Arista
Networks stock gave ground in late trading Monday, after the networking equipment company posted fourth-quarter results that edged Street estimates.
Apparently, investors wanted more than Arista delivered.
For the December quarter, Arista posted revenue of $1.54 billion, up 21% from a year earlier. That was toward the top end of the company’s guidance range of $1.5 billion to $1.55 billion, and just ahead of the Street consensus forecast as tracked by
FactSet
of $1.53 billion.
The company posted a non-GAAP gross margin of 64.9%, above the company’s forecast of 63%. Adjusted profit was $2.08 a share, ahead of the Street consensus at $1.70.
For the March quarter, Arista expects revenue of between $1.52 billion to $1.56 billion, with non-GAAP gross margin of 62%, and non-GAAP operating margin of 42%. Street consensus estimates for the quarter had called for $1.53 billion in revenue and profit of $1.66 a share.
Expectations for Arista among investors were high headed into the quarter. The company generates close to half of its revenue from
Microsoft
and
Meta,
both of which recently predicted 2024 capital spending would be well above the 2023 level, driven by investment in AI data centers.
Arista shares through Monday’s close had rallied 19% for the year to date, and the stock has more than doubled over the last 12 months.
While there weren’t obvious flaws with the quarter or the guidance, the Street obviously was looking for higher numbers. In late trading, Arista was off 5.5% at $266.57.
Write to Eric J. Savitz at [email protected]
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