A10 Networks Reports 9% Revenue Growth to $66.1 Million, Completes Acquisition of ThreatX Protect

A10 Networks, Inc. reported a total net revenue of $66.1 million for the three months ended March 31, 2025, marking a 9% increase from $60.7 million in the same period of the previous year. The growth was primarily driven by a 20% rise in product revenue, which reached $36.0 million, compared to $30.1 million in the prior year. However, service revenue saw a slight decline of 1.5%, totaling $30.2 million, down from $30.6 million. The company's gross profit for the quarter was $52.7 million, resulting in a gross margin of 79.7%, down from 81.1% a year earlier.

In terms of profitability, A10 Networks reported a net income of $9.5 million, or $0.13 per share, which is a decrease from $9.7 million, also $0.13 per share, in the prior year. The decline in net income was attributed to increased operating expenses, which rose to $43.9 million from $42.0 million, driven by higher costs in research and development and general administrative expenses. The company’s operating income increased to $8.8 million, up from $7.2 million, reflecting improved operational efficiency despite rising costs.

Strategically, A10 Networks completed the acquisition of ThreatX Protect in February 2025 for approximately $19.6 million, enhancing its cybersecurity offerings. This acquisition is expected to bolster the company's product portfolio, particularly in web application and API protection. The company also issued $225 million in convertible senior notes in March 2025, which will provide additional capital for growth initiatives and operational flexibility.

Operationally, A10 Networks reported a customer base that remains heavily reliant on a few large clients, with the top ten customers accounting for 44% of total revenue in both the current and prior year periods. The Americas region generated 51% of total revenue, with significant growth in the U.S. market, while the APJ region experienced a decline. The company’s cash and cash equivalents increased to $243.8 million, alongside $112 million in marketable securities, providing a strong liquidity position to support future investments.

Looking ahead, A10 Networks plans to continue investing in product development and expanding its sales and marketing efforts to drive long-term growth. The company anticipates that demand for its cybersecurity solutions will remain strong, although it acknowledges potential challenges from macroeconomic factors, including trade policies and market volatility. The board has also approved a new stock repurchase program of up to $75 million, reflecting confidence in the company's financial health and commitment to returning value to shareholders.