Shares of Arista Networks, a cloud networking solutions provider, surged more than 15% after the company reported better-than-expected earnings for the first quarter of 2021. The company not only beat Wall Street’s estimates for revenue and earnings per share, but also provided a robust outlook for the upcoming quarter, which further fueled investor optimism. Arista Networks’ solid performance was primarily driven by increased demand for its products and services, as more businesses are prioritizing digital transformation and remote work capabilities. The strong financial results and positive outlook positions Arista Networks well for future growth in the cloud networking market..
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Arista manufactures data center switch routers like this one.
Jason Alden/Bloomberg
Arista Networks
shares are trading sharply higher after the data center networking hardware provider posted better-than-expected second quarter results.
Last week, Arista (ticker: ANET) shares sold off on concerns about a potential slowdown in data center infrastructure demand, in particular following disappointing financial results from rival
Juniper Networks
(JNPR), and signs of moderating spending from Arista’s two biggest customers,
Microsoft
(MSFT) and
Meta Platforms
(META).
In its announcement, Arista said that it is seeing “a return to shorter lead times and reduced visibility,” but results nonetheless were better than the Street had feared, and the stock is on the mend.
In late trading Monday, Arista shares were 11.6% higher at $173.10.
For the June quarter, Arista reported revenue of $1.459 billion, up 8%, and ahead of the company’s guidance range of $1.35 billion to $1.4 billion. The Street consensus estimate called for $1.378 billion, according to FactSet. Non-GAAP profits were $1.58 a share, ahead of the Street consensus at $1.44 a share. On a GAAP basis, the company earned $1.55 a share.
Non-GAAP gross margin in the quarter was 61.3%, in line with guidance at 61%. Non-GAAP operating margin was 41.6%, above the company’s forecast of 40%.
For the September quarter, Arista sees revenue of $1.45 billion to $1.5 billion; Street consensus had been $1.48 billion. Arista projecting Q3 non-GAAP gross margin of 62%, with non-GAAP operating margin of 41%.
Arista says it now sees full-year growth of more than 30%; Street estimates had been projecting 26.5% full-year growth.
Write to Eric J. Savitz at [email protected]
Data center networking hardware provider Arista Networks saw a rise in its stock price after posting better-than-expected second quarter results. This comes after concerns about a potential slowdown in data center infrastructure demand due to disappointing financial results from rival Juniper Networks and signs of reduced spending from Arista’s two biggest customers, Microsoft and Meta Platforms. Despite a return to shorter lead times and reduced visibility, Arista’s revenue for the June quarter reached $1.459 billion, up 8% and exceeding the company’s guidance range. The company also projects a full-year growth of more than 30%, surpassing previous Street estimates.
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