I believe everybody has known about the Q3 earnings result of ANET. As Saul said, ANET kicked it out of the park. I will not reiterate that in this post but would like to mention several proud moments emphasized by CEO on CC.
Proud moment 1 (about awards)
“In terms of Q3 recognition, we received some key awards that we’re really proud of. The Bay Area News Group published the Bay Area News Top Workplaces and Arista has been named number 5 out of 95 companies in the large company category with more than 500 employees. We also received accolades from Fortune Magazine as number 10 out of 100 of the top fastest growing companies in America.”
Proud moment 2 (about R&D expense and talent recruiting)
“I think our engineers know that they have unlimited hiring capabilities, but they have a very high bar. So we continue to hire very, very well in engineering head count, but frankly, many of them don’t make our bar. So if we are limiting hiring, it’s not because we don’t want to hire, but because we are limited by the talent pool in a geography. So one of the things we are doing is expanding geographies beyond our headquarters here in Santa Clara. But I just want to high-five and give kudos to our engineering team for dexterously developing new products, doing very good engineering recruiting and still keeping the bar high. I’m very proud of that.”
Proud moment 3 (about software-only revenue)
One analyst asked:
“Could you comment on your software-only revenue and how meaningful it’s becoming? You mentioned over 150 FlexRoute software licenses and you also have CloudVision.”
And the CEO answered:
“…Thank you for letting me speak about that. This is a proud moment, because I think it’s an indication of how the networking business is truly migrating to software-driven networking. We not only exceeded 150 routing customers, but we have now also crossed 200 CloudVision customers. And we have several trials going on. So my anticipation is while it is not yet reportable, so, it’s not material revenue, and again, because it’s a software subscription over multiple years, I expect in the next two years that this business can become approximately a 5% of our revenue.”
Proud moment 4 (about international revenue)
“This is one of our prouder moments, I think, because we had a lot of international shipments in Q3 and we had a particularly strong Asia-Pac and EMEA. It broke out to where EMEA was 18%, and the APJ was about 11%. We had a very strong quarter for new customers acquired internationally with over half of the customers – new customers we acquired were international. But the organic international customer revenue has been growing faster than the company average. This removes out any global customers which may be headquartered in the United States. But the organic international customer revenue has actually been very strong for us.”
The table below demonstrates the Percentage of International Revenue to Total Revenue. We can notice that the share of international revenue is stably increasing.
FY2013 FY2014 FY2015 FY2016 2017Q1 2017Q2 2017Q3
19% 22% 24% 24% 21% 25% 29%
