Arista Networks, Inc.
CEO : Ms. Jayshree V. Ullal
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2022 Q4 | 54.7% YoY | 76.4% | 78.2% | 2023-02-13 |
Anshul Sadana says,
Strong partnerships with Microsoft and Meta
- Next-gen 100, 200 and 400-gig products deployed at several key tails of their networks
- Additional design wins in backbone, WAN and edge folds
- Co-developed platforms with Meta, such as the Timeout phase 7368 and 7388, helped improve throughput and datacenter power efficiencies
Expansion of product portfolio
- Ramped up 7800R3 series, high-density, 400-gig, near-lossless spine
- Introduced several new products based on Timeout 4 and deep buffer virtual output care systems based on Jericho 2 to 7280 and the 7800R3 modular systems
- Launched first 1 RAC unit 25-terabit product, with 800-gig ports that can be broken out as 2 x 400-gig
Growth in AI and Cloud
- EOS, the high-quality resilient network data lake-based operating system, has matured and now supports cloud scale with multiple copies of the Internet routing table
- Co-development with cloud customers who greatly appreciate Arista engineering expertise
- Work with Microsoft on automation and monitoring for Azure and Bing deployments
- Deployments in their backbone and in generative AI and recommendation engines with the 7800 series are now smoothly deployed in production
Exciting market segment
- Cloud journey has come a long way over the last decade
- Pace of innovation and partnerships in cloud segment is exciting
Jayshree Ullal says,
Record Year for Arista
- Achieved 48% growth in 2022, surpassing the guidance of 30% growth
- Record annual revenue of $4.38 billion, with non-GAAP EPS of $4.58
- EPS growth of 58% for 2022
Q4 2022 Performance
- Delivered $1.276 billion for the quarter, with non-GAAP EPS of $1.41
- Services and software support renewals contributed approximately 15.8% of the revenue
- Non-GAAP gross margin was 61%, influenced by supply chain overhead and cloud tightening concentration
- International contribution registered at 23.5%, with the Americas at 76.5%
- Cloud titans was the largest vertical, followed by enterprise and specialty cloud providers, financials, and service providers
Segment Sector Revenue
- Cloud titans contributed significantly at approximately 46%, resulting in triple-digit growth annually
- Enterprise and financials together were strong at approximately 32%, while providers were at approximately 22%
- Meta and Microsoft are now far greater than 10% customers at 25.5% and 16% contribution respectively
2023 Reporting Changes
- Will report the three segment sectors instead of the verticals
Cloud Tightening Performance
- More information to be provided by the Chief Operating Officer, Anshul Sadana
Q & A sessions,
Revenue and Growth
- Expect both Microsoft and Meta to contribute greater than 10% of total revenue in 2023
- Doubled 400-gig customers from 300 in 2021 to over 600 in 2022
- Aiming for $750 million in revenue by 2025 in the network adjacencies category
- Reiterating 25% annual growth outlook and aiming for $5.47 billion in revenue in 2023
Product Lines
- Core cloud and data center products built upon a highly differentiated Arista EOS staff that drove approximately 68% of revenue with strong cloud and enterprise spending cycles
- Network adjacencies comprised of routing, replacing routers and cognitive campus, together contributing approximately 14% of revenue
- Network software and services based on subscription models, such as Arista A-Care, CloudVision, DMF Observability, and advanced NDR with Eva sensors for securities, contributing approximately 18% of total product line
Wins and Use Cases
- Universal cloud network wins in the travel industry using DMF, DANZ Monitoring Fabric solution, and Layer 3 leaf/spine EVPN design for critical VDI environment
- Financial customers chose Arista’s cognitive campus with wired and wireless solutions and virtual training environment, such as Arista’s Cloud Test
- Arista is making inroads on regional Tier 2 and Tier 3 service providers, delivering a cloud-like operating model
- International win in the education sector for high-performance computing, and a government sector win for big data Hadoop cluster deployments
Transformation to Arista 2.0
- Building upon cloud network heritage to bring proactive platforms, predictive operations and a complete prescriptive experience, unifying datasets from multiple sources
- NetDL architecture and AVA, or autonomous virtual assist, using AI and ML and natural language processing techniques
- Software functions such as routing for WAN, Zero Trust security and observability are moving into the Arista U.S. stack
No bad stock 