Arista Networks, Inc. (NYSE: ANET), an industry leader in data-driven, client to cloud networking for large data center/AI, campus and routing environments, today announced financial results for its f...
Board of Directors Authorizes Additional $1.2B Stock Repurchase Program
SANTA CLARA, Calif.: Arista Networks, Inc. (NYSE: ANET), an industry leader in data-driven, client to cloud networking for large data center/AI, campus and routing environments, today announced financial results for its first quarter ended March 31, 2024.
First Quarter Financial Highlights
“Arista is off to a strong start to 2024 with solid first quarter results,” said Jayshree Ullal, Chairperson and CEO of Arista Networks. “As we get ready to celebrate the 10th anniversary of our IPO in June, I am pleased with our progress in the Arista 2.0 journey as seen in breakthrough innovations, customer traction and building our next generation leaders.”
Commenting on the company's financial results, Chantelle Breithaupt, Arista’s CFO said, "We are pleased with our performance this quarter, which exceeded expectations across key financial metrics. Our commitment remains to deliver long-term value to our shareholders through sustained financial performance and strategic investments."
Stock Repurchase Programs
Arista has now completed repurchases of its common stock totaling $2 billion under previous stock repurchase programs. On May 3, 2024, Arista’s Board of Directors authorized an additional program to repurchase up to $1.2 billion. The actual timing and amount of repurchases will be dependent on market and business conditions, capital requirements, stock price, acquisition opportunities and other factors.
Company Highlights
Financial Outlook
For the second quarter of 2024, we expect:
Guidance for non-GAAP financial measures excludes 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 because these exclusions can be uncertain or difficult to predict, including stock-based compensation expense which is impacted by 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 first 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 second 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 and the Houthi attacks on marine vessels in the Red Sea; 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; 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 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 data center/AI, campus and routing environments. Arista’s award-winning platforms deliver availability, agility, automation, analytics and security through an advanced network operating stack. For more information, visit www.arista.com.
ARISTA, CloudVision, CV UNO, AVA 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.
ARISTA NETWORKS, INC. Condensed Consolidated Income Statements (Unaudited, in thousands, except per share amounts) | ||||||
|
| Three Months Ended March 31, | ||||
|
|
| 2024 |
|
| 2023 |
Revenue: |
|
|
|
| ||
Product |
| $ | 1,328,845 |
| $ | 1,172,094 |
Service |
|
| 242,529 |
|
| 179,257 |
Total revenue |
|
| 1,571,374 |
|
| 1,351,351 |
Cost of revenue: |
|
|
|
| ||
Product |
|
| 521,679 |
|
| 508,862 |
Service |
|
| 48,316 |
|
| 37,982 |
Total cost of revenue |
|
| 569,995 |
|
| 546,844 |
Gross profit |
|
| 1,001,379 |
|
| 804,507 |
Operating expenses: |
|
|
|
| ||
Research and development |
|
| 208,395 |
|
| 201,408 |
Sales and marketing |
|
| 105,080 |
|
| 93,492 |
General and administrative |
|
| 27,763 |
|
| 25,029 |
Total operating expenses |
|
| 341,238 |
|
| 319,929 |
Income from operations |
|
| 660,141 |
|
| 484,578 |
Other income (expense), net |
|
| 62,620 |
|
| 12,146 |
Income before income taxes |
|
| 722,761 |
|
| 496,724 |
Provision for income taxes |
|
| 85,069 |
|
| 60,251 |
Net income |
| $ | 637,692 |
| $ | 436,473 |
Net income per share: |
|
|
|
| ||
Basic |
| $ | 2.04 |
| $ | 1.42 |
Diluted |
| $ | 1.99 |
| $ | 1.38 |
Weighted-average shares used in computing net income per share: |
|
|
|
| ||
Basic |
|
| 313,032 |
|
| 306,985 |
Diluted |
|
| 319,865 |
|
| 315,578 |
ARISTA NETWORKS, INC. Reconciliation of Selected GAAP to Non-GAAP Financial Measures (Unaudited, in thousands, except percentages and per share amounts) | ||||||||
|
| Three Months Ended March 31, | ||||||
|
|
| 2024 |
|
|
| 2023 |
|
GAAP gross profit |
| $ | 1,001,379 |
|
| $ | 804,507 |
|
GAAP gross margin |
|
| 63.7 | % |
|
| 59.5 | % |
Stock-based compensation expense |
|
| 3,450 |
|
|
| 2,975 |
|
Intangible asset amortization |
|
| 4,195 |
|
|
| 6,820 |
|
Non-GAAP gross profit |
| $ | 1,009,024 |
|
| $ | 814,302 |
|
Non-GAAP gross margin |
|
| 64.2 | % |
|
| 60.3 | % |
|
|
|
|
| ||||
GAAP income from operations |
| $ | 660,141 |
|
| $ | 484,578 |
|
Stock-based compensation expense |
|
| 77,215 |
|
|
| 62,881 |
|
Intangible asset amortization |
|
| 6,690 |
|
|
| 9,315 |
|
Non-GAAP income from operations |
| $ | 744,046 |
|
| $ | 556,774 |
|
Non-GAAP operating margin |
|
| 47.4 | % |
|
| 41.2 | % |
|
|
|
|
| ||||
GAAP net income |
| $ | 637,692 |
|
| $ | 436,473 |
|
Stock-based compensation expense |
|
| 77,215 |
|
|
| 62,881 |
|
Intangible asset amortization |
|
| 6,690 |
|
|
| 9,315 |
|
(Gains)/losses on strategic investments |
|
| — |
|
|
| 5,571 |
|
Tax benefits on stock-based awards |
|
| (70,833 | ) |
|
| (50,062 | ) |
Income tax effect on non-GAAP exclusions |
|
| (13,048 | ) |
|
| (11,716 | ) |
Non-GAAP net income |
| $ | 637,716 |
|
| $ | 452,462 |
|
|
|
|
|
| ||||
GAAP diluted net income per share |
| $ | 1.99 |
|
| $ | 1.38 |
|
Non-GAAP adjustments to net income |
|
| — |
If you liked this article and want to stay up to date with news from
InnovationOpenLab.com subscribe to ours
Free newsletter.
Related newsLast News25 Italian Startups Will Be Present at Expand North Star 2024Scheduled for October, the world's largest startup event will bring together more than 2,000 exhibitors in Dubai, UAE Partitalia: Italian IoT innovation in San FranciscoThe Italian IoT company is in the US for the second phase of CALL4INNOVIT Sparkle works on environmentally sustainable content distributionThe Italian company partners with MainStreaming for high-performance, energy-efficient video streaming Libraesva: being specialized is ok again in cybersecuritySoftware vendors developing vertical solutions against specific attack vectors are 'cool' again. And when it comes to email security, all companies now… Most readNew Zealand Buy Now Pay Later Business and Investment Opportunities Databook…The "New Zealand Buy Now Pay Later Business and Investment Opportunities Databook - Q2 2024 Update" report has been added to ResearchAndMarkets.com's… Kenya Buy Now Pay Later Business Report 2024: BNPL Payments to Grow by…The "Kenya Buy Now Pay Later Business and Investment Opportunities Databook - 75+ KPIs on BNPL Market Size, End-Use Sectors, Market Share, Product Analysis,… Median Technologies to host two webcasts on September 5, 2024Regulatory News: Median Technologies (FR0011049824, ALMDT, PEA/SME eligible, “Median” or “The Company”) will host two live webcasts on September 5, 2024.… Mark Lawyer Joins RWS’s Executive Team as President of Regulated Industries…RWS, a unique, world-leading provider of technology-enabled language, content and intellectual property solutions, announces that Mark Lawyer has joined… G11 Media Networks |