Arista Networks, Inc. Q1 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Arista Networks Q1 2021 Earnings Summary

Overview

  • Q1 2021 revenue was $667.6M, up 27.6% year-over-year. This exceeded guidance of $630M–$650M.
  • Non-GAAP EPS was $2.50, up ~23.8% from Q1 2020.
  • Gross margin was 64.7%, above midpoint of guidance (63%–65%).
  • Services and subscription software represented 21.4% of revenue.
  • Operating income was $251.3M (37.6% margin).

Business Segment & Geographic Performance

  • Cloud Titans were the largest vertical; Enterprise was a close second.
  • Financials and specialty cloud providers tied for third.
  • Service providers ranked fourth.
  • Americas revenue accounted for 75% and International for 25% (down slightly from 26% in Q4 2020).
  • Notable strength across all five verticals—management reiterated broad-based demand.

Key Growth Drivers & Trends

  • Stronger-than-expected Cloud Titan demand, with improving visibility across 100G, 200G, and 400G upgrades.
  • Enterprise traction driven by:
    • Expanded portfolio including campus, routing, CloudVision, and security integrations.
    • Shift toward cloud-first, data-centric architectures.
  • Customer fatigue with legacy network stacks accelerated adoption of Arista’s unified EOS and CloudVision approach.

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Operator: Welcome to the First Quarter 2021 Arista Networks Financial Results Earnings Conference Call. During the call, all participants will be in a listen-only mode. After the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time. [Operator Instructions] As a reminder, this conference is being recorded and will be available for replay from the Investor Relations section at the Arista website following this call. I will now turn the call over to Mr. Curtis McKee, AVP, Corporate and Investor Development. Sir, you may begin. Curtis McKee: Thank you, operator. Good afternoon, everyone, and thank you for joining us. With me on today’s call are Jayshree Ullal, Arista Networks’ President and Chief Executive Officer; and Ita Brennan, Arista’s Chief Financial Officer. This afternoon, Arista Networks issued a press release announcing the results of the fiscal first quarter ending March 31, 2021. If you would like a copy of the release, you can access it online at our website. During the course of this conference call, Arista Networks’ management will make forward-looking statements, including those relating to our financial outlook for the second quarter of the 2021 fiscal year, longer-term financial outlooks for 2021 and beyond, our total addressable market and strategy for addressing these market opportunities, the potential impact of COVID-19 on our business and product innovation, and the benefits of recent acquisitions, which ar

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