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NEW YORK - Arista Networks Inc (NYSE:ANET) shares tumbled 10.8% after the networking equipment provider’s fourth-quarter outlook failed to impress investors, despite reporting better-than-expected third-quarter results.
The Santa Clara-based company posted adjusted earnings of $0.75 per share for the third quarter, exceeding analyst estimates of $0.71. Revenue rose 27.5% YoY to $2.31 billion, surpassing the consensus forecast of $2.26 billion.
The company’s fourth-quarter revenue guidance of $2.3-$2.4 billion was largely in line with analyst expectations of $2.335 billion.
"Our centers of data strategy is resonating well across customers and analysts because it delivers a superior client to campus to cloud/data and AI centers experience," said Jayshree Ullal, Chairperson and CEO of Arista Networks .
The company’s third-quarter gross margin slightly contracted to 65.2% on a non-GAAP basis, compared to 65.6% in the previous quarter, though it improved from 64.6% in the year-ago period.
CFO Chantelle Breithaupt highlighted the company’s strong execution, stating, "We are proud to have delivered 25% non-GAAP EPS growth in this quarter, a reflection not only of strong demand, but also of the disciplined execution of our strategic roadmap."
Arista’s product revenue grew to $1.91 billion, while service revenue reached $396.6 million. The company also announced leadership changes, appointing Kenneth Duda as President and Chief Technology Officer and Tyson Lamoreaux as Senior Vice President of Cloud and AI Networking.
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