NYSE$ANET

Arista Networks Inc · Q3 2024 earnings

Q3 2024 earnings · · Investor relations

Briefing

Arista reported strong Q3 2024 results, driven by innovation and value delivery to customers and shareholders.

Arista Networks reported a strong third quarter with revenue of $1.811 billion, a 20.0% increase year-over-year. GAAP net income was $747.9 million, or $2.33 per diluted share, compared to $545.3 million, or $1.72 per diluted share in the third quarter of 2023.

  • Revenue reached $1.811 billion, up 20.0% year-over-year.
  • GAAP gross margin was 64.2%, compared to 62.4% in the third quarter of 2023.
  • GAAP net income was $747.9 million, or $2.33 per diluted share.
  • Arista's board approved a four-for-one forward stock split.

Headline financials

Total Revenue

$1.81B

Previous: $1.51B+20.0%
EPS

$2.33

Previous: $1.83+27.3%
GAAP Gross Margin

64.2%

Previous: 62.4%+2.9%
Non-GAAP Gross Margin

64.6%

Previous: 63.1%+2.4%
GAAP Operating Margin

43.4%

Previous: 46.1%-5.9%
Non-GAAP Operating Margin

49.1%

No prior period
Capital Expenditures

-$19.6M

Previous: -$28.4M+31.1%
Free Cash Flow

$728M

Previous: $517M+40.9%
Net Income

$748M

Previous: $545M+37.2%
Operating Income

$785M

Previous: $603M+30.3%
Gross Profit

$1.16B

Previous: $942M+23.3%
R&D Expense

$236M

Previous: $212M+11.1%
Stock-Based Comp

$98.1M

Previous: $85.4M+14.9%

Revenue & EPS history

Arista · Revenue · Quarterly

$1.81B

Q3 2024+20%vs Q3 2023
Beat estimate in 13 of 15 quarters(87%)
ActualEstimate

Revenue by segment

Arista · $1.51B total across 2 segments · Q3 2023

  • Product Revenue
    $1.29B+27.4%
  • Service Revenue
    $224M+33.2%

Forward guidance

For the fourth quarter of 2024, Arista expects revenue between $1.85 billion to $1.90 billion, a non-GAAP gross margin of approximately 63% - 64%, and a non-GAAP operating margin of approximately 44%.

Tailwinds

  • Revenue between $1.85 billion to $1.90 billion
  • Non-GAAP gross margin of approximately 63% - 64%
  • Non-GAAP operating margin of approximately 44%
  • Stockholders will receive an additional three shares of common stock for each share held as of the effective time of the filing of the amendment on December 3, 2024.
  • Prior to market open on December 4, 2024, trading is expected to commence on a split-adjusted basis.

Headwinds

  • Excludes stock-based compensation expense
  • Excludes intangible asset amortization
  • Excludes potential non-recurring charges or benefits
  • Stock-based compensation expense is impacted by the timing of employee stock transactions
  • Stock-based compensation expense is impacted by the company’s future hiring and retention needs and the future fair market value of the company’s common stock.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2024

Historical avgQ3 2024

+1.6%

Avg return

Earnings day

+1.7%

Avg return

5 days after

+4.0%

Avg return

30 days after

55%

29 / 53 earnings

Positive

+22.8%

Q2 2023

Best reaction

-24.8%

Q3 2019

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+4.5%-19.8%-9.4%
Q4 2025+4.8%+3.3%-1.1%
Q3 2025+3.4%-10.6%-16.3%
Q2 2025+17.5%+16.5%+20.9%
Q1 2025-4.8%+1.7%+7.1%
Q4 2024-6.4%-16.5%-25.1%
Q3 2024-5.4%-6.5%+2.3%
Q2 2024+8.1%-0.4%+8.1%
Q1 2024+4.6%+12.6%+6.4%
Q4 2023-6.0%-7.3%-0.6%
Q3 2023+13.7%+20.6%+24.5%
Q2 2023+22.8%+18.9%+23.8%
Q1 2023-15.7%-13.8%+3.9%
Q4 2022+6.2%+3.7%+15.4%
Q3 2022+5.1%+7.9%+14.7%
Q2 2022+0.4%+8.6%+2.8%
Q1 2022-1.3%-4.0%-12.0%
Q4 2021+7.5%+4.1%+2.7%
Q3 2021+20.0%+29.5%+18.5%
Q2 2021-0.3%-0.7%-5.5%
Q1 2021+0.7%+4.4%+9.3%
Q4 2020-0.4%-8.0%-8.6%
Q3 2020+19.4%+25.9%+30.0%
Q2 2020-9.7%-11.4%-16.8%
Q1 2020-1.4%+3.3%+8.4%
Q4 2019-4.6%-3.7%-24.6%
Q3 2019-24.8%-23.3%-20.8%
Q2 2019-10.7%-13.8%-17.1%
Q1 2019-10.3%-14.4%-21.2%
Q4 2018+11.6%+14.0%+25.5%
Q3 2018+11.9%+6.4%+3.5%
Q2 2018-1.9%+2.4%+13.9%
Q1 2018-7.7%-2.3%-1.6%
Q4 2017-17.4%-17.4%-2.8%
Q3 2017+2.1%+6.2%+15.9%
Q2 2017+19.8%+18.5%+23.7%
Q1 2017+3.0%+3.0%+8.2%
Q4 2016+18.3%+21.8%+27.2%
Q3 2016+0.6%+3.8%+12.4%
Q2 2016+0.4%+3.9%+13.5%
Q1 2016+6.9%
Q4 2015+8.6%
Q3 2015+11.7%
Q2 2015-0.6%
Q1 2014-1.9%
Q1 2015-1.2%
Q4 2012+0.5%
Q4 2014+5.2%
Q3 2013-11.9%
Q3 2014-7.6%
Q4 2013-3.1%
Q2 2013-3.1%
Q2 2014+1.6%
Q1 2013

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