Arista Networks Inc. announced its fourth-quarter earnings, exceeding expectations, and shared its revenue outlook for the upcoming quarter. However, despite the positive news, the company’s stock experienced a slight pullback during after-hours trading.
Revenue Outlook
For the ongoing quarter, Arista Networks projects revenues between $1.52 billion and $1.56 billion. Analysts surveyed by FactSet had estimated revenue of $1.53 billion. Additionally, Arista Networks executives anticipate a gross margin of 62%, slightly lower than the consensus view of 63%.
Stock Performance
Following the earnings release, Arista Networks’ stock declined approximately 6% in after-hours trading. Despite this setback, the stock has shown substantial growth, with a 36% increase over the past three months and an impressive 111% increase over the last 12 months.
Strong Earnings
In the fourth quarter, Arista Networks reported a net income of $613.6 million, or $1.92 per share, compared to $427.1 million, or $1.35 per share, in the same period the previous year. On an adjusted basis, the company posted earnings per share of $2.08, surpassing both the previous year’s earnings of $1.41 per share and the FactSet consensus of $2.08 per share.
Furthermore, Arista Networks’ revenue for the quarter reached $1.54 billion, marking a 2% increase compared to the previous year’s figures. Analysts had predicted revenue of $1.53 billion.
Optimistic Outlook
During the earnings call, Arista Networks’ CEO, Jayshree Ullal, expressed cautious optimism about achieving their AI revenue goal of at least $750 million by 2025 in the field of AI networking.
Networking Rival
On Wednesday afternoon, Arista Networks’ primary networking competitor, Cisco Systems Inc., will release its quarterly results.
