Arista Networks ' (NYSE: ANET) quarterly performance left investors impressed. In this clip from "3 Minute Stocks Updates" on Motley Fool Live , recorded on Feb. 16 , Motley Fool contributors Brian Feroldi and Brian Withers review the cloud computing company's financials and discuss its goal to grow its top line by 30% this year.
Brian Feroldi: Arista Networks, ticker symbol ANET. This is a company that struggled in 2020 and 2021, even though the fact that spending on the cloud was exploding. The company has since returned to its high-growth way. In the most recent quarter, revenue grew 27% to $825 million. Of that total, about 21% is service and support revenue. That's good to see. Arista now has 8,000 customers that have bought from it. But, don't be fooled. Of that 8,000 customers, 15% of that total is revenue and 10% is Facebook [Meta Platforms (NASDAQ: FB) ]. The company still gets a sizable amount of its revenue from just two businesses. Gross margin for the company were strong, down a little bit due to supply chain pressures and the semiconductor crunch, dropping about 50 basis points on a GAAP basis to 63%. Net income for the quarter was up 32% to $263 million. So, $825 million in revenue, $263 million in non-GAAP net income, that is what you call impressive total margins. Earnings per share came in at $0.82, nine cents ahead of estimates. The company also bought back $176 million of stock during the quarter. This is a company that has done quite a good job with share repurchases, buying back about 60 million shares in total for an average price of $60 per share. Not a bad job with the stock currently trading at $130 or so. Moving forward, in the first quarter, the company expects revenue growth of about 32%. Margins are about the same, stable, and the company continues to believe that it's going to grow its top line about 30% for 2022 and has multiple years of growth ahead of it. Financially, Arista is doing great.
For further details see:
Here's Why Arista Networks Could Be a Winner in 2022