A10 Networks reported third-quarter 2025 revenue of $74.7 million, up nearly 12% year-over-year, split 58% product ($43.1 million, +17%) and 42% service ($31.6 million, +6%), with security-led solutions exceeding management's long-term target of 65% of total revenue. Growth was led by AI infrastructure build-out concentrated among a few large customers in the Americas, which represented 65% of global revenue and grew 25% on a trailing-12-month basis, offsetting macro-related headwinds in the rest of the world. Profitability expanded as adjusted EBITDA margin rose from 26.7% to 29.3% ($21.9 million) and non-GAAP operating margin improved about 215 basis points from 22.6% to 24.7%, even amid increased R&D investment. Non-GAAP net income was $16.7 million, or $0.23 per diluted share, up 7.4% year-over-year, while GAAP net income was $12.2 million, or $0.17 per diluted share. The company generated $22.8 million in operating cash flow, ended the quarter with $371 million in cash and investments, and returned capital via a $0.06 quarterly dividend and $11 million of buybacks. Management expects full-year 2025 revenue growth of 10% and guided to high-single-digit growth in 2026 with a 26%-28% EBITDA target and EPS growth faster than the top line. The quarter also marked the debut of new CFO Michelle Caron, who emphasized disciplined capital allocation and support for a pipeline of M&A activity.
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, A10'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 third quarter 2025 financial results. Additionally, A10 published a presentation and supplemental trended 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, November 4th, 2025. 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, and 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 a10networks.com. Now, I'd like to turn the call over to Dhrupad Trivedi, President and CEO of A10 Networks.
Thank you, Tom, and thank you all for joining us today. A10's strategic position. Aligning our solutions and technology roadmap with the persistent needs of our customers around trusted infrastructure, cybersecurity, and AI capabilities continues to enable growth that outpaces our market peers. Our solutions emphasize high throughput, low latency, and integrated security, which our customers and the broader market increasingly view as essential. A10 is well positioned alongside the durable catalysts that are driving spending across our markets. In the third quarter, revenue grew nearly 12% year-over-year. On a trailing 12-month basis, growth from enterprise customers in North America continues to outpace our overall company-wide growth. Revenue from the Americas has increased 25% on a trailing 12-month basis, driven primarily by investment in AI infrastructure. This performance helped offset macro-related headwinds in other regions. Our global diversification continues to enable consistent performance despite macro variability.
AI-related deployments were a key driver for growth, where security and performance at scale are critical. These applications are power-hungry, and our solutions deliver efficient throughput and low latency with integrated best-in-class security capabilities. This allows customers to achieve target performance with fewer devices, improving total cost of ownership while maintaining the highest levels of network performance. We continue to leverage this advantage in large data center opportunities globally. Our operating model continues to focus on discipline and leverage. Converting growth into profitability and cash while reinvesting in strategic priorities. EBITDA margins expanded year-over-year from 26.7% to 29.3%. While non-GAAP operating margin expanded from 22.6% to 24.7%. This demonstrates the inherent leverage in our model, even as we continue to invest more in R&D. A10 is well positioned to serve both enterprise and service customers alike while we navigate macro uncertainty.
In the world of AI, these will be harder to demarcate as customers redefine their architectures. Our increasingly strong alignment with AI infrastructure build-out and adoption gives us confidence in our strategic positioning. As we align investment with structural tailwinds of AI and cybersecurity. As our investments in innovation and product enhancements have taken shape, we have established ourselves as a stronger, more differentiated technology solution provider. On a trailing 12-month basis, growth stands at just over 10%. Based on momentum in key strategic initiatives, we expect full-year growth rate of 10%. With that, I'd like to formally welcome Michelle Caron, our new Chief Financial Officer, to the call. I also want to take a moment to thank Brian Becker. Brian had been an important part of the leadership team during A10's progress and had instituted strong processes that will continue to serve us well into the future.
Michelle brings deep operational and financial expertise from complex global organizations and a proven ability to align financial strategy with growth opportunities. Her background complements A10's disciplined culture and long-term transformation agenda. We expect continued disciplined execution and an increased focus on capital deployment to play a role in our overall growth. Michelle's experience positions her well to help drive that next phase of the company. Michelle?
Thank you, Dhrupad. I'm excited to join A10 at this important inflection point. What drew me here is the combination of a strong foundation coupled with an even stronger opportunity ahead. With a proven business model, solutions that are ideally aligned with global spending trends, and a tier-one customer base, A10 is positioned for consistent success. I share Dhrupad's belief that we can continue to grow both organically and inorganically, and I look forward to contributing to both sides of that growth equation. My near-term focus involves building on our solid base and driving greater consistency, predictability, and profitability as we grow. I'll be concentrating on a few key areas. First, maintaining financial discipline and transparency, better aligning our performance and market expectations. Second, driving profitable growth, balancing top-line expansion with healthy margins and cash flow. And third, maintaining disciplined capital allocation.
Investing where we can create the most value while continuing to return capital to our shareholders. Supporting our pipeline of M&A activities and effectively putting our cash to work will be part of this initiative. Now, let me turn to the results. As Dhrupad noted, we delivered a strong Q3, growing revenue almost 12% to $74.7 million. Reflecting a mix of 58% product revenue and 42% service revenue. Global service revenue of $31.6 million grew 6%, while product revenue of $43.1 million grew 17% year-over-year. Product revenue, which has been strong for the last two quarters, represents a leading indicator of future revenue. Our third-quarter performance gives us confidence we're on the right track to deliver on our strategic priorities while continuing to drive rigor, building on our culture of excellence.
Within our product revenue category, the third quarter reflected a greater contribution of security-led revenue, exceeding our long-term target of generating 65% of our total revenue from security-led solutions. This performance reflects customer demand and our alignment with customer needs, particularly within North America, for both service providers and enterprises. Now, looking at our major verticals, enterprise customers represented 36% of Q3 revenues. As previously stated, Americas is our priority region, and we continue to see growth in excess of overall revenue on a trailing 12-month basis. Service provider revenue, which was 64% of total revenue, was weighted towards cloud providers, further indication of our success in strategically aligning our offerings with AI infrastructure build-out. From a geo perspective, our Americas region represented 65% of global revenue, reflecting the benefits of A10's investments in our enterprise segment and strength of AI infrastructure build-out.
As Dhrupad mentioned, macro-related headwinds in rest of world were made up for in the Americas region. Now, 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 is provided in our press release and on our website. Our continued operating discipline contributed to our strong Q3 results. Non-GAAP gross margin was 80.7%, in line with our stated goals of 80%-82%. Operating expenses were $41.8 million, reflecting an operating margin of 24.7%, an improvement of about 215 basis points year-over-year. GAAP net income for the quarter was $12.2 million, or $0.17 per diluted share. Non-GAAP net income for the quarter was $16.7 million, or $0.23 per diluted share, reflecting 7.4% EPS growth from the year-ago period.
Diluted weighted shares used for computing non-GAAP EPS for the third quarter were approximately 73 million shares, down 1.7 million shares year-over-year, driven by our continued share buyback. Adjusted EBITDA was $21.9 million, 29.3% of revenue, which is aligned with our long-term strategic goals. Turning to the year-to-date results, revenue for the first nine months of 2025 was $210.2 million, compared to $187.5 million, an increase of 12.1%. Non-GAAP gross margin was 80.5% year-to-date. Adjusted EBITDA was $61.1 million year-to-date, reflecting 29% of revenue. Non-GAAP net income on a year-to-date basis was $47.2 million, or $0.64 per diluted share, compared to $41.9 million, or $0.56 per diluted share last year. On a GAAP basis, net income for the first nine months was $32.3 million, or $0.44 per diluted share, compared to net income of $31.8 million, or $0.42 per diluted share in the first nine months last year.
I'll now turn to the cash flow and balance sheet, both of which are very strong. We generated $22.8 million in cash flow from operations in Q3. CapEx was $4.7 million, with cash and investments totaling $371 million at the end of the quarter. Deferred revenue was $143.5 million. During the quarter, we paid $4.3 million in cash dividends and repurchased $11 million worth of shares. The board has approved a quarterly cash dividend of $0.06 per share to be paid on December 1, 2025, to shareholders of record on November 17, 2025. The company still has over $60 million remaining of its $75 million share repurchase authorization. I look forward to speaking with many of you in the coming weeks, gathering your feedback on our strategy and operations. I'll now turn the call back to Dhrupad for closing comments.
Thank you, Michelle. We are encouraged by continued business execution and remain confident that A10 is strategically well positioned in the market, especially as we see acceleration in AI infrastructure build-out. A10 is positioned squarely in front of multiple durable circular catalysts. In fact, our strength in high-performance hardware and software is more relevant than ever before. We are investing to enhance our position in the enterprise space and remain aligned with key leaders in the service provider sector around the world. We believe our business model enables us to dynamically allocate resources to address changing market conditions while preserving profitability and shareholder returns. Operator, you can now open the call up for questions.