Arista Networks, Inc. · NYSE:ANET
Arista Networks — FY2014 Earnings Presentation
19 slides from Arista Networks's earnings presentation, Feb 19, 2015
Slide 1: 2014 Highlights
2014 Highlights! February 2015!
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: Paradigm Shift – Data Center Moving to the Cloud
Paradigm Shift – Data Center Moving to the Cloud Cloud Virtualization Internet Environment Client Server Architecture Database Server Rise of the PC Server Petabytes of Storage Client Client Client Client Client 100,000s of Servers Mainframe 1,000,000s of VMs 10,000s 1,000s 100s 10s 1970 1980 1990 2
Slide 4: Arista's Served and Total Addressable Market
Arista’s Served and Total Addressable Market Switching Market Size ($Bn) 25.4 25.7 24.5 24.9 25.1 22.4 23.0 TAM TAM CAGR: 2.3% SAM SAM CAGR: 14% Data Center Switching (10/25/40/50/100GbE) Market Size (1) Remaining Ethernet Switching Market (2) Note 1. High-speed data center switching market, excludi
Slide 5: Market Potential by Speed
Market Potential by Speed Switching Market Aggregate Revenue ($Bn) $25 $19.5Bn $20 $19Bn $0.07Bn $15 $79Bn $0.4Bn $10 $181Bn $5 Notes 1. Dell’Oro, 2015: 1GbE aggregate revenue from 1997-2019; 10GbE aggregate revenue from 2001-2019; 25GbE aggregate revenue from 2018-2019; 40GbE aggregate revenue from
Slide 6: Arista Platform Delivers Software Driven Cloud Networking
Arista Platform Delivers Software Driven Cloud Networking + EOS Merchant Silicon Cloud Scale Open and Availability Visibility Automation Architecture Programmable Accelerates Time to Service and Reduces TCO Higher Feature Velocity 6
Slide 7: Arista Key Differentiators of Software Driven Cloud Networks
Arista Key Differentiators of Software Driven Cloud Networks EOS Programmable & Open 7
Slide 8: Arista Portfolio
Arista Portfolio 7300 Series 7500E Series Spline/Spine 7050 Series 7150 & 7280 Series Leaf Volume Value Single-Image Arista EOS Across All Platforms 8
Slide 9: Arista's Ecosystem: Open and Programmable
Arista’s Ecosystem: Open and Programmable Hypervisor/Virtualization Management, Automation, Orchestration Network Services EOS Application Programming Interfaces (APIs)! JSON | XMPP | CLI | Python | CloudVision! EOS Extensible Operating System! Scalability | Availability | Programmability | Automati
Slide 10: Broad Customer Adoption
Broad Customer Adoption End Customers (Cumulative) 3500! 3000+ 3000! 2500! 2300+ 2000! 1600+ 1500! 1000+ 1000! 500+ 500! 0! FY10! FY11! FY12! FY13! FY14! 10
Slide 11: Pace of Cloud Networking Adoption
Pace of Cloud Networking Adoption Large Financial Services Web1 520+ Customers 100+ Customers Cloud Spend Service Provider / High Tech Cloud / Hosting 360+ Customers Government Media & 150+ 330+ Customers Entertainment 190+ Oil & Gas Education Business 30+ 210+ Services 220+ Research Labs 75+ Health
Slide 12: Arista in 2014
Arista in 2014 Compelling Attributes Financial Results (non-GAAP)1 Talented team, technology Q4’14 Revenue: $173.5M and results FY14 Revenue: $584.1M Large and expanding FY13-FY14 Revenue YOY Growth: 61.7% market opportunity FY10-FY14 Revenue CAGR: 68.9% Q4’14 Gross Margin: 67.4% Sustainable softwar
Slide 13: Strong Revenue Growth
Strong Revenue Growth Annual Revenue Quarterly Revenue $M $M $173 2010-2014 $584 $155 CAGR: 68.9% $138 $115 $117 $361 $193 $140 $72 FY10 FY11 FY12 FY13 FY14 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 13
Slide 14: 2013-2014 Financial Highlights
2013-2014 Financial Highlights1 $200 Revenue Gross Profit Millions Millions $180 $140 $160 $120 $140 $100 $120 $100 $80 $80 $60 $60 $40 $40 $20 $20 61 83 102 115 117 138 155 173 42 54 65 78 82 94 101 117 $0 $0 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14
Slide 15: Cash Flow and Balance Sheet
Cash Flow and Balance Sheet ($ In Ms) Q1’14 Q2’14 Q3’14 Q4’14 Cash and Cash Equivalents $129.5 $397.2 $408.6 $240.0 3. Marketable Securities $209.4 Cash Flow From Operations $17.7 $46.3 $34.8 $15.8 Accounts Receivable $63.0 $67.9 $84.1 $97.0 DSO 48 45 50 51 Inventories $79.0 $71.1 $62.6 $80.5 Turns
Slide 16: Arista vs. Select Peers – GAAP
Arista vs. Select Peers – GAAP (In 000s except per share data) Q1’14 Q2’14 Q3’14 Q4’14 Q/E Jan 2014 Q/E Apr 2014 Q/E Jul 2014 Q/E Oct 2014 Revenue 117,207 137,947 155,463 173,489 141,068 150,700 178,231 192,346 qoq% 2.1% 17.7% 12.7% 11.6% 10.1% 6.8% 18.3% 7.9% yoy% 91.1% 65.2% 53.0% 51.2% 46.2% 48.8
Slide 17: Arista Evolution
Arista Evolution People 6 100 250 500 750+ 1,000+ EOS 7500 VXLAN 7050 7150 7500E 7300 EOS+ Products 7100S Best of Interop Best of VMworld Best of Interop 7000X 7280E High Tech Enterprise Customers Financial 50+% 1000+ Web SP/Cloud 3000+ Financial H UK India Germany Hong Kong Sweden Company Founded J
Slide 18: 2014 Summary
2014 Summary • Strong revenue and market share growth driven by broad customer adoption • Visibility from deep customer engagement • Diverse and growing customer base across key verticals • Proven land and expand model • Good margins supported by differentiated technology advantage 18
Slide 19: Appendix: GAAP to Non-GAAP Reconciliation
Appendix: GAAP to Non-GAAP Reconciliation In 000's except per share data Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 GAAP gross profit $ 42,128 $ 53,901 $ 65,036 $ 77,473 $ 81,314 $ 93,380 $ 100,957 $ 116,440 Stock compensation 67 83 107 151 211 301 480 543 Non-‐GAAP gross profit $ 42,195 $ 53,