Arista Networks revenue jumps 26% in Q1, but Q2 outlook dented stocks

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The American solution provider reported revenue of $595.42 million for the quarter ended March 2019. This is a 26% jump compares to year-ago revenues of $472.49 million.

“Arista’s Q1 results demonstrate our consistent execution and profitability despite the seasonality of the quarter. We are witnessing the deployment of principles into new enterprise markets,” said Jayshree Ullal, Arista President and CEO.

Despite the better performance in the first quarter, the cloud networking firm gave a flat outlook for the second quarter stating that it expects revenue to be between $600 to $610 million.

The company attributed the flat forecast to the fact that one of its big clients has placed most order on hold for Q2 2019. “In particular, one cloud titan has placed most orders on hold for Q2 2019,” Ullal told analysts.

According to the analyst, this ‘one cloud titan’ is most likely to be Microsoft’s Azure business. It accounts for about 10% of Arista business. When asked by JMP Securities analyst Erik Suppiger, “so you haven’t changed your expectation in terms of the contribution from Microsoft,” for the full year, Ullal responded, “we have to see the second half and then we’ll know better.”

In the first quarter, the company has launched Arista Introduces Open Cloud-Scale Platform. This will enable cloud providers ability to migrate to higher performance 100G or 400G while leveraging Arista EOS for single image consistency across the network, said the company.

The company has also launched the Arista 7130L Series, an ultra-low latency, high-precision network application platform, with deterministic 5 nanosecond switching and virtually undetectable jitter.

The 7130L Series consolidates FPGA (field-programmable gate array) based network applications, notably MetaMux, which enables lower latency data aggregation and is ideal for connecting electronic trading platforms directly to exchanges and MetaWatch for tapping and aggregating time-stamped packets for data analysis or compliance, said the company.

The company also said that it has been selected by CBC/Radio-Canada for its new “Maison de Radio-Canada” in Montreal, a planned state-of-the-art facility that will be fully compliant with the SMPTE ST2110 suite of standards for professional media applications over managed IP networks.

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