Slide 1: Arista in Q4 2016
Arista in Q4 2016 Copyright © Arista 2017. All rights reserved.
Slide 2: Safe Harbor
Safe Harbor This presentation and the accompanying oral presentation contain forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements other than statements of historic
Slide 3: Inevitable Shift to Seamless Cloud Networking
Inevitable Shift to Seamless Cloud Networking Cloud Native Containers Seamless PINS Software Defined Cloud Networking Leaf-Spine 100,000s Cloud Networks Zettabytes of Storage High 100,000s+ of Servers Performance 1,000,000s of VMs Computing 50,000s Convergence of PINS Containerization Client Server
Slide 4: Cloud vs Enterprise – They are Different Networks
Cloud vs Enterprise – They are Different Networks Traditional Networking Cloud Networking (Legacy) (Arista) Serves <100,000 employees Serves hundreds of millions of users Expensive to build and scale 10x-40x more cost effective Minimal API usage API for programmatic access Manual management Automate
Slide 5: Arista's Cloud Networking Opportunity
Arista’s Cloud Networking Opportunity Server Shipments Data Center Ethernet Switch Revenue 100% $15 Percent of Server Shipments Enterprises/Premises Revenue in $ Billions Telco SPs Top 7 Cloud Providers $10 50% Rest of Cloud $5 Rest of Market Cloud and SP (Enterprise and SMB) 0% $0 Source: Dell’Oro
Slide 6: Arista Market Share vs. Cisco
Arista Market Share vs. Cisco High Speed Data Center Switching Market Share in Ports (10GbE and Higher) 22.0% 73.3% 74.0% 71.4% 20.0% 72.0% 70.8% 18.0% 70.0% Arista 16.0% 68.0% 14.5% 66.1% 14.0% 66.0% 12.0% 12.0% 64.0% 9.3% 10.0% 62.0% 60.7% 8.0% 6.7% 60.0% 6.0% 4.9% 58.0% 3.4% 4.0% 56.0% 2.0% Cisco
Slide 7: Market Potential by Speed
Market Potential by Speed Data Center Ethernet Switch Revenue ($Bn) $15 Software Revenue in $ Billions $10 > 100 GE 40 GE 50 GE* $5 10 GE 25 GE* 1 GE $0 *Shows discrete 25G or 50G ports only. Majority of 25/50GE server ports are expected to connect via QSFP-100G break out to 100 GE switch ports at t
Slide 8: Arista's Cloud Scale Software Architecture
Arista’s Cloud Scale Software Architecture • Arista has ONE Operating System, purpose built for the cloud Legacy – Spaghetti Code Arista Programmable EOS OTV MSDP PIM IGMP Notify Resilient LC IGMP ACL IPQOS FIB Snoop Programmable STP U4RIB U6RIB CoPP Publish BGP RIP OSPF EIGRP ISIS Scalable Suscepti
Slide 9: Arista EOS Evolution
Arista EOS Evolution History of Rich Innovation in Extensible – Open – Scalable 2004-2009 2010-2012 2013 2014 2015 2016 2017+ EOS EOS EOS EOS EOS EOS EOS Architecture Architecture Cloud Designs High Availability Scale Automation NetDB 2017 State Programmability Leaf-Spine Cloud SSU VXLAN Integration
Slide 10: Foundational High Availability and Resiliency
Foundational High Availability and Resiliency CLOUDVISION ADVANTAGE • Automated network wide change NETWORK controls, including upgrades and rollback SPINE SSU • Maintenance mode • Dual SUP SSO with NSF SPINE • MLAG Active/Active L2 SSO LEAF SSU • Hitless Software Upgrade LEAF • MLAG Active/Active L
Slide 11: Cloud Networking is Everywhere: Three Key Segments
Cloud Networking is Everywhere: Three Key Segments Arista Cloud Arista Arista Cloud Converged Cloud Scale Class Enterprises Titans Key Verticals § Compute, Storage, § 25/50/100GbE Scale § Leaf-Spine Switching Security Tech § Internal Projects § Spine Routing Partners § API controls § UCN Designs § C
Slide 12: Expanding Ecosystem
Expanding Ecosystem • Drive Automation with best of breed partners: security, overlays, orchestration, and storage • Advanced Analytics and network wide services • Any Work-X with CloudVision for workloads, workflows and work-streams Virtualization/ Containers AUTOMATION Network Security / Workflow
Slide 13: Cloud-Class Platform Portfolio
Cloud-Class Platform Portfolio Diverse Merchant Silicon Architectures 7300X 7500E/R Series Spine/SplineTM Series 7050X/7060X Series 7150, 7160 & 7280R Series Leaf Leaf EOS Volume Value Single-Image Arista EOS Across All Platforms 13 Copyright © Arista 2017. All rights reserved.
Slide 14: Proven Arista EOS Architecture Flexibility
Proven Arista EOS Architecture Flexibility Automation & Cloud Programmability Networking Telemetry Consistent and Open Arista EOS One Single EOS Abstraction Layer Fulcrum-FM BRCM-DNX BRCM-XGS CAVIUM-XPA 4 Architectures Jericho Trident-II+ Tomahawk+ NEW Alta Arad Trident-II Tomahawk 12 Silicon Famili
Slide 15: 7160 Series
7160 Series 1RU systems for 10G to 100G scale-out Applications • Innovation: Arista AlgoMatch - Improves scale, performance & efficiency for programming filters over traditional approach • Investment Protection: Flexible Port Configurations for 1/10/25/40/50/100G • High Performance: Scalable Through
Slide 16: Disruptive Cloud Economics for Routers
Disruptive Cloud Economics for Routers Arista 7500R Traditional Router Spine Interface Types Legacy & Ethernet Ethernet 100G Density ~80 Ports 432 Ports Arista’s Power ~200+ watts 25 watts Disruptive (per 100G port) Economics List Pricing $100,000+ $3,000 (per 100G port) Cloud-optimized Routing, Sof
Slide 17: Arista Universal Spine & Leaf Routing Use-Cases
Arista Universal Spine & Leaf Routing Use-Cases Cloud DC Content Provider Internet Inter-DC WAN DCI Peer F Peer G Public Peer E Transit Peering Spine Peer D Peer H Core Private WAN Peer C DC Universal Spine Internet Peering Segment Routing Intelligent Source Routing Path computation Globally optimiz
Slide 18: Migration to Cloud Storage Architectures in the Enterprise
Migration to Cloud Storage Architectures in the Enterprise Traditional Enterprise Cloud Storage Storage Cost per GB $5/GB ~ 36¢/GB (2-3¢/GB/month) Market Growth -6% CAGR + 22% CAGR Scaling Scale-up Scale-out Architecture Siloed Fibre Channel Common IP/Ethernet SANs Infrastructure Transforming Storag
Slide 19: Arista's IP Storage Solution
Arista’s IP Storage Solution Compute Spine Storage Spine Hyperconverged Storage/Compute App Servers App Servers IP Storage App Servers App Servers IP Storage Hyper-converged Storage Racks Dedicated Storage Rack Dedicated Storage Spine (Small) (Medium) (Large) Scalable to Lossless High Simplified Ret
Slide 20: Universal Cloud Network Architecture
Universal Cloud Network Architecture Legacy Leaf/Spine Universal Leaf-Spine Internet DCI Internet DCI Internet Inter-DC WAN DCI Transit Peering Optical Legacy Core Routing Spine Core Spine Switching Spine Leaf Distribution Leaf Access W E Core is subsumed in Spine 20 Copyright © Arista 2017. All rig
Slide 21: Arista EOS Supports Many Roles
Arista EOS Supports Many Roles • We target a large and growing market, $10B+1 • Our open software approach is applicable to new opportunities • EOS software is our foundational building block which drives TAM growth • Arista has a proven ability to insert and drive sharp share gains • New applicatio
Slide 22: Foundational Technology Underpins TAM Expansion
Foundational Technology Underpins TAM Expansion • We partner with customers and follow their journey • EOS software drives repeat purchases, Arista cultivates customer advocacy • EOS software organically enables additional use cases Additional Purchases Did Not Purchase Chart illustrates the top 25
Slide 23: Long Runway Ahead
Long Runway Ahead Large Financial Services Web1 680+ Customers 140+ Customers Cloud Spend High Tech Service Provider / 525+ Customers Cloud / Hosting Government Media & 24% 220+ Entertainment 440+ Customers 265+ 76% Oil & Gas Education Business 40+ 290+ Services 295+ Research Labs 85+ Healthcare Ret
Slide 24: Arista Software Strategy
Arista Software Strategy • FLX for advanced routing, DANZ+ monitoring features for expanding protocols and use cases • CloudVision brings turnkey cloud network automation, telemetry, hitless change control • Arista EOS/vEOS and SDK offer customers choice and flexibility for Hybrid Cloud • Software v
Slide 25: Financial Highlights
Financial Highlights1 $350 Total Revenue Gross Margin Millions 70% 66.1% 65.8% 65.5% $300 64.0% 64.4% 64.1% 64.6% 64.4% 60% $250 50% $200 40% $150 30% $100 20% $50 10% 179 196 218 245 242 269 290 328 $0 0% Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'1
Slide 26: Balance Sheet & Cash Conversion Cycle
Balance Sheet & Cash Conversion Cycle $1,000 Cash, Cash Equivalents & $300 AR and DSO 80 Millions Marketable Securities Millions $900 AR 71 67 DSO (R) 70 $800 $250 54 60 $700 51 50 $200 $600 50 $500 $150 40 $400 30 $100 $300 20 $200 $50 10 $100 687 762 824 800 868 144 135 147 210 253 $0 $0 0 Q4'15 Q
Slide 27: Arista in Q4'16 and 2016
Arista in Q4’16 and 2016 Key Highlights Financial Results (non-GAAP)1 Q4-2016: Q4-2016: - Introduced Arista AlgoMatch™, along with the Q4’16 Revenue: $328M new Arista 7160 Series 25/100GbE programmable platforms. Q4’16 EPS: $1.04 Full Year 2016: Q4’15-Q4’16 YOY Revenue Growth: 33.6% - The Arista 750
Slide 28: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation 28 Copyright © Arista 2017. All rights reserved.
Slide 29: Thank You
Thank You www.arista.com Copyright © Arista 2017. All rights reserved.