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Earnings Results: Arista Networks stock rises following earnings beat, forecast of first potential $1 billion sales quarter

Arista Networks Inc. shares rose in the extended session Monday after the cloud-software and data-center supplier reported results that topped Wall Street estimates, and forecast that the current quarter could produce $1 billion in revenue for the first time.

Arista 
ANET,
+2.33%

shares gained more than 5% after hours, following a 2.3% rise in the regular session to close at $118.26. The company’s share price is already 50% higher than it was 12 months ago, versus a 0.6% decline by the S&P 500 index
SPX,
+0.57%

and a 10.2% drop in the tech-heavy Nasdaq Composite Index
COMP,
+1.63%

over that period.

The company reported first-quarter net income of $272.3 million, or 85 cents a share, compared with $180.4 million, or 57 cents a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were 84 cents a share, compared with 62 cents a share in the year-ago period. Per-share amounts account for a four-to-one stock split announced back in November.

Revenue rose to $877.1 million from $667.6 million in the year-ago quarter.

Analysts surveyed by FactSet had forecast earnings of 81 cents a share on revenue of $856.1 million, based on Arista’s forecast of $840 million to $860 million.

Products sales rose to $724.7 million from $539.1 million in the year-ago period, while service revenue rose to $152.3 million from $128.4 million, Arista said. Analysts had forecast $693 million in product sales and $158.5 million in service revenue.

“Arista has delivered record Q1 2022 sales despite the sustained supply-chain challenges,” said Jayshree Ullal, Arista’s chief executive, in a statement. “I am pleased with our enterprise execution and cloud titan strength in these uncertain times.”

For the second quarter, Arista forecast revenue between $950 million and $1 billion, while analysts forecast revenue of $917 million.

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