Shares of A10 Networks (NYSE:ATEN) dropped 16.2%, according to data provided by S&P Global Market Intelligence, after the company's management said revenue for the second quarter would come in below its original guidance.
A10 Networks' management said in the middle of July that second-quarter revenue would be between $52.5 million to $53.5 million, which was a significant drop from its original guidance of $62 million to $64 million. It also readjusted A10's non-GAAP earnings-per-share forecasts of $0.01 to $0.03 in the quarter down to a net loss of $0.05 to $0.06.
CEO Lee Chen said that management adjusted the forecasts for revenue "as a number of opportunities in our pipeline did not close" mainly from its North American customers. Investors didn't take too kindly to the announcement and pushed the company's share price down nearly 20% after the announcement.
While investors pummeled A10 Networks' stock price in the middle of the month, things turned around a bit after the release of the actual second-quarter results, which came in higher than the preliminary numbers.
The stock was up about 11% after the company reported revenue of $53.7 million and a non-GAAP net loss of $3.1 million, representing an EPS loss of $0.04.
In a press release, Chen said, "We are implementing a number of cross-functional actions to improve our execution, increase the effectiveness of our go-to-market activities and support growth for our expanding product portfolio."
The fact remains, though, that A10's revenue and earnings fell year over year in the second quarter, and the company still needs to show investors that it can deliver growth in both areas.