睿科網路 (ATEN) 2023 Q1 法說會逐字稿

Hello, and welcome to the A10 Networks First Quarter 2023 Financial Results Conference Call. My name is Alex, and I'll be coordinating the call today. (Operator Instructions) I'll now hand over to Tom Baumann of FNK IR. Please go ahead.

您好，歡迎來到 A10 Networks 2023 年第一季度財務業績電話會議。我叫亞歷克斯，今天我將負責協調電話會議。 （操作員說明）我現在將交給 FNK IR 的 Tom Baumann。請繼續。

Thank you, and Thank you all for joining us today. This call is being recorded and webcast live and may be accessed for at least 90 days via the A10 Networks website at a10networks.com. Hosting the call today are Dhrupad Trivedi, A10's President and CEO; and CFO, Brian Becker.

謝謝大家，感謝大家今天加入我們。此通話正在錄音和網絡直播中，可以通過 A10 Networks 網站 a10networks.com 訪問至少 90 天。今天主持電話會議的是 A10 總裁兼首席執行官 Dhrupad Trivedi；和首席財務官布賴恩·貝克爾。

Before we begin, I would like to remind you that shortly after the market closed today, A10 Networks issued a press release announcing its first quarter 2023 financial results. Additionally, A10 published a presentation and supplemental trended financial statements. You may access the press release, presentation and trended financial statements on the Investor Relations section of the company's website.

在我們開始之前，我想提醒您，今天收市後不久，A10 Networks 發布了一份新聞稿，宣布了其 2023 年第一季度的財務業績。此外，A10 還發布了演示文稿和補充趨勢財務報表。您可以在公司網站的投資者關係部分訪問新聞稿、演示文稿和趨勢財務報表。

During the course of today's call, management will make forward-looking statements, including statements regarding projections for future operating results, including our potential revenue growth, industry and customer trends, our capital allocation strategy, supply chain constraints and expectations, our positioning, our repurchase and dividend programs, and our market share. These statements are based on current expectations and beliefs as of today, May 4, 2023.

在今天的電話會議中，管理層將做出前瞻性陳述，包括關於未來經營業績預測的陳述，包括我們的潛在收入增長、行業和客戶趨勢、我們的資本配置戰略、供應鏈限制和預期、我們的定位、我們的回購和分紅計劃，以及我們的市場份額。這些陳述基於截至 2023 年 5 月 4 日的當前預期和信念。

These forward-looking statements involve a number of risks and uncertainties, some of which are beyond our control, such as the potential impact of the COVID-19 pandemic on our business and operations that could cause actual results to differ materially, and you should not rely on them as predictions of future events. A10 does not intend to update the information contained in these forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law. For a more detailed description of these risks and uncertainties, please refer to our most recent 10-Q.

這些前瞻性陳述涉及許多風險和不確定性，其中一些是我們無法控制的，例如 COVID-19 大流行對我們的業務和運營的潛在影響可能導致實際結果出現重大差異，您不應該依靠它們作為對未來事件的預測。 A10 不打算更新這些前瞻性陳述中包含的信息，無論是由於新信息、未來事件還是其他原因，除非法律要求。有關這些風險和不確定性的更詳細描述，請參閱我們最近的 10-Q。

Please note that with the exception of revenue, financial measures discussed today are on a non-GAAP basis and have been adjusted to exclude certain charges. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP and may be different from non-GAAP financial measures presented by other companies. A reconciliation between GAAP and non-GAAP measures can be found in the press release issued today and on the trended quarterly financial statements posted on the company's website.

請注意，除收入外，今天討論的財務指標均基於非公認會計原則，並已進行調整以排除某些費用。非 GAAP 財務措施並非旨在孤立考慮或替代根據 GAAP 編制的結果，並且可能與其他公司提出的非 GAAP 財務措施不同。在今天發布的新聞稿和公司網站上發布的趨勢季度財務報表中可以找到 GAAP 和非 GAAP 措施之間的對賬。

Now I would like to turn the call over to Dhrupad Trivedi, President and CEO of A10 Networks.

現在我想把電話轉給 A10 Networks 總裁兼首席執行官 Dhrupad Trivedi。

Thank you, Tom, and thank you all for joining us today. Our first quarter results were in line with the estimates we shared on April 3. While revenue was impacted by the economy and slowing purchasing decisions, the team moved quickly to respond to these changes, and we maintain our profitability at historical levels, better positioning us to achieve our full year targets for non-GAAP EPS. This was due in large part to the focus on driving a more resilient and durable business model. As previously communicated, we believe the first quarter will represent a floor for our results this year, and we expect sequential improvements as we move through the balance of 2023.

謝謝你，湯姆，感謝大家今天加入我們。我們第一季度的業績與我們在 4 月 3 日分享的估計一致。雖然收入受到經濟和採購決策放緩的影響，但團隊迅速採取行動應對這些變化，我們將盈利能力保持在歷史水平，更好地定位我們實現我們的非 GAAP 每股收益的全年目標。這在很大程度上是由於專注於推動更具彈性和持久的商業模式。正如之前所傳達的那樣，我們認為第一季度將代表我們今年業績的底線，我們預計隨著 2023 年餘下時間的推移會出現連續改善。

While large enterprises and especially Tier 1 service providers are more carefully considering investments due to the economy, security solutions remain a priority and are increasingly not a discretionary consideration. Companies around the world, even those with robust security processes and controls, are experiencing an ever-growing threat of cyber-attack.

儘管大型企業，尤其是一級服務提供商因經濟形勢而更加謹慎地考慮投資，但安全解決方案仍然是優先事項，並且越來越不是隨意考慮的因素。世界各地的公司，即使是那些擁有強大安全流程和控制的公司，都面臨著日益增長的網絡攻擊威脅。

During the first quarter, we further augmented our already robust security infrastructure to enable us to better support our customers against these threats.

在第一季度，我們進一步增強了本已強大的安全基礎設施，使我們能夠更好地支持我們的客戶抵禦這些威脅。

Cyber-attacks are simply a business reality for even the most prepared organization and that deploying solutions to mitigate this risk and the associated disruptions they cause is a priority even during challenging times.

即使對於準備最充分的組織來說，網絡攻擊也只是一個商業現實，即使在充滿挑戰的時期，部署解決方案來減輕這種風險及其造成的相關中斷也是當務之急。

Like others, we are seeing longer sales cycles, particularly among larger North American customers due to concerns about the economy. We do not believe we have lost any meaningful forecasted deals to competitors, but they are taking longer to close, impacting our normal revenue cadence.

與其他公司一樣，我們看到銷售週期變長，尤其是由於對經濟的擔憂，北美較大的客戶尤其如此。我們認為我們沒有將任何有意義的預測交易輸給競爭對手，但它們需要更長的時間才能完成，從而影響我們的正常收入節奏。

Indeed, North America declined 9% in the first quarter compared to last year, and revenue in the rest of the world was down 7% year-over-year. Effectively, all of this revenue decline was due to Tier 1 customers who paused plan buying in the quarter with expectations of resumption in the second half of the year.

事實上，北美第一季度與去年相比下降了 9%，而世界其他地區的收入同比下降了 7%。實際上，所有這些收入下降都是由於一級客戶在本季度暫停了計劃購買，並期望在下半年恢復。

Our diversification, both in terms of geography and customers, helped us mitigate the macro environment as we believe we are navigating the economy better than most, but we were not immune from the conditions.

我們在地域和客戶方面的多元化幫助我們緩解了宏觀環境，因為我們相信我們比大多數人都更好地駕馭經濟，但我們也不能倖免。

Proactively, we have taken steps to align our cost structure. We deployed select austerity measures to reduce operating expenses by 10.3% year-over-year in Q1 in light of these macro headwinds. I want to note that we were mindful of our long-term goals, particularly related to growth as we reviewed our near-term spending. Over the long term, I don't believe this effort will materially impact our business trajectory, our ability to achieve multiyear targets as market conditions normalize.

我們已積極採取措施調整我們的成本結構。鑑於這些宏觀逆風，我們採取了精選的緊縮措施，以在第一季度將運營費用同比減少 10.3%。我想指出的是，在我們審查近期支出時，我們注意到了我們的長期目標，尤其是與增長相關的目標。從長遠來看，我認為這項努力不會對我們的業務軌跡以及我們在市場條件正常化時實現多年目標的能力產生重大影響。

In reality, our ability to maintain solid profitability and cash generation even during a quarter with significant revenue challenges speaks to the durability of our business model and execution.

實際上，即使在收入面臨重大挑戰的季度中，我們也能保持穩健的盈利能力和現金生成能力，這說明了我們業務模式和執行力的持久性。

As a result, we maintained our gross margins in excess of 80% and significantly expanded our adjusted EBITDA margin to 26.8% versus 21.6% in last year's first quarter. This is in line with our business model goals of achieving 26% to 28% EBITDA and 80% gross margin.

因此，我們保持了超過 80% 的毛利率，並將調整後的 EBITDA 利潤率從去年第一季度的 21.6% 大幅提高至 26.8%。這符合我們實現 26% 至 28% EBITDA 和 80% 毛利率的商業模式目標。

As we have previously communicated, our ability to proactively manage investments and certain expenses enables us to maintain robust profitability even when revenues are under external pressure. We have continued to methodically plan these actions, including supply chain, sales and marketing investment, and selected strategic investments in R&D.

正如我們之前所傳達的那樣，我們主動管理投資和某些費用的能力使我們即使在收入受到外部壓力的情況下也能保持強勁的盈利能力。我們繼續有條不紊地規劃這些行動，包括供應鏈、銷售和營銷投資，以及選定的研發戰略投資。

In an effort to improve the security and resiliency of our hybrid cloud offering, we recently announced a strategic partnership with Fastly, an industry leader in next-generation web application firewalls or WAF. By combining our leading ADC solution with their next-generation WAF, this first-to-market integrated solution can provide our large enterprise customers a single solution to enhance web defenses across software and hardware appliances within their hybrid cloud environment. We believe this partnership strengthens our portfolio and unlocks further diversification of our revenue stream.

為了提高我們混合雲產品的安全性和彈性，我們最近宣布與 Fastly 建立戰略合作夥伴關係，Fastly 是下一代 Web 應用程序防火牆或 WAF 的行業領導者。通過將我們領先的 ADC 解決方案與他們的下一代 WAF 相結合，這一首次上市的集成解決方案可以為我們的大型企業客戶提供單一解決方案，以增強其混合雲環境中跨軟件和硬件設備的 Web 防禦。我們相信這種合作夥伴關係可以加強我們的產品組合，並使我們的收入來源進一步多樣化。

Additionally, our collaboration should broaden our go-to-market strategy for this type of solution as we leverage the reach and capability of both A10 and Fastly teams.

此外，隨著我們利用 A10 和 Fastly 團隊的影響力和能力，我們的合作應該會拓寬我們針對此類解決方案的上市戰略。

Additionally, in Q1 and in line with these diversification efforts, a large partner in Japan introduced A10's cloud access controller into their security operations center service package. A10 Networks Cloud Access Proxy is a complete enterprise solution designed specifically to help organizations optimize the performance and security of their SaaS applications, enhance user experience and provide comprehensive visibility into branch offices and the cloud. With a partner enabling this as a service, it is further proof that we continue to invest in comprehensive security solutions delivered through multiple form factors for our customers.

此外，在第一季度，為了配合這些多元化努力，日本的一家大型合作夥伴將 A10 的雲訪問控制器引入了他們的安全運營中心服務包。 A10 Networks 雲訪問代理是一個完整的企業解決方案，專門設計用於幫助組織優化其 SaaS 應用程序的性能和安全性，增強用戶體驗並提供對分支機構和雲的全面可見性。通過合作夥伴將此作為一項服務，進一步證明我們繼續投資於通過多種形式為我們的客戶提供的全面安全解決方案。

In the first quarter, our revenue was negatively impacted by the combination of macroeconomic headwinds and internal company priorities to strengthen our security posture, but our business model and focus on execution enabled us to preserve our profitability. We are confident that we will show improvements as we move through the year and we continue to expect full year EPS expansion. We also continue to maintain a disciplined, flexible and opportunistic capital allocation strategy. Today, our Board approved a quarterly dividend of $0.06 per share.

在第一季度，我們的收入受到宏觀經濟逆風和公司內部優先事項相結合的負面影響，以加強我們的安全態勢，但我們的商業模式和對執行的關注使我們能夠保持盈利能力。我們有信心，我們將在這一年中有所改善，並且我們繼續期望全年每股收益擴張。我們還繼續保持有紀律、靈活和機會主義的資本配置策略。今天，我們的董事會批准了每股 0.06 美元的季度股息。

With that, I'd like to turn the call over to Brian for a detailed review of the quarter. Brian?

有了這個，我想把電話轉給布賴恩，對本季度進行詳細審查。布萊恩？

Thank you, Dhrupad. First quarter revenue was $57.7 million, a decrease of 7.9% year-over-year, reflecting the headwinds Dhrupad described earlier. Product revenue for the quarter was $31.2 million, representing 54% of total revenue. Services revenue, which includes maintenance and support revenue, was $26.5 million or 46% of total revenue.

謝謝你，德魯帕德。第一季度收入為 5770 萬美元，同比下降 7.9%，反映了 Dhrupad 之前描述的不利因素。本季度產品收入為 3120 萬美元，佔總收入的 54%。包括維護和支持收入在內的服務收入為 2650 萬美元，佔總收入的 46%。

Moving to revenue from a geographic standpoint. Revenue from the Americas was $30 million, down 9.1%. As Dhrupad described, this reflects slowing purchasing from larger customers, primarily service providers due to the economic concerns.

從地域的角度來看收入。來自美洲的收入為 3000 萬美元，下降 9.1%。正如 Dhrupad 所描述的，這反映出由於經濟問題，大客戶（主要是服務提供商）的採購放緩。

As you can see on our balance sheet, our deferred revenue was $128.5 million as of March 31, 2023, up 5.9% year-over-year. On a constant currency basis, deferred revenue would have increased 8.3% year-over-year.

正如您在我們的資產負債表上看到的那樣，截至 2023 年 3 月 31 日，我們的遞延收入為 1.285 億美元，同比增長 5.9%。按固定匯率計算，遞延收入同比增長 8.3%。

With the exception of revenue, all of the metrics discussed on this call are on a non-GAAP basis, unless otherwise stated. A full reconciliation of GAAP to non-GAAP results are provided in our press release and on our website.

除收入外，除非另有說明，否則本次電話會議上討論的所有指標均基於非公認會計原則。我們的新聞稿和我們的網站上提供了 GAAP 與非 GAAP 結果的完整對賬。

Gross margin for the first quarter was 83.1%. This reflects strong execution overcoming input cost pressures and due to our product mix. We expect our revenue mix to normalize in future quarters.

第一季度的毛利率為 83.1%。這反映了克服投入成本壓力以及我們的產品組合的強大執行力。我們預計我們的收入組合將在未來幾個季度正常化。

We reported $13.4 million in non-GAAP operating income, up 14.3% compared with $11.7 million in the year ago quarter.

我們報告的非 GAAP 營業收入為 1340 萬美元，與去年同期的 1170 萬美元相比增長 14.3%。

Adjusted EBITDA was $15.5 million for the quarter, reflecting 26.8% of revenue. We were able to achieve our targeted adjusted EBITDA margins even as revenue declined by nearly 8%.

本季度調整後的 EBITDA 為 1550 萬美元，佔收入的 26.8%。即使收入下降近 8%，我們仍能夠實現調整後的 EBITDA 利潤率目標。

Non-GAAP net income for the quarter was $9.9 million or $0.13 per share, which is relatively flat compared to $10 million or $0.13 per share in the year ago quarter. Maintaining our non-GAAP net income on 8% lower revenue is a significant accomplishment, demonstrating the earnings power we have built into the business.

本季度非 GAAP 淨收入為 990 萬美元或每股 0.13 美元，與去年同期的 1000 萬美元或每股 0.13 美元相比持平。在收入減少 8% 的情況下保持我們的非 GAAP 淨收入是一項重大成就，證明了我們在業務中建立的盈利能力。

Diluted weighted shares used for computing non-GAAP EPS for the first quarter were approximately 75.5 million shares compared to 79.3 million shares in the year ago quarter.

用於計算第一季度非 GAAP 每股收益的稀釋加權股份約為 7550 萬股，而去年同期為 7930 萬股。

On a GAAP basis, net income for the quarter was $4 million or $0.05 per share, compared with net income of $6.3 million or $0.08 per share in the year ago quarter.

根據 GAAP，本季度淨收入為 400 萬美元或每股 0.05 美元，而去年同期的淨收入為 630 萬美元或每股 0.08 美元。

Turning to the balance sheet. As of March 31, 2023, we had $144.5 million in total cash and marketable securities compared to $150.9 million at the end of 2022. During the quarter, we paid $4.4 million in cash dividends, and we continue to carry no debt.

轉向資產負債表。截至 2023 年 3 月 31 日，我們的現金和有價證券總額為 1.445 億美元，而 2022 年底為 1.509 億美元。本季度，我們支付了 440 萬美元的現金股息，並且繼續沒有債務。

As Dhrupad mentioned, the Board approved a quarterly cash dividend of $0.06 per share to be paid on June 1, 2023, to shareholders of record on May 15, 2023.

正如 Dhrupad 提到的，董事會批准了每股 0.06 美元的季度現金股息，將於 2023 年 6 月 1 日支付給 2023 年 5 月 15 日登記在冊的股東。

As Dhrupad indicated, we believe the first quarter represents the floor for our financial results, and we anticipate sequential improvements throughout the year.

正如 Dhrupad 所指出的，我們認為第一季度是我們財務業績的底線，我們預計全年會有所改善。

I'll now turn the call back over to Dhrupad for closing comments.

我現在將電話轉回 Dhrupad 以徵求意見。

Thank you, Brian. There is no doubt this was a challenging start to the year, but our team responded effectively, delivering strong execution and solid profitability despite revenue headwinds. Our security-led solutions are in demand across all customer segments and in each of our target geographies, and our solutions are aligned with durable secular catalysts.

謝謝你，布萊恩。毫無疑問，今年是一個充滿挑戰的開端，但我們的團隊做出了有效的反應，儘管收入逆風，但仍提供了強大的執行力和穩健的盈利能力。我們以安全為主導的解決方案在所有客戶群和我們的每個目標地區都有需求，並且我們的解決方案與持久的長期催化劑保持一致。

Operator, you can now open the call up for questions.

接線員，您現在可以打開電話提問。

(Operator Instructions) Our first question for today comes from Christian Schwab of Craig-Hallum.

（操作員說明）我們今天的第一個問題來自 Craig-Hallum 的 Christian Schwab。

So as we think about sequential revenue growth from here to the rest of the year, would you expect that to be kind of a linear event? Or how should we think about that?

因此，當我們考慮從這裡到今年剩餘時間的連續收入增長時，您是否認為這是一種線性事件？或者我們應該如何考慮？

Yes. I think I'll let Brian add context to that, right? So as we noted in the last call, our normal seasonality is being impacted certainly by the economy. And so I think our results for this year from first half to second half are likely to be more back-end loaded. So we certainly see that as reflecting some of the orders that are now scheduled or planned at least by the second half, right, if not earlier. And so I would say from that perspective, we certainly expect sequential improvements into Q3 and beyond and probably sequential improvements that are in line or slightly better than historic seasonality. I don't know, Brian.

是的。我想我會讓 Brian 添加上下文，對嗎？因此，正如我們在上次電話會議中指出的那樣，我們的正常季節性肯定受到經濟的影響。因此，我認為我們今年上半年到下半年的結果可能會有更多的後端負載。因此，我們當然認為這反映了現在至少在下半年（如果不是更早的話）之前安排或計劃的一些訂單。所以我想說，從這個角度來看，我們當然期望第三季度及以後的連續改善，並且可能與歷史季節性一致或略好於歷史季節性的連續改善。我不知道，布萊恩。

Yes. I think we've talked about 2021 was a similar pattern where we had the pandemic with challenging revenue growth in the first half of the year. Last year, I think we saw 48%, 52% mix first half to second half in terms of how much revenue was recognized first half to second half. And we believe this year will be a similar pattern we saw in '21 with a little bit of a slow start. But as Dhrupad mentioned and as I said in the script, we haven't seen any meaningful cancellations or pull back. So we think it will be a sequential growth quarter.

是的。我認為我們已經討論過 2021 年是一個類似的模式，我們在今年上半年的收入增長具有挑戰性。去年，我認為我們看到 48%、52% 的人將上半年和下半年的收入混合在一起確認了上半年和下半年的收入。我們相信今年將是我們在 21 年看到的類似模式，只是開局有點緩慢。但正如 Dhrupad 提到的和我在劇本中所說的那樣，我們沒有看到任何有意義的取消或撤回。所以我們認為這將是一個連續增長的季度。

Okay. Great. And then some of the things that you mentioned and highlighted partnerships, Fastly, and a large partnership in Japan, is that directionally helpful? Or is that material revenue that could come this year?

好的。偉大的。然後你提到的一些事情並強調了合作夥伴關係，Fastly 和日本的一個大型合作夥伴關係，這對方向有幫助嗎？或者是今年可能出現的物質收入？

Yes, good question, Christian. I would think of it in two different ways. One is, obviously, we continue to maintain and invest in differentiating solutions for large service providers around the world. But at the same time, as we see maybe more uncertainty or pause in their spending related to economy, we are also accelerating our efforts to be more relevant to large enterprise customers, right? So that's an example of where we are partnering so we have a compelling value proposition. Typical sales cycle could be 6 months kind of time frame in an enterprise or large enterprise sales. So we are certainly in the mode of building the pipeline, and that certainly makes us optimistic to call that out as a meaningful partnership that gives us also more durability and broadening of revenue, but in line with our differentiation.

是的，問得好，克里斯蒂安。我會以兩種不同的方式來考慮它。一是，顯然，我們繼續維護和投資於為全球大型服務提供商提供差異化解決方案。但與此同時，正如我們看到他們與經濟相關的支出可能存在更多不確定性或暫停，我們也在加快努力與大型企業客戶更相關，對吧？所以這是我們合作的一個例子，所以我們有一個引人注目的價值主張。在企業或大型企業銷售中，典型的銷售週期可能是 6 個月的時間範圍。因此，我們當然處於構建管道的模式中，這當然讓我們樂觀地將其稱為有意義的合作夥伴關係，這也為我們提供了更多的持久性和收入的擴大，但符合我們的差異化。

And the example related to Japan highlights that our progress in terms of supporting customers in hybrid environments, which could be on-prem, cloud, any other mode of consumption, and that we are able to deliver kind of cloud leading applications as well, right? So that diversification, but in the sort of vertical sense of where we are gaining more customers and partners. And we expect, again, that to be more relevant in pipeline generation in the near term, but certainly not irrelevant on revenue either for the year.

與日本相關的例子突出表明，我們在支持混合環境中的客戶方面取得了進展，混合環境可以是本地、雲、任何其他消費模式，而且我們也能夠提供某種雲領先的應用程序，對吧？所以這種多元化，但在我們獲得更多客戶和合作夥伴的垂直意義上。我們再次預計，這在短期內與管道發電更相關，但肯定與今年的收入無關。

Okay. Great. And then just one last question. The tight controls on operating expenses. Should we anticipate that operating expenses will grow with revenue on a sequential basis? How should we be thinking about either operating expenses to revenue growth on a sequential basis going up? Or do you have a level of operating expenses you're targeting here?

好的。偉大的。然後是最後一個問題。嚴格控制運營費用。我們是否應該預期營業費用會隨著收入的增加而連續增長？我們應該如何考慮營業支出與收入增長的連續上升？或者你有一定水平的運營費用嗎？

Yes. So I think there's two reasons, right? So one is, obviously, with our shortfall in revenue, there's natural reduction in commission expenses and partner costs and things like that, right, on sales and marketing side. Second is, we are able to adjust discretionary spending more to be in line with revenue and pipeline potential versus just kind of doing it linearly or spreading it equally.

是的。所以我認為有兩個原因，對吧？因此，很明顯，由於我們的收入不足，在銷售和營銷方面，佣金支出和合作夥伴成本以及類似的事情自然會減少。其次，我們能夠更多地調整可自由支配的支出，以與收入和管道潛力保持一致，而不是僅僅線性地調整或平均分配。

And the third is, I think the decisions we are making as it relates to investments in product is more driven by ensuring that we are protecting our long-term growth and security portfolio and hybrid solutions completely and maybe being a little bit more prudent on how much we spend and how on some of the older product side.

第三個是，我認為我們正在做出的與產品投資相關的決定更多地受到確保我們完全保護我們的長期增長和安全產品組合以及混合解決方案的驅動，並且可能會更加謹慎地考慮如何我們在一些較舊的產品方面花費了多少以及如何。

So we are doing it in a way that we think flexes, and our business model philosophy really is, when revenue grows, a certain percentage, our OpEx growth is lower than that. And in the opposite direction, unfortunately, when revenue drops, a certain percent of our OpEx went lower than that too, right? So I think we still are focused on delivering 80% gross margin, 26% to 28% EBITDA, and flexing our cost structure with those kind of business model goals.

因此，我們正在以一種我們認為靈活的方式來做這件事，而我們的商業模式理念實際上是，當收入增長一定百分比時，我們的運營支出增長低於此。不幸的是，在相反的方向，當收入下降時，我們的運營支出的一定百分比也低於那個，對吧？所以我認為我們仍然專注於實現 80% 的毛利率，26% 至 28% 的 EBITDA，並根據這些商業模式目標調整我們的成本結構。

Our next question comes from Gray Powell of BTIG.

我們的下一個問題來自 BTIG 的 Gray Powell。

Okay. Great. Just a couple on my side. So I think you hit on this already, but can you maybe talk about the linearity you saw throughout Q1? And did you see any material improvement in activity over the course of April or any deals that slipped from March into April that have since closed?

好的。偉大的。我這邊只有一對。所以我認為你已經想到了這一點，但你能談談你在整個第一季度看到的線性嗎？您是否看到 4 月份活動有任何實質性改善，或者從 3 月份到 4 月份有任何交易已經結束？

Yes, good question, I think. So in terms of linearity in Q1, what we saw was probably slower January than we expected, which we had been worried about in Q4, and probably by March and being more in line with what we would have expected. So I would say, as we exited the quarter, certainly from a linearity, order rate perspective, et cetera, things were better than beginning of the quarter, which is not to suggest everything is completely normal, but certainly we saw that trend where, from what we would have expected, January start to linearity was a little worse and March was probably in line. So that's kind of entering into the quarter.

是的，好問題，我想。因此，就第一季度的線性度而言，我們看到的 1 月份可能比我們預期的要慢，這是我們在第四季度一直擔心的，可能到 3 月份更符合我們的預期。所以我想說，當我們退出本季度時，當然從線性、訂單率等角度來看，情況比本季度初要好，這並不意味著一切都完全正常，但我們肯定看到了這種趨勢，從我們的預期來看，1 月開始的線性度稍差，3 月可能符合。所以這有點進入本季度。

Certainly, as we have gone through the quarter so far, we have been in line with what we are expecting and not seeing a worsening versus that expectation. And we'll continue to monitor it, obviously, as the quarter goes on.

當然，到目前為止，我們已經經歷了這個季度，我們一直符合我們的預期，並且沒有看到比預期更糟的情況。顯然，隨著本季度的進行，我們將繼續對其進行監控。

Okay. Really helpful. And then just high level, if we were to take sort of a blended average across your primary target markets, what do you think the growth is this year? And then how should it shake out once things normalize?

好的。真的很有幫助。然後只是高水平，如果我們要對您的主要目標市場採取某種混合平均值，您認為今年的增長是多少？一旦事情正常化，它應該如何擺脫困境？

So I think, Gray, just so I'm clear on the question, you are thinking of that relative to our infrastructure market and cybersecurity markets or geographically. What that...

所以我認為，格雷，我很清楚這個問題，你正在考慮相對於我們的基礎設施市場和網絡安全市場或地理上的問題。那是什麼...

Yes, exactly.

對，就是這樣。

Okay. So I think, certainly, what we are seeing now is our security-driven portfolio continues to be the lead for conversations right now. And that is where we are seeing probably some adjustment of budget, but much more resilient than the rest of the portfolio, where that discretionary is not sort of the approach there. It's more of we need to do x and maybe we can push it a month or 2, But it's not being rescoped significantly or canceled.

好的。所以我認為，當然，我們現在看到的是我們的安全驅動產品組合現在仍然是對話的主角。這就是我們可能看到的預算調整的地方，但比其他投資組合更具彈性，而在其他投資組合中，這種自由裁量權不是那裡的方法。更多的是我們需要做 x，也許我們可以將它推遲一兩個月，但它不會被顯著重新確定或取消。

On the infrastructure side, projects that tie to customer revenue generation, I think, are moving along slightly slower and a little bit more scrutiny around them, but still moving along. And I would say the most affected category negatively is related to new project to replace infrastructure and nice to have projects. And so relative to those, when I look at the growth rates near term and long term, I think on the security portfolio, we still expect that to be unchanged, slightly shifting from first half to second half, maybe, but on an annual basis, still supporting low single digits or better.

在基礎設施方面，我認為與客戶創收相關的項目進展速度稍慢，並且對其進行了更多審查，但仍在進展中。我想說受影響最大的負麵類別與更換基礎設施的新項目有關，並且很高興有項目。因此，相對於那些，當我查看近期和長期的增長率時，我認為在安全投資組合方面，我們仍然預計它會保持不變，從上半年到下半年可能會略有變化，但以年度為基礎，仍然支持低個位數或更好。

And on our infrastructure side, I think the first half looks challenging more so. We have projects where we have line of sight to the second half of the year. But certainly, with inflation, concerns of recession, cost of capital, all of that, North America infrastructure is where we see the most impact. So our projects in EMEA and Asia are less impacted by that phenomenon. So that's an area where we certainly expect it to resume to mid-single-digit or better growth. But that's the one where we would say that's probably a second half phenomenon at this point and then gets us back to kind of our long-term perspective on the blended market.

在我們的基礎設施方面，我認為上半年看起來更具挑戰性。我們有一些項目可以在今年下半年看到。但可以肯定的是，由於通貨膨脹、對經濟衰退的擔憂、資本成本，所有這些，北美基礎設施是我們看到影響最大的地方。因此，我們在 EMEA 和亞洲的項目受這種現象的影響較小。因此，我們當然希望它能恢復到中個位數或更好的增長。但這就是我們會說這可能是下半場現象的地方，然後讓我們回到我們對混合市場的長期觀點。

Okay. That's a lot of color.

好的。那是很多顏色。

Yes. And Gray, sorry, just one last thing to add. Obviously, you look at those as market growth rates, but expect to do a little better with commercial execution, so slightly better than those rates there.

是的。格雷，抱歉，最後要補充一點。顯然，您將這些視為市場增長率，但期望在商業執行方面做得更好，比那裡的增長率略好。

Our next question comes from Hamed Khorsand from BWS Financial.

我們的下一個問題來自 BWS Financial 的 Hamed Khorsand。

Could you just be a little bit more specific as to the cost levers that you pulled in the quarter, and why is it that you waited until revenue is starting to slow to pull those levers instead of in a good environment?

你能否更具體地說明你在本季度拉動的成本槓桿，為什麼你要等到收入開始放緩而不是在良好的環境中拉動這些槓桿？

Yes. So good question, Hamed. And obviously, I would say if you look at our trajectory for the last 12 quarters, we certainly have improved EBITDA continuously, right? So it's not a matter of not.

是的。問得好，哈米德。顯然，如果你看看我們過去 12 個季度的軌跡，我們肯定會不斷提高 EBITDA，對吧？所以這不是沒有的問題。

I think the way to think about it really is we are responding to a changing market environment, right? So 1 year ago, our spending profile was linked to a market environment that supported a certain growth rate. And so we flexed our spending to grow slower than that, but help us continue to support that growth rate. When we are faced with a change in external circumstance on market and customer spending, I think it's responsible for us to respond to maintain our commitments on profitability and EBITDA. So the nature of reductions, I think, obviously, if revenue is less, it saves us on commissions and partners and rebates and all of that.

我認為真正的思考方式是我們正在應對不斷變化的市場環境，對嗎？所以一年前，我們的支出狀況與支持一定增長率的市場環境有關。因此，我們調整支出以使其增長速度低於該水平，但有助於我們繼續支持該增長率。當我們面臨市場和客戶支出方面的外部環境變化時，我認為我們有責任做出回應以維持我們對盈利能力和 EBITDA 的承諾。因此，我認為，顯然，如果收入減少，減少的性質會為我們節省佣金、合作夥伴和回扣等所有費用。

Discretionary events and marketing and other spending, we basically deferred it to outer quarters when it is more in line with where we see growth and actually customer receptivity to that translating into pipeline and spending.

可自由支配的活動、營銷和其他支出，我們基本上將其推遲到外部區域，因為它更符合我們看到的增長以及實際上客戶對轉化為渠道和支出的接受程度。

And I think on the R&D side, it's continuing to be more and more sharper on what our portfolio focus is. And I fully expect that as revenue improves, we will continue investing in those priorities, but now they will be even more aligned with long-term goals for us.

我認為在研發方面，我們的投資組合重點將越來越清晰。我完全希望隨著收入的增加，我們將繼續投資於這些優先事項，但現在它們將更加符合我們的長期目標。

Okay. And then has the average sales or request for quote declined in the quarter?

好的。那麼本季度的平均銷售額或報價請求是否有所下降？

Average, no. If anything, it's improved. I mean, we see that in our margins, but it's not a meaningful improvement. I think it is as expected.

平均，沒有。如果有的話，它得到了改善。我的意思是，我們在利潤率上看到了這一點，但這並不是一個有意義的改進。我認為這是預期的。

Yes. It's not a deterioration in the packet size or sales size there?

是的。那裡的數據包大小或銷售量不是下降了嗎？

Yes. We weren't getting pressure in competitive situations. We were just seeing delays.

是的。我們在競爭激烈的情況下沒有受到壓力。我們只是看到延誤。

And the size of the spend is not really declining either from the customers. They're still spending the same amount, just taking longer?

而且客戶的支出規模並沒有真正下降。他們仍然花費相同的金額，只是花的時間更長？

Yes, yes, exactly.

是的，是的，完全正確。

Correct.

正確的。

Okay. And then as far as your commentary about the sequential improvement, what gives you the confidence that you could see that further into Q3 and Q4 given the hiccup that happened in January?

好的。然後就您對連續改進的評論而言，考慮到 1 月份發生的小問題，是什麼讓您有信心在第三季度和第四季度進一步看到這種情況？

Yes. So I mean, I think that's a good question. And I think, if you connect back, our sales cycle is 6 to 8 months, typically in big deals on the longer side. And that is the reason why when we were looking at Q4 pipeline and projected like deals coming out and when and which customers and regions, that is when we had started seeing concern about Q1 and the environment, right? So right now, when we look at our customer mix and pipeline as it is projected out into Q3, Q4, certainly Q3, we have higher confidence that, that is based on a broad set of customers and solutions and not driven by 1 region or 1 product per se, right? So I think as we have continued to diversify with more security-led sales, we think that, that continues to add to our confidence where a lot of the wins could be in EMEA or Asia or Japan as well.

是的。所以我的意思是，我認為這是一個很好的問題。而且我認為，如果你連接回來，我們的銷售週期是 6 到 8 個月，通常是較長的大交易。這就是為什麼當我們查看第四季度管道並預測交易即將到來以及何時以及哪些客戶和地區時，我們開始看到對第一季度和環境的擔憂，對吧？所以現在，當我們查看我們的客戶組合和管道時，它預計會進入第三季度、第四季度，當然還有第三季度，我們更有信心，這是基於廣泛的客戶和解決方案，而不是由一個地區或1 個產品本身，對嗎？因此，我認為，隨著我們繼續通過更多以安全為主導的銷售實現多元化，我們認為，這將繼續增加我們的信心，因為歐洲、中東和非洲、亞洲或日本也可能取得很多勝利。

Our next question comes from Anja Soderstrom from Sidoti.

我們的下一個問題來自 Sidoti 的 Anja Soderstrom。

All right. This is Stephan on for Anja Soderstrom. My first question is, has the customer sentiment changed over the last couple of weeks?

好的。我是安雅·索德斯特羅姆的斯蒂芬。我的第一個問題是，過去幾週客戶的情緒是否發生了變化？

So yes, let me see if I can answer the question. Customer sentiment behavior over the last number of weeks. So entering into Q2, have we seen a change? I'd say what we have seen is a little bit more clarity around budget cycle. I think as we walked through Q1, we were having a difficult time on visibility into customers' budgeting cycles just because of delays in their own processes. I think now we're seeing a lot more clarity and visibility.

所以是的，讓我看看我是否可以回答這個問題。過去幾週的客戶情緒行為。那麼進入第二季度，我們看到變化了嗎？我想說的是，我們所看到的是圍繞預算週期更加清晰。我認為，當我們走過第一季度時，由於客戶自身流程的延遲，我們在了解客戶預算週期方面遇到了困難。我認為現在我們看到了更多的清晰度和可見性。

Also to Hamed's point, what's different now versus last quarter. I think we have a little bit better visibility. We think the pipeline is shaping up pretty nicely to deliver on our internal plans over the next few quarters. But that's really the biggest shift that we've seen this quarter. It's just a little bit more visibility and clarity coming out of the budget cycles our customers have gone through.

對於 Hamed 的觀點，現在與上個季度有什麼不同。我認為我們的能見度要好一些。我們認為管道的形成非常好，可以在接下來的幾個季度內實現我們的內部計劃。但這確實是我們本季度看到的最大轉變。我們的客戶經歷的預算週期只是提高了可見性和清晰度。

And I think, Brian, good point. And just to add, typically, we would have had that clarity in January or February, but with a lot of the customers themselves going through size reductions and other events, those got pushed out to where there was not that clarity in that normal time, right? And we are seeing a little more of that now.

我認為，布賴恩，好點。只是補充一下，通常情況下，我們會在一月或二月有這樣的清晰度，但是由於許多客戶自己經歷了尺寸縮減和其他事件，這些被推到正常時間不那麼清晰的地方，正確的？我們現在看到了更多。

And can you speak about your capital allocation priorities?

你能談談你的資本配置優先事項嗎？

Sure. Unchanged really largely. We continue to look at our priorities. We want to fund organic growth, first and foremost. We're looking long term to ensure that we continue to hit the growth targets that we've outlined in our Investor Day presentation back in February of 2022. Obviously, things are shaping up a little bit differently in this year. But again, investing in organic growth is first priority. Second is to return value to shareholders and employees through repurchases and dividends, which continues. As I mentioned, Board approved another $0.06 dividend for this quarter. And then lastly, we're always being opportunistic about what we do with our cash on hand.

當然。基本上沒有變化。我們繼續關注我們的優先事項。我們首先要為有機增長提供資金。我們著眼於長遠，以確保我們繼續實現我們在 2022 年 2 月的投資者日演講中概述的增長目標。顯然，今年的情況有所不同。但同樣，投資於有機增長是首要任務。二是通過回購和分紅的方式，為股東和員工回饋價值，並持續下去。正如我所提到的，董事會批准了本季度另外 0.06 美元的股息。最後，我們總是對手頭現金的處理持機會主義態度。

At this time, we have no further questions. So I'll hand back to Dhrupad Trivedi for any further remarks.

目前，我們沒有進一步的問題。因此，我會交還給 Dhrupad Trivedi 以徵求任何進一步的意見。

Great. Thank you, and thank you to all of our shareholders for joining us today and for your ongoing support. Thanks.

偉大的。謝謝你們，也感謝我們所有的股東今天加入我們，感謝你們一直以來的支持。謝謝。

Thank you for joining today's call. You may now disconnect your lines.

感謝您參加今天的電話會議。您現在可以斷開線路。