A10 Networks, Inc.

Previous wording

On August 3, 2026, the Company issued a warrant to Microsoft Corporation in connection with the parties' commercial relationship. The warrant is designed to vest based on purchases by Microsoft and its affiliates of the Company’s products and services during measurement periods ending June 30, 2027 and June 30, 2028, and is intended to further align the parties' commercial interests.

Current wording

On August 3, 2026, the Company issued a warrant to Microsoft Corporation in connection with the parties' commercial relationship. The warrant is designed to vest based on purchases by Microsoft and its affiliates of the Company’s products and services during two separate one-year periods beginning on July 1, 2026 and ending on June 30, 2028, and is intended to further align the parties' commercial interests. The $22.1 million fair value of the Microsoft Warrant will be recognized as a reduction of revenue as Microsoft and its affiliates purchase our products and services through June 30, 2028, and we expect it to reduce our reported revenue in those periods, with the amount in any quarter depending on the timing and volume of those purchases.

Previous wording

During the three months ended June 30, 2026, (i) 68% of our total revenue was generated from the Americas region, of which 65% was generated from the United States and 4% was generated from the Americas-other, (ii) 21% of our total revenue was generated from the APJ region and (iii) 11% of our total revenue was generated from the EMEA region. During the three months ended June 30, 2025, (i) 59% of our total revenue was generated from the Americas region, of which 55% was generated from the United States and 4% was generated from the Americas-other, (ii) 26% of our total revenue was generated from the APJ region and (iii) 15% of our total revenue was generated from the EMEA region. One of our priorities is to strengthen our sales efforts in North America. During the three months ended June 30, 2026 and 2025, our enterprise customers accounted for 60% and 40% of our total revenue, respectively, and our service provider customers accounted for 40% and 60% of our total revenue, respectively.

Current wording

During the three months ended September 30, 2026, (i) 64% of our total revenue was generated from the Americas region, of which 59% was generated from the United States and 5% was generated from the Americas-other, (ii) 21% of our total revenue was generated from the APJ region and (iii) 15% of our total revenue was generated from the EMEA region. During the three months ended September 30, 2025, (i) 66% of our total revenue was generated from the Americas region, of which 62% was generated from the United States and 4% was generated from the Americas-other, (ii) 22% of our total revenue was generated from the APJ region and (iii) 12% of our total revenue was generated from the EMEA region. One of our priorities is to strengthen our sales efforts in North America. During the three months ended September 30, 2026 and 2025, our enterprise customers accounted for 58% and 36% of our total revenue, respectively, and our service provider customers accounted for 42% and 64% of our total revenue, respectively.

Previous wording

During the six months ended June 30, 2026, (i) 68% of our total revenue was generated from the Americas region, of which 64% was generated from the United States and 4% was generated from the Americas-other, (ii) 20% of our total revenue was generated from the APJ region and (iii) 12% of our total revenue was generated from the EMEA region. During the six months ended June 30, 2025, (i) 55% of our total revenue was generated from the Americas region, of which 50% was generated from the United States and 5% was generated from the Americas-other, (ii) 27% of our total revenue was generated from the APJ region and (iii) 18% of our total revenue was generated from the EMEA region. One of our priorities is to strengthen our sales efforts in North America. During the six months ended June 30, 2026 and 2025, our enterprise customers accounted for 58% and 41% of our total revenue, respectively, and our service provider customers accounted for 42% and 59% of our total revenue, respectively.

Current wording

During the nine months ended September 30, 2026, (i) 66% of our total revenue was generated from the Americas region, of which 62% was generated from the United States and 4% was generated from the Americas-other, (ii) 20% of our total revenue was generated from the APJ region and (iii) 14% of our total revenue was generated from the EMEA region. During the nine months ended September 30, 2025, (i) 59% of our total revenue was generated from the Americas region, of which 54% was generated from the United States and 5% was generated from the Americas-other, (ii) 25% of our total revenue was generated from the APJ region and (iii) 16% of our total revenue was generated from the EMEA region. One of our priorities is to strengthen our sales efforts in North America. During the nine months ended September 30, 2026 and 2025, our enterprise customers accounted for 58% and 39% of our total revenue, respectively, and our service provider customers accounted for 42% and 61% of our total revenue, respectively.

Previous wording

As a result of the nature of our target market and the current stage of our development, a substantial portion of our revenue comes from a limited number of large customers, including service providers and enterprise customers, in any period. Purchases by our ten largest end-customers accounted for 58% and 46% of our total revenue for the three months ended June 30, 2026 and 2025, respectively, and accounted for 55% and 42% of our total revenue for the six months ended June 30, 2026 and 2025, respectively. Sales to these large end-customers have typically been characterized by large but irregular purchases with long sales cycles. The timing of these purchases and the delivery of the purchased products are difficult to predict. Consequently, any acceleration or delay in anticipated product purchases by or deliveries to our largest customers could materially impact our revenue and operating results in any quarterly period. This may cause our quarterly revenue and operating results to fluctuate from quarter to quarter and make them difficult to predict.

Current wording

As a result of the nature of our target market and the current stage of our development, a substantial portion of our revenue comes from a limited number of large customers, including service providers and enterprise customers, in any period. Purchases by our ten largest end-customers accounted for 55% and 51% of our total revenue for the three months ended September 30, 2026 and 2025, respectively, and accounted for 54% and 45% of our total revenue for the nine months ended September 30, 2026 and 2025, respectively. Sales to these large end-customers have typically been characterized by large but irregular purchases with long sales cycles. The timing of these purchases and the delivery of the purchased products are difficult to predict. Consequently, any acceleration or delay in anticipated product purchases by or deliveries to our largest customers could materially impact our revenue and operating results in any quarterly period. This may cause our quarterly revenue and operating results to fluctuate from quarter to quarter and make them difficult to predict.

Previous wording

As of June 30, 2026, we had $54.7 million of cash and cash equivalents and $302.7 million of marketable securities. Cash provided by operating activities was $31.3 million during the six months ended June 30, 2026, compared to $39.4 million in the same period of 2025.

Current wording

As of September 30, 2026, we had $75.8 million of cash and cash equivalents and $284.6 million of marketable securities. Cash provided by operating activities was $65.3 million during the nine months ended September 30, 2026, compared to $62.2 million in the same period of 2025.

Previous wording

A summary of our condensed consolidated statements of operations for the three and six months ended June 30, 2026 and 2025 is as follows (dollars in thousands):

Current wording

A summary of our condensed consolidated statements of operations for the three and nine months ended September 30, 2026 and 2025 is as follows (dollars in thousands):

Previous wording

Our products revenue primarily consists of revenue from sales of our hardware appliances upon which our software is installed. Such software includes our ACOS software platform plus one or more of our ADC, CGN, TPS, SSLi or CFW solutions. Purchase of a hardware appliance includes a perpetual license to the included software. Additionally, a small portion of our products revenue comes from subscription revenue. We offer several products by subscription, primarily through either term-based license agreements or as a service through our cloud-based platform. With respect to sales of our hardware appliances, we recognize products revenue upon transfer of control, generally at the time of shipment, provided that all other revenue recognition criteria have been met. Revenue for term-based license agreements is recognized at a point in time when we deliver the software license to the customer and the subscription term has commenced. For our SaaS offerings, our customers do not take possession of our software but rather we provide access to the service via a hosting arrangement. Revenue in these arrangements is recognized ratably as the services are provided. As a percentage of revenue, our products revenue may vary from quarter to quarter based on, among other things, the timing of orders and delivery of products, cyclicality and seasonality, changes in currency exchange rates and the impact of significant transactions with unique terms and conditions.

Current wording

Our products revenue primarily consists of revenue from sales of our hardware appliances upon which our software is installed. Such software includes our ACOS software platform plus one or more of our ADC, CGN, TPS, SSLi or CFW solutions. Purchase of a hardware appliance includes a perpetual license to the included software. Additionally, a small portion of our products revenue comes from subscription revenue. We offer several products by subscription, primarily through either term-based license agreements or as a service through our cloud-based platform. With respect to sales of our hardware appliances, we recognize products revenue upon transfer of control, generally at the time of shipment, provided that all other revenue recognition criteria have been met. Revenue for term-based license agreements is recognized at a point in time when we deliver the software license to the customer and over time once the subscription term has commenced. For our SaaS offerings, our customers do not take possession of our software but rather we provide access to the service via a hosting arrangement. Revenue in these arrangements is recognized ratably as the services are provided. As a percentage of revenue, our products revenue may vary from quarter to quarter based on, among other things, the timing of orders and delivery of products, cyclicality and seasonality, changes in currency exchange rates and the impact of significant transactions with unique terms and conditions.

Previous wording

Total net revenue increased $19.6 million, or 14%, during the six months ended June 30, 2026 and 2025, compared to the same period of 2025. Changes in revenue were due primarily to (i) an increase of $30.6 million in the Americas region, comprised of increases of $30.2 million in the United States and $0.4 million in Americas-other, (ii) a decrease of $5.6 million in the APJ region, and (iii) a decrease of $5.3 million in the EMEA region. The overall increase in revenue was attributable to a $35.3 million increase in revenue from enterprise customers, partially offset by a $15.7 million decrease in revenue from service provider customers during the six months ended June 30, 2026 and 2025 compared to the same period of 2025. Products revenue increased $17.9 million, of which the Americas region increased $26.9 million, partially offset by decreases of $4.6 million in the APJ region and $4.4 million in the EMEA region for the six months ended June 30, 2026 and 2025, compared to the same period of 2025. Services revenue increased $1.8 million, of which the Americas region increased $3.7 million, partially offset by decreases of $1.0 million in the APJ region and $0.9 million in the EMEA region for the six months ended June 30, 2026 and 2025, compared to the same period of 2025.

Current wording

Total net revenue increased $16.9 million, or 23%, during the three months ended September 30, 2026, compared to the same period of 2025. Changes in revenue were due primarily to (i) an increase of $9.6 million in the Americas region, comprised of increases of $8.7 million in the United States and $1.0 million in Americas-other, (ii) an increase of $2.2 million in the APJ region, and (iii) an increase of $5.1 million in the EMEA region. The overall increase in revenue was attributable to a $26.4 million increase in revenue from enterprise customers, partially offset by a $9.6 million decrease in revenue from service provider customers during the three months ended September 30, 2026 compared to the same period of 2025. Products revenue increased $15.4 million, of which the Americas region increased $9.2 million, the APJ region increased $1.8 million and the EMEA region increased $4.4 million for the three months ended September 30, 2026, compared to the same period of 2025. Services revenue increased $1.5 million, of which the Americas region increased $0.5 million, the APJ region increased $0.4 million and the EMEA region increased $0.6 million for the three months ended September 30, 2026, compared to the same period of 2025.

Previous wording

During the three months ended June 30, 2026, $54.8 million, or 68% of total revenue, was generated from the Americas region, which represents a 33% increase in revenue compared to the same period of 2025. The increase was primarily due to higher products and services revenue due to an increase in demand from our enterprise customers in the Americas region.

Current wording

During the three months ended September 30, 2026, $58.4 million, or 64% of total revenue, was generated from the Americas region, which represents a 20% increase in revenue compared to the same period of 2025. The increase was primarily due to higher products and services revenue due to an increase in demand from our enterprise customers in the Americas region.

Previous wording

During the three months ended June 30, 2026, $16.7 million, or 21% of total revenue, was generated from the APJ region, which represents a 7% decrease compared to the same period of 2025. The decrease was primarily due to lower products and services revenue due to a decrease in demand from our enterprise and service provider customers in the APJ region.

Current wording

During the three months ended September 30, 2026, $18.9 million, or 21% of total revenue, was generated from the APJ region, which represents a 13% increase compared to the same period of 2025. The increase was primarily due to higher products and services revenue due to an increase in demand from our enterprise and service provider customers in the APJ region.

Previous wording

Total net revenue increased $10.8 million, or 15%, during the three months ended June 30, 2026, compared to the same period of 2025. Changes in revenue were due primarily to (i) an increase of $13.6 million in the Americas region, comprised of increases of $13.5 million in the United States and $0.1 million in Americas-other, (ii) a decrease of $1.2 million in the APJ region, and (iii) a decrease of $1.6 million in the EMEA region. The overall increase in revenue was attributable to a $20.2 million increase in revenue from enterprise customers, partially offset by a $9.5 million decrease in revenue from service provider customers during the three months ended June 30, 2026 compared to the same period of 2025. Products revenue increased $9.9 million, of which the Americas region increased $11.5 million, partially offset by decreases of $1.0 million in the APJ region and $0.7 million in the EMEA region for the three months ended June 30, 2026, compared to the same period of 2025. Services revenue increased $0.9 million, of which the Americas region increased $2.1 million, partially offset by decreases of $0.3 million in the APJ region and $0.9 million in the EMEA region for the three months ended June 30, 2026, compared to the same period of 2025.

Current wording

Total net revenue increased $36.5 million, or 17%, during the nine months ended September 30, 2026, compared to the same period of 2025. Changes in revenue were due primarily to (i) an increase of $40.2 million in the Americas region, comprised of increases of $38.8 million in the United States and $1.3 million in Americas-other, (ii) a decrease of $3.4 million in the APJ region, and (iii) a decrease of $0.3 million in the EMEA region. The overall increase in revenue was attributable to a $61.7 million increase in revenue from enterprise customers, partially offset by a $25.2 million decrease in revenue from service provider customers during the nine months ended September 30, 2026 compared to the same period of 2025. Products revenue increased $33.2 million, of which the Americas region increased $36.1 million partially offset by a decrease of $2.8 million in the APJ region, while EMEA region was unchanged for the nine months ended September 30, 2026, compared to the same period of 2025. Services revenue increased $3.2 million, of which the Americas region increased $4.1 million, partially offset by decreases of $0.6 million in the APJ region and $0.3 million in the EMEA region for the nine months ended September 30, 2026, compared to the same period of 2025.

Previous wording

During the six months ended June 30, 2026 and 2025, $105.3 million, or 68% of total revenue, was generated from the Americas region, which represents a 41% increase in revenue compared to the same period of 2025. The increase was primarily due to higher products and services revenue due to an increase in demand from our enterprise customers in the Americas region.

Current wording

During the nine months ended September 30, 2026, $163.7 million, or 66% of total revenue, was generated from the Americas region, which represents a 33% increase in revenue compared to the same period of 2025. The increase was primarily due to higher products and services revenue due to an increase in demand from our enterprise customers in the Americas region.

Previous wording

During the six months ended June 30, 2026 and 2025, $30.9 million, or 20% of total revenue, was generated from the APJ region, which represents a 15% decrease compared to the same period of 2025. The decrease was primarily due to lower products and services revenue due to a decrease in demand from our enterprise and service provider customers in the APJ region.

Current wording

During the nine months ended September 30, 2026, $49.8 million, or 20% of total revenue, was generated from the APJ region, which represents a 6% decrease compared to the same period of 2025. The decrease was primarily due to lower products and services revenue due to a decrease in demand from our service provider customers in the APJ region.

Previous wording

During the three months ended June 30, 2026, $8.6 million, or 11% of total revenue, was generated from the EMEA region, which represents a 16% decrease compared to the same period of 2025. The decrease was primarily due to lower products and services revenue due to a decrease in demand from our service provider customers in the EMEA region.

Current wording

During the nine months ended September 30, 2026, $33.2 million, or 14% of total revenue, was generated from the EMEA region, which represents a 1% decrease compared to the same period of 2025. The decrease was primarily due to lower services revenue due to a decrease in demand from our service provider customers in the EMEA region.

Previous wording

Products cost of revenue increased 23.0% during the three and six months ended June 30, 2026, compared to the same periods of 2025, primarily due product and regional mix.

Current wording

Products cost of revenue increased 64.4% and 37.2% during the three and nine months ended September 30, 2026, respectively, compared to the same periods of 2025, primarily due to product and regional mix.

Previous wording

Services cost of revenue increased 3.1% during the three and six months ended June 30, 2026, and increased 2.9% during the six months ended June 30, 2026, compared to the same periods of 2025, primarily driven by an increase in personnel-related support costs and the mix of services delivered, which include technical support, training and service costs.

Current wording

Services cost of revenue decreased 8.2% and 0.9% during the three and nine months ended September 30, 2026, respectively, compared to the same periods of 2025, primarily driven by fluctuations in personnel-related support costs and the mix of services delivered, which include technical support, training and service costs.

Previous wording

Products gross margin increased 0.3% to 79.4% during thethree months ended June 30, 2026, and increased 0.2% to 79.6% during thesix months ended June 30, 2026, compared to the same periods of 2025, primarily due to product and regional mix.

Current wording

Products gross margin decreased 4.0% to 77.2% during thethree months ended September 30, 2026, and decreased 1.4% to 78.7% during thenine months ended September 30, 2026, compared to the same periods of 2025, primarily due to product and regional mix.

Previous wording

Services gross margin decreased 0.1% to 78.5% for thethree months ended June 30, 2026, and remained consistent at 79.0% during the six months ended June 30, 2026 compared to the same periods of 2025. Changes in services gross margin is primarily due to the mix of services delivered, which include technical support, training and service costs.

Current wording

Services gross margin increased 2.6% to 81.3% for thethree months ended September 30, 2026, and increased 0.9% to 79.8% during the nine months ended September 30, 2026 compared to the same periods of 2025. Changes in services gross margin is primarily due to the mix of services delivered, which include technical support, training and service costs.

Previous wording

Our operating expenses consist of sales and marketing, research and development, general and administrative and restructuring expenses. The largest component of our operating expenses is personnel costs which consist of wages, benefits, bonuses, and, with respect to sales and marketing expenses, sales commissions. Personnel costs also include stock-based compensation.

Current wording

Our operating expenses consist of sales and marketing, research and development and general and administrative expenses. The largest component of our operating expenses is personnel costs which consist of wages, benefits, bonuses, and, with respect to sales and marketing expenses, sales commissions. Personnel costs also include stock-based compensation.

Previous wording

Sales and marketing operating expenses increased $0.9 million, or 4.5%, in thethree months ended June 30, 2026, and increased $1.4 million, or 3.5%, in thesix months ended June 30, 2026, compared to the same period in 2025, primarily due to an increase in personnel costs.

Current wording

Sales and marketing operating expenses increased $0.5 million, or 2.3%, in the three months ended September 30, 2026, and increased $1.9 million, or 3.1%, in the nine months ended September 30, 2026, compared to the same periods in 2025, primarily due to an increase in personnel costs.

Previous wording

Research and development operating expenses increased $4.9 million, or 30.1%, in thethree months ended June 30, 2026, and increased $8.0 million, or 24.9%, in thesix months ended June 30, 2026, compared to the same periods in 2025, primarily due to an increase in personnel costs.

Current wording

Research and development operating expenses increased $3.2 million, or 17.4%, in the three months ended September 30, 2026, and increased $11.2 million, or 22.2%, in the nine months ended September 30, 2026, compared to the same periods in 2025, primarily due to an increase in personnel costs.

Previous wording

General and administrative operating expenses increased $4.1 million, or 57.4%, in the three months ended June 30, 2026, and increased $3.3 million, or 21.3%, in thesix months ended June 30, 2026, compared to the same periods in 2025, primarily due to an increase in personnel costs.

Current wording

General and administrative operating expenses increased $3.2 million, or 46.3%, in the three months ended September 30, 2026, and increased $6.6 million, or 29.0%, in the nine months ended September 30, 2026, compared to the same periods in 2025, primarily due to an increase in personnel costs.

Previous wording

Non-Operating income, net, consists primarily of interest income earned on our cash and cash equivalents and marketable securities, interest expense on the 2030 Notes, foreign currency exchange gains and losses and fair value adjustments on investments in publicly held equity securities. Foreign currency exchange gains and losses are primarily a result of fluctuations in the Japanese Yen versus the U.S. Dollar.

Current wording

Non-Operating income, net, consists primarily of interest income earned on our cash and cash equivalents and marketable securities, interest expense on the 2030 Notes and foreign currency exchange gains and losses. Foreign currency exchange gains and losses are primarily a result of fluctuations in the Japanese Yen versus the U.S. Dollar.

Previous wording

Interest income was $3.3 million and $3.0 million in thethree months ended June 30, 2026 and 2025, respectively, and was $6.7 million and $4.8 million in thesix months ended June 30, 2026 and 2025, respectively.

Current wording

Interest income was $3.3 million and $3.4 million in the three months ended September 30, 2026 and 2025, respectively, and was $10.0 million and $8.2 million in the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

Interest expense was $1.9 million and $1.9 million in thethree months ended June 30, 2026 and 2025, respectively, and was $3.8 million and $2.2 million in thesix months ended June 30, 2026 and 2025, respectively, and was related to our outstanding 2030 Notes that were issued in March 2025.

Current wording

Interest expense was $1.9 million and $1.9 million in the three months ended September 30, 2026 and 2025, respectively, and was $5.7 million and $4.1 million in the nine months ended September 30, 2026 and 2025, respectively, and was related to our outstanding 2030 Notes that were issued in March 2025.

Previous wording

The Company recorded $0.6 million of net losses and $0.5 million of net gains in other income (expense) in thethree months ended June 30, 2026 and 2025, respectively, and recorded $0.8 million of net losses and $0.7 million of net gains in other income (expense) in thesix months ended June 30, 2026 and 2025, respectively, primarily from foreign currency exchange gains and losses from fluctuations in the Japanese Yen versus the U.S. Dollar.

Current wording

The Company recorded $0.1 million of net gains and $0.5 million of net losses in other income (expense) in the three months ended September 30, 2026 and 2025, respectively, and recorded $0.8 million of net losses and $0.3 million of net gains in other income (expense) in the nine months ended September 30, 2026 and 2025, respectively, primarily from foreign currency exchange gains and losses from fluctuations in the Japanese Yen versus the U.S. Dollar.

Previous wording

We recorded a provision for income taxes of $1.0 million and $1.4 million for thethree months ended June 30, 2026 and 2025, respectively, and we recorded a provision for income taxes of $3.2 million and $2.3 million for thesix months ended June 30, 2026 and 2025, respectively. The Company’s income tax provisions for thethree and six months ended June 30, 2026 and 2025 primarily consisted of U.S. federal and state taxes.

Current wording

We recorded a provision for income taxes of $2.6 million and $1.8 million for the three months ended September 30, 2026 and 2025, respectively, and we recorded a provision for income taxes of $5.8 million and $4.1 million for the nine months ended September 30, 2026 and 2025, respectively. The Company’s income tax provisions for the three and nine months ended September 30, 2026 and 2025 primarily consisted of U.S. federal and state taxes.

Previous wording

As of June 30, 2026, we had cash and cash equivalents of $54.7 million, including $3.5 million held outside the United States in our foreign subsidiaries, and $302.7 million of marketable securities. We currently do not have any plans to repatriate our earnings from our foreign operations. As of June 30, 2026, we had working capital of $108.7 million, retained earnings of $22.7 million and total stockholders’ equity of $238.0 million. Our marketable securities are highly liquid and are classified as available for sale should the Company decide to quickly raise cash at any time in the future.

Current wording

As of September 30, 2026, we had cash and cash equivalents of $75.8 million, including $3.7 million held outside the United States in our foreign subsidiaries, and $284.6 million of marketable securities. We currently do not have any plans to repatriate our earnings from our foreign operations. As of September 30, 2026, we had working capital of $340.2 million, retained earnings of $39.9 million and total stockholders’ equity of $232.8 million. Our marketable securities are highly liquid and are classified as available for sale should the Company decide to quickly raise cash at any time in the future.

Previous wording

As described in Note 7 to the condensed consolidated financial statements included elsewhere in this Quarterly Report, the 2030 Notes are convertible into cash or a combination of cash and shares of common stock, at our election, upon the occurrence of certain circumstances specified in the indenture governing the 2030 Notes. One such circumstance was satisfied during the second quarter of 2026: for at least 20 trading days during the 30 consecutive trading days ending on the last trading day of such quarter, the last reported sale price of our common stock exceeded 130% of the applicable conversion price. As a result, holders of the 2030 Notes have the right, at their option, to convert their notes at any time during the third quarter of 2026 (from July 1, 2026 through September 30, 2026), and we reclassified the $219.5 million carrying amount of the 2030 Notes from long-term debt to a current liability on our condensed consolidated balance sheet as of June 30, 2026. Whether the 2030 Notes will become convertible again following the current conversion period and prior to December 1, 2029 (on and after which date they will become freely convertible) will depend on our common stock price or other conditions specified in the indenture in future periods, and we cannot predict whether, or to what extent, holders will elect to convert their 2030 Notes during the current or any future conversion period.

Current wording

As described in Note 7 to the condensed consolidated financial statements included elsewhere in this Quarterly Report, the 2030 Notes are convertible into cash or a combination of cash and shares of common stock, at our election, upon the occurrence of certain conversion conditions specified in the indenture governing the 2030 Notes. One such conversion condition was satisfied during the second quarter of 2026: for at least 20 trading days during the 30 consecutive trading days ending on the last trading day of such quarter, the last reported sale price of our common stock exceeded 130% of the applicable conversion price. As a result, holders of the 2030 Notes had the right, at their option, to convert their notes at any time during the third quarter of 2026 (from July 1, 2026 through September 30, 2026), and we reclassified the $219.5 million carrying amount of the 2030 Notes from long-term debt to a current liability on our condensed consolidated balance sheet as of June 30, 2026. During the third quarter of 2026, this conversion condition was not satisfied and the holders cannot opt to convert their notes after September 30, 2026. As such, the Company reclassified the carrying amount of the 2030 Notes from a current liability to long-term debt as of September 30, 2026. Whether the 2030 Notes will become convertible again prior to December 1, 2029 (on and after which date they will become freely convertible) will depend on our common stock price or other conversion conditions specified in the indenture in future periods, and we cannot predict whether, or to what extent, holders will elect to convert their 2030 Notes during any future conversion period.

Previous wording

If holders elect to convert their 2030 Notes, we may settle our conversion obligation in cash or a combination thereof, at our election. If holders elect to convert their 2030 Notes and we elect to settle all or a portion of our conversion obligation in cash, we would be required to use a portion of our cash, cash equivalents and marketable securities, which totaled $54.7 million and $302.7 million, respectively, as of June 30, 2026, or seek additional financing, to fund that obligation, and if we elect to settle any portion in shares of our common stock, such issuance would dilute the ownership interests of our existing stockholders. We believe our existing cash, cash equivalents and marketable securities, together with cash expected to be generated from operating activities, would be sufficient to satisfy a cash settlement obligation with respect to the 2030 Notes if holders were to elect to convert their notes during the current conversion period. However, the extent and timing of any such elections are outside of our control, and satisfying a significant cash settlement obligation could reduce the cash resources available to fund our other liquidity needs, including our stock repurchase programs and quarterly cash dividend, and could require us to seek additional financing on terms that may not be favorable to us, or at all.

Current wording

If holders elect to convert their 2030 Notes, we may settle our conversion obligation in cash or a combination thereof, at our election. If holders elect to convert their 2030 Notes and we elect to settle all or a portion of our conversion obligation in cash, we would be required to use a portion of our cash, cash equivalents and marketable securities, which totaled $75.8 million and $284.6 million, respectively, as of September 30, 2026, or seek additional financing, to fund that obligation, and if we elect to settle any portion in shares of our common stock, such issuance would dilute the ownership interests of our existing stockholders. We believe our existing cash, cash equivalents and marketable securities, together with cash expected to be generated from operating activities, would be sufficient to satisfy a cash settlement obligation with respect to the 2030 Notes if holders were to elect to convert their notes during any future conversion period. However, the extent and timing of any such elections are outside of our control, and satisfying a significant cash settlement obligation could reduce the cash resources available to fund our other liquidity needs, including our stock repurchase programs and quarterly cash dividend, and could require us to seek additional financing on terms that may not be favorable to us, or at all.

Previous wording

The Board of Directors has authorized various stock repurchase programs from time to time, including most recently, a twelve-month $50 million program approved November 7, 2023 (the “2023 Program”), a $50 million program approved November 7, 2024 (the “2024 Program”) and a $75 million program approved May 1, 2025 (the “2025 Program”). Under all programs, repurchased shares are held in treasury at cost. The Company’s stock repurchase programs do not obligate us to acquire any specific number of shares. Shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act. During the year ended December 31, 2025, the Company repurchased 3.7 million shares for a total cost of $68.9 million under the 2024 and 2025 Programs. During thethree months ended June 30, 2026, the Company did not repurchase any shares and during thesix months ended June 30, 2026, the Company repurchased $17 thousand shares for a total cost of $317 thousand under the 2025 Program.

Current wording

The Board of Directors has authorized various stock repurchase programs from time to time, including most recently, a twelve-month $50 million program approved November 7, 2023 (the “2023 Program”), a $50 million program approved November 7, 2024 (the “2024 Program”) and a $75 million program approved May 1, 2025 (the “2025 Program”). Under all programs, repurchased shares are held in treasury at cost. The Company’s stock repurchase programs do not obligate us to acquire any specific number of shares. Shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act. During the year ended December 31, 2025, the Company repurchased 3.7 million shares for a total cost of $68.9 million under the 2024 and 2025 Programs. During the three months ended September 30, 2026, the Company repurchased 0.9 million shares for a total cost of $23.0 million and during the nine months ended September 30, 2026, the Company repurchased 0.9 million shares for a total cost of $23.3 million under the 2025 Program.

Previous wording

In October 2021, the Board of Directors approved the initiation of a regular quarterly cash dividend on our common stock. The Company paid cash dividends of $0.06 per share outstanding, for a total of $4.3 million and $8.6 million in the three and six months ended June 30, 2026. The next dividend, in the amount of $0.06 per share, will be paid on September 1, 2026 to stockholders of record on August 17, 2026. We currently anticipate that we will continue to pay comparable quarterly cash dividends in the future. However, the payment, amount and timing of future dividends remain within the discretion of the Board of Directors and will depend upon our results of operations, financial condition, cash requirements, and other factors.

Current wording

In October 2021, the Board of Directors approved the initiation of a regular quarterly cash dividend on our common stock. The Company paid cash dividends of $0.06 per share outstanding, for a total of $4.4 million and $13.0 million in the three and nine months ended September 30, 2026, respectively. The next dividend, in the amount of $0.06 per share, will be paid on December 1, 2026 to stockholders of record on November 16, 2026. We currently anticipate that we will continue to pay comparable quarterly cash dividends in the future. However, the payment, amount and timing of future dividends remain within the discretion of the Board of Directors and will depend upon our results of operations, financial condition, cash requirements, and other factors.

Previous wording

During thesix months ended June 30, 2026, cash provided by operating activities was $31.3 million, consisting of net income of $20.9 million, non-cash charges of $24.3 million and a decrease in cash resulting from the net change in operating assets and liabilities of $13.9 million. Our non-cash charges consisted primarily of depreciation and amortization expenses of $8.4 million and stock-based compensation expense of $13.8 million. The net change in our operating assets and liabilities primarily reflects cash outflows from the changes in inventory of $13.9 million, accounts receivable of $10.1 million, accrued and other liabilities of $8.0 million and prepaid expenses and other assets of $6.1 million, partially offset by cash inflows from accounts payable of $12.3 million and deferred revenue of $11.8 million.

Current wording

During the nine months ended September 30, 2026, cash provided by operating activities was $65.3 million, consisting of net income of $38.1 million, non-cash charges of $35.7 million and a decrease in cash resulting from the net change in operating assets and liabilities of $8.4 million. Our non-cash charges consisted primarily of depreciation and amortization expenses of $13.3 million and stock-based compensation expense of $19.6 million. The net change in our operating assets and liabilities primarily reflects cash outflows from the changes in inventory of $18.4 million, accrued and other liabilities of $11.2 million and prepaid expenses and other assets of $6.8 million, partially offset by cash inflows from deferred revenue of $14.0 million, accounts receivable of $10.0 million and accounts payable of $4.0 million.

Previous wording

The unfavorable change in inventory was attributable to the timing of product shipments. The unfavorable change in accounts receivable was attributable to timing of billing and cash collections. The unfavorable change in accrued and other liabilities was primarily due to payments for variable compensation. The unfavorable change in prepaid expenses and other assets was attributable to an increase in prepaid accounting and marketing expenses. The favorable change in accounts payable was attributable to the timing of payments to vendors. The favorable change in deferred revenue was attributable to the timing of service contract bookings.

Current wording

The unfavorable change in inventory was attributable to the timing of product shipments. The unfavorable change in accrued and other liabilities was primarily due to the timing of payments for variable compensation. The unfavorable change in prepaid expenses and other assets was attributable to an increase in prepaid Federal and State taxes. The favorable change in deferred revenue was attributable to the timing of service contract bookings. The favorable change in accounts receivable was attributable to timing of billings and cash collections. The favorable change in accounts payable was attributable to the timing of payments to vendors.

Previous wording

During the six months ended June 30, 2025, cash provided by operating activities was $39.4 million, consisting of net income of $20.1 million, non-cash charges of $18.2 million and an increase in cash resulting from the net change in operating assets and liabilities of $1.1 million. Our non-cash charges consisted primarily of depreciation and amortization expenses of $7.1 million and stock-based compensation expense of $10.4 million. The net change in our operating assets and liabilities primarily reflects cash inflows from the changes in accounts receivable of $24.0 million and inventory of $1.6 million, partially offset by cash outflows from accounts payable of $6.4 million, deferred revenue of $6.3 million, accrued and other liabilities of $5.9 million and prepaid expenses and other current assets of $5.9 million.

Current wording

During the nine months ended September 30, 2025, cash provided by operating activities was $62.2 million, consisting of net income of $32.3 million, non-cash charges of $28.3 million and an increase in cash resulting from the net change in operating assets and liabilities of $1.6 million. Our non-cash charges consisted primarily of depreciation and amortization expenses of $10.9 million and stock-based compensation expense of $15.2 million. The net change in our operating assets and liabilities primarily reflects cash inflows from the changes in accounts receivable of $14.8 million, inventory of $2.7 million and accrued liabilities of $0.4 million, partially offset by cash outflows from deferred revenue of $7.3 million, prepaid expenses and other assets of $6.9 million and accounts payable of $2.1 million.

Previous wording

The favorable change in accounts receivable was attributable to timing of billing and cash collections. The favorable change in inventory was attributable to the timing of product shipments. The unfavorable change in accounts payable was attributable to the timing of payments to vendors. The unfavorable change in deferred revenue was attributable to the timing of service contract bookings. The unfavorable change in accrued and other liabilities was primarily due to a decrease in accrued variable compensation. The unfavorable change in prepaid expenses and other current assets was attributable to an increase in prepaid accounting and marketing expenses.

Current wording

The favorable change in accounts receivable was attributable to timing of billing and cash collections. The favorable change in inventory was attributable to the timing of product shipments. The favorable change in accrued liabilities was primarily due to an increase in accrued variable compensation. The unfavorable change in deferred revenue was attributable to the timing of service contract bookings. The unfavorable change in prepaid expenses and other assets was attributable to an increase in prepaid accounting and marketing expenses. The unfavorable change in accounts payable was attributable to the timing of payments to vendors.

Previous wording

During the six months ended June 30, 2025, cash used in investing activities was $41.2 million, consisting of purchases of marketable securities of $68.1 million, cash paid for the acquisition of ThreatX Protect of $19.1 million and capital expenditures of $8.7 million, partially offset by maturities of marketable securities of $54.7 million. See Note 5 for additional information regarding our acquisitions.

Current wording

During the nine months ended September 30, 2026, cash used in investing activities was $21.5 million, consisting of purchases of marketable securities of $148.9 million, cash paid for the acquisition of TrojAI of $34.1 million and capital expenditures of $7.8 million, partially offset by sales and maturities of marketable securities of $169.3 million. See Note 5 for additional information regarding our acquisitions.

Previous wording

During thesix months ended June 30, 2026, cash used in investing activities was $36.0 million, consisting of purchases of marketable securities of $112.2 million, cash paid for the acquisition of TrojAI of $34.7 million and capital expenditures of

Current wording

During the nine months ended September 30, 2025, cash used in investing activities was $215.1 million, consisting of purchases of marketable securities of $278.9 million, cash paid for the acquisition of ThreatX Protect of $19.1 million and capital expenditures of $13.5 million, partially offset by maturities of marketable securities of $96.4 million.

Previous wording

During thesix months ended June 30, 2026, cash used in financing activities was $11.8 million, consisting of cash dividend payments of $8.6 million, the repurchase of common stock, including the withholding of shares to satisfy income tax withholding and remittance obligations resulting from the vesting of certain awards, of $4.9 million, partially offset by proceeds from issuance of common stock under employee equity incentive plans of $1.7 million.

Current wording

During the nine months ended September 30, 2026, cash used in financing activities was $39.2 million, consisting of cash dividend payments of $13.0 million, the repurchase of common stock, including the withholding of shares to satisfy income tax withholding and remittance obligations resulting from the vesting of certain awards, of $27.9 million, partially offset by proceeds from issuance of common stock under employee equity incentive plans of $1.7 million.

Previous wording

During the six months ended June 30, 2025, cash provided by financing activities was $159.7 million, consisting of proceeds from the sale on the Company’s 2030 Notes of $217.7 million, proceeds from common stock issued under the Company’s equity plans of $1.7 million, partially offset by repurchases of common stock, including the withholding of shares to satisfy income tax withholding and remittance obligations resulting from the vesting of certain awards, of $51.0 million and cash dividend payments of $8.8 million.

Current wording

During the nine months ended September 30, 2025, cash provided by financing activities was $144.3 million, consisting of proceeds from the sale on the Company’s 2030 Notes of $217.7 million, proceeds from common stock issued under the Company’s equity plans of $1.7 million, partially offset by repurchases of common stock of $62.0 million and cash dividend payments of $13.1 million.