Arista revenue rises to US$179 million in March quarter

Arista Networks has reported continuing growth, taking its revenue to US$179 million, but at the cost of a slimming of its margins to 65.8 per cent (down from 69.4 per cent a year ago).

The revenue growth was strong at nearly 53 per cent higher than a year ago, but it slowed at the end of the period and was only 3.2 per cent up compared to Q4 2014.

Revenue of $179.0 million, an increase of 52.8 per cent compared to the first quarter of 2014, and an increase of 3.2 per cent from the fourth quarter of 2014.

While service revenues at 10 per cent of the total are still dwarfed by product revenues, the latter grew more than 75 per cent. It's also the first time service revenues have hit a point at which the company breaks them out separately.

However, it's the acceleration in sales that has the company happiest, because it represents increased penetration in the core data centre market.

The slimming margins are the result of increased cost-of-sales.

Given the push-back from incumbents – most particularly Cisco – in the data centre market, the cost of sales could in turn represent a renewed push to rope off its customers. Additionally, services sales typically cost more than product sales.

The company says its near-term future will be boosted on alliances with Supermicro, Infinera, and Lawo; along with its recently-announced EOS-as-a-subscription service that gives cloud operators a more flexible purchase model for buying its Extensible Operating System. ®