For its third quarter 2017, Arista Networks reported record revenue of $437.6 million, an increase of 8 percent sequentially, and an increase of 50.8 percent from the third quarter of 2016. The company reported non-GAAP net income of $128.2 million, or $1.62 per share, in its most recent quarter, compared to non-GAAP net income of $61.2 million, or $0.83 per share, in the third quarter of 2016.
In addition, it reported a record operating margin of 38.6 percent. The company’s stock is up about 10 percent today.
Jayshree Ullal, Arista president and CEO, said the company’s top customers were represented by five verticals in the following order: cloud titans, Tier 1 and 2 service providers, cloud specialty providers, high tech enterprises, and financials.
Ullal said that “cloud” crosses all the company’s verticals. “We’re not relying on one titan,” said Ullal, according to a Seeking Alpha transcript. “It’s really important to understand that when we say cloud, increasingly, it’s not a vertical, it’s a horizontal. Cloud principles are being deployed across all our five verticals. Our top 30 customers are all deploying cloud architectures.”
Arista is also growing its service provider customer group, and Ullal said she expects that to continue in 2018. She noted this is the second consecutive quarter in which service providers have been Arista’s second-largest vertical.
A highlight during the third quarter was Arista’s unveiling of its Any Cloud software platform to manage hybrid clouds across private cloud data centers and public cloud providers.
Looking ahead to the fourth quarter of 2017, Arista CFO Ita Brennan said, “We expect revenues to range from $450 million to $464 million, representing 40 percent-plus year-over-year growth at the upper end of our range.”
Brennan added, “We continue to work closely with customers on the qualification of our 945-related product redesign, and we expect this to have some impact on our business in the [fourth] quarter.” She was referring to Cisco’s litigation with Arista. In September, Arista introduced workaround features to impacted products.