A10 Networks, Inc. (NYSE:ATEN) Q4 2022 Earnings Call Transcript

Dhrupad Trivedi: Thank you, Stefan.

Operator: Thank you. Our next question comes from Tyler Burmeister with Craig-Hallum Capital. You may proceed.

Tyler Burmeister: Hey, guys. Thanks for letting us ask a couple of questions. So first, I guess, if you guys could provide any additional color, I understand that given a number for revenue growth next year, but just some maybe seasonality or linearity through the year. I would suspect maybe the first half is going to be even softer than it typically is and you talked about kind of a six-month sales process to some customers. So do you have pretty good visibility in the first half and just maybe lacking visibility in the second half? Is that some of the uncertainty around that provided number?

A – Dhrupad Trived: Yes. Good question, Tyler, and then I’ll jump in and then Brian can add to that, So I think you are right, because the dynamic we are seeing is more around customer deferral of spending versus competitive loss. That’s why even in our own pipeline and funnel, what we see is certainly, maybe seasonality being stronger. And our normal seasonality is 48%, 52%, but we think based on the pipeline movement we see that some of these larger deals. We certainly think that it looks like some of it will differ into the later part of the year, right? So I think — so we think net revenue wise, we understand kind of where we look for the year, but we certainly see shift where things move. And it’s a committed project. We wanted no competition, right? It’s purely a deployment decision, but we are certainly seeing that moving a little bit more to the back half than the front end. We can — Brian, I don’t know anything you want to add to that?

Brian Becker: Yes. I mean, we typically see a 52%, 48%mix being 48% first half, 52% second half. I think what we’re seeing is some similar behavior that we saw in 2021 and there was a lot of uncertainty, a lot of closures from the pandemic. I think not related to closures, but related more to FX and interest rates. We’re seeing it’s just a similar pattern or it’s a little slower outlook for the year than I think we saw this past year 2022. Similar to 2021, but we don’t think we’re seeing a loss of the opportunities. It’s just simply a timing issue.

Dhrupad Trivedi: So it’s looking more like 2021 than 2022, right at this point.

Tyler Burmeister: I appreciate that color. That’s very helpful. And then last, I just wanted to give you as an opportunity. You announced a security breach internally. Just want to give you an opportunity to comment on that? I think you said it was internal, it wasn’t your products, it wasn’t with customers, just any other color you’d like to give there?