Dhrupad Trivedi: I think that if you look at our year-over-year growth and you look at security solutions as a percent of revenue, certainly that’s probably slightly higher. But I think more importantly, having those solutions is enabling us to open the door to broader conversations, which also lead to sales of other products, right? So I think if we look at what is a result of driving those solutions and engaging customers in that way, that is probably a pretty meaningful driver of that growth.
Hendry Cisanto: I see. And Dhrupad, the presentation mentioned service provider customer investment plans. Could you share more insight and light, let’s say, among different service provider investment plans, which investment plans are the higher priority ones, which one can be postponed indefinitely, and which one cannot be postponed?
Dhrupad Trivedi: Yes, so I think, I would say probably think of it as three categories, right? So where it is something related to them needing to add capacity or products to help actually generate or maintain revenue, that is usually number one priority. I think where it relates to making their network more resilient and more secure, it’s, close to number one, right? So those two are the categories that they would typically hold off as long as they can, but they cannot do that forever. I think, industry-wide, when you look at solutions that are more about rebuilding completely new type of network, changing how you do, application, things like that are the ones that have the highest risk of being delayed because they are not directly in line of operations. They are more in line of sort of modernization.
Hendry Cisanto: That’s very helpful, Dhrupad. And then, Dhrupad, any insight into penetration rate of security solution among your customer install base, like qualitatively speaking, how much more of your install base still has not adopted security solutions? Or in other words, how much more opportunity out there for penetration among your install base?
Dhrupad Trivedi: Yes, I think that’s difficult to quantify, but I’ll give you the reason why, right? So I think there are two reasons why people spend more on security. One is they are doing something today and they realize they need to do more, right? So it’s not that they don’t do anything, but they need to do more. And second is when people hear about kind of public breaches and incidents, it oftentimes prompts them to do something when they were not doing anything, right? So in the first case, it’s an expansion of demand. In the second case, it’s actually creation of demand, right? And I would say certainly with our existing customers, there’s no quantitative benchmark that says you must spend X percent on security. So it depends on the vertical, like a financial firm is going to spend more.
And it depends on kind of the scale of the company and their own view of what risk they face, right? So but having said that, I think certainly for a company of our size, we think that’s a very meaningful opportunity for us for many years to come.
Hendry Cisanto: Okay, Yes. And Dhrupad, if I look at the list of A10 network solutions, let’s say within security and within hybrid cloud solutions, and then looking back, let’s say like 12 months ago, which one has gained like a stronger momentum? Or in other words, which one offers like more potential upside this year?
Dhrupad Trivedi: I think that probably, Hendy, I would rate both of them as the main things we are trying to do. And that’s why our R&D and everything is aligned that way. So I think what we are doing in terms of supporting more hybrid infrastructure, which is on-prem plus cloud, which more and more is becoming more popular, is directly going to help us, right, with growth in enterprise as well as some service providers. And I think what we are doing in security is with new capabilities is much broader based at SP and enterprise and it’s every region. So I would say those are the two main investment areas for us, which, hopefully you can see are 100% aligned with where we are investing.
Hendry Cisanto: Yep. And then one more question. Brian, is there any impact of Japanese yen exchange rates in Q1 or any anticipated impact?
Brian Becker: Yes, there’s a couple of points to make about that. As everyone has seen, the Japanese yen declined over the quarter, starting out in the low 140s exchange rates of US dollars to 150s and even today trading higher. we don’t really plan our budget based on US dollar outcome. And so our Japanese team continues to meet plan. There was some FX adjustment, but we don’t really disclose that because it can swing both ways and we typically will cover gaps or take the benefit as it comes through other regions and or to help offset other risks. But Yes, modest impact in the quarter in terms of revenue, but nothing to speak of. And then you probably see in the OI&E line, there was some pickup in FX just based on our hedged receivables.
Operator: This concludes our Q&A. I’ll now hand back to Dhrupad Trivedi for final remarks.
Dhrupad Trivedi: Thank you. And thank you to all of our shareholders for joining us today and for your support. And thanks to all the AITEN employees around the world that continue to help drive our business forward. Thank you.
Operator: Ladies and gentlemen, today’s call is now concluded. We’d like to thank you for your participation. You may now disconnect your lines.
