Arista Networks Soars on Strong Earnings and AI-Driven Growth Prospects

An Earnings Beat and an Upbeat AI Outlook Lifted Arista Networks Stock

Analysts said the company's Etherlink switch portfolio positions it to gain from the artificial intelligence boom. Arista Networks (ANET) shares finished Wednesday up 11% after the cloud networking giant reported better-than-expected earnings and raised its outlook. The company late Tuesday reported revenue of $1.69 billion and net income of $665.4 million, or $2.08 a share, better than analysts had expected. Jefferies analysts highlighted Arista Networks' Etherlink switch portfolio, which is designed for the backend of graphics processing units (GPUs) to reduce slowness in AI networks. The analysts said that the technology is important to solidifying the company's position in the AI era. Arista Networks' chief financial officer, Chantelle Breithaupt, said in the company's earnings conference call that it was lifting its full-year guidance to reflect "at least" 14% revenue growth. Some analysts said that outlook may be conservative, as it assumes a weaker second half that would be unusual for Arista's industry. Melius Research analysts said the company is poised to gain from increased AI spending by Microsoft (MSFT), one of Arista Networks' biggest customers. The analysts said they wouldn't be surprised if Arista partnered more closely with Nvidia (NVDA) and AMD (AMD) to drive sales from cloud hyperscalers -- large-scale data centers that deliver massive amounts of computing power and storage capacity to organizations and individuals. Wednesday's share-price advance left Arista Networks' shares up nearly 50% this year.

Why Arista Networks Stock Is Soaring Today

The booming artificial intelligence (AI) market is bearing fruit for more companies than the obvious names like Nvidia and Google parent Alphabet. According to numbers from S&P Global Market Intelligence, shares of networking technology outfit Arista Networks (ANET 10.33%) are up 10.9% as of 1:16 p.m. ET Wednesday in response to an impressive second-quarter report, largely fueled by its role in the advent of AI. For the three months ending in June, Arista Networks turned revenue of $1.69 billion into a per-share profit of $2.10 per share. Both are up from year-ago comparisons of $1.46 billion and $1.58 per share, respectively. But, perhaps more importantly, both numbers topped expectations for a top line of $1.65 billion and per-share profits of $1.94. Artificial intelligence accounts for the bulk of the beat. While Arista Networks is widely known as a maker of routers, switches, and other networking solutions -- much like rival and industry leader Cisco -- Arista is proving to be an important data center specialist, and AI data centers in particular. In fact, its new 7060X6 etherlink AI networking platform is built from the ground up specifically to handle heavy-duty artificial workloads, whether they're created by training (machine learning) processes or less-developed inference models. This tech effectively connects multiple computer-processing units, addressing one of the AI industry's bigger data-crunching bottlenecks. Whatever the company's making, it's finding a market for it. Arista Networks' revenue guidance for the quarter now underway is a range between $1.72 billion and $1.75 billion, versus analysts' consensus estimate of $1.73 billion. That's nearly 17% better than the year-earlier comparison of $1.48 billion, underscoring Arista's opportunity within the AI hardware market that Mordor Intelligence predicts will grow at an average annualized pace of 26% through 2029. Arista Networks is a long-term buy at this price Any daily gain on the order of 10% is a tough act to follow, simply because it invites profit-taking soon thereafter. Arista Networks is no exception to this potential risk. Even if profit-taking-driven correction in the near-term cards here, though, Arista is still a compelling growth prospect, before or after. For perspective, most of the 27 analysts following this ticker rate it as a strong buy despite the stock's two-year, 265% run-up that pushed it to a record high just earlier this month. Most of them are eyeing the company's growing role as a well-equipped solutions provider in the AI data center arena. Just bear in mind that the stock's already proven it's volatile, and as such isn't for the faint of heart or the short-term-minded.

Arista sees Q3 revenue largely above estimates (NYSE:ANET)

Arista Networks (NYSE:ANET) on Tuesday announced a Q2 top- and bottom-line beat, while issuing current quarter revenue guidance that was largely above expectations. Shares of ANET initially fell in extended trade after the report, but then recovered after a while and were last up 3.5% to $322.86 after hours. Santa Clara, Calif.-based Arista (ANET) makes cloud networking gear such as servers and switches. Its products are used by data centers, campuses and routing environments. Arista (ANET) earned $2.10 per share on an adjusted basis for Q2 on revenue of $1.69B. Analysts had been expecting earnings of $1.94 on revenue of $1.65B. "We achieved an EPS increase of 33% in Q2 2024 compared to the same period last year, driven by our strong revenue and gross margin performance," ANET finance chief Chantelle Breithaupt said in a statement. For Q3, Arista (ANET) sees revenue of $1.72B to $1.75B. The consensus revenue estimate is $1.72B. Arista's (ANET) results come at a time when data centers are rapidly scaling up operations to meet the demand for artificial intelligence (AI) processes. "The collective nature of AI training models relies on a lossless, highly-available network to seamlessly connect every GPU in the cluster to one another and enable peak performance. Networks also connect trained AI models to end users and other systems in the data center such as storage, allowing the system to become more than the sum of its parts," Arista (ANET) top boss Jayshree Ullal said in a blog post in May. "As a result, data centers are evolving into new AI Centers where the networks become the epicenter of AI management," Ullal added. More on Arista Arista Networks Is Poised For A Major Upcycle (Earnings Preview) Arista Networks: AI-Induced Rally Creates Risk Arista Networks: Time To Sell Arista Networks: Nvidia Isn't The Only AI Gold Rush Beneficiary Arista Networks Is Too Expensive, Despite The Robust Growth Prospects

Arista seizes the AI networking opportunity with strong earnings beat and revenue growth - SiliconANGLE

Arista seizes the AI networking opportunity with strong earnings beat and revenue growth Shares of Arista Networks Inc. were trading higher today after the company forecast strong third-quarter revenue that surpassed Wall Street's expectations. It said it's anticipating strong demand for its networking gear from both cloud computing infrastructure providers and artificial intelligence applications. The strong forecast came after the company posted solid second quarter results, with earnings before certain costs such as stock compensation coming to $2.10 per share, nicely ahead of Wall Street's target of $1.94 per share. Revenue for the period rose 16% to $1.69 billion, surpassing the $1.65 billion analyst target. All told, Arista delivered a net profit of $665.4 million, up from a $491.9 million profit in the same period one year ago. Investors liked what they saw, and Arista's stock gained 3% in extended trading. Arista Chairperson and Chief Executive Jayshree Ullal (pictured) said the company surpassed an important milestone during the quarter, celebrating its 10th year as a public company. "Our Q2 2024 financial results demonstrated Arista's powerful combination of growth, profitability and best of breed platforms," she said. Arista is a key rival to the much larger Cisco Systems Inc. in the computer networking industry, focused on selling premium gear such as high-speed switches that accelerate communications between racks of computer servers in corporate data centers. The company sees third quarter revenue of between $1.72 billion and $1.75 billion, the midpoint of which is just ahead of Wall Street's estimate of $1.73 billion. The optimistic guidance underscores Arista's growing presence in the networking sector, which has benefited from the strong enterprise demand for powerful new generative artificial intelligence applications. Those apps need a rapid communications infrastructure to operate, and that's exactly what Arista provides. In a blog post last month, Ullal talked about this demand, saying AI training models in particular are reliant on a "lossless, highly-available network to seamlessly connect every GPU in the cluster to one another and enable peak performance." Trained AI models also need a reliable network to connect to end users and deliver fast responses, she said. "As a result, data centers are evolving into new AI Centers where the networks become the epicenter of AI management," Ullal continued. While Arista is clearly benefiting from the AI demand, its rival Juniper Networks Inc. has struggled to take advantage of the opportunity. Although it said customers are beefing up their investments in its AI network offerings, that company disappointed investors with lower-than-expected sales and profit.

Arista Networks forecasts quarterly revenue above estimates on AI boom

July 30 (Reuters) - Arista Networks forecast third-quarter revenue above Wall Street estimates on Tuesday, anticipating strong demand for its networking gear from cloud computing companies and artificial intelligence applications. The upbeat forecast highlights Arista's role in the sector, which has largely benefited from strong demand from cloud computing firms -- some of the largest beneficiaries of the AI boom. Rival Juniper last week reported lower-than-expected quarterly revenue and profit but noted many of its customers have digested inventory and are investing to bolster AI infrastructure. Shares of the Santa Clara, California-based company rose more than 2% in extended trading. Meanwhile, chip major Advanced Micro Devices posted third-quarter revenue above estimates due to surging AI chip demand. The company forecast third quarter revenue in the range of $1.72 billion to $1.75 billion, compared with estimates of $1.73 billion, according to LSEG data. Its revenue for the quarter ended June 30 rose about 16% to $1.69 billion, beating analysts' estimate of $1.65 billion. The company reported net income of $665.4 million, compared with $491.9 million a year ago. On an adjusted basis, the company earned $2.10 per share, compared with profit of $1.58 apiece in the previous year. (Reporting by Akash Sriram in Bengaluru; Editing by Tasim Zahid)

Arista Networks Forecasts Quarterly Revenue Above Estimates on AI Boom

(Reuters) - Arista Networks forecast third-quarter revenue above Wall Street estimates on Tuesday, anticipating strong demand for its networking gear from cloud computing companies and artificial intelligence applications. The upbeat forecast highlights Arista's role in the sector, which has largely benefited from strong demand from cloud computing firms -- some of the largest beneficiaries of the AI boom. Rival Juniper last week reported lower-than-expected quarterly revenue and profit but noted many of its customers have digested inventory and are investing to bolster AI infrastructure. Shares of the Santa Clara, California-based company rose more than 2% in extended trading. Meanwhile, chip major Advanced Micro Devices posted third-quarter revenue above estimates due to surging AI chip demand. The company forecast third quarter revenue in the range of $1.72 billion to $1.75 billion, compared with estimates of $1.73 billion, according to LSEG data. Its revenue for the quarter ended June 30 rose about 16% to $1.69 billion, beating analysts' estimate of $1.65 billion. The company reported net income of $665.4 million, compared with $491.9 million a year ago. On an adjusted basis, the company earned $2.10 per share, compared with profit of $1.58 apiece in the previous year. (Reporting by Akash Sriram in Bengaluru; Editing by Tasim Zahid)

Arista Networks Q2 Earnings: Revenue Beat, EPS Beat, Strong Guidance And More - Arista Networks (NYSE:ANET)

Arista sees third-quarter revenue in the range of $1.72 billion to $1.75 billion versus estimates of $1.652 billion Arista Networks Inc ANET shares are volatile in Tuesday's after-hours session on the heels of the company's second-quarter financial results. Here's a rundown of the report. Q2 Revenue: $1.69 billion, versus estimates of $1.651 billion Q2 EPS: $2.10, versus estimates of $1.95 Total revenues were up 15.9% on a year-over-year basis and up 7.6% compared to the prior quarter. Gross margin was 64.9% in the quarter. The company said strong revenue and gross margin performance helped drive 33% earnings growth. "Our Q2 2024 financial results demonstrate Arista's powerful combination of growth, profitability and best of breed platforms," said Jayshree Ullal, chairperson and CEO of Arista Networks. Q3 Outlook: Arista Networks sees third-quarter revenue in the range of $1.72 billion to $1.75 billion versus estimates of $1.652 billion, according to Benzinga Pro. The company anticipates third-quarter gross margin of approximately 63% to 64%. Arista Networks provides data-driven, client-to-cloud networking for large AI, data center, campus and routing environments. The company is discussing its quarterly results on a conference call that kicked off at 4:30 p.m. ET. ANET Price Action: Arista Networks shares are up 3.40% after-hours at $322 at the time of publication Tuesday, per Benzinga Pro. Read Next: Microsoft Q4 Earnings Highlights: Revenue Beat, EPS Beat, Cloud Revenue Up 21% YoY, 'Ensuring We Lead The AI Era' Photo: 3844328 from Pixabay. Market News and Data brought to you by Benzinga APIs

Arista Networks forecasts quarterly revenue above estimates on AI boom

Rival Juniper last week reported lower-than-expected quarterly revenue and profit but noted many of its customers have digested inventory and are investing to bolster AI infrastructure. Shares of the Santa Clara, California-based company rose more than 2% in extended trading. Meanwhile, chip major Advanced Micro Devices posted third-quarter revenue above estimates due to surging AI chip demand. The company forecast third quarter revenue in the range of $1.72 billion to $1.75 billion, compared with estimates of $1.73 billion, according to LSEG data. Its revenue for the quarter ended June 30 rose about 16% to $1.69 billion, beating analysts' estimate of $1.65 billion. The company reported net income of $665.4 million, compared with $491.9 million a year ago. On an adjusted basis, the company earned $2.10 per share, compared with profit of $1.58 apiece in the previous year. (Reporting by Akash Sriram in Bengaluru; Editing by Tasim Zahid)

Arista Networks, Inc. Reports Second Quarter 2024 Financial Results

Arista Networks, Inc. (NYSE: ANET), an industry leader in data-driven, client-to-cloud networking for large AI, data center, campus and routing environments, today announced financial results for its second quarter ended June 30, 2024. Second Quarter Financial Highlights "On the heels of our June celebration of 10 years as a public company, I would again like to thank our customers, employees and partners for contributing to our success as we arrived at this important milestone," said Jayshree Ullal, Chairperson and CEO of Arista Networks. "Our Q2 2024 financial results demonstrate Arista's powerful combination of growth, profitability and best of breed platforms." Commenting on the company's financial results, Chantelle Breithaupt, Arista's CFO, said, "We achieved an EPS increase of 33% in Q2 2024 compared to the same period last year, driven by our strong revenue and gross margin performance." Guidance for non-GAAP financial measures excludes certain items, including stock-based compensation expense, amortization of acquisition-related intangible assets, and potential non-recurring charges or benefits. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort because these exclusions can be uncertain or difficult to predict, including stock-based compensation expense which is impacted by the timing of employee stock transactions, the company's future hiring and retention needs and the future fair market value of the company's common stock. The actual amount of these exclusions will have a significant impact on the company's GAAP gross margin and GAAP operating margin. Prepared Materials and Conference Call Information Arista's executives will discuss the second quarter 2024 financial results on a conference call at 1:30 p.m. Pacific time today. To listen to the call via telephone, dial (888) 330-2502 in the United States or +1 (240) 789-2713 from international locations. The Conference ID is 5655862. The financial results conference call will also be available via live webcast on Arista's investor relations website at https://investors.arista.com/. Shortly after the conclusion of the conference call, a replay of the audio webcast will be available on Arista's investor relations website. Forward-Looking Statements This press release contains "forward-looking statements" regarding our future performance, including quotations from management, statements in the section entitled "Financial Outlook," such as estimates regarding revenue, non-GAAP gross margin and non-GAAP operating margin for the third quarter of 2024 and statements regarding the benefits of Arista's products. Forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause actual results, performance or achievements to differ materially from those anticipated in or implied by the forward-looking statements including risks associated with: large purchases by a limited number of customers who represent a substantial portion of our revenue; adverse economic and geopolitical conditions and conflicts, including inflationary pressures which result in increased component costs and reduced information technology and network infrastructure spending, the Russia/Ukraine, Israel/Hamas conflicts, the Houthi attacks on marine vessels in the Red Sea and the outcome of the upcoming U.S. presidential election; changes in our customers technology roadmaps and priorities including the need for the deployment of artificial intelligence ("AI") and related technologies; the impact of sole or limited sources of supply, supply shortages and extended lead times or supply changes; volatility in our revenue growth rate; variations in our results of operations; the rapid evolution of the networking market; failure to successfully carry out new products and service offerings and expand into adjacent markets; variability in our gross margins; intense competition and industry consolidation; expansion of our international sales and operations; investments in or acquisitions of other businesses; seasonality and industry cyclicality; fluctuations in currency exchange rates; failure to raise additional capital on favorable terms; our inability to attract new large customers or sell additional products and services to our existing customers; sales of our switches generating most of our product revenue; large customers requiring more favorable terms; inability to increase market awareness or acceptance of our new products and services; the inclusion of any acceptance provisions in our customer contracts and any delays in acceptance, or rejection, of those products; decreases in the sales prices of our products and services; long and unpredictable sales cycles; declines in maintenance renewals by customers; product quality problems; failure to anticipate technological shifts; managing the supply of our products and product components; our dependence on third-party manufacturers to build our products; assertions by third parties of intellectual property rights infringement; failure or inability to protect or assert our intellectual property rights; defects, errors or vulnerabilities in our products, the failure of our products to detect security breaches or incidents, the misuse of our products or the risks or product liability; enhanced U.S. tax, tariff, import/export restrictions, Chinese regulations or other trade barriers; failure to comply with government law and regulations; issues in the development and use of artificial intelligence, combined with an uncertain regulatory environment; and other future events. Additional risks and uncertainties that could affect us can be found in our most recent filings with the Securities and Exchange Commission including, but not limited to, our annual report on Form 10-K and quarterly reports on Form 10-Q. You can locate these reports through our website at https://investors.arista.com/ and on the SEC's website at https://www.sec.gov/. All forward-looking statements in this press release are based on information available to the company as of the date hereof and we disclaim any obligation to publicly update or revise any forward-looking statement to reflect events that occur or circumstances that exist after the date on which they were made. Non-GAAP Financial Measures This press release and accompanying table contain certain non-GAAP financial measures including non-GAAP gross profit, non-GAAP gross margin, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income and non-GAAP diluted net income per share. These non-GAAP financial measures exclude stock-based compensation expense, amortization of acquisition-related intangibles, gains/losses on strategic investments, and the income tax effect of these non-GAAP exclusions. In addition, non-GAAP financial measures exclude net tax benefits associated with stock-based awards, which include excess tax benefits, and other discrete indirect effects of such awards. The company uses these non-GAAP financial measures internally in analyzing its financial results and believes that these non-GAAP financial measures are useful to investors as an additional tool to evaluate ongoing operating results and trends. In addition, these measures are the primary indicators management uses as a basis for its planning and forecasting for future periods. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for the comparable GAAP financial measures. Non-GAAP financial measures are subject to limitations, and should be read only in conjunction with the company's consolidated financial statements prepared in accordance with GAAP. Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similarly titled measures presented by other companies. A description of these non-GAAP financial measures and a reconciliation of the company's non-GAAP financial measures to their most directly comparable GAAP measures have been provided in the financial statement tables included in this press release, and investors are encouraged to review the reconciliation. About Arista Networks Arista Networks is an industry leader in data-driven, client-to-cloud networking for large AI, data center, campus and routing environments. Its award-winning platforms deliver availability, agility, automation, analytics, and security through an advanced network operating stack. For more information, visit www.arista.com. ARISTA, MSS, EOS and Etherlink are among the registered and unregistered trademarks of Arista Networks, Inc. in jurisdictions around the world. Other company names or product names may be trademarks of their respective owners.