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What changed in A10 Networks, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of A10 Networks, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+293 added−300 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-25)

Top changes in A10 Networks, Inc.'s 2025 10-K

293 paragraphs added · 300 removed · 187 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

29 edited+46 added−89 removed36 unchanged
Biggest changeDuring the years ended December 31, 2024, 2023 and 2022, purchases from our 10 largest end-customers accounted for approximately 38%, 33% and 41% of our total revenue, respectively. A substantial portion of our revenue is from sales of our products and services through distribution channels, such as resellers and distributors.
Biggest changeA substantial portion of our revenue is from sales of our products and services through distribution channels, such as resellers and distributors. During the years ended December 31, 2025, 2024 and 2023, sales through a single distribution channel represented 29%, 20% and 19% of our total revenue, respectively.
Below are some of the types of health and wellness related benefits offered to employees: • Medical, dental and vision insurance; • Retirement plan with Company matching contribution feature; • Flexible Spending Accounts for medical expenses, childcare, parking and transit; • Health Savings Account (with employer contribution); • Life insurance; • Short & long-term disability; • Paid time off and leave of absences; and • Employee assistance program Employees have an opportunity for financial inclusion at A10 Networks with an ownership interest in our company.
Below are some of the types of health and wellness related benefits offered to employees: • Medical, dental and vision insurance; • Retirement plan with Company matching contribution feature; • Flexible Spending Accounts for medical expenses, childcare, parking and transit; • Health Savings Account (with employer contribution); • Life insurance; 13 • Short & long-term disability; • Paid time off and leave of absences; and • Employee assistance program Employees have an opportunity for financial inclusion at A10 Networks with an ownership interest in our company.
Additionally, we provide EV charging stations for employees and visitors and facilitate recycling and proper disposal of e-waste, in accordance with local requirements. • Conflict Minerals Supply Chain Policy : Under our Conflict Minerals Supply Chain Policy, which can be viewed at https://investors.a10networks.com/corporate-responsibility/default.aspx , we expect our suppliers to comply with our standards for responsible sourcing of minerals from conflict-affected and high-risk areas.
Additionally, we provide EV charging stations for employees and visitors and facilitate recycling and proper disposal of e-waste, in accordance with local requirements. 12 • Conflict Minerals Supply Chain Policy : Under our Conflict Minerals Supply Chain Policy, which can be viewed at https://investors.a10networks.com/corporate-responsibility/default.aspx , we expect our suppliers to comply with our standards for responsible sourcing of minerals from conflict-affected and high-risk areas.
Furthermore, we expect employees to conduct themselves in a professional and dignified manner at all times; in doing so, we seek to avoid making employees feel uncomfortable at work. 15 As new employees join us, they learn more about our policies and culture through orientation and onboarding, our Employee Handbook, Code of Business Conduct and Ethics, and compliance trainings.
Furthermore, we expect employees to conduct themselves in a professional and dignified manner at all times; in doing so, we seek to avoid making employees feel uncomfortable at work. As new employees join us, they learn more about our policies and culture through orientation and onboarding, our Employee Handbook, Code of Business Conduct and Ethics, and compliance trainings.
They are also given access to our Statement Against Discrimination and are expected to comply with it. These all provide guidance on how we expect to operate in order to foster diversity, equity and inclusion across our company. We are an equal opportunity employer and a Vietnam Era Veterans' Readjustment Assistance Act (“VEVRAA”) federal subcontractor.
They are also given access to our Statement Against Discrimination and are expected to comply with it. These all provide guidance on how we expect to operate in order to foster equity and inclusion across our company. We are an equal opportunity employer and a Vietnam Era Veterans' Readjustment Assistance Act (“VEVRAA”) federal subcontractor.
Our sales organization includes sales engineers with deep technical domain expertise who are responsible for pre-sales technical support, solutions engineering, proof-of-concept work and technical training for our distribution channels. Our sales team is also comprised of a channel sales organization that is expanding our market reach through resellers.
Our sales organization includes sales engineers with deep technical domain expertise who are responsible for pre-sales technical support, solutions engineering, proof-of-concept work and technical training for our distribution channels. Our sales team is also comprised of a channel sales organization that is 10 expanding our market reach through resellers.
Our supply chain has sustained audits based on the Validated Assessment Program. 14 Further, we have established standards and practices to which our Board of Directors, executives and employees are obligated to adhere, as outlined on our website under Corporate Responsibility.
Our supply chain has sustained audits based on the Validated Assessment Program. Further, we have established standards and practices to which our Board of Directors, executives and employees are obligated to adhere, as outlined on our website under Corporate Responsibility.
Any issued patent may not preserve our proprietary position, and competitors or others may develop technologies similar to or superior to our technology. Our failure to enforce and protect our intellectual property rights could harm our business, operating results and financial condition.
Any issued patent may not preserve our proprietary position, and competitors or others may develop technologies similar to or superior to 11 our technology. Our failure to enforce and protect our intellectual property rights could harm our business, operating results and financial condition.
Information provided includes press releases and other information about financial performance, information on environmental, social and governance and details related to the Company’s annual meeting of stockholders.
Information provided includes press releases and other information about 14 financial performance, information on environmental, social and governance and details related to the Company’s annual meeting of stockholders.
We use as a guide the code of conduct policies set fourth by the Responsible Business Alliance, the world’s largest industry coalition dedicated to corporate social responsibility in global supply chains, and we expect all of our suppliers to do so as well.
We use as a guide the code of conduct policies set forth by the Responsible Business Alliance, the world’s largest industry coalition dedicated to corporate social responsibility in global supply chains, and we expect all of our suppliers to do so as well.
We encourage investors and others to review the information we make public in these locations, as such information could be deemed to be material information. Please note that this list may be updated from time to time. 17
We encourage investors and others to review the information we make public in these locations, as such information could be deemed to be material information. Please note that this list may be updated from time to time. 15
Our sales team is comprised of inside sales and field sales personnel who are organized by geography and maintain sales presence in 24 countries as of December 31, 2024, including in the following countries and regions: United States, Western Europe, the Middle East, Japan, Taiwan, South Korea, Southeast Asia and Latin America.
Our sales team is comprised of inside sales and field sales personnel who are organized by geography and maintain sales presence in 23 countries as of December 31, 2025, including in the following countries and regions: United States, Western Europe, the Middle East, Japan, Taiwan, South Korea, Southeast Asia and Latin America.
We fulfill nearly all orders globally through our distribution channels, which include distributors, value added resellers and system integrators. Revenue fulfilled through our distribution channels accounted for 94%, 95% and 83% of our total revenue for the years ended December 31, 2024, 2023 and 2022, respectively.
We fulfill nearly all orders globally through our distribution channels, which include distributors, value added resellers and system integrators. Revenue fulfilled through our distribution channels accounted for 96%, 94% and 95% of our total revenue for the years ended December 31, 2025, 2024 and 2023, respectively.
Our issued U.S. patents, excluding 10 patents that we acquired, expire between 2025 and 2042. Our issued overseas patents, excluding 2 patents that we acquired, expire between 2025 and 2037. Our future success depends in part on our ability to protect our proprietary rights to the technologies used in our principal products.
Our issued U.S. patents, excluding 10 patents that we acquired, expire between 2026 and 2043. Our issued overseas patents, excluding 2 patents that we acquired, expire between 2026 and 2037. Our future success depends in part on our ability to protect our proprietary rights to the technologies used in our principal products.
Environmental, Social and Governance (“ESG”) Environmental We are committed to business practices that preserve the environment, recognizing its fundamental role in sustaining our society and economy. We are committed to meeting and strive to exceed all legal and compliance requirements related to our people, products, and operations.
Sustainability We are committed to business practices that preserve the environment, recognizing its fundamental role in sustaining our society and economy. We are committed to meeting and strive to exceed all legal and compliance requirements related to our people, products, and operations.
For the years ended December 31, 2024, 2023 and 2022, our total revenue was $261.7 million, $251.7 million, and $280.3 million, respectively, and our gross margin was 80.4%, 80.9%, and 79.7%, respectively. We had net income of $50.1 million, $40.0 million and $46.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.
For the years ended December 31, 2025, 2024 and 2023, our total revenue was $290.6 million, $261.7 million, and $251.7 million, respectively, and our gross margin was 79.3%, 80.4%, and 80.9%, respectively. We had net income of $42.1 million, $50.1 million and $40.0 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Risk Factors included in this Annual Report on Form 10-K for additional information regarding the risks associated with protecting our intellectual property. Human Capital As of December 31, 2024, we had 481 full-time employees, including 217 engaged in research and development and customer support, 210 in sales and marketing and 54 in general and administrative and other activities.
Risk Factors included in this Annual Report on Form 10-K for additional information regarding the risks associated with protecting our intellectual property. Human Capital As of December 31, 2025, we had 494 full-time employees, including 219 engaged in research and development and customer support, 220 in sales and marketing and 55 in general and administrative and other activities.
Intellectual Property We rely on a combination of patent, copyright, trademark and trade secret laws, and restrictions on disclosure to protect our intellectual property rights. As of December 31, 2024, we had 210 United States (“U.S.”) patents issued, 3 U.S. patent applications pending, 78 overseas patents issued and 7 overseas patent applications pending.
Intellectual Property We rely on a combination of patent, copyright, trademark and trade secret laws, and restrictions on disclosure to protect our intellectual property rights. As of December 31, 2025, we had 211 United States (“U.S.”) patents issued, 2 U.S. patent applications pending, 77 overseas patents issued and 7 overseas patent applications pending.
Orders may be subject to cancellation, rescheduling by customers and product specification changes by customers. Although we believe that the backlog orders are firm, purchase orders may be canceled by the customer prior to shipment without significant cost. For this reason, we believe that our product backlog at any given date is not a reliable indicator of future revenues.
Although we believe that the backlog orders are firm, purchase orders may be canceled or rescheduled by the customer prior to shipment without significant cost. For these reasons, we believe that our product backlog at any given date is not a reliable indicator of future revenues.
Social Diversity, Inclusion & Equal Opportunity We are committed to providing a work environment that is free of discrimination and harassment. We are an equal-opportunity employer. We make employment decisions on the basis of a person’s qualifications, and our business needs.
Workplace Standards We are committed to providing a work environment that is free of discrimination and harassment. We are an equal-opportunity employer. We make employment decisions on the basis of a person’s qualifications, as well as our business needs, while complying with our statement against discrimination.
We are committed to ensuring our team members are treated with fairness, dignity and respect. We believe that a cooperative work environment, based on trust and mutual respect, is essential to our success. We embrace the diversity of our workforce and celebrate the creative value added by individuals with differing backgrounds.
We believe that a cooperative work environment, based on trust and mutual respect, is essential to our success. We embrace the diversity of our workforce and celebrate the creative value added by individuals with differing backgrounds. We expressly prohibit intimidation, hostility, harassment, discrimination and other inappropriate behavior.
Governance Our Board of Directors believes that our board should be a diverse body, and our Nominating and Corporate Governance Committee considers a broad range of backgrounds and experiences when selecting nominees for our board.
Governance Our Board of Directors believes that our board should be a diverse body, and our Nominating and Corporate Governance Committee considers a broad range of backgrounds and experiences when selecting nominees for our board. Sixty percent of our directors currently self-identify as being from one or multiple diverse groups, including gender.
Sixty percent of our directors currently self-identify as being from one or multiple diverse groups, including gender. 16 We continuously review and improve our corporate governance guidelines in response to changing requirements and feedback from employees, customers, partners, vendors and stockholders.
We continuously review and improve our corporate governance guidelines in response to changing requirements and feedback from employees, customers, partners, vendors and stockholders.
Our portfolio also includes container and microservices-based versions of certain of our comprehensive set of hardware, software and cloud offerings. We do not consider any of these markets to include a single dominant company, nor do we consider the markets to be fragmented.
We do not consider any of these markets to include a single dominant company, nor do we consider the markets to be fragmented.
We outsource delivery to a third-party logistics provider for deliveries in Japan. 13 Backlog As of December 31, 2024 and 2023, we had product backlog of approximately $11.6 million and $3.8 million, respectively. Backlog represents orders confirmed with a purchase order for products to be shipped generally within 90 days to customers with approved credit status.
We outsource delivery to a third-party logistics provider for deliveries in Japan. Backlog Backlog represents orders confirmed with a purchase order for products to be shipped to customers with approved credit status. Orders may be subject to cancellation, rescheduling by customers and product specification changes by customers.
Sales and Marketing Sales Our high-touch sales force engages customers directly and through distribution channels.
We believe our unified architecture, performance heritage, and integrated security capabilities position us to compete effectively across these markets. Sales and Marketing Sales Our high-touch sales force engages customers directly and through distribution channels.
We believe in the richness and quality of a working environment that is informed by people from all walks of life and strive to create a genuinely inclusive environment. We have implemented Diversity, Equal Opportunity, and Inclusion action planning teams focused on analysis from diversity surveys and focus groups. We have ongoing outreach efforts to recruit a diverse candidate pool.
We believe in the richness and quality of a working environment that is informed by people from all walks of life and strive to create a genuinely inclusive environment. We are committed to ensuring our team members are treated with fairness, dignity and respect.
Item 1. Business Overview We are a leading provider of security and infrastructure solutions for on-premises, hybrid cloud, and edge-cloud environments of our global enterprise, communication, cloud and web service provider customers who strive to provide business-critical applications and networks that are secure, available, and efficient.
Item 1. Business Overview We are a global provider of secure application and network infrastructure solutions that enable enterprises and service providers to deliver high-performance, reliable, and protected digital services across on-premises, hybrid cloud, and distributed environments. Our solutions are designed to operate in mission-critical environments where availability, scalability, low latency, and security are essential.
We invoice resellers or customers directly for maintenance contracts at the time of hardware purchase, and all maintenance contracts are non-cancellable and are generally renewed through the same channel as originally purchased. Software updates are provided to all customers with a current maintenance contract on a when-and-if-available basis.
Software updates are provided to customers with an active maintenance agreement on a when-and-if-available basis. Maintenance and support services are typically renewed through the same sales channel as the original purchase. We operate technical support centers in the United States, Japan, India, and the Netherlands to provide global coverage.
Removed
As cyber-attacks increase in volume and complexity, we integrate security and artificial intelligence (“AI”) enabled capabilities in our solutions that enable our customers to continue to adapt to market trends in hybrid cloud, AI-ready data centers and the ever-increasing need for high performance, high availability and low latency.
Added
We provide integrated capabilities spanning application delivery, traffic management, distributed denial of service (“DDoS”) protection, application and application programming interfaces (“API”) security, and centralized management. Our portfolio is built on a unified software architecture that allows customers to deploy consistent performance and security policies across physical, virtual, containerized, and cloud-native environments.
Removed
This provides the foundation for our strong global footprint and leadership in application and network security and infrastructure. In February 2025, we acquired the assets and key personnel of ThreatX Protect, which expanded our cybersecurity portfolio with web application and application programming interfaces protection (“WAAP”). ThreatX Protect is ideally suited for securing applications and application programming interfaces (“APIs”).
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We serve customers worldwide across industries including telecommunications, technology, financial services, public sector, industrial, retail, gaming, and education. Our service provider customers rely on our solutions to support large-scale network infrastructure and deliver connectivity and managed services.
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Industry Trends & Market Drivers The digitization of business has made applications and APIs a critical ingredient in network operations. The safety and efficiency of applications can directly impact business and financial performance, and security shortfalls can impact brand value and customer retention.
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Our enterprise customers use our solutions to secure and optimize business-critical applications, modernize hybrid architectures, and address increasingly complex cybersecurity requirements, including those associated with artificial intelligence (“AI”) enabled workloads. We generate revenue primarily from the sale of secure networking and cybersecurity solutions and related maintenance and support services.
Removed
The application networking and security industry is experiencing dynamic shifts in the way applications are developed, delivered, monetized and protected. Innovation in artificial intelligence (“AI”) is driving new ways to gain application delivery efficiency and enhance protection.
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Our offerings are delivered through a combination of direct sales and channel partners. Customers typically purchase maintenance and support alongside initial deployments and renew those services over time. We are continuing to expand subscription, term-based, and software-focused offerings to support recurring revenue growth and flexible customer consumption models.
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Our corporate strategy and technology address these evolving trends and the needs of our customers and industry, including: Increased Adoption of Cloud Applications . For decades, businesses operated with applications based in physical, appliance-based data centers.
Added
In February 2025, we acquired the assets and key personnel of ThreatX Protect, expanding our cybersecurity portfolio with cloud-delivered web application and API protection capabilities. This acquisition supports our strategy to strengthen our position in enterprise security and application protection markets. Industry Trends and Customer Requirements Digital transformation continues to increase reliance on applications and APIs as core business infrastructure.
Removed
While these traditional applications remain central to businesses around the world, a new genre of cloud-based applications is emerging, presenting new opportunities and challenges that require organizations to reassess the visibility, performance and security of their applications.
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As organizations modernize their technology environments, application architectures are becoming more distributed, hybrid, and cloud-integrated. At the same time, threat landscapes are evolving in scale and sophistication. These dynamics are reshaping performance, security, and operational requirements across enterprise and service provider environments. AI-Driven Infrastructure Evolution.
Removed
Some of these challenges relate to how a business effectively manages secure application services across various data centers and cloud types, whether private, public or hybrid clouds. Over time, more and more applications may be born or provided in the cloud, while some applications that existed in traditional data centers may migrate to clouds as well.
Added
The rapid adoption of artificial intelligence technologies, including generative AI and large language models, is introducing new infrastructure demands. AI-enabled applications increase traffic concurrency, intensify east-west traffic flows within data centers, and introduce new security considerations related to data exposure, prompt-based interactions, and API-driven workflows.
Removed
To address this shift, businesses will benefit from solutions that bridge both traditional and cloud-based application environments and centrally manage all secure application services holistically in this multi-cloud world. Increased Network Complexity and New Infrastructure Paradigms.
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Organizations are seeking infrastructure capable of supporting AI workloads while maintaining performance, reliability, and policy enforcement across environments. Hybrid and Multi-Cloud Architectures. Enterprises and service providers increasingly operate across combinations of on-premises data centers, private clouds, and public cloud environments.
Removed
Traditional IT vendors may want to shift from hardware-centric models to software-defined approaches across several operating environments to improve agility for critical applications, and subsequently, their business operations. Enabling product portfolios to adapt and diversify to include newer virtualized software, container-based software and cloud-based offerings are key factors determining future market leadership and competitive landscapes. Growing Importance of Automation, Orchestration.
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Applications may originate in traditional infrastructure and migrate to the cloud over time, while new applications are often cloud-native from inception. This hybrid reality requires consistent traffic management, visibility, and security controls across deployment models, supported by centralized management and flexible form factors. Escalating Cybersecurity Threats. Cybersecurity threats continue to grow in frequency, scale, and complexity.
Removed
As applications increasingly move to a multi-cloud environment, automation tools help enable efficient operations of security and application services.
Added
Distributed denial of service attacks, application-layer attacks, bot-driven abuse, API exploitation, and threats embedded in encrypted traffic require advanced detection and mitigation capabilities. The widespread adoption of TLS and SSL encryption has improved privacy but has also increased the need for efficient inspection and policy enforcement without degrading user experience.
Removed
There is a desire for increased operational efficiency and agility, improved detection and reporting of security anomalies, enhanced end-user experiences and reduced total cost of ownership (“TCO”), simplified management of distributed application services, improved capacity planning and optimized multi-cloud software lifecycle management.
Added
Organizations require solutions that combine performance and security at scale. 6 Operational Complexity and Automation. As networks and application environments grow more complex, organizations are prioritizing automation, orchestration, and analytics to improve operational efficiency. Centralized management, predictive insights, and programmable interfaces help customers simplify deployment, reduce total cost of ownership, and respond more rapidly to performance or security anomalies.
Removed
By deploying newly developed secure application delivery automation and predictive analytics tools, enterprises can visualize their application performance, detect anomalous trends and automate their application delivery and network security. The Rise of DDoS Attacks and use of Artificial Intelligence. The cyberthreat landscape continues to plague enterprises and society as a whole.
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Integrated platforms that unify performance and security services are increasingly favored over point solutions. Service Provider Network Evolution. Service providers continue to modernize core and edge network infrastructure to support increasing bandwidth consumption, higher connection densities, IPv6 migration, and the delivery of value-added services.
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Malicious actors and cyber criminals such as hacktivists, amateur hackers, and foreign military and intelligence organizations target data centers of every type. Distributed Denial of Service (“DDoS”) attacks are increasing in size, frequency, complexity and notoriety. IT defenders are faced with the increasing sophistication of adversaries who are responsible for the size and frequency of these attacks.
Added
As operators expand fiber and mobile networks and introduce new digital offerings, they require scalable, high-throughput infrastructure capable of supporting large session volumes while maintaining performance and security. In addition, many service providers are increasingly embedding security capabilities into their offerings, including managed DDoS and application protection services for enterprise customers.
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A DDoS attack seeks to render a target network or website unavailable by orchestrating coordinated attacks from massive worldwide networks of compromised endpoints, called botnets. Compromised endpoints can be computing devices or “Internet of Things” driven devices like video cameras. Any internet-connected device can be vulnerable to 6 hackers and utilized as part of a botnet.
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These dynamics create demand for solutions that combine carrier-grade scalability, traffic management, and integrated security within programmable, operationally efficient platforms. These evolving requirements across enterprise and service provider markets are driving demand for integrated solutions that unify application delivery, infrastructure scalability, and cybersecurity within a common architecture.
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Innovations in AI enable security teams to temper the rise in DDoS attack signals and apply techniques that accurately address compromised endpoints in a rapid manner. Rapid growth of TLS, SSL, Encrypted Applications and Hidden Threats . Many applications use Transport Layer Security (“TLS”) and Secure Sockets Layer (“SSL”) protocols.
Added
Product Portfolio Our product portfolio is designed to deliver secure, high-performance networking for enterprises and service providers operating across on-premises, hybrid cloud, and edge environments. We focus on outcomes customers require in production environments, including low latency at scale, always-on reliability, embedded security, and operational simplicity through automation and centralized control.
Removed
Cyber criminals exploit the protocol to hide malicious malware within encrypted channels and carry out attacks against businesses and users. This malicious trend drives demand for greater visibility within SSL-encrypted channels.
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Consistent with how we operate and go to market, we organize our portfolio around three core solution areas, supported by a unified control plane and common architecture. Three Core Solution Areas 1. Legacy Networking Our legacy networking solutions support large-scale service provider and enterprise environments where performance, scale, and reliability are essential.
Removed
Businesses need a way to decrypt traffic and apply outbound security policies efficiently, and require an effective way to inspect, identify, and remediate malicious traffic, then re-encrypt traffic and deliver it quickly to its destination. Conducting this process efficiently without placing a “security performance tax” on the user experience is a capability valued by our customers.
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A core capability in this area is carrier-grade address and protocol translation, which enables customers to extend IPv4 networks, support migration to IPv6, and manage subscriber or device growth while maintaining service continuity. These solutions are commonly deployed in high-throughput networks and are designed to provide resilient, standards-based traffic processing with operational stability.
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The Advent of 5G Networks and a Smart World . The growing deployment of commercial 5G networks will bring massive increases in network throughput and significant new business opportunities for mobile carriers and others.
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Representative capabilities include carrier-grade NAT and related translation services, high scale session management, policy controls, and visibility required to operate in complex networks. 2. Next-Generation Networking Our next-generation networking solutions focus on application delivery and traffic management for modern data center, hybrid cloud, and distributed architectures.
Removed
It will also require a new generation of security and internet delivery infrastructure capable of handling the growing capacity requirements and complex management needs of 5G networks. Capacity requirements increase dramatically in 5G networks due to substantial increases in concurrent sessions, lower packet size and higher connections per second.
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These solutions help customers ensure application availability, optimize performance, and apply consistent traffic policies across environments as applications become more distributed and API-driven. In many customer deployments, application delivery also serves as an enforcement point for performance and security policies in the data path, helping reduce operational complexity while maintaining low latency.
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Operators strive to dramatically lower latency, reduce total cost of ownership, and improve efficiency which may require advanced consolidation of network functions at the core.
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Representative capabilities include server load balancing, high availability, application traffic steering, global load distribution, SSL/TLS acceleration and offload, and application-level observability and policy controls. 3. Network Security (A10 Defend) Security is embedded across our portfolio and is also delivered through dedicated security solutions designed to protect applications, APIs, and infrastructure from modern cyber threats.
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Meanwhile, the scope and size of DDoS attacks may also increase dramatically with the proliferation of connected devices and traffic, due in large part to the expansion of Internet of Things (“IoT”)/Machine-to-Machine traffic coming from new 5G-delivered Smart World applications.
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Our network security capabilities support both enterprises and service providers with solutions that help defend against volumetric and application-layer DDoS 7 attacks, protect web applications and APIs, mitigate automated threats such as bots, and improve operational outcomes through centralized orchestration and actionable threat intelligence.
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To address these requirements, mobile and other operators want new solutions that provide hyperscale and increased performance, richer feature sets, and rich automation, analytics and threat intelligence. Need for Advanced Multi-Cloud Secure Application Service Solutions. To address these challenges, advanced and integrated solutions for managing secure application services across businesses’ application environments are desirable.
Added
Representative capabilities include DDoS detection and mitigation, orchestration and workflow automation, threat intelligence and blocklisting, converged network security functions delivered in the data path, and cloud-delivered WAAP (web application and API) capabilities, including web application firewall, bot protection, Layer 7 DDoS protection, and API protection.
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Of the many solution requirements, some of the more critical include: • Ability to Centrally Manage Traditional and Cloud Environments. As more applications are provided in the cloud, and they operate alongside traditional applications supported by on-premise and appliance-based data centers, application delivery and security solutions will be called upon to span traditional and cloud-based environments.
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Unified Control Plane, Architecture, and Policy Our solutions are built on a unified product architecture and are centrally managed through a control plane that provides policy management, automation, and analytics. This common foundation is intended to help customers operate performance, availability, and security as a single system across hybrid environments and deployment models.
Removed
In doing so, solutions must centrally control and manage secure application services across any combination of traditional data centers and a myriad of different clouds. To support data centers and different cloud types, solutions require a variety of form factors: hardware, software (i.e., virtual, bare metal and containers) and cloud-based offerings. • Clear Visibility and Sophisticated Analytics.
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Product Families and Delivery Models We deliver our capabilities through integrated product families that span secure application delivery, traffic management, and infrastructure security, as well as our A10 Defend security portfolio.
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The effectiveness of application performance and security depends greatly on the level of visibility a business has into its application and API traffic. That visibility should effectively span any number of data centers and cloud types to provide a holistic view of security threats and performance issues affecting applications.
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Our solutions are available in multiple form factors and deployment models, including: • Purpose-built hardware appliances • Software deployed on customer-selected hardware • Virtual appliances • Containerized software • Cloud-native and SaaS-delivered offerings (where applicable) Historically, a significant portion of our revenue has been derived from proprietary software embedded in optimized hardware and licensed on a perpetual basis.
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The deeper and clearer the visibility, the better the analytics and actionable information that can be applied to enhancing application performance and protection. Secure application service solutions should provide solid visibility and per-app analytics. • Ability to Scale. Performance and security at scale are highly desirable to our customers given today’s dynamic application environments.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

75 edited+36 added−8 removed328 unchanged
Biggest changeIn the EU/UK, various cyber resilience related laws (for example the EU Cyber Resilience Act, Network and Information Systems Directive 2, and the Digital Operational Resilience Act) have either recently been enacted or are in the process of being enacted, which essentially oblige those doing business in the EU/UK to implement robust cybersecurity standards with respect to the products and services they provide.
Biggest changeThese frameworks essentially oblige those doing business in the EU/UK to implement robust cybersecurity standards with respect to the products and services they provide, and aspects of these laws, including breach reporting requirements, are also subject to proposed amendments under the EU’s Digital Omnibus initiative.
Furthermore, the U.S. tariffs may cause customers to delay orders as they evaluate where to take delivery of our products in connection with their efforts to mitigate their own tariff exposure. Such delays create forecasting difficulties for us and increase the risk that orders might be canceled or might never be placed.
Furthermore, the U.S. tariffs may cause customers to delay orders as they evaluate where to take delivery of our products in connection with their efforts to mitigate their own tariff exposure. Such delays create forecasting difficulties for us and increase the risk that orders might be canceled or never be placed.
These provisions include: • the ability of our Board of Directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preference and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the exclusive right of our Board of Directors to elect a director to fill a vacancy created by the expansion of our Board of Directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our Board of Directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may be called only by the chairman of our Board of Directors, our Chief Executive Officer, our president (in the absence of a chief executive officer), or a majority vote of our Board of Directors, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • the ability of our Board of Directors, by majority vote, to amend the bylaws, which may allow our Board of Directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to our Board of Directors or not to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer 40 from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
These provisions include: • the ability of our Board of Directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preference and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the exclusive right of our Board of Directors to elect a director to fill a vacancy created by the expansion of our Board of Directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our Board of Directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may be called only by the chairman of our Board of Directors, our Chief Executive Officer, our president (in the absence of a chief executive officer), or a majority vote of our Board of Directors, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • the ability of our Board of Directors, by majority vote, to amend the bylaws, which may allow our Board of Directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to our Board of Directors or not to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
Factors that could cause fluctuations in the trading price of our common stock include the following: • announcements of new products, services or technologies, commercial relationships, acquisitions or other events by us or our competitors; • price and volume fluctuations in the overall stock market from time to time; • significant volatility in the market price and trading volume of technology companies in general and of companies in our industry; • fluctuations in the trading volume of our shares or the size of our public float; • actual or anticipated changes or fluctuations in our results of operations; • whether our results of operations meet the expectations of securities analysts or investors; • actual or anticipated changes in the expectations of investors or securities analysts; 42 • litigation or investigations involving us, our industry, or both; • regulatory developments in the U.S., foreign countries or both; • general economic conditions and trends; • major catastrophic events, including pandemics, acts of terrorism or war, or other events affecting the global economy, and the responses thereto; • cyber-attacks and other information or security breaches; • sales of large blocks of our common stock; or • departures of key personnel.
Factors that could cause fluctuations in the trading price of our common stock include the following: • announcements of new products, services or technologies, commercial relationships, acquisitions or other events by us or our competitors; • price and volume fluctuations in the overall stock market from time to time; • significant volatility in the market price and trading volume of technology companies in general and of companies in our industry; • fluctuations in the trading volume of our shares or the size of our public float; • actual or anticipated changes or fluctuations in our results of operations; • whether our results of operations meet the expectations of securities analysts or investors; • actual or anticipated changes in the expectations of investors or securities analysts; • litigation or investigations involving us, our industry, or both; • regulatory developments in the U.S., foreign countries or both; • general economic conditions and trends; • major catastrophic events, including pandemics, acts of terrorism or war, or other events affecting the global economy, and the responses thereto; • cyber-attacks and other information or security breaches; • sales of large blocks of our common stock; or • departures of key personnel.
In addition to other risks listed in this “Risk Factors” section, factors that may affect our operating results include: • fluctuations in and timing of purchases from, or loss of, large customers; • the budgeting cycles and purchasing practices of end-customers; • changes in end-customer preferences, practices or personnel; • our ability to attract and retain new end-customers; • our ability to provide and enhance efficient operations; • changes in demand for our products and services, including seasonal variations in customer spending patterns or cyclical fluctuations in our markets; • our reliance on shipments at the end of our quarters; • variations in product mix or geographic locations of our sales, which can affect the revenue we realize for those sales; • the timing and success of new product and service introductions by us or our competitors; • our ability to increase the size of our distribution channel and to maintain relationships with important distribution channels; • our ability to improve our overall sales productivity and successfully execute our marketing strategies; • the effect of currency exchange rates on our revenue and expenses; 19 • changes in legal requirements, our compliance obligations and/or relevant tax schemas; • the cost and potential outcomes of existing and future litigation; • expenses related to our facilities, networks, and network operations; • the effect of discounts negotiated by our largest end-customers for sales or pricing pressure from our competitors; • changes in the growth rate of the application networking or security markets or changes in market needs; • inventory write downs, which may be necessary for our older products when our new products are launched and adopted by our end-customers; • our ability to expand internationally and domestically; and • our third-party manufacturers’ and component suppliers’ capacity to meet our product demand forecasts on a timely basis, or at all.
In addition to other risks listed in this “Risk Factors” section, factors that may affect our operating results include: • fluctuations in and timing of purchases from, or loss of, large customers; • the budgeting cycles and purchasing practices of end-customers; • changes in end-customer preferences, practices or personnel; • our ability to attract and retain new end-customers; • our ability to provide and enhance efficient operations; • changes in demand for our products and services, including seasonal variations in customer spending patterns or cyclical fluctuations in our markets; • our reliance on shipments at the end of our quarters; • variations in product mix or geographic locations of our sales, which can affect the revenue we realize for those sales; • the timing and success of new product and service introductions by us or our competitors; • our ability to increase the size of our distribution channel and to maintain relationships with important distribution channels; • our ability to improve our overall sales productivity and successfully execute our marketing strategies; • the effect of currency exchange rates on our revenue and expenses; 17 • changes in legal requirements, our compliance obligations and/or relevant tax schemas; • the cost and potential outcomes of existing and future litigation; • expenses related to our facilities, networks, and network operations; • the effect of discounts negotiated by our largest end-customers for sales or pricing pressure from our competitors; • changes in the growth rate of the application networking or security markets or changes in market needs; • inventory write downs, which may be necessary for our older products when our new products are launched and adopted by our end-customers; • our ability to expand internationally and domestically; and • our third-party manufacturers’ and component suppliers’ capacity to meet our product demand forecasts on a timely basis, or at all.
Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including: • changes in the valuation of our deferred tax assets and liabilities; • expiration of, or detrimental changes in, research and development tax credit laws; • tax effects of stock-based compensation; • costs related to intercompany restructurings; • changes in tax laws, regulations, accounting principles or interpretations thereof; • future earnings being lower than anticipated in countries where we have lower statutory tax rates and higher than anticipated earnings in countries where we have higher statutory tax rates; and/or • examinations by U.S. federal, state, local or foreign jurisdictions that disagree with interpretations of tax rules and regulations and the resulting positions we have taken in tax filings.
Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including: 37 • changes in the valuation of our deferred tax assets and liabilities; • expiration of, or detrimental changes in, research and development tax credit laws; • tax effects of stock-based compensation; • costs related to intercompany restructurings; • changes in tax laws, regulations, accounting principles or interpretations thereof; • future earnings being lower than anticipated in countries where we have lower statutory tax rates and higher than anticipated earnings in countries where we have higher statutory tax rates; and/or • examinations by U.S. federal, state, local or foreign jurisdictions that disagree with interpretations of tax rules and regulations and the resulting positions we have taken in tax filings.
Our management and Board will determine the timing and 43 amount of any repurchase in its discretion based on a variety of factors, such as the market price of our common stock, corporate requirements, general market economic conditions and legal requirements. The Company plans to fund repurchases from its existing cash balance and cash provided by operating activities.
Our management and Board will determine the timing and amount of any repurchase in its discretion based on a variety of factors, such as the market price of our common stock, corporate requirements, general market economic conditions and legal requirements. The Company plans to fund repurchases from its existing cash balance and cash provided by operating activities.
The price of our common stock has been highly volatile since our initial public offering in March 2014. We have experienced securities class action and related derivative litigation and SEC investigations. Future securities litigation, including any related shareholder derivative litigation, or investigations could result in substantial costs and divert our management’s attention and resources from our business.
The price of our common 41 stock has been highly volatile since our initial public offering in March 2014. We have experienced securities class action and related derivative litigation and SEC investigations. Future securities litigation, including any related shareholder derivative litigation, or investigations could result in substantial costs and divert our management’s attention and resources from our business.
Evolving and changing definitions of personal data and personal information, within the EU, the U.S., and elsewhere, especially relating to classification of Internet Protocol (“IP”) addresses, machine identification, location data, biometric data and other information, may limit or inhibit our ability to operate or expand our business, including limiting strategic partnerships that may involve the sharing of 37 data.
Evolving and changing definitions of personal data and personal information, within the EU, the U.S., and elsewhere, especially relating to classification of Internet Protocol (“IP”) addresses, machine identification, location data, biometric data and other information, may limit or inhibit our ability to operate or expand our business, including limiting strategic partnerships that may involve the sharing of data.
To the extent potential end-customers or industry 27 analysts believe that the occurrence of any actual or perceived failure of our products to detect or prevent malware, viruses, worms or similar threats is a flaw or indicates that our products do not provide significant value, our reputation and business could be harmed.
To the extent potential end-customers or industry analysts believe that the occurrence of any actual or perceived failure of our products to detect or prevent malware, viruses, worms or similar threats is a flaw or indicates that our products do not provide significant value, our reputation and business could be harmed.
As we maintain our international operations, we are subject to a number of risks, including the following: • greater difficulty in enforcing contracts and accounts receivable collection and possible longer collection periods; • increased expenses incurred in establishing and maintaining office space and equipment for our international operations; • greater difficulty in recruiting local experienced personnel, and the costs and expenses associated with such activities; • general economic and political conditions in these foreign markets; • economic uncertainty around the world, including continued economic uncertainty as a result of sovereign debt issues in Europe, the United Kingdom’s exit from the European Union (commonly referred to as “Brexit”), the war between Russia and Ukraine, and tensions between China and Taiwan; • management communication and integration problems resulting from cultural and geographic dispersion; • risks associated with trade restrictions and foreign legal requirements, including the importation, certification, and localization of our products required in foreign countries; • greater risk of unexpected changes in regulatory practices, tariffs, and tax laws and treaties; • the uncertainty of protection for intellectual property rights in some countries; • greater risk of a failure of foreign employees to comply with both U.S. and foreign laws, including antitrust regulations, the U.S.
As we maintain our international operations, we are subject to a number of risks, including the following: • greater difficulty in enforcing contracts and accounts receivable collection and possible longer collection periods; • increased expenses incurred in establishing and maintaining office space and equipment for our international operations; • greater difficulty in recruiting local experienced personnel, and the costs and expenses associated with such activities; • general economic and political conditions in these foreign markets; • economic uncertainty around the world, including continued economic uncertainty as a result of sovereign debt issues in Europe, the United Kingdom’s exit from the European Union (commonly referred to as “Brexit”), the war between Russia and Ukraine, and tensions between China and Taiwan; • management communication and integration problems resulting from cultural and geographic dispersion; • risks associated with trade restrictions and foreign legal requirements, including the importation, certification, and localization of our products required in foreign countries; • greater risk of unexpected changes in regulatory practices, tariffs, and tax laws and treaties; • the uncertainty of protection for intellectual property rights in some countries; • greater risk of a failure of foreign employees to comply with both U.S. and foreign laws, including antitrust regulations, relevant accounting standards the U.S.
Similarly, our failure or perceived failure to pursue or fulfill our goals, targets and objectives or to satisfy various reporting standards within the 41 timelines we announce, or at all, could also have similar negative impacts and expose us to government enforcement actions and private litigation.
Similarly, our failure or perceived failure to pursue or fulfill our goals, targets and objectives or to satisfy various reporting standards within the timelines we announce, or at all, could also have similar negative impacts and expose us to government enforcement actions and private litigation.
We are also subject to the European Union Directive, known as the Waste Electrical and Electronic Equipment Directive (“WEEE Directive”), which requires producers of certain electrical and electronic equipment to 38 properly label products, register as a WEEE producer, and provide for the collection, disposal and recycling of waste electronic products.
We are also subject to the European Union Directive, known as the Waste Electrical and Electronic Equipment Directive (“WEEE Directive”), which requires producers of certain electrical and electronic equipment to properly label products, register as a WEEE producer, and provide for the collection, disposal and recycling of waste electronic products.
There is uncertainty as to whether a court would enforce this provision with respect to claims under the Securities Act, and our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.
There is uncertainty as to whether a court would enforce this provision with respect to claims under the Securities 39 Act, and our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.
In addition, speculation and uncertainty regarding our exploration of strategic alternatives may cause or result in: • disruption of our business; • distraction of our management and employees; • difficulty in recruiting, hiring, motivating, and retaining talented and skilled personnel; • difficulty in maintaining or negotiating and consummating new, business or strategic relationships or transactions; • increased stock price volatility; and • increased costs and advisory fees. 25 If we are unable to mitigate these or other potential risks related to the uncertainty caused by our exploration of strategic alternatives, it may disrupt our business or adversely impact our revenue, operating results, and financial condition.
In addition, speculation and uncertainty regarding our exploration of strategic alternatives may cause or result in: • disruption of our business; • distraction of our management and employees; • difficulty in recruiting, hiring, motivating, and retaining talented and skilled personnel; • difficulty in maintaining or negotiating and consummating new, business or strategic relationships or transactions; • increased stock price volatility; and • increased costs and advisory fees. 23 If we are unable to mitigate these or other potential risks related to the uncertainty caused by our exploration of strategic alternatives, it may disrupt our business or adversely impact our revenue, operating results, and financial condition.
Real or perceived security breaches of our end-customers’ networks could cause disruption or damage to their networks or other negative consequences and could result in negative publicity to us, damage to our reputation, declining sales, increased expenses and end-customer relations issues.
Real or perceived security breaches of our end-customers’ networks could cause disruption or damage to their networks or other negative consequences and could result in negative publicity to us, damage to our reputation, 25 declining sales, increased expenses and end-customer relations issues.
If our ESG initiatives fail to satisfy investors, customers, partners and our other stakeholders, our reputation, our ability to sell products and services to customers, our ability to attract or retain employees, and our attractiveness as an investment, business partner or acquirer could be negatively impacted.
If our initiatives fail to satisfy investors, customers, partners and our other stakeholders, our reputation, our ability to sell products and services to customers, our ability to attract or retain employees, and our attractiveness as an investment, business partner or acquirer could be negatively impacted.
Our charter documents and Delaware law could discourage takeover attempts and lead to management entrenchment. Our restated certificate of incorporation and bylaws contain provisions that could delay or prevent a change in control of our company.
Our charter documents and Delaware law could discourage takeover attempts and lead to management entrenchment. 38 Our restated certificate of incorporation and bylaws contain provisions that could delay or prevent a change in control of our company.
Many of our existing and potential competitors enjoy substantial competitive advantages, such as: • longer operating histories; • the capacity to leverage their sales efforts and marketing expenditures across a broader portfolio of products and services at a greater range of prices including through selling at zero or negative margins; • the ability to incorporate functionality into existing products to gain business in a manner that discourages users from purchasing our products, including through product bundling or closed technology platforms; • broader distribution and established relationships with distribution channel partners in a greater number of worldwide locations; • access to larger end-customer bases; • the ability to use their greater financial resources to attract our research and development engineers as well as other employees of ours; • larger intellectual property portfolios; and • the ability to bundle competitive offerings with other products and services.
Many of our existing and potential competitors enjoy substantial competitive advantages, such as: • longer operating histories; • the capacity to leverage their sales efforts and marketing expenditures across a broader portfolio of products and services at a greater range of prices including through selling at zero or negative margins; • the ability to incorporate functionality into existing products to gain business in a manner that discourages users from purchasing our products, including through product bundling or closed technology platforms; • broader distribution and established relationships with distribution channels in a greater number of worldwide locations; • access to larger end-customer bases; • the ability to use their greater financial resources to attract our research and development engineers as well as other employees of ours; • larger intellectual property portfolios; and • the ability to bundle competitive offerings with other products and services.
Because some of the key components in our products come from limited sources of supply, we are susceptible to supply shortages or supply changes, which could disrupt or delay our scheduled product deliveries to our end-customers and may result in the loss of sales and end-customers. 26 Our products incorporate key components, including certain integrated circuits that we and our third-party manufacturers purchase on our behalf from a limited number of suppliers, including some sole-source providers.
Because some of the key components in our products come from limited sources of supply, we are susceptible to supply shortages or supply changes, which could disrupt or delay our scheduled product deliveries to our end-customers and may result in the loss of sales and end-customers. 24 Our products incorporate key components, including certain integrated circuits that we and our third-party manufacturers purchase on our behalf from a limited number of suppliers, including some sole-source providers.
The need to engage in these or other remedies could increase our costs or otherwise adversely affect our business, operating results and financial condition. 29 Our products must interoperate with operating systems, software applications and hardware that are developed by others and if we are unable to devote the necessary resources to ensure that our products interoperate with such software and hardware, we may fail to increase, or we may lose market share and we may experience a weakening demand for our products.
The need to engage in these or other remedies could increase our costs or otherwise adversely affect our business, operating results and financial condition. 27 Our products must interoperate with operating systems, software applications and hardware that are developed by others and if we are unable to devote the necessary resources to ensure that our products interoperate with such software and hardware, we may fail to increase, or we may lose market share and we may experience a weakening demand for our products.
However, if we are unable to develop new products and features to address technological changes and new customer requirements in the application networking or security markets, or if our investments in research and development do not yield the expected benefits in a timely manner, our business and operating results could be adversely affected. 18 We have experienced net losses in the past and may not maintain profitability in future periods.
However, if we are unable to develop new products and features to address technological changes and new customer requirements in the application networking or security markets, or if our investments in research and development do not yield the expected benefits in a timely manner, our business and operating results could be adversely affected. 16 We have experienced net losses in the past and may not maintain profitability in future periods.
Any 33 disruption in the business of our supply chain, manufacturers, logistics providers, channels or end-customers that impacts sales at the end of a quarter could have a significant adverse impact on our quarterly results. All of the aforementioned risks may be further increased if the disaster recovery plans for us and our suppliers prove to be inadequate.
Any 31 disruption in the business of our supply chain, manufacturers, logistics providers, channels or end-customers that impacts sales at the end of a quarter could have a significant adverse impact on our quarterly results. All of the aforementioned risks may be further increased if the disaster recovery plans for us and our suppliers prove to be inadequate.
Such substantive changes could adversely impact our operations and financial results. 39 Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.
Such substantive changes could adversely impact our operations and financial results. Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.
Additionally, the budgetary decisions at these entities can be lengthy and require multiple organization reviews. The length of time that end-customers 30 devote to their evaluation of our products and decision-making process varies significantly. The length of our products’ sales cycles typically ranges from three to 12 months but can be longer for our large end-customers.
Additionally, the budgetary decisions at these entities can be lengthy and require multiple organization reviews. The length of time that end-customers 28 devote to their evaluation of our products and decision-making process varies significantly. The length of our products’ sales cycles typically ranges from three to 12 months but can be longer for our large end-customers.
Additionally, future actual, potential or 36 anticipated attacks may cause us to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants. A significant number of our employees are currently working from home or other remote locations.
Additionally, future actual, potential or anticipated attacks may cause us to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants. A number of our employees are currently working from home or other remote locations.
Dollar and the Japanese Yen, could impact the purchasing decisions of our customers. 23 We generate a significant amount of revenue from sales to distributors, resellers, and end-customers outside of the United States, and we are therefore subject to a number of risks that could adversely affect these international sources of our revenue.
Dollar and the Japanese Yen, could impact the purchasing decisions of our customers. 21 We generate a significant amount of revenue from sales to distributors, resellers, and end-customers outside of the United States, and we are therefore subject to a number of risks that could adversely affect these international sources of our revenue.
To the extent this impacts our ability to react timely to specific market or business opportunities, our financial results may be harmed. 32 Future acquisitions we may undertake may not result in the financial and strategic goals that are contemplated at the time of the transaction.
To the extent this impacts our ability to react timely to specific market or business opportunities, our financial results may be harmed. 30 Future acquisitions we may undertake may not result in the financial and strategic goals that are contemplated at the time of the transaction.
Moreover, conditions in our market could change rapidly and significantly as a result of technological advancements or other factors. 21 In addition, current or potential competitors may be acquired by third parties that have greater resources available.
Moreover, conditions in our market could change rapidly and significantly as a result of technological advancements or other factors. 19 In addition, current or potential competitors may be acquired by third parties that have greater resources available.
Our use of open source software and position regarding the potential use of generative artificial intelligence (AI) in our products could negatively affect our ability to sell our products and subject us to possible litigation. We incorporate open source software such as the Linux operating system kernel into our products.
Our use of open source software and position regarding the potential use of generative AI in our products could negatively affect our ability to sell our products and subject us to possible litigation. We incorporate open source software such as the Linux operating system kernel into our products.
Foreign Corrupt Practices Act (“FCPA”), and any trade regulations ensuring fair trade practices; and 24 • heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements.
Foreign Corrupt Practices Act (“FCPA”), and any trade regulations ensuring fair trade practices; and 22 • heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements.
While we do not currently utilize software generated by artificial intelligence tools in our products we may at some point choose to do so, and, if we do, we will likely treat AI generated code as a form of open source software.
While we do not currently utilize software generated by AI tools in our products we may at some point choose to do so, and, if we do, we will likely treat AI generated code as a form of open source software.
In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters. Such ratings are used by some investors to inform their investment and voting decisions.
In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to these matters. Such ratings are used by some investors to inform their investment and voting decisions.
We have, in the past, and may, in the future, conclude that our internal control over financial reporting is not effective. We have identified significant deficiencies and material weakness in the past that has resulted in a restatement of certain of our financial reports.
We have, in the past, and may, in the future, conclude that our internal control over financial reporting is not effective. We have identified significant deficiencies and material weaknesses in the past that has resulted in a restatement of certain of our financial reports.
While we carry insurance policies 28 covering this type of liability, these policies may not provide sufficient protection should a claim be asserted. A material product liability claim may harm our business and results of operations.
While we carry insurance policies 26 covering this type of liability, these policies may not provide sufficient protection should a claim be asserted. A material product liability claim may harm our business and results of operations.
Concurrently with this transition, pricing and delivery models are also evolving. Many companies in our industry, including some of our competitors, are developing and deploying cloud-based solutions for their customers. In addition, the emergence of new cloud infrastructures and artificial intelligence or other tools may enable new companies to compete with our business.
Concurrently with this transition, pricing and delivery models are also evolving. Many companies in our industry, including some of our competitors, are developing and deploying cloud-based solutions for their customers. In addition, the emergence of new cloud infrastructures and AI or other tools may enable new companies to compete with our business.
A subscription revenue model also makes it difficult for us to rapidly 31 increase our revenue through additional subscription sales in any one period, as revenue is generally recognized over a longer period.
A subscription revenue model also makes it difficult for us to rapidly 29 increase our revenue through additional subscription sales in any one period, as revenue is generally recognized over a longer period.
A reduction in or suspension or elimination of our dividend payments could have a negative effect on our stock price. On October 28, 2021, we announced that our Board of Directors approved a capital allocation strategy to return capital to our stockholders. As part of this strategy, the Board began declaring quarterly cash dividends.
A reduction in or suspension or elimination of our dividend payments could have a negative effect on our stock price. On October 28, 2021, we announced that our Board of Directors approved a capital allocation strategy for our stockholders. As part of this strategy, the Board of Directors began declaring quarterly cash dividends.
Our reliance on these third-party manufacturers reduces our control over the manufacturing process and exposes us to risks, including reduced control over quality assurance, product costs, and product supply and timing. Any manufacturing disruption at these manufacturers, including but not limited to disruptions due to tensions with China, could severely impair our ability to fulfill orders.
Our reliance on these third-party manufacturers reduces our control over the manufacturing process and exposes us to risks, including reduced control over quality assurance, product costs, and product supply and timing. Any manufacturing or other form of disruption at these manufacturers, including but not limited to disruptions due to tensions with China, could severely impair our ability to fulfill orders.
Risks Related to Intellectual Property, Litigation, Laws and Regulations We have been, may presently be, or in the future may be, a party to litigation and claims regarding intellectual property rights, resolution of which has been and may in the future be time-consuming, expensive and adverse to us, as well as require a significant amount of resources to prosecute, defend, or make our products non-infringing.
We have been, may presently be, or in the future may be, a party to litigation and claims regarding intellectual property rights, resolution of which has been and may in the future be time-consuming, expensive and adverse to us, as well as require a significant amount of resources to prosecute, defend, or make our products non-infringing.
Our business is subject to regulation by various federal, state, local and foreign governmental entities, including agencies responsible for monitoring and enforcing employment and labor laws, workplace safety, product safety, environmental laws, consumer protection laws, anti-bribery laws, import/export controls, artificial intelligence, data privacy laws, federal securities laws, and tax laws and regulations.
Our business is subject to regulation by various federal, state, local and foreign governmental entities, including agencies responsible for monitoring and enforcing employment and labor laws, workplace safety, product safety, environmental laws, consumer protection laws, anti-bribery laws, import/export controls, AI, data privacy laws, federal securities laws, and tax 36 laws and regulations.
During the years ended December 31, 2024, 2023 and 2022, purchases by our ten largest end-customers accounted for approximately 38%, 33% and 41% of our total revenue, respectively. The composition of the group of these ten largest end-customers changes from period to period, but often includes service providers and enterprise customers.
During the years ended December 31, 2025, 2024 and 2023, purchases by our ten largest end-customers accounted for approximately 40%, 38% and 33% of our total revenue, respectively. The composition of the group of these ten largest end-customers changes from period to period, but often includes service providers and enterprise customers.
A significant portion of our revenue is generated in international markets, including Japan, Western Europe, Taiwan and South Korea. During the years ended December 31, 2024, 2023, and 2022, approximately 55%, 55% and 54% of our total revenue, respectively, was generated from customers located outside of the U.S.
A significant portion of our revenue is generated in international markets, including Japan, Western Europe, Taiwan and South Korea. During the years ended December 31, 2025, 2024, and 2023, approximately 45%, 55% and 55% of our total revenue, respectively, was generated from customers located outside of the U.S.
Further, U.S. states have passed or introduced legislations regulating the development and deployment or artificial intelligence and automated decision making technologies across different sectors and in some instances have passed or introduced legislations or regulations that apply across sectors.
Further, U.S. states have passed or introduced legislations regulating the development and deployment or AI and automated decision making technologies across different sectors and in some instances have passed or introduced legislations or regulations that apply across sectors.
Additionally, the current uncertainty about the future relationship between the U.S. and China, as well as other countries, with respect to the trade policies, treaties, taxes, government regulations and tariffs makes it difficult to plan for the future.
Additionally, the current uncertainty about the future relationship between the U.S. and other countries with respect to the trade policies, treaties, taxes, sanctions, government regulations and tariffs makes it difficult to plan for the future.
During the years ended December 31, 2024, 22 2023 and 2022, service providers accounted for approximately 57%, 58% and 66%, of our total revenue, respectively, and enterprise customers accounted for approximately 43%, 42% and 34% of our total revenue, respectively. Sales to these large end-customers have typically been characterized by large but irregular purchases with long initial sales cycles.
During the years ended December 31, 2025, 20 2024 and 2023, service providers accounted for approximately 60%, 57% and 58%, of our total revenue, respectively, and enterprise customers accounted for approximately 40%, 43% and 42% of our total revenue, respectively. Sales to these large end-customers have typically been characterized by large but irregular purchases with long initial sales cycles.
Any of these factors could depress economic activity and restrict our access to suppliers or customers and have a material adverse effect on our business, financial condition and results of operations and affect our strategy in China and elsewhere around the world.
Any of these factors could depress economic activity and restrict our access to suppliers or customers and have a material adverse effect on our business, financial condition and results of operations and affect our strategy.
As a 35 result, future U.S. tariffs on imports and retaliatory tariffs could increase the cost of, and reduce demand for, our products, which may materially adversely affect our results of operations.
Simply put, future U.S. tariffs on imports and retaliatory tariffs could increase the cost of, and reduce demand for, our products, which may materially adversely affect our results of operations.
We may need to or may elect to raise additional funds in future private or public offerings, and such funds may not be available on acceptable terms, if at all. If we do raise additional funds, existing stockholders will suffer dilution.
We may need to or may elect to raise additional funds in future private or public offerings, and such funds may not be available on acceptable terms, if at all.
(“HAProxy”) as well as many startups; 20 • Companies that sell CGN products, which were originally designed for other networking purposes, such as edge routers and security appliances from vendors like Cisco Systems, Inc. (“Cisco Systems”), Juniper Networks, Inc. (“Juniper Networks”) and Fortinet, Inc.
(“HAProxy”) as well as many startups; 18 • Companies that sell CGN products, which were originally designed for other networking purposes, such as edge routers and security appliances from vendors like Cisco Systems, Inc. (“Cisco Systems”), Hewlett Packard Enterprise (division f/k/a Juniper Networks, Inc. (“Juniper Networks”)) and Fortinet, Inc.
If we raise additional funds through further issuances of equity or convertible debt securities, you could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of our then-existing capital stock.
We may also elect to raise additional funds to help us pursue our business or strategic objectives. If we raise additional funds through further issuances of equity or convertible debt securities, you could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of our then-existing capital stock.
Increasing attention on environmental, social and governance (“ESG”) matters may have a negative impact on our business, impose additional costs on us, and expose us to additional risks. Companies are facing increasing attention from investors, customers, partners, consumers and other stakeholders relating to ESG matters, including environmental stewardship, social responsibility, diversity and inclusion, racial justice and workplace conduct.
Increasing attention on sustainability, human capital, governance and other corporate responsibility matters may have a negative impact on our business, impose additional costs on us, and expose us to additional risks. Companies are facing increasing attention from investors, customers, partners, consumers and other stakeholders relating to sustainability, human capital and governance matters, including environmental stewardship, social responsibility and workplace conduct.
The currency exchange impact of the foreign exchange rates on our net income was $0.5 million unfavorable during the year ended December 31, 2022. As exchange rates vary, our operating income may differ from expectations. We deploy normal and customary hedging practices that are designed to proactively mitigate such exposure.
The currency exchange impact of the foreign exchange rates on our net income was $2.1 million and $0.1 million favorable during the years ended December 31, 2024 and 2023, respectively. As exchange rates vary, our operating income may differ from expectations. We deploy normal and customary hedging practices that are designed to proactively mitigate such exposure.
Current or future tariffs imposed by the U.S. may also negatively impact our customers’ sales, thereby causing an indirect negative impact on our own sales. Any reduction in customers’ sales, and/or any apprehension among distributors and customers of a possible reduction in such sales, would likely cause an indirect negative impact on our own sales.
Current or future tariffs may also negatively impact our customers’ revenue, thereby causing an indirect negative impact on our sales. Any reduction in customers’ revenue, and/or any apprehension among distributors and customers of a possible reduction in such revenue, could cause an indirect negative impact on our own sales.
Revenue resulting from selling in local currencies and costs incurred in local currencies are exposed to foreign currency exchange rate fluctuations that can affect our operating income. The currency exchange impact of the foreign exchange rates on our net income was $2.1 million and $0.1 million favorable during the years ended December 31, 2024 and 2023, respectively.
Revenue resulting from selling in local currencies and costs incurred in local currencies are exposed to foreign currency exchange rate fluctuations that can affect our operating income. The currency exchange impact of the foreign exchange rates on our net income was $0.3 million unfavorable during the year ended December 31, 2025.
Any compromise or perceived compromise of our security could damage our reputation with our end-customers, and could subject us to significant liability, as well as regulatory action, including financial penalties, which could significantly adversely affect our brand, results of operations, financial condition, business and prospects.
Any compromise or perceived compromise of our security could damage our reputation with our end-customers, and could subject us to significant liability, as well as regulatory action, including financial penalties, which could significantly adversely affect our brand, results of operations, financial condition, business and prospects. 34 We have incurred, and expect to continue to incur, significant costs to protect against or remedy security breaches.
Noncompliance with the GDPR can trigger regulator fines of up to €20 million or 4% of global annual revenues, whichever is higher, in the most serious cases and/or legal claims. The United Kingdom enacted legislation that substantially implements the GDPR.
Noncompliance with the GDPR can trigger regulatory fines of up to €20 million or 4% of global annual revenues, whichever is higher, in the most serious cases and/or legal claims.
Unfavorable ESG ratings may lead to negative investor sentiment toward the Company, which could have a negative impact on our stock price and our access to and costs of capital. We have established corporate social responsibility programs aligned with sound environmental, social and governance principles.
Unfavorable ratings may lead to negative investor sentiment toward the Company, which could have a negative impact on our stock price and our access to and costs of capital. We have established corporate social responsibility programs aligned with our business objectives and applicable legal and regulatory requirements.
There are no assurances that any security measures we have in place, or any additional security measures that our subcontractors may have in place, will be sufficient to protect this confidential information from unauthorized security breaches.
We may also outsource operations to third-party service providers to whom we transmit certain confidential data. There are no assurances that any security measures we have in place, or any additional security measures that our subcontractors may have in place, will be sufficient to protect this confidential information from unauthorized security breaches.
We have incurred, and expect to continue to incur, significant costs to protect against or remedy security breaches. We may incur significant additional costs in the future to address problems caused by any actual or perceived security breaches .
We may incur significant additional costs in the future to address problems caused by any actual or perceived security breaches .
Furthermore, if tariffs, trade restrictions, or trade barriers are placed on products such as ours by foreign governments, especially China, the prices for our products may increase, which may result in the loss of customers and harm to our business, financial condition and results of operations.
Furthermore, while we are not presently aware of duties applicable to digital services, if trade restrictions or barriers are placed on our products by foreign governments, the prices for such products may increase, which may result in the loss of customers and harm to our business, financial condition and results of operations.
These data protection, privacy and cyber resilience-related laws and regulations are evolving and being tested in courts and may result in ever-increasing regulatory and public scrutiny and escalating levels of enforcement and sanctions.
These data protection, privacy and cyber resilience-related laws and regulations continue to evolve, are increasingly being tested in courts, and remain subject to ongoing governmental review and reform. Such laws may result in ever-increasing regulatory and public scrutiny and escalating levels of enforcement and sanctions.
Because the GDPR may be subject to new or changing interpretations by courts, our interpretation of the law and efforts to comply with the rules and regulations of the law may be ruled invalid.
Because the GDPR and related UK data protection laws may be subject to new or changing interpretations by courts and regulators, as well as legislative modification or reform, our interpretation of the law and efforts to comply with the rules and regulations of the law may be challenged or ruled invalid.
As part of this strategy, the Company announced on November 7, 2024, that its Board of Directors had authorized a new, non-expiring stock repurchase program under which the Company may repurchase up to $50 million of its outstanding common stock.
On October 28, 2021, we announced that our Board of Directors approved a capital allocation strategy for our stockholders. As part of this strategy, the Company announced on May 1, 2025, that its Board of Directors had authorized a new, non-expiring stock repurchase program under which the Company may repurchase up to $75 million of its outstanding common stock.
While the Cyber Incident we experienced in January 2023 did not result in material degradation of our systems, it did expose a vulnerability in our security measures which we believe has been corrected.
We may collect, store and use certain confidential information in the course of providing our services, and we have invested in preserving the security of this data. While the Cyber Incident we experienced in January 2023 did not result in material degradation of our systems, it did expose a vulnerability in our security measures which we believe has been corrected.
We may need to raise additional funds in private or public offerings, and these funds may not be available to us when we need them or on acceptable terms, if at all. We may also elect to raise additional funds to help us pursue our business or strategic objectives.
If we do raise additional funds, existing stockholders will suffer dilution. 40 We may need to raise additional funds in private or public offerings, and these funds may not be available to us when we need them or on acceptable terms, if at all.
We may not be able to adequately protect our intellectual property, and if we are unable to do so, our competitive position could be harmed, or we could be required to incur significant expenses to enforce our rights.
We may not be able to adequately protect our intellectual property, and if we are unable to do so, our competitive position could be harmed, or we could be required to incur significant expenses to enforce our rights. 33 We rely on a combination of patent, copyright, trademark and trade secret laws, and contractual restrictions on disclosure of confidential and proprietary information, to protect our intellectual property.
We rely on a combination of patent, copyright, trademark and trade secret laws, and contractual restrictions on disclosure of confidential and proprietary information, to protect our intellectual property. Despite the efforts we take to protect our intellectual property and other proprietary rights, these efforts may not be sufficient or effective at preventing their unauthorized use.
Despite the efforts we take to protect our intellectual property and other proprietary rights, these efforts may not be sufficient or effective at preventing their unauthorized use. In addition, effective trademark, patent, copyright and trade secret protection may not be available or cost-effective in every country in which we have rights.
These protections and agreements may not effectively prevent disclosure of our confidential information and may not provide an adequate remedy in the event of unauthorized disclosure.
We also rely in part on confidentiality and/or assignment agreements with our technology partners, employees, consultants, advisors and others. These protections and agreements may not effectively prevent disclosure of our confidential information and may not provide an adequate remedy in the event of unauthorized disclosure.
Moreover, if our products are subject to tariffs, we may be impacted to a greater degree than our competitors who operate in countries that are not subject to tariffs, placing us at a disadvantage.
Moreover, an increase in the cost of our products due to tariffs or other trade actions could cause us to be impacted to a greater degree than our competitors 32 who are based in countries that are not subject to tariffs, placing us at a disadvantage.
If we are unable to protect our intellectual property and other proprietary rights from unauthorized use, the value of those assets may be reduced, which could negatively impact our business. We also rely in part on confidentiality and/or assignment agreements with our technology partners, employees, consultants, advisors and others.
There may be instances where we are not able to protect intellectual property or other proprietary rights in a manner that maximizes competitive advantage. If we are unable to protect our intellectual property and other proprietary rights from unauthorized use, the value of those assets may be reduced, which could negatively impact our business.
The extent to which these threats will be enacted and the duration for which enacted tariffs will be in place remain uncertain and could lead to economic decline in affected countries, which could negatively impact demand for our products.
The duration and magnitude of these tariffs and other trade disruptions remains uncertain and could lead to economic decline in affected countries, which could negatively impact purchases of our products.
Although the stock repurchase programs are intended to enhance long term stockholder value, short-term stock price fluctuations could reduce their effectiveness. 44 Item 1B. Unresolved Staff Comments None.
Although the stock repurchase programs are intended to enhance long term stockholder value, short-term stock price fluctuations could reduce their effectiveness. Risks Related to Our Convertible Indebtedness The issuance of shares of our common stock could depress the trading price of our common stock.
Enhanced United States tariffs, import/export restrictions, Chinese regulations or other trade barriers may have a negative effect on global economic conditions, financial markets and our business. There is currently significant uncertainty about the future relationship between the U.S. and various other countries, most significantly China, with respect to trade policies, treaties, tariffs and taxes.
Risks Related to Intellectual Property, Litigation, Laws and Regulations Enhanced U.S. tariffs, import/export restrictions, Chinese regulations, countermeasures taken by affected countries or other trade barriers may have a negative effect on global economic conditions, financial markets and our business.
The USTR is currently evaluating comments submitted as part of the four-year review process and a decision on the tariffs is likely to be made later this year. An increase in tariffs will cause our costs to increase, which could narrow the profits we earn from sales of products requiring such materials.
Although A10's supply chain does not depend exclusively upon imports from China, an increase in tariffs generally will cause our costs to increase, which could narrow the profits we earn from sales of products requiring such materials and/or compel us to increase our prices to customers.
Removed
In addition, effective trademark, patent, copyright and trade secret protection may not be available or cost-effective in every country in which we have rights. There may be instances where we are not able to protect intellectual 34 property or other proprietary rights in a manner that maximizes competitive advantage.
Added
There is currently significant uncertainty about the future relationship between the U.S. and various other countries, including China, with respect to trade policies, treaties, tariffs and taxes. The current U.S. administration has imposed a range of tariff actions on U.S. trading partners.
Removed
Some within the U.S. government have called for substantial changes to U.S. foreign trade policy with respect to China and other countries, including the possibility of imposing greater restrictions on international trade and significant increases in tariffs on goods imported into the U.S. In 2018, the Office of the U.S.
Added
In April 2025, acting under the International Economic Emergency Powers Act (“IEEPA”), the Trump administration temporarily increased IEEPA tariffs on Chinese imports to 145% (reduced back to 30% in May 2025) and set a baseline 10% tariff applicable to almost every country, with exemptions for certain products.
Removed
Trade Representative (the “USTR”) enacted tariffs on imports into the U.S. from China, including communications equipment products and components manufactured and imported from China. In October 2021 the USTR confirmed these enacted U.S. tariffs will stay in place for the time being.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+1 added−1 removed14 unchanged
Biggest changeAdditionally, on at least an annual basis, the Audit Committee reviews and discusses with management our policies and programs with respect to the oversight of IT risk and cybersecurity threats. Oversight for assessing and managing cybersecurity risk is performed by our IT cybersecurity team, with additional oversight performed by our Human Resources, Internal Audit and Legal Departments.
Biggest changeThe Board of Directors, executive management and the Audit Committee receive quarterly reports on IT controls and information security. Additionally, on at least an annual basis, the Audit Committee reviews and discusses with management our policies and programs with respect to the oversight of IT risk and cybersecurity threats.
This training consists of educational material and compliance testing administered to, and completed by, all of our employees on an annual basis, which is tracked and recorded throughout the year. Results are shared with executive management, the Audit Committee, and the Board of Directors. Additionally, employee phishing tests are conducted on a regular basis.
This training consists of educational material and compliance testing administered to, and completed by, all of our employees on an annual basis, which is tracked and recorded throughout the year. Results are shared with executive management, the Audit Committee, and the Board of Directors. Additionally, employee phishing tests are regularly conducted.
Our executive management is briefed at least quarterly from these teams. Members of the Board of Directors, Audit Committee, and executive management are also encouraged to regularly engage in ad hoc conversations with management on cybersecurity-related news events and discuss any updates to our cybersecurity risk management and strategy programs.
Members of the Board of Directors, Audit Committee, and executive management are also encouraged to regularly engage in ad hoc conversations with management on cybersecurity-related news events and discuss any updates to our cybersecurity risk management and strategy programs.
In our risk factors, we describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have significantly affected or are reasonably likely to significantly affect us, including our business strategy, results of operations, or financial condition.
In our risk factors, we describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have significantly affected or are reasonably likely to significantly affect us, including our business strategy, results of operations, or financial condition. See our risk factor disclosures at Item 1A of this Annual Report on Form 10-K.
Executive management and the Audit Committee share responsibility for overseeing our risk exposure to information security, cybersecurity, and data protection, as well as the steps management has taken to monitor and control such exposure. The Board of Directors, executive management and the Audit Committee receive quarterly reports on IT controls and information security.
Cybersecurity Governance 44 Our Board of Directors, executive management and Audit Committee are actively engaged in the oversight of IT risk management, including cybersecurity risk. Executive management and the Audit Committee share responsibility for overseeing our risk exposure to information security, cybersecurity, and data protection, as well as the steps management has taken to monitor and control such exposure.
Removed
See our risk factor disclosures at Item 1A of this Annual Report on Form 10-K. 45 Cybersecurity Governance Our Board of Directors, executive management and Audit Committee are actively engaged in the oversight of IT risk management, including cybersecurity risk.
Added
Oversight for assessing and managing cybersecurity risk is performed by our IT cybersecurity team, with additional oversight performed by our Human Resources, Internal Audit and Legal Departments. Our executive management is briefed at least quarterly from these teams.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeWe also lease space for offices internationally and for sales offices in locations throughout the U.S. and various international locations, including, among others, Japan, the UK, the Netherlands, Taiwan, South Korea, Singapore and India. We believe that our current facilities are adequate to meet our current needs.
Biggest changeWe also lease space for offices internationally and for sales offices in locations throughout the U.S. and various international locations, including, among others, Japan, the UK, the Netherlands, Taiwan, South Korea and India. We believe that our current facilities are adequate to meet our current needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed4 unchanged
Biggest changeAdditional information with respect to this Item may be found in Note 7 Commitments and Contingencies, in the notes to consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K, which is incorporated by reference. Item 4. Mine Safety Disclosures Not applicable. 46 PART II
Biggest changeAdditional information with respect to this Item may be found in Note 9 Commitments and Contingencies, in the notes to consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K, which is incorporated by reference. Item 4. Mine Safety Disclosures Not applicable. 45 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+0 added−2 removed4 unchanged
Biggest changeShare repurchase activity during the three months ended December 31, 2024 was as follows (in thousands, except per share amounts): 48 Periods Total Number of Shares Purchased Average Price Paid Per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (2) October 1 - 31, 2024 — $ — — November 1 - 30, 2024 330 $ 15.73 330 December 1 - 31, 2024 31 $ 18.81 31 Total 361 $ 44,237 (1) Average price paid per share includes broker commission fees, if applicable.
Biggest changeShare repurchase activity during the three months ended December 31, 2025 was as follows (in thousands, except per share amounts): 47 Periods Total Number of Shares Purchased Average Price Paid Per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (2) October 1 - 31, 2025 — $ — — November 1 - 30, 2025 392 $ 16.99 392 December 1 - 31, 2025 14 $ 18.12 14 Total 406 $ 53,393 (1) Average price paid per share includes broker commission fees, if applicable.
Shares may be repurchased in privately negotiated and/or open market transactions and by withholding shares in connection with vesting equity awards held by certain employees, including under plans complying with Rule 10b5-1 under the Exchange Act. Unregistered Sales of Equity Securities None. Item 6. [Reserved] 49
Shares may be repurchased in privately negotiated and/or open market transactions and by withholding shares in connection with vesting equity awards held by certain employees, including under plans complying with Rule 10b5-1 under the Exchange Act. Unregistered Sales of Equity Securities None. Item 6. [Reserved] 48
The graph assumes $100 was invested on December 31, 2019 in our common stock and each index and all dividends were reinvested. The historic stock price performance is not necessarily indicative of future stock price performance.
The graph assumes $100 was invested on December 31, 2020 in our common stock and each index and all dividends were reinvested. The historic stock price performance is not necessarily indicative of future stock price performance.
Because many shares of our common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these holders of record. 47 Company Stock Performance The following graph compares the cumulative total return on our common stock, the NASDAQ Composite, the Russell 2000 Index, the NYSE Technology Index and the S&P 600 Index.
Because many shares of our common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these holders of record. 46 Company Stock Performance The following graph compares the cumulative total return on our common stock, the Russell 2000 Index, the NYSE Technology Index and the S&P 600 Index.
(2) The $44.2 million in the table above represents the amount available to repurchase shares under the authorized repurchase program as of December 31, 2024. The Company’s stock repurchase program does not obligate it to acquire any specific number of shares.
(2) The $53.4 million in the table above represents the amount available to repurchase shares under the authorized repurchase program as of December 31, 2025. The Company’s stock repurchase program does not obligate it to acquire any specific number of shares.
However, the payment, amount and timing of future dividends remain within the discretion of our Board of Directors and will depend on our results of operations, financial condition, cash requirements, and other factors. There were approximately 44 stockholders of record on February 20, 2025.
However, the payment, amount and timing of future dividends remain within the discretion of our Board of Directors and will depend on our results of operations, financial condition, cash requirements, and other factors. There were approximately 37 stockholders of record on February 19, 2026.
As of December 31, 2024, the Company had $44.2 million available to repurchase shares under this program. Under the stock repurchase program, we may repurchase shares of common stock in the open market, privately negotiated transactions, in block trades or a combination of the foregoing.
As of December 31, 2025, the Company had $53.4 million available to repurchase shares under this program. Under the stock repurchase program, we may repurchase shares of common stock in the open market, privately negotiated transactions, in block trades or a combination of the foregoing.
Comparison Of Cumulative Total Return Among A10 Networks, Inc., NASDAQ Composite, Russell 2000 Index, NYSE Technology Index and S&P 600 Index Issuer Purchases of Equity Securities On November 7, 2024, the Company announced its Board of Directors had authorized a new, non-expiring stock repurchase program under which the Company may repurchase up to $50 million of its outstanding common stock.
Comparison Of Cumulative Total Return Among A10 Networks, Inc., Russell 2000 Index, NYSE Technology Index and S&P 600 Index Issuer Purchases of Equity Securities On May 1, 2025, the Company announced its Board of Directors had authorized a new, non-expiring stock repurchase program under which the Company may repurchase up to $75 million of its outstanding common stock.
Removed
The Company has elected to replace the NASDAQ Composite with the S&P 600 Index because the Company is a component of the S&P 600 Index and the Company believes the S&P 600 Index represents a group of companies more aligned with our peer group.
Removed
In this transition year, the stock performance graph below includes the new index and the previously reported index.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

64 edited+22 added−13 removed27 unchanged
Biggest changeOur investments in growth in these areas may affect our short-term profitability. 51 Results of Operations A summary of our consolidated statements of operations for the years ended December 31, 2024 and 2023 are as follows (dollars in thousands): Years Ended December 31, 2024 2023 Increase (Decrease) Amount Percent of Total Revenue Amount Percent of Total Revenue Amount Percent Revenue: Products $ 139,799 53.4 % $ 141,082 56.1 % $ (1,283) (0.9) % Services 121,897 46.6 110,618 43.9 11,279 10.2 % Total revenue 261,696 100.0 251,700 100.0 9,996 4.0 % Cost of revenue: Products 31,218 11.9 31,468 12.5 (250) (0.8) % Services 20,201 7.7 16,494 6.6 3,707 22.5 % Total cost of revenue 51,419 19.6 47,962 19.1 3,457 7.2 % Gross profit 210,277 80.4 203,738 80.9 6,539 3.2 % Operating expenses: Sales and marketing 83,300 31.8 85,976 34.2 (2,676) (3.1) % Research and development 57,726 22.1 55,229 21.9 2,497 4.5 % General and administrative 25,283 9.7 23,885 9.5 1,398 5.9 % Total operating expenses 166,309 63.6 165,090 65.6 1,219 0.7 % Income from operations 43,968 16.8 38,648 15.4 5,320 13.8 % Non-operating income (expense): Interest income 6,747 2.6 5,078 2.0 1,669 32.9 % Interest and other income (expense), net 7,384 2.8 69 — 7,315 10,601.4 % Total non-operating income (expense), net 14,131 5.4 5,147 2.0 8,984 174.5 % Income before income taxes 58,099 22.2 43,795 17.4 14,304 32.7 % Provision for income taxes 7,959 3.0 3,825 1.5 4,134 108.1 % Net income $ 50,140 19.2 % $ 39,970 15.9 % $ 10,170 25.4 % 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 post contract support (“PCS”), professional services, training and software-as-a-service offerings.
Biggest changeSpending patterns remain uneven due to the unpredictable impact of trade policies, and we may need to implement tariff-related input cost increases. 50 Results of Operations A summary of our consolidated statements of operations for the years ended December 31, 2025 and 2024 are as follows (dollars in thousands): Years Ended December 31, 2025 2024 Increase (Decrease) Amount Percent of Total Revenue Amount Percent of Total Revenue Amount Percent Revenue: Products $ 167,086 57.5 % $ 139,799 53.4 % $ 27,287 19.5 % Services 123,471 42.5 121,897 46.6 1,574 1.3 % Total revenue 290,557 100.0 261,696 100.0 28,861 11.0 % Cost of revenue: Products 33,403 11.5 31,218 11.9 2,185 7.0 % Services 26,639 9.2 20,201 7.7 6,438 31.9 % Total cost of revenue 60,042 20.7 51,419 19.6 8,623 16.8 % Gross profit 230,515 79.3 210,277 80.4 20,238 9.6 % Operating expenses: Sales and marketing 84,467 29.1 83,300 31.8 1,167 1.4 % Research and development 69,104 23.8 57,726 22.1 11,378 19.7 % General and administrative 29,802 10.3 25,283 9.7 4,519 17.9 % Total operating expenses 183,373 63.1 166,309 63.6 17,064 10.3 % Income from operations 47,142 16.2 43,968 16.8 3,174 7.2 % Non-operating income (expense): Interest income 11,628 4.0 6,747 2.6 4,881 72.3 % Interest and other income (expense), net (6,348) (2.2) 7,384 2.8 (13,732) (186.0) % Total non-operating income (expense), net 5,280 1.8 14,131 5.4 (8,851) (62.6) % Income before income taxes 52,422 18.0 58,099 22.2 (5,677) (9.8) % Provision for income taxes 10,285 3.5 7,959 3.0 2,326 29.2 % Net income $ 42,137 14.5 % $ 50,140 19.2 % $ (8,003) (16.0) % Revenue We derive revenue from two sources: (i) products revenue, which includes hardware, perpetual software license and subscription offerings, which include term-based license agreements; and (ii) services revenue, which includes PCS, professional services, training and software-as-a-service offerings.
Cash Flows from Financing Activities During the year ended December 31, 2024, cash used in financing activities was $44.3 million consisting primarily of $30.1 million of cash used to repurchase our common stock in the open market, from privately negotiated transactions and from withholding shares in connection with vesting equity awards held by certain employees.
During the year ended December 31, 2024, cash used in financing activities was $44.3 million consisting primarily of $30.1 million of cash used to repurchase our common stock in the open market, from privately negotiated transactions and from withholding shares in connection with vesting equity awards held by certain employees.
The favorable change in deferred revenues was attributable to the timing of service contract bookings. The favorable change in accrued liabilities was due to increases in accrued income taxes and variable compensation. The favorable change in accounts payable is due to the timing of payments to our vendors.
The favorable change in deferred revenues was attributable to the timing of service contract bookings. The favorable change in accrued liabilities was due to increases in 56 accrued income taxes and variable compensation. The favorable change in accounts payable is due to the timing of payments to our vendors.
For 2025, we expect research and development expenses to increase from 2024 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.
For 2026, we expect research and development expenses to increase from 2025 levels reflecting strategic investments in our growth priorities, including cybersecurity technology and AI technologies. General and Administrative General and administrative expenses primarily consist of personnel costs, professional services and office expenses. General and administrative personnel costs include executive, finance, human resources, information technology, facility and legal related expenses.
For 2025, we expect sales and marketing expenses to increase modestly from 2024 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.
For 2026, we expect sales and marketing expenses to increase modestly from 2025 levels as we continue to apply a disciplined approach to focus our investments in areas that offer the greatest opportunities. Research and Development Research and development efforts are focused on new product development and on developing additional functionality for our existing products.
We generally use a range of amounts to estimate SSP for individual products and services based on multiple factors including, but not limited to the sales channel (reseller, distributor or end-customer), the geographies in which our products and services are sold, and the size of the end-customer. 59
We generally use a range of amounts to estimate SSP for individual products and services based on multiple factors including, but not limited to the sales channel (reseller, distributor or end-customer), the geographies in which our products and services are sold, and the size of the end-customer. 58
As a percentage of revenue, our 52 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.
As a percentage of revenue, our 51 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.
In addition, as described in Note 7 Commitments and Contingencies , in the notes to consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K, we may be currently, or may be from time to time, involved in ongoing litigation.
In addition, as described in Note 9 Commitments and Contingencies , in the notes to consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K, we may be currently, or may be from time to time, involved in ongoing litigation.
These forward-looking statements include, but are not limited to, those matters discussed under the heading “Forward-looking Statements.” Our actual results could differ materially from those anticipated by these forward‑looking statements due to various factors, including, but not limited to, those set forth under Item 1A. Risk Factors of this Form 10-K and elsewhere in this document.
These forward-looking statements include, but are not limited to, those matters discussed under the heading “Forward-looking Statements.” Our actual results could differ materially from those anticipated by these forward‑looking statements due to various factors, including, but not limited to, those set forth under Item 1A. Risk Factors of this Annual Report on Form 10-K and elsewhere in this document.
For 2025, we expect general and administrative expenses to increase modestly from 2024 levels as we continue to apply a disciplined approach to focus our investments in areas that offer the greatest opportunities. Non-Operating Income (Expense) - Interest Income Interest income consists primarily of interest income earned on our invested cash, cash equivalents and marketable securities.
For 2026, we expect general and administrative expenses to increase modestly from 2025 levels as we continue to apply a disciplined approach to focus our investments in areas that offer the greatest opportunities. 54 Non-Operating Income (Expense) - Interest Income Interest income consists primarily of interest income earned on our invested cash, cash equivalents and marketable securities.
We generate services revenue from sales of post contract support (“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 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.
Discussions of fiscal 2022 items and year-to-year comparisons between fiscal 2023 and 2022 that are not included in this Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 29, 2024.
Discussions of fiscal 2024 items and year-to-year comparisons between fiscal 2024 and 2023 that are not included in this Annual Report on Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on February 25, 2025.
Revenue in these arrangements is recognized ratably as the services are provided. A substantial portion of our revenue is from sales of our products and services through distribution channels, such as resellers and distributors. Our customers predominantly purchase PCS services in conjunction with purchases of our products.
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.
Provision for Income Taxes We recorded a provision for income tax of $8.0 million for the year ended December 31, 2024 and $3.8 million for the year ended December 31, 2023. Our deferred tax assets primarily consist of research and development credits, capitalized research and development expenses and accruals and reserves.
Provision for Income Taxes We recorded a provision for income tax of $10.3 million for the year ended December 31, 2025 and $8.0 million for the year ended December 31, 2024. Our deferred tax assets primarily consist of research and development credits, capitalized research and development expenses and accruals and reserves.
Revenue Recognition We derive revenue from two sources: (i) products revenue, which includes hardware, perpetual software license and subscription offerings, which include term-based license agreements; and (ii) services revenue, which includes post contract support (“PCS”), professional services, training and software-as-a-service offerings.
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.
We report two customer verticals: service providers, which accounted for 57% and 58% of our total revenue during 2024 and 2023, respectively, and enterprise, which accounted for 43% and 42% of our total revenue during 2024 and 2023, respectively.
We report two customer verticals: service providers, which accounted for 60%, 57% and 58% of our total revenue during 2025, 2024 and 2023, respectively, and enterprise, which accounted for 40%, 43% and 42% of our total revenue during 2025, 2024 and 2023, respectively.
The net change in our operating assets and liabilities primarily reflects cash outflows from changes in accrued and other liabilities of $20.8 million, inventory of $6.3 million, accounts payable of $3.0 million and prepaid expenses and other assets of $1.9 million, partially offset by cash inflows from changes in deferred revenue of $14.3 million.
The net change in our operating assets and liabilities primarily reflects cash inflows from changes in accounts receivable of $14.6 million, accrued and other liabilities of $4.6 million and inventory of $3.7 million, partially offset by cash outflows from changes in prepaid expenses and other assets of $8.3 million, deferred revenue of $8.0 million, and accounts payable of $1.5 million.
Our non-cash benefits primarily consisted of non-cash charges of $14.1 million for stock-based compensation and $9.3 million of depreciation and amortization expense.
Our non-cash benefits primarily consisted of non-cash charges of $20.0 million for stock-based compensation and $14.9 million of depreciation and amortization expense.
The $2.5 million increase in research and development expenses in 2024 compared to 2023 was primarily due to an increase of $1.5 million in personnel costs and a $1.3 million increase in equipment and software expense, partially offset by a decrease of $0.6 million in professional services.
The $11.4 million increase in research and development expenses in 2025 compared to 2024 was primarily due to an increase of $12.0 million in personnel costs and a $1.5 million increase in equipment and software expense, partially offset by a decrease of $2.3 million in consultants and professional services.
Most of our contracts with customers, other than renewals of PCS, contain multiple performance obligations with a combination of products and PCS. Products and PCS generally qualify as distinct performance obligations. Our hardware includes embedded ACOS software, which together deliver the essential functionality of our products.
Our customers predominantly purchase PCS services in conjunction with purchases of our products. 57 Most of our contracts with customers, other than renewals of PCS, contain multiple performance obligations with a combination of products and PCS. Products and PCS generally qualify as distinct performance obligations. Our hardware includes embedded ACOS software, which together deliver the essential functionality of our products.
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.
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.
Liquidity and Capital Resources As of December 31, 2024, we had cash and cash equivalents of $95.1 million, including $3.9 million held outside the U.S. in our foreign subsidiaries, and $100.4 million of marketable securities. We currently do not have any plans to repatriate our earnings from our foreign operations.
Liquidity and Capital Resources As of December 31, 2025, we had cash and cash equivalents of $71.1 million, including $4.1 million held outside the U.S. in our foreign subsidiaries, and $306.7 million of marketable securities. We currently do not have any plans to repatriate our earnings from our foreign operations.
Note 1, Description of Business and Summary of Significant Accounting Policies, in notes to consolidated financial statements in Item 8 of Part II of this Report, describes the significant accounting policies and methods used in the preparation of the consolidated financial statements.
Our actual results could differ from these estimates. Note 1 Description of Business and Summary of Significant Accounting Policies , in notes to consolidated financial statements in Item 8 of Part II of this Report, describes the significant accounting policies and methods used in the preparation of the consolidated financial statements.
The decrease was primarily due to lower products revenue driven by a decrease in demand from our service provider customers. 53 Cost of Revenue, Gross Profit and Gross Margin Cost of Revenue Cost of products revenue is primarily comprised of cost of third-party manufacturing services and cost of inventory for the hardware component of our products.
The increase was primarily a result of higher products revenue driven by an increase in demand from our service provider customers. 52 Cost of Revenue, Gross Profit and Gross Margin Cost of Revenue Cost of products revenue is primarily comprised of cost of third-party manufacturing services and cost of inventory for the hardware component of our products.
During the year ended December 31, 2023, the Company repurchased 1.3 million shares for a total cost of $16.0 million. In October 2021, our Board approved the initiation of a regular quarterly cash dividend on our common stock.
During the year ended December 31, 2024, the Company repurchased 2.2 million shares for a total cost of $30.1 million under the 2024 and 2023 Programs. In October 2021, the Board of Directors approved the initiation of a regular quarterly cash dividend on our common stock.
The favorable change in deferred revenues was attributable to the timing of service contract bookings. 57 Cash Flows from Investing Activities During the year ended December 31, 2024, cash used by investing activities was $48.4 million, consisting of purchases of marketable securities of $142.8 million and capital expenditures of $12.3 million, partially offset by proceeds from maturities of marketable securities of $81.1 million and proceeds from the sales of marketable securities of $25.5 million.
During the year ended December 31, 2024, cash used by investing activities was $48.4 million, consisting of purchases of marketable securities of $142.8 million and capital expenditures of $12.3 million, partially offset by proceeds from maturities of marketable securities of $81.1 million and proceeds from the sales of marketable securities of $25.5 million.
This section of the Form 10-K generally discusses fiscal 2024 and 2023 items and year-to-year comparisons between fiscal 2024 and 2023.
This section of this Annual Report on Form 10-K generally discusses fiscal 2025 and 2024 items and year-to-year comparisons between fiscal 2025 and 2024.
Statements of Cash Flows The following table summarizes our cash flow related activities (in thousands): Years Ended December 31, 2024 2023 Cash provided by (used in): Operating activities $ 90,492 $ 44,514 Investing activities (48,350) 13,608 Financing activities (44,257) (28,849) Net increase (decrease) in cash and cash equivalents $ (2,115) $ 29,273 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.
Statements of Cash Flows The following table summarizes our cash flow related activities (in thousands): Years Ended December 31, 2025 2024 Cash provided by (used in): Operating activities $ 84,894 $ 90,492 Investing activities (243,638) (48,350) Financing activities 134,754 (44,257) Net decrease in cash and cash equivalents $ (23,990) $ (2,115) Cash Flows from Operating Activities Our cash provided by operating activities is driven primarily by sales of our products and management of working capital investments.
The Company recorded $5.3 million of investment gains in the year ended December 31, 2024, compared to an immaterial loss in the year ended December 31, 2023. Foreign currency exchange gains and losses had a favorable change of $2.1 million in the year ended December 31, 2024 compared to a favorable change of $0.1 million in 2023.
Foreign currency exchange gains and losses, net had an unfavorable change of $0.3 million in the year ended December 31, 2025 compared to a favorable change of $2.1 million in the year ended December 31, 2024.
The increase was primarily due to higher products and services revenue driven by an increase in demand from our service provider customers. During 2024, $40.2 million, or 16% of total revenue, was generated from EMEA, which represented a 3% decrease compared to 2023.
The decrease was primarily a result of lower products and services revenue driven by a decrease in demand from our service provider and enterprise customers. During 2025, $44.9 million, or 16% of total revenue, was generated from EMEA, which represented a 12% increase compared to 2024.
Interest income was $6.7 million and $5.1 million in the years ended December 31, 2024 and 2023, respectively. 55 Non-Operating Income (Expense) - Interest and Other Income (Expense), Net In the years ended December 31, 2024 and 2023, interest and other income (expense), net consisted primarily of gains on equity investments and foreign currency exchange gains and losses.
Interest income was $11.6 million and $6.7 million in the years ended December 31, 2025 and 2024, respectively. Non-Operating Income (Expense) - Interest and Other Income (Expense), Net In the year ended December 31, 2025, interest and other income (expense), net consisted primarily of interest expense for the 2030 Notes and foreign currency exchange gains and losses.
The $2.7 million decrease in sales and marketing expenses in 2024 compared to 2023 was primarily due to decreases of $3.2 million in personnel costs as a result of a decrease in headcount, partially offset by an increase in marketing events of $0.6 million.
The $1.2 million increase in sales and marketing expenses in 2025 compared to 2024 was primarily due to increases of $1.8 million in personnel costs as a result of an increase in headcount, $0.3 million in equipment expense and $0.3 million of amortization and depreciation expense, partially offset by a decrease in bad debt expense of $1.2 million.
As of December 31, 2024, we had working capital of $183.7 million, accumulated deficit of $40.3 million and total stockholders’ equity of $231.8 million. We plan to continue to invest for long-term growth, and our investment may increase.
As of December 31, 2025, we had working capital of $342.3 million, retained earnings of $1.8 million and total stockholders’ equity of $211.5 million. We plan to continue to invest for long-term growth, and our investment may increase.
The increase was primarily attributable to the increase in PCS sales in connection with our increased installed customer base in the APJ region, and to a lesser extent in the Americas and EMEA regions. During 2024, $134.4 million, or 51% of total revenue, was generated from the Americas region, which represents a 1% increase compared to 2023.
Services revenue increased $1.6 million, or 1%, in 2025 compared to 2024. The increase was primarily attributable to the increase in PCS sales in connection with our increased installed customer base in the Americas region. During 2025, $175.2 million, or 60% of total revenue, was generated from the Americas region, which represents a 30% increase compared to 2024.
However, the payment, amount and timing of future dividends remain within the discretion of our Board and will depend on our results of operations, financial condition, cash requirements, and other factors.
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.
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 perform quality assurance and testing at our San Jose, Taiwan and Japan distribution centers, as well as at our manufacturers’ locations.
Additionally, cash used for the payments of cash dividends was $17.8 million. Partially offsetting these cash outflows was $3.6 million of cash proceeds from common stock issuances under our equity incentive plans.
Additionally, cash used for the payments of cash dividends was $17.8 million. Partially offsetting these cash outflows was $3.6 million of cash proceeds from common stock issuances under our equity incentive plans. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the U.S.
See Note 10 Income Taxes , of the notes to consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for further details regarding the Company’s taxes.
The Company’s income tax provision for the year ended December 31, 2025 and 2024, primarily consisted of U.S. federal, state and foreign income taxes. See Note 12 Income Taxes , of the notes to consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for further details regarding the Company’s taxes.
We use a range of amounts to estimate SSP for products and PCS sold together in a contract to determine whether there is a discount to be allocated based on the relative SSP of the various products and PCS. 58 If we do not have an observable SSP, such as when we do not sell a product or service separately, then SSP is estimated using judgment and considering all reasonably available information such as market conditions and information about the size and/or purchase volume of the customer.
If we do not have an observable SSP, such as when we do not sell a product or service separately, then SSP is estimated using judgment and considering all reasonably available information such as market conditions and information about the size and/or purchase volume of the customer.
A summary of our cost of revenue is as follows (dollars in thousands): Years Ended December 31, Increase (Decrease) 2024 2023 Amount Percent Cost of revenue: Products $ 31,218 $ 31,468 $ (250) (1) % Services 20,201 16,494 3,707 22 % Total cost of revenue $ 51,419 $ 47,962 $ 3,457 7 % Gross Margin Gross margin may vary and be unpredictable from period to period due to a variety of factors.
A summary of our cost of revenue is as follows (dollars in thousands): Years Ended December 31, Increase (Decrease) 2025 2024 Amount Percent Cost of revenue: Products $ 33,403 $ 31,218 $ 2,185 7 % Services 26,639 20,201 6,438 32 % Total cost of revenue $ 60,042 $ 51,419 $ 8,623 17 % Gross Margin Gross margin may vary and be unpredictable from period to period due to a variety of factors.
Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the U.S. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis.
The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances.
Our customers include leading service providers (cloud, telecommunications, multiple system operators, cable), government organizations, and enterprises. 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 post contract support (“PCS”), professional services, training and software-as-a-service offerings.
Revenue Recognition We derive revenue from two sources: (i) products revenue, which includes hardware, perpetual software license and subscription offerings, which include term-based license agreements; and (ii) services revenue, which includes PCS, professional services, training and software-as-a-service offerings.
The increase was primarily due to higher services revenue driven by an increase in demand from our enterprise customers. During 2024, $87.2 million, or 33% of total revenue, was generated from APJ, which represents a 12% increase compared to 2023.
The increase was primarily a result of higher products and services revenue driven by an increase in demand from both service provider and enterprise customers. During 2025, $70.5 million, or 24% of total revenue, was generated from APJ, which represents a 19% decrease compared to 2024.
Revenue in these arrangements is recognized over time as the services are provided. A substantial portion of our revenue is from sales of our products and services through distribution channel partners, such as resellers and distributors. Our customers predominantly purchase PCS services in conjunction with purchases of our products other than our software-as-a-service offerings.
Revenue in these arrangements is recognized ratably as the services are provided. A substantial portion of our revenue is from sales of our products and services through distribution channels, such as resellers and distributors.
As a result of the nature of our target market and the current stage of our development, a substantial portion of our revenue comes from a limited number of large end-customers and service providers. Purchases from our ten largest end-customers accounted for 38%, 33% and 41% of our total revenue for 2024, 2023 and 2022, 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 end-customers, including service providers and enterprise customers, in any period.
We sell our products globally to service providers and enterprises that depend on data center applications and networks to generate revenue and manage operations efficiently.
We perform quality assurance and testing at our San Jose, Taiwan and Japan distribution centers, as well as at our manufacturers’ locations. 49 We sell our products globally to service providers and enterprises that depend on data center applications and networks to generate revenue and manage operations efficiently.
Consequently, any acceleration or delay in anticipated product purchases by or deliveries to our largest end-customers could materially impact our revenue and operating results in any quarterly period. This may cause our quarterly revenue and operating results to fluctuate from quarter to quarter and make them difficult to predict.
The timing of these purchases and the delivery of the purchased products are difficult to predict and rely upon customer growth and network enhancements. Consequently, any acceleration or delay in anticipated product purchases by or deliveries to our largest end-customers could materially impact our revenue and operating results in any quarterly period.
Professional services primarily consist of fees for outside accounting, tax, legal, recruiting and other administrative services. The $1.4 million increase in general and administrative expenses in 2024 compared to 2023 was primarily due to an increase of $1.3 million in personnel costs as a result of an increase in variable compensation.
The $4.5 million increase in general and administrative expenses in 2025 compared to 2024 was primarily due to an increases of $1.2 million in legal services, $1.0 million in personnel costs primarily as a result of an increase in variable compensation, $1.0 million in amortization and depreciation, $0.5 million in business insurance and $0.4 million in equipment expense.
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.
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.
A summary of our gross profit and gross margin is as follows (dollars in thousands): Years Ended December 31, 2024 2023 Increase (Decrease) Amount Gross Margin Amount Gross Margin Amount Gross Margin Gross profit: Products $ 108,581 77.7 % $ 109,614 77.7 % $ (1,033) — % Services 101,696 83.4 % 94,124 85.1 % 7,572 (1.7) % Total gross profit $ 210,277 80.4 % $ 203,738 80.9 % $ 6,539 (0.5) % Products gross margin percentage remained flat in 2024 compared to 2023.
A summary of our gross profit and gross margin is as follows (dollars in thousands): Years Ended December 31, 2025 2024 Increase (Decrease) Amount Gross Margin Amount Gross Margin Amount Gross Margin Gross profit: Products $ 133,683 80.0 % $ 108,581 77.7 % $ 25,102 2.3 % Services 96,832 78.4 % 101,696 83.4 % (4,864) (5.0) % Total gross profit $ 230,515 79.3 % $ 210,277 80.4 % $ 20,238 (1.1) % Products gross margin percentage increased to 80.0% in 2025 compared to 77.7% in 2024, primarily due to product and regional mix.
Personnel costs also include stock-based compensation. 54 A summary of our operating expenses is as follows (dollars in thousands): Years Ended December 31, Increase (Decrease) 2024 2023 Amount Percent Operating expenses: Sales and marketing $ 83,300 $ 85,976 $ (2,676) (3) % Research and development 57,726 55,229 2,497 5 % General and administrative 25,283 23,885 1,398 6 % Total operating expenses $ 166,309 $ 165,090 $ 1,219 1 % Sales and Marketing Sales and marketing expenses are our largest functional category of operating expenses and primarily consist of personnel costs.
A summary of our operating expenses is as follows (dollars in thousands): Years Ended December 31, Increase (Decrease) 2025 2024 Amount Percent Operating expenses: Sales and marketing $ 84,467 $ 83,300 $ 1,167 1 % Research and development 69,104 57,726 11,378 20 % General and administrative 29,802 25,283 4,519 18 % Total operating expenses $ 183,373 $ 166,309 $ 17,064 10 % Sales and Marketing Sales and marketing expenses are our largest functional category of operating expenses and primarily consist of personnel costs.
During the year ended December 31, 2023, cash provided in investing activities was $13.6 million, consisting of proceeds from maturities of marketable securities of $64.5 million and proceeds from the sales of marketable securities of $45.4 million, partially offset by purchases of marketable securities of $85.4 million and capital expenditures of $10.9 million.
Cash Flows from Investing Activities During the year ended December 31, 2025, cash used by investing activities was $243.6 million, consisting of purchases of marketable securities of $342.0 million, our acquisition of ThreatX Protect for $19.1 million and capital expenditures of $20.1 million, partially offset by proceeds from maturities of marketable securities of $136.8 million and proceeds from the sales of marketable securities of $0.9 million.
Our end-customers operate in a variety of industries, including telecommunications, technology, industrial, retail, financial, gaming, education and government. Since inception, our customer base has grown rapidly.
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.
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 intend to continue to invest for long-term growth.
This may cause our quarterly revenue and operating results to fluctuate from quarter to quarter and make them difficult to predict. In February 2025, we acquired the assets and key personnel of ThreatX Protect, which expanded our cybersecurity portfolio with WAAP protection (web application and application programming interfaces). We offer protection under A10 Defend ThreatX Protect.
The unfavorable change in accounts receivable was due to the timing of collections from our customers. During the year ended December 31, 2023, cash provided by operating activities was $44.5 million, consisting of net income of $40.0 million and non-cash benefits totaling $22.8 million, partially offset by an unfavorable net change in operating assets and liabilities of $18.3 million.
During the year ended December 31, 2025, cash provided by operating activities was $84.9 million, consisting of net income of $42.1 million, non-cash benefits totaling $37.8 million and a favorable net change in operating assets and liabilities of $5.0 million.
A summary of our total revenue is as follows (dollars in thousands): Years Ended December 31, 2024 2023 Increase (Decrease) Amount Percent of Total Revenue Amount Percent of Total Revenue Amount Percent Revenue: Products $ 139,799 53 % $ 141,082 56 % $ (1,283) (1) % Services 121,897 47 % 110,618 44 % 11,279 10 % Total revenue $ 261,696 100 % $ 251,700 100 % $ 9,996 4 % Revenue by geographic region: Americas $ 134,356 51 % $ 132,745 53 % $ 1,611 1 % United States 117,707 45 % 113,766 45 % 3,941 3 % Americas-other 16,649 6 % 18,979 8 % (2,330) (12) % APJ 87,175 33 % 77,606 31 % 9,569 12 % EMEA 40,165 16 % 41,349 16 % (1,184) (3) % Total revenue $ 261,696 100 % $ 251,700 100 % $ 9,996 4 % Total revenue increased by $10.0 million, or 4%, in 2024 compared to 2023.
A summary of our total revenue is as follows (dollars in thousands): Years Ended December 31, 2025 2024 Increase (Decrease) Amount Percent of Total Revenue Amount Percent of Total Revenue Amount Percent Revenue: Products $ 167,086 58 % $ 139,799 53 % $ 27,287 20 % Services 123,471 42 % 121,897 47 % 1,574 1 % Total revenue $ 290,557 100 % $ 261,696 100 % $ 28,861 11 % Revenue by geographic region: Americas $ 175,181 60 % $ 134,356 51 % $ 40,825 30 % United States 160,528 55 % 117,707 45 % 42,821 36 % Americas-other 14,653 5 % 16,649 6 % (1,996) (12) % APJ 70,524 24 % 87,175 33 % (16,651) (19) % EMEA 44,852 16 % 40,165 15 % 4,687 12 % Total revenue $ 290,557 100 % $ 261,696 99 % $ 28,861 11 % Total revenue increased by $28.9 million, or 11%, in 2025 compared to 2024 as a result of an increase of $27.3 million in products revenue and an increase of $1.6 million in services revenue.
During the year ended December 31, 2023, cash used in financing activities was $28.8 million consisting primarily of $17.8 million of cash used for the payments of cash dividends and $16.0 million of cash used to repurchase our common stock in the open market, partially offset by $4.9 million of cash proceeds from common stock issuances under our equity incentive plans.
Cash Flows from Financing Activities During the year ended December 31, 2025, cash provided by financing activities was $134.8 million consisting primarily of $217.7 million of net cash proceeds from the issuance of the 2030 Notes and $3.4 million of cash proceeds from common stock issuances under our equity incentive plans.
We sell substantially all of our solutions through our high-touch sales organization as well as distribution channels, including distributors, value-added resellers and system integrators, and fulfill nearly all orders globally through such resellers. 50 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 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.
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.
Shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act of 1934 (the “Exchange Act”). During the year ended December 31, 2025, the Company had repurchased 3.7 55 million shares for a total cost of $68.9 million under the 2025 and 2024 Programs.
Sales to these large end-customers have typically been characterized by large but irregular purchases with long sales cycles. The timing of these purchases and the delivery of the purchased products are difficult to predict and rely upon customer growth and network enhancements.
Purchases from our ten largest end-customers accounted for 40%, 38% and 33% of our total revenue for 2025, 2024 and 2023, respectively. Sales to these large end-customers have typically been characterized by large but irregular purchases with long sales cycles.
To date, all repurchases under the Company’s stock repurchase programs have occurred in the open market, in negotiated transactions and from withholding shares in connection with vesting equity awards held by certain employees. During the year 56 ended December 31, 2024, the Company repurchased 2.2 million shares for a total cost of $30.1 million.
Partially offsetting these cash inflows was $68.9 million of cash used to repurchase our common stock in the open market, from privately negotiated transactions and from withholding shares in connection with vesting equity awards held by certain employees and $17.4 million of cash used for the payments of cash dividends.
Services gross margin percentage decreased by 1.7% in 2024 compared to 2023 primarily due to an increase in personnel-related support costs, especially variable compensation. Operating Expenses Our operating expenses consist of sales and marketing, research and development, general and administrative, and restructuring expenses.
Services gross margin percentage decreased to 78.4% in 2025 compared to 83.4% in 2024 primarily due to an increase in personnel-related support costs and the mix of services delivered, which include technical support, training and service costs.
Products revenue decreased $1.3 million, or 1%, in 2024 compared to 2023 primarily driven by lower demand from our service provider and enterprise customers in the Americas, and EMEA regions, partially offset by higher demand from service provider customers in APJ. Services revenue increased $11.3 million, or 10%, in 2024 compared to 2023.
The increase was primarily a result of an increase in demand from our service provider and enterprise customers in the Americas region and an increase in demand from our service provider customers in the EMEA region, partially offset by decreases in demand from service provider and enterprise customers in the APJ region and enterprise customers in the EMEA region.
On November 7, 2024, the Company announced its Board of Directors had authorized a new, non-expiring stock repurchase program under which the Company may repurchase up to $50 million of its outstanding common stock. As of December 31, 2024, the Company had $44.2 million available to repurchase shares. Under these repurchase programs, repurchased shares are held in treasury at cost.
The Board of Directors terminated the 2024 Program on May 1, 2025. Under all programs, repurchased shares are held in treasury at cost. The Company’s stock repurchase programs do not obligate us to acquire any specific number of shares.
Removed
Overview We are a leading provider of secure application solutions and services that enable a new generation of intelligently connected companies with the ability to continuously improve cyber protection and digital responsiveness across dynamic Information Technology (“IT”) and network infrastructures. Our product portfolio seeks to address many of the cyber protection challenges and solution requirements.
Added
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.
Removed
The portfolio consists of network infrastructure and security products. The infrastructure portfolio powers the delivery of internet services and applications while the security products protect applications, APIs, infrastructure and enterprises from cyber-attacks. Our security suite is known as A10 Defend.
Added
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.
Removed
In addition, we have an intelligent management and automation tool known as A10 Control (formally Harmony Controller), which provides intelligent management, automation and analytics for secure application delivery in multi-cloud environments to help simplify operations. Our secure infrastructure solutions include; Thunder Application Delivery Controller (“ADC”), Thunder Carrier Grade Networking (“CGN”), Thunder SSL Insight (“SSLi”) and Thunder Convergent Firewall (“CFW”).
Added
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.
Removed
Our security products include; A10 Defend Threat Control, A10 Defend Orchestrator, A10 Defend Detector, A10 Defend Mitigator and A10 Defend ThreatX Protect. Our solutions are available in a variety of form factors, such as optimized hardware appliances, bare metal software, containerized software, virtual appliances and cloud-native software.
Added
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.
Removed
We have invested and expect to continue to invest in our product development efforts to deliver new products and additional features in our current products to address customer needs. In addition, we may expand our global sales and marketing organizations, expand our distribution channel programs and increase awareness of our solutions on a global basis.
Added
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.
Removed
This increase was due to a $11.3 million increase in services revenue, partially offset by a decrease of $1.3 million in products revenue.
Added
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.
Removed
The Company’s income tax provision for the year ended December 31, 2024 primarily consisted of U.S. federal and state taxes. The Company’s income tax provision for the year ended December 31, 2023 primarily consisted of U.S. federal, state and foreign income taxes.
Added
Our end-customers operate in a variety of industries, including telecommunications, technology, industrial, retail, financial, gaming, education and government. Since inception, our customer base has grown rapidly. We sell substantially all of our solutions through our high-touch sales organization as well as distribution channels, including distributors, value-added resellers and system integrators, and fulfill nearly all orders globally through such resellers.
Removed
In September 2022, we entered into a Common Stock Repurchase Agreement (the “Repurchase Agreement”) with Summit Partners Growth Equity Fund VIII-A, L.P., Summit Partners Growth Equity Fund VIII-B L.P., Summit Investors I, LLC and Summit Investors I (UK), L.P. (collectively, “Summit”). Pursuant to the Repurchase Agreement, we repurchased 3.5 million shares of common stock from Summit for approximately $44.6 million.
Added
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+1 added−0 removed5 unchanged
Biggest changeTreasury and agency securities, commercial paper and asset-backed securities and equity securities of publicly traded companies. We do not enter into investments for trading or speculative purposes. At December 31, 2024, our investment portfolio included marketable securities with an aggregate fair market value and amortized cost basis of $100.4 million and $100.2 million, respectively.
Biggest changeOur marketable securities are comprised of certificates of deposit, corporate securities, U.S. Treasury and agency securities, commercial paper and asset-backed securities and equity securities of publicly traded companies. We do not enter into investments for trading or speculative purposes.
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 consolidated financial position and results of operations. We recorded $2.1 million and $0.1 million of net foreign exchange gains in the years ended December 31, 2024 and 2023, respectively.
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 consolidated financial position and results of operations.
We recorded $0.5 million of net foreign exchange losses during the year ended December 31, 2022. Interest Rate Sensitivity Our exposure to market risk for changes in interest rates relates primarily to our marketable securities. Our marketable securities are comprised of certificates of deposit, corporate securities, U.S.
We recorded $0.3 million of net foreign exchange losses in the year ended December 31, 2025 and we recorded $2.1 million and $0.1 million of net foreign exchange gains during the years ended December 31, 2024 and 2023, respectively. Interest Rate Sensitivity Our exposure to market risk for changes in interest rates relates primarily to our marketable securities.
The following table presents the hypothetical fair values of our marketable securities assuming immediate parallel shifts in the yield curve of 50 basis points (“BPS”), 100 BPS and 150 BPS as of December 31, 2024 (in thousands): Fair Value as of (150 BPS) (100 BPS) (50 BPS) 12/31/2024 50 BPS 100 BPS 150 BPS Marketable securities $ 101,233 $ 100,965 $ 100,697 $ 100,429 $ 100,161 $ 99,893 $ 99,625 60
The following table presents the hypothetical fair values of our marketable securities assuming immediate parallel shifts in the yield curve of 50 basis points (“BPS”), 100 BPS and 150 BPS as of December 31, 2025 (in thousands): Fair Value as of (150 BPS) (100 BPS) (50 BPS) 12/31/2025 50 BPS 100 BPS 150 BPS Marketable securities $ 309,872 $ 308,856 $ 307,804 $ 306,714 $ 305,588 $ 304,426 $ 303,227 59
Added
At December 31, 2025, our investment portfolio included marketable securities with an aggregate fair market value and amortized cost basis of $306.7 million and $306.0 million, respectively.

Other ATEN 10-K year-over-year comparisons