Arista posts Q3 sales of $654M, up 16%, warns on cloud titans

Arista Networks reported Q3 2019 revenue of $654.4 million, an increase of 7.6% compared to the second quarter of 2019, and an increase of 16.2% from the third quarter of 2018. GAAP gross margin was 63.8%, compared to GAAP gross margin of 64.1% in the second quarter of 2019 and 64.2% in the third quarter of 2018. GAAP net income of $208.9 million, or $2.59 per diluted share, compared to GAAP net income of $168.5 million, or $2.08 per diluted share in the third quarter of 2018. Non-GAAP net income of $217.1 million, or $2.69 per diluted share, compared to non-GAAP net income of $171.3 million, or $2.11 per diluted share in the third quarter of 2018.

“In Q3 2019 we continued to see the adoption of our cloud networking technology in more diverse environments. While we expect a sudden softening in Q4 with a specific cloud titan customer, we are committed to a sustainable and strong foundation of long-term growth, innovation and profitability,” stated Jayshree Ullal, Arista President and CEO.

On a conference call, Arista execs discussed a "sudden softening with a specific cloud titan customer" as well as a longer timeline for the industry adoption on 400G. Q4 revenue is now expected between $540 million and $560 million.