By Arista Networks stock is trading significantly higher in the Tuesday premarket session after the networking-hardware company revealed better-than-expected third-quarter results on Monday. The company also announced an upcoming four-for-one stock split and introduced a new $1 billion stock-buyback plan.
Q3 Performance Overview
- Revenue: Arista reported revenue of $748.7 million for the quarter, marking a 23.7% increase from the previous year and surpassing the Street’s forecast of $737.9 million.
- Earnings: Non-GAAP profits came in at $2.96 per share, outperforming the consensus estimate of $2.73 per share. Under GAAP, the company earned $224.3 million, or $2.81 per share.
- Gross Margin: Non-GAAP gross margin stood at 64.9%, slightly higher than the previous year’s 64.6%.
In a statement, Arista CFO Ita Brennan commented, “The business continued to perform well in the quarter, exceeding on all key financial metrics, while the team navigates a difficult supply environment.”
Stock Performance and Future Projections
Arista’s stock surged nearly 18% in premarket trading to reach $481. The company announced a four-for-one stock split scheduled to be distributed to holders of record on Nov. 11, with trading on a split-adjusted basis starting on Nov. 18. Additionally, Arista’s board approved a new $1 billion addition to its stock-repurchase program.
Looking ahead to the December quarter, Arista anticipates revenue in the range of $775 million to $795 million, with a non-GAAP gross margin expected to fall within the 63%-to-65% range.
It seems that Arista Networks is on a positive trajectory following its strong quarterly performance and strategic announcements.
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