A10 Networks, Inc. (ATEN)

Price$27.11Cached quoteAs of 2026-10-01 10:29 UTC

AI: Overvalued

Price checkThe shares look expensive unless recent double-digit growth lasts for several years.

At the observed quote, A10 is valued at about 41 times the last four quarters’ reported earnings and 29 times free cash flow, meaning cash left after running and investing in the business. Those are demanding levels for a company whose 2020–2025 sales grew about 5% yearly. A present-value estimate using $61 million of trailing free cash flow, 12% growth for five years, 4% lasting growth, and a 10% required return lands roughly 9% below the market. That leaves no value-investor margin of safety.

Big pictureSales are accelerating, but past reversals warn that today’s pace may not last.

Revenue reached $290.6 million in 2025, up 11%, then advanced 14.5% in the first half of 2026. Yet sales fell 10% in 2023 after peaking in 2022, showing that large networking orders can reverse. Reported earnings for the last four quarters were about $43.0 million, below 2024’s $50.1 million, while trailing free cash flow was about $60.9 million. First-half operating cash flow also fell 20% to $31.3 million despite faster sales, so recent growth has not yet proved equally durable in cash.

Business strengthHigh margins and ample liquid assets support resilience, though stock-based pay remains meaningful.

A10’s 79.1% second-quarter gross margin—the share of sales left after direct costs—and $357.3 million of cash and securities are strong protection; they exceed the convertible notes’ $219.5 million accounting balance by $137.8 million. Capital returns are mixed: 2025 buybacks cut year-end shares 3.0%, and the dividend uses about 28% of trailing free cash flow. However, shares rose 1.3% in 2026’s first half as employee and acquisition issuance exceeded repurchases. Stock-based pay was $13.8 million versus $4.9 million of buybacks; Microsoft’s warrant could add 800,000 shares.

What could change the storyMicrosoft-led demand offers upside, while customer concentration and weaker cash conversion threaten it.

The bull case is that management’s raised 12%–14% sales-growth outlook becomes a multi-year pattern as Microsoft purchases and new artificial-intelligence security products broaden demand; sustained free cash flow above $65 million would support that view. The bear case is concentration: one unnamed customer supplied 38% of first-half revenue, and inventory climbed 76% from December while first-half operating cash fell. The valuation effectively needs roughly 14% annual free-cash-flow growth for five years under the assumptions above. Growth below 10%, or continued customer concentration near 40%, would weaken the story.

AI: News

Outlook raised after strong quarterFaster product sales lifted revenue, prompting management to raise its full-year growth forecast.

On August 5, A10 reported second-quarter revenue of $80.1 million, up 15.5% from a year earlier; product revenue rose 25% to $49.0 million. Reported net income fell to $8.9 million from $10.5 million as operating expenses grew. Management raised expected 2026 revenue growth to 12%–14% from 10%–12% and earnings growth to 14%–16% from 12%–14%. The combination raises growth expectations, although weaker reported profit tempers the headline.

Microsoft purchase-linked warrantMicrosoft can earn low-cost shares by meeting purchase targets, validating demand but expanding the share count.

On August 3, A10 issued Microsoft a warrant—an option to buy shares—for up to 800,000 shares at one cent each. Two 400,000-share portions vest only if Microsoft and its affiliates reach undisclosed purchase thresholds in periods ending June 2027 and June 2028. Full vesting would equal about 1.1% of current shares. This purchase linkage is commercial validation, but the undisclosed thresholds prevent estimating revenue. Separately, an unnamed customer supplied 38% of first-half sales; the filing does not identify it as Microsoft.

TrojAI acquisition completedThe TrojAI purchase expands artificial-intelligence security capabilities, but near-term revenue impact should be small.

A10 completed the TrojAI acquisition on June 15 for $34.7 million in cash and $5.0 million in stock. TrojAI tests artificial-intelligence models for weaknesses and protects applications while they run, extending A10 beyond network hardware and established security products. Management said the deal should not materially affect 2026 results and framed the opportunity over two to five years. The strategic fit is plausible, but the lack of disclosed revenue means the purchase cannot yet justify much of the current valuation.

AI Gateway launchedA newly launched artificial-intelligence gateway broadens the product set, though commercial proof remains absent.

On August 13, A10 made its AI Gateway generally available. The software routes artificial-intelligence requests, controls access and spending, and can run inside a customer’s own environment, fitting the company’s security and data-control positioning. It also links the recently acquired TrojAI and ThreatX capabilities into a broader offering. A10 disclosed no bookings, named buyers, pricing, or revenue target with the launch, so this is a product milestone rather than evidence of meaningful sales.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014	2013	2012
Revenue	$290.6M	$261.7M	$251.7M	$280.3M	$250.0M	$225.5M	$212.6M	$232.2M	$235.4M	$227.3M	$196.3M	$179.5M	$141.7M	$120.1M
Gross profit	$230.5M	$210.3M	$203.7M	$223.5M	$196.5M	$175.4M	$163.7M	$180.3M	$182.1M	$172.9M	$147.9M	$136.6M	$108.3M	$95.6M
Gross margin	79.34%	80.35%	80.94%	79.73%	78.60%	77.76%	77.01%	77.65%	77.35%	76.06%	75.34%	76.08%	76.44%	79.59%
Research & development	$69.1M	$57.7M	$55.2M	$58.4M	$54.1M	$58.1M	$61.8M	$65.2M	$63.0M	$60.7M	$54.8M	$49.9M	$33.3M	$25.5M
Operating expenses	$183.4M	$166.3M	$165.1M	$170.4M	$163.1M	$157.6M	$180.8M	$208.0M	$192.5M	$193.5M	$188.2M	$166.8M	$131.2M	$182.6M
Operating income	$47.1M	$44.0M	$38.6M	$53.1M	$33.4M	$17.7M	−$17.1M	−$27.7M	−$10.4M	−$20.6M	−$40.3M	−$30.3M	−$22.8M	−$87.0M
Operating margin	16.22%	16.80%	15.35%	18.93%	13.35%	7.86%	−8.04%	−11.92%	−4.41%	−9.05%	−20.54%	−16.86%	−16.12%	−72.48%
EBITDA	$62.0M	$55.3M	$48.0M	$60.5M	$42.3M	$29.0M	−$7.1M	−$19.8M	−$1.9M	−$12.3M	−$31.7M	−$20.3M	−$15.9M	−$82.3M
EBITDA margin	21.34%	21.12%	19.07%	21.57%	16.92%	12.87%	−3.32%	−8.53%	−0.79%	−5.41%	−16.15%	−11.29%	−11.25%	−68.56%
Net income	$42.1M	$50.1M	$40.0M	$46.9M	$94.9M	$17.8M	−$17.8M	−$27.6M	−$10.8M	−$22.4M	−$41.9M	−$34.7M	−$27.1M	−$90.2M
Net profit margin	14.50%	19.16%	15.88%	16.73%	37.95%	7.90%	−8.38%	−11.89%	−4.57%	−9.85%	−21.34%	−19.34%	−19.12%	−75.08%
Basic EPSper basic share	$0.58	$0.68	$0.54	$0.62	$1.23	$0.23	-$0.23	-$0.38	-$0.15	-$0.34	-$0.67	-$0.74	-$3.14	-$10.80
Diluted EPSper diluted share	$0.57	$0.67	$0.53	$0.60	$1.19	$0.22	-$0.23	-$0.38	-$0.15	-$0.34	-$0.67	-$0.74	-$3.14	-$10.80

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

18.73%of listed shares

BlackRock, Inc.13.57M shares · Jun 30, 2026

View holders

Top 20 reported holders of ATEN
Holder	% owned
BlackRock, Inc.	18.73%13.57M shares
VANGUARD PORTFOLIO MANAGEMENT LLC	4.78%3.46M shares
FIRST TRUST ADVISORS LP	4.48%3.24M shares
STATE STREET CORP	4.25%3.08M shares
VANGUARD CAPITAL MANAGEMENT LLC	4.24%3.07M shares
Penserra Capital Management LLC	4.23%3.07M shares
Boston Trust Walden Corp	3.34%2.42M shares
WELLINGTON MANAGEMENT GROUP LLP	2.70%1.96M shares
GEODE CAPITAL MANAGEMENT, LLC	2.50%1.81M shares
GOLDMAN SACHS GROUP INC	2.46%1.78M shares
DIMENSIONAL FUND ADVISORS LP	2.21%1.6M shares
RENAISSANCE TECHNOLOGIES LLC	2.10%1.52M shares
ARROWSTREET CAPITAL, LIMITED PARTNERSHIP	1.98%1.44M shares
FMR LLC	1.98%1.43M shares
MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd.	1.97%1.43M shares
Invesco Ltd.	1.72%1.24M shares
PUNCH & ASSOCIATES INVESTMENT MANAGEMENT, INC.	1.64%1.19M shares
TWO SIGMA INVESTMENTS, LP	1.55%1.12M shares
PRUDENTIAL FINANCIAL INC	1.45%1.05M shares
BARCLAYS PLC	1.33%962.38K shares

Percentages use 72.45M shares of this listed class outstanding on Jun 30, 2026.

Gray completes the 100% scale. Reported positions may overlap; holders have different reporting dates.

Source: SEC Form 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys0$0.00 disclosed value

Sells (SEC code S)15$6.40M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
May 5, 2026Form 4	Singer EricDirector	SellCommon Stock	24.7K	$27.21	$672.0K	68.8K
Feb 13, 2026Form 4 · 10b5-1	Trivedi DhrupadChief Executive Officer	SellCommon Stock	33.3K	$20.55	$685.0K	713.6K
Feb 12, 2026Form 4 · 10b5-1	Trivedi DhrupadChief Executive Officer	SellCommon Stock	33.3K	$20.56	$685.3K	615.4K
Feb 11, 2026Form 4 · 10b5-1	Trivedi DhrupadChief Executive Officer	SellCommon Stock	33.3K	$20.69	$689.7K	648.7K
Aug 13, 2025Form 4	Becker BrianChief Financial Officer	SellCommon Stock	6.4K	$18.03	$115.4K	77.6K

Review ownership filings at SEC.gov ↗

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A10 Networks, Inc. (ATEN)

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