A10 Networks, Inc. (NYSE:ATEN) Q2 2023 Earnings Call Transcript

Hendi Susanto: And then Dhrupad, any update on product development and product road map for this year?

Dhrupad Trivedi: Yeah. So I think the — what we have discussed before, so consistently our investments are heavily around supporting more cybersecurity capabilities and features and on the infrastructure side around enabling more and more hybrid operating environment. So if you see — and we have continued to move to a more agile methodology. So our releases are more continuous versus sort of one big box every six months. So yes, we have a road map and we released a new hardware platform last December and probably another one this Q3 Q4 time frame. But predominantly our R&D on software side and either driving more security portfolio or supporting more hybrid operating environments.

Hendi Susanto: And a question for Brian. Brian how should we anticipate like OpEx is Q2 OpEx a good run rate for the remainder of the year? And then additionally, if I look at the tax rate maybe you can give us some insight in terms of the business mix. I think the tax rate is somewhat closer to like 18% higher than last year?

Brian Becker: Yes. No great question Hendi. Thanks for your questions both. OpEx currently is about as lean as we get on variable comp. I mean we’re not on course to achieve, what is our expectations. So my plan is to continue to monitor our progress and to flex our OpEx accordingly. But yes, a lot of things you could expect as sales go up and I think Dhrupad mentioned this earlier then we pay more commissions. So that’s basically what is the variable. Currently the last two quarters is what you’re seeing is probably about the run rate you could expect. And then as we continue to grow and to meet our targets on growth rates or at least attempt to achieve them for the year we’ll see OpEx run up accordingly. As far as tax rate I mean you’re spot on.

We’re running at about 18% non-GAAP effective tax rate. That’s a function of profit before tax. It’s approximately EBITDA but it’s a little bit different. Obviously, our GAAP tax rate is a little bit different but we try to align with both of them and we continue to invest in tax saving strategies to maintain that outlook.

Hendi Susanto: Thank you, Dhrupad. Thank you, Brian.

Dhrupad Trivedi: Thanks, Hendi.

Operator: Thank you, Hendi. We have now reached our allotted time and now turning the call back over to the management team for closing remarks.

Dhrupad Trivedi: Thank you. And thank you to all of our shareholders for joining us today and for your continued support and to all A10 employees around the world. Thank you.

Operator: That concludes the conference call. Thank you for your participation. You may now disconnect your line.