Cloud networking company Arista Networks rises on Q4 earnings and revenue beat

Cloud networking company Arista Networks Inc. is on the rise, its stock up more than 8% in after-hours trading after posting fourth quarter financial results that beat expectations, followed by a strong outlook.

The company reported a net income of $239.2 million, with earnings before certain costs such as stock compensation coming to 82 cents per share. Revenue for the period was $824.5 million, up 27% from the same quarter one year ago.

Wall Street had been looking for earnings of 73 cents per share on revenue of just $790 million.

Arista co-founder and Chief Executive Jayshree Ullal (pictured) said she was “delighted” with the company’s achievements in terms of innovation, diversified customer momentum and earnings in 2021.

“We have executed well to establish Arista among the fastest growing networking companies in this decade,” she added.

Arista sells a range of networking products including high-speed switches that are primarily used by hyperscale data center operators such as Facebook Inc. and Microsoft Corp. It also sells enterprise campus switches, where it competes with its much larger rival Cisco Systems Inc.

The other side of Arista’s business is software services, mainly network management and security software that’s infused with artificial intelligence that helps to identify the cause of faults, monitor user experiences and identify network threats.

Arista said its product revenue came to $667.9 million, while services added another $156.5 million in the quarter.

For its full fiscal 2021 year, Arista reported revenue of $2.95 billion, up 27.2% from a year prior.

The only real blot was Arista’s gross profit margin, which came to 64.3%, down from 65% one year ago. However, Arista did at least report that its cash from operations increased to $1.015 billion, while capital investment was $64.7 million, leaving it with a free cash flow of $950 million.

For the next quarter, Arista said it sees revenue of between $840 million to $860 million, far above Wall Street’s forecast of $831.6 million.

Photo: SiliconANGLE