efficient, and secure networks to
deliver connectivity, cloud and other services that may generate revenue to their customers. Our enterprise customers
require secure application delivery, AI-ready infrastructure, and are increasingly concerned about the landscape of
cybersecurity threats across their complex networks and emerging AI workloads. Our end-customers operate in a
variety of industries, including telecommunications, technology, industrial, retail, financial, gaming, education and
government. Since inception, our customer base has grown significantly.
A10’s portfolio brings together secure application delivery, DDoS and API protection, and unified management
into a cohesive platform that integrates with existing network architectures and leading public cloud environments. We
deliver these capabilities through flexible deployment models, including software, cloud-native, and hardware form
factors that are tailored to the scale and requirements of our customers. We generate revenue primarily from the sale of
our secure networking and cybersecurity solutions and related support services. These offerings are delivered through
a combination of direct and channel-based sales, with most customers purchasing maintenance and support alongside
their initial deployment and renewing that support as contracts expire.
We derive revenue from two sources: (i) products revenue, which includes hardware, perpetual software licenses
and subscription offerings, which include term-based license agreements; and (ii) services revenue, which includes post
contract support (‘‘PCS’’), professional services, training and software-as-a-service (’’SaaS’’) offerings. Revenue for
term-based license agreements is recognized at a point in time when the Company delivers the software license to the
customer and over time once the subscription term has commenced. For our software-as-a-service offerings, our
customers do not take possession of the Company’s software but rather we provide access to the service via a hosting
arrangement. Revenue in these arrangements is recognized over time as the services are provided.Asubstantial portion
of our revenue is from sales of our products and services through distribution channels, such as resellers and
distributors. Our customers predominantly purchase PCS services in conjunction with purchases of our products.
We operate worldwide across the Americas, EMEA, and Asia Pacific, supported by a hybrid go-to-market model
that combines a direct, high-touch sales organization with a broad ecosystem of distributors, resellers, and system
integrators. We believe this sales approach allows us to obtain the benefits of channel distribution, such as expanding
our market coverage, while still maintaining face-to-face relationships with our end-customers. We outsource the
manufacturing of our hardware products to original design manufacturers. We perform quality assurance and testing at
our San Jose, Taiwan and Japan distribution centers, as well as at our manufacturers’ locations.
We sell our products globally to service providers and enterprises that depend on data center applications and
networks to generate revenue and manage operations efficiently. We report two customer verticals: service providers,
which accounted for 60%, 57% and 58% of our total revenue during 2025, 2024 and 2023, respectively, and enterprise,
47

which accounted for 40%, 43% and 42% of our total revenue during 2025, 2024 and 2023, respectively. While we
expect total demand to remain strong as the need for cybersecurity solutions continues to increase, we expect the
demand shift trend from service provider to enterprise to continue in the near term. We report customer revenues in
three broad geographic regions: theAmericas,APJ and EMEAregions. TheAmericas region comprises the U.S. and all
other countries in the Americas (excluding the U.S.). The APJ region comprises Asia Pacific region including Japan.
The EMEAregion comprises Europe, Middle East andAfrica. We believe this vertical and geographic view aligns with
how we manage the business and maps our product portfolio to customer verticals.
Our end-customers operate in a variety of industries, including telecommunications, technology, industrial, retail,
financial, gaming, education and government. Since inception, our customer base has grown rapidly.
We sell substantially all of our solutions through our high-touch sales organization as well as distribution channels,
including distributors, value-added resellers and system integrators, and fulfill nearly all orders globally through such
resellers. We believe this sales approach allows us to obtain the benefits of channel distribution, such as expanding our
market coverage, while still maintaining face-to-face relationships with our end-customers. We outsource the
manufacturing of our hardware products to original design manufacturers. We perform quality assurance and testing at
our San Jose, Taiwan and Japan distribution centers, as well as at our manufacturers’ locations.
As a result of the nature of our target market and the current stage of our development, a substantial portion of our
revenue comes from a limited number of large end-customers, including service providers and enterprise customers, in
any period. Purchases from our ten largest end-customers accounted for 40%, 38% and 33% of our total revenue for
2025, 2024 and 2023, respectively. Sales to these large end-customers have typically been characterized by large but
irregular purchases with long sales cycles. The timing of these purchases and the delivery of the purchased products are
difficult to predict and rely upon customer growth and network enhancements. Consequently, any acceleration or delay
in anticipated product purchases by or deliveries to our largest end-customers could materially impact our revenue and
operating results in any quarterly period. This may cause our quarterly revenue and operating results to fluctuate from
quarter to quarter and make them difficult to predict.
In February 2025, we acquired the assets and key personnel of ThreatX Protect, which expanded our cybersecurity
portfolio with WAAP protection (web application and application programming interfaces). We offer protection under
A10 Defend ThreatX Protect.
In March 2025, we issued $225.0 million aggregate principal amount of 2.75% Convertible Senior Notes due 2030 (the
‘‘2030Notes’’).TheCompanyreceivednetproceedsfromtheofferingofapproximately$217.7million.The2030Noteswill
mature on April 1, 2030, unless earlier converted, redeemed or repurchased.
We continue to invest in innovation that strengthens our leadership in secure infrastructure, expands our
cybersecurity capabilities, and positions A10 at the intersection of network performance, protection, and AI-driven
workloads. Our strategy is grounded in disciplined capital allocation and a commitment to deliver durable revenue
growth, expanding recurring revenue, and strong cash flow generation.
Enhanced U.S. tariffs, import/export restrictions and countermeasures taken by affected countries are contributing
to macroeconomic volatility which in turn is impacting demand and our cost inputs. Spending patterns remain uneven
due to the unpredictable impact of trade policies, and we may need to implement tariff-related input cost increases.
48

Results of Operations
A summary of our consolidated statements of operations for the years ended December 31, 2025 and 2024 are as
follows (dollars in thousands):
Years Ended December 31,
2025
2024
Increase (Decrease)
Amount
Percent
of Total
Revenue
Amount
Percent
of Total
Revenue
Amount
Percent
Revenue:
Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$167,086
57.5% $139,799
53.4% $ 27,287
19.5%
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
123,471
42.5
121,897
46.6
1,574
1.3%
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . .
290,557
100.0
261,696
100.0
28,861
11.0%
Cost of revenue:
Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33,403
11.5
31,218
11.9
2,185
7.0%
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26,639
9.2
20,201
7.7
6,438
31.9%
Total cost of revenue . . . . . . . . . . . . . . . . . . . .
60,042
20.7
51,419
19.6
8,623
16.8%
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
230,515
79.3
210,277
80.4
20,238
9.6%
Operating expenses:
Sales and marketing. . . . . . . . . . . . . . . . . . . . . . .
84,467
29.1
83,300
31.8
1,167
1.4%
Research and development . . . . . . . . . . . . . . . . .
69,104
23.8
57,726
22.1
11,378
19.7%
General and administrative . . . . . . . . . . . . . . . . .
29,802
10.3
25,283
9.7
4,519
17.9%
Total operating expenses . . . . . . . . . . . . . . . . .
183,373
63.1
166,309
63.6
17,064
10.3%
Income from operations. . . . . . . . . . . . . . . . . . . . . .
47,142
16.2
43,968
16.8
3,174
7.2%
Non-operating income (expense):
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . .
11,628
4.0
6,747
2.6
4,881
72.3%
Interest and other income (expense), net. . . . . . .
(6,348)
(2.2)
7,384
2.8
(13,732)
(186.0)%
Total non-operating income (expense), net . . .
5,280
1.8
14,131
5.4
(8,851)
(62.6)%
Income before income taxes . . . . . . . . . . . . . . . . . .
52,422
18.0
58,099
22.2
(5,677)
(9.8)%
Provision for income taxes . . . . . . . . . . . . . . . . . . .
10,285
3.5
7,959
3.0
2,326
29.2%
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 42,137
14.5% $ 50,140
19.2% $ (8,003)
(16.0)%
Revenue
We derive revenue from two sources: (i) products revenue, which includes hardware, perpetual software license
and subscription offerings, which include term-based license agreements; and (ii) services revenue, which includes
PCS, professional services, training and software-as-a-service offerings.
Our products revenue primarily consists of revenue from sales of our hardware appliances upon which our
software is installed. Such software includes our ACOS software platform plus one or more of our ADC, CGN, TPS,
SSLi or CFW solutions. Purchase of a hardware appliance includes a perpetual license to the included software.
Additionally, a small portion of our products revenue comes from subscription revenue. We offer several products by
subscription, primarily through either term-based license agreements or as a service through our cloud-based platform.
With respect to sales of our hardware appliances, we recognize products revenue upon transfer of control, generally at
the time of shipment, provided that all other revenue recognition criteria have been met. Revenue for term-based license
agreements is recognized at a point in time when we deliver the software license to the customer and the subscription
term has commenced. For our software-as-a-service offerings, our customers do not take possession of our software but
rather we provide access to the service via a hosting arrangement. Revenue in these arrangements is recognized ratably
as the services are provided. As a percentage of revenue, our products revenue may vary from quarter to quarter based
on, among other things, the timing of orders and delivery of products, cyclicality and seasonality, changes in currency
exchange rates and the impact of significant transactions with unique terms and conditions.
We generate services revenue from sales of PCS, which is bundled with sales of products and technical services.
We offer tiered PCS services under renewable, fee-based PCS contracts, primarily including technical support,
49

hardware repair and replacement parts, and software upgrades on a when-and-if-available basis. We recognize services
revenue ratably over the term of the PCS contract, which is typically one year, but can be up to seven years.
A summary of our total revenue is as follows (dollars in thousands):
Years Ended December 31,
2025
2024
Increase (Decrease)
Amount
Percent
of Total
Revenue
Amount
Percent
of Total
Revenue
Amount
Percent
Revenue:
Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$167,086
58%
$139,799
53%
$ 27,287
20%
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
123,471
42%
121,897
47%
1,574
1%
Total revenue . . . . . . . . . . . . . . . . . . . . . . . .
$290,557
100%
$261,696
100%
$ 28,861
11%
Revenue by geographic region:
Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$175,181
60%
$134,356
51%
$ 40,825
30%
United States . . . . . . . . . . . . . . . . . . . . . . . . . .
160,528
55%
117,707
45%
42,821
36%
Americas-other . . . . . . . . . . . . . . . . . . . . . . . .
14,653
5%
16,649
6%
(1,996)
(12)%
APJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
70,524
24%
87,175
33%
(16,651)
(19)%
EMEA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44,852
16%
40,165
15%
4,687
12%
Total revenue . . . . . . . . . . . . . . . . . . . . . . . .
$290,557
100%
$261,696
99%
$ 28,861
11%
Total revenue increased by $28.9 million, or 11%, in 2025 compared to 2024 as a result of an increase of
$27.3 million in products revenue and an increase of $1.6 million in services revenue.
Products revenue increased $27.3 million, or 20%, in 2025 compared to 2024. The increase was primarily a result
of an increase in demand from our service provider and enterprise customers in the Americas region and an increase in
demand from our service provider customers in the EMEAregion, partially offset by decreases in demand from service
provider and enterprise customers in the APJ region and enterprise customers in the EMEA region.
Services revenue increased $1.6 million, or 1%, in 2025 compared to 2024. The increase was primarily attributable
to the increase in PCS sales in connection with our increased installed customer base in the Americas region.
During 2025, $175.2 million, or 60% of total revenue, was generated from the Americas region, which represents
a 30% increase compared to 2024. The increase was primarily a result of higher products and services revenue driven
by an increase in demand from both service provider and enterprise customers.
During 2025, $70.5 million, or 24% of total revenue, was generated from APJ, which represents a 19% decrease
compared to 2024. The decrease was primarily a result of lower products and services revenue driven by a decrease in
demand from our service provider and enterprise customers.
During 2025, $44.9 million, or 16% of total revenue, was generated from EMEA, which represented
a 12% increase compared to 2024. The increase was primarily a result of higher products revenue driven by an increase
in demand from our service provider customers.
Cost of Revenue, Gross Profit and Gross Margin
Cost of Revenue
Cost of products revenue is primarily comprised of cost of third-party manufacturing services and cost of inventory
for the hardware component of our products. Our component suppliers change their selling prices frequently in response
to market trends, including industry-wide increases in demand. Cost of products revenue also includes warehouse
personnel costs, shipping costs, inventory write-downs, certain allocated facilities and information technology
infrastructure costs, and expenses associated with logistics and quality control.
Cost of services revenue is primarily comprised of personnel costs for our technical support, training and
professional service teams. Cost of services revenue also includes the costs of inventory used to provide hardware
replacements to end- customers under PCS contracts and certain allocated facilities and information technology
infrastructure costs. Additionally, cost of services revenue includes a one-time asset impairment cost of $951 thousand
for the year ended December 31, 2025.
50

A summary of our cost of revenue is as follows (dollars in thousands):
Years Ended December 31,
Increase (Decrease)
2025
2024
Amount
Percent
Cost of revenue:
Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$33,403
$31,218
$2,185
7%
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26,639
20,201
6,438
32%
Total cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$60,042
$51,419
$8,623
17%
Gross Margin
Gross margin may vary and be unpredictable from period to period due to a variety of factors. These may include
the mix of revenue from each of our regions, the mix of our products sold within a period, discounts provided to
customers, cost of inventory for the hardware component of our products, inventory write-downs and foreign currency
exchange rates.
Our sales are generally denominated in U.S. dollars, however, in Japan they are denominated in Japanese yen.
Any of the factors noted above can generate either a favorable or unfavorable impact on gross margin.
A summary of our gross profit and gross margin is as follows (dollars in thousands):
Years Ended December 31,
2025
2024
Increase (Decrease)
Amount
Gross
Margin
Amount
Gross
Margin
Amount
Gross
Margin
Gross profit:
Products. . . . . . . . . . . . . . . . . . . . . . . . .
$133,683
80.0%
$108,581
77.7%
$25,102
2.3%
Services . . . . . . . . . . . . . . . . . . . . . . . . .
96,832
78.4%
101,696
83.4%
(4,864)
(5.0)%
Total gross profit . . . . . . . . . . . . . . . .
$230,515
79.3%
$210,277
80.4%
$20,238
(1.1)%
Products gross margin percentage increased to 80.0% in 2025 compared to 77.7% in 2024, primarily due to product
and regional mix.
Services gross margin percentage decreased to 78.4% in 2025 compared to 83.4% in 2024 primarily due to an
increase in personnel-related support costs and the mix of services delivered, which include technical support, training
and service costs. Additionally, in 2025 services gross margin percentage was negatively impacted by a one-time asset
impairment charge totaling $951 thousand.
Operating Expenses
Our operating expenses consist of sales and marketing, research and development, general and administrative, and
restructuring expenses. The largest component of our operating expenses is personnel costs which consist of wages,
benefits, bonuses, and, with respect to sales and marketing expenses, sales commissions. Personnel costs also include
stock-based compensation.
A summary of our operating expenses is as follows (dollars in thousands):
Years Ended December 31,
Increase (Decrease)
2025
2024
Amount
Percent
Operating expenses:
Sales and marketing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 84,467
$ 83,300
$ 1,167
1%
Research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
69,104
57,726
11,378
20%
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29,802
25,283
4,519
18%
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$183,373
$166,309
$17,064
10%
51

Sales and Marketing
Sales and marketing expenses are our largest functional category of operating expenses and primarily consist of
personnel costs. Sales and marketing expenses also include the cost of marketing programs, trade shows, consulting
services, promotional materials, demonstration equipment, depreciation and certain allocated facilities and information
technology infrastructure costs.
The $1.2 million increase in sales and marketing expenses in 2025 compared to 2024 was primarily due to
increases of $1.8 million in personnel costs as a result of an increase in headcount, $0.3 million in equipment expense
and $0.3 million of amortization and depreciation expense, partially offset by a decrease in bad debt expense of
$1.2 million.
For 2026, we expect sales and marketing expenses to increase modestly from 2025 levels as we continue to apply
a disciplined approach to focus our investments in areas that offer the greatest opportunities.
Research and Development
Research and development efforts are focused on new product development and on developing additional
functionality for our existing products. These expenses primarily consist of personnel costs, and, to a lesser extent,
prototype materials, depreciation and certain allocated facilities and information technology infrastructure costs. We
expense research and development costs as incurred.
The $11.4 million increase in research and development expenses in 2025 compared to 2024 was primarily due to
an increase of $12.0 million in personnel costs and a $1.5 million increase in equipment and software expense, partially
offset by a decrease of $2.3 million in consultants and professional services.
For 2026, we expect research and development expenses to increase from 2025 levels reflecting strategic
investments in our growth priorities, including cybersecurity technology and AI technologies.
General and Administrative
General and administrative expenses primarily consist of personnel costs, professional services and office
expenses. General and administrative personnel costs include executive, finance, human resources, information
technology, facility and legal related expenses. Professional services primarily consist of fees for outside accounting,
tax, legal, recruiting and other administrative services.
The $4.5 million increase in general and administrative expenses in 2025 compared to 2024 was primarily due to
an increases of $1.2 million in legal services, $1.0 million in personnel costs primarily as a result of an increase in
variable compensation, $1.0 million in amortization and depreciation, $0.5 million in business insurance and
$0.4 million in equipment expense.
For 2026, we expect general and administrative expenses to increase modestly from 2025 levels as we continue to
apply a disciplined approach to focus our investments in areas that offer the greatest opportunities.
Non-Operating Income (Expense) - Interest Income
Interest income consists primarily of interest income earned on our invested cash, cash equivalents and marketable
securities.
Interest income was $11.6 million and $6.7 million in the years ended December 31, 2025 and 2024, respectively.
Non-Operating Income (Expense) - Interest and Other Income (Expense), Net
In the year ended December 31, 2025, interest and other income (expense), net consisted primarily of interest
expense for the 2030 Notes and foreign currency exchange gains and losses. In the year ended December 31, 2024,
interest and other income (expense), net consisted primarily of gains on equity investments and foreign currency
exchange gains and losses. The Company recorded $6.1 million of interest expense for the 2030 Notes in the year ended
December 31, 2025, while no interest expense was recorded during the year ended December 31, 2024. The Company
recorded $5.3 million of investment gains in the year ended December 31, 2024, while no investment gains or losses
were recorded in the year ended December 31, 2025. Foreign currency exchange gains and losses, net had an
unfavorable change of $0.3 million in the year ended December 31, 2025 compared to a favorable change of
$2.1 million in the year ended December 31, 2024.
52

Provision for Income Taxes
We recorded a provision for income tax of $10.3 million for the year ended December 31, 2025 and $8.0 million
for the year ended December 31, 2024. Our deferred tax assets primarily consist of research and development credits,
capitalized research and development expenses and accruals and reserves. The Company’s income tax provision for the
year ended December 31, 2025 and 2024, primarily consisted of U.S. federal, state and foreign income taxes.
See Note 12 Income Taxes, of the notes to consolidated financial statements in Part II, Item 8 of thisAnnual Report
on Form 10-K for further details regarding the Company’s taxes.
Liquidity and Capital Resources
As of December 31, 2025, we had cash and cash equivalents of $71.1 million, including $4.1 million held outside
the U.S. in our foreign subsidiaries, and $306.7 million of marketable securities. We currently do not have any plans to
repatriate our earnings from our foreign operations. As of December 31, 2025, we had working capital of
$342.3 million, retained earnings of $1.8 million and total stockholders’ equity of $211.5 million.
We plan to continue to invest for long-term growth, and our investment may increase. We currently believe that our
existing cash and cash equivalents and marketable securities will be sufficient to meet our anticipated cash needs for at
least the next 12 months and beyond. Our future capital requirements will depend on many factors, including our growth
rate, the expansion of sales and marketing activities, the timing and extent of spending to support development efforts,
the introduction of new and enhanced product and service offerings and the continuing market acceptance of our
products. In the event that additional financing is required from outside sources, we may not be able to raise such
financing on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business,
operating results and financial condition could be adversely affected. We may also elect to raise additional financing to
help us pursue our business and strategic objectives. Any additional financing could be dilutive to our existing
stockholders.
In March 2025, the Company issued the 2030 Notes and received net proceeds from the offering of approximately
$217.7 million.
The Board of Directors, from time to time, has authorized various stock repurchase programs, including most
recently, a twelve-month $50 million program approved November 7, 2023 (the ‘‘2023 Program’’), a $50 million
program approved November 7, 2024 (the ‘‘2024 Program’’) and a $75 million program approved May 1, 2025 (the
‘‘2025 Program’’). The Board of Directors terminated the 2024 Program on May 1, 2025. Under all programs,
repurchased shares are held in treasury at cost. The Company’s stock repurchase programs do not obligate us to acquire
any specific number of shares. Shares may be repurchased in privately negotiated and/or open market transactions,
including under plans complying with Rule 10b5-1 under the Exchange Act of 1934 (the ‘‘Exchange Act’’). During the
year ended December 31, 2025, the Company had repurchased 3.7 million shares for a total cost of $68.9 million under
the 2025 and 2024 Programs. During the year ended December 31, 2024, the Company repurchased 2.2 million shares
for a total cost of $30.1 million under the 2024 and 2023 Programs.
In October 2021, the Board of Directors approved the initiation of a regular quarterly cash dividend on our
common stock. During the year ended December 31, 2025, the Company paid quarterly cash dividends in the amount
of $0.06 per share outstanding, for a total of $17.4 million. The next dividend, in the amount of $0.06 per share, will be
paid on March 2, 2026 to stockholders of record on February 16, 2026. We currently anticipate that we will continue to
pay comparable quarterly cash dividends in the future. However, the payment, amount and timing of future dividends
remain within the discretion of the Board of Directors and will depend upon our results of operations, financial
condition, cash requirements, and other factors.
In addition, as described in Note 9 Commitments and Contingencies, in the notes to consolidated financial
statements in Part II, Item 8 of this Annual Report on Form 10-K, we may be currently, or may be from time to time,
involved in ongoing litigation. Any adverse settlements or judgments in any litigation could have a material adverse
impact on our results of operations, cash balances and cash flows in the period in which such events occur.
53

Statements of Cash Flows
The following table summarizes our cash flow related activities (in thousands):
Years Ended December 31,
2025
2024
Cash provided by (used in):
Operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
84,894
$ 90,492
Investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(243,638)
(48,350)
Financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
134,754
(44,257)
Net decrease in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ (23,990)
$ (2,115)
Cash Flows from Operating Activities
Our cash provided by operating activities is driven primarily by sales of our products and management of working
capital investments. Our primary uses of cash from operating activities have been for personnel-related expenditures,
manufacturing costs, marketing and promotional expenses and costs related to our facilities. Our cash flows from
operating activities will continue to be affected principally by the extent to which we increase spending on our business
and our working capital requirements.
During the year ended December 31, 2025, cash provided by operating activities was $84.9 million, consisting of
net income of $42.1 million, non-cash benefits totaling $37.8 million and a favorable net change in operating assets and
liabilities of $5.0 million. Our non-cash benefits primarily consisted of non-cash charges of $20.0 million for
stock-based compensation and $14.9 million of depreciation and amortization expense. The net change in our operating
assets and liabilities primarily reflects cash inflows from changes in accounts receivable of $14.6 million, accrued and
other liabilities of $4.6 million and inventory of $3.7 million, partially offset by cash outflows from changes in prepaid
expenses and other assets of $8.3 million, deferred revenue of $8.0 million, and accounts payable of $1.5 million. The
favorable change in accounts receivable was due to the timing of collections from our customers. The favorable change
in accrued liabilities was due to increases in accrued income taxes and variable compensation. The unfavorable change
in prepaid expenses and other assets was due to an increase in deferred contract acquisition costs. The unfavorable
change in deferred revenues was attributable to the timing of service contract bookings. The favorable change in
accounts payable is due to the timing of payments to our vendors.
During the year ended December 31, 2024, cash provided by operating activities was $90.5 million, consisting of
net income of $50.1 million, non-cash benefits totaling $28.0 million and a favorable net change in operating assets and
liabilities of $12.4 million. Our non-cash benefits primarily consisted of non-cash charges of $17.0 million for
stock-based compensation and $11.3 million of depreciation and amortization expense. The net change in our operating
assets and liabilities primarily reflects cash inflows from changes in deferred revenue of $6.9 million, accrued and other
liabilities of $6.6 million and accounts payable of $2.2 million, partially offset by cash outflows from changes in
accounts receivable of $2.6 million, inventory of $0.8 million and prepaid expenses and other assets of $0.1 million. The
favorable change in deferred revenues was attributable to the timing of service contract bookings. The favorable change
in accrued liabilities was due to increases in accrued income taxes and variable compensation. The favorable change in
accounts payable is due to the timing of payments to our vendors. The unfavorable change in accounts receivable was
due to the timing of collections from our customers.
Cash Flows from Investing Activities
During the year ended December 31, 2025, cash used by investing activities was $243.6 million, consisting of
purchases of marketable securities of $342.0 million, our acquisition of ThreatX Protect for $19.1 million and capital
expenditures of $20.1 million, partially offset by proceeds from maturities of marketable securities of $136.8 million
and proceeds from the sales of marketable securities of $0.9 million.
During the year ended December 31, 2024, cash used by investing activities was $48.4 million, consisting of
purchases of marketable securities of $142.8 million and capital expenditures of $12.3 million, partially offset by
proceeds from maturities of marketable securities of $81.1 million and proceeds from the sales of marketable securities
of $25.5 million.
54

Cash Flows from Financing Activities
During the year ended December 31, 2025, cash provided by financing activities was $134.8 million consisting
primarily of $217.7 million of net cash proceeds from the issuance of the 2030 Notes and $3.4 million of cash proceeds
from common stock issuances under our equity incentive plans. Partially offsetting these cash inflows was
$68.9 million of cash used to repurchase our common stock in the open market, from privately negotiated transactions
and from withholding shares in connection with vesting equity awards held by certain employees and $17.4 million of
cash used for the payments of cash dividends.
During the year ended December 31, 2024, cash used in financing activities was $44.3 million consisting primarily
of $30.1 million of cash used to repurchase our common stock in the open market, from privately negotiated
transactions and from withholding shares in connection with vesting equity awards held by certain employees.
Additionally, cash used for the payments of cash dividends was $17.8 million. Partially offsetting these cash outflows
was $3.6 million of cash proceeds from common stock issuances under our equity incentive plans.
Critical Accounting Estimates
Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in
the U.S. The preparation of these consolidated financial statements requires us to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates
and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions
that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.
Note 1 Description of Business and Summary of Significant Accounting Policies, in notes to consolidated financial
statements in Item 8 of Part II of this Report, describes the significant accounting policies and methods used in the
preparation of the consolidated financial statements.
We believe the following critical accounting policies require us to make significant judgments and estimates in the
preparation of our consolidated financial statements.
Revenue Recognition
We derive revenue from two sources: (i) products revenue, which includes hardware, perpetual software license
and subscription offerings, which include term-based license agreements; and (ii) services revenue, which includes
PCS, professional services, training and software-as-a-service offerings. Revenue for term-based license agreements is
recognized at a point in time when the Company delivers the software license to the customer and the subscription term
has commenced. For our software-as-a-service offerings, our customers do not take possession of the Company’s
software but rather we provide access to the service via a hosting arrangement. Revenue in these arrangements is
recognized ratably as the services are provided. A substantial portion of our revenue is from sales of our products and
services through distribution channels, such as resellers and distributors. Our customers predominantly purchase PCS
services in conjunction with purchases of our products.
Most of our contracts with customers, other than renewals of PCS, contain multiple performance obligations with
a combination of products and PCS. Products and PCS generally qualify as distinct performance obligations. Our
hardware includes embedded ACOS software, which together deliver the essential functionality of our products. For
contracts which contain multiple performance obligations, we allocate revenue to each distinct performance obligation
based on the standalone selling price (‘‘SSP’’). Judgment is required to determine the SSPfor each distinct performance
obligation. We use a range of amounts to estimate SSP for products and PCS sold together in a contract to determine
whether there is a discount to be allocated based on the relative SSP of the various products and PCS.
If we do not have an observable SSP, such as when we do not sell a product or service separately, then SSP is
estimated using judgment and considering all reasonably available information such as market conditions and
information about the size and/or purchase volume of the customer. We generally use a range of amounts to estimate
SSP for individual products and services based on multiple factors including, but not limited to the sales channel
(reseller, distributor or end-customer), the geographies in which our products and services are sold, and the size of the
end-customer.
Item 7A.
Quantitative and Qualitative Disclosures about Market Risk
Foreign Currency Risk
Our consolidated results of operations, financial position and cash flows are subject to fluctuations due to changes
in foreign currency exchange rates. Historically, the majority of our revenue contracts are denominated in U.S. Dollars,
55

with the most significant exception being Japan where we invoice primarily in JapaneseYen. Our costs and expenses are
generally denominated in the currencies where our operations are located, which is primarily in the Americas, EMEA
and, to a lesser extent, the Asia Pacific region, including Japan. We have a hedging program with respect to foreign
currency risk. Revenue resulting from selling in local currencies and costs and expenses incurred in local currencies are
exposed to foreign currency exchange rate fluctuations, which can affect our revenue and operating income. As
exchange rates vary, operating income may differ from expectations.
The functional currency of our foreign subsidiaries is the U.S. Dollar.At the end of each reporting period, monetary
assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet date.
Non-monetary assets and liabilities are remeasured at historical exchange rates. Gains and losses related to
remeasurement are recorded in interest and other income, net in the consolidated statements of operations.Asignificant
fluctuation in the exchange rates between our subsidiaries’local currencies, especially the Japanese Yen, British Pound
and Euro, and the U.S. Dollar could have an adverse impact on our consolidated financial position and results of
operations.
We recorded $0.3 million of net foreign exchange losses in the year ended December 31, 2025 and we recorded
$2.1 million and $0.1 million of net foreign exchange gains during the years ended December 31, 2024 and 2023,
respectively.
Interest Rate Sensitivity
Our exposure to market risk for changes in interest rates relates primarily to our marketable securities. Our
marketable securities are comprised of certificates of deposit, corporate securities, U.S. Treasury and agency securities,
commercial paper and asset-backed securities and equity securities of publicly traded companies. We do not enter into
investments for trading or speculative purposes. At December 31, 2025, our investment portfolio included marketable
securities with an aggregate fair market value and amortized cost basis of $306.7 million and $306.0 million,
respectively. Due to the current nature of our investment portfolio, the effect of a hypothetical 10% increase or decrease
in interest rates would not have had a material impact on the fair value of our investment portfolio. Therefore, we do not
expect our operating results or cash flows to be materially affected by a sudden change in interest rates.
The following table presents the hypothetical fair values of our marketable securities assuming immediate parallel
shifts in the yield curve of 50 basis points (‘‘BPS’’), 100 BPS and 150 BPS as of December 31, 2025 (in thousands):
Fair Value as of
(150 BPS)
(100 BPS)
(50 BPS)
12/31/2025
50 BPS
100 BPS
150 BPS
Marketable securities. . . . . . . . . . . .
$309,872
$308,856
$307,804
$306,714
$305,588
$304,426
$303,227
56

Item 8.
Financial Statements and Supplementary Data
Index to Consolidated Financial Statements
Page
Reports of Independent Registered Public Accounting Firm - Grant Thornton LLP (PCAOB ID: 248). . . . . .
58
Consolidated Balance Sheets as of December 31, 2025 and 2024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61
Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023 . . . . . . . . . .
62
Consolidated Statements of Comprehensive Income for the years ended December 31, 2025, 2024 and
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
63
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2025, 2024 and 2023 . .
64
Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023. . . . . . . . . .
65
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66
57

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Stockholders
A10 Networks, Inc.
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of A10 Networks, Inc. (a Delaware corporation)
and subsidiaries (the ‘‘Company’’) as of December 31, 2025 and 2024, the related consolidated statements of
operations, comprehensive income, stockholders’equity, and cash flows for each of the three years in the period ended
December 31, 2025, and the related notes (collectively referred to as the ‘‘consolidated financial statements’’). In our
opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United
States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (‘‘PCAOB’’), the Company’s internal control over financial reporting as of December 31, 2025, based
on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (‘‘COSO’’), and our report dated February 25, 2026 expressed an
unqualified opinion.
Basis for opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility
is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public
accounting firm registered with the PCAOB and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.
Critical audit matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on
the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing
a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Revenue Recognition - Determination of standalone selling price for performance obligations not sold separately
As described further in note 1 to the consolidated financial statements, most of the Company’s revenue contracts,
other than renewals of post contract support, contain multiple performance obligations with a combination of products
and post contract support. Products and post contract support generally qualify as distinct performance obligations. For
contracts that contain multiple performance obligations, the Company allocates revenue to each distinct performance
obligation based on the standalone selling price. Judgment is required to determine the standalone selling price for each
distinct performance obligation. The Company uses a range of amounts to estimate standalone selling price for products
and post contract support sold together in a contract to determine whether there is a discount to be allocated based on
the relative standalone selling price of the various products and post contract support. We identified estimates of
standalone selling price as a critical audit matter.
58

The principal consideration for our determination that estimates of standalone selling price is a critical audit matter
is that auditing the estimates involved subjective auditor judgment due to the absence of directly observable data which
requires the Company to make subjective assumptions used to estimate the standalone selling price for each
performance obligation. If the Company does not have an observable standalone selling price, such as when they do not
sell a product or service separately, then standalone selling price is estimated using judgment and considering all
reasonably available information such as market conditions and information about the size and/or purchase volume of
the customer. The Company generally uses a range of amounts to estimate standalone selling price for individual
products and services based on multiple factors including, but not limited to the sales channel (reseller, distributor or
end-customer), the geographies in which products and services are sold, and the size of the end-customer. Given these
factors, the related audit effort in evaluating management’s judgments in determining revenue recognition for these
customer contracts was extensive and required subjective auditor judgment.
We obtained an understanding, evaluated design and tested the operating effectiveness of internal controls related
to the determination of the standalone selling price for performance obligations not sold separately.
To test management’s estimates of standalone selling price, we performed procedures to evaluate the methodology
applied, including evaluating whether management maximized the use of observable inputs. We also inspected the
sources of historical data used, evaluated pricing practices, and other observable inputs such as customer grouping,
tested the mathematical accuracy of the underlying data and evaluated the accounting policies and practices related to
the estimated standalone selling prices by management.
/s/ GRANT THORNTON LLP
We have served as the Company’s auditor since 2023.
San Jose, California
February 25, 2026
59

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Stockholders
A10 Networks, Inc.
Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of A10 Networks, Inc. (a Delaware corporation) and
subsidiaries (the ‘‘Company’’) as of December 31, 2025, based on criteria established in the 2013 Internal
Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(‘‘COSO’’). In our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework
issued by COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (‘‘PCAOB’’), the consolidated financial statements of the Company as of and for the year ended
December 31, 2025, and our report dated February 25, 2026 expressed an unqualified opinion on those financial
statements.
Basis for opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and
for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the
Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects. Our audit included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls
may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
/s/ GRANT THORNTON LLP
San Jose, California
February 25, 2026
60

A10 NETWORKS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
As of
December 31,
2025
As of
December 31,
2024
ASSETS
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
71,139
$
95,129
Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
306,714
100,429
Accounts receivable, net of allowances of $66 and $465, respectively . . . . . . . . . . . .
62,069
76,687
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18,032
22,005
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18,000
13,038
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
475,954
307,288
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50,221
39,142
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15,134
1,307
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,259
—
Deferred tax assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
62,109
62,364
Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,136
22,714
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 629,813
$ 432,815
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
11,694
$
12,542
Accrued and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41,132
32,696
Deferred revenue, current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
80,824
78,335
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
133,650
123,573
Deferred revenue, non-current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61,982
69,924
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
218,787
—
Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,848
7,489
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
418,267
200,986
Commitments and contingencies (Note 9)
Stockholders’ equity:
Common stock, $0.00001 par value: 500,000 shares authorized; 91,996 and
90,520 shares issued and 71,498 and 73,693 shares outstanding, respectively . . . .
1
1
Treasury stock, at cost: 20,498 and 16,827 shares, respectively. . . . . . . . . . . . . . . . . .
(249,912)
(180,992)
Additional paid-in-capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
531,790
508,387
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(72,785)
(55,417)
Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
659
194
Retained earnings (accumulated deficit). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,793
(40,344)
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
211,546
231,829
Total liabilities and stockholders’ equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 629,813
$ 432,815
61
See accompanying notes to consolidated financial statements.

A10 NETWORKS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Years Ended December 31,
2025
2024
2023
Revenue:
Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$167,086
$139,799
$141,082
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
123,471
121,897
110,618
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
290,557
261,696
251,700
Cost of revenue:
Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33,403
31,218
31,468
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26,639
20,201
16,494
Total cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60,042
51,419
47,962
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
230,515
210,277
203,738
Operating expenses:
Sales and marketing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
84,467
83,300
85,976
Research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
69,104
57,726
55,229
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29,802
25,283
23,885
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
183,373
166,309
165,090
Income from operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
47,142
43,968
38,648
Non-operating income (expense):
Interest income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,628
6,747
5,078
Interest and other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . .
(6,348)
7,384
69
Total non-operating income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,280
14,131
5,147
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
52,422
58,099
43,795
Provision for income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,285
7,959
3,825
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 42,137
$ 50,140
$ 39,970
Net income per share:
Basic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
0.58
$
0.68
$
0.54
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
0.57
$
0.67
$
0.53
Weighted-average shares used in computing net income per share:
Basic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
72,253
74,088
74,210
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
73,590
75,302
75,550
62
See accompanying notes to consolidated financial statements.

A10 NETWORKS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
Years Ended December 31,
2025
2024
2023
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$42,137
$50,140
$39,970
Other comprehensive income (loss), net of tax:
Unrealized gain on marketable securities. . . . . . . . . . . . . . . . . . . . . . . . . . . .
367
214
911
Foreign currency translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . .
98
51
(256)
Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$42,602
$50,405
$40,625
63
See accompanying notes to consolidated financial statements.

A10 NETWORKS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
Common Stock
Treasury
stock,
at cost
Additional
Paid-in
Capital
Dividends
paid
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Stockholders'
Equity
Shares
Amount
Balance at December 31,
2022. . . . . . . . . . . . . . . . 73,738
$ 1
$(134,934) $466,927 $(19,802)
$(726)
$(130,454)
$181,012
Stock-based compensation
expense . . . . . . . . . . . . .
—
—
—
15,088
—
—
—
15,088
Common stock issued
under employee equity
incentive plans. . . . . . . .
1,881
—
—
4,943
—
—
—
4,943
Repurchase of common
stock . . . . . . . . . . . . . . . (1,260)
—
(15,975)
—
—
—
—
(15,975)
Payments for dividends. . .
—
—
—
—
(17,817)
—
—
(17,817)
Unrealized gain on
marketable securities,
net of tax . . . . . . . . . . . .
—
—
—
—
—
911
—
911
Other comprehensive loss .
—
—
—
—
—
(256)
—
(256)
Net Income . . . . . . . . . . . .
—
—
—
—
—
—
39,970
39,970
Balance at December 31,
2023. . . . . . . . . . . . . . . . 74,359
$ 1
$(150,909) $486,958 $(37,619)
$ (71)
$ (90,484)
$207,876
Stock-based compensation
expense . . . . . . . . . . . . .
—
—
—
17,805
—
—
—
17,805
Common stock issued
under employee equity
incentive plans. . . . . . . .
1,516
—
—
3,624
—
—
—
3,624
Repurchase of common
stock . . . . . . . . . . . . . . . (2,182)
—
(30,083)
—
—
—
—
(30,083)
Payments for dividends. . .
—
—
—
—
(17,798)
—
—
(17,798)
Unrealized gain on
marketable securities,
net of tax . . . . . . . . . . . .
—
—
—
—
—
214
—
214
Other comprehensive
income. . . . . . . . . . . . . .
—
—
—
—
—
51
—
51
Net Income . . . . . . . . . . . .
—
—
—
—
—
—
50,140
50,140
Balance at December 31,
2024. . . . . . . . . . . . . . . . 73,693
$ 1
$(180,992) $508,387 $(55,417)
$ 194
$ (40,344)
$231,829
Stock-based compensation
expense . . . . . . . . . . . . .
—
—
—
20,030
—
—
—
20,030
Common stock issued
under employee equity
incentive plans. . . . . . . .
1,476
—
—
3,373
—
—
—
3,373
Repurchase of common
stock . . . . . . . . . . . . . . . (3,671)
—
(68,920)
—
—
—
—
(68,920)
Payments for dividends. . .
—
—
—
—
(17,369)
—
—
(17,369)
Unrealized gain on
marketable securities,
net of tax . . . . . . . . . . . .
—
—
—
—
—
367
—
367
Other comprehensive
income. . . . . . . . . . . . . .
—
—
—
—
—
99
—
99
Net Income . . . . . . . . . . . .
—
—
—
—
—
—
42,137
42,137
Balance at December 31,
2025. . . . . . . . . . . . . . . . 71,498
$ 1
$(249,912) $531,790 $(72,786)
$ 660
$
1,793
$211,546
64
See accompanying notes to consolidated financial statements.

A10 NETWORKS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended December 31,
2025
2024
2023
Cash flows from operating activities:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
42,137
$
50,140
$ 39,970
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,859
11,293
9,346
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,030
17,048
14,081
Provision for (recovery from) credit losses and sales returns . . . . . . . . . . . . .
(399)
59
(699)
Other non-cash items. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,282
(424)
117
Changes in operating assets and liabilities:
Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,569
(2,555)
(679)
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,659
(760)
(6,302)
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(8,326)
(67)
(1,862)
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,516)
2,224
(2,999)
Accrued and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,568
6,609
(20,801)
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7,969)
6,925
14,342
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . .
84,894
90,492
44,514
Cash flows from investing activities:
Proceeds from sales of marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . .
853
25,531
45,420
Proceeds from maturities of marketable securities . . . . . . . . . . . . . . . . . . . . . . .
136,765
81,146
64,504
Purchases of marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(342,028)
(142,759)
(85,420)
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(20,128)
(12,268)
(10,896)
Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(19,100)
—
—
Net cash provided by (used in) investing activities. . . . . . . . . . . . . . . . . . . . .
(243,638)
(48,350)
13,608
Cash flows from financing activities:
Proceeds from issuance of common stock under employee equity incentive
plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,373
3,624
4,943
Proceeds from the issuance of convertible debt . . . . . . . . . . . . . . . . . . . . . . . . .
225,000
—
—
Payment of debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7,330)
—
—
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(68,920)
(30,084)
(15,975)
Payments for dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(17,369)
(17,797)
(17,817)
Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . .
134,754
(44,257)
(28,849)
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . .
(23,990)
(2,115)
29,273
Cash and cash equivalents - beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95,129
97,244
67,971
Cash and cash equivalents - end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
71,139
$
95,129
$ 97,244
Supplemental Disclosures:
Cash paid for income taxes, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
6,777
$
6,283
$
2,409
Cash paid for interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
3,334
$
—
$
—
Non-cash investing and financing activities:
Transfers between inventory and property and equipment . . . . . . . . . . . . . . . . .
$
314
$
2,277
$
2,473
Capital expenditures included in accounts payable. . . . . . . . . . . . . . . . . . . . . . .
$
120
$
672
$
3,298
65
See accompanying notes to consolidated financial statements.

Notes to Consolidated Financial Statements
1.
Description of Business and Summary of Significant Accounting Policies
Description of Business
A10 Networks, Inc. (together with our subsidiaries, the ‘‘Company’’, ‘‘we’’, ‘‘our’’ or ‘‘us’’) was incorporated in
California in 2004 and reincorporated in Delaware in March 2014. We are headquartered in San Jose, California and
have wholly-owned subsidiaries throughout the world including Asia and Europe.
We are a leading provider of secure application solutions and services that enable a new generation of intelligently
connected companies with the ability to continuously improve cyber protection and digital responsiveness across
dynamic Information Technology (‘‘IT’’) and network infrastructures. Our product portfolio seeks to address many of
the cyber protection challenges and solution requirements. The portfolio consists of network infrastructure and security
products. The infrastructure portfolio powers the delivery of internet services and applications while the security
products protect applications, APIs, infrastructure and enterprises from cyber-attacks. Our security suite is known as
A10 Defend. In addition, we have an intelligent management and automation tool known as A10 Control (formally
Harmony Controller), which provides intelligent management, automation and analytics for secure application delivery
in multi-cloud environments to help simplify operations.
Our secure infrastructure solutions include; Thunder Application Delivery Controller (‘‘ADC’’), Thunder Carrier
Grade Networking (‘‘CGN’’), Thunder SSL Insight (‘‘SSLi’’) and Thunder Convergent Firewall (‘‘CFW’’). Our
security products include; A10 Defend Threat Control, A10 Defend Orchestrator, A10 Defend Detector, A10 Defend
Mitigator and A10 Defend ThreatX Protect. Our solutions are available in a variety of form factors, such as optimized
hardware appliances, bare metal software, containerized software, virtual appliances and cloud-native software. Our
customers include leading service providers (cloud, telecommunications, multiple system operators, cable),
government organizations, and enterprises.
Basis of Presentation
The accompanying consolidated financial statements include those ofA10 Networks, Inc. and its subsidiaries, and
have been prepared in accordance with generally accepted accounting principles in the United States of America
(‘‘U.S. GAAP’’) and pursuant to the rules and regulations of the United States Securities and Exchange Commission
(the ‘‘SEC’’). All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates
and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.
Those estimates and assumptions affect revenue recognition and deferred revenue, the allowance for credit losses for
potential uncollectible amounts, the sales return reserve, the valuation of inventory, the fair value of marketable
securities, contingencies and litigation, accrued liabilities, deferred commissions, ThreatX Protect purchase price
allocation and the determination of fair value of stock-based compensation. These estimates are based on information
available as of the date of the consolidated financial statements; therefore, actual results could differ from
management’s estimates.
Significant Accounting Policies
Cash and Cash Equivalents
Cash and cash equivalents include bank deposits and short-term, highly liquid investments purchased with an
original maturity of 90 days or less. Our cash equivalents consist of money market funds.
Marketable Securities
We classify our investments in debt securities as available-for-sale and record these investments at fair value. We
may sell these investments at any time before their maturity dates. Accordingly, we classify our securities, including
those with maturities exceeding twelve months, as current assets and include them in marketable securities in the
consolidated balance sheets. Unrealized gains and losses are reported in accumulated other comprehensive income
66

(loss), net of taxes, in the consolidated statements of stockholders’ equity. Realized gains and losses are determined
based on the specific identification method. Realized gains and losses and credit allowances and impairments due to
credit losses, if any, on marketable securities are reported in interest and other income, net as incurred in the
consolidated statements of operations.
We regularly review our investment portfolio for impairment. If the estimated fair value of available-for-sale debt
securities is less than its amortized cost basis, we determine if the difference, if any, is caused by expected credit losses
and write-down the amortized cost basis of the securities if it is more likely than not we will be required or we intend
to sell the securities before recovery of its amortized cost basis. Allowances for credit losses and write-downs are
recognized in the non-operating income (expense) section of our consolidated statements of operations.
The Company also invests in equity securities with readily determinable fair values which consist of investments
in publicly traded companies. These investments are measured at fair value with changes in fair value recognized in
non-operating income (expense) in our consolidated statements of operations.
Fair Value Measurement
Our financial instruments consist of cash, cash equivalents, marketable securities, accounts receivable and
accounts payable. Our cash equivalents are measured and recorded at fair value on a recurring basis. Marketable
securities are typically comprised of certificates of deposit, corporate securities, U.S. Treasury and agency securities,
commercial paper, asset-backed securities and publicly trader equity securities and are measured at fair value on a
recurring basis. The Company determines whether a credit loss exists for available-for-sale debt securities in an
unrealized loss position. When the fair value of a security is below its amortized cost, the amortized cost will be reduced
to its fair value and the resulting loss will be recorded in our consolidated statements of operations, if it is more likely
than not that we are required to sell the impaired security before recovery of its amortized cost basis, or we have the
intention to sell the security. If neither of these conditions are met, the Company considers the extent to which the fair
value is less than the amortized cost, any changes to the rating of the security by a rating agency, and review of the
issuer’s financial statements. If factors indicate a credit loss exists, an allowance for credit loss is recorded through other
expense, net, limited by the amount that the fair value is less than the amortized cost basis.
For all available-for-sale debt securities, unrealized gains and the amount of unrealized loss relating to factors
other than credit loss are reported as a separate component of accumulated other comprehensive loss in our consolidated
balance sheets. Realized gains and losses are determined based on the specific identification method and are reported
in our consolidated statements of operations.
Financial instruments recorded at fair value are measured and classified using the three-level valuation hierarchy
as described below:
Level 1 — observable inputs for identical assets or liabilities, such as quoted prices in active markets.
Level 2 — inputs other than the quoted prices in active markets that are observable either directly or indirectly.
Level 3 — unobservable inputs in which there is little or no market data, which requires us to develop our own
assumptions when pricing the financial instruments.
Accounts receivable and accounts payable are stated at their carrying value, which approximates fair value due to
the short time to the expected receipt or payment.
Accounts Receivable and Allowance for Credit Losses
Accounts receivable are unsecured and are recorded at invoice amounts, net of allowances for credit losses for any
potential uncollectible amounts. We evaluate the collectability of our accounts receivable based on known collection
risks and historical experience. We mitigate credit risk in respect to accounts receivable by performing periodic credit
evaluations based on a number of factors, including past transaction experience, evaluation of credit history and review
of the invoicing terms of the contract. We generally do not require our customers to provide collateral to support
accounts receivable. In circumstances where we are aware of a specific customer’s inability to meet its financial
obligations to us (for examples, bankruptcy filings or substantial downgrading of credit ratings), we record a specific
allowance for credit losses against amounts due to reduce the net recognized receivable to the amount we reasonably
believe will be collected. For all other customers, we record allowances for credit losses based on the length of time the
receivables are past due and our historical experience of collections and write-offs.
67

Inventory
Inventory is stated at the lower of cost or net realizable value. Inventory cost is determined using first-in, first-out
method. We regularly evaluate inventory for excess and obsolete products. Most of our inventory provisions relate to
excess quantities of certain products, based on our inventory levels and future product purchase commitments
compared to assumptions based on management’s assessment of future demand and market conditions. Inventory
write-downs, once established, are not reversed as they establish a new cost basis for the inventory. Inventory write
downs are included as a component of cost of products revenue in the consolidated statements of operations.
Property and Equipment, Net
Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and
amortization is computed using the straight-line method over the estimated useful lives of the related assets.
Depreciation and amortization on property and equipment, excluding leasehold improvements, ranges from one to
seven years.
Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful lives of the
assets or the remaining lease term. Remaining amortization terms on leasehold improvements as of December 31, 2025
ranged from approximately one to three years.
Leases
The Company determines if an arrangement is a lease at inception. For leases where the Company is the lessee,
right-of-use (‘‘ROU’’) assets represent the Company’s right to use the underlying asset for the term of the lease and are
included within other non-current assets in the consolidated balance sheets, and the lease liabilities represent an
obligation to make lease payments arising from the lease and are recorded within accrued liabilities and other
non-current liabilities in the consolidated balance sheets. Lease liabilities are recognized at the lease commencement
date based on the present value of the future lease payments over the lease term. The Company uses its incremental
borrowing rate based on the information available at the commencement date of the underlying lease arrangement to
determine the present value of lease payments. The ROU asset is determined based on the lease liability initially
established and reduced for any prepaid lease payments and any lease incentives received. The lease term to calculate
the ROU asset and related lease liability includes options to extend or terminate the lease when it is reasonably certain
that the Company will exercise the option. The Company’s lease agreements generally do not contain any material
variable lease payments, residual value guarantees or restrictive covenants.
The Company elected the package of practical expedients permitted under the transition guidance, which allowed
for the carry-forward of the Company’s historical lease classification and assessment on whether a contract is or
contains a lease. The Company elected to not apply the new standard’s recognition requirements to leases with an initial
term of 12 months or less and instead elected to recognize lease payments in the consolidated statements of operations
on a straight-line basis over the lease term.
Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense
while expense for financing leases is recognized as depreciation expense and interest expense using the accelerated
interest method of recognition. The Company accounts for lease components and non-lease components as a single
lease component.
Business Combinations
We use our best estimates and assumptions to allocate the fair value of purchase consideration to the tangible and
intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of
purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. We apply
significant judgment in determining the fair value of the intangible assets acquired, which involves the use of significant
estimates and assumptions with respect to revenue growth rates, royalty rate and technology migration curve. While we
use our best estimates and judgments, our estimates are inherently uncertain and subject to refinement. During the
measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value
of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In
addition, uncertain tax positions and tax-related valuation allowances are initially established in connection with a
business combination as of the acquisition date. We continue to collect information and reevaluate these estimates and
assumptions quarterly and record any adjustments to our preliminary estimates to goodwill provided that we are within
68

the measurement period. Upon the conclusion of the final determination of the fair value of assets acquired or liabilities
assumed during the measurement period, any subsequent adjustments are included in our consolidated statements of
operations.
The results of operations for businesses acquired are included in the financial statements from the acquisition date.
Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.
Goodwill
Goodwill represents the excess of purchase consideration over the fair values of assets acquired and liabilities
assumed in a business combination. Goodwill is not amortized but is reviewed for possible impairment annually in the
fourth quarter or more frequently if impairment indicators arise. We have identified a single reporting unit for the
purpose of our goodwill impairment tests, and the fair value of our reporting unit has been determined by our enterprise
value. We may elect to utilize a qualitative assessment to determine whether it is more likely than not that the fair value
of our reporting unit is less than its carrying value. If, after assessing the qualitative factors, we determine that it is more
likely than not that the fair value of our reporting unit is less than its carrying value, an impairment analysis will be
performed. We compare the fair value of our reporting unit with its carrying amount and if the carrying value of the
reporting unit exceeds its fair value, an impairment loss will be recognized for the amount by which the carrying amount
of a reporting unit exceeds its fair value up to the amount of goodwill. We did not identify impairment of goodwill for
any periods presented.
Intangible Assets
Intangible assets with finite lives consist of acquired developed technology, customer relationships, trademarks
and trade names acquired through our acquisition of ThreatX Protect. Intangible assets are recorded at their respective
estimated fair values upon acquisition close. The Company determines the estimated useful lives for acquired intangible
assets based on the expected future cash flows associated with the respective asset. The Company’s intangible assets
with finite lives are amortized using the straight-line method over their estimated useful lives, ranging from four to five
years. Amortization expense related to acquired developed technology is charged to product cost of revenues.
Amortization expense related to customer relationships, trademarks and trade names is charged to sales and marketing
activities. Amortization expense related to patents and trademarks is charged to general and administrative activities.
The Company evaluates the recoverability of intangible assets periodically by taking into account events or
circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired.
Impairment of Long-Lived Assets
We evaluate our property and equipment for impairment whenever events or changes in circumstances indicate
that the carrying amount of our long-lived assets may not be recoverable. Recoverability of an asset group is measured
by comparison of its carrying amount to the expected future undiscounted cash flows that the asset group is expected to
generate. If it is determined that an asset group is not recoverable, an impairment loss is recorded in the amount by which
the carrying amount of the asset group exceeds its fair value.
In the year ended December 31, 2025, we recorded an impairment charge totaling $951 thousand related to an
incomplete internally developed software project that will not be completed.
Revenue Recognition
We recognize revenue, net of applicable taxes, when we transfer control of promised goods or services to our
customers in an amount that reflects the consideration to which we expect to be entitled to in exchange for those goods
or services.
69

We derive revenue from two sources: (i) products revenue, which includes hardware, perpetual software license
and subscription offerings, which include term-based license agreements; and (ii) services revenue, which includes
PCS, professional services, training and software-as-a-service offerings. Revenue for term-based license agreements is
recognized at a point in time when the Company delivers the software license to the customer and over time once the
subscription term has commenced. For our software-as-a-service offerings, our customers do not take possession of the
Company’s software but rather we provide access to the service via a hosting arrangement. Revenue in these
arrangements is recognized over time as the services are provided. A substantial portion of our revenue is from sales of
our products and services through distribution channel partners, such as resellers and distributors. We apply the
following five-step revenue recognition model:
•
Identification of the contract, or contracts, with a customer
•
Identification of the performance obligations in the contract
•
Determination of the transaction price
•
Allocation of the transaction price to the performance obligations in the contract
•
Recognition of revenue when, or as, performance obligations are satisfied.
Our customers predominantly purchase PCS services in conjunction with purchases of our products. PCS revenue
includes arrangements for software support and technical support for our products. PCS is offered under renewable,
fee-based contracts, which include technical support, hardware repair and replacement parts, bug fixes, patches, and
unspecified upgrades on a when-and-if available basis. We recognize services revenue ratably over the term of the PCS
contract, which is typically one year, but can be up to seven years. Billed but unearned PCS revenue is included in
deferred revenue.
Professional service revenue primarily consists of the fees we earn related to installation and consulting services.
We recognize revenue from professional services upon delivery or completion of performance. Professional service
arrangements are typically short term in nature and are largely completed within 30 to 90 days from the start of service.
Revenue is recognized for training when the training course is delivered.
Contracts with Multiple Performance Obligations
Most of our contracts with customers, other than renewals of PCS, contain multiple performance obligations with
a combination of products and PCS. Products and PCS generally qualify as distinct performance obligations. Our
hardware includes embedded ACOS software, which together deliver the essential functionality of our products. For
contracts which contain multiple performance obligations, we allocate revenue to each distinct performance obligation
based on the SSP. Judgment is required to determine the SSP for each distinct performance obligation. We use a range
of amounts to estimate SSP for products and PCS sold together in a contract to determine whether there is a discount to
be allocated based on the relative SSP of the various products and PCS.
If we do not have an observable SSP, such as when we do not sell a product or service separately, then SSP is
estimated using judgment and considering all reasonably available information such as market conditions and
information about the size and/or purchase volume of the customer. We generally use a range of amounts to estimate
SSP for individual products and services based on multiple factors including, but not limited to the sales channel
(reseller, distributor or end-customer), the geographies in which our products and services are sold, and the size of the
end-customer.
We account for multiple contracts with a single customer as one arrangement if the contractual terms and/or
substance of those agreements indicate that they may be so closely related that they are, in effect, parts of a single
contract.
We may occasionally accept returns to address customer satisfaction issues even though there is generally no
contractual provision for such returns. We estimate returns for sales to customers based on historical return rates applied
against current-period shipments. Specific customer returns and allowances are considered when determining our sales
return reserve estimate.
Consequently, we have chosen to apply the portfolio approach when possible, which we do not believe will happen
frequently. Additionally, we will evaluate a portfolio of data, when possible, in various situations, rights of return and
transactions with variable consideration.
70

We report revenue net of sales taxes. We include shipping charges billed to customers in revenue and the related
shipping costs are included in cost of product revenue.
Deferred Contract Acquisition Costs
We capitalize certain contract acquisition costs consisting of incremental sales commissions incurred to obtain
customer contracts. Deferred commissions related to product revenues are recognized upon transfer of control to
customers. Deferred commissions related to services revenue are recognized as the related performance obligations are
met. Deferred commissions that will be recognized during the succeeding 12-month period are recorded as prepaid
expenses and other current assets in the Company’s consolidated balance sheets, and the remaining portion is recorded
as other non-current assets. Amortization of deferred commissions is included in sales and marketing expense in the
consolidated statements of operations.
Research and Development Costs
Research and development efforts are focused on new product development and on developing additional
functionality for our existing products. These expenses consist of personnel costs, and to a lesser extent, prototype
materials, depreciation and certain allocated facilities and information technology costs. We expense research and
development costs as incurred.
Capitalization of Internal Use Software
The company capitalizes costs incurred during the application development stage associated with the development
of internal-use software systems. We account for the capitalization of internal-use software under ASC Topic 350-40,
Internal-Use Software. Capitalized costs are included in property and equipment, net on the Company’s consolidated
balance sheet. Once a project is available for general release to customers, the accumulated capitalized costs associated
with that project will begin to be amortized over the estimated useful life of the software.
Capitalization of Internally Developed Software to be Marketed and Sold
We capitalize software engineering labor costs related to certain long-term projects that are expected to take more
than a year to complete. We account for the capitalization of labor costs under Accounting Standards Codification
(‘‘ASC’’) Topic 985-20, Software to be Sold, Leased or Marketed. Once a long-term project is available for general
release to customers, the accumulated capitalized labor costs associated with that project will begin to be amortized over
the expected revenue-generating life of that project and are recorded in cost of sales. If internal-use software that was
previously capitalized is abandoned, the cost less the accumulated amortization, if any, is recorded as an operating
expense.
Stock-Based Compensation
Stock-based compensation expense is measured on the grant date based on the fair value of the award and
recognized on a straight-line basis over the requisite service period, reduced for actual forfeitures. The fair values of
restricted stock units (‘‘RSUs’’) are estimated using our stock price at the close of the market on the grant date. The fair
value of employee stock purchase rights is estimated using the Black-Scholes model on the grant date. The Black-
Scholes model determines the fair value of share-based payment awards based on assumptions including expected term,
stock price volatility and risk-free interest rate. Stock-based compensation expense related to shares not purchased due
to terminations, or forfeitures, is reversed on the date of forfeiture. The fair values of market performance-based
restricted stock units (‘‘PSUs’’) are estimated using the Monte Carlo simulation model, which uses the stock price,
expected volatility and risk-free interest rate to determine the fair value.
Warranty Costs
Our appliance hardware and software generally carry a warranty period of 90 days. Estimates of future warranty
costs are based on historical returns and the application of the historical return rates to our in-warranty installed base.
Warranty costs to repair or replace items sold to customers have been insignificant for the years ended December 31,
2025, 2024 and 2023.
Foreign Currency
The functional currency of our foreign subsidiaries is the U.S. Dollar. Transactions denominated in non-functional
currencies are remeasured to the functional currency at the average exchange rate for the period. Non-functional
71

currency monetary assets and liabilities are remeasured to the functional currency using the exchange rate in effect at
the balance sheet date, and non-monetary assets and liabilities are remeasured at historical exchange rates. Gains and
losses related to remeasurement are recorded in interest and other income, net in the consolidated statements of
operations.
Income Taxes
We account for income taxes using the asset and liability method, which requires the recognition of deferred tax
assets and liabilities for the expected future tax consequences of events that have been recognized in our consolidated
financial statements or in our tax returns. Estimates and judgments occur in the calculation of certain tax liabilities and
in the determination of the recoverability of certain deferred income tax assets, which arise from temporary differences
and carryforwards. Deferred income tax assets and liabilities are measured using the currently enacted tax rates that
apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. We
regularly assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the
extent we believe, based upon the weight of available evidence, that it is more likely than not that all or a portion of
deferred tax assets will not be realized, a valuation allowance is established through an adjustment to income tax
expense.
The factors used to assess the likelihood of realization of our deferred tax assets include our historical operating
performance, our forecast of future taxable income and available tax planning strategies that could be implemented to
realize the net deferred tax assets. Assumptions represent our best estimates and involve inherent uncertainties and the
application of our judgment.
We account for uncertainty in income taxes recognized in our consolidated financial statements by regularly
reviewing our tax positions and benefits to be realized. We recognize tax liabilities based upon our estimate of whether,
and the extent to which, additional taxes will be due when such estimates are more-likely-than-not to be sustained. An
uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained upon
examination by taxing authorities. The provision for (benefit from) income taxes excludes the effects of any resulting
tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and
penalties.
Advertising Costs
Advertising costs are expensed when incurred. Advertising costs were $0.2 million, $0.1 million and $0.1 million
for the years ended December 31, 2025, 2024 and 2023, respectively.
Segment Information
An operating segment is a component of an enterprise for which its discrete financial information is available and
its operating results are regularly reviewed by our chief operating decision maker for resource allocation decisions and
performance assessment. Our chief operating decision maker is our Chief Executive Officer.
Our Chief Executive Officer reviews financial information presented on a consolidated basis for purposes of
allocating resources and assessing performance of the Company.Accordingly, we have one reportable segment and one
operating segment. See Note 13 Segment and Geographic Information in the accompanying notes to the consolidated
financial statements for further detail.
Vendor Business Concentration
We rely on third parties to manufacture our hardware appliances and we purchase raw materials from third-party
vendors. We outsource substantially all of our manufacturing services to three independent manufacturers. In addition,
we purchase certain strategic component inventory which is consigned to our third-party manufacturers. Other
hardware components included in our products are sourced from various suppliers by our manufacturers and are
principally industry standard parts and components that are available from multiple vendors.
Concentration of Credit Risk and Significant Customers
Financial instruments that potentially subject us to concentrations of credit risk consist of cash, cash equivalents,
marketable securities and accounts receivable. Our cash, cash equivalents and marketable securities are held and
invested in high-credit quality financial instruments by recognized financial institutions and are subject to minimum
credit risk.
72

Our accounts receivable are unsecured and represent amounts due to us based on contractual obligations of our
customers. We mitigate credit risk in respect to accounts receivable by performing periodic credit evaluations based on
a number of factors, including past transaction experience, evaluation of credit history and review of the invoicing terms
of the contract. We generally do not require our customers to provide collateral to support accounts receivable.
Significant customers, including distribution channel partners and direct customers (‘‘end-customers’’), are those
which represent 10% or more of our total revenue for each period presented or our gross accounts receivable balance as
of each respective balance sheet date.
A substantial portion of our revenue is from sales of our products and services through distribution channel
partners, such as resellers and distributors. In 2025, 2024 and 2023, sales through a single distribution channel partner
represented 29%, 20% and 19% of our total revenue, respectively.
Revenues from our significant end-customers as a percentage of our total revenue are as follows:
Years Ended December 31,
2025
2024
2023
Customer A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26%
15%
14%
We report revenue in two customer verticals: service providers, which accounted for 60%, 57% and 58% of our
total revenue during the years ended December 31, 2025, 2024 and 2023, respectively, and enterprises, which accounted
for 40%, 43% and 42% of our total revenue during years ended December 31, 2025, 2024 and 2023, respectively.
A substantial portion of our revenue comes from a limited number of large end-customers and service providers.
Purchases from our ten largest end-customers accounted for 40%, 38% and 33% of our total revenue for the years ended
December 31, 2025, 2024 and 2023, respectively.
As of December 31, 2025, a single distribution channel partner accounted for 23% of our total gross accounts
receivable. As of December 31, 2024, a single distribution channel partner accounted for 34% of our total gross
accounts receivable.
Recent Accounting Standards Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-
Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring
public entities to disclose additional information about specific expense categories in the notes to the consolidated
financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after
December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The
Company is currently evaluating the impact of adopting ASU 2024-03.
Recently Adopted Accounting Standard
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax
Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate
reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for
fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adoptedASU 2023-09 for
its fiscal year ending December 31, 2025. See Note 12 Income Taxes in the accompanying notes to the consolidated
financial statements for further detail.
There have been no other recent accounting pronouncements, changes in accounting pronouncements or recently
adopted accounting guidance during the year ended December 31, 2025 that are of significance or potential significance
to us.
73

2.
Revenue
Contract Balances
The following table reflects contract balances with customers (in thousands):
Balance Sheet Line Reference
As of
December 31,
2025
As of
December 31,
2024
As of
December 31,
2023
Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$62,069
$76,687
$74,307
Deferred revenue, current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
80,824
78,335
82,657
Deferred revenue, non-current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61,982
69,924
58,677
The Company receives payment from customers based upon billing cycles. Invoice payment terms typically range
from 30 to 90 days.
Accounts receivable are recorded when the right to consideration becomes unconditional.
Contract assets include amounts related to the Company’s contractual right to consideration for performance
obligations not yet billed, and are included in prepaid and other current assets in the Company’s consolidated balance
sheets. The contract assets amount was immaterial as of December 31, 2025 and 2024.
Deferred revenue primarily consists of amounts that have been invoiced but not yet recognized as revenue and
consists of performance obligations pertaining to support and subscription services. During the years ended
December 31, 2025 and 2024, the Company recognized revenue of $77.8 million and $80.7 million, respectively,
related to deferred revenue at the beginning of the period.
Deferred revenue consisted of the following (in thousands):
As of
December 31,
2025
As of
December 31,
2024
As of
December 31,
2023
Deferred revenue:
Products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2,783
$
4,405
$ 14,917
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
140,023
143,854
126,417
Total deferred revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
142,806
148,259
141,334
Less: current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(80,824)
(78,335)
(82,657)
Non-current portion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61,982
$ 69,924
$ 58,677
Deferred Contract Acquisition Costs
As of December 31, 2025, the current and non-current portions of deferred contract acquisition costs totaled
$8.3 million and $5.7 million, respectively, and the related amortization was $7.1 million for the year ended
December 31, 2025. As of December 31, 2024, the current and non-current portions of deferred contract acquisition
costs totaled $6.2 million and $4.8 million, respectively, and the related amortization was $5.9 million for the year
ended December 31, 2024.
For the years ended December 31, 2025, 2024 and 2023, the Company had no impairment loss in relation to
capitalized deferred contract acquisition costs and no asset impairment charges related to contract assets.
Remaining Performance Obligations
Remaining performance obligations represent contracted revenues that are non-cancellable and have not yet been
recognized due to unsatisfied or partially satisfied performance obligations, which include deferred revenues and
amounts that will be invoiced and recognized as revenues in future periods.
74

The Company expects to recognize revenue on the remaining performance obligations as follows (in thousands):
As of
December 31,
2025
Within 1 year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 80,824
Next 2 to 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
51,628
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,354
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$142,806
3.
Marketable Securities and Fair Value Measurements
Marketable Securities
Marketable securities, classified as available-for-sale, consisted of the following (in thousands):
As of December 31, 2025
As of December 31, 2024
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
Corporate securities. . . . . . $184,414
$397
$(3)
$184,808 $ 52,311
$102
$(12)
$ 52,401
U.S. Treasury and agency
securities . . . . . . . . . . . .
94,148
246
(4)
94,390
47,865
163
—
48,028
Asset-backed securities. . .
27,419
99
(2)
27,516
—
—
—
—
Total marketable
securities . . . . . . . . . . $305,981
$742
$(9)
$306,714 $100,176
$265
$(12)
$100,429
During the years ended December 31, 2025 and 2024, the Company did not reclassify any amount to earnings from
accumulated other comprehensive income (loss) related to unrealized gains or losses.
The Company anticipates that it will recover the entire amortized cost basis of its available-for-sale marketable
securities and has determined that no allowance for credit losses was required to be recognized during the years ended
December 31, 2025 and 2024.
The following table summarizes the cost and estimated fair value of debt securities based on stated effective
maturities as of December 31, 2025 (in thousands):
Amortized Cost
Fair Value
Less than 1 year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$182,342
$182,721
Mature in 1 - 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
123,639
123,993
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$305,981
$306,714
All available-for-sale securities are classified as current because they are available for use in current operations.
Marketable securities in an unrealized loss position consisted of the following (in thousands):
Less Than 12 Months
12 Months or More
Total
As of December 31, 2025
Fair Value
Gross
Unrealized
Losses
Fair Value
Gross
Unrealized
Losses
Fair Value
Gross
Unrealized
Losses
Corporate securities . . . . . . . . . . . . . . . . . . . . . .
$12,024
$(3)
$—
$—
$12,024
$(3)
U.S. Treasury and agency securities. . . . . . . . . .
13,194
(4)
—
—
13,194
(4)
Asset-backed securities. . . . . . . . . . . . . . . . . . . .
3,348
(2)
—
—
3,348
(2)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$28,566
$(9)
$—
$—
$28,566
$(9)
75

Less Than 12 Months
12 Months or More
Total
As of December 31, 2024
Fair Value
Gross
Unrealized
Losses
Fair Value
Gross
Unrealized
Losses
Fair Value
Gross
Unrealized
Losses
Corporate securities . . . . . . . . . . . . . . . . . . . . . .
$12,516
$(12)
$—
$—
$12,516
$(12)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$12,516
$(12)
$—
$—
$12,516
$(12)
Based on evaluation of securities that have been in a continuous loss position, the Company determined all gross
unrealized losses on its marketable securities as of December 31, 2025 were temporary in nature and related primarily
to interest rate shifts rather than changes in the underlying credit quality of the securities in a loss position. The
Company has the ability to hold these investments until maturity, or for at least the foreseeable future. As such, the
Company determined that as of December 31, 2025, there were no credit losses on any securities within its portfolio of
marketable securities.
Fair Value Measurements
The following is a summary of the Company’s cash, cash equivalents and marketable securities. The Company
records cash and cash equivalents at cost, which approximates fair value. Marketable securities are measured at fair
value on a recurring basis (in thousands):
As of December 31, 2025
As of December 31, 2024
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Cash. . . . . . . . . . . . . . . . . .
$ 62,348
$
—
$—
$ 62,348
$ 89,195
$
—
$—
$ 89,195
Cash equivalents . . . . . . . .
8,791
—
—
8,791
5,934
—
—
5,934
Corporate securities. . . . . .
—
184,808
—
184,808
—
52,401
—
52,401
U.S. Treasury and agency
securities . . . . . . . . . . . .
73,458
20,932
—
94,390
38,025
10,003
—
48,028
Asset-backed securities. . .
—
27,516
—
27,516
—
—
—
—
$144,597
$233,256
$—
$377,853
$133,154
$62,404
$—
$195,558
There were no transfers between Level 1 and Level 2 fair value measurement categories during the years ended
December 31, 2025 and 2024.
The Company measures the fair value of the 2030 Notes (as defined in Note 8 Long-Term Debt below) using inputs
of quoted prices for disclosure purposes on a recurring basis. The fair value of the 2030 Notes was $232.7 million as of
December 31, 2025. The 2030 Notes are categorized as Level 2 since their fair values is based on Level 2 inputs of
quoted prices.
4.
Derivatives
Foreign Exchange Forward Contracts
The Company uses derivative financial instruments to manage exposures to foreign currency that may or may not
be designated as hedging instruments. The Company’s objective for holding derivatives is to use the most effective
methods to minimize the impact of these exposures. The Company does not enter into derivatives for speculative or
trading purposes. The Company enters into foreign exchange forward contracts primarily to mitigate the effect of gains
and losses generated by foreign currency transactions related to certain operating expenses and remeasurement of
certain assets and liabilities denominated in foreign currencies.
For foreign exchange forward contracts not designated as hedging instruments, the fair value of the derivatives in
a net gain or net loss position are recorded in prepaid expenses and other current assets in the accompanying
consolidated balance sheets. Changes in the fair value of derivatives are recorded in other income, net in the
accompanying consolidated statements of operations. As of December 31, 2025 and 2024, foreign exchange forward
currency contracts not designated as hedging instruments had the total notional amount of $2.0 million and $7.6 million,
respectively. These contracts have maturities of approximately 30 days. For the years ended December 31, 2025 and
2024, the Company recorded unrealized net losses of $0.1 million and $0.2 million, respectively, in its consolidated
statements of operations related to these contracts. For the years ended December 31, 2025 and 2024, the net realized
gain recorded in the consolidated statements of operations from these contracts was $0.3 million and $4.5 million,
respectively.
76

For foreign exchange forward contracts designated as hedging instruments, unrealized gains and losses arising
from these contracts are recorded as a component of accumulated other comprehensive income (loss) on the
consolidated balance sheets. These hedging contracts have 30 day maturities. The hedging gains and losses in
accumulated other comprehensive income (loss) in the consolidated balance sheet are subsequently reclassified to
expenses, as applicable, in the consolidated statements of operations in the same period in which the underlying
transactions affect the Company’s earnings. As of December 31, 2025 and 2024, there were no outstanding foreign
exchange forward contracts designated as hedging instruments.
5.
Acquisition
ThreatX Protect Business
In February 2025, we completed an acquisition of the ThreatX Protect business of ThreatX, Inc. for $19.1 million
in cash. This acquisition has been accounted for as a business combination. The purchase price allocation is as follows:
$7.6 million to identified intangible assets, $2.5 million to deferred revenue assumed and $0.2 million to net assets
acquired, with the excess $13.8 million of the purchase price over the fair value of net assets acquired recorded as
goodwill, allocated to our single operating segment. Goodwill is primarily attributable to assembled workforce, future
synergies, and other intangible assets that do not qualify for separate recognition. Goodwill is not deductible for tax
purposes.
The Company applied the fair value measurement requirements within ASC 820 Fair Value Measurements to
evaluate the fair value of identifiable assets acquired and liabilities assumed in connection with its acquisition of
ThreatX Protect in February 2025. The Company estimated fair value and remaining useful life of the intangible assets
acquired based on the price that would be received if the Company were to sell the intangible assets in an orderly
transaction between market participants. Intangible assets will be amortized on a straight-line basis over their remaining
useful life.
The results of operations of the acquired business, which are not material, have been included in our consolidated
financial statements from the date of the acquisition. Pro forma results of operations have not been presented because
the effect of the acquisition was not material to the consolidated statements of operations.
The Company incurred approximately $0.3 million of acquisition-related costs, including legal, accounting, and
advisory fees. These costs were expensed as incurred and included in general and administrative expenses in the
consolidated statements of operations. The cash outflows for these costs are classified as operating activities in the
consolidated statements of cash flows.
Acquired Intangible Assets
The following table sets forth the components of acquired intangible assets and their estimated useful lives as of
the date of acquisition (in thousands, except years):
Fair Value
Useful Life (Years)
Developed Technology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$5,700
5.0
Customer Relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,500
5.0
Trademark / trade name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
400
4.0
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$7,600
Intangible assets subject to amortization as of December 31, 2025 are as follows (in thousands, except years):
Gross
Accumulated
Amortization
Net
Weighted-
Average
Remaining
Useful Life
Developed technology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$5,700
$ (993)
$4,707
4.1 years
Customer relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,500
(261)
1,239
4.1 years
Trademark / trade name. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
400
(87)
313
3.1 years
$7,600
$(1,341)
$6,259
Amortization expense from acquired intangible assets was $1.3 million for the year ended December 31, 2025.
77

The expected future amortization expense for acquired intangible assets as of December 31, 2025 is as follows (in
thousands):
2026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,519
2027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,519
2028. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,519
2029. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,437
2030. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
265
Total amortization expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$6,259
Goodwill
The Company recorded goodwill in the amount of $13.8 million. There were no events or changes in
circumstances that triggered an impairment review of ThreatX Protect goodwill or intangible assets during the year
ended December 31, 2025.
6.
Leases
The Company leases various facilities in the U.S., Asia and Europe under non-cancellable operating lease
arrangements that expire on various dates through April 2028. These arrangements require the Company to pay certain
operating expenses, such as taxes, repairs and insurance, and contain renewal and escalation clauses.
The table below presents the Company’s right-of-use assets and lease liabilities as of December 31, 2025 (in
thousands):
As of
December 31,
2025
Operating leases
Right-of-use assets:
Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$8,858
Total right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$8,858
Lease liabilities:
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$5,562
Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,409
Total operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$8,971
The aggregate future lease payments for the Company’s operating leases as of December 31, 2025 were as follows
(in thousands):
2026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$5,701
2027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,234
2028. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
220
Total lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,155
Less: imputed interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(184)
Present value of lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$8,971
The components of lease costs were as follows (in thousands):
Year Ended
December 31,
2025
Operating lease costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$4,347
Short-term lease costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
592
Total lease costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$4,939
78

Average lease terms and discount rates for the Company’s operating leases were as follows:
As of
December 31,
2025
Weighted-average remaining term (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.6
Weighted-average discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.54%
Supplemental cash flow information for the Company’s operating leases were as follows (in thousands):
Year Ended
December 31, 2025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$5,476
Right-of-use assets obtained in exchange for new lease liabilities . . . . . . . . . . . . . . . . . . . . . . .
$
—
Corporate Headquarters Lease
On May 2, 2019, the Company entered into a sublease agreement (the ‘‘Sublease’’) with Marvell Semiconductor,
Inc. (‘‘Sublandlord’’) for its corporate headquarters and research and development space located at 2300 Orchard
Parkway, San Jose, California, 95131 (the ‘‘Premises’’). The term of the Sublease is approximately eight years and
began on December 1, 2019, the date the Company commenced business operations at the Premises. The Sublease
provides for monthly base rent of approximately $262,000 per month for the first year with annual increases thereafter.
The total base rent through the end of the term of the Sublease will total approximately $33.8 million. In addition to base
rent, the Company will also be responsible for operating and other facility expenses. The Company has accounted for
the lease under ASC 842 and has a right-of-use asset of $8.9 million recorded in other non-current assets and has lease
liabilities of $5.6 million and $3.4 million, recorded in accrued liabilities and other non-current liabilities, respectively,
in the consolidated balance sheets as of December 31, 2025. The Company had a right-of-use asset of $11.5 million
recorded in other non-current assets and has lease liabilities of $4.7 million and $7.2 million, recorded in accrued
liabilities and other non-current liabilities, respectively, in the consolidated balance sheets as of December 31, 2024.
7.
Other Balance Sheet Accounts Details
Accounts Receivable Allowance for Credit Losses
The following table presents the changes in the Company’s accounts receivable allowance for credit losses (in
thousands):
As of
December 31,
2025
As of
December 31,
2024
Allowance for credit losses, beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 465
$
405
Increase (decrease) in allowance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(232)
1,067
Write-offs, net of recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(167)
(1,007)
Allowance for credit losses, ending balance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
66
$
465
Inventory
Inventory consisted of the following (in thousands):
As of
December 31,
2025
As of
December 31,
2024
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10,457
$12,883
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,575
9,122
Total inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$18,032
$22,005
79

Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following (in thousands):
As of
December 31,
2025
As of
December 31,
2024
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 5,899
$ 4,245
Deferred contract acquisition costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,332
6,201
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,769
2,592
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$18,000
$13,038
Property and Equipment, Net
Property and equipment, net, consisted of the following (in thousands):
Useful Life
As of
December 31,
2025
As of
December 31,
2024
(in years)
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1 to 5
$ 46,637
$ 36,615
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1 to 6
7,023
5,705
Furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1 to 7
531
531
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease term
3,560
3,439
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29,307
22,651
Property and equipment, gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
87,058
68,941
Less: accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(36,837)
(29,799)
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 50,221
$ 39,142
Depreciation and amortization expense on property and equipment was $9.8 million, $6.0 million and $4.6 million
for the years ended December 31, 2025, 2024 and 2023, respectively.
Internally Developed Software to be Marketed and Sold
During the year ended December 31, 2025, no costs were capitalized associated with internally developed software
to be marketed and sold. During the years ended December 31, 2024 and 2023, capitalized costs totaled $0.0 million and
$0.5 million, respectively. During the years ended December 31, 2025 and 2024, amortization cost totaled $0.5 million
and $0.5 million, respectively. During the years ended December 31, 2025, 2024 and 2023, impairment cost totaled
$1.0 million, $0.9 million and $3.0 million, respectively.As of December 31, 2025, the unamortized capitalized balance
was $1.2 million.
Other Non-Current Assets
Other non-current assets consisted of the following (in thousands):
As of
December 31,
2025
As of
December 31,
2024
Right-of-use assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 8,858
$11,539
Deferred contract acquisition costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,693
4,814
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,005
1,667
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,580
4,694
Total other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$20,136
$22,714
80

Accrued Liabilities
Accrued liabilities consisted of the following (in thousands):
As of
December 31,
2025
As of
December 31,
2024
Accrued compensation and benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$23,067
$19,058
Accrued tax liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,247
2,687
Lease liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,562
4,744
Accrued interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,553
—
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,703
6,207
Total accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$41,132
$32,696
Other Non-Current Liabilities
Other non-current liabilities consisted of the following (in thousands):
As of
December 31,
2025
As of
December 31,
2024
Lease liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3,409
$7,194
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
439
295
Total other non-current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3,848
$7,489
8.
Long-Term Debt
2030 Convertible Senior Notes
In March 2025, the Company issued $225.0 million aggregate principal amount of 2.75% Convertible Senior
Notes due 2030 (the ‘‘2030 Notes’’). The Company received net proceeds from the offering of approximately
$217.7 million. The 2030 Notes will mature on April 1, 2030, unless earlier converted, redeemed or repurchased.
The 2030 Notes bear interest at the stated rate of 2.75% per annum, payable semi-annually in arrears onApril 1 and
October 1 of each year, beginning on October 1, 2025. The 2030 Notes are convertible into solely cash, or a combination
of cash and shares of common stock, at the Company’s election, at an initial conversion rate of 42.6257 shares of
common stock per $1,000 principal amount of 2030 Notes, which is equivalent to an initial conversion price of
$23.46003 per share of common stock. The conversion rate is subject to customary adjustments for certain events as
described in the indenture governing the 2030 Notes (the ‘‘2030 Notes Indenture’’). Special interest and additional
interest will accrue on the 2030 Notes in the circumstances and at the rates described in the 2030 Notes Indenture. The
debt issuance costs are amortized to interest expense applying the effective interest method. The 2030 Notes do not
contain financial maintenance covenants.
The holders may convert their 2030 Notes at their option only in the following circumstances: (1) during any fiscal
quarter commencing after the fiscal quarter ended on June 30, 2025, if the last reported sale price per share of the
Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days during the 30
consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;
(2) during five consecutive business days immediately after any ten consecutive trading day period (such ten
consecutive trading day period, the ‘‘measurement period’’) in which the trading price per $1,000 principal amount of
2030 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale
price per share of Company’s common stock on such trading day and the conversion rate on such trading day; (3) upon
the occurrence of certain corporate events or distributions on the Company’s common stock, as described in the 2030
Notes Indenture; (4) if the Company calls such 2030 Notes for redemption; and (5) at any time from, and including,
December 1, 2029 until the close of business on the 2nd scheduled trading day immediately before the maturity date.
If the Company undergoes a fundamental change (as defined in the 2030 Notes Indenture), subject to certain
conditions, holders may require the Company to repurchase for cash all or any portion of their 2030 Notes, at a
fundamental change repurchase price equal to 100% of the principal amount of the 2030 Notes to be repurchased, plus
any accrued and unpaid special interest and additional interest, if any, up to, but excluding, the fundamental change
81

repurchase date. In addition, following certain corporate events or if the Company issues a notice of redemption, it will,
under certain circumstances, increase the conversion rate for holders who elect to convert their 2030 Notes in
connection with such corporate event or during the relevant redemption period.
The 2030 Notes are redeemable, in whole or in part (subject to certain limitations), for cash at Company’s option
at any time, and from time to time, on or afterApril 5, 2028 and on or before the 60th scheduled trading day immediately
before the maturity date, but only if (i) the 2030 Notes are ‘‘freely tradable’’(as defined in the 2030 Notes Indenture) and
all accrued and unpaid additional interest, if any, has been paid in full; and (ii) the last reported sale price per share of
common stock is at least 130% of the conversion price for a specified period of time. The redemption price will be equal
to the principal amount of the 2030 Notes to be redeemed, plus accrued and unpaid special and additional interest, if any,
to, but excluding, the redemption date.
The 2030 Notes have customary provisions relating to the occurrence of ‘‘events of default’’(as defined in the 2030
Notes Indenture). The occurrence of such events of default may result in the acceleration of all amounts due under 2030
Notes. The 2030 Notes were not eligible for conversion as of December 31, 2025. No sinking fund is provided for the
2030 Notes.
The 2030 Notes are general unsecured obligations of the Company and rank senior in right of payment to all of
Company’s existing and future indebtedness that is expressly subordinated in the right of payment to the 2030 Notes;
equal in right of payment with all of the Company’s existing and future senior, unsecured indebtedness; effectively
subordinated to any of the Company’s existing and future secured indebtedness to the extent of the value of the collateral
securing such indebtedness; and structurally subordinated to all existing and future indebtedness and other liabilities,
including trade payables, and (to the extent the Company is not a holder thereof) preferred equity if any, of the
Company’s current or future subsidiaries.As of December 31, 2025, none of the conditions permitting the holders of the
2030 Notes to convert their notes early had been met. Therefore, the 2030 Notes are classified as long-term debt.
The Company accounted for the issuance of the 2030 Notes as a single liability measured at its amortized cost, as
no embedded features require bifurcation and recognition as derivatives.
The carrying value of the 2030 Notes, net of unamortized debt issuance costs of $6.2 million, was $218.8 million
as of December 31, 2025. Interest expense related to the amortization of debt issuance costs was $5.9 million for the
year ended December 31, 2025. The effective interest rate on the 2030 Notes is 3.43%.
9.
Commitments and Contingencies
Legal Proceedings
Litigation
From time to time, we may be party or subject to various legal proceedings and claims, either asserted or
unasserted, which arise in the ordinary course of business. Some of these proceedings involve claims that are subject to
substantial uncertainties and unascertainable damages. We make a provision for a liability when it is both probable that
a liability has been incurred and the amount of the loss can be reasonably estimated. Unless otherwise specifically
disclosed in this note, we have determined that no provision for liability nor disclosure is required related to any claim
against us because: (a) there is not a reasonable possibility that a loss exceeding amounts already recognized (if any)
may be incurred with respect to such claim; (b) a reasonably possible loss or range of loss cannot be estimated; or
(c) such estimate is immaterial.
Investigations
In January 2023, the Company identified a cybersecurity incident in its corporate IT infrastructure (not related to
any of the Company’s products or solutions used by its customers) (the ‘‘Cyber Incident’’). Upon detecting the incident,
the Company launched an investigation and engaged the services of cybersecurity experts and advisors, incident
response professionals and external counsel to support the investigation. While this incident did not have a material
impact on the Company, it did result in additional expense incurred in connection with the investigation.
Lease Commitments
The Company leases various operating spaces in the U.S., Asia and Europe under non-cancelable operating lease
arrangements that expire on various dates through July 2027. These arrangements require us to pay certain operating
expenses, such as taxes, repairs and insurance, and contain renewal and escalation clauses. The Company recognizes
rent expense under these arrangements on a straight-line basis over the term of the lease.
82

The Company has open purchase commitments with third-party contract manufacturers with facilities in Taiwan
to supply nearly all of our finished goods inventories, spare parts, and accessories. These purchase orders are expected
to be paid within one year of the issuance date. The Company had open purchase commitments with manufactures in
Taiwan totaling $23.6 million as of December 31, 2025.
The following table summarizes our non-cancelable operating leases as of December 31, 2025 (in thousands):
Years Ending December 31,
Operating
Leases
2026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$5,701
2027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,234
2028. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
220
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$9,155
Rent expense was $4.9 million for each of the years ended December 31, 2025, 2024 and 2023, respectively.
Guarantees and Indemnifications
In the normal course of business, we provide indemnifications to customers against claims of intellectual property
infringement made by third parties arising from the use of our products. Other guarantees or indemnification
arrangements include guarantees of product and service performance, and standby letters of credit for lease facilities
and corporate credit cards. We have not recorded a liability related to these indemnifications and guarantee provisions
and our guarantees and indemnification arrangements have not had any significant impact on our consolidated financial
statements to date.
10. Equity Incentive Plans, Stock-Based Compensation and Stock Repurchase Program
Equity Incentive Plans
2014 Equity Incentive Plan and 2023 Stock Incentive Plan
The 2014 Equity Incentive Plan (the ‘‘2014 Plan’’) was in effect until it was replaced by the 2023 Stock Incentive
Plan (the ‘‘2023 Plan’’) on April 1, 2023. Both the 2014 Plan and 2023 Plan provide for the granting of stock options,
restricted stock awards, restricted stock units (‘‘RSUs’’), market performance-based RSUs (‘‘PSUs’’), stock
appreciation rights, performance units and performance shares to our employees, consultants and members of our Board
of Directors. As of December 31, 2025, we had 2,464,605 shares available for future grant under the 2023 Plan.
Like the 2014 Plan, the shares authorized for the 2023 Plan increase annually on January 1 by the least of
(i) 8,000,000 shares, (ii) 5% of the outstanding shares of common stock on the last day of our immediately preceding
fiscal year, or (iii) such other amount as determined by our Board of Directors. Our Board of Directors determined the
current shares authorized under the 2023 Plan were sufficient for the time being and decided not to increase the number
of shares authorized on January 1, 2025.
To date, the Company has granted stock options, RSUs and PSUs. Stock options expire no more than 10 years from
the grant date and generally vest over four years. In the case of an incentive stock option granted to an employee, who
at the time of grant, owns stock representing more than 10% of the total combined voting power of all classes of stock,
the per share exercise price will be no less than 110% of the fair market value per share on the date of grant, and the
incentive stock option will expire no later than five years from the date of grant. For incentive stock options granted to
any other employees and nonstatutory stock options granted to employees, consultants, or members of our Board of
Directors, the per share exercise price will be no less than 100% of the fair market value per share on the date of grant.
RSUs and PSUs generally vest from one to four years.
2014 Employee Stock Purchase Plan
In October 2018, the Board of Directors approved amending the 2014 Employee Stock Purchase Plan (the
‘‘Amended 2014 Purchase Plan’’) in order to, among other things, reduce the maximum contribution participants can
make under the plan from 15% to 10% of eligible compensation. The Amended 2014 Purchased Plan also reflects
revised offering periods, which were changed from 24 months to six months in duration and that begin on or about
December 1 and June 1 each year, starting in December 2018. The Amended 2014 Purchase Plan permits eligible
employees to purchase shares of our common stock through payroll deductions with up to 10% of their pre-tax eligible
83

earnings subject to certain Internal Revenue Code (‘‘IRC’’) limitations. The purchase price of the shares is 85% of the
lower of the fair market value of our common stock on the first day of a six-month offering period or the relevant
purchase date. In addition, no participant may purchase more than 1,500 shares of common stock in each purchase
period.
Employees purchased 230,716 shares at an average price of $14.62 per share and with an aggregate intrinsic value
of $0.6 million during the year ended December 31, 2025. Employees purchased 281,107 shares at an average price of
$11.69 per share and with an aggregate intrinsic value of $1.2 million during the year ended December 31, 2024.
Employees purchased 274,937 shares at an average price of $12.88 per share and with an aggregate intrinsic value of
$1.2 million during the year ended December 31, 2023. The intrinsic value is calculated as the difference between the
market value on the date of purchase and the purchase price of the shares. As of December 31, 2025, we had 2,800,454
shares available for future issuance under the Amended 2014 Purchase Plan.
Stock-Based Compensation
A summary of our stock-based compensation expense is as follows (in thousands):
Years Ended December 31,
2025
2024
2023
Stock-based compensation by type of award:
Stock awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$19,012
$15,958
$12,999
Employee stock purchase rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,018
1,090
1,082
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$20,030
$17,048
$14,081
Stock-based compensation by category of expense:
Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 1,627
$ 2,022
$ 1,702
Sales and marketing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,435
3,946
3,722
Research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,672
4,199
3,232
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,296
6,881
5,425
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$20,030
$17,048
$14,081
As of December 31, 2025, the Company had $35.2 million of unrecognized stock-based compensation expense
related to unvested stock-based awards, including ESPP under the Amended 2014 Purchase Plan, which will be
recognized over a weighted-average period of 2.2 years.
Fair Value Determination
The fair values of employee stock purchase rights were estimated as of the grant date using the Black-Scholes
option-pricing model with the following assumptions:
Years Ended December 31,
2025
2024
2023
Expected term (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.5
0.5
0.5
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.0%
5.0%
5.3%
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35%
32%
42%
Dividend rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.39%
1.50%
1.80%
•
Expected Term. We estimate the expected life of options based on an analysis of our historical experience of
employee exercise and post-vesting termination behavior considered in relation to the contractual life of the
option. The expected term for the employee stock purchase rights is based on the term of the purchase period.
•
Risk-Free Interest Rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the
time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the expected terms
of stock options and the employee stock purchase rights.
•
Expected Volatility. For stock options, due to the limited trading history of our own common stock, we
determined the share price volatility factor based on a combination of the historical volatility of our own
common stock and the historical volatility of our peer group for the stock options. For employee stock
purchase rights, we used the historical volatility of our own common stock.
84

•
Dividend Rate. In December 2021, the Company paid its first quarterly cash dividend in the amount of $0.05
per share of common stock outstanding and increased the amount to $0.06 per share in the three months ended
December 31, 2022. For the years ended December 31, 2025, 2024 and 2023, the expected dividend rate
assumes cash dividends will total $0.24, $0.24 and $0.24 per common share outstanding annually,
respectively.
Stock-based compensation expense related to shares not purchased due to terminations, or forfeitures, is reversed
on the date of forfeiture.
Stock Options
No stock options were granted in years ended December 31, 2025, 2024 and 2023.
The intrinsic value of options exercised is as follows (in thousands):
Years Ended December 31,
2025
2024
2023
Intrinsic value of options exercised(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$—
$822
$1,440
(1)
Intrinsic value of options exercised is the difference between the closing price of our common stock at the time of exercise and the exercise price
paid.
Stock Awards
The Company has granted Restricted Stock Units (‘‘RSUs’’) to its employees, consultants and members of its
Board of Directors, and Performance Stock Units (‘‘PSUs’’) to certain executives and employees. RSUs have
service-based vesting conditions and PSUs have market performance-based vesting conditions as well as service-based
vesting conditions. As of December 31, 2025, there were 2,468,406 RSUs outstanding that were unvested and 618,452
PSUs outstanding that had not yet achieved their market-performance vesting conditions.
Our RSUs typically vest over a three or four year service term. We granted 1,135,099, 1,424,261 and 1,315,210
RSUs in 2025, 2024 and 2023, respectively. The fair value of RSUs is determined to be the fair value of our common
stock on the grant date as quoted on the New York Stock Exchange.
Our PSUs typically have a four year term. Market performance-based conditions are satisfied upon the
achievement of specified 100-day volume weighted average stock price targets for the Company’s common stock. We
granted 279,869, 363,445 and 326,630 PSUs in 2025, 2024 and 2023, respectively. The fair value of our PSUs is
determined using a Monte Carlo valuation model which incorporates various assumptions including expected stock
price volatility, expected term, expected dividend yield and risk-free interest rates. We estimate the volatility of
common stock on the date of grant based on historical volatility of our common stock price. We estimate the expected
term based on various exercise scenarios. We estimate the expected dividend yield based on the current annual dividend
payment per share divided by our grant date common stock price The risk-free interest rate is based on U.S. Treasury
yields in effect at the time of grant.
The following table summarizes our restricted stock unit activities and related information:
Service-Based Restricted Stock Units (RSUs)
Number of
Shares
(thousands)
Weighted-
Average Grant
Date Fair
Value Per
Share
Weighted-
Average
Remaining
Vesting Term
(years)
Nonvested as of December 31, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,496
$14.26
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,135
18.86
Released . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(888)
14.31
Canceled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(275)
15.38
Nonvested as of December 31, 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,468
$16.23
1.31
85

The following table summarizes our market performance-based restricted stock unit activities and related
information:
Market Performance-Based Restricted Stock Units (PSUs)
Number of
Shares
(thousands)
Weighted-
Average Grant
Date Fair
Value Per
Share
Weighted-
Average
Remaining
Vesting Term
(years)
Nonvested as of December 31, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
746
$11.63
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
280
17.86
Released . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(357)
11.76
Canceled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(51)
13.51
Nonvested as of December 31, 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
618
$14.22
2.06
The fair values of market performance-based restricted stock units were estimated as of the grant date using a
Monte Carlo valuation model with the following assumptions:
Years Ended December 31,
2025
2024
2023
Expected term (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.0
4.0
4.0
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.2%
4.0%
4.3%
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44.75%
52.01%
50.20%
Dividend rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.17%
1.77%
1.63%
Following is additional information pertaining to our stock award activities for both RSUs and PSUs (in thousands,
except per share data):
Years Ended December 31,
2025
2024
2023
Weighted-average grant date fair value of stock awards granted (per share) . . . . . . .
$ 18.66
$ 13.57
$ 14.04
Total fair value of stock awards released (vested) during the period. . . . . . . . . . . . . .
$16,906
$14,044
$13,535
Repurchase Agreements
In November 2024, the Company entered into a Common Stock Repurchase Agreement with entities affiliated
with Summit Partners whereby the Company purchased 330 thousand shares of common stock for $15.73 per share, or
an aggregate purchase price of $5.2 million. The Company’s common shares repurchased are held in treasury and
accounted for under the cost method.
Stock Repurchase Programs
On November 7, 2023, the Company announced its Board of Directors had authorized a stock repurchase program
under which the Company may repurchase up to $50 million of its outstanding common stock over a period of twelve
months. On November 7, 2024, the Company announced its Board of Directors had authorized a new, non-expiring
stock repurchase program under which the Company may repurchase up to $50 million of its outstanding common
stock. On May 1, 2025, the Company announced its Board of Directors had authorized a new, non-expiring stock
repurchase program under which the Company may repurchase up to $75 million of its outstanding common stock. As
of December 31, 2025, the Company had $53.4 million available to repurchase shares under this program. Under all of
the Company’s stock repurchase programs, repurchased shares are held in treasury at cost. The Company’s stock
repurchase programs do not obligate it to acquire any specific number of shares. Shares may be repurchased in privately
negotiated and/or open market transactions and by withholding shares in connection with vesting equity awards held by
certain employees, including under plans complying with Rule 10b5-1 under the Exchange Act.
To date, all repurchases under the Company’s stock repurchase programs have occurred in the open market, in
negotiated transactions and from withholding shares in connection with vesting equity awards held by certain employees.
During the year ended December 31, 2025, the Company repurchased 3.7 million shares for a total cost of $68.9 million.
During the year ended December 31, 2024, the Company repurchased 2.2 million shares for a total cost of $30.1 million.
During the year ended December 31, 2023, the Company repurchased 1.3 million shares for a total cost of $16.0 million.
86

11.
Net Income Per Share
Basic net income per share is computed using the weighted average number of common shares outstanding for the
period. Diluted net income per share is computed using the weighted average number of common shares outstanding for
the period plus potential dilutive common shares, including stock options, RSUs, PSUs and employee stock purchase
rights, unless the potential common shares are anti-dilutive.
The following table presents common shares related to potentially dilutive shares excluded from the calculation of
diluted net income per share as their effect would have been anti-dilutive (in thousands):
Years Ended December 31,
2025
2024
2023
Stock options, stock awards and employee stock purchase rights . . . . . . . . . . . . . . . .
30
23
93
2030 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,591
—
—
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,621
23
93
12. Income Taxes
The geographical breakdown of income before income taxes is as follows (in thousands):
Years Ended December 31,
2025
2024
2023
Domestic income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$49,064
$56,707
$41,105
Foreign income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,358
1,392
2,690
Income before income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$52,422
$58,099
$43,795
The provision for income taxes consisted of the following (in thousands):
Years Ended December 31,
2025
2024
2023
Current provision for income taxes:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 4,096
$3,894
$
329
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,416
1,809
2,016
Foreign. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,052
1,959
1,228
Total current. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,564
7,662
3,573
Deferred tax expense (benefit): . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 3,114
$ 975
$ 1,374
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,512)
(556)
(1,265)
Foreign. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
119
(122)
143
Total deferred. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,721
297
252
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$10,285
$7,959
$ 3,825
The reconciliation of the statutory federal income taxes and the provision for income taxes for the year ended
December 31, 2025 in accordance with the guidance in ASU 2023-09 is as follows (in thousands, except percentages):
Year ended December 31, 2025
Amount
Percentage
Tax at statutory rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$11,009
21.0%
State and local income taxes - net of federal income tax effect(1) . . . . . . . . . . . . . . . . . .
904
1.7
Foreign tax effects:
Withholding tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,420
2.7
Foreign rate differential. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
128
0.2
87

Year ended December 31, 2025
Amount
Percentage
Effect of cross-border tax laws:
Foreign-derived intangible income deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3,577)
(6.8)
Subpart F income and section 78 gross up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
99
0.2
Tax credits:
R&D tax credits, net of uncertain positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
559
1.1
Foreign tax credits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,540)
(2.9)
Nontaxable or non deductible items:
Stock-based compensation including 162(m) limitation . . . . . . . . . . . . . . . . . . . . . . .
1,588
3.0
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
—
Changes in unrecognized tax benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(307)
(0.6)
$10,285
19.6%
(1)
State taxes in Illinois made up the majority (greater than 50%) of the tax effect in this category.
The reconciliation of the statutory federal income taxes and the provision for income taxes for the years ended
December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09 is as follows (in
thousands, except percentages):
Years Ended December 31,
2024
2023
Amount
Percentage
Amount
Percentage
Tax at statutory rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$12,201
21.0%
$ 9,197
21.0%
State tax - net of federal benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
763
1.3%
751
1.7%
Foreign rate differential. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,606
2.8%
954
2.2%
Changes in federal valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . .
—
— %
210
0.5%
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
108
0.2%
(1,083)
(2.5)%
Non-deductible meals and entertainment expenses . . . . . . . . . . . . . . . . .
289
0.5%
398
0.9%
Other permanent items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
— %
5
— %
Federal tax credits - net of uncertain tax positions . . . . . . . . . . . . . . . . . .
(3,959)
(6.8)%
(4,047)
(9.2)%
Return to provision true-up. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(162)
(0.3)%
(8)
— %
Foreign-derived intangible income deduction . . . . . . . . . . . . . . . . . . . . .
(3,699)
(6.4)%
(3,585)
(8.2)%
162(m) limitation on officers compensation. . . . . . . . . . . . . . . . . . . . . . .
873
1.5%
1,221
2.8%
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(61)
(0.1)%
(188)
(0.4)%
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 7,959
13.7%
$ 3,825
8.7%
Cash paid for income taxes (net of refunds) consisted of the following (in thousands):
Year Ended
December 31,
2025
U.S. Federal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3,621
U.S. State and local. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,087
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,069
Cash paid for income taxes (net of refunds) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$6,777
Individual jurisdictions equaling 5% or more of the total income taxes paid (net of refunds) for the year ended
December 31, 2025 include U.S. Federal for $3.6 million, Illinois for $1.3 million, Japan for $0.5 million and India for
$0.3 million.
88

Deferred tax balances are comprised of the following (in thousands):
As of
December 31,
2025
As of
December 31,
2024
Deferred tax assets:
Net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
3,395
$
3,561
Research and development credits, net of uncertain tax positions. . . . . . . . . . . . . .
19,350
29,217
Accruals, reserves and other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24,613
19,086
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,108
2,040
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,760)
(1,293)
Operating lease liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,704
2,728
Capitalized research and development expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .
37,771
30,985
Gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
87,181
86,324
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(19,773)
(18,569)
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
67,408
67,755
Deferred tax liabilities:
Deferred contract acquisition costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3,300)
(2,560)
Operating lease right-of-use asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,642)
(2,610)
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(357)
(221)
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5,299)
(5,391)
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 62,109
$ 62,364
Recognition of deferred tax assets is appropriate when realization of these assets is more likely than not. Primarily
based upon a strong earnings history, expectation of future taxable income, with the exception of certain state tax
attributes, we believe that a significant amount of the deferred tax assets would be realized on a more likely than not
basis. Therefore, we released the valuation allowance on our U.S. deferred tax assets except for state credits in 2021. For
the years ended December 31, 2025 and 2024, the valuation allowance increased by $1.2 million and $1.0 million,
respectively.
Companies subject to the Global Intangible Low-Taxed Income provision (‘‘GILTI’’) have the option to account
for the GILTI tax as a period cost if and when incurred, or to recognize deferred taxes for outside basis temporary
differences expected to reverse as GILTI. We have elected to account for GILTI as a period cost.
As of December 31, 2025 and 2024, we had no U.S. federal NOL carryforward balance.As of December 31, 2025
and 2024, we had state NOL carryforwards of $48.1 million and $51.0 million, respectively. The state NOL
carryforwards expire in various years beginning in 2025, if not utilized.
Additionally, as of December 31, 2025 and 2024, we had U.S. federal research and development credit
carryforwards of $2.2 million and $14.8 million, respectively, and state research and development credit carryforwards
of $28.5 million and $27.1 million, respectively. The federal credit carryforwards will begin to expire at various dates
beginning in 2031 while the state credit carryforwards can be carried over indefinitely.
Utilization of the NOL and credit carryforwards may be subject to an annual limitation provided for in IRC
Sections 382 and 383 and similar state codes. Any annual limitation could result in the expiration of NOL and credit
carryforwards before utilization. The Company believes NOL’s will not expire unused as a result of any Section 382
annual limitations.
Additionally, as of December 31, 2025 and 2024, we had no U.S. foreign tax credit carryforwards.
With respect to our undistributed foreign subsidiaries’ earnings, we consider those earnings to be indefinitely
reinvested and, accordingly, no related provision for U.S. federal and state income taxes has been provided. Our
intention has not changed subsequent to the one-time transition tax under the Tax Cuts and Jobs Act of 2017 (the ‘‘Tax
Act’’). Upon distribution of those earnings in the form of dividends or otherwise, we may be subject to both U.S. income
taxes subject to an adjustment for foreign tax credits and withholding taxes in the various countries.As of December 31,
2025 and 2024, the undistributed earnings approximated $21.3 million and $18.6 million, respectively. Our
undistributed earnings through December 31, 2017, have been taxed under the one-time transition tax under theTaxAct.
89

The Tax Cuts and Jobs Act of 2017 (‘‘TCJA’’) amended Section 174 to require research and experimental
(‘‘R&E’’) expenses incurred in tax years beginning on or after January 1, 2022, to be capitalized and amortized over five
years (fifteen years for expenditures attributable to R&E activity performed outside the U.S.) using a half-year
convention. Prior to the amendment, Section 174 expenses were allowed to be expensed in the year incurred. In 2025,
the Company is capitalizing $48.7 million of US R&E expenses (amortizable over 10 years) and $15.4 million of R&E
expenses performed outside the US (amortizable over 15 years) which results in unfavorable book/tax differences as a
temporary adjustment. Since the Section 174 impact is a temporary difference, no material impact to tax expense is
expected.
Uncertain Tax Positions
As of December 31, 2025, 2024 and 2023, we had gross unrecognized tax benefits of $8.2 million, $8.1 million and
$7.6 million, respectively. Accrued interest expense related to unrecognized tax benefits is recognized as part of our
income tax provision in our consolidated statements of operations and was immaterial for the years ended December 31,
2025, 2024 and 2023. Our policy for classifying interest and penalties associated with unrecognized income tax benefits
is to exclude such items in income tax expense.
The activity related to the unrecognized tax benefits is as follows (in thousands):
Years Ended December 31,
2025
2024
2023
Gross unrecognized tax benefits—beginning balance . . . . . . . . . . . . . . . . . . . . . . . . .
$8,075
$7,575
$7,077
Increases (decreases) related to tax positions from prior years . . . . . . . . . . . . . . . .
(225)
—
27
Increases related to tax positions taken during current year . . . . . . . . . . . . . . . . . .
447
576
580
Releases / statute lapses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(80)
(76)
(109)
Gross unrecognized tax benefits—ending balance . . . . . . . . . . . . . . . . . . . . . . . . . . .
$8,217
$8,075
$7,575
These amounts are related to certain deferred tax assets with a corresponding valuation allowance. As of
December 31, 2025, the total amount of unrecognized tax benefits, if recognized, that would affect the effective tax rate
is $4.0 million.
The Company is subject to taxation in the U.S., various states, and several foreign jurisdictions. Because the
Company has NOL and credit carryforwards, there are open statutes of limitations in which federal, state and foreign
taxing authorities may examine our tax returns for all years from 2005 through the current period. The Company is not
currently under examination by any taxing authorities.
13. Segment and Geographic Information
ASC 280 Segment Reporting, establishes standards for reporting information about operating segments. Operating
segments are defined as components of an enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker (‘‘CODM’’) to assess performance and to decide how to
allocate resources. The Company manages its business on the basis of one reportable segment and unit and derives
revenues from two sources: products revenue and services revenue. See Note 1 Description of Business and Summary
of Significant Accounting Policies for additional information.
The Company’s CODM is our Chief Executive Officer, Dhrupad Trivedi. Our CODM assesses the performance of
the Company and decides how to allocate resources based upon consolidated net income, which is also reported within
the consolidated statements of operations. The CODM uses consolidated net income to monitor period-over-period
results, to assess financial performance and decide where to allocate additional resources within the business. The
CODM does not regularly review significant classifications of expenses outside those shown on the consolidated
statements of operations.
90

The following table depicts the disaggregation of revenue by geographic region based on the ship to location of our
customers and is consistent with how we evaluate our financial performance (in thousands):
Years Ended December 31,
2025
2024
2023
Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$175,181
$134,356
$132,745
United States. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
160,528
117,707
113,766
Americas-other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,653
16,649
18,979
APJ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
70,524
87,175
77,606
EMEA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44,852
40,165
41,349
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$290,557
$261,696
$251,700
The Americas region comprises the U.S. and all other countries in the Americas (excluding the U.S.). The APJ
region comprises all countries in theAsia Pacific region including Japan. The EMEAregion comprises Europe, Middle
East and Africa.
The following table is a summary of our long-lived assets which include property and equipment, net and
right-of-use assets based on the physical location of the assets (in thousands):
As of December 31,
2025
As of December 31,
2024
Americas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$54,798
$48,468
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,852
363
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,429
1,850
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$59,079
$50,681
14. Employee Benefit Plan
The Company has a profit sharing plan that qualifies under IRC Section 401(k), which is offered to all of its
U.S. employees. Participants in the plan may elect to contribute up to $23,500 of their annual compensation to the plan
for the 2025 calendar year and $24,500 for the 2026 calendar year. Individuals who are 50 or older may contribute an
additional $7,500 of their annual income for the 2025 calendar year and $8,000 for the 2026 calendar year. The
Company typically matches 50% of the first 6% of the employee’s eligible compensation for a maximum employer
contribution of $2,500 per participant per year. The Company’s matching contributions totaled $1.2 million,
$1.1 million and $1.2 million during the years ended December 31, 2025, 2024 and 2023, respectively.
15. Subsequent Event
On February 4, 2026, the Company announced its Board of Directors declared a quarterly dividend. The dividend,
in the amount of $0.06 per share of common stock outstanding, will be paid on March 2, 2026, to stockholders of record
on February 16, 2026. Future dividends will be subject to further review and approval by the Board of Directors in
accordance with applicable law. The Board of Directors reserves the right to adjust or withdraw the quarterly dividend
in future periods as it reviews the Company’s capital allocation strategy from time to time.
91

Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A.
Controls and Procedures
Management’s Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated
the effectiveness of our disclosure controls and procedures as of December 31, 2025, as required by Rule 13a-15(b)
under the Securities Exchange Act of 1934, or the Exchange Act. The term ‘‘disclosure controls and procedures,’’ as
defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company
that are designed to ensure that information required to be disclosed by the company in the reports that it files or submits
to the SEC, under the ExchangeAct is recorded, processed, summarized and reported, within the time periods specified
in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by a company in the reports that it files or submits under
the Exchange Act is accumulated and communicated to the company’s management, including its principal executive
and financial officers, as appropriate to enable timely decisions regarding required disclosure.
In designing and evaluating our disclosure controls and procedures, our management recognizes that any
disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance
of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the
fact that there are resource constraints and that our management is required to apply its judgment in evaluating the
benefits of possible controls and procedures relative to their costs.
Our Chief Executive Officer and Chief Financial Officer, as our principal executive officer and principal financial
officer, respectively, concluded that our disclosure controls and procedures were effective at the reasonable assurance
level as of December 31, 2025, and that the consolidated financial statements included in this Annual Report on
Form 10-K present fairly, in all material respects and in conformity with U.S. GAAP, our financial position, results of
operations and cash flows for the periods presented.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting
(as defined in Rules 13a-15(f) and 15d-15(f) under the ExchangeAct). Internal control over financial reporting consists
of policies and procedures that:
•
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the Company;
•
Are designed and operated to provide reasonable assurance regarding the reliability of our financial reporting
and our process for the preparation of consolidated financial statements for external purposes in accordance
with generally accepted accounting principles and that receipts and expenditures of the Company are being
made only in accordance with authorizations of management and directors of the Company; and
•
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the Company’s assets that could have a material effect on the consolidated financial statements.
Our internal control over financial reporting is designed by, and under the supervision of our principal executive
officer and principal financial officer and effected by our Board of Directors, management, and others. Because of its
inherent limitations, internal control over financial reporting may not prevent or detect misstatements.Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with internal control policies or procedures may deteriorate.
Management has assessed the effectiveness of our internal control over financial reporting as of December 31,
2025, using the criteria set forth in the Internal Control - Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (‘‘COSO’’). Based on the assessment, our management has
concluded that our internal control over financial reporting was effective as of December 31, 2025 to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements in
accordance with GAAP.
92

The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by
Grant Thornton LLP, an independent registered public accounting firm, as stated in its report, which is included in this
Annual Report on Form 10-K.
Changes to Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the fourth quarter of
2025, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15
and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the
Company’s internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Our management, including our principal executive officer and our principal financial officer, does not expect that
our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud.
Acontrol system, no matter how well-designed and operated, can provide only reasonable, not absolute, assurance that
the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource
constraints and the benefits of controls must be considered relative to their costs. Further, because of the inherent
limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to
error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. The design of
any system of controls is based in part on certain assumptions about the likelihood of future events and there can be no
assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of
any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become
inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
Item 9B.
Other Information
Insider Adoption, Modification or Termination of Trading Arrangements
During the three months ended December 31, 2025, none of our directors or executive officers adopted, modified
or terminated a ‘‘Rule 10b5-1 trading arrangement’’ or a ‘‘non-Rule 10b5-1 trading arrangement’’ as such terms are
defined under Item 408 of Regulation S-K.
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
93

PART III
Item 10.
Directors, Executive Officers and Corporate Governance
The information required by this item is incorporated by reference from the information under the captions
‘‘Board of Directors and Corporate Governance—Nominees for Director,’’ ‘‘Board of Directors and Corporate
Governance—Board Meetings and Committees,’’ and ‘‘Executive Officers’’ contained in our proxy statement to be
filed with the SEC in connection with the solicitation of proxies for our 2026Annual Meeting of Stockholders pursuant
to Regulation 14A (the ‘‘Proxy Statement’’).
Item 405 of Regulation S-K calls for disclosure of any known late filing or failure by an insider to file a report
required by Section 16(a) of the Exchange Act. To the extent disclosure for delinquent reports is being made, it can be
found under the caption ‘‘Delinquent Section 16(a) Reports’’ in the Proxy Statement and is incorporated herein by
reference.
We have adopted a Code of Business Conduct and Ethics applicable to our employees including our Chief
Executive Officer, Chief Financial Officer, and other executive and senior financial officers. The full text of our
Corporate Governance Guidelines and our Code of Business Conduct and Ethics is available free of charge, on our
website’s investor relations page at https://investors.A10networks.com within the ‘‘Governance - Governance
Documents’’ section. We will post amendments or waivers relating to our Code of Business Conduct and Ethics for
directors and executive officers on the same website referenced in this paragraph.
With respect to Item 408(b) of Regulation S-K, the Company has an insider trading policy governing the purchase,
sale and other dispositions of the Company’s securities that applies to the Company and its personnel, including
officers, directors, employees and agents, and other covered persons (the ‘‘Insider Trading Policy’’). The Company
believes that the Insider Trading Policy is reasonably designed to promote compliance with insider trading laws, rules
and regulations, and listing standards applicable to the Company. A copy of the Insider Trading Policy is filed as
Exhibit 19.1 to this Annual Report on Form 10-K.
Item 11.
Executive Compensation
The information required by this item is incorporated by reference from the information under the captions
‘‘Board of Directors and Corporate Governance—Compensation Committee Interlocks and Insider Participation,’’
‘‘Board of Directors and Corporate Governance—Director Compensation,’’and ‘‘Executive Compensation’’contained
in the Proxy Statement.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
The information required by this item with respect to security ownership of certain beneficial owners and
management is incorporated by reference from the information under the captions ‘‘Executive Compensation—Equity
Compensation Plan Information’’and ‘‘Security Ownership of Certain Beneficial Owners and Management’’contained
in the Proxy Statement.
Item 13.
Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated by reference from the information under the captions
‘‘Board of Directors and Corporate Governance—Director Independence’’ and ‘‘Related Person Transactions’’
contained in the Proxy Statement.
Item 14.
Principal Accounting Fees and Services
The information required by this item is incorporated by reference from the information under the caption
‘‘Ratification of Appointment of Independent Registered Public Accounting Firm’’ contained in the Proxy Statement.
94

PART IV
Item 15.
Exhibits, Financial Statement Schedules
(a)
The following documents are filed as part of this Annual Report on Form 10-K:
1.
Consolidated Financial Statements
Our consolidated financial statements are listed in the Index to Consolidated Financial Statements in Part II,
Item 8 of this Annual Report on Form 10-K.
2.
Consolidated Financial Statement Schedules
All other schedules have been omitted as they are not required, not applicable, or the required information is
otherwise included.
3.
Exhibits
The following exhibits are filed with or incorporated by reference in this report, in each case as indicated
therein (numbered in accordance with Item 601 of Regulation S-K).
95

EXHIBIT INDEX
Exhibit
Number
Description
Incorporated by Reference
Filed
Herewith
Form
SEC File No.
Exhibit
Number
Filing Date
3.1
Amended and Restated Certificate of Incorporation of
the Registrant
8-K
001-36343
3.1
December 6, 2019
3.2
Amended and Restated Bylaws of the Registrant
8-K
001-36343
3.2
December 6, 2019
4.1
Form of common stock certificate of the Registrant
S-1/A
333-194015
4.1
March 10, 2014
4.2
Amended and Restated Investors’ Rights Agreement
among the Registrant and certain holders of its capital
stock, amended as of October 4, 2013
S-1/A
333-194015
4.2
March 10, 2014
4.3
Description of the Registrant’s securities
10-K
001-36343
4.3
March 10, 2020
4.4
Indenture, dated as of March 17, 2025, between the
Registrant and U.S. Bank Trust Company, National
Association, as trustee (including form of certificate
representing the notes)
8-K/A
001-36343
4.1
March 20, 2025
10.1*
Form of Indemnification Agreement between the
Registrant and each of its directors and executive
officers
S-1/A
333-194015
10.1
March 10, 2014
10.2*
Amended and Restated 2014 Equity Incentive Plan
10-Q
001-36343
10.1
August 6, 2015
10.3*
2014 Employee Stock Purchase Plan, as amended
S-8
333-287082
99.1
May 8, 2025
10.4*
Form of Stock Option Agreement pursuant to the
Amended and Restated 2014 Equity Incentive Plan
10-Q
001-36343
10.4
August 4, 2014
10.5*
Form of Restricted Stock Unit Agreement pursuant to
the Amended and Restated 2014 Equity Incentive Plan
10-Q
001-36343
10.5
August 4, 2014
10.6*
Offer Letter, dated November 12, 2019, by and between
the Registrant and Dhrupad Trivedi
8-K
001-36343
10.2
November 21, 2019
10.7*
Form of CEO Change in Control and Severance
Agreement
8-K
001-36343
10.3
November 21, 2019
10.8
Reseller Agreement, dated April 2, 2009, by and
between the Registrant and NEC Corporation
S-1
333-194015
10.12
February 18, 2014
10.9
First Amendment to Reseller Agreement, dated May 19,
2011, by and between the Registrant and NEC
Corporation
S-1
333-194015
10.13
February 18, 2014
10.10
Second Amendment to Reseller Agreement, dated
April 1, 2011, by and between the Registrant and NEC
Corporation
S-1
333-194015
10.14
February 18, 2014
10.11
Third Amendment to Reseller Agreement, dated April 1,
2011, by and between the Registrant and NEC
Corporation
S-1
333-194015
10.15
February 18, 2014
10.12
Fourth Amendment to Reseller Agreement, dated
October 3, 2011, by and between the Registrant and
NEC Corporation
S-1
333-194015
10.16
February 18, 2014
10.13
Fifth Amendment to Reseller Agreement, dated April 2,
2012, by and between the Registrant and NEC
Corporation
S-1
333-194015
10.17
February 18, 2014
10.14
Sixth Amendment to Reseller Agreement, dated
November 29, 2012, by and between the Registrant and
NEC Corporation
S-1
333-194015
10.18
February 18, 2014
10.15
Seventh Amendment to Reseller Agreement, dated
April 9, 2013, by and between the Registrant and NEC
Corporation
S-1
333-194015
10.19
February 18, 2014
96

Exhibit
Number
Description
Incorporated by Reference
Filed
Herewith
Form
SEC File No.
Exhibit
Number
Filing Date
10.16
Eighth Amendment to Reseller Agreement, dated
October 22, 2013, by and between the Registrant and
NEC Corporation
S-1
333-194015
10.20
February 18, 2014
10.17
Ninth Amendment to Reseller Agreement, executed on
April 22, 2014, by and between the Registrant and NEC
Corporation
10-Q
001-36343
10.1
August 4, 2014
10.18
Manufacturing Services Agreement, dated December 8,
2006, by and between the Registrant and Lanner
Electronics (USA)
S-1
333-194015
10.21
February 18, 2014
10.19
Amendment No. 1 to Manufacturing Services
Agreement, dated June 27, 2013, by and between the
Registrant and Lanner Electronics (USA)
S-1
333-194015
10.22
February 18, 2014
10.20
Contract Manufacturer Agreement, dated July 1, 2008,
by and between the Registrant and AEWIN
Technologies, Inc.
S-1
333-194015
10.23
February 18, 2014
10.21
Amendment No. 1 to Contract Manufacturer
Agreement, dated June 30, 2014, by and between the
Registrant and AEWIN Technologies, Inc.
10-K
001-36343
10.31
March 11, 2015
10.22*
Form of Change in Control and Severance Agreement
S-1/A
333-194015
10.25
March 10, 2014
10.23*
Executive Incentive Compensation Plan
10-K
001-6343
10.32
March 1, 2016
10.24
Sublease Agreement, dated May 2, 2019, by and
between Marvell Corporation and the Registrant
10-Q
001-36343
10.1
May 8, 2019
10.25*
2023 Stock Incentive Plan
S-8
333-272010
4.1
May 17, 2023
10.26*
Form of Stock Option Agreement pursuant to the 2023
Stock Incentive Plan
10-Q
001-36343
10.2
May 3, 2024
10.27*
Form of Restricted Stock Unit Agreement pursuant to
the 2023 Stock Incentive Plan
10-Q
001-36343
10.3
May 3, 2024
10.28*
Form of Restricted Stock Agreement pursuant to the
2023 Stock Incentive Plan
10-Q
001-36343
10.4
May 3, 2024
10.29*
Form of Performance-Based Restricted Stock Unit
Agreement pursuant to the 2023 Stock Incentive Plan
10-Q
001-36343
10.1
August 5, 2025
19.1
Insider Trading Policy
10-K
001-36343
19.1
February 25, 2025
21.1
List of subsidiaries of the Registrant
X
23.1
Consent of Grant Thornton LLP, independent registered
public accounting firm
X
31.1
Certification of Chief Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act
X
31.2
Certification of Chief Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act
X
32.1 **
Certification of Chief Executive Officer pursuant to
Section 906 of the Sarbanes-Oxley Act
X
32.2 **
Certification of Chief Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act
X
97
A10 Networks, Inc. Policy for the Recovery of
Erroneously Awarded Compensation
10-K
001-36343
97
February 29, 2024
101.INS
XBRL Instance Document.
X
101.SCH
XBRL Taxonomy Extension Schema Document.
X
97

Exhibit
Number
Description
Incorporated by Reference
Filed
Herewith
Form
SEC File No.
Exhibit
Number
Filing Date
101.CAL
XBRL Taxonomy Extension Calculation Linkbase
Document.
X
101.DEF
XBRL Taxonomy Extension Definition Linkbase
Document.
X
101.LAB
XBRL Taxonomy Extension Label Linkbase Document.
X
101.PRE
XBRL Taxonomy Extension Presentation Linkbase
Document.
X
104
Cover Page Interactive Data File (formatted as inline
XBRL and contained in Exhibit 101)
X
*
Indicates a management contract or compensatory plan.
**
The certifications attached as Exhibit 32.1 and 32.2 that accompany thisAnnual Report on Form 10-K are not deemed filed with the Securities
and Exchange Commission and are not to be incorporated by reference into any filing of A10 Networks, Inc. under the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K,
irrespective of any general incorporation language contained in such filing.
Item 16.
Form 10-K Summary
None.
98

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly authorized.
A10 NETWORKS, INC.
Date: February 25, 2026
By:
/s/ Dhrupad Trivedi
Dhrupad Trivedi
Chief Executive Officer and President
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this annual report on Form 10-K has been
signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.
Signature
Title
Date
/s/ Dhrupad Trivedi
Chief Executive Officer, President and Chairman of the Board
(Principal Executive Officer)
February 25, 2026
Dhrupad Trivedi
/s/ Michelle Caron
Chief Financial Officer
(Principal Financial and Accounting Officer)
February 25, 2026
Michelle Caron
/s/ Tor R. Braham
Director
February 25, 2026
Tor R. Braham
/s/ Peter Y. Chung
Director
February 25, 2026
Peter Y. Chung
/s/ Eric Singer
Director
February 25, 2026
Eric Singer
/s/ Dana Wolf
Director
February 25, 2026
Dana Wolf
99

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Additional Corporate Information
Investor Relations
2300 Orchard Pkwy. 
San Jose, CA 95131
investors@A10networks.com
investors.A10networks.com
Transfer Agent and Registrar
Computershare Trust Company
N.A. 250 Royall Street
Canton, MA 02021 
Phone: (800) 962-4284
Management Team
Board of Directors
Dhrupad Trivedi
President, 
Chief Executive Officer 
and Chairperson
Scott Weber 
General Counsel
Mikko Disini
Vice President of 
Product Line Management
Andrew Kim
Vice President of 
Worldwide
Human Resources
Eric Kwok 
Vice President of 
Worldwide Support 
and Services
David Schroeder
Vice President of
Corporate Development
Bret Sloan
Head of 
Global Operations
Sean Pike
Head of 
Information Security
Aris Wong
Vice President of
Worldwide Engineering
Dana Wolf
Director 
Tor R. Braham
Director
Peter Y. Chung
Director
Eric Singer
Lead Independent
Director
Dhrupad Trivedi
President, Chief Executive Officer 
and Chairperson
Michelle Caron
Chief Financial Officer
Sheen Khoury
Executive Vice President, 
Worldwide Sales & Marketing
ANNUAL REPORT   |   2025

A10Networks.com