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 premarket trading Tuesday, Arista shares were 15% higher at $177.87.
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]
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