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Arista Networks showed Q4 2023 strong results but catious 2024 outlook

21:26 12 February 2024

Positive Q4 Results:

  • Revenue growth: 2.1% from Q3 and 20.8% year-over-year, indicating consistent growth despite a seasonally weaker quarter. Generally, revenue came out at 1.54 billion USD
  • EPS: Non-GAAP of 2.08 that was better by 0.37 USD
  • Profitability: Strong gross margins (64.9% GAAP, 65.4% non-GAAP) and net income growth (63.5% GAAP, 48.5% non-GAAP) showcase financial health of the company
  • Product innovation: Launches like the 7130 Series and expanded zero trust vision demonstrate commitment to R&D and staying ahead of market trends.
  • Leadership transition: Appointment of new CFO signals smooth succession and continuity of strategy.

Overall, Q4 presents a strong picture, slightly exceeding expectations and solidifying Arista's position as a leader in data center networking. Despite that shares are down more than 6% after the closing bell.

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2024 Outlook:

  • Conservative guidance: Revenue and margin projections suggest cautious optimism, potentially reflecting macroeconomic concerns. The company expects revenue between 1.52 billion to 1.56 billion USD in the Q1 2024
  • Focus on profitability: Continued commitment to maintaining healthy margins aligns with Arista's historical approach.

While the outlook reflects confidence, the conservative guidance suggests Arista is cautiously navigating potential market headwinds.

Additional information from financial statement:

  • The full-year results are impressive, with significant revenue and profit growth compared to 2022.
  • Key achievements like surpassing 75 million cloud network ports shipped and leadership recognition underscore Arista's market impact.
  • The company's focus on open AI networking and AI-driven solutions positions it well for future growth opportunities.

Overall, Arista is in a strong position, with Q4 2023 results exceeding expectations. The 2024 outlook suggests cautious optimism due to potential market headwinds, but the company's focus on profitability and innovation bodes well for the future. It is worth to note that the company reached an all-time high at the start of the week above 280 USD per share.

The price is down by 5-6% after the closing bell as the company showed cautious optimism about the future. Source: xStation5

 

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