Arista Networks, Inc. Q2 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Highlights

  • Q2 2020 revenue was 540.6 million dollars, at the upper end of guidance (520–540 million dollars). This represents an 11 percent year-over-year decline, though approximately 6 percent of that decline is due to a 38 million dollar deferred revenue recognition in Q2 2019.
  • Non-GAAP EPS was 2.11 dollars, down 13.5 percent year-over-year.
  • Non-GAAP gross margin was 64.7 percent, compared to 65.6 percent last quarter. The decline reflects COVID-related supply chain costs and product mix.
  • Operating margin was 38.1 percent.
  • Service revenue represented 22 percent of total revenue, up from 21 percent in Q1.
  • Cloud titan customers comprised approximately 40 percent of revenue, enterprises 35 percent, and service providers 25 percent—consistent with prior quarters.
  • International revenue was 19 percent of total revenue, down from 23 percent in Q1, driven by push-outs and lower cloud titan spending in Europe.
  • Arista met its first-year Cognitive Campus revenue objective of 100 million dollars.
  • The company continues to operate and forecast under COVID-related supply constraints, with normal lead times not expected until Q4.

Balance Sheet and Cash Flow

  • Cash and investments totaled 2.8 billion dollars.
  • Q2 operating cash flow was 138 million dollars.

Continue Reading

Unlock the full AI-powered summary with key highlights, financial performance, and analyst Q&A.

Upgrade to Professional
Operator: Welcome to the Second Quarter 2020 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, Director of 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 for its fiscal second quarter ending June 30, 2020. 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 third quarter of the 2020 fiscal year, longer term financial outlooks, the potential impact of COVID-19 on our business, industry innovation, our market opportunity, the benefits of recent acquisitions and the impact of litigations, which are subject to the risks and uncertainties that we wi

Continue Reading

Unlock the full earnings call transcript with speaker labels and formatted dialogue.

Upgrade to Professional