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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


☐			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(s)

Name of each exchange on which registered

Common Stock, par value $0.00001 per share

ATEN

New York Stock Exchange

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 Exchange Act 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 x 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 x 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	x	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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of May 4, 2026, the number of outstanding shares of the registrant’s common stock, par value $0.00001 per share, was 71,998,175.

A10 NETWORKS, INC.

FORM 10-Q

TABLE OF CONTENTS


			Page No.
Note Regarding Forward-Looking Statements			2
PART I. FINANCIAL INFORMATION			4
Item 1. Condensed Consolidated Financial Statements (unaudited):			4
Condensed Consolidated Balance Sheets as of March 3 1 , 202 6 and December 31, 20 25			4
Condensed Consolidated Statements of Operations for the Three Months Ended March 3 1 , 202 6 and 20 25			5
Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 3 1 , 202 6 and 20 25			6
Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 3 1 , 202 6 and 20 25			7
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 3 1 , 202 6 and 20 25			8
Notes to Condensed Consolidated Financial Statements			9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			25
Item 3. Quantitative and Qualitative Disclosures About Market Risk			34
Item 4. Controls and Procedures			34
PART II. OTHER INFORMATION			36
Item 1. Legal Proceedings			36
Item 1A. Risk Factors			36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			36
Item 5. Other Information			36
Item 6. Exhibits			37
Signatures			38

NOTE REGARDING FORWARD-LOOKING STATEMENTS

The Quarterly Report on Form 10-Q 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 strategy, including as to capital allocation, revenue growth, expanding recurring revenue, and positioning for AI-driven workloads, business plan and our ability to effectively manage our growth and business operations;

• 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 and enhance our cybersecurity and AI-ready solutions;

• our investment plans, including with respect to our sales and marketing organizations, research and development (including cybersecurity technology and AI technologies), 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 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;

• 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;

• variability of our gross margin and the factors affecting it;

• our expectations with respect to liquidity position and future capital requirements;

• our stock repurchase program and our quarterly cash dividends;

• our accounting policies and estimates;

• fluctuations in currency exchange rates;

• the cost and potential outcomes of litigation;

• future acquisitions of or investments in complementary companies, products, services or technologies;

• our evaluations and expectations with respect to the potential impacts of OBBBA (as defined below);

• the impact of tariffs, import/export restrictions, and trade policies on our business, demand, and cost inputs;

• our expectations regarding demand trends across our service provider and enterprise customer verticals;

• our plans to strengthen our sales efforts in North America; and

• our expectations regarding cash flows from operating activities.

These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in “Risk Factors” and elsewhere in our Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (the “SEC”) on February 25, 2026. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. 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, or the loss of, or reduction in orders from, significant customers or distribution channel partners on whom we depend for a substantial portion of our revenue; our ability to maintain or improve our competitive position; competitive and execution risks related to cloud-based computing trends and our ability to compete effectively in the market for AI-driven network solutions; 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 to sell our products; variations in product mix or geographic locations of our sales; risks associated with our presence in international markets; including changes in tariffs, trade policies, import/export restrictions, and countermeasures that may impact our costs, supply chain, or customer demand; risks related to our convertible notes, including interest expense obligations, potential dilution upon conversion, and liquidity requirements in the event of a fundamental change; cybersecurity threats, security breaches, or other vulnerabilities affecting our own systems, products, or services; our ability to attract, retain, and motivate qualified personnel, including key technical,

sales, and management employees; changes in tax laws and regulations, including ongoing assessment of the impact of OBBBA on our financial results; 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 related to our supply chain, including risks associated with the geographic concentration of our manufacturing operations in Taiwan and potential geopolitical instability affecting the region; 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 contained in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.

In light of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q 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 X 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,” our Annual 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 SEC.

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

A10 NETWORKS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands, except par value)


	As of March 31, 2026		As of December 31, 2025
ASSETS
Current assets:
Cash and cash equivalents	$	57,895	$	71,139
Marketable securities	311,867		306,714
Accounts receivable, net of allowances of $46 and $66, respectively	69,003		62,069
Inventory	20,172		18,032
Prepaid expenses and other current assets	20,611		18,000
Total current assets	479,548		475,954
Property and equipment, net	51,972		50,221
Goodwill	15,134		15,134
Intangible assets, net	5,879		6,259
Deferred tax assets, net	63,034		62,109
Other non-current assets	18,853		20,136
Total assets	$	634,420	$	629,813
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	14,078	$	11,694
Accrued and other liabilities	30,740		41,132
Deferred revenue, current	84,298		80,824
Total current liabilities	129,116		133,650
Deferred revenue, non-current	62,864		61,982
Long-term debt	219,153		218,787
Other non-current liabilities	2,450		3,848
Total liabilities	413,583		418,267
Commitments and contingencies (Note 8)
Stockholders' equity:
Common stock, $0.00001 par value: 500,000 shares authorized; 92,395 and 91,996 shares issued and 71,759 and 71,498 shares outstanding, respectively	1		1
Treasury stock, at cost: 20,636 and 20,498 shares, respectively	(252,408)		(249,912)
Additional paid-in-capital	536,611		531,790
Dividends paid	(77,089)		(72,785)
Accumulated other comprehensive income (loss)	(103)		659
Retained earnings	13,825		1,793
Total stockholders' equity	220,837		211,546
Total liabilities and stockholders' equity	$	634,420	$	629,813

See accompanying notes to the condensed consolidated financial statements.

A10 NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share amounts)


	Three Months Ended March 31,
	2026		2025
Net revenue:
Products	$	43,986	$	35,979
Services	31,014		30,158
Total net revenue	75,000		66,137
Cost of net revenue:
Products	8,930		7,263
Services	6,346		6,179
Total cost of net revenue	15,276		13,442
Gross profit	59,724		52,695
Operating expenses:
Sales and marketing	20,014		19,545
Research and development	19,018		15,900
General and administrative	7,693		8,472
Total operating expenses	46,725		43,917
Income from operations	12,999		8,778
Non-operating income (expense):
Interest income	3,383		1,790
Interest and other income (expense), net	(2,158)		(90)
Total non-operating income, net	1,225		1,700
Income before income taxes	14,224		10,478
Provision for income taxes	2,192		935
Net income	$	12,032	$	9,543
Net income per share:
Basic	$	0.17	$	0.13
Diluted	$	0.17	$	0.13
Weighted-average shares used in computing net income per share:
Basic	71,667		73,555
Diluted	72,915		75,048

See accompanying notes to the condensed consolidated financial statements.

A10 NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited, in thousands)


	Three Months Ended March 31,
	2026		2025
Net income	$	12,032	$	9,543
Other comprehensive income (loss), net of tax:

Unrealized gain (loss) on marketable securities	(664)		23
Unrealized loss on cash flow hedge	(99)		(65)
Comprehensive income	$	11,269	$	9,501

See accompanying notes to the condensed consolidated financial statements.

A10 NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited, in thousands)


Three Months Ended March 31, 2025	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, 2024	73,693	$	1	$	(180,992)	$	508,387	$	(55,417)	$	194	$	(40,344)	$	231,829
Common stock issued under employee equity incentive plans	530	—		—		—		—		—		—		—
Repurchase of common stock	(2,402)	—		(47,030)		—		—		—		—		(47,030)
Stock-based compensation expense	—	—		—		6,018		—		—		—		6,018
Payments for dividends	—	—		—		—		(4,434)		—		—		(4,434)
Unrealized gain on marketable securities, net of tax	—	—		—		—		—		23		—		23
Unrealized loss on cash flow hedge, net of tax	—	—		—		—		—		(65)		—		(65)

Net Income	—	—		—		—		—		—		9,543		9,543
Balance at March 31, 2025	71,821	$	1	$	(228,022)	$	514,405	$	(59,851)	$	152	$	(30,801)	$	195,884


Three Months Ended March 31, 2026	Common Stock			Treasury stock, at cost		Additional Paid-in Capital		Dividends Paid		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total Stockholders' Equity
	Shares	Amount
Balance at December 31, 2025	71,498	$	1	$	(249,912)	$	531,790	$	(72,786)	$	660	$	1,793	$	211,546
Common stock issued under employee equity incentive plans	399	—		—		—		—		—		—		—
Repurchase of common stock	(138)	—		(2,496)		—		—		—		—		(2,496)
Stock-based compensation expense	—	—		—		4,821		—		—		—		4,821
Payments for dividends	—	—		—		—		(4,303)		—		—		(4,303)
Unrealized loss on marketable securities, net of tax	—	—		—		—		—		(664)		—		(664)
Unrealized loss on cash flow hedge, net of tax	—	—		—		—		—		(99)		—		(99)

Net Income	—	—		—		—		—		—		12,032		12,032
Balance at March 31, 2026	71,759	$	1	$	(252,408)	$	536,611	$	(77,089)	$	(103)	$	13,825	$	220,837

See accompanying notes to the condensed consolidated financial statements.

A10 NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)


	Three Months Ended March 31,
	2026		2025
Cash flows from operating activities:
Net income	$	12,032	$	9,543
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3,969		3,396
Stock-based compensation	4,821		6,018

Other non-cash items	716		1,237
Changes in operating assets and liabilities:
Accounts receivable	(6,974)		10,543
Inventory	(2,147)		1,152
Prepaid expenses and other assets	(3,654)		(2,896)
Accounts payable	902		(5,646)
Accrued and other liabilities	(11,790)		(8,175)
Deferred revenue	4,356		2,032

Net cash provided by operating activities	2,231		17,204
Cash flows from investing activities:

Proceeds from sales and maturities of marketable securities	58,525		30,744
Purchases of marketable securities	(64,282)		(41,896)
Acquisition	—		(19,100)
Capital expenditures	(2,920)		(4,494)
Net cash used in investing activities	(8,677)		(34,746)
Cash flows from financing activities:


Proceeds from the issuance of convertible notes	—		225,000
Payment of debt issuance costs	—		(7,277)
Repurchase of common stock	(2,495)		(47,030)
Payments for dividends	(4,303)		(4,434)

Net cash provided by (used in) financing activities	(6,798)		166,259
Net increase (decrease) in cash and cash equivalents	(13,244)		148,717
Cash and cash equivalents—beginning of period	71,139		95,129
Cash and cash equivalents—end of period	$	57,895	$	243,846

Non-cash investing and financing activities:
Transfers between inventory and property and equipment	$	7	$	314
Capital expenditures included in accounts payable	$	1,482	$	193
Supplemental cash flow disclosure:
Cash paid for income taxes, net	$	111	$	5
Cash paid for interest on debt	$	3,094	$	—

See accompanying notes to the condensed consolidated financial statements.

A10 Networks, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Description of Business and Summary of Significant Accounting Policies

Description of Business

A10 Networks, Inc. (together with our subsidiaries, the “Company”, “A10”, “we”, “our” or “us”) is 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 SaaS 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 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 enterprises and service providers that depend on data center applications and networks to generate revenue and manage operations efficiently. We report two customer verticals: enterprises, which accounted for 56% and 41% of our total revenue during the three months ended March 31, 2026 and 2025, respectively, and service providers, which accounted for 44% and 59% of our total revenue during the three months ended March 31, 2026 and 2025, 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: the Americas, APJ and EMEA regions. The Americas 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 EMEA region comprises Europe, Middle East and Africa. We believe this vertical and geographic view aligns with how we manage the business and maps our product portfolio to customer verticals.

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.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include those of A10 Networks, Inc. and its subsidiaries after elimination of all intercompany accounts and transactions.

We have prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). As permitted under these rules and regulations, we have condensed or omitted certain financial information and footnote disclosures we normally include in our annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The unaudited condensed consolidated balance sheet as of December 31, 2025 has been derived from our audited financial statements, which are included in our 2025 Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 25, 2026 (the “2025 Annual Report”).

These financial statements have been prepared on the same basis as our annual financial statements and, in management’s opinion, reflect all adjustments consisting only of normal recurring adjustments that are necessary for a fair presentation of our financial information. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year.

These financial statements and accompanying notes should be read in conjunction with the financial statements and accompanying notes thereto in the 2025 Annual Report.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the condensed 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 condensed consolidated financial statements, therefore, actual results could differ from management’s estimates.

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in Part II – Item 8, “Financial Statements and Supplementary Data” of the 2025 Annual Report. There have been no material changes to the Company’s significant accounting policies during the three months ended March 31, 2026.

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.

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 channels 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 channels, such as resellers and distributors. In the three months ended March 31, 2026 and 2025, sales through a single distribution channel partner represented 38% and 17% of our total revenue, respectively.

Revenues from our significant end-customers as a percentage of our total revenue are as follows:


	Three Months Ended March 31,
Customers	2026	2025
Customer A	37%	15%

We report revenue in two customer verticals: service providers, which accounted for 44% and 59% of our total revenue during the three months ended March 31, 2026 and 2025, respectively, and enterprises, which accounted for 56% and 41% of our total revenue during three months ended March 31, 2026 and 2025, 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 55% and 44% of our total revenue for three months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026, a single distribution channel accounted for 40% of our total gross accounts receivable. As of December 31, 2025, a single distribution channel accounted for 23% 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.

There have been no other recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance during the three months ended March 31, 2026 that are of significance or potential significance to us.

2. Leases

The Company leases various operating spaces in the United States, Asia and Europe under non-cancellable operating lease arrangements that expire on various dates through April 2028. These arrangements require us 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 March 31, 2026 (in thousands):


		As of March 31, 2026		As of December 31, 2025
Operating leases
Right-of-use assets:
	Other non-current assets	$	7,572	$	8,858
Total right-of-use assets		$	7,572	$	8,858

Lease liabilities:
	Accrued liabilities	$	5,600	$	5,562
	Other non-current liabilities	1,983		3,409
Total operating lease liabilities		$	7,583	$	8,971

The aggregate future lease payments for non-cancelable operating leases as of March 31, 2026 were as follows (in thousands):


Remainder of 2026	$	4,262
2027	3,217
2028	215



Total lease payments	7,694
Less: imputed interest	(111)
Present value of lease liabilities	$	7,583

The components of lease costs were as follows (in thousands):


	Three Months Ended March 31,
	2026		2025
Operating lease costs	$	1,082	$	1,086
Short-term lease costs	160		185
Total lease costs	$	1,242	$	1,271

Average lease terms and discount rates for the Company’s operating leases were as follows:


	Three Months Ended March 31,
	2026	2025
Weighted-average remaining term (years)	1.40	2.24
Weighted-average discount rate	3.6%	3.18%

Supplemental cash flow information for the Company’s operating leases were as follows (in thousands):


		Three Months Ended March 31,
		2026		2025
Cash paid for amounts included in the measurement of lease liabilities:
	Operating cash flows from operating leases	$	1,402	$	1,369

3. Marketable Securities and Fair Value Measurements

Marketable Securities

Marketable securities, classified as available-for-sale, consisted of the following (in thousands):


	As of March 31, 2026								As of December 31, 2025
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

Corporate securities	$	192,096	$	83	$	(185)	$	191,994	$	184,414	$	397	$	(3)	$	184,808
U.S. Treasury and agency securities	91,601		62		(152)		91,511		94,148		246		(4)		94,390

Asset-backed securities	28,306		62		(6)		28,362		27,419		99		(2)		27,516
Debt securities	$	312,003	$	207	$	(343)	$	311,867	$	305,981	$	742	$	(9)	$	306,714

During the three months ended March 31, 2026 and 2025, we did not reclassify any amount to earnings from accumulated other comprehensive income related to unrealized gains or losses.

The following table summarizes the cost and estimated fair value of our marketable securities based on stated effective maturities as of March 31, 2026 (excluding publicly held equity securities, in thousands):


As of March 31, 2026	Amortized Cost		Fair Value
Less than 1 year	$	194,026	$	194,080
Mature in 1 - 3 years	117,977		117,787
Debt securities	$	312,003	$	311,867

All available-for-sale securities have been classified as current because they are available for use in current operations.

Marketable securities in an unrealized loss position as of March 31, 2026 consisted of the following (in thousands):


	Less Than 12 Months				12 Months or More				Total
As of March 31, 2026	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Corporate securities	$	112,231	$	(185)	$	—	$	—	$	112,231	$	(185)
U.S. Treasury and agency securities	55,972		(152)		—		—		55,972		(152)
Asset-backed securities	5,428		(6)		—		—		5,428		(6)
Total	$	173,631	$	(343)	$	—	$	—	$	173,631	$	(343)

Marketable securities in an unrealized loss position as of December 31, 2025 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)

Based on evaluation of securities that have been in a continuous loss position, we did not recognize any other-than-temporary impairment charges during the three months ended March 31, 2026 and 2025.

Fair Value Measurements

The following is a summary of our cash, cash equivalents and marketable securities measured at fair value on a recurring basis (in thousands):


	As of March 31, 2026								As of December 31, 2025
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash	$	52,082	$	—	$	—	$	52,082	$	62,348	$	—	$	—	$	62,348
Cash equivalents	5,813		—		—		5,813		8,791		—		—		8,791

Corporate securities	—		191,994		—		191,994		—		184,808		—		184,808
U.S. Treasury and agency securities	71,036		20,475		—		91,511		73,458		20,932		—		94,390

Asset-backed securities	—		28,362		—		28,362		—		27,516		—		27,516
	$	128,931	$	240,831	$	—	$	369,762	$	144,597	$	233,256	$	—	$	377,853

There were no transfers between Level 1 and Level 2 fair value measurement categories during the three months ended March 31, 2026 and 2025.

The Company measures the fair value of the 2030 Notes (as defined below) using inputs of quoted prices for

disclosure purposes on a recurring basis. The fair value of the 2030 Notes was $267.0 million as of March 31, 2026. 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 condensed consolidated balance sheets. Changes in the fair value of derivatives are recorded in other income, net in the accompanying condensed consolidated statements of operations. As of March 31, 2026 and December 31, 2025, foreign exchange forward currency contracts not designated as hedging instruments had total notional amounts of $4.9 million and $2.0 million, respectively. These contracts have maturities of approximately 30 days. For the three months ended March 31, 2026 and 2025, the Company recorded an unrealized net losses of $52 thousand and $24 thousand, respectively, in its condensed consolidated statements of operations related to these contracts. For the three months ended March 31, 2026 and 2025, the Company recorded a realized net gain of $0.2 million and a realized net loss of $0.5 million, respectively, in its condensed consolidated statements of operations related to these contracts.

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 March 31, 2026 and December 31, 2025, the Company had 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 preliminary 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 preliminary 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 results of operations of the acquired business, which are not material, have been included in our condensed 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 condensed 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 condensed consolidated statements of operations. The cash outflows for these costs are classified as operating activities in the condensed 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
Customer relationships	1,500		5
Trademark / trade name	400		4
Total	$	7,600

Acquired intangible assets subject to amortization as of March 31, 2026 are as follows (in thousands, except years):


	Gross		Accumulated Amortization		Net		Weighted-Average Remaining Useful Life
							(in years)
Developed technology	$	5,700	$	(1,274)	$	4,426	3.9
Customer relationships	1,500		(335)		1,165		3.9
Trademark / trade name	400		(112)		288		2.9
	$	7,600	$	(1,721)	$	5,879

Amortization expense from acquired intangible assets was $0.4 million and $0.2 million for the three months ended March 31, 2026 and 2025, respectively.

The expected future amortization expense for acquired intangible assets as of March 31, 2026 is as follows (in thousands):


Remainder of 2026	$	1,139
2027	1,519
2028	1,519
2029	1,437
2030	265

Total amortization expense	$	5,879

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 during the three months ended March 31, 2026.

6. Condensed Consolidated Financial Statement Components

Accounts Receivable Allowance for Credit Losses

The following table presents the change in the Company’s accounts receivable allowance for credit losses (in thousands):


	As of March 31, 2026		As of December 31, 2025

Allowance for credit losses, beginning balance	$	66	$	465
Decrease in allowance	—		(232)
Write-offs, net of recoveries	(20)		(167)
Allowance for credit losses, ending balance	$	46	$	66

Inventory

Inventory consisted of the following (in thousands):


	As of March 31, 2026		As of December 31, 2025

Raw materials	$	11,445	$	10,457
Finished goods	8,727		7,575
Total inventory	$	20,172	$	18,032

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):


	As of March 31, 2026		As of December 31, 2025

Prepaid expenses	$	8,084	$	5,899
Deferred contract acquisition costs	8,405		8,332
Other	4,122		3,769
Total prepaid expenses and other current assets	$	20,611	$	18,000

Property and Equipment, Net

Property and equipment, net, consisted of the following (in thousands):


	Useful Life	As of March 31, 2026		As of December 31, 2025
	(in years)
Equipment	1 - 5	$	48,595	$	46,637
Software	1 - 3	7,374		7,023
Furniture and fixtures	1 - 7	531		531
Leasehold improvements	Lease term	3,560		3,560
Construction in process		30,903		29,307
Property and equipment, gross		90,963		87,058
Less: accumulated depreciation		(38,991)		(36,837)
Property and equipment, net		$	51,972	$	50,221

Construction in process primarily consists of deferred software development costs related to several SaaS projects that will take longer than one year to complete.

Depreciation expense on property and equipment was $2.7 million and $2.2 million for the three months ended March 31, 2026 and 2025, respectively.

Internally Developed Software to be Marketed and Sold

During the three months ended March 31, 2026 and 2025, no costs were capitalized associated with internally developed software to be marketed and sold. During the three months ended March 31, 2026 and 2025, amortization cost totaled $0.1 million in each period, respectfully. As of March 31, 2026, the unamortized capitalized internally developed software balance was $1.1 million and is included in other non-current assets.

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):


	As of March 31, 2026		As of December 31, 2025

Accrued compensation and benefits	$	12,550	$	23,067
Accrued tax liabilities	6,267		3,247
Lease liability	5,600		5,562
Accrued interest payable	6		1,553
Other	6,317		7,703
Total accrued liabilities	$	30,740	$	41,132

Deferred Revenue

Deferred revenue consisted of the following (in thousands):


	As of March 31, 2026		As of December 31, 2025

Deferred revenue:
Products	$	16,356	$	2,783
Services	130,806		140,023
Total deferred revenue	147,162		142,806
Less: current portion	(84,298)		(80,824)
Non-current portion	$	62,864	$	61,982

7. 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 on April 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 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 after April 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 March 31, 2026. 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 March 31, 2026, 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 $5.8 million, was $219.2 million as of March 31, 2026. Interest expense related to the amortization of debt issuance costs was $1.9 million and $0.3 million for the three months ended March 31, 2026 and 2025, respectively. The effective interest rate on the 2030 Notes is 3.43%.

8. Commitments and Contingencies

Lease Commitments

We lease various operating spaces in the United States, Asia and Europe under non-cancelable operating lease arrangements that expire on various dates through April 2028. These arrangements require us to pay certain operating expenses, such as taxes, repairs and insurance, and contain renewal and escalation clauses. We recognize rent expense under these arrangements on a straight-line basis over the term of the lease. See Note 2 – Leases for the Company’s aggregate future lease payments for the Company’s non-cancelable operating leases as of March 31, 2026.

Rent expense was $1.2 million and $1.3 million for the three months ended March 31, 2026 and 2025, respectively.

Purchase Commitments

We have 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. We had open purchase commitments with manufacturers in Taiwan totaling $46.4 million as of March 31, 2026.

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 indemnification and guarantee provisions and our guarantees and indemnification arrangements have not had any significant impact on our condensed consolidated financial statements to date.

9. Equity Incentive Plans, Stock-Based Compensation and Stock Repurchase Programs

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. No further grants will be made under the 2014 Plan. 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 March 31, 2026, we had 2,020,296 shares available for future grant under the 2023 Plan.

2014 Employee Stock Purchase Plan

The 2014 Employee Stock Purchase Plan, as amended (the “Amended 2014 Purchase Plan”) provides employees with an opportunity to purchase our common stock through accumulated contributions, up to a maximum of 10% of eligible compensation, with offering periods of six months in duration, beginning on or about December 1 and June 1 each year. As of March 31, 2026, the Company 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):


	Three Months Ended March 31,
	2026		2025
Stock-based compensation by type of award:
Stock awards	$	4,576	$	5,794
Employee stock purchase rights	245		224
	$	4,821	$	6,018

Stock-based compensation by category of expense:
Cost of net revenue	$	388	$	625
Sales and marketing	1,141		894
Research and development	1,492		1,390
General and administrative	1,800		3,109
	$	4,821	$	6,018

As of March 31, 2026, the Company had $39.1 million of unrecognized stock-based compensation expense related to unvested stock-based awards, including common stock acquired under our Amended 2014 Purchase Plan, which will be recognized over a weighted-average period of 2.4 years.

Stock Awards

The Company has granted RSUs to its employees, consultants and members of the Board of Directors, and PSUs to certain executives and employees. The Company’s PSUs have market performance-based vesting conditions as well as service-based vesting conditions. As of March 31, 2026, there were 2,445,077 RSUs and 687,070 PSUs outstanding.

The following table summarizes our stock award activities and related information:


	Number of Shares (thousands)	Weighted-Average Grant Date Fair Value Per Share		Weighted-Average Remaining Vesting Term (years)	Aggregate Fair Value (thousands)
Nonvested as of December 31, 2025	3,086	$	15.83
Granted	482	19.22
Released	(399)	14.30
Canceled	(37)	16.06
Nonvested as of March 31, 2026	3,132	$	16.54	1.79	$	72,415

The aggregate fair value of stock awards released was $5.7 million and $6.7 million for the three months ended March 31, 2026 and 2025, respectively.

Stock Repurchase Programs

On November 1, 2022, the Company announced that the Board of Directors authorized a stock repurchase program of up to $50 million of its common stock over a period of twelve months. On November 7, 2023, the Company announced that the Board of Directors authorized a stock repurchase program of up to $50 million of its common stock over a period of twelve months. These repurchase programs were active for twelve months and are expired.

On November 7, 2024, the Company announced that the Board of Directors authorized a stock repurchase program of up to $50 million of its common stock (the “2024 Program”). The 2024 Program did not have a specified term or termination date. The Board of Directors terminated the 2024 Program on May 1, 2025.

On May 1, 2025, the Company announced that the Board of Directors authorized a new stock repurchase program of up to $75 million of its common stock (the “2025 Program”). The 2025 Program does not have a specified term or termination date. During the three months ended March 31, 2026, we repurchased 137,612 shares for a total of $2.5 million or $18.13 per share under the 2025 Program. As of March 31, 2026, the Company had $53.1 million available to repurchase shares under the 2025 Program.

Under 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, including under plans complying with Rule 10b5-1 under the Securities and Exchange Act of 1934 (the “Exchange Act”).

10. 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 applying the treasury stock method is computed using the weighted average number of common shares outstanding for the period plus potential dilutive common shares, including stock awards (RSUs and PSUs), employee stock purchase rights and the 2030 Notes, unless the potential common shares are anti-dilutive.

Basic and diluted net income per share are calculated as follows (in thousands, except per share amounts):


	Three Months Ended March 31,
	2026		2025
Basic and diluted net income per share
Numerator:
Net income	$	12,032	$	9,543
Denominator:
Weighted-average shares outstanding - basic	71,667		73,555
Effect of dilutive potential common shares from stock awards and employee stock purchase plan	1,248		1,493
Weighted-average shares outstanding - diluted	72,915		75,048
Net income per share:
Basic	$	0.17	$	0.13
Diluted	$	0.17	$	0.13

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):


	Three Months Ended March 31,
	2026	2025
Stock awards and employee stock purchase rights	120	144
2030 Notes	9,591	9,591
Total	9,711	9,735

11. Income Taxes

We recorded a provision for income taxes of $2.2 million and $0.9 million for the three months ended March 31, 2026 and 2025, respectively. The Company’s income tax provision for the three months ended March 31, 2026 and 2025 primarily consisted of U.S. federal and state taxes.

We had $8.3 million of unrecognized tax benefits as of March 31, 2026.

Accrued interest and penalties related to unrecognized tax benefits are recognized as part of our provision for income taxes in our condensed consolidated statements of operations.

We are subject to taxation in the United States, various states, and several foreign jurisdictions. Because we have net operating loss 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. We are not currently under examination by any taxing authorities.

Statement of Cash Flows Income Taxes Paid Disclosure

Cash payments of U.S. federal, state and foreign income taxes, net of refunds, during the three months ended March 31, 2026 were as follows (in thousands):


Tax Jurisdiction	Cash Paid
Cash payments of federal income taxes	$	—
Cash payments of state income taxes:
States	37
Cash payments of foreign income taxes:
India	30
Korea	17
Turkey	19
Other countries	8
Total cash payments, net of refunds	$	111

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the U.S. The OBBBA introduces significant provisions, including the permanent extension of certain expiring provisions under the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation contains multiple effective dates, with some provisions effective in 2025 and others implemented through 2027. The Company has considered the impact of OBBBA on the Company's annual effective tax rate, mainly the reduction in the R&D credit from the Section 280(c) election. The tax effects of the enacted legislation are reflected in the three months ended March 31, 2026 and there was no material impact on our effective tax rate as of March 31, 2026. The Company will continue to monitor and assess the impact of OBBBA on our consolidated financial statements.

12. 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 one operating segment and derives revenues from two sources: products revenue and services revenue.

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 condensed 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 condensed consolidated statements of operations.

We report customer revenues in three broad geographic regions: the Americas, APJ and EMEA regions. The Americas region comprises the United States and other countries in the Americas (excluding the United States). The APJ region comprises Japan and all other countries in APAC (excluding Japan). The EMEA region comprises Europe, Middle East and

Africa. We believe this geographic view aligns with how we manage the business and maps our product portfolio to customer verticals.

The following table depicts the disaggregation of revenue by geographic region based on the ship to location of our customers (in thousands):


	Three Months Ended March 31,
	2026		2025
Americas	$	50,496	$	33,496
United States	46,829		30,117
Americas-other	3,667		3,379
APJ	14,203		18,619


EMEA	10,301		14,022
Total net revenue	$	75,000	$	66,137

The following table is a summary of our long-lived assets which include property and equipment, net and operating lease right-of-use assets based on the physical location of the assets (in thousands):


	As of March 31, 2026		As of December 31, 2025
Americas	$	55,462	$	54,798

Japan	1,840		1,852
Other	2,242		2,429
Total	$	59,544	$	59,079

13. Revenue

We report two customer verticals: service providers and enterprises. Revenue generated from service providers and enterprises was as follows (in thousands):


	Three Months Ended March 31,
	2026		2025
Service providers	$	32,808	$	38,997
Enterprises	42,192		27,140
Total	$	75,000	$	66,137

Contract Balances

The following table reflects contract balances with customers (in thousands):


	As of March 31, 2026		As of December 31, 2025
Accounts receivable, net	$	69,003	$	62,069


Deferred revenue, current	84,298		80,824
Deferred revenue, non-current	62,864		61,982

We receive payments from customers based upon billing cycles. Invoice payment terms usually range from 30 to 90 days.

Accounts receivable are recorded when the right to consideration becomes unconditional.

Contract assets include amounts related to our contractual right to consideration for performance obligations not yet billed and are included in prepaid and other current assets in the condensed consolidated balance sheets. The amounts were immaterial as of March 31, 2026 and December 31, 2025.

Deferred revenue primarily consists of amounts that have been invoiced but not yet been recognized as revenue and consists of performance obligations pertaining to support and subscription services. We recognized revenue of $29.6 million and $26.1 million during the three months ended March 31, 2026 and 2025, respectively, related to deferred revenues at the beginning of the respective periods.

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, and the remaining portion is recorded as other non-current assets. Amortization of deferred commissions is included in sales and marketing expense.

As of March 31, 2026, the current and non-current portions of deferred contract acquisition costs were $8.4 million and $5.5 million, respectively. As of December 31, 2025, the current and non-current portions of deferred contract acquisition costs were $8.3 million and $5.7 million, respectively. Related amortization expense was $1.9 million and $1.7 million for the three months ended March 31, 2026 and 2025, respectively.

We had no impairment loss in relation to the costs capitalized and no asset impairment charges related to contract assets during the three months ended March 31, 2026 and 2025.

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.

We expect to recognize revenue on the remaining performance obligations as follows (in thousands):


		As of March 31, 2026

Within 1 year		$	84,298
Next 2 to 3 years		52,547
Thereafter		10,317
	Total	$	147,162

14. Subsequent Event

On April 28, 2026, the Company announced that the Board of Directors approved a quarterly cash dividend. The dividend, in the amount of $0.06 per share outstanding, will be paid on June 1, 2026 to stockholders of record on May 15, 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 of Directors strategy from time-to-time.

ITEM 2. 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 condensed consolidated financial statements and related notes included elsewhere in this document. In addition to historical information, the MD&A contains forward-looking statements that reflect our plans, estimates, and beliefs that involve significant risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to those differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in “Note Regarding Forward-Looking Statements” and other risk factors contained in Part I, Item 1A “Risk Factors” in the 2025 Annual Report.

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 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. 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. 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.

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, the Company issued the 2030 Notes and received net proceeds from the offering of approximately $217.7 million.

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 PCS, professional services, training and 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 SaaS 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 channels, such as resellers and distributors. Our customers predominantly purchase PCS services in conjunction with purchases of our products.

During the three months ended March 31, 2026, (i) 67% of our total revenue was generated from the Americas region, of which 62% was generated from the United States and 5% was generated from the Americas-other, (ii) 19% of our total revenue was generated from the APJ region and (iii) 14% of our total revenue was generated from the EMEA region. During the three months ended March 31, 2025, (i) 51% of our total revenue was generated from the Americas region, of which 46% was generated from the United States and 5% was generated from the Americas-other, (ii) 28% of our total revenue was generated from the APJ region and (iii) 21% of our total revenue was generated from the EMEA region. One of our priorities is to strengthen our sales efforts in North America. During the three months ended March 31, 2026 and 2025, our enterprise customers accounted for 56% and 41% of our total revenue, respectively, and our service provider customers accounted for 44% and 59% of our total revenue, respectively.

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 customers, including service providers and enterprise customers, in any period. Purchases by our ten largest end-customers accounted for 55% and 44% of our total revenue for the three months ended March 31, 2026 and 2025, 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. Consequently, any acceleration or delay in anticipated product purchases by or deliveries to our largest 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.

As of March 31, 2026, we had $57.9 million of cash and cash equivalents and $311.9 million of marketable securities. Cash provided by operating activities was $2.2 million during the three months ended March 31, 2026, compared to $17.2 million in the same period of 2025.

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.

Results of Operations

A summary of our condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025 is as follows (dollars in thousands):


	Three Months Ended March 31,
	2026				2025				Increase (Decrease)
	Amount		Percent of Total Revenue		Amount		Percent of Total Revenue		Amount		Percent
Net revenue:
Products	$	43,986	58.6	%	$	35,979	54.4	%	$	8,007	22.3	%
Services	31,014		41.4		30,158		45.6		856		2.8
Total net revenue	75,000		100.0		66,137		100.0		8,863		13.4
Cost of net revenue:
Products	8,930		11.9		7,263		11.0		1,667		23.0
Services	6,346		8.5		6,179		9.3		167		2.7
Total cost of net revenue	15,276		20.4		13,442		20.3		1,834		13.6
Gross profit	59,724		79.6		52,695		79.7		7,029		13.3
Operating expenses:
Sales and marketing	20,014		26.7		19,545		29.6		469		2.4
Research and development	19,018		25.4		15,900		24.0		3,118		19.6
General and administrative	7,693		10.3		8,472		12.8		(779)		(9.2)
Total operating expenses	46,725		62.3		43,917		66.4		2,808		6.4
Income from operations	12,999		17.3		8,778		13.3		4,221		48.1
Non-operating income (expense):
Interest income	3,383		4.5		1,790		2.7		1,593		89.0
Interest and other income (expense), net	(2,158)		(2.9)		(90)		(0.1)		(2,068)		2,297.8
Non-operating income, net	1,225		1.6		1,700		2.6		(475)		(27.9)
Income before provision for income taxes	14,224		19.0		10,478		15.8		3,746		35.8
Provision for income taxes	2,192		2.9		935		1.4		1,257		134.4
Net income	$	12,032	16.0	%	$	9,543	14.4	%	$	2,489	26.1	%

Net 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 SaaS 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 SaaS 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, 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):


	Three Months Ended March 31,
	2026				2025				Increase (Decrease)
	Amount		Percent of Total Revenue		Amount		Percent of Total Revenue		Amount		Percent
Net revenue:
Products	$	43,986	59	%	$	35,979	54	%	$	8,007	22	%
Services	31,014		41		30,158		46		856		3
Total net revenue	$	75,000	100	%	$	66,137	100	%	$	8,863	13	%
Net revenue by geographic region:
Americas	$	50,496	67	%	$	33,496	51	%	$	17,000	51	%
United States	46,829		62	%	30,117		46	%	16,712		55	%
Americas-other	3,667		5	%	3,379		5	%	288		9	%
APJ	14,203		19	%	18,619		28	%	(4,416)		(24)	%


EMEA	10,301		14	%	14,022		21	%	(3,721)		(27)	%
Total net revenue	$	75,000	100	%	$	66,137	100	%	$	8,863	13	%

Three Months Ended March 31, 2026 and 2025

Total net revenue increased $8.9 million, or 13%, during the three months ended March 31, 2026, compared to the same period of 2025. Changes in revenue were due primarily to (i) an increase of $17.0 million in the Americas region, comprised of increases of $16.7 million in the United States and $0.3 million in Americas-other, (ii) a decrease of $4.4 million in the APJ region, and (iii) a decrease of $3.7 million in the EMEA region. The overall increase in revenue was attributable to a $15.1 million increase in revenue from enterprise customers, partially offset by a $6.2 million decrease in revenue from service provider customers during the three months ended March 31, 2026 compared to the same period of 2025. Products revenue increased $8.0 million, of which the Americas region increased $15.4 million, partially offset by decreases of $3.7 million in the APJ region and $3.7 million in the EMEA region for the three months ended March 31, 2026, compared to the same period of 2025. Services revenue increased $0.9 million, of which the Americas region increased $1.6 million, partially offset by a decrease of $0.7 million in the APJ region for the three months ended March 31, 2026, compared to the same period of 2025. Services revenue in the EMEA region was flat for the three months ended March 31, 2026, compared to the same period of 2025.

Products revenue increased $8.0 million, or 22%, during the three months ended March 31, 2026 compared to the same period of 2025, as a result of an increase in demand from our enterprise customers in the Americas and EMEA regions.

Services revenue increased $0.9 million, or 3%, during the three months ended March 31, 2026, compared to the same period of 2025, as a result of an increase in demand from our service provider and enterprise customers in the Americas region.

During the three months ended March 31, 2026, $50.5 million, or 67% of total revenue, was generated from the Americas region, which represents a 51% increase in revenue compared to the same period of 2025. The increase was primarily due to higher products revenue due to an increase in demand from our service provider and enterprise customers in the Americas region.

During the three months ended March 31, 2026, $14.2 million, or 19% of total revenue, was generated from the APJ region, which represents a 24% decrease compared to the same period of 2025. The decrease was primarily due to lower products and services revenue due to a decrease in demand from our service provider customers in the APJ region.

During the three months ended March 31, 2026, $10.3 million, or 14% of total revenue, was generated from the EMEA region, which represents an 27% decrease compared to the same period of 2025. The decrease was primarily due to lower products revenue due to a decrease in demand from our service provider customers in the EMEA region.

Cost of Net Revenue, Gross Margin and Gross Profit

Cost of Net 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.

A summary of our cost of net revenue is as follows (dollars in thousands):


	Three Months Ended March 31,				Increase (Decrease)
	2026		2025		Amount		Percent
Cost of net revenue:
Products	$	8,930	$	7,263	$	1,667	23.0	%
Services	6,346		6,179		167		2.7
Total cost of net revenue	$	15,276	$	13,442	$	1,834	13.6	%

Products cost of revenue increased 23.0% during the three months ended March 31, 2026, compared to the same period of 2025, primarily due product and regional mix.

Services cost of revenue increased 2.7% during the three months ended March 31, 2026, compared to the same period of 2025, primarily driven by an increase in personnel-related support costs and the mix of services delivered, which include technical support, training and service costs.

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, our sales 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):


	Three Months Ended March 31,
	2026				2025				Increase (Decrease)
	Amount		Gross Margin		Amount		Gross Margin		Amount		Gross Margin
Gross profit:
Products	$	35,056	79.7	%	$	28,716	79.8	%	$	6,340	(0.1)	%
Services	24,668		79.5		23,979		79.5		689		—
Total gross profit	$	59,724	79.6	%	$	52,695	79.7	%	$	7,029	(0.1)	%

Products gross margin decreased 0.1% to 79.7% during the three months ended March 31, 2026, compared to the same periods of 2025, primarily due to product and regional mix.

Services gross margin remained consistent at 79.5% for both the three months ended March 31, 2026 and 2025. Service gross margin is impacted by the mix of services delivered, which include technical support, training and service costs.

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):


	Three Months Ended March 31,				Increase (Decrease)
	2026		2025		Amount		Percent
Operating expenses:
Sales and marketing	$	20,014	$	19,545	$	469	2.4	%
Research and development	19,018		15,900		3,118		19.6
General and administrative	7,693		8,472		(779)		(9.2)
Total operating expenses	$	46,725	$	43,917	$	2,808	6.4	%

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.

Sales and marketing operating expenses increased $0.5 million, or 2.4%, in the three months ended March 31, 2026, compared to the same period in 2025, primarily due to an increase in personnel costs.

For the full year 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.

Research and development operating expenses increased $3.1 million, or 19.6%, in the three months ended March 31, 2026, compared to the same period in 2025, primarily due to an increase in personnel costs.

For the full year 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.

General and administrative operating expenses decreased $0.8 million, or 9.2%, in the three months ended March 31, 2026, compared to the same period in 2025, primarily due to a decrease in personnel costs.

For the full year 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)

Non-Operating income, net, consists primarily of interest income earned on our cash and cash equivalents and marketable securities, interest expense on the 2030 Notes, foreign currency exchange gains and losses and fair value adjustments on investments in publicly held equity securities. Foreign currency exchange gains and losses are primarily a result of fluctuations in the Japanese Yen versus the U.S. Dollar.

Interest Income

Interest income was $3.4 million and $1.8 million in the three months ended March 31, 2026 and 2025, respectively.

Interest Expense

Interest expense was $1.9 million and $0.3 million in the three months ended March 31, 2026, respectively, and was related to our outstanding 2030 Notes that were issued in March 2025.

Other Income (Expense)

The Company recorded $0.2 million of net losses and $0.2 million of net gains in other income (expense) in the three months ended March 31, 2026, and 2025 respectively, primarily from foreign currency exchange gains and losses from fluctuations in the Japanese Yen versus the U.S. Dollar.

Provision for Income Taxes

We recorded a provision for income taxes of $2.2 million and $0.9 million for the three months ended March 31, 2026 and 2025, respectively. The Company’s income tax provisions for the three months ended March 31, 2026 and 2025 primarily consisted of U.S. federal and state taxes.

Liquidity and Capital Resources

As of March 31, 2026, we had cash and cash equivalents of $57.9 million, including $3.3 million held outside the United States in our foreign subsidiaries, and $311.9 million of marketable securities. We currently do not have any plans to repatriate our earnings from our foreign operations. As of March 31, 2026, we had working capital of $350.4 million, retained earnings of $13.8 million and total stockholders’ equity of $220.8 million. Our marketable securities are highly liquid and are classified as available for sale should the Company decide to quickly raise cash at any time in the future.

We plan to continue to invest for long-term growth, and our investment may increase. We 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 has authorized various stock repurchase programs from time to time, 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”). 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. During the year ended December 31, 2025, the Company repurchased 3.7 million shares for a total cost of $68.9 million under the 2023 and 2024 Programs. During the three months ended March 31, 2026, the Company had repurchased 0.1 million shares for a total cost of $2.5 million under the 2025 Program.

In October 2021, the Board of Directors approved the initiation of a regular quarterly cash dividend on our common stock. The Company paid cash dividends of $0.06 per share outstanding, for a total of $4.3 million and $4.4 million in the three months ended March 31, 2026. The next dividend, in the amount of $0.06 per share, will be paid on June 1, 2026 to stockholders of record on May 15, 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.

As described in Part II – Item 1, “Legal Proceedings” of this Quarterly Report on Form 10-Q, from time to time we are 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.

Statements of Cash Flows

The following table summarizes our cash flow related activities (in thousands):


	Three Months Ended March 31,
	2026		2025
Cash provided by (used in):
Operating activities	$	2,231	$	17,204
Investing activities	(8,677)		(34,746)
Financing activities	(6,798)		166,259
Net increase (decrease) in cash and cash equivalents	$	(13,244)	$	148,717

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 three months ended March 31, 2026, cash provided by operating activities was $2.2 million, consisting of net income of $12.0 million, non-cash charges of $9.5 million and a decrease in cash resulting from the net change in operating assets and liabilities of $19.3 million. Our non-cash charges consisted primarily of depreciation and amortization expenses of $4.0 million and stock-based compensation expense of $4.8 million. The net change in our operating assets and liabilities

primarily reflects cash outflows from the changes in accrued liabilities of $11.8 million, accounts receivable of $7.0 million, prepaid expenses and other assets of $3.7 million and inventory of $2.1 million, partially offset by cash inflows from deferred revenue of $4.4 million and accounts payable of $0.9 million.

The unfavorable change in accrued liabilities was primarily due to payments for variable compensation. The unfavorable change in accounts receivable was attributable to timing of billing and cash collections. The unfavorable change in prepaid expenses and other assets was attributable to an increase in prepaid accounting and marketing expenses. The unfavorable change in inventory was attributable to the timing of product shipments. The favorable change in deferred revenue was attributable to the timing of service contract bookings. The favorable change in accounts payable was attributable to the timing of payments to vendors.

During the three months ended March 31, 2025, cash provided by operating activities was $17.2 million, consisting of net income of $9.5 million, non-cash charges of $10.7 million and a decrease in cash resulting from the net change in operating assets and liabilities of $3.0 million. Our non-cash charges consisted primarily of depreciation and amortization expenses of $3.4 million and stock-based compensation expense of $6.0 million. The net change in our operating assets and liabilities primarily reflects cash outflows from the changes in accrued liabilities of $8.2 million, accounts payable of $5.6 million and prepaid expenses and other assets of $2.9 million, partially offset by cash inflows from accounts receivable of $10.5 million deferred revenue of $2.0 million and inventory of $1.2 million.

The unfavorable change in accrued liabilities was primarily due to a decrease in accrued variable compensation. The unfavorable change in accounts payable was attributable to the timing of payments to vendors. The unfavorable change in prepaid expenses and other assets was attributable to an increase in prepaid accounting and marketing expenses. The favorable change in accounts receivable was attributable to timing of billing and cash collections. The favorable change in deferred revenue was attributable to the timing of service contract bookings and the acquisition of ThreatX Protect deferred revenue. The favorable change in inventory was attributable to the timing of product shipments.

Cash Flows from Investing Activities

During the three months ended March 31, 2026, cash used in investing activities was $8.7 million, consisting of purchases of marketable securities of $64.3 million and capital expenditures of $2.9 million, partially offset by maturities of marketable securities of $58.5 million.

During the three months ended March 31, 2025, cash used in investing activities was $34.7 million, consisting of purchases of marketable securities of $41.9 million, cash paid for the acquisition of ThreatX Protect of $19.1 million and capital expenditures of $4.5 million, partially offset by maturities of marketable securities of $30.7 million. See Note 5 - Acquisition for additional information.

Cash Flows from Financing Activities

During the three months ended March 31, 2026, cash used in financing activities was $6.8 million, consisting of cash dividend payments of $4.3 million and repurchases of common stock of $2.5 million.

During the three months ended March 31, 2025, cash provided by financing activities was $166.3 million and primarily consisting of $217.7 million in net proceeds from the issuance of the 2030 Notes, $47.0 million used for repurchases of common stock and $4.4 million used for cash dividend payments.

Contractual Obligations

Our contractual obligations consist of non-cancellable operating lease arrangements and totaled $7.6 million as of March 31, 2026. Our operating lease arrangements expire on various dates through April 2028. These arrangements require us to pay certain operating expenses, such as taxes, repairs and insurance, and contain renewal and escalation clauses.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these condensed 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.

The Company’s critical accounting policies and estimates are disclosed in Part II – Item 7, “Critical Accounting Estimates” of the 2025 Annual Report. There have been no material changes to the Company’s critical accounting policies and estimates during the three months ended March 31, 2026.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Risk

Our condensed 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 Japanese Yen. 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, Japan and the Asia Pacific region. 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 condensed consolidated statements of operations. A significant 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 condensed consolidated financial position and results of operations.

We recorded $0.2 million of net foreign exchange losses and $0.2 million of net foreign exchange gains during the three months ended March 31, 2026 and 2025, respectively. The effect of a hypothetical 10% change in our exchange rate would not have a significant impact on our condensed consolidated results of operations.

Interest Rate Sensitivity

Our exposure to market risk for changes in interest rates relates primarily to our marketable securities. Our marketable securities are typically comprised of corporate securities, U.S. Treasury and agency securities, commercial paper, asset-backed securities and equity securities of publicly traded companies. We do not enter into investments for trading or speculative purposes. As of March 31, 2026, our investment portfolio included marketable securities with an aggregate amortized cost basis of $312.0 million and a fair value of $311.9 million. The effect of a hypothetical 10% change in interest rates would not have a material impact on our interest expense.

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 March 31, 2026 (in thousands):


							Fair Value as of
	(150 BPS)		(100 BPS)		(50 BPS)		3/31/2026		50 BPS		100 BPS		150 BPS
Marketable securities	$	314,921	$	313,963	$	312,946	$	311,867	$	310,729	$	309,530	$	308,270

ITEM 4. CONTROLS AND PROCEDURES

Management’s Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer), has evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2026, as required by Rule 13a-15(b) under the Securities Exchange Act of 1934 (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 Exchange Act 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 March 31, 2026, and that the condensed consolidated financial statements included in this Form 10-Q 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.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the three months ended March 31, 2026, 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. A control 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.

PART II. OTHER INFORMATION

ITEM 1. 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 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.

ITEM 1A. RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully review and consider the information regarding certain factors that could materially affect our business, financial condition or future results set forth under Part I, Item 1A "Risk Factors" in the 2025 Annual Report. There have been no material changes to the risk factors disclosed in the 2025 Annual Report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On May 1, 2025, the Company announced that the Board of Directors authorized a new stock repurchase program of up to $75 million of its common stock (the “2025 Program”). The 2025 Program does not have a specified term or termination date. Under the 2025 Program, we can repurchase shares of our common stock in the open market, in privately negotiated transactions, in block trades or a combination of the foregoing. We are not obligated under the 2025 Program to repurchase any specific number or dollar amount of shares of common stock, and were able to modify, suspend or discontinue the 2025 Program at any time. Our management and the Board of Directors determined 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 funded repurchases from its existing cash balance and cash provided by operating activities.

Share repurchase activity during the three months ended March 31, 2026 was as follows (in thousands, except per share amounts):


Periods	Total Number of Shares Purchased		Average Price Paid Per Share		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 (1)
January 1 - 31, 2026		25	$	17.52	439	$	55,572

February 1 - 28, 2026		113	$	18.27	2,056	$	55,133

March 1 - 31, 2026		—	$	—	—	$	53,077

Total		138				$	53,077

(1) The $53,077 thousand in the table above represents the amount available to repurchase shares under the 2025 Program as of March 31, 2026.

ITEM 5. OTHER INFORMATION

Insider Adoption or Termination of Trading Arrangements

During the fiscal quarter ended March 31, 2026, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” as those terms are defined in Regulation S-K, Item 408.

ITEM 6. EXHIBITS

Incorporated herein by reference is a list of the exhibits contained in the Exhibit Index below.

EXHIBIT INDEX


Exhibit Number						Description
3.1						Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on December 6, 2019)
3.2						Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on December 6, 2019)
31.1*						Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
31.2*						Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
32.1**						Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act
32.2**						Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act
101*						Inline XBRL Document Set for the condensed consolidated financial statements and accompanying notes in Part I – Item 1, “Condensed Consolidated Financial Statements (Unaudited)” of this Quarterly Report on Form 10-Q
104*						Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set

* Filed herewith.

** The certifications attached as Exhibit 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of A10 Networks, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

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: May 7, 2026


			By: /s/ Dhrupad Trivedi
			Dhrupad Trivedi
			President and Chief Executive Officer (Principal Executive Officer)

Date: May 7, 2026


			By: /s/ Michelle Caron
			Michelle Caron
			Chief Financial Officer (Principal Accounting and Financial Officer)

A10 Networks, Inc. 10-Q