睿科網路 (ATEN) 2024 Q3 法說會逐字稿

Hello, everyone. And welcome to the A10 Networks third-quarter 2024 financial results call. My name is Lydia and I'll be your operator today.

大家好。歡迎參加 A10 Networks 2024 年第三季財務業績電話會議。我叫莉迪亞，今天我將成為您的接線生。

(Operator Instructions)

（操作員說明）

And I'll hand you over to Tom Bowman to begin. Please go ahead.

我將把你交給湯姆鮑曼開始。請繼續。

Thank you all for joining us today. This call is being recorded in 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.

感謝大家今天加入我們。這通電話正在網路直播中錄製，並且可以透過 A10 網路網站 a10networks.com 觀看至少 90 天。今天主持電話會議的是 A10 總裁兼執行長 Dhrupad Trivedi；和財務長布萊恩·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 third-quarter 2024 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.

在開始之前，我想提醒大家，今天收盤後不久，A10 Networks 發布了一份新聞稿，宣布了 2024 年第三季財務業績。此外，A10 還發布了簡報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存取新聞稿、簡報和趨勢財務報表。

During the course of today's call, management will make forward-looking statements. Including statements regarding projections for future operating results, demand industry and customer trends, strategy, potential new products and solutions. Our capital allocation strategy, profitability, expenses and investments, positioning in our repurchase and dividend programs.

在今天的電話會議中，管理階層將發表前瞻性聲明。包括有關未來經營業績預測、需求產業和客戶趨勢、策略、潛在新產品和解決方案的聲明。我們的資本配置策略、獲利能力、費用和投資，以及我們在回購和股利計畫中的定位。

These statements are based on current expectations and beliefs as of today, November 7 2024. These forward-looking statements involve a number of risks and uncertainties, some of which are beyond our control that could cause actual results to differ materially. And you should not rely on them as predictions of future events.

這些陳述是基於截至 2024 年 11 月 7 日的當前預期和信念。這些前瞻性陳述涉及許多風險和不確定性，其中一些風險和不確定性超出了我們的控制範圍，可能導致實際結果出現重大差異。而且您不應該依賴它們來預測未來事件。

A10 does not intend to update information contained in these forward-looking statements whether as a result of new information, future events or otherwise, unless required by law. But for a more detailed description of these risks and uncertainties, please refer to our most recent 10-K and quarterly report on form 10-Q.

A10 無意更新這些前瞻性聲明中包含的信息，無論是由於新信息、未來事件還是其他原因，除非法律要求。但有關這些風險和不確定性的更詳細描述，請參閱我們最新的 10-K 和 10-Q 表格季度報告。

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.

請注意，除收入外，今天討論的財務指標均基於非公認會計準則，並已進行調整以排除某些費用。

The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. It 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.

非公認會計原則財務指標不應被孤立考慮，也不能取代根據公認會計原則編制的結果。它可能與其他公司提出的非公認會計準則財務指標不同。GAAP 和非 GAAP 指標之間的調整可以在今天發布的新聞稿以及公司網站上發布的趨勢季度財務報表中找到。

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

現在，我想將電話轉給 A10 Networks 總裁兼執行長 Dhrupad Trivedi。

Thank you, Tom. And thank you all for joining us today.

謝謝你，湯姆。感謝大家今天加入我們。

This was a balanced quarter for A10 with improved performance from both enterprise and service provider sectors.

對於 A10 來說，這是一個平衡的季度，企業和服務提供者部門的表現都有所提升。

Enterprise revenue increased 5% year-to-date and is up 9% on a trailing 12 month basis, validating our new road map and increased focus on these customers. Growth with enterprise customers is part of our ongoing strategic focus on driving predictable performance through diversification.

企業收入今年迄今成長了 5%，過去 12 個月成長了 9%，驗證了我們的新路線圖以及對這些客戶的更多關注。與企業客戶一起成長是我們持續策略重點的一部分，即透過多角化推動可預測的績效。

The diversification remains core to our overall strategy, enabling it and to navigate challenging conditions more consistently than peers and over the long term driving growth that outpaces the broader market segment.

多元化仍然是我們整體策略的核心，使其能夠比同行更一致地應對充滿挑戰的環境，並從長遠來看推動超越更廣泛市場領域的成長。

Service provider revenue was up 2% year-to-date after being down in the first half of 2024. While the North American segment of this business remains volatile, the overall trend is encouraging. For the past several quarters, we have communicated that the short term headwinds impacting our service provider customers will likely pose less of a long term challenge for A10 as our security led solutions are less and less optional. Even when macro uncertainties force customers to spend more cautiously.

服務提供者收入繼 2024 年上半年下降後，今年迄今成長了 2%。儘管該業務的北美部分仍然不穩定，但整體趨勢令人鼓舞。在過去的幾個季度中，我們表示，影響我們的服務提供者客戶的短期阻力可能不會對 A10 構成長期挑戰，因為我們的安全主導解決方案的可選性越來越少。即使宏觀不確定性迫使客戶更加謹慎消費。

We communicated in Q2 that opportunities in the pipeline were not lost, just delayed. This quarter validated those expectations. We do not yet have sufficient visibility to state that the North American service provider market has stabilized, but we are cautiously optimistic that the worst is behind us.

我們在第二季表示，管道中的機會並沒有遺失，只是被推遲了。本季度驗證了這些預期。我們還沒有足夠的證據表明北美服務提供者市場已經穩定，但我們謹慎樂觀地認為最糟糕的時期已經過去。

Our strong competitive position is due to our focus on security solutions. Our security led revenue increased 10% year-to-date. Customer decisions to bolster security may be delayed, but they cannot be canceled.

我們強大的競爭地位得益於我們對安全解決方案的關注。今年迄今為止，我們的安全主導收入成長了 10%。客戶加強安全性的決定可能會延遲，但不能取消。

This is true. Both of enterprises who experience more and more cybersecurity threats every day and service providers who must safeguard critical networks to service existing customers and to add new ones.

這是真實的。每天都面臨越來越多網路安全威脅的企業和必須保護關鍵網路以服務現有客戶並增加新客戶的服務供應商。

We recently announced that we are expanding our security led offering and laid out a longer term blueprint for further expansion including integration of AI capabilities throughout the portfolio.

我們最近宣布，我們正在擴展我們的安全主導產品，並為進一步擴展制定了長期藍圖，包括在整個產品組合中整合人工智慧功能。

These new solutions leverage our existing presence and our two decade long track record of enabling best in class throughput, low latency and high levels of cyber security. All while focusing on industry leading low total cost of ownership.

這些新解決方案利用了我們現有的業務以及我們長達二十年的記錄，實現了一流的吞吐量、低延遲和高水準的網路安全。同時專注於業界領先的低總擁有成本。

Over the next few months, A10 will continue to introduce additional tools, solutions and capabilities to better enable positive business outcomes for our customers. Our goal is to create an integrated solution that reduces cyber security risk, improves the user experience and simplifies the IT infrastructure of our customers, including AI buildout. Overall, we anticipate adding new AI based capabilities, harnessing machine learning to better identify and mitigate threats.

在接下來的幾個月中，A10 將繼續推出更多工具、解決方案和功能，以更好地為我們的客戶帶來積極的業務成果。我們的目標是創建一個整合解決方案，降低網路安全風險、改善使用者體驗並簡化客戶的 IT 基礎設施，包括人工智慧建置。總體而言，我們預計會添加新的基於人工智慧的功能，利用機器學習來更好地識別和減輕威脅。

We are also creating solutions specifically targeting threats and vulnerabilities that AI deployments can create, launching new approaches to address these threats.

我們也專門針對人工智慧部署可能產生的威脅和漏洞創建解決方案，推出新方法來應對這些威脅。

Our infrastructure solutions help customers improve the performance and resiliency of their applications. From an infrastructure standpoint, we will integrate AI to predict future network performance. With A10 control, we will enable centralized management for all A10 products including partner products.

我們的基礎設施解決方案可協助客戶提高應用程式的效能和彈性。從基礎設施的角度來看，我們將整合人工智慧來預測未來的網路效能。透過A10控制，我們將實現對包括合作夥伴產品在內的所有A10產品的集中管理。

With A10 defend, we are developing solutions that will help our customers protect their mission critical applications and infrastructure from an ever growing number of cyber threats. This includes protecting web applications, providing AI enabled protection from bots and DDoS attacks and threat intelligence to proactively identify potential threats.

透過 A10後衛，我們正在開發解決方案，幫助我們的客戶保護他們的關鍵任務應用程式和基礎設施免受越來越多的網路威脅。這包括保護 Web 應用程式、提供人工智慧保護以抵禦機器人和 DDoS 攻擊以及威脅情報以主動識別潛在威脅。

Our priorities continue to be a mix of internal investments to support innovation, returning capital to shareholders, and evaluating strategic opportunities to accelerate growth.

我們的首要任務仍然是內部投資的組合，以支持創新、向股東返還資本以及評估加速成長的策略機會。

You are seeing the results of our internal investment reflected in this blueprint and we continue to consistently return capital to shareholders.

您將看到我們內部投資的結果反映在這個藍圖中，我們將繼續持續向股東返還資本。

Our strong third quarter performance demonstrate the upside that is built into our business model. We maintained robust profitability in line and slightly ahead of our targets in the quarter.

我們強勁的第三季業績證明了我們業務模式的優勢。我們保持了強勁的獲利能力，符合併略高於本季的目標。

During the third quarter, we expanded operating margins, EBITDA margins and net margins as incremental revenue disproportionately fell to the bottom line. At the same time, it is important to note that we have increased our R&D investment more than 15% year over year. We generated more than $21 million in cash from operations, keeping us on track for full year targets.

在第三季度，我們擴大了營業利潤率、EBITDA 利潤率和淨利潤率，因為增量收入不成比例地下降至利潤。同時值得注意的是，我們的研發投入年增超過15%。我們從營運中產生了超過 2,100 萬美元的現金，使我們能夠順利實現全年目標。

Our EPS in the quarter benefited from non-recurring foreign currency factors. But even excluding these benefits, our net margin and operating income expansion demonstrate the leverage and systemic profitability built into our operating model.

我們本季的每股盈餘受惠於非經常性外匯因素。但即使排除這些好處，我們的淨利潤和營業收入的擴張也證明了我們營運模式中內建的槓桿和系統獲利能力。

We have continued to buyback stock and our cash flow has more than funded our buyback and dividend programs.

我們繼續回購股票，我們的現金流超過了我們的回購和股利計劃。

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

至此，我想將電話轉給布萊恩，讓他詳細審查本季的情況。布萊恩？

Thank you, Dhrupad.

謝謝你，德魯帕德。

Third quarter revenue was $66.7 million an increase of 15.5% year over year. As Dhrupad described, quarter to quarter volatility in the North American service provider sector persists, but we delivered meaningful growth in sales to both service provider and enterprise customers.

第三季營收為 6,670 萬美元，年增 15.5%。正如 Dhrupad 所描述的，北美服務供應商產業的季度波動仍然存在，但我們為服務供應商和企業客戶帶來了顯著的銷售成長。

Product revenue for the quarter was $36.9 million, representing 55% of total revenue. Services revenue was $29.9 million or 45% of total revenue.

該季度產品收入為 3,690 萬美元，佔總收入的 55%。服務收入為 2,990 萬美元，佔總收入的 45%。

Third quarter recurring revenue increased 6% compared to the third quarter last year. Deferred revenue increased 6% demonstrating stronger product sales in the third quarter and continued demand for our cyber led solutions.

第三季經常性收入較去年第三季成長6%。遞延收入成長了 6%，顯示第三季產品銷售更加強勁，以及對我們網路主導解決方案的持續需求。

As you can see on our balance sheet, deferred revenue was $144.2 million as of September 30, 2024, as I mentioned, 6% up year over year and as Dhrupad had indicated in his opening remarks. 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.

正如您在我們的資產負債表上看到的，正如我所提到的，截至 2024 年 9 月 30 日，遞延收入為 1.442 億美元，同比增長 6%，正如 Dhrupad 在開場白中所指出的那樣。除收入外，本次電話會議討論的所有指標均基於非 GAAP 基礎，除非另有說明，我們的新聞稿和網站上提供了 GAAP 與非 GAAP 結果的全面對帳。

Gross margin in the third quarter was 81.3% in line with our stated goal 80% to 82%. Adjusted EBITDA was $17.8 million for the quarter, reflecting 26.7% of revenue in line with our goal of 26% to 28%. Non-GAAP net income for the quarter was $15.9 million or $0.21 per diluted share, compared to $12 million or $0.16 per diluted share in the year ago quarter. Diluted weighted shares used for computing non-GAAP EPS for the third quarter were approximately $74.8 million shares, compared to $75.8 million shares in the year ago quarter.

第三季毛利率為81.3%，符合我們既定目標80%至82%。本季調整後 EBITDA 為 1,780 萬美元，佔營收的 26.7%，符合我們 26% 至 28% 的目標。本季非 GAAP 淨利為 1,590 萬美元，即稀釋後每股收益 0.21 美元，而去年同期淨利為 1,200 萬美元，即稀釋後每股收益 0.16 美元。用於計算第三季非公認會計準則每股收益的稀釋加權股票約為 7,480 萬美元，而去年同期為 7,580 萬美元。

On a GAAP basis, net income for the quarter was $12.6 million or $0.17 per diluted share, compared to net income of $6.5 million or $0.09 per diluted share in the year ago quarter.

以 GAAP 計算，本季淨利為 1,260 萬美元，即稀釋後每股收益 0.17 美元，而去年同期淨利為 650 萬美元，即稀釋後每股收益 0.09 美元。

As Dhrupad mentioned, several non-recurring and non-operational benefits resulted in higher than normal earnings per share. This was largely related to foreign currency exchange rates and interest income.

正如德魯帕德所提到的，一些非經常性和非經營性福利導致每股收益高於正常水平。這很大程度上與外幣匯率和利息收入有關。

Turning to the year-to-date results. Revenue was $187.5 million, up 3.4% year over year. Year-to-date on GAAP gross margin was 81.4% in line with our target range.

轉向今年迄今的結果。營收為 1.875 億美元，年增 3.4%。年初至今 GAAP 毛利率為 81.4%，符合我們的目標範圍。

We reported $39 million in non-GAAP operating income down 3.6% compared with $40.4 million in the first nine months last year. Adjusted EBITDA was $47.2 million, reflecting 25.2% of revenue. Non-GAAP net income for the first nine months was $41.9 million or $0.56per diluted share, up from $36.5 million or $0.48 per diluted share in the year ago period. On a GAAP basis, net income for the first nine months was $31.8 million or $0.42 per diluted share, compared with net income of $22 million or $0.29 per diluted share.

我們報告的非 GAAP 營業收入為 3,900 萬美元，比去年前 9 個月的 4,040 萬美元下降了 3.6%。調整後 EBITDA 為 4,720 萬美元，佔營收的 25.2%。前 9 個月的非 GAAP 淨利潤為 4,190 萬美元，即稀釋後每股收益 0.56 美元，高於去年同期的 3,650 萬美元，即稀釋後每股收益 0.48 美元。以 GAAP 計算，前 9 個月的淨利潤為 3,180 萬美元，即稀釋後每股收益 0.42 美元，而淨利潤為 2,200 萬美元，即稀釋後每股收益 0.29 美元。

During the quarter, we generated $21 million in cash from operations, as Dhrupad had mentioned earlier. And year-to-date cash generated by operations was $64.8 million in line with our full year targets. Turning to the balance sheet as of September 30, 2024, we had $182.1 million in total cash equivalents and marketable securities, compared to $159.3 million at the end of 2023.

正如 Dhrupad 之前提到的，本季我們從營運中產生了 2,100 萬美元的現金。年初至今，營運產生的現金為 6,480 萬美元，符合我們的全年目標。截至 2024 年 9 月 30 日的資產負債表，我們的現金等價物及有價證券總額為 1.821 億美元，而 2023 年底為 1.593 億美元。

During the quarter, we paid $4.4 million in cash dividends and we purchased $9.4 million worth of shares.

本季度，我們支付了 440 萬美元的現金股息，並購買了價值 940 萬美元的股票。

We also continue to carry no debt.

我們也繼續沒有債務。

The Board has approved a quarterly cash dividend of $0.06 per share to be paid on December 2, 2024 to shareholders of record on November 18, 2024. We have $25.4 million remaining in our $50 million share purchase authorization as of September 30. We continue to target gross margins of 80% to 82% and adjusted EBITDA margins of 26% to 28% on a full year basis.

董事會已批准於 2024 年 12 月 2 日向 2024 年 11 月 18 日登記在冊的股東支付每股 0.06 美元的季度現金股利。截至 9 月 30 日，我們的 5,000 萬美元股票購買授權中還剩 2,540 萬美元。我們繼續將全年毛利率目標定為 80% 至 82%，調整後 EBITDA 利潤率目標為 26% 至 28%。

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

我現在將把電話轉回 Dhrupad 以徵求結束意見。

Thank you, Brian.

謝謝你，布萊恩。

Increasingly A10 is outperforming our peers and amid ongoing market volatility. The buying cadence from service providers is improving and our ability to execute in driving demand from enterprise is improving simultaneously.

在市場持續波動的情況下，A10 的表現越來越好於同業。服務提供者的購買節奏正在改善，我們推動企業需求的執行能力也同時提高。

Additionally, our investments in R&D are expected to result in additional solution, leveraging our growing position in cyber security, further enhancing our growth profile.

此外，我們在研發方面的投資預計將帶來更多解決方案，利用我們在網路安全方面日益增長的地位，進一步增強我們的成長前景。

And we have proven the ability to translate incremental revenue into significantly higher profitability levels.

我們已經證明有能力將增量收入轉化為顯著更高的獲利水準。

I'm confident we have the right strategy delivering the most important business outcomes for our customers and a durable business model.

我相信我們擁有正確的策略，可以為客戶提供最重要的業務成果，並擁有持久的業務模式。

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

接線員，現在可以撥打電話詢問問題。

(Operator Instructions)

（操作員說明）

Trevor Rambo, BTIG.

特雷弗·蘭博，BTIG。

Great. Thanks for taking my question, guys. It's Trevor on for Gray Powell. And congrats on some nice results in the quarter.

偉大的。謝謝你們提出我的問題，夥伴們。特雷弗替補格雷鮑威爾。恭喜本季取得的一些不錯的業績。

So to start, it was good to see SP spending come back and to see some strength in that segment. How should we expect demand there to continue throughout the rest of the year and maybe into next year? Just any more color on what you're seeing in that segment would be great.

因此，首先，很高興看到 SP 支出回升並看到該領域的一些實力。我們應該如何預期那裡的需求將在今年剩餘時間甚至明年持續下去？如果您在該部分中看到的內容有更多的顏色，那就太好了。

Sure. Yeah. So I would say that as we noted earlier, we expect to see some level of volatility in the space. But overall trend is improving and stabilizing more, given sort of post election outcomes on things like interest rate that can get modulated a little bit up or down, right?

當然。是的。所以我想說，正如我們之前指出的，我們預計該領域會出現一定程度的波動。但整體趨勢正在改善和更加穩定，考慮到選舉後的結果，例如利率可以稍微上調或下調，對嗎？

But overall, I would say that we certainly feel from a customer demand perspective, we are seeing more positive signs where they are beginning to resume investments and plans for that infrastructure growth, whether it's to support AI or just cloud and so forth. So overall, I would say we feel that is trending towards where it's in line with what we expect long term from that segment. Hard to say whether every next quarter is going to be perfect, but suddenly the trend line is turning in a different direction than before.

但總的來說，我想說，從客戶需求的角度來看，我們確實看到了更多積極的跡象，他們開始恢復投資和基礎設施成長計劃，無論是支援人工智慧還是雲端等。總的來說，我想說，我們認為這種趨勢與我們對該細分市場的長期預期一致。很難說接下來的每個季度是否都會完美，但趨勢線突然轉向與以前不同的方向。

Awesome. That's some -- that's good color. Thank you for that.

驚人的。就是這樣——顏色很好。謝謝你。

And maybe on the other segment with enterprise revenue. I know you guys said it was more in line with your expectations, but only up to 3% about year over year, which was down from the previous year and last quarter. Just any puts and takes of what you're seeing in that segment or anything you want to call out, that's one time or just overall what you're seeing for demand there would be great. Thank you.

也許在企業收入的另一個部分。我知道你們說比較符合你們的預期，但年比只上升了3%，比去年和上季都有所下降。只要您在該細分市場中看到的任何內容或您想要調用的任何內容，一次性或總體上您所看到的需求都會很棒。謝謝。

Yeah. Great question.

是的。很好的問題。

So I think a couple of points to note, right? So one is -- remember for us, the focus in enterprise segment is predominantly large enterprise and not necessarily small and mid enterprise, right? So what this is reflective of is when we look at our funnel and opportunities in front of us, we see this line continuing to improve on a dollar basis, not just as percent of total revenue. And you are correct, I think, we had a good quarter in enterprise last year.

所以我認為有幾點要注意，對嗎？所以，我們要記住，企業細分市場的重點主要是大型企業，而不一定是中小企業，對吧？因此，這反映的是，當我們審視我們面前的管道和機會時，我們看到這條線在美元基礎上持續改善，而不僅僅是佔總收入的百分比。我認為你是對的，去年我們的企業季度表現不錯。

But if you look at from a year-to-date or trailing 12-month perspective, I would say those numbers compare favorably to what you might be seeing from industry overall and certainly some of the larger enterprise companies. So that's the basis for us to say that our view is we continue to make progress in that segment. And the sign of that is our trailing 12-month or 9-month growth is above industry average and that we continue to grow on a dollar basis, right? That's probably how to think about it.

但如果你從今年迄今或過去 12 個月的角度來看，我會說這些數字與你從整個行業，當然還有一些較大的企業中看到的數字相比是有利的。因此，這就是我們說我們的觀點是我們繼續在該領域取得進展的基礎。跡像是我們過去 12 個月或 9 個月的成長高於行業平均水平，並且我們繼續以美元為基礎成長，對嗎？大概就是這麼想的。

Great. Thanks for the call and congrats. That's it for me. And congrats on a good quarter, guys.

偉大的。感謝您的來電並表示祝賀。對我來說就是這樣。夥計們，恭喜您度過了一個美好的季度。

Thanks, Trevor.

謝謝，特雷弗。

Hamed Khorsand, BWS Financials.

Hamed Khorsand，BWS Financials。

Hi. So first question I had was your accounts receivable went up quite a bit this quarter compared to Q2. What's the plan there to manage that? And are you seeing any delays as far as getting paid?

你好。所以我的第一個問題是，與第二季相比，本季你們的應收帳款增加了很多。有什麼計劃來解決這個問題？您是否發現付款有任何延遲？

Yeah. Good question. And you're exactly right. We are not concerned with the trend.

是的。好問題。你是完全正確的。我們不關心趨勢。

What we're seeing is the impact of some linearity during the period. But it's still a good result. I think what you're seeing on the statement of cash flows, however, is period over period, we are seeing an improvement at this time of the year. But I think it's really reflective of timing of the year. I think we usually see a little bit of a drag in terms of placing orders in Q2. But then as we got closer in the Q3, we start to see things improve and hope to see linearity return to normal. But as we have talked about before, looking at as a percent of revenue to the reserve against is extremely small, reflecting the health of the aging in general.

我們看到的是這段時間內一些線性的影響。但這仍然是一個很好的結果。然而，我認為您在現金流量表上看到的情況是一段時期以來的情況，我們在每年的這個時候看到了改善。但我認為這確實反映了今年的時機。我認為我們通常會在第二季的下訂單方面看到一些拖累。但隨著第三季的臨近，我們開始看到情況有所改善，並希望看到線性恢復正常。但正如我們之前談到的，從儲備金佔收入的百分比來看，這是非常小的，反映了整體老化的健康狀況。

Yeah, exactly. And I think the easiest way to think about it is the aging of our receivables is in line or better than we normally see. So there's no concern in that regard.

是的，完全正確。我認為最簡單的思考方式是我們的應收帳款帳齡符合或比我們通常看到的更好。所以這方面不用擔心。

Okay. And then could you just bridge your two comments here? One about the volatility in the service provider continuing and then the other comment being that you're optimistic that the worst is behind. What's the -- just bridge it if you could for me, just to bring it together.

好的。那麼你能在這裡橋接你的兩則評論嗎？一個是關於服務提供者持續的波動，另一個評論是您樂觀地認為最糟糕的情況已經過去。這是什麼——如果可以的話，就為我架起橋樑，把它們整合在一起。

Yeah, no problem. Good observation.

是的，沒問題。良好的觀察力。

So what I meant by that, Hamed, is if you remember in Q2, we had said after the call that because we still see a little bit caution on spending by service providers. We can see movements of few million dollars between orders. But that when you look at it from a longer trend perspective, we do not see that as a concern.

哈米德，我的意思是，如果你還記得在第二季度，我們在電話會議後說過，因為我們仍然看到服務提供者對支出有些謹慎。我們可以看到訂單之間有幾百萬美元的變動。但當你從更長期的趨勢角度來看它時，我們並不認為這是一個問題。

So I would say the way to bridge it is our service provider business outside of North America was already doing fine and is still doing fine. Our North America business is a little bit volatile. As you can see that if you look at Q2 and Q3, there's a slight movement between them. But if we do a trend line of what we are seeing in the funnel, the opportunities and close rates and so forth. As well as customer conversations around their plans to use capital that is more favorable than say 6 months ago or 12 months ago, right? So that's the combination of factors to bridge that.

因此，我想說，解決這個問題的方法是我們在北美以外的服務提供者業務已經表現良好，並且仍然表現良好。我們的北美業務有點不穩定。正如您所看到的，如果您查看 Q2 和 Q3，它們之間有輕微的變化。但如果我們對漏斗中看到的趨勢線、機會和成交率等進行繪製。以及客戶圍繞他們的資本使用計劃進行的對話，這比 6 個月前或 12 個月前更有利，對嗎？這就是彌補這一點的因素的結合。

Okay. And do you think that you would -- you can grow from here or it's just you don't have that clarity yet.

好的。你認為你會——你可以從這裡成長嗎？

I think that we think we grow from here, but it's hard to say exactly on a quarterly basis what that percent is, right? But the trend would be positive. That's correct.

我認為我們認為我們從這裡開始成長，但很難準確地說出每個季度的百分比是多少，對嗎？但趨勢將是正面的。這是正確的。

Great. Thank you.

偉大的。謝謝。

No problem. Thank you, Hamed.

沒問題。謝謝你，哈米德。

Christian Schwab, Craig-Hallum Capital Group.

克里斯蒂安·施瓦布，克雷格·哈勒姆資本集團。

Great. I'm sorry, I was -- I kind of missed it. I thought you said that that your security led business in the quarter grew 10%. Did I hear that correct?

偉大的。抱歉，我——我有點錯過了。我以為您說過您的安全主導業務在本季成長了 10%。我沒聽錯吧？

Yeah, so that is correct. Security led on a complete basis grew from 59% of total revenue to 69% of revenue.

是的，所以這是正確的。安全性佔總收入的比例從 59% 成長到 69%。

On a year-to-date basis which are not in quarter.

以年初至今計算，不按季度計算。

On a year-to-date basis, 10%. Yes.

年初至今為 10%。是的。

Okay. And then what is your future expectation for that portion of your business? Is 10% the new normal or do you think it could be higher than that?

好的。那麼您對這部分業務的未來期望是什麼？10% 是新常態還是您認為可能會更高？

Yeah. I think in the near future we think 10% to 12% is appropriate. But yeah, that's baked into our plan and we think that that's a reasonable expectation.

是的。我認為在不久的將來我們認為10%到12%是合適的。但是，是的，這已納入我們的計劃中，我們認為這是一個合理的期望。

Okay, great. And then my last question just regarding potential strategic alternatives or initiatives regarding M&A, is there anything new to report on opportunities for you to layer in other businesses or is it really not much effort there right now?

好的，太好了。然後我的最後一個問題是關於併購方面的潛在策略替代方案或舉措，是否有任何新的內容可以報告您在其他業務中的機會，或者現在真的沒有太多努力嗎？

Yeah. I would say that there is effort there right now. I mean, I would say in period and even year-to-date, we have looked at assets that are scalable, that would be more consolidation oriented ideas, as well as assets that accelerate our security portfolio. And we'll continue to do that. We are pretty active, but also very cautious on how we deploy capital relative to defending the business model long term while also accelerating growth. So it is pretty active, right? We have partnerships, we have exploration and other discussions, but it's not a secondary priority. But I would say we are very mindful on how we choose to use capital when it comes to doing something.

是的。我想說現在正在努力。我的意思是，我想說，在一段時間內甚至今年迄今為止，我們已經研究了可擴展的資產，這將是更加以整合為導向的想法，以及加速我們的安全投資組合的資產。我們將繼續這樣做。我們非常積極，但對於如何部署資本以長期捍衛商業模式同時加速成長也非常謹慎。所以它非常活躍，對吧？我們有合作夥伴關係，我們有探索和其他討論，但這不是次要的優先事項。但我想說的是，我們在做某事時非常注意如何選擇使用資本。

Fantastic. No other questions. Thank you.

極好的。沒有其他問題。謝謝。

Thank you. I appreciate it.

謝謝。我很感激。

Anja Soderstrom, Sidoti.

安雅·索德斯特羅姆，西多蒂。

Hi and thank you for taking my questions. And congratulations on the nice progress here.

您好，感謝您回答我的問題。祝賀這裡取得的良好進展。

And I'm curious with the new solutions you are about or capabilities about to release and increasing the R&D. Will those capabilities be an up sell? And how should we think about the margin profile going forward?

我對您即將發布的新解決方案或即將發布和增加研發的能力感到好奇。這些功能會被追加銷售嗎？我們該如何考慮未來的利潤狀況？

A good question, Anja.

這是個好問題，安雅。

So I think the margin profile we feel good about continuing to drive 80% to 82% gross margin, which is obviously good profile even if you are a vast company, right? So we think we continue to drive that through a mix of product mix, as well as productivity, and other initiatives we have in place. I would say that with a lot of the new products and solutions, our goal is to expand the number of categories and products we can sell to existing or new customers. And from a margin perspective, in line with our customer target, we will, obviously. And we already do support a mix of hardware, software or other consumption model. But as we plan that out, we believe we can continue to deliver 80% to 82% gross margin.

因此，我認為我們對繼續推動 80% 至 82% 的毛利率感到滿意，即使您是一家大型公司，這顯然也是不錯的，對吧？因此，我們認為我們將繼續透過產品組合、生產力以及我們現有的其他措施來推動這一目標。我想說，透過許多新產品和解決方案，我們的目標是擴大我們可以向現有或新客戶銷售的類別和產品的數量。從利潤的角度來看，根據我們的客戶目標，我們顯然會這樣做。我們已經支援硬體、軟體或其他消費模式的混合。但按照我們的計劃，我們相信我們可以繼續實現 80% 至 82% 的毛利率。

Okay. Thank you.

好的。謝謝。

And in terms of your cash position with a nice increase there, could you become more aggressive on buybacks or how do you think about the buybacks?

就您的現金部位而言，您的現金狀況有了不錯的成長，您能否在回購方面變得更加積極，或者您如何看待回購？

Yeah, I mean, we continue to be consistent of our priorities around cash and capital. Our first priority is to reinvest in the business drive growth. As Dhrupad had mentioned, we see a good increase of over 15% from an RD perspective, on a non-GAAP basis.

是的，我的意思是，我們在現金和資本方面的優先事項仍然保持一致。我們的首要任務是對業務進行再投資，推動成長。正如 Dhrupad 所提到的，從 RD 角度來看，在非 GAAP 基礎上，我們看到了超過 15% 的良好成長。

But yeah, we continue to look at ways to return value to shareholders through the share repurchase program and the dividend. Obviously, the repurchase program is not an accelerated program that we filed a protection against. So it's an opportunistic endeavor which requires us to be mindful of guardrails around volume and pricing. So we do what we can, when we can. But yeah, that is our main priorities on cash deployment.

但是，是的，我們繼續尋找透過股票回購計畫和股利向股東回報價值的方法。顯然，回購計畫不是我們申請保護的加速計畫。因此，這是一種機會主義的努力，要求我們注意數量和定價方面的護欄。因此，當我們可以的時候，我們會盡力而為。但是，是的，這是我們現金部署的主要優先事項。

And we'll continue, I think. I mean, I had to do buyback and we think that's a great use of our capital as well. But at the same time, we want to find the right balance between buyback versus organic investment versus strategic investment, right? So that's the balance.

我想我們會繼續下去。我的意思是，我必須進行回購，我們認為這也是對我們資本的充分利用。但同時，我們希望在回購、有機投資和策略投資之間找到適當的平衡，對嗎？這就是平衡。

And as Brian said, sometimes that is determined by volume and keeping like the capacity limits on what we can and cannot do in period. But it's something we think is an important part of our capital strategy.

正如布萊恩所說，有時這是由數量和保持能力決定的，就像我們在一段時間內可以做什麼和不能做什麼的能力限制一樣。但我們認為這是我們資本策略的重要組成部分。

Okay, thank you. That was all for me.

好的，謝謝。這就是我的全部。

Thank you, Anja.

謝謝你，安雅。

Thank you. We have no further questions. So I'll pass you back to Dhrupad Trivedi for any closing comments.

謝謝。我們沒有其他問題了。因此，我會將您轉回給 Dhrupad Trivedi，以徵求結束意見。

Thank you. And thank you to all of our shareholders for joining us today. And for all the -- thanks to all the A10 employees around the world for your continued support and we look forward to a great quarter ahead. Thank you.

謝謝。感謝所有股東今天加入我們。感謝全球所有 A10 員工的持續支持，我們期待著一個美好的季度。謝謝。

This concludes our call. Thank you for joining. You may now disconnect your line.

我們的通話到此結束。感謝您的加入。現在您可以斷開線路。