Arista Networks Inc(NYSE: ANET) lost over 9.9% in the pre-market session on Feb 16th, 2018 (as of 6:47AM EST ; Source: Google finance) on concerns over their outlook.
The group delivered a solid underlying 2017 financial performance, with 46% revenue growth, and 70% growth in earnings per share on a year over year basis. For 2018, they see the demand drivers for the business to remain strong, and remain well positioned to benefit from the continuing growth in cloud networking across our customer base. On the other hand, the group expects to face some tough comparable for year over year revenue growth as they move through 2018. Moreover, for the first quarter, the group expects costs related with the ongoing lawsuits to be over $8 million for the quarter.
As of December 31, 2017, the group has over 4,900 customers, with Microsoft becoming 16% of the total revenue for the year. Meanwhile, for the fourth quarter of 2017, the international segment contributed 33%, while the Americas contributing 67%. For the full year of 2017, the Americas contributed 73% while the rest of International accounted 27%. During fourth quarter of 2017, Enterprise was the number one vertical for the very first time in while Cloud titans was the second largest vertical because of some 945 legal certifications, where some of the complex use cases testing spilled into Q1 2018.
Total revenues rose 42.7% yoy to $467.9 million, during the quarter which is above their guidance of $450 million to $464 million. Services revenues accounted over 13% of revenue, consistent with last quarter. International revenues for the quarter reached $153.8 million, or 33% of total revenue, up from 27% in the prior period.
The group’s gross margin improved to 65.9% during the quarter which is a rise from 64.4% last quarter and above the midpoint of their guidance of 63% to 65%.
In December 2017, Arista unveiled its next generation of cloud grade routing. Moreover, 2017 has also been an important inflection year for both their routing as well as 100 gigabit Ethernet products. The group sees this robust growth to continue ahead in 2018, along with their entry into 400 gigabit Ethernet next year. They also delivered many powerful software innovations in containerization, data analyzers, and hybrid any cloud offering with Amazon, Microsoft Google, Oracle and Equinix, to name a few.