Arista Networks, Inc. Q4 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Highlights

  • Q4 2021 revenue: $824.5 million, up 27.1% year-over-year (compared to Q4 2020).
  • Non-GAAP EPS: $0.82, up approximately 32.3% year-over-year.
  • Non-GAAP gross margin: 64.3%, slightly above guidance midpoint but pressured by supply chain costs.
  • Services and subscription software contributed 21% of revenue, consistent with Q3 2021.
  • International revenue was 29% of total, up from 25% in Q3 and up 46% for the year.
  • Record number of million-dollar customers and over 8,000 cumulative customers.
  • Cloud Titans remained the largest vertical, followed by enterprise, specialty cloud providers, financials, and service providers.

Full-Year 2021 Highlights

  • Total revenue: $2.94 billion, up 27% year-over-year.
  • Operating cash flow exceeded $1 billion for the first time.
  • Cloud Titans: ~30% of full-year revenue; enterprise + financials: ~40%; providers: ~30%.
  • Microsoft was the only >10% customer at 15% of revenue; Meta expected to be >10% in 2022.
  • Campus revenue doubled to $200 million; goal to double again to $400 million in 2022.
  • Subscriptions software and services contributed 22% of total product revenue.

Product & Technology Highlights

  • Strong deployments across 10G to 400G, with leadership expected to continue in 100G and 400G ports.

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Operator: Welcome to the Fourth 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 call is being recorded and will be available for replay from the Investor Relations section of the Arista website following this call. Mr. Venk Nathamuni, Arista’s Head of Corporate and Finance and Investor Relations, you may begin. Venk Nathamuni: 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 its fiscal fourth quarter ending December 30, 2021. If you would like a copy of the press 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 first quarter of fiscal year 2022, the longer-term financial outlook for 2022 and beyond, our total addressable market and strategy for addressing these market opportunities, the potential impact of COVID-19, supply chain constraints, manufacturing capacity and inventory purchases on our business

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