Early Access

10-QPeriod: Q1 FY2024

Arista Networks, Inc. Quarterly Report for Q1 Ended Mar 31, 2024

Filed May 8, 2024For Securities:ANET

Summary

Arista Networks, Inc. reported a strong first quarter for 2024, demonstrating robust revenue growth and significant improvements in profitability. Total revenue reached $1.57 billion, a 16.3% increase year-over-year, driven by a healthy 13.4% rise in product revenue and an impressive 35.3% surge in service revenue. This top-line growth was complemented by a substantial expansion in gross margin, which climbed from 59.5% to 63.7%, attributed to decreased logistics costs, reduced excess/obsolete inventory charges, and improved fixed cost leverage. Net income saw a substantial increase of approximately 46%, reaching $637.7 million, with diluted EPS growing to $1.99 from $1.38 in the prior year. The company's balance sheet remains strong, with total assets growing to $10.55 billion. Notably, cash and cash equivalents increased to $2.09 billion, and marketable securities rose to $3.36 billion, indicating a solid liquidity position. Operating cash flow also showed considerable strength, increasing to $513.8 million from $374.5 million in Q1 2023. Management highlighted ongoing investments in R&D and sales & marketing, alongside efforts to navigate supply chain improvements and evolving customer demand, particularly concerning AI infrastructure. Arista Networks appears well-positioned to capitalize on the growing cloud networking market.

Financial Highlights

51 data points
Beta

Revenue

$1.57B

0.6% Gross Margin

Net Income

$637.70M

0.4% Net Margin

EPS (Diluted)

$0.50

Total Assets

$10.55B

Cash & Equivalents

$2.09B

Free Cash Flow

$504.40M

Financial Statements
Beta
Revenue$1.57B
Cost of Revenue$570.00M
Gross Profit$1.00B
R&D Expenses$208.40M
Operating Expenses$341.20M
Operating Income$660.20M
Net Income$637.70M
EPS (Basic)$0.51
EPS (Diluted)$0.50
Shares Outstanding (Basic)1.25B
Shares Outstanding (Diluted)1.28B

Key Highlights

  • 1Total revenue increased by 16.3% year-over-year to $1.57 billion.
  • 2Gross margin expanded significantly to 63.7% from 59.5% in the prior year's quarter.
  • 3Net income rose by 46% to $637.7 million, with diluted EPS increasing to $1.99.
  • 4Operating cash flow improved substantially, reaching $513.8 million.
  • 5Cash and marketable securities remain robust, totaling over $5.45 billion.
  • 6Service revenue demonstrated strong growth of 35.3% year-over-year.
  • 7Investments in Research and Development and Sales & Marketing increased, reflecting continued focus on growth and innovation.

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