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DATE

Wednesday, Aug. 5, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

  • President and Chief Executive Officer - Dhrupad Trivedi
  • Chief Financial Officer - Michelle Caron

TAKEAWAYS

  • Revenue -- $80.1 million, representing a 15.5% increase driven by demand for next-generation networking and AI-related infrastructure.
  • Product Revenue -- $49 million, growing 25% due to new customer acquisitions and a strengthening commercial focus in the enterprise segment.
  • Service Revenue -- $31.1 million, contributing 39% of total quarterly revenue.
  • Non-GAAP Diluted EPS -- $0.25, compared to $0.21 in the prior-year period.
  • Enterprise Revenue -- 60% of total quarterly revenue, aligning with corporate goals of achieving balanced growth alongside service provider accounts.
  • Americas Revenue -- 68% of global revenue, reflecting a deliberate focus on the region's AI infrastructure build-outs.
  • Non-GAAP Gross Margin -- 80.3%, remaining consistent with management's stated business model objectives.
  • Non-GAAP Operating Margin -- 25.5%, reflecting balanced investments in AI facing innovation and profitability expansion.
  • Adjusted EBITDA -- $24.4 million, representing 30.5% of total revenue.
  • Free Cash Flow -- $26.9 million, recovering from first-quarter timing items as expected.
  • Cash and Marketable Securities -- $357.3 million as of June 30, 2026.
  • Full-Year Revenue Guidance -- 12% to 14% growth, increased from the previous outlook of 10% to 12% based on performance in the first six months.
  • Full-Year EPS Guidance -- 14% to 16% growth, raised from the prior range of 12% to 14%.
  • Microsoft Customer Concentration -- 37%, representing the company's largest end customer during the ongoing support of a significant project rollout.
  • Inventory -- $31.7 million, increasing from $18 million at the end of 2025 to manage supply chain requirements.
  • Share Repurchases -- $2.4 million, involving the repurchase of 86,115 shares at an average price of $27.63.
  • Dividend Payments -- $4.3 million in the quarter, with a subsequent quarterly dividend of $0.06 per share approved for payment on Sept. 1, 2026.
  • Deferred Revenue -- $154.8 million, comprised of current and non-current portions on the balance sheet.
  • Non-GAAP Net Income -- $18.7 million for the quarter.
  • Year-to-Date Revenue -- $155.1 million, an increase of 14.5% compared to the first six months of 2025.

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RISKS

  • Caron stated, "Consistent with the industry, we continue to navigate cost and delivery challenges related to the supply chain," regarding potential impacts on near-term cost dynamics.
  • Trivedi noted that while North American demand is improving, the service provider environment in Japan is "equal or slightly worse" due to macroeconomic spending pressures.
  • Caron stated that EMEA service provider demand was "impacted by the geopolitical environment," which influenced international growth cycles.

SUMMARY

A10 Networks, Inc. (ATEN +1.18%) reported second-quarter results featuring 15.5% revenue growth and an expansion of its enterprise vertical. Management raised its full-year 2026 outlook for both revenue and earnings per share following the announcement of an expanded multiyear agreement with Microsoft and the acquisition of AI security firm Troj.ai. The company stated that demand is being driven by AI infrastructure build-outs and the increasing complexity of network traffic, which require integrated security and traffic management solutions. Operating margins remained within management's target model as the company balanced research and development investments with capital returns to shareholders through dividends and share repurchases.

  • CEO Trivedi stated the expanded Microsoft agreement "reflects a shared commitment to a long term partnership with mutual performance commitments on both sides."
  • Management reported that AI traffic is "more complicated" and "high volume," increasing the demand for low-latency traffic management solutions.
  • The company acquired Troj.ai in June to provide "red teaming" capabilities and "real time protection at run time" for organizations securing AI applications.
  • CEO Trivedi stated that large enterprises are increasingly choosing to deploy "inference AI" on-premise for sovereign or proprietary reasons, which management views as a future growth driver.
  • Management noted that service provider spend in the Americas has "begun to normalize" following prior periods of volatility.
  • CEO Trivedi highlighted that product growth is a "lead indicator" of new business, with product revenue outpacing service revenue growth during new customer onboarding.

INDUSTRY GLOSSARY

  • Application Delivery Controller (ADC): A network device that manages and distributes traffic to improve application performance and reliability.
  • DDoS (Distributed Denial of Service): A cyberattack that attempts to crash a network or service by overwhelming it with a flood of internet traffic.
  • Red Teaming: The practice of using AI or human agents to probe software models and agents for vulnerabilities during the development phase.
  • Agentic Workflows: Automated processes where AI agents perform specific tasks or a series of actions autonomously within a network environment.
  • Carrier Grade Networking: Networking solutions designed to be highly reliable and scalable for large-scale telecommunications and service provider environments.
  • non-GAAP: Financial measures that exclude certain non-recurring or non-cash items to provide a different view of a company's operational performance.

Full Conference Call Transcript

Operator: Good afternoon, everyone, and welcome to the A10 Networks second quarter 26 financial results. At this time, all participants have been placed in a listen-only mode. And we will open the floor for questions following the presentation. It is now my pleasure to turn the floor over to your host, Tom Baumann of FNK Investor Relations. Tom, the floor is yours.

Tom Baumann: Thank you, and thank you all for joining us today. This call is being recorded. And webcast live and may be accessed for at least 90 days via the A10 Networks' website at a10networks.com. Hosting the call today are Dhrupad Trivedi, ATN's president and CEO; and CFO, Michelle Caron. Before we begin, I would like to remind you that shortly after the market closed today, A10 Networks issued a press release announcing its second quarter 26 financial results. Additionally, A10 published a presentation supplemental trend financial statements. You may access the press release, presentation, and trended financial statements on the Investor Relations section of the company's website. During the course of today's call, management will make forward looking statements.

Including statements regarding projections for future operating results, demand, industry, and customer trends, macroeconomic factors, strategy, potential new products and solutions, our capital allocation strategy, profitability, expenses and investments, positioning, and our dividend program. These statements are based on current expectations and beliefs as of today 08/05/2026. These forward looking statements involve a number of risks and uncertainties. Some of which are beyond our control that could cause actual results to differ materially and you should not rely on them as predictions of future events. A10 does not intend to update information contained in these forward looking statements whether as a result of new information, future events, or otherwise, unless required by law.

For a more detailed description of these risks and uncertainties, please refer to our most recent 10-K and quarterly report on Form 10 Q. Please note that with the exception of revenue, financial measures discussed today are on a non GAAP basis. Unless otherwise noted. It may have been adjusted to exclude certain charges. The non GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP and may be different from non GAAP financial measures presented by other companies.

A reconciliation between GAAP and non GAAP measures can be found in the press release issued today and on the trended quarterly financial statements posted on the company's website at www.a10networks.com. Now I would like to turn the call over to Dhrupad Trivedi president and CEO of A10 Networks.

Dhrupad Trivedi: Thank you, Tom. And thank you all for joining us today. A10 continues to deliver top and bottom line growth driven by the increasing relevance of our platform to the demands of next generation networking. From our foundation, advanced traffic management solutions, to our more recent focus on integrating security into all our offerings. We have built exactly the platform that today's customers need to address the host of challenges impacting their operations. AI is creating new challenges for customers across the industry. Greater traffic volume, expanding security threats, and the need for lower latency.

Our focus on next generation networking which combines advanced application management with integrated security represents the future of A10 and increasingly the standard our industry is being held to. Subsequent to the quarter, we announced a significant expansion of our relationship with Microsoft. This agreement reflects a shared commitment to a long term partnership with mutual performance commitments on both sides. As a result, we are more firmly aligned with the long term road map of this industry leader. It also serves as a powerful validation of A10's relevance to the customer and market and speaks to the depth of the relationship we have built over multiple years. We also continue to advance our product road map.

In June, we acquired Troj.ai, AI security company that helps organizations secure, test, and govern AI applications and agentic workflows. This acquisition adds 2 layers to our platform. Red teaming, which uses AI to probe models and agents for vulnerabilities at build time. As well as real time protection at run time. We generated 15% revenue growth in the second quarter on a year over year basis and 14.5% growth year to date. This marked our fourth quarter of double digit growth in the last 5, and as a result, we have increased our full year outlook to 12% to 14% for the full year versus previous guidance of 10% to 12%, reflecting continued confidence in the demand environment ahead.

AI continues to erase the distinction between how enterprises and service providers build their networks. Today, enterprises and service providers face the same workloads performance demands, and security requirements. We have built our platform for exactly this world. 1 architecture, 1 operating model, 1 security framework across both segments. Through this period of improving demand, our operating discipline has remained constant. We balanced targeted investment with EPS expansion and we delivered on both goals in the second quarter. Our goal is to convert growth into profitability and cash. While continuing to invest in the technical capabilities this demand environment requires. With earnings per share growth exceeding revenue growth, and we remain on track to do just that.

With that, I would like to turn the call over to Michelle Caron. Our chief financial officer, to review the numbers in more detail.

Michelle Caron: Thank you, Dhrupad. As a reminder, with the exception of revenue, all of the metrics discussed on this call are on a non GAAP basis. Unless otherwise stated. A full reconciliation of GAAP to non-GAAP results are provided in our press release and on our website. Let me now turn to the results. As Dhrupad noted, Q2 results were aligned with our business model goals. We delivered revenue growth of 15.5% to $80.1 million Year to date, our revenue was $155.1 million an increase of 14.5%. Turning to mix, Product revenue in the second quarter was $49 million or 61% of total revenue, while service revenue was $31.1 million or 39% of total revenue.

From a product mix perspective, security-led revenue continues to drive product revenue growth and meet our long term goals as a percentage of total revenue. From a vertical perspective, enterprise customers represented 60% of Q2 revenues. On a trailing 12 month basis, enterprise represents approximately half of total revenue in line with our previously stated corporate goals of driving balanced growth. Service provider spend in the Americas has begun to normalize. EMEA service provider demand was impacted by the geopolitical environment, while Japan within our APJ region continues to experience macroeconomic pressures that are impacting spending cycles.

We remain confident that our service provider relationships around the world remain a strong foundation for continued growth within international markets, Both verticals align with our strategy and reflect the strength of our offerings supporting AI infrastructure build out. From a geographic perspective, our Americas region represented 68% of global revenue. This reflects our deliberate focus on the Americas as a growth region driven by AI infrastructure build outs and strength in the enterprise market. Non GAAP gross margin was 80.3%. In line with our stated goals. Operating expenses were $43.9 million as we continue to prioritize investments in AI facing innovation, next gen networking, and security.

Operating margin was 25.5%, resulting in net income of $18.7 million or $0.26 per basic and $0.25 per diluted share, compared to $0.21 in the year ago period. Q2 diluted weighted share count was 75.7 million shares, We generated $26.9 million in free cash flow in the quarter, as the Q1 items, as the Q1 timing items we noted recovered as expected? On a year to date basis, free cash flow was $20.2 million We continue to expect full year free cash flow to grow year over year from approximately $65 million in 2025. Adjusted EBITDA was $25.4 million 30.5% of revenue. Consistent with our business model goals. Turning to the balance sheet.

Cash and marketable securities were $357.3 million as of June 30, and deferred revenue was $104.8 million We continue to return meaningful capital to shareholders. During the quarter, we paid $4.3 million in cash dividends and repurchased $2.4 million worth of shares, returning a total of $6.7 million to shareholders. The Board has approved a quarterly cash dividend of $0.06 per share to be paid on 09/01/2026, to shareholders of record on 08/15/2026. The company has $53 million remaining on its $75 million share repurchase authorization. Consistent with the industry, we continue to navigate cost and delivery challenges related to the supply chain.

Customer satisfaction and on time delivery remain our top priorities, and the strength of our business model gives us the confidence to raise our EPS outlook even as we navigate near term cost dynamics. I will now turn the call back to Dhrupad for an update on our 2026 outlook and closing comments.

Dhrupad Trivedi: Thank you, Michelle. A10 continues to strengthen its position as a partner of choice for next generation networks, and we are positioned to benefit from multiple durable secular catalysts. We continue to invest to enhance our position across our portfolio while preserving profitability and shareholder returns. Based on the results through 6 months, and our visibility ahead, we are increasing our full-year 2026 outlook. We now expect 2026 full-year revenue to increase by 12% to 14% on a year over year basis up from 10% to 12%. And EPS growth of 14% to 16% up from 12% to 14% previously. Operator, you can now open the call up for questions.

Operator: Thank you very much. We are now opening the floor for questions. If you have any questions, you can press 1 on your phone keypad now to join the queue. We ask that while you are posing your question, you please pick up your handset if you are listening on the speakerphone to provide optimum sound quality. So press 1 if you would like to ask a question. Please wait a moment whilst we poll for questions. Thank you. Our first question is coming from Gray Powell of BTIG. Gray? Your line is live.

Gray Powell: Hi. Gray. Thanks for, taking the question, and congratulations on the, really strong set of results.

Dhrupad Trivedi: Thank you. Thanks, sir.

Gray Powell: Yeah. Okay. So on product revenue growth, it is consistently been strong. it is it is the last 18 months, 25% growth in Q2 versus a tough comp last year. I thought that was particularly impressive. Can you maybe talk about how the drivers of growth on the product side have been changing this year versus last year? Then just how should we think about the duration of the spending cycle that you are currently benefiting from?

Dhrupad Trivedi: Yeah. Yeah. No. Gray, good question. And I think, you know, as we said before, when we get new customer or new business, product revenue is the lead indicator. And relative to your question, Gray, 2 things. Right? So a, over the last several quarters, we have spoken about that we are strengthening on the commercial side and the product side. To be able to better address and win opportunities including in the enterprise segment. Right? So that is 1 aspect of where as we get new business, the product growth is the lead driver and grows faster than service at that point.

Second, I would say is as we have continued to engage customers, with longer term road map and solutions related to what they can do with AI when they actually deploy it in the next 2-3 years, that has also naturally led to broader conversations with other products that they could be engaging with us today while they do that. So I think those 2 dimensions have helped us kind of drive that product growth a little bit more substantially. And the, you know, goal is obviously to continue to maintain that as much as we can.

Gray Powell: Okay. that is that is really helpful. And then just I guess related question. But the last quarter, called out some pull forward dynamics with your largest customer. So I guess I was a little bit surprised to see product growth accelerate in Q2. Can you maybe just talk about what surprised you the most in the quarter? Mhmm. And was there any similar pull forward dynamics in Q2 to what you saw last quarter?

Dhrupad Trivedi: Yeah. No. Fair point. And I think, you know, maybe a minor subtlety there. Right? So the pull forward dynamic was not sort of a relocation of demand. It had more to do with supporting a significant project. That had a timeline that needed to be completed. So when I look at Q2, similarly, I would say, right? We continue to balance the customer needs and deployment needs. But there is no concern that this is demand from outer quarters that is coming into the period. if that is helpful.

Gray Powell: that is really helpful. Thank you very much.

Dhrupad Trivedi: Thanks. Thanks, Gray.

Operator: Thank you very much. And our next question is coming from Christian Schwab of Craig-Hallum Group. Christian, your line is live.

Christian Schwab: Great. Thanks. Thanks for taking my question. Great quarter and outlook. Can you just give a better description and discussion on the growth drivers, which appear to be you know, a large degree to increased traffic that is going through the network. A particular through enterprises as AI adoption is accelerating? And is that also part of the expansion of the Microsoft relationship? And in addition to that, as more and more traffic becomes localized, on the enterprise. And as enterprise deploy specific AI applications that they will run dedicated on their networks versus going to the cloud Should we think of that as a meaningful growth driver for you over time?

Dhrupad Trivedi: Yeah. I know. it is a great question, Christian. So I think I will maybe talk about that in 3 parts. Right? So first, as you mentioned, right, our approach is around the notion of helping whatever type of company uses the product that when there is more traffic more complicated traffic, and people are worried about latency, that is a good fit for our solutions, independent of you know, what exact application may be. So certainly, the growth in traffic driven in some part due to AI, which is much more, you know, burst traffic, high volume traffic, and different than what we used to see it results in 2 parts.

1 is just managing that traffic efficiently and with low latency. And second is, dealing with the new kinds of threats that arise because of the use of AI by even enterprises, but by everybody on the network. So that is certainly 1 of the drivers. And I would say we see that as, you know, kind of a sustainable thing for several years. Because it is related ultimately not to who is building how many data centers. it is linked to are people using AI? Right? And I think we all can answer that for ourselves. So that is clearly 1 of the drivers.

Second, I think you talked about Microsoft and, obviously, we have been partnered with them. it is been a great customer for us for a long period of time. The expansion is that over the next couple of years time frame again, we are more and more aligned on the road map that as they build out their own architecture and infrastructure that we are continuing to be embedded with them in broader areas than we used to before. Right? So it is continuing to expand that. At the same time, obviously, we are very focused on ensuring we do our part to help them continue to be successful.

So that is simply kind of a reflection and joint commitment from both sides that we want to make it work for an extended period of time, and this is just a reflection of that. And, ultimately, has to be that we have to deliver the right technology they need and we are obviously focused on that from a technical point of view. The last point you mentioned actually is an interesting 1.

So I would say this is not a big demand driver immediately, but certainly in the next 2 to 3 years, as you see in the news, large enterprise, particularly chooses to do sometimes their own models, or because of sovereign AI reasons in outside of US as well. They choose to do actually more things on-prem than even in the cloud. Our solution can go across all of that. So as we see uptake in the next 2-3 years with enterprise doing more AI, like inference AI and generally the large ones preferring to do their own. We see that obviously as a strength for us, again, based on the nature of our solution.

And the ability that we have maintained how we deliver these capabilities in any kind of form factor. Great. Thank you for that.

Christian Schwab: I just have 1 more question. Regarding your first sustainable growth driver. As more complicated traffic and latency is and security threats are a huge issue. Your success there, can you just remind us who your first or second biggest competitor for those products are?

Dhrupad Trivedi: I think so there is, I think, 2 class of people that we would compete with. Right? So 1 is traditional companies that deliver infrastructure products, obviously, are also trying to add similar capabilities. So that would be 1 category of that. And I would say, though, the way we are approaching it, we try to do it based on our differentiation. So we believe we can be competitive. The second part of that is, which is an evolving market, is because of the nature of funding there is a lot of small and start up companies that are trying to compete in those slots.

But, ultimately, I think 1 of the factors that plays into it is would you trust you know, if you are a large bank, would you trust your data to an AI with a 6-person team? Right? So I think, and if you do, then the technology has to be really, really good. So I think the balance for us is we overlap with both The direct competition, I would say, though, would be with companies that do networking and infrastructure. Trying to add on AI products and capabilities. Great. Thank you.

Christian Schwab: No other questions.

Dhrupad Trivedi: Thank you. Thanks. Thank you, Christian.

Operator: Thank you very much. And our next question is coming from Hamed Khorsand of BWS Financial. Hamed, your line is live.

Hamed Khorsand: Hi. So first off, were there any pre buy requirements on the part of Microsoft for the expanded relationship? And how do you are you going to manage the business given that Microsoft is so large of a percentage of revenue at this point?

Dhrupad Trivedi: Yeah. So I think the you know, so I think the agreement that we have is linked to more their demand and us working jointly with them in a much more longer time frame. So there is no prebuys or anything like that. it is very much aligned with their business needs, rollout forecast, and us being much more operationally intertwined than before as well as the product side. The second part of your question, Hamed, I would say is, you know, if you put aside that and maybe, you know, where 1 or 2 countries where there is macro issues, our overall business excluding those factors, is also growing close to double digits. Right?

So it is not that this is the only place that is growing. So our objective continues to be to increase our relevance more and more in enterprise, obviously, including cloud and AI. As well as maintain durability where we should also benefit when service provider CapEx rebounds and does better. Right? So we are not losing those slots. We are maintaining those positions. But obviously, we are taking advantage of the current spending profile of customers by quarter. Okay.

Hamed Khorsand: And then is there you know, a higher drag on earnings because of where memory prices are? Or have you been able to stabilize that? Great question.

Dhrupad Trivedi: So I think you know, we have been able to maintain it in the last couple of quarters. As, you know, people talk about that memory constraint, whether it is supply or pricing, or combined, is expected to last for a while. Right? So we are continuing to navigate that. But our bias is customer satisfaction and delivery. So if we were forced to make that choice, you know, we figure out what to do and still deliver EPS. But so far, we have been able to manage that. But it is unknown. Right? Everybody's expecting it to last for many more quarters, so we are just staying focused on the customer delivery. Okay.

Hamed Khorsand: Thank you.

Dhrupad Trivedi: Thank you, Thank you very much.

Operator: Our next question is coming from Michael Romanelli of Mizuho Securities. Michael, your line is live.

Michael Romanelli: Great. Hey, guys. Thanks for taking the questions. Maybe to start off, obviously, new Microsoft agreement provides some validation around demand and deployment activity. So congrats on that. I guess just looking beyond that relationship, can you talk a little bit about the broader pipeline today, how that compares to perhaps 90 days ago whether that be size, quality, and visibility, particularly for just the larger enterprise and you know, any AI related opportunities that you can comment on, just trying to understand how demand looks for outside of the Microsoft, agreement. Yep. And then I have a follow-up. Sure.

Dhrupad Trivedi: Yeah. No. Good question, and I will maybe answer it in 2 ways. So first is when we look at our overall pipeline, it is compared to 90 days ago and, let's say, enterprise and SP separately, I would say. On the service provider side, we certainly see slight improvement in the North America market. And some of it is, right, that the products we sell, help them run networks better, cheaper, faster. Whether they replace the network or not. So we certainly see that as trend where that pipeline is improving, and so we expect that to be a contributor more in the future.

On the enterprise side, obviously, we have put lot of effort and I think because our focus is typically on large enterprise, the sales cycle tend to be 6 to 9 months and are pretty complex. So I would say the pipeline is good. We see kind of the trend being pretty positive as well. But I think we should start seeing the results you know, later this year, early next year, more so than before, based on that. Right? So the pipeline compared to 90 days is definitely better, and I would say the quality of deals is better. So it is obviously, the last part is the most important, which is we are going execute. Got it. Okay.

Sounds And as second thing, yeah, and the second thing, Michael, you asked, on the AI side, right, like many companies, we are engaged with a lot of customers on proof-of-concepts, those kinds of things right now, as they are themselves figuring out what to do with AI. So there, I would say our measure of success is more around how many customers are we engaged with, then are we deeply involved with kind of their business problems and how we can solve them. Got it. Okay. Thanks, Dhrupad. that is that is helpful.

Michael Romanelli: And then maybe as for my follow-up, congrats on the recent acquisition of Troj.ai. Guess what made this the right asset for A10? And where do you see the strongest fit within the portfolio? And I guess just more broadly, could AI security become a more meaningful growth vector for A10 over time? Or should we think of it more as an important capability that enhances the relevance of the existing portfolio? Thanks.

Dhrupad Trivedi: Yeah. No, great question. So I think first of all, I think, you know, 1 of the most important things for us in going with Troj.ai was the team there had developed a very strong technical solution and which was very much in line with kind of the road map we were driving towards. And, somewhat complementary to some other things we were doing. So in a way, it was adding that capability to strengthen a portfolio that we can sell stand alone, but also as part of broader bundles in the future. I would say the near term, of course, it adds capability to the overall solution for sure.

But at the same time, the road map that we are driving has more to do with kind of native AI solutions that we can bring to market in the next 1 or 2 years. That are not even predicated on people using all of our other products. Right? So it is more of the first thing today, but it could be both in the future as the market matures. Great. Thank you.

Michael Romanelli: Yep.

Operator: Thank you very much, And our next question is coming from Simon Leopold of Raymond James. Apologies. Simon, your line is live.

Analyst: that is okay. Wanted to check. Historically, you have included Microsoft within your service provider vertical, I believe. I want to confirm that and just verify that is still how you categorize it. Just to make sure that essentially, the sort of shift in mix is not reflective of recategorization of a customer?

Dhrupad Trivedi: No. Good question and clarification. So, Simon, you are correct. Historically, we characterize it as service provider. We have not recategorized that portion of the business. But as I mentioned before, we are also doing different and new business with Microsoft and as well as others. And that is where it is, sometimes difficult for us to kind of split in that enterprise SP mix because many of our customers, including in Europe, do both. And so you are correct. there is no historical revenue that has been recategorized. And so what is sold to them as a service provider is still counted in the service provider segment.

So then in the most recent quarter, is there Microsoft Business showing up that you do categorize as enterprise? Yes. Correct. based on a completely different product set. Yeah. based on a completely different product set. Correct. Yeah. Okay. That like, totally now things make so much more sense to me. So helpful. So then stepping back last quarter, you did disclose in the Q that you did have a 37% end customer. Can you give us some more metrics for the June quarter? I think, you know, obviously, we will come out in the queue, but it will be a similar number.

And I think it will it will you know, we will publish the queue next day or 2. So but it will be a similar number, and it is it is linked to kind of completing the rollout. Right? So it will change probably in the future, but as of now for Q2, it will be a similar number, just for those exact reasons. Okay. And so, I guess, kind of trying to just put a button on this line of questioning. It looks like service provider excluding Microsoft declined in 2025. And I think you are talking about it stabilizing. So Mhmm.

If we are trying to think about service provider excluding Microsoft in 2026, We should be thinking about that as similar to the 2025 level. Is that what you mean by normalizing? I just wanna make sure I am interpreting that commentary correctly. Yeah. So I think good very good question. I think so. I would say expecting it to be slightly better than 2025 level. And the puts and takes are the North America segment we see as improving. Japan is equal or slightly worse, and Europe is neutral. Right? So between those factors, overall, we expect it to be slightly better versus 2025. Thank you. Appreciate the clarification. Appreciate it. No problem. Thank you. Thank you. Thanks, Simon.

Operator: Thank you very much. Well, we appear to have reached the end of our question and answer session. So I will now hand back over to the management team for any closing comments.

Dhrupad Trivedi: Thank you, and thank you to all of our employees, customers and shareholders for joining us today and for your continued support. I am increasingly confident in our strategic orientation with security, and next generation networking spending patterns. Thank you for your time and attention.

Operator: Thank you very much, everybody. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful rest of the day. We thank you for your participation.