2023-08-01 14:22:28 ET
Shares of Arista ( NYSE: ANET ) surged as much as 22.9% on Tuesday, leading the top percentage gainer board on the S&P 500 Index ( SP500 ), after the company reported an easy beat for its second quarter results.
The network equipment company on Monday after the bell posted Q2 non-GAAP EPS of $1.58, topping estimates by 14 cents. Revenue of $1.46 billion was up 39% from last year and ahead of consensus by $80 million.
During an earnings call with analysts, CEO Jayashree Ullal said Q2 non-GAAP gross margins of 61.3% were influenced by improving supply chain overheads and higher enterprise contribution. Ullal added that gross margins are expected to consistently improve every quarter this year and stabilize in 2024.
Revenue breakdown: product: $1.26 billion; service: $197.4 million. The company said the increase in revenue largely reflected a healthy contribution from its enterprise customers in EMEA and APAC.
Other metrics: GAAP net income $491.9 million; Non-GAAP net income $501.2 million; Operating expenses $287.3 million; Operating income $606.5 million; Cash, cash equivalents, and investments $3.7 billion.
For the third quarter, the company said it expects revenue between $1.450 billion and $1.500 billion and a non-GAAP gross margin of approximately 62%. The consensus estimate for Q3 revenue is $1.48 billion.
ANET is up 52.8% so far this year. The company has a " BUY " rating from Quant, SA analysts, and Wall Street.
More on ANET:
Arista Networks: Strong Outlook, Impressive Gross Margins, And AI Potential .
Arista Networks Q2 2023 Earnings Call Transcript .
For further details see:
Arista surpasses Wall Street expectations with impressive Q2 beat, stock soars ~23%