Financial Data and Key Metrics Changes - Arista Networks achieved record revenue of $7 billion for fiscal year 2024, reflecting a growth of almost 20% compared to initial guidance of 10% to 12% [9][33] - Q4 2024 revenues were $1.93 billion, up 25.3% year-over-year, exceeding guidance [33] - Non-GAAP operating margin for Q4 was 47%, contributing to a fiscal year operating margin of 47.5% [10][38] - Non-GAAP gross margin for Q4 was 64.2%, slightly down from 65.4% year-over-year [34] Business Line Data and Key Metrics Changes - Cloud and AI sectors contributed approximately 48% of annual revenue, with enterprise and financials at 35%, and providers at 17% [11][12] - Subscription-based network services and software accounted for approximately 17% of total revenue [19] - The core cloud AI and data center products generated about 65% of revenue, with a significant increase in 400-gig customer base to approximately 1,000 [14] Market Data and Key Metrics Changes - International revenue contribution for Q4 was 16%, down from 17.6% in the previous quarter, primarily due to increased domestic revenue from large global customers [33] - The Americas region showed strong performance, contributing 84% of total revenue [11] Company Strategy and Development Direction - The company aims for $10 billion in annual revenue with a double-digit CAGR, reiterating a revenue guidance of approximately $8.2 billion for 2025 [27][48] - Arista's strategy focuses on AI, cloud, and enterprise markets, with significant investments in product innovation and customer partnerships [21][28] - The company is positioned as a modern network innovator, emphasizing the importance of unified data across silos for optimal networking outcomes [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving AI revenue goals of $1.5 billion in AI centers for 2025, despite some delays with one customer [15][48] - The leadership team highlighted the importance of navigating a dynamic market environment, with a focus on innovation and customer needs [29][50] - The company expects to maintain a healthy position regarding key components and manage variability in purchase commitments to meet customer demand [45] Other Important Information - The company repurchased $123.8 million of common stock in Q4, with a total of $423.6 million repurchased in fiscal 2024 [40] - Cash, cash equivalents, and marketable securities totaled approximately $8.3 billion at the end of Q4 [40] Q&A Session Summary Question: Timing of year and risks related to AI back-end switches - Management confirmed commitment to four out of five AI projects, with three customers expected to roll out a cumulative 100,000 GPUs this year [56][58] Question: Impact of white box vendors on revenue growth - Management acknowledged coexistence with white box vendors, emphasizing Arista's differentiation in AI back-end networks [62][66] Question: Cloud titan numbers and Meta's performance - Management noted that Meta's lower numbers were influenced by their reduced CapEx in 2023, while other cloud titans performed well [70][72] Question: Gross margins and mix-driven factors - Management clarified that gross margin changes were primarily mix-driven, with some absorption of tariffs impacting the numbers [75][78] Question: Opportunities from Stargate and Sovereign AI - Management discussed the integration of GPUs and networking in projects like Stargate, highlighting optimism for future AI accelerator developments [91][93] Question: AI back-end sales and TAM for 2028 - Management indicated that approximately one-third of the $70 billion TAM in 2028 is expected to come from AI [97][98]

Michael Wiggins De Oliveira is an inflection investor. This means buying into cheap companies at the moment when their narrative is changing and the business is on a path toward becoming significantly more profitable over the next year.With a focus on tech and “the Great Energy Transition (including uranium)”, Michael runs a concentrated portfolio with approximately 15 to 20 stocks and an average holding period of 18 months. Through his 10+ years analyzing countless companies, Michael has accumulated outsta ...

Arista Networks Inc (NYSE:ANET) Q4 2024 Earnings Conference Call February 19, 2025 4:30 PM ET Company Participants Rudolph Araujo - Investor Advocacy Jayshree Ullal - Chairperson and Chief Executive Officer Chantelle Breithaupt - Chief Financial Officer John McCool - Chief Platform Officer, Senior Vice President of Engineering and Operations Conference Call Participants Michael Ng - Goldman Sachs Amit Daryanani - Evercore Tim Long - Barclays Ben Reitzes - Melius Meta Marshall - Morgan Stanley Aaron Rakers - ...

Financial Performance - Arista Networks has achieved leadership in overall data center Ethernet switch ports and revenue, with a focus on higher speed Ethernet port shipments of 100G and above, since its inception in 2008[21]. - The company has been profitable and cash flow positive since 2010, indicating strong financial health and operational efficiency[21]. - The company experienced annual revenue growth rates of 19.5%, 33.8%, 48.6%, and 27.2% in 2024, 2023, 2022, and 2021 respectively, indicating volatility in revenue growth rates[140]. - Revenue growth may be impacted by changes in customer demand, particularly from large customers, and the unpredictability of supply chain conditions[142]. - The company has not paid dividends in the past and does not intend to pay dividends for the foreseeable future[124]. - Sales prices for products may decline due to competitive pressures, which could reduce gross profits and adversely affect results[176]. - The company relies on contract manufacturers like Jabil Inc. and Foxconn for product manufacturing, ensuring ISO-9001 certification across all locations[85]. - The company has historically derived substantial revenue from switching and routing platforms, and future performance relies on successfully developing next-generation products[173]. Customer Concentration - Meta Platforms and Microsoft each accounted for more than 10% of Arista's total revenue for the years ended December 31, 2024, and December 31, 2023, highlighting significant customer reliance[23]. - Sales to Microsoft represented 20%, 18%, and 16% of total revenue for the years ended 2024, 2023, and 2022 respectively[125]. - Sales to Meta Platforms accounted for 15%, 21%, and 26% of total revenue for the years ended 2024, 2023, and 2022 respectively[125]. - The company expects continued variability in customer concentration and timing of sales on a quarterly and annual basis due to large purchases by a limited number of customers[126]. Product Development and Innovation - The company focuses on research and development to enhance existing products and develop new solutions, particularly for AI workloads and CloudVision management stack[84]. - The product portfolio includes industry-leading Ethernet switches with low latency, high capacity, and power efficiency, utilizing multiple merchant silicon architectures[58]. - The company has made substantial investments in new product development, and failure to meet market demand could result in a loss of competitive position[147]. - The company anticipates that fiscal 2024 will be marked by new product introductions and expanded use cases, particularly in the AI Ethernet market, continuing into fiscal 2025[126]. - The Arista Etherlink AI portfolio includes 800G switches designed for large-scale AI networks, emphasizing high performance and scalability[65]. - The Arista 7700R4 DES is engineered for demanding AI and machine learning environments, offering high throughput and advanced congestion management[66]. Supply Chain and Manufacturing Risks - The company’s products depend on key components from a limited number of suppliers, which may pose risks due to potential supply chain disruptions[87]. - The reliance on a predominant merchant silicon vendor, Broadcom, for switching chips increases supply chain risks[132]. - The company has experienced prolonged manufacturing and supply chain disruptions due to geopolitical conditions, affecting component supply and inventory management[202]. - Supply chain disruptions could impact the ability to manufacture and ship products timely, affecting seasonal trends and overall business performance[168]. - The company must comply with various regulations when selling to government entities, which may change and affect sales capabilities[189]. Competitive Landscape - The competitive landscape is intensifying with the expansion of cloud and AI networking, leading to new entrants and enhanced products from existing competitors[90]. - Major competitors include Cisco, Dell/EMC, and Huawei, with industry consolidation through acquisitions like Broadcom's acquisition of VMware[91]. - Ethernet technology faces competition from InfiniBand and NV Link for AI networking clusters, which are known for high reliability and low latency[92]. - The company competes in the NDR market against Cisco and Darktrace, and in the NPB market against Cisco and Gigamon[94]. - Intense competition is anticipated from established companies and new entrants, which may lead to increased pricing pressure and reduced profit margins[155]. Employee and Workplace Culture - The company employs approximately 4,412 full-time employees as of December 31, 2024, with no union representation[104]. - The company has been recognized by Forbes and Time Magazine for its workplace culture and investment potential[105]. - The company emphasizes diversity and inclusion, with 50% of its board comprising women or underrepresented minorities[107]. - The company provides comprehensive benefits, including stock purchase plans and wellness programs, to support employee well-being[110]. Economic and Geopolitical Risks - Economic uncertainties, including geopolitical tensions and inflationary pressures, may adversely affect customer spending on IT and network infrastructure[129]. - The company faces risks associated with the cancellation, delay, or modification of purchase commitments by customers, impacting revenue predictability[127]. - Fluctuations in currency exchange rates could adversely affect the company's business[124]. - The company is primarily exposed to fluctuations in currency exchange rates, which could adversely affect its business and financial condition, particularly due to the strengthening U.S. dollar increasing costs for international customers[169]. Intellectual Property Risks - Intellectual property disputes could result in significant costs and harm to the company's financial condition and operations[214]. - The company faces risks from third-party patent infringement claims, which could lead to expensive litigation and settlement costs[215]. - Competitors may have larger patent portfolios, increasing the risk of patent infringement lawsuits against the company[216]. - Adverse outcomes in intellectual property disputes could require substantial damages or penalties, harming the company's financial condition[218].

Arista Networks (ANET) came out with quarterly earnings of $0.65 per share, beating the Zacks Consensus Estimate of $0.57 per share. This compares to earnings of $0.52 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 14.04%. A quarter ago, it was expected that this cloud networking company would post earnings of $0.52 per share when it actually produced earnings of $0.60, delivering a surprise of 15.38%.Over the last four quart ...

Arista Networks (ANET) reported fourth-quarter results that beat analysts’ estimates, and offered a better-than-expected outlook. The cloud networking company posted fourth-quarter revenue of $1.93 billion, up 7% year-over-year, and above the analyst consensus tracked by Visible Alpha. Arista's adjusted earnings rose to $830.1 million, or 65 cents per share, from $664.3 million, or 52 cents per share, a year earlier, topping projections.  CFO Chantelle Breithaupt said Arista's results allowed the company t ...

"2024 was a remarkable year of momentum resulting in a record $7 billion in revenue," stated Jayshree Ullal, Chairperson and CEO for Arista Networks. "I am so proud of the team's execution in delivering the ultimate combination of superior growth and profitability. We continued to innovate for our customers with best-of-breed platforms enabling AI for networking and networking for AI." Full Year Financial Highlights Fourth Quarter Financial Highlights Commenting on the company's financial results, Chantelle ...

These high-performing companies have generated solid returns for shareholders and likely still have room to run.The S&P 500 is in the midst of a market rally that has persisted for more than two years and continues to defy detractors. A solid economic outlook, growing corporate profits, and the vast potential of artificial intelligence (AI) have all helped fuel the market's advances. After gaining 24% in 2023, the benchmark index tacked on gains of 23% in 2024. Market history suggests the S&P will likely co ...

Arista Networks, Inc. (ANET) is scheduled to report fourth-quarter 2024 earnings on Feb. 18. The Zacks Consensus Estimate for revenues and earnings is pegged at $1.89 billion and 57 cents per share, respectively. Earnings estimates for Arista for 2024 have remained steady at $2.20 per share over the past 60 days and increased marginally to $2.42 per share for 2025.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.ANET Estimate TrendChart 1Earnings Surprise HistoryThe communications comp ...

Arista Networks (ANET -6.16%) stock lost ground in Wednesday's trading. The company's share price closed out the session down 6.2% in a day that saw the S&P 500 index slip 0.3% and the Nasdaq Composite index close out at roughly the same level as yesterday's finish.Arista Networks stock lost ground today on the heels of a recent insider selling disclosure that was submitted to the Securities and Exchange Commission (SEC). The company's share price also saw bearish momentum in conjunction with Cisco's recent ...