Boosted by cloud computing customers, Arista Networks reported fourth-quarter earnings and revenue that handily beat analyst estimates amid high expectations for ANET stock.
Arista reported Q4 earnings after the market close on Monday.
For the three months ended Dec. 31, Arista earnings surged 72% to $1.41 per share, topping estimates of $1.21. Revenue jumped 55% to $1.275 billion vs. forecasts for $1.2 billion, said the maker of cloud computing network gear.
A year earlier, Arista earnings were 82 cents a share on revenue of $824 million.
In 2022, "cloud titans" contributed 46% of Arista revenue, noted Raymond James analyst Simon Leopold in a report. "Meta Platforms (25.5%) and Microsoft (16%) contributed 41.5% of 2022 sales," Leopold said. "Other cloud titans contributed 4.5%. We expect Alphabet's Google increases in the mix later in 2023 and 2024."
For the March quarter, Arista predicted revenue in a range of $1.275 billion to $1.325 billion, topping estimates of $1.21 billion.
ANET stock rose 4% to close at 141.46 on the stock market today.
ANET Stock: Gaining In Enterprise Market
At an analyst day in November, Arista predicted 25% revenue growth in 2023, topping estimates. However, analysts expect sales growth to slow moderately in 2024 and 2025. That has raised questions over the valuation of ANET stock.
Heading into the earnings report, ANET stock had advanced nearly 10% in 2023.
Arista sells switches that speed up communications among racks of computer servers packed into data centers. Its chief rivals are Cisco Systems and Juniper Networks.
According to analysts, Arista is gaining ground in the so-called "enterprise" market — large companies, government agencies and educational institutions.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
