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Arista Reports $837.6M 2015 Revenue, up 43.4%

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2/18/2016
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SANTA CLARA, Calif. -- Arista Networks, an industry leader in software-driven cloud networking solutions for large data center and computing environments, today announced financial results for its fourth quarter and year ended December 31, 2015.

Fourth Quarter Financial Highlights

  • Revenue of $245.4 million, an increase of 41.5% compared to the fourth quarter of 2014, and an increase of 12.8% from the third quarter of 2015.
  • Non-GAAP gross margin of 64.0%, compared to non-GAAP gross margin of 67.4% in the fourth quarter of 2014 and 65.5% in the third quarter of 2015.
  • GAAP gross margin of 63.6%, compared to GAAP gross margin of 67.1% in the fourth quarter of 2014 and 65.2% in the third quarter of 2015.
  • Non-GAAP net income of $57.5 million, or $0.80 per diluted share, compared to non-GAAP net income of $37.3 million, or $0.53 per diluted share, in the fourth quarter of 2014.
  • GAAP net income of $43.9 million, or $0.60 per diluted share, compared to GAAP net income of $31.0 million, or $0.43 per diluted share, in the fourth quarter of 2014.

"Arista has delivered a spectacular 2015. I have been pleased with the rapid acceptance by our customers of Arista's programmable cloud networking," stated Jayshree Ullal, Arista President and CEO. "The inevitable shift from legacy enterprises to cloud workloads has fueled Arista's strong performance of profitable revenue growth and increasing market share."

Full Year Financial Highlights

  • Revenue of $837.6 million, an increase of 43.4% compared to fiscal year 2014.
  • Non-GAAP gross margin of 65.3%, compared to non-GAAP gross margin of 67.4% in fiscal year 2014.
  • GAAP gross margin of 64.9%, compared to GAAP gross margin of 67.1% in fiscal year 2014.
  • Non-GAAP net income of $174.2 million or $2.44 per diluted share, compared to non-GAAP net income of $105.5 million, or $1.54 per diluted share, in fiscal year 2014.
  • GAAP net income of $121.1 million, or $1.67 per diluted share, compared to GAAP net income of $86.9 million, or $1.29 per diluted share, in fiscal year 2014.

Commenting on the company's financial results, Ita Brennan, Arista's CFO, said, "We are pleased with another quarter of double digit quarter over quarter revenue growth, record EPS and enhanced free cash-flow generation."

Fourth Quarter Company Highlights

  • Introduced Cloud Connect solutions that extend its spine networking platforms to provide optimized interconnect solutions for private and public cloud data centers, leveraging the technology and operational advantages of Arista's EOS and CloudVision to reduce both capital and operational costs.
  • In January 2016, the next phase of Arista EOS (Extensible Operating System) was unveiled enabling customers to focus on real-time migration from legacy enterprise silos to private, public and hybrid cloud networking, based on three powerful building blocks: Infrastructure, Hybrid Cloud and Container Support.

Financial Outlook
For the first quarter of 2016, we expect:

  • Revenue between $232 and $240 million.
  • Non-GAAP gross margin between 62% to 65%, and
  • Non-GAAP operating margin of approximately 26%.

Guidance for non-GAAP financial measures excludes legal expenses associated with the OptumSoft and Cisco litigation, stock-based compensation and other non-recurring expenses. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis

Arista Networks Inc.

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