Technology StocksArista Networks

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To: FUBHO who wrote (7)5/5/2016 6:05:15 PM
From: The Ox
1 Recommendation   of 36
Arista (NYSE: ANET): Q1 EPS of $0.68 beats by $0.08.

Revenue of $242.19M (+35.3% Y/Y) beats by $7.26M.

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From: FUBHO5/6/2016 7:42:22 AM
   of 36
Arista Will Ramp Manufacturing in the U.S.

Craig Matsumoto
May 5, 2016
3:07 pm PT

Arista Networks is hiring a contract manufacturer that will operate a facility in the United States, a decision that seems related to the pending U.S. International Trade Commission (ITC) decision in Cisco’s lawsuit against the company.

Arista announced the move during its first-quarter earnings call today, saying it involves a contract manufacturer that’s new to the company. In other words, it isn’t Foxconn or Jabil Circuit, the two manufacturers Arista uses today.

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For what it’s worth, Arista already enlists San Jose, Calif.-based Flextronics “to provide logistics and final configuration services in North America,” according to Arista’s annual report.

CEO Jayshree Ullal emphasized that the new manufacturer, due to be announced this quarter, will be operating in the United States. “We felt the need to automate the factory more and bring proximity to our headquarters and our headcount,” Ullal said during the call.

“Proximity” relates to the number of new products Arista has and is anticipating, such as the 7500R spine switch. In those cases, Ullal sees a benefit in having manufacturing reside close to Arista’s engineering.

But she acknowledged that the Cisco patent suits against the company factored into the decision, too.

The ITC ruled in February that Arista violates three Cisco patents. Nothing further will be decided until the ITC’s final determination on June 2, but it’s possible the commission could issue an injunction against the importing of Arista’s products — a move that would theoretically cut off Arista’s supply from overseas contract manufacturers Foxconn and Jabil.

Publicly, Arista has remained sanguine about this, saying it’s revising product designs to skirt around the patent issues. “We are absolutely prepared with the right design workarounds and the engineering workarounds” should an injunction come around, said Ullal.

(The June 2 decision relates to one set of patents, referred to as the ‘944 case. A separate case brought by Cisco, nicknamed ‘955, was due for an initial decision in April but has been delayed. Arista is providing a Web page to track these and other cases.)

Running the Numbers

Arista shares rose 5.5 percent in after-hours trading, to $63.58, as the company’s first-quarter earnings beat analyst estimates by eight cents per share.

Moreover, the company continues to grow while peers such as Brocade, Cisco, and Juniper talk about economic “headwinds” and “uncertainty.” Technically, Arista’s growth slowed down in the first quarter, but that’s partly the law of gravity; no one expected the company to grow at more than 40 percent forever.

In the first quarter Arista’s revenue grew 35 percent year-over-year – to $242.2 million from $179 million a year ago.

Net income was $35.2 million, or 48 cents per share, compared with $25.5 million, or 34 cents per share, a year ago.

Non-GAAP net income of 68 cents per share outdid the analysts’ consensus of 60 cents as measured by Thomson Financial Network.

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From: FUBHO6/28/2016 9:49:07 AM
   of 36
Last week, the International Trade Commission (ITC) ruled against Arista Networks(ANET) in a patent dispute brought by Cisco Systems (CSCO).

The ITC said Arista's products infringe on three Cisco patents. The companies face off again in August in a second round of patent infringement cases. In a last-ditch effort, Arista is asking the U.S. Patent and Trademark Office to invalidate a bunch of Cisco patents. It's unlikely either company will settle this dispute peacefully.

At the start of the year, I was bullish on the shares of Arista. I thought the company's attack from below would continue to take market share from Cisco and the stock would work higher.

Many tech bulls blew off the patent ruling, saying tech companies are frequently involved in patent fights and eventually cooler heads prevail and the companies reach a sensible settlement. And besides, many investors feel Arista is clever enough to get around Cisco's patents, since most of Arista's engineers designed the original Cisco products to begin with.

Maybe so, but I don't think it's going to be as easy as that. Because of the ruling, Arista is going to have to move production to the U.S. to avoid import restrictions.

The ITC ruling has entered the two-month presidential review process. Assuming the process expires without action, Arista will be banned from importing equipment towards the end of August. Arista has between now and August to build as much equipment as possible and get it into the U.S. before the end of August.

If Arista can come up with a workaround, the company will still need to get ITC and U.S. Customs approval to sell its equipment in the U.S. It could take months for customs to sign off on any workarounds. The U.S. accounts for 75% of Arista's sales.

Even if the ITC or U.S. Customs gives the company temporary approval to sell in the U.S., Cisco can still get a court order to stop the infringing sales.

Assuming Arista can get its equipment manufactured in the U.S., gross margins are going to take a big hit. In fiscal 2015, Arista reported gross margins of 65.3% and an operating margin of 28.2%. The switchover will cost them at least 50 basis points in gross margin (or more) and operating margins will probably be down nearly 200 basis points.

Tech investor's value top-line growth and this patent war could cost the company some growth as big customers take a wait-and-see approach to new purchases.

In fact, sales are already slowing. Sales were up 61% in 2014, slowed to 43% in 2015 and are estimated to be up just 28% this year. Right now, the consensus analyst estimate for fiscal 2017 is $1.26 billion in revenue, which would only be up 17% over 2016.

Likewise, earnings are slowing down, too. In 2014, on a non-GAAP basis, Arista earned $1.54, up 59%. But earnings are expected to be up just 13% this year and 11% next year.

The stock is down nearly 18% since the news of the patent infringement and import ban became public.

I would be very careful here. Over the last five years, it's been very difficult to make money in this stock, patent infringement or not. The stock could be good for a trade if it gets into the mid-$50s. Good news on the litigation front could bounce the shares higher, but it's hard to see the stock higher on an expanding top line. For now I would avoid shares of Arista.

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To: FUBHO who wrote (10)6/28/2016 4:03:37 PM
From: akmike
   of 36
Why does this guy have any credibility?

Over the last five years, it's been very difficult to make money in this stock, patent infringement or not. The stock could be good for a trade if it gets into the mid-$50s. Good news on the litigation front could bounce the shares higher, but it's hard to see the stock higher on an expanding top line. For now I would avoid shares of Arista.

He doesn't even realize the IPO was in 2014. How could we make money in ANET in 2011-2014?

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To: akmike who wrote (11)6/28/2016 5:10:57 PM
   of 36
You have a good point there...

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From: JakeStraw2/1/2017 8:39:37 AM
   of 36
Arista Introduces DANZ 2017 Visibility for 100G Enhanced Cloud Security

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From: JakeStraw2/17/2017 9:15:44 AM
   of 36
Arista Networks, Inc. Reports Fourth Quarter and Full Year 2016 Financial Results

"2016 was indeed a historic year for Arista, as we exceeded one billion dollars in annual sales within two years of becoming a public company,” stated Jayshree Ullal, Arista President and CEO. “Our customers are adopting cloud networking at an unprecedented pace.”

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From: JakeStraw3/8/2017 1:56:36 PM
1 Recommendation   of 36
Arista Networks' Software Strategy Could Jar Cisco Even More

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From: surfbaron6/15/2017 11:43:15 AM
   of 36
I came across this Patent-United States Patent 9674116.

Title is : Data distribution packet-flow interconnect fabric modular management optimized system

Abstract: A method includes operating a packet flow module including a plurality of ports, each of the plurality of ports including at least a pair of bidirectional and logically independent communications channels. An apparatus includes a packet flow module including a plurality of ports, each of the plurality of ports including at least a pair of bidirectional and logically independent communications channels.

Looking at their website under "Show BenchMarks" they are citing third party verification test results benchmarking against Arista 7150 10GbE Switch/ Solarflare SFN7122F 10 GbE Adaptor.

Is anybody on this board qualified to comment on these test results?

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From: FUBHO6/19/2017 8:40:31 AM
   of 36

Arista Networks ( ANET) today introduced new software and hardware for the Arista R-Series platforms, accelerating cloud transformation for customers deploying routing technology. Based on merchant silicon that is twice the density and half the power of custom routing silicon, the latest R-Series platforms deliver more than 150 Tbps of capacity for switching and routing applications with cloud-driven Arista EOS® software technologies including Arista FlexRoute™ and AlgoMatch™.

This Smart News Release features multimedia. View the full release here:

"Working together with Arista has helped Netnod to develop a flexible, future-proof infrastructure that accommodates significant increases in capacity at the same time as reducing the cost per terabit compared with traditional routing platforms,” said Lars Michael Jogbäck, CEO at Netnod. “Arista 7500R/7280R and EOS support our next-generation platform as we develop industry-leading IX services and offer Netnod customers more connection options than ever before.”

Cloud Class: Scaling Up and Out

With the 2016 introduction of the Arista 7280R Universal Leaf and 7500R Universal Spine platforms, the first phase of cloud transformation is underway across multiple routing use cases across cloud providers, Content Delivery Networks (CDN) and Internet service providers. Arista is focused on the next phase of this transformation with the 7500R2 line cards for the 7500R systems and the 7280R2 fixed platforms, delivering significant enhancements in scale, telemetry, security and routing.

“We selected Arista EOS and the 7500R2 as a part of our new edge architecture, which will become the foundation for our hyper-scale security platform. This was based on the combination of deep telemetry, dense 100G, and large routing scale, while providing stability and extensibility with Arista EOS,” said Wen Temitim, Chief Network Scientist at StackPath.

Cloud network designs require both scaling up and scaling out. The FlexRoute enhancements on the 7500R2 line cards and the 7280R2 fixed platforms introduce support for over 2 million routes in hardware, equivalent to more than three copies of the Internet routing table. While the Internet routing table continues to grow and native IPv6 networks increase, customers can invest in a routing platform that can handle the Internet table scale both for today and the future.

In addition, the newest member of the 7500R Series, the 7516, increases port scale, with up to 576 ports of line rate 100G Ethernet. These scale up improvements provide the building blocks for scale-out network designs, including spine capacity of an industry leading 15 Petabits per second.

AlgoMatch on the 7500R2 line cards and 7280R fixed platforms introduces high rate sFlow, providing improved traffic analysis for routing use cases. Addressing the challenge of scaling telemetry at 100G interface speeds, this solution makes the R-Series the industry's highest visibility solution for dense 100G.

Security enforcement is critical at the edge of today’s cloud networks. Access control policies can be deployed in edge routing roles with confidence, enabled by both the increased ACL scale and the common IPv4 and IPv6 scale that AlgoMatch provides. With new MACsec capable line cards for the 7500R, datacenter interconnect traffic can be secured with strong 256-bit MACsec encryption.

Without the burden of legacy protocols, Arista has a clean approach to both Layer 2 and Layer 3 VPN solutions with improved redundancy, leveraging Ethernet Virtual Private Networks (EVPN) for MPLS and VXLAN. Arista demonstrated these technologies as part of the public multi-vendor interoperability test and showcase at the MPLS + SDN + NFV World Congress in March, 2017. These service edge capabilities in EOS coupled with improved table sizes on the R2 series enable new routing use cases for Internet Exchange (IX) cloud fabrics as well as additional Network Functions Virtualization (NFV) cloud solutions for cable providers and 5G mobile packet cores.

Next Generation Universal Spine and Leaf

Arista continues a track record of strong investment protection with backwards compatibility for customers using the 7500R modular platform while introducing new capabilities with the 7500R2 line cards and 7280R2 systems including:

16-slot 7500R Series providing a new performance and density benchmark for a spine of up to 15 Petabits and 576 ports of 100G in a single system, with the flexibility to enable from 1G to 100G with future proof support for 400GExpanded high capacity 7280R2 with up to 60 ports of 100G, IEEE 802.3by 25G Ethernet, and over 2 million routes in hardwareHigh rate sFlow export on both fixed and modular systemsNew datacenter interconnect solutions with secure 802.1AE MACsec encryption on 36 port 100G line cards and Coherent 200G DWDM line cards with reach of over 5000 km.With these introductions, Arista is outpacing traditional custom silicon, allowing customers to transition from legacy platforms to scalable, efficient and programmable 100G and 25G solutions.

Pricing and Availability

The 7500R2/7280R2 Series are available now. The 7516 is currently in customer trials with general availability in 2H 2017.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)--sm Mt(0.8em)--sm" type="text" content="For additional information join us for a webinar on the next generation R2 Series on Tuesday, July 11th at 10:00 A.M. PT. Register here." data-reactid="48" style="margin: 0px 0px 1em;">For additional information join us for a webinar on the next generation R2 Series on Tuesday, July 11th at 10:00 A.M. PT. Register here.

About Arista Networks

Arista Networks was founded to pioneer and deliver software-driven cloud networking solutions for large datacenter storage and computing environments. Arista’s award-winning platforms, ranging in Ethernet speeds from 10 to 100 gigabits per second, redefine scalability, agility, and resilience. Arista has shipped more than ten million cloud networking ports worldwide with CloudVision and EOS, an advanced network operating system. Committed to open standards, Arista is a founding member of the 25/50GbE consortium. Arista Networks products are available worldwide directly and through partners.

ARISTA, EOS, and CloudVision, FlexRoute and AlgoMatch are among the registered and unregistered trademarks of Arista Networks, Inc. in jurisdictions around the world. Other company names or product names may be trademarks of their respective owners. Additional information and resources can be found at This press release contains forward-looking statements including, but not limited to, statements regarding the benefits and best practices utilized in the design and implementation of Arista's EOS and CloudVision software and the enablement of cost savings, more performance, and efficiency. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the forward-looking statements including: our limited operating history and experience with developing and releasing new products; product, support or service quality problems; rapidly evolving changes in technology, customer requirements and industry standards as well as other risks stated in our filings with the SEC available on Arista's website at and the SEC's website at Arista disclaims any obligation to publicly update or revise any forward-looking statement to reflect events that occur or circumstances that exist after the date on which they were made.

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