Arista Warns of 'Sudden Softening' From Major Cloud Customer
SANTA CLARA, Calif. -- Arista Networks today announced financial results for its third quarter ended September 30, 2019.
Third Quarter Financial Highlights
- Revenue of $654.4 million, an increase of 7.6% compared to the second quarter of 2019, and an increase of 16.2% from the third quarter of 2018.
- GAAP gross margin of 63.8%, compared to GAAP gross margin of 64.1% in the second quarter of 2019 and 64.2% in the third quarter of 2018.
- Non-GAAP gross margin of 64.4%, compared to non-GAAP gross margin of 64.7% in the second quarter of 2019 and 64.6% in the third quarter of 2018.
- GAAP net income of $208.9 million, or $2.59 per diluted share, compared to GAAP net income of $168.5 million, or $2.08 per diluted share in the third quarter of 2018.
- Non-GAAP net income of $217.1 million, or $2.69 per diluted share, compared to non-GAAP net income of $171.3 million, or $2.11 per diluted share in the third quarter of 2018.
"In Q3 2019 we continued to see the adoption of our cloud networking technology in more diverse environments. While we expect a sudden softening in Q4 with a specific cloud titan customer, we are committed to a sustainable and strong foundation of long-term growth, innovation and profitability," stated Jayshree Ullal, Arista President and CEO.
Commenting on the company's financial results, Ita Brennan, Arista's CFO, said, "We saw continued solid business execution in the quarter with strong earnings and cash flow generation."
For the fourth quarter of 2019, we expect:
- Revenue between $540 million and $560 million;
- Non-GAAP gross margin between 63% to 65%, and
- Non-GAAP operating margin of approximately 36%