A10 Networks Lifts 2026 Growth Outlook to 16% After Record Quarter

A10 Networks lifted its 2026 revenue growth forecast to approximately 16 percent, up from a prior range of 12 to 14 percent, after posting record third-quarter revenue of $91.5 million. The company also set a longer-term target of $500 million in annual revenue through organic growth and $2 in annual non-GAAP earnings per share for fiscal 2029.

Third-quarter revenue rose 22.6 percent from a year earlier, the company reported. President and CEO Dhrupad Trivedi said the higher outlook reflected year-to-date performance, demand visibility and the current supply environment. Demand from A10's largest customer remained healthy and stable, while the forecast implied fourth-quarter year-over-year growth across the rest of the business.

How did the quarter's numbers break down?

• Revenue: $91.5 million, up 22.6 percent year over year
• Product revenue: $58.5 million, or 64 percent of the quarterly total
• Service revenue: $33 million, or 36 percent
• Non-GAAP gross profit: a record $73.3 million, an 80 percent margin
• Operating expenses: $47.8 million; operating margin of 27.8 percent
• Non-GAAP net income: $23.6 million, or $0.31 per diluted share, against $0.23 a year earlier

CFO Michelle Caron said revenue for the first nine months of 2026 increased 17.4 percent to $246.7 million. Security-led revenue continued to drive product growth and represented 65 percent of total revenue, she said. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came in at $29.5 million, or 32 percent of revenue.

Free cash flow reached a quarterly record, Caron said, though she did not provide a figure on the call. Year-to-date free cash flow rose 18 percent to $57.5 million. The omission is a small irritation for model-builders. The trend, at least, speaks for itself.

What is driving demand?

Trivedi attributed growth to rising network traffic and the spread of artificial intelligence, both of which increase demand for A10's networking and security products. He pointed to a Fortune 50 financial services company that uses A10's AI Firewall to protect employee access to public AI tools and govern application traffic.

Approximately 800 enterprise agentic AI applications at that customer connect to A10's GuardRail solution, with roughly 50,000 sessions routed through it daily under customized policies, Trivedi said. He also cited a global information and analytics provider using A10's AI red-teaming capability (the practice of stress-testing models and applications for vulnerabilities) to probe its own systems.

The growth is not confined to one account. Revenue excluding A10's largest customer grew at a double-digit rate in the quarter. Europe, the Middle East and Africa, and the Asia-Pacific and Japan region each also grew by double-digit percentages, Trivedi said.

He told analysts the business outside the largest customer could support double-digit growth going forward. One caveat applies: supply constraints could require the company to prioritize customers over the next four to six quarters. Capacity, not demand, is the binding constraint.

Caron said enterprise customers accounted for 58 percent of third-quarter revenue and about half of revenue over the trailing 12 months. Service provider spending in the Americas had begun to normalize but remained below historical levels, she said.

What does the outlook promise?

For 2026, A10 expects non-GAAP diluted earnings of $1.08 to $1.10 per share, representing growth of 20 to 22 percent, and an adjusted EBITDA margin above 30 percent. The company maintained its full-year free cash flow expectation of $74 million to $77 million, up from approximately $64 million a year earlier.

The balance sheet offers room for manoeuvre. A10 ended September with $360.4 million in cash and marketable securities and $157 million in deferred revenue (revenue billed but not yet recognized).

During the quarter, the company paid $4.4 million in dividends and repurchased $23 million of shares. The board approved a quarterly dividend of $0.06 per share, payable Dec. 1 to shareholders of record on Nov. 16. Shareholder returns continue, modestly and without drama.

A10 Networks, a cybersecurity and networking company, provides solutions designed to improve the availability, performance and security of applications and digital services. Its portfolio includes application delivery controllers, distributed denial-of-service (DDoS) protection, secure application services, carrier-grade networking and centralized management and analytics tools. On this quarter's evidence, the AI security build-out has found a willing vendor.