Arista Networks Q3 2023 Earnings Report

Arista Networks EPS Results

• Actual EPS: $0.41
• Consensus EPS: $0.35
• Beat/Miss: Beat by +$0.06
• One Year Ago EPS: N/A

Arista Networks Revenue Results

• Actual Revenue: $1.51 billion
• Expected Revenue: $1.48 billion
• Beat/Miss: Beat by +$30.46 million
• YoY Revenue Growth: N/A

Arista Networks Announcement Details

• Quarter: Q3 2023
• Date: 10/30/2023
• Time: N/A
• Conference Call Date: Monday, October 30, 2023
• Conference Call Time: 4:30PM ET

Arista Networks (NYSE:ANET) designs, develops and sells cloud networking solutions for large data centers, cloud service providers, internet companies, enterprises and other organizations. Its portfolio includes high-performance Ethernet switches, routers and wireless networking products used to connect servers, storage systems, users and applications across data center and campus environments.

The company’s software offerings include Arista EOS, its Linux-based network operating system, and CloudVision, a cloud-based platform for network management, automation, monitoring and analytics. Arista also provides networking solutions designed for artificial intelligence and high-performance computing workloads, as well as services including technical support, consulting and training.

Arista was founded in 2004 and is headquartered in Santa Clara, California. The company serves customers globally across North America, Europe, Asia and other international markets. Jayshree Ullal has served as Arista’s president and chief executive officer since 2008, while co-founder and chairman Andy Bechtolsheim has played a significant role in the company’s technology and strategic direction.

Arista Networks Q3 2023 Earnings Call Transcript

Key Takeaways

• Q3 revenue of $1.51 billion was up 28.3% YoY and beat the high end of guidance, driving non-GAAP EPS of $1.83.
• The company raised its 2023 calendar-year revenue growth outlook to ~33% (from 25%) and expects gross margins to remain around 63% into Q4 and stabilize in 2024.
• Improving supply chain conditions and shorter lead times are normalizing visibility and manufacturing output, with full normalization expected in 2024.
• Arista will merge its cloud and AI Titan customer categories into a single sector, now projected to account for >40% of total revenue, adding Oracle OCI to the segment.
• Services and subscription software support renewals contributed 16.8% of Q3 revenue, up from 15.2% in Q2, reflecting strength in recurring revenue streams.

Presentation

[Operator]

Welcome to the Third Quarter 2023 Arista Networks Financial Results Earnings Conference Call. During the call, all participants will be in a listen-only mode. After the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time. If at any time during the conference you need to reach an operator, please press the star followed by zero. As a reminder, this conference is being recorded and will be available for replay from the Investor Relations section at the Arista website following this call. Ms. Liz Stine, Arista's Director of Investor Relations, you may begin.

[Liz Stine, Director of Investor Relations at Arista Networks]

Thank you, operator. Good afternoon, everyone, and thank you for joining us. With me on today's call are Jayshree Ullal, Arista Networks President and Chief Executive Officer, and Ita Brennan, Arista's Chief Financial Officer. This afternoon, Arista Networks issued a press release announcing the results for its fiscal third quarter, ending September 30, 2023. If you would like a copy of the release, you can access it online at our website.

[Liz Stine, Director of Investor Relations at Arista Networks]

During the course of this conference call, Arista Networks management will make forward-looking statements, including those relating to our financial outlook for the fourth quarter of the 2023 fiscal year, longer-term financial outlooks for 2024 and beyond, our total addressable market and strategy for addressing these market opportunities, including AI, customer demand trends, supply chain constraints, component costs, manufacturing output, inventory management and inflationary pressures on our business, lead time, product innovation, working capital optimization, and the benefits of acquisitions, which are subject to the risks and uncertainties that we discuss in detail in our documents filed with the SEC. Specifically in our most recent Form 10-Q and Form 10-K, and which could cause actual results to differ materially from those anticipated by these statements. These forward-looking statements apply as of today, and you should not rely on them as representing our views in the future.

[Liz Stine, Director of Investor Relations at Arista Networks]

We undertake no obligation to update these statements after this call. Also, please note that certain financial measures we use on the call are expressed on a non-GAAP basis and have been adjusted to exclude certain charges. We have provided reconciliations of these non-GAAP financial measures to GAAP financial measures in our earnings press release. With that, I will turn the call over to Jayshree.

[Jayshree Ullal, President and CEO at Arista Networks]

Thank you, Liz, and happy Halloween, everyone. We delivered revenues of $1.51 billion for the quarter, with a non-GAAP earnings per share of $1.83. Services and software support renewals contributed approximately 16.8% of revenue. Our non-GAAP gross margins of 63.1% was influenced by improving supply chain overheads and higher enterprise contribution. As we have said before, gross margins have consistently improved every quarter this year and will stabilize next year in 2024. International contribution registered at 21.5%, with the Americas at 78.5%. As predicted, Arista's supply chain and lead times are improving steadily in 2023 and be expected to normalize in 2024. We are now projecting 33% annual growth versus our prior Analyst Day forecast of 25% growth for the 2023 calendar year.

[Jayshree Ullal, President and CEO at Arista Networks]

During the past year, our Cloud Titan customers have been planning a different mix of AI networking and classic cloud networking for their compute and storage clusters. Our historic classification of our Cloud Titan customers has been based on industry definition of customers with or likely to attain greater than 1 million installed compute servers. Looking ahead, we will combine cloud and AI customer spend into one category called Cloud and AI Titan Sector. As a result of this combination, Oracle OCI becomes a new member of the sector, while Apple shifts to cloud specialty providers. This new Cloud and AI Titan sector is projected to represent greater than 40% of our total revenue mix due to the favorable AI investments expected in the future.

[Jayshree Ullal, President and CEO at Arista Networks]

In terms of enterprise momentum, Arista continues to focus on multi-domain modern software with architectural superiority based on our single EOS Extensible Operating System and CloudVision stack. This is truly a unique foundation and differentiator. We have demonstrated our strong execution and uncompromised quality with predictable release cadence that our customers have come to enjoy and appreciate. The power of our one consistent software stack across a breadth of use cases, be they WAN routing, campus, branch, or data center infrastructure, is truly unmatched by our industry peers. Let me illustrate with a few customer wins. Our first customer win is an international one, where the customer is providing services for the interconnect of high-performance compute HPC clusters, which are often its foundation for GPU as a service offering.

[Jayshree Ullal, President and CEO at Arista Networks]

Arista's Ethernet modular switch, coupled with EOS, created a perfect combination of a switching platform with real-time telemetry, leveraging our EOS state-driven, publish-subscribe model. Our next win showcases our expansion of Arista in the public sector with their AI initiative. This grant-funded project utilizes Arista simplified operational models with CloudVision. New AI workloads require high scale, high radix, high bandwidth, and low latency, as well as a need for granular visibility. This build out of a single EVPN/VXLAN-based 400 gig fabric is based on deep buffer spines and underscores the importance of a lossless architecture for AI networking. This last but not least customer is an example of a campus win. A couple of years ago, the customer was looking to do a complete refresh of their aging campus network, which comprises of four major headquarters campuses and several remote sites.

[Jayshree Ullal, President and CEO at Arista Networks]

The customer was able to leverage the Arista Validated Design models, AVD, all the way from data center into the campus network. The customer chose Arista because they were able to offer best-of-breed operational excellence, as well as security with our Zero Trust AVA sensors for threat mitigation across the entire campus of wired switches. Arista's innovative macro segmentation, MSS, combined with leaf access and core spine, delivered a compelling two-tier cognitive campus solution. These three customers illustrate our power of the platform and software innovations for a modern network model with a low total cost of operations. We are pleased with our trajectory, setting the gold standard in our industry with the lowest CVEs and vulnerabilities and the highest net promoter score for cloud networking. With that, I'd like to hand to Ita, our CFO, for financial specifics.

[Ita Brennan, CFO at Arista Networks]

Thanks, Jayshree, and good afternoon. This analysis of our Q3 results and our guidance for Q4 2023 is based on non-GAAP. It excludes all non-cash stock-based compensation impacts, certain acquisition-related charges, and other non-recurring items. A full reconciliation of our selected GAAP to non-GAAP results is provided in our earnings release. Total revenues in Q3 were $1.51 billion, up 28.3% year-over-year, and well above the upper end of our guidance of $1.45 billion-$1.5 billion. Services and subscription software contributed approximately 16.8% of revenues in the third quarter, up from 15.2% in Q2. International revenues for the quarter came in at $324.7 million, or 21.5% of total revenue, up from 20.9% last quarter.

[Ita Brennan, CFO at Arista Networks]

This quarter-over-quarter increase largely reflected a healthy contribution from our enterprise customers in EMEA and APAC, and some reduction in domestic shipments to our Cloud Titan customers. Overall gross margin in Q3 was 63.1%, well above guidance of approximately 62% and up from 61.3% last quarter. We continue to see incremental improvements in gross margin quarter over quarter, with higher enterprise shipments and better supply chain costs, somewhat offset by the need for additional inventory reserves as customers refine their forecast product mix. Operating expenses for the quarter were $255.6 million, or 16.9% of revenue, down from last quarter at $287.3 million.

[Ita Brennan, CFO at Arista Networks]

R&D spending came in at $164.4 million, or 10.9% of revenue, down from $188.5 million last quarter. This primarily reflected increased headcount, more than offset by lower new product introduction costs in the period. Sales and marketing expense was $79 million, or 5.2% of revenue, consistent with last quarter, with increased headcount and some reduction in product demo costs. Our G&A costs came in at $12.1 million, or 0.8% of revenue, down from last quarter and reflecting the recovery of some bad debt amounts recorded in prior periods. Our operating income for the quarter was $696.2 million, or 46.1% of revenue.

[Ita Brennan, CFO at Arista Networks]

Other income and expense for the quarter was a favorable $42.3 million, and our effective tax rate was 21.3%. This resulted in net income for the quarter of $581.4 million, or 38.5% of revenue. Our diluted share number was 317.6 million shares, resulting in a diluted earnings per share number for the quarter of $1.83, up 46.4% from the prior year. Now turning to the balance sheet. Cash, cash equivalents, and investments into the quarter at approximately $4.5 billion. We did not repurchase shares of our common stock in the quarter.

[Ita Brennan, CFO at Arista Networks]

To recap our repurchase program to date, we have repurchased $855.5 million, or 8 million shares, at an average price of $107 per share under our current $1 billion board authorization. This leaves $144.5 million available for repurchase in future quarters. The actual timing and amount of future repurchases will be dependent on market and business conditions, stock price, and other factors. Now turning to operating cash performance for the third quarter. We generated approximately $699 million of cash from operations in the period, reflecting strong earnings performance, combined with some increase in deferred revenue and taxes payable. DSOs came in at 51 days, up from 49 days in Q2, reflecting the strong collections quarter and a good linearity of billings.

[Ita Brennan, CFO at Arista Networks]

Inventory turns were 1.1x, down from 1.2 last quarter. Inventory remained flat to last quarter at $1.9 billion, reflecting the ongoing receipt and consumption of components from our purchase commitments and an increase in switch-related finished goods. Our purchase commitments at the end of the quarter were $2 billion, down from $2.2 billion at the end of Q2. We expect the overall purchase commitment number to continue to decline as we further optimize our supply positions. However, we will maintain a healthy position related to key components, especially as we focus on new products. Our total deferred revenue balance was $1.195 billion, up from $1.085 billion in Q2.

[Ita Brennan, CFO at Arista Networks]

The majority of the deferred revenue balance and services related and directly linked to the timing and term of service contracts, which can vary on a quarter-by-quarter basis. Our product deferred revenues balance increased by $47 million from last quarter. Sales payable days were 44 days, down from 57 days in Q2, reflecting the timing of inventory receipts and payments. Capital expenditures for the quarter were $11.2 million. Now turning to our outlook for the fourth quarter. Customer planning horizons for new deployments have shortened in concert with steadily improving lead time. On the supply side, we expect to continue to ship against previously committed deployment plans for some time, targeting supply improvements where most needed, but also careful not to create redundant customer inventory.

[Ita Brennan, CFO at Arista Networks]

As outlined in our guidance, we expect to make incremental improvements to our 2023 outlook, which now call for year-over-year revenue growth of approximately 33%. On the gross margin front, we expect gross margins of approximately 63% in the fourth quarter, reflecting ongoing supply chain and manufacturing benefits, while maintaining a reasonably healthy cloud contribution. Turning to spending and investments, we expect to monitor the overall macro environment carefully while engaging in targeted hiring and R&D go-to-market as the team seize the opportunity to acquire talent. On the cash front, while increases in working capital have begun to moderate in recent quarters, our year-to-date 2023 tax payments have been deferred to October, and this will represent a significant incremental use of cash in the fourth quarter at approximately $352 million.

[Ita Brennan, CFO at Arista Networks]

With all of this as a backdrop, our guidance for the fourth quarter, which is based on non-GAAP results and excludes any non-cash stock-based compensation impacts and other non-recurring items, is as follows: revenues of approximately $1.5 billion-$1.55 billion, gross margin of approximately 63%, operating margin of approximately 42%. Our effective tax rate is expected to be approximately 21.5%, with diluted shares of approximately 319 million shares. I will now turn the call back to Liz. Liz?

[Liz Stine, Director of Investor Relations at Arista Networks]

Thank you, Ita. We will now move to the Q&A portion of the Arista earnings call. To allow for greater participation, I'd like to request that everybody please limit themselves to a single question. Thank you for your understanding. Operator, take it away.

[Operator]

We will now begin the Q&A portion of the Arista earnings call. In order to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press the star and the number one again. We ask that you pick up your handset before asking questions in order to ensure optimal sound quality. Your first question comes from the line of Samik Chatterjee with JPMorgan. Your line is open.

[Samik Chatterjee, Executive Director at JPMorgan]

Hi, thank you for the question and congrats on the results. I guess, just to keep it simple, Jayshree, if you can give us an update on when we think about the last 90 days, how have the two sets of verticals, Cloud Titans and enterprise, sort of shown up in terms of momentum of orders and demand, relative to where your expectations were 90 days ago? I know some of the cloud companies have talked about their CapEx outlook for next year as well. So an update on that would be helpful. And on the last call, you did talk about a target for double-digit growth next year or so. How are you thinking on, in relation to that number, still going into the Investor Day? Thank you.

[Jayshree Ullal, President and CEO at Arista Networks]

Okay. Thanks, Samik. First of all, we are looking forward to sharing more details on Analyst Day. But just to reiterate, our team has always projected at least a double-digit growth for next year and years beyond. So that goal remains unchanged, and we'll tell-- we'll share more with you. Coming back to the last 90 days, as you know, as our lead times improve, our visibility declines. But we don't see significant change in improvements or declines in the last 90 days. We continue to see good momentum on enterprise, and we continue to see a good, you know, expected push on the combination of both cloud and AI together.

[Samik Chatterjee, Executive Director at JPMorgan]

Thank you. Thanks for taking my question.

[Jayshree Ullal, President and CEO at Arista Networks]

Thanks, Samik.

[Operator]

Your next question comes from the line of Antoine Chkaiban with New Street Research. Your line is open.

[Antoine Chkaiban, Equity Research Analyst at New Street Research]

Thanks very much for taking my question. So, accelerated AI cluster deployment is clearly waiting on traditional infrastructure deployment this year. And I'm keen to hear how sustainable you think this is, because the vast majority of workloads still run on traditional infrastructure, right? So is it fair to expect a rebound in traditional infrastructure spend next year?

[Jayshree Ullal, President and CEO at Arista Networks]

Yes. Thank you, Antoine. I'll share some of my thoughts, and I'd like to hand it over to Anshul for further thoughts. You know, we've always looked at the cloud network as a front end and a back end. As we said last year, many of our cloud customers are favoring spending more on the back end with AI, which doesn't mean they stop spending on front end, but they've clearly prioritized and doubled down on AI this year. My guess is as we look at the next few years, they'll continue to double down on AI, but you cannot build an AI back-end cluster without thinking of the front end.

[Jayshree Ullal, President and CEO at Arista Networks]

So we'll see a full cycle here, where while today the focus is greatly on AI and the back end of the network, in the future, we expect to see more investments in the front end as well.

[Anshul Sadana, COO at Arista Networks]

Jayshree, that's right. You said it's spot on. AI is everyone's priority right now, and the rest will get touched at the right time.

[Jayshree Ullal, President and CEO at Arista Networks]

Thanks, Antoine.

[Antoine Chkaiban, Equity Research Analyst at New Street Research]

Thank you.

[Operator]

Your next question comes from the line of Matt Nikman with Deutsche Bank. Your line is open.

[Matt Niknam, Managing Director at Deutsche Bank]

Hey, yeah, thank you for taking the question. One question, very, very simple one on services. So, pretty nice improvement, about 13% sequential improvement in the quarter. Seasonally, I think we've seen low single digits, mid single digits. Anything you would call out, and how are we thinking about that for the fourth quarter? Thanks.

[Ita Brennan, CFO at Arista Networks]

Yeah, look, I think every now and again, you see kind of a pop on the services line. It's usually, you know, either somebody has consumed services faster than they intended to, or we've been negotiating a contract, and then when we do actually finally sign the renewals contract, there's some flush of prior periods into the quarter. So if you look back historically, you'll see that happens from time to time. I don't think it changes the kind of fundamental, you know, growth in services. We've talked about this kind of mid- to maybe a little bit higher-teens growth on an ongoing basis, year-over-year. I don't think it changes that. It's just if we do have these little spikes from time to time.

[Jayshree Ullal, President and CEO at Arista Networks]

Thank you.

[Liz Stine, Director of Investor Relations at Arista Networks]

Thanks, Matt.

[Operator]

Your next question comes from the line of Karl Ackerman with BNP Paribas. Your line is open.

[Karl Ackerman, Managing Director of Equity Research at BNP Paribas Exane]

Yes, thank you. I suppose this is a question for Ita, but is the upside in the quarter and outlook coming from a combination of better bookings and working down, you know, some of your prior backlog? Just any thoughts in terms of maybe where your backlog may end up relative to normal levels pre-pandemic would be super helpful. Thank you.

[Ita Brennan, CFO at Arista Networks]

Yeah, Karl, we don't talk about backlog, you know, specifically. I think what we have said is, you know, as lead times improve, you know, you expect to see some reduction in visibility to customers. The time where they have to place orders changes over time, right? So I think that we are seeing that dynamic. You know, we've talked about that dynamic that, you know, we are as the lead times get better, we are seeing kind of customer planning horizons are shortening. We will be still deploying, if you listen to my prepared remarks, I mean, we are still deploying equipment into next year from plans that we made some time ago, and that's just kind of, again, working with customers and laying out their plans. But in terms of giving specific numbers, we haven't done that.

[Jayshree Ullal, President and CEO at Arista Networks]

Great.

[Ita Brennan, CFO at Arista Networks]

Thanks, Karl.

[Karl Ackerman, Managing Director of Equity Research at BNP Paribas Exane]

Thanks.

[Operator]

Your next question comes from the line of Amit Daryanani with Evercore. Your line is open.

[Amit Daryanani, Senior Managing Director at Evercore ISI]

Yep. Good afternoon, everyone, and congrats on a nice set of numbers here. You know, I was hoping you'd talk a little bit more on the enterprise side. You're seeing some really good strength over here, clearly, but maybe you can talk about, you know, is the strength more coming from campus versus the data center side? Maybe just qualitatively, where are you seeing better trends? And really the context of this is, I think a lot of your peers are seeing a very severe drop in their growth rates, as their backlogs have gone away. You don't seem to be having that issue, so I'm wondering, like, what is the offset to that and what's enabling the growth? And to the extent you can talk about campus versus the data center, that would be really helpful. Thank you.

[Jayshree Ullal, President and CEO at Arista Networks]

Well, okay, Amit. Again, I'll share a few words, and I'd love for Anshul to step in and say some, too. Look, if you look back three years ago, we started seriously investing in the enterprise. And, you know, back in 2020, we had a small enterprise business, and it was largely comprised of, as you rightly pointed out, data center and some high-performance compute and low-latency HFT. Can't ever forget our original heritage. But in the last three years, we have made an investment and seen a significant uptick in enterprise customers wanting to do business with Arista. Historically, it's been the high-tech enterprise and the financials, and today we're seeing a much better cross-section of verticals, including healthcare, education. We expect to see more and more distributed enterprises.

[Jayshree Ullal, President and CEO at Arista Networks]

To your question on data center versus campus, the answer is yes to both. We actually see one uniform architecture where you can have a universal spine that connects into a wired leaf, a wireless leaf, a storage cluster, a compute cluster, you know, a border leaf for routing and WAN transit. It's pretty exciting that Arista is truly and remarkably setting the tone for a two-tier leaf-spine architecture across the enterprise and building that modern operating model based on CloudVision.

[Anshul Sadana, COO at Arista Networks]

Amit, this is Anshul here. You know, we have a great team being led by, Chris Schmidt and Ashwin Kohli in this space, and now we sell in many, many countries around the world. And as Jayshree mentioned, both data center and campus, customers are coming to us for the automation, for the higher quality, for the visibility that we're able to bring to them across the board in one architecture, one OS, and one CloudVision. That message resonates with every CIO today, and they are no longer worried about Arista being this new kid on the block that's a risky move for them. We are, in fact, becoming the de facto, and they like it. So which is why the momentum just continues. It's good execution by the team and, getting to more and more customers around the world.

[Jayshree Ullal, President and CEO at Arista Networks]

Thank you, Amit.

[Amit Daryanani, Senior Managing Director at Evercore ISI]

Thanks.

[Operator]

Your next question comes from the line of Ben Bollin with Cleveland Research. Your line is open.

[Ben Bollin, Analyst and Partner at Cleveland Research]

Thanks for taking the question. Good evening, everyone. Jayshree and Anshul, I was hoping you might be able to comment a little bit about your thoughts as you make progress in the backend network around GPU cluster opportunity. How you see that developing versus what you've shared with us previously, and any color in particular around both preexisting and the opportunity for net new wins would be helpful. Thanks.

[Jayshree Ullal, President and CEO at Arista Networks]

Sure. Again, this is an area that Anshul lives and breathes more than I do, so I'll give you some executive comments. But then, as I see it, you know, the backend network was something we didn't even see a few months or years ago and was largely dominated by InfiniBand. Today, if I look at the five major designs for AI networking. One of them is still very InfiniBand dominated. All the others we're looking at are adopting a dual strategy of both Ethernet and InfiniBand. So I think AI networking is going to become more and more favorable to Ethernet, particularly with the Ultra Ethernet Consortium and the work they're doing to define a spec. You're gonna see more products based on UEC.

[Jayshree Ullal, President and CEO at Arista Networks]

You're gonna see more of a connection between the back end and the front end, using IP as a singular protocol. And so we're feeling very encouraged that, especially in 2025, there will be a lot of production rollout of back end, and of course, front end based on Ethernet. Over to you, Anshul.

[Anshul Sadana, COO at Arista Networks]

Sure. Thanks, Jayshree. Then, you know, our Cloud Titan customers, as well as the specialty providers, have been great partners of ours. So the level of partnership and co-development that's going on in this space is high. It's just like in previous cycles, previous products that we've done with them. There's a lot of fine-tuning needed in these back-end networks to get the maximum utilization of GPUs. And, as you know, we are good at these engineering projects. So the teams are enjoying it. The activity is much, much higher than before. And the goal is to scale these clusters as quickly as possible, so our customers can run their jobs faster. We're feeling good about it.

[Anshul Sadana, COO at Arista Networks]

You know, you've heard comments from Jayshree as well in the past, and you'll hear more on the Analyst Day on this topic, too. But, all good on the activity front over here.

[Jayshree Ullal, President and CEO at Arista Networks]

Thank you.

[Jayshree Ullal, President and CEO at Arista Networks]

I think one, one thing to just add is the entropy and efficiency of these large language models and the job completion time is becoming so critical, that it's not just about, you know, packet latency, it's really about end-to-end latency. This is something our team, especially our engineers, know a lot about from the early days. So we're really working this end to end.

[Jayshree Ullal, President and CEO at Arista Networks]

Thanks, Ben.

[Operator]

Your next question comes from the line of Aaron Rakers with Wells Fargo. Your line is open.

[Aaron Rakers, Managing Director and Senior Equity Analyst at Wells Fargo]

Yeah, thanks for taking the question. I just wanna kinda dovetail off that last question a little bit. I know, you know, Jayshree, last quarter, I think it was, you commented that you'd expect to see pilot deployments for these AI opportunities in 2024 and then meaningful volume in 2025. You know, first of all, do you, do you reaffirm that view, or has that changed at all? And, and then, you know, on that, can you give us some context of how you see network spend intensity for these AI fabrics relative to... I think in the past, it's been kinda high single-digit percent of compute spend on networking in classical cloud infrastructure environments?

[Jayshree Ullal, President and CEO at Arista Networks]

Yeah. Well, first of all, Aaron, the first question is easy. I reaffirm that view, and more later on November ninth at our Analyst Day. So if I tell you everything now, you may not attend that session. Coming back to this networking spend versus the, you know, the rest of the GPUs and et cetera, I would say it started to get higher and higher with 100 gig, 400 gig, 800 gig, where the optics and the switches are more than 10%, perhaps even 15%, in some cases, 20%. A lot of it's governed by the cables and optics, too. But the percentage hasn't changed a lot in high-speed networking. In other words, it's not too different between 10, 100, 200, 400, and 800. So you'll continue to see that 10%-15% range.

[Aaron Rakers, Managing Director and Senior Equity Analyst at Wells Fargo]

Okay. Thank you.

[Jayshree Ullal, President and CEO at Arista Networks]

Thanks, Aaron.

[Operator]

Your next question comes from the line of Tal Liani with Bank of America. Your line is open.

[Tal Liani, Managing Director and Senior Equity Analyst at Bank of America]

Hi. Jayshree, your tone is definitely better this quarter than last quarter. You sound more confident in the numbers, and I want to understand, did something change in the last three months that made you more optimistic? I'm looking at the consensus estimates, and it looks like the growth rate has been declining for four quarters, from, like, 54% to about 20% next quarter. Then it troughs at Q1, stays there, and recovers after that. Do you agree that we are nearing kind of the end of the down adjustment to the growth rates, and then it's gonna stabilize and go up from there? Or how do you look at the risks of that not materializing?

[Jayshree Ullal, President and CEO at Arista Networks]

What do you think, Ita?

[Ita Brennan, CFO at Arista Networks]

So Tal, I think, look, we've been talking about kind of the, you know, the growth decelerating as we move through the year, just because the comps are so high. You know, I think if you look at the discussion we've had so far about 2024, and obviously there's more to come next week, you know, we've talked about double-digit growth. But again, you know, we are expecting that, you know, there is some moderation on the cloud side of the, of the business, next year. So I think, you know, within the bounds of kind of the plans that we've laid out and the discussions that we've laid out, I think we're executing well, right? We're giving you some upside, on the, you know, in the guide for 2023, and by default, almost, there is some upside on 2024, right?

[Ita Brennan, CFO at Arista Networks]

So I think we're executing well, but within the bounds of what we talked about. We do believe that there's moderation in cloud spending, as we head into 2024.

[Jayshree Ullal, President and CEO at Arista Networks]

Tal, I think I need to focus on my tone and maybe sing a song or something, because I sound really enthusiastic last quarter and this quarter.

[Ita Brennan, CFO at Arista Networks]

I was going to say, she was pretty happy last quarter.

[Jayshree Ullal, President and CEO at Arista Networks]

I'm a happy kind of gal at the moment.

[Tal Liani, Managing Director and Senior Equity Analyst at Bank of America]

We read in between the lines, you know?

[Jayshree Ullal, President and CEO at Arista Networks]

Thanks, Tal.

[Ita Brennan, CFO at Arista Networks]

Thank you.

[Operator]

Your next question comes from the line of Sebastien Naji with William Blair. Your line is open.

[Sebastien Naji, Equity Research Associate at William Blair]

Hi, thanks for taking the question. I wanted to ask about the change in revenue breakdown and the inclusion of OCI in this new Cloud Titan and AI segment. Was this the result of the material change in Arista's wallet share at Oracle, or is that business becoming a larger portion of revenue? Anything you can provide there?

[Jayshree Ullal, President and CEO at Arista Networks]

Yeah, no, we don't do it based on wallet share of Arista. We do it based on definition. So I think OCI has become a meaningful top-tier cloud customer, and they belong in the Cloud Titan category, and in addition to their AI investments as well. So for reasons of classification and definition, the change is very warranted. And yes, they happen to be a good customer of Arista. That's nice as well.

[Sebastien Naji, Equity Research Associate at William Blair]

Got it. Okay. Thank you.

[Jayshree Ullal, President and CEO at Arista Networks]

Thank you.

[Operator]

Your next question comes from the line of Meta Marshall with Morgan Stanley. Your line is open.

[Meta Marshall, Executive Director and Senior Equity Analyst at Morgan Stanley]

Great, thanks. Jayshree or Anshul, maybe just some commentary on the tier two and specialty providers, and just what you're seeing in terms of other people kind of building out some of these AI clusters. You know, you classify some of those customers as largely focused on back end today, and those represent opportunities going forward, or just kind of what the discussion is outside of the Cloud Titans amongst some of these other guys that are building very large networks. Thanks.

[Anshul Sadana, COO at Arista Networks]

Sure. Meta, this is Anshul. You know, the tier two cloud providers are doing exactly what the tier one is doing, just at a smaller scale. So the activity is out there. Many companies are trying to build these clusters, maybe not hundreds of thousands of GPUs, but you know, thousands of GPUs together in their real estate if they can get them. But the designs that we're working on with them, the type of sort of features, fine-tuning, is actually very, very similar to the cloud, just at a smaller scale. So we're very happy with that activity. And this is across the board. It's very positive to see this in the ecosystem, that it's not limited to just four or five customers.

[Jayshree Ullal, President and CEO at Arista Networks]

I think they're also waiting for GPUs like everyone else is, so there's that common problem that we're not the only one with lead time issues. But, just to clarify the comment on scale, Anshul and I are also seeing some very interesting enterprise projects, again, smaller scale. So, a lot of customers are trying AI for small clusters, not too different from what we saw with HPC clusters back in the day.

[Anshul Sadana, COO at Arista Networks]

Yep.

[Meta Marshall, Executive Director and Senior Equity Analyst at Morgan Stanley]

Great. Thank you.

[Operator]

Your next question comes from the line of Michael Ng with Goldman Sachs. Your line is open.

[Michael Ng, VP and Senior Equity Analyst at Goldman Sachs]

Hey, good afternoon. Thank you very much for the question. I just had one on the OpEx outperformance in the quarter. We saw an unseasonal decline quarter on quarter, and I think you mentioned lower product introduction costs that may have helped R&D. I was just wondering if you could talk a little bit more about that aspect of it. Any way we should think about, you know, product introductions going forward to help us understand the trajectory of OpEx? Thank you.

[Ita Brennan, CFO at Arista Networks]

Yeah. I mean, a lot of it is timing, right? We've got a lot of different projects, a lot of different products kind of flowing through the R&D labs right now. So there is going to be some kind of volatility in terms of when the spend shows up, when the proto spend happens, et cetera. So I think we were lower this quarter in Q3 than maybe we even anticipated coming into the quarter. I expect that to come back in kind of the, you know, the guide for Q4. And again, there may be some volatility in that even going forward, just because it's all about timing. Nothing unusual in that. There's just a lot of products kind of going through the R&D labs.

[Jayshree Ullal, President and CEO at Arista Networks]

So Michael, when the chips are down, our spending is down, but when the chips come on hot, our spending gets hot too. So expect our prototype to have some high variability. I mean, we've got a lot, lot, a lot of new products in the pipeline that Andy, Anshul, Ken, you are all working on. So we expect that number to go up over the next four quarters.

[Michael Ng, VP and Senior Equity Analyst at Goldman Sachs]

Great. Very helpful.

[Jayshree Ullal, President and CEO at Arista Networks]

We did have a-

[Michael Ng, VP and Senior Equity Analyst at Goldman Sachs]

Thanks, Jayshree. Thanks, Jayshree.

[Ita Brennan, CFO at Arista Networks]

Right. That's a part of it.

[Operator]

Your next question comes from the line of Atif Malik with Citi. Your line is open.

[Atif Malik, Managing Director and Senior Analyst at Citi]

Hi, thank you for taking my question. Jayshree, at the recent Open Compute Project conference, Marvell and Broadcom, leading Ethernet switch merchant chip providers, sounded very confident in terms of Ethernet adoption at hyperscalers like Meta and Oracle as well. And one of your peers has talked about a $500 million in AI orders, whether it's custom chip. So I was curious about your thoughts on the dynamics between custom chip and merchant switch chip providers, and how does that help Arista? Thank you.

[Jayshree Ullal, President and CEO at Arista Networks]

Yeah. Atif, we have been strong proponents in our last 15, 17 years of Arista career on merchant silicon. We look for the best-of-breed chips. It's something my team, engineering team, has built a lot of chips in their past before, but we've decided to work with the best-of-breed companies, Broadcom being one of our favorite and major suppliers. Of course, in the past, we worked with Intel, Cavium, and we don't rule out other suppliers as well. But this is clearly an area where you can't just build one chip, but you have to build a portfolio of silicon. And what Broadcom has done in building that portfolio, not only for cloud networking, but for campus and AI, is impressive. And, and you have to not just look at performance, you have to look at, price, density, power.

[Jayshree Ullal, President and CEO at Arista Networks]

These are all very important metrics as we look ahead. You know, the root issue here, and we'll share this more with you going forward as well, is not just the merchant silicon, but how you can enable the merchant silicon with the right software and drivers. And this is an area that really Arista excels in. If you just have chips, you can't build a system. But our system-wide features, whether it's in dynamic load balancing or latency analyzer, to really improve the job completion time and deal with that frequent communication in generative AI, is also fundamentally important. You're going to hear a lot more about this next week, so stay tuned.

[Atif Malik, Managing Director and Senior Analyst at Citi]

Thank you.

[Operator]

Your next question comes from the line of Ben Reitzes with Melius Research. Your line is open.

[Ben Reitzes, Managing Director at Melius Research]

Yeah, hey, thanks for the question. Hey, Jayshree, Ita, can you discuss a little more your gross margin commentary, that it should moderate next year from the 63 levels in the back half? I mean, are we, are we talking about it going to the first half 2023 kind of levels, or just a little bit of a, a degradation next year? And what would be the reason behind it, other than lead times, is there any other customer mix or other issues that would cause it to go down? Thanks.

[Ita Brennan, CFO at Arista Networks]

I think both Jayshree's commentary and my commentary is, you know, we have been seeing it incrementally improve as we've gone through the year. We expect it to stabilize, so not that we expect it to go down next year, but more that it'll stabilize, and then it'll become more dependent on customer mix and other things, again, similar to where we've been before. Obviously provides more outlook on discussion on this next week, too. The intention was not to say that we think it starts to decline again. It was more that we think it'll stabilize after a period where we've been seeing these incremental improvements.

[Ben Reitzes, Managing Director at Melius Research]

Okay, thanks a lot. Appreciate the color.

[Jayshree Ullal, President and CEO at Arista Networks]

Thanks, Ben.

[Operator]

Your next question comes from the line of Tim Long with Barclays. Your line is open.

[Tim Long, Managing Director and Senior Equity Research Analyst at Barclays]

Thank you. I just wanted to hit on the, the Cloud Titan vertical or Cloud Titan AI vertical now, if I could. I think, Ita, one of your comments was, down a little or something in the quarter. Could you just, you know, two parts here, talk a little bit about that comment. Is this just timing or are there some, you know, different market share dynamics there? And then secondly, if you could talk a little bit about, you know, opportunities at other, hyperscalers. I know that's something where, there's, there's been trial activity and, and potential, and it sounds like it, it might take a little while, but any updates on other, Cloud Titans that could become larger customers? Thank you.

[Jayshree Ullal, President and CEO at Arista Networks]

Just in terms of cloud, I mean, it's gonna be a good cloud year again in 2023 for us, I think. But we did come into the year saying we wanted, if we could, to, you know, balance supply a little bit towards enterprise, and we have been doing that, right? There's been some... You'll see it. It's not a huge mix shift, but there has been some mix shift towards enterprise when we can, and we're pleased that we've been able to do that. Anshul, I not going to take the other cloud.

[Anshul Sadana, COO at Arista Networks]

Sure. Then the engagement with other cloud titans, who are customers, but our customers is still very positive. They're good customers, as many of you know, in routed layers, backbone, WAN use cases as well. The next week we'll touch a little bit more on the whole build versus buy topic.

[Jayshree Ullal, President and CEO at Arista Networks]

Thanks, Tim.

[Operator]

Your next question comes from the line of James Fish with Piper Sandler. Your line is open.

[James Fish, Managing Director and Senior Research Analyst at Piper Sandler]

Hey, ladies and Anshul, great, great quarter. Just on the product side, you guys released a new 25 gig offering recently. I guess what's been the early feedback? What kind of differentiates down there? And Jayshree, just to clarify here, when you talk about that double-digit growth rate for next year and years beyond, are you talking about a multiyear CAGR or for 2024 specifically, and then for 2025 and 2026 and beyond? Just trying to clarify here. Thanks.

[Jayshree Ullal, President and CEO at Arista Networks]

Right. Okay. Well, Anshul, you want to answer the product question first?

[Anshul Sadana, COO at Arista Networks]

Sure. James, the recent announcement was the launch of our 25 gig ultra-low latency switches. These are the 7130 Series, and now the whole world can upgrade the high frequency trading infrastructure going from 10 to 25 at very, very low latency. You're talking about, you know, with cross-point technology, you're talking about 7 nanoseconds, but we also now introduced layer two, layer three features at about 100 to 130 nanoseconds in these products.

[Jayshree Ullal, President and CEO at Arista Networks]

Anshul, just to put this in perspective, back in the day, it used to be 500 nanoseconds, right?

[Anshul Sadana, COO at Arista Networks]

That's right. It only keeps going down.

[Jayshree Ullal, President and CEO at Arista Networks]

Yeah, faster than the speed of light. And, James, just to give you a clarification, I was saying as a company, EOS, myself, Anshul, we're aiming for at least double digits in 2024 and years beyond, but I wasn't making any forecasts for exact numbers.

[Operator]

Thanks, James. Your next question comes from the line of Ittai Kidron with Oppenheimer. Your line is open.

[Ittai Kidron, Managing Director and Senior Analyst at Oppenheimer]

Thanks, ladies. Quick question on gross margin. Nice improvements there. Ittai, maybe you can go into the details of how much room is there more to go. And I'm just kind of wondering, with your customers now looking at your excellent financials and your recovering gross margins, what are the odds that pricing pressures start coming back? Something you probably have not seen much in the last couple of years since COVID, now that margins are normalizing. What are... You know, could prices come down potentially, perhaps even for the, more specifically to the larger customers of yours?

[Jayshree Ullal, President and CEO at Arista Networks]

Yeah, I'll just start by saying prices are always coming down. You know, as we go from one speed factor to another, you know, between the SerDes technology and the density, the dollar per gigabit is always coming down. So, pricing pressure doesn't change independent of our growth margin. We're always in competitive deals. Where the value really comes in, and again, as I alluded to this, is CapEx versus OpEx. We expect pricing to be reasonably stable, but we expect the operational cost to be significantly advantageous with the Arista technology. The total, the TCO, you know, because of singular CloudVision, because of our software-driven approach, because of the fact that we have single-digit vulnerabilities, while our industry peers have 100-500 of them in a given five-year factor. These are-...

[Jayshree Ullal, President and CEO at Arista Networks]

Now, paying customers and enterprises, especially, are very fatigued with the poor quality of our competitors and are paying a lot of attention to that and willing to pay for that quality.

[Anshul Sadana, COO at Arista Networks]

I, as Jayshree mentioned, but I want to emphasize this, you know, the market is very competitive, and it has been ever since we started. The growth margin that we report is not the reason why customers try to negotiate pricing. The growth margin is simply a result of what we've been executing on, and I think it will continue to be so.

[Ittai Kidron, Managing Director and Senior Analyst at Oppenheimer]

Very good. Thank you.

[Liz Stine, Director of Investor Relations at Arista Networks]

Thank you, Ittai.

[Operator]

Your next question comes from the line of Simon Leopold with Raymond James. Your line is open.

[Simon Leopold, Managing Director and Senior Equity Analyst at Raymond James]

Thanks for taking the question. I wanted to see if you would be able or willing to comment on your customer concentration year to date. I appreciate it, it can be lumpy quarter to quarter, but given sort of where you were in 2022, I'd just like to get a better understanding of what essentially the progress has been in 2023. In that context, you know, how big is enterprise as a percent of revenue this year year-to-date, versus where it was last year? Thank you.

[Jayshree Ullal, President and CEO at Arista Networks]

Simon, I, we're very proud of our customers, even if they're concentrated. We love it. And as you know, the last year, we had some outsized concentration. If I recall the numbers, Meta was at 26%, and what was Microsoft, Ita?

[Ita Brennan, CFO at Arista Networks]

Microsoft was 16%.

[Jayshree Ullal, President and CEO at Arista Networks]

16% or 17%.

[Ita Brennan, CFO at Arista Networks]

Yeah.

[Jayshree Ullal, President and CEO at Arista Networks]

Well, you know, while we expect due to many of the CapEx news you've seen and shift in AI spending, that it's possible they come down, but they're still gonna be very strong, north of 10% contributors to our 2023 results. And we continue to, even as the denominator may get larger in the forthcoming years, we continue to look at them as two very important and strategic customers for us.

[Liz Stine, Director of Investor Relations at Arista Networks]

Thanks, Simon.

[Operator]

Your next question comes from the line of David Vogt with UBS. Your line is open.

[David Vogt, Managing Director and Senior Equity Research Analyst at UBS]

Great. Thanks, guys, for taking the question. I just want to follow up on Simon's question, maybe put it, put it a little bit differently. So if I think about your market sector trend update, how much of the shift to that 40%-45% cloud and AI titans reflects the inclusion of new AI use cases going forward, and the shift of Oracle, combined with maybe some normalization at Meta and Microsoft? Can you kind of help us think through the dynamics there? And if it looks like share is going to be unchanged with enterprise and financials, does that suggest to you that those markets are going to grow comparably over the long term across the cycle? Is that the right way to look at it? Thanks.

[Jayshree Ullal, President and CEO at Arista Networks]

Yeah. David, your analysis is really deep on this one. Let me just say how innocently we reported this, which is, Oracle is a greater than million-dollar installed server company right now, and they, both their cloud spend as OCI and AI is significant, both as a company and for Arista. But we're not making any assumptions, and that'll vary every year, of course, on the mix of Meta, Microsoft or Oracle or any other, for that matter. We're simply saying AI is going to become such an important component of, all our cloud types, that it's now a combined vertical. So don't read too much more into it.

[Ita Brennan, CFO at Arista Networks]

Yeah, and it, it's more of a forward-looking impact, to be honest, right?

[Jayshree Ullal, President and CEO at Arista Networks]

Yeah.

[Ita Brennan, CFO at Arista Networks]

Historically, this doesn't really change the trends that we've been talking about previously. It's really more about the future and, you know-

[Jayshree Ullal, President and CEO at Arista Networks]

Yeah

[Ita Brennan, CFO at Arista Networks]

How do you think AI will impact these numbers going forward?

[Jayshree Ullal, President and CEO at Arista Networks]

Yeah, AI-

[David Vogt, Managing Director and Senior Equity Research Analyst at UBS]

Great. Thanks, guys.

[Jayshree Ullal, President and CEO at Arista Networks]

... much right now, right? You know that. But as it starts to become important, then the, then this combined will go north of the 39% we have normally forecast.

[David Vogt, Managing Director and Senior Equity Research Analyst at UBS]

Great, understood.

[Liz Stine, Director of Investor Relations at Arista Networks]

Thank you.

[David Vogt, Managing Director and Senior Equity Research Analyst at UBS]

Thank you.

[Operator]

Your next question comes from the line of Erik Suppiger with JMP Securities. Your line is open.

[Erik Suppiger, Managing Director and Senior Equity Research Analyst at JMP Securities]

Yeah, thanks for taking the question, and congrats. I know you don't want to talk about backlog, but can you give us a sense at what point or what time you think your book-to-bill will return back to one or greater than one? Or when will your lead times reach a normalized level? And then I have a quick follow-up after that.

[Ita Brennan, CFO at Arista Networks]

Yeah, we're not going to talk about book-to-bill if we don't talk about backlog, Erik. So look, I think honestly, we're making improvements on that. Jayshree talked about how lead times are much improved, right? So we'll continue to do that. That's a positive thing for the customers and for the business. And you know, we're still not back to kind of the current business that we had some time ago. We're making progress, but we're still out there.

[Jayshree Ullal, President and CEO at Arista Networks]

I just want to add, and I'm very proud of the progress the team has made. You know, when you look back a few years ago, we were short of components. We were making multi-year purchases. There was a risk of a very large exposure, because you can't get all these forecasts right. And then obviously, the mix change, changes from time to time, especially with the cloud and AI. So it's very hard to measure our business on, you know, book-to-bill and backlog at a given time, but if you look at it as an overall multi-year trend.

[Ita Brennan, CFO at Arista Networks]

Yeah.

[Erik Suppiger, Managing Director and Senior Equity Research Analyst at JMP Securities]

Can you comment then on just when will the lead times be at a normalized level?

[Jayshree Ullal, President and CEO at Arista Networks]

Yeah. And I think we said this. It's been improving consistently, and we expect it to be normalized just like our growth margins in 2024.

[Erik Suppiger, Managing Director and Senior Equity Research Analyst at JMP Securities]

All right. Very good.

[Liz Stine, Director of Investor Relations at Arista Networks]

Thank you.

[Erik Suppiger, Managing Director and Senior Equity Research Analyst at JMP Securities]

Thank you.

[Liz Stine, Director of Investor Relations at Arista Networks]

Operator, we have time for one last question.

[Operator]

Your last question today comes from the line of Woo Jin Ho with Bloomberg. Your line is open.

[Woo Jin Ho, Analyst at Bloomberg]

Oh, great, thanks. I made the cut. Happy Halloween, folks. I think there was a mention on merchant silicon earlier in the Q&A. And one of your merchant silicon partners has actually moved up the stack towards a service provider routing. I'm just curious if there's any intention on going after that piece, if that chip is made available to you.

[Anshul Sadana, COO at Arista Networks]

Sure. Woo Jin, I believe you're referring to the latest announcement at Broadcom on their 25.6T Jericho chip that was announced recently.

[Woo Jin Ho, Analyst at Bloomberg]

Yep, the Qumran3D.

[Anshul Sadana, COO at Arista Networks]

Qumran3D, exactly. So, with the same family, same features, and as you know, we've been a great partner of Broadcom for a long time, and we'll continue to build our new products. This is not a new entry, so to speak. We've been building these products that can be used as switches or routers for a while, and the bandwidth just doubled, going to now 25.6T. So you can expect some products from us in the future with those variants as well. But really, nothing really changes, just innovation continues and merchant silicon continues to succeed.

[Jayshree Ullal, President and CEO at Arista Networks]

The investment solution we have made in our routing stack over the last 10 years, I want to say, has just gotten better and stronger. You know, powering the internet, powering the cloud, powering the AI, these are hard problems, and they require thousands of engineers of investment to build the right VXLAN, BGP routing, EVPN, et cetera. So it's not just the chip, it's how we enable the chip to do these complicated routing algorithms.

[Woo Jin Ho, Analyst at Bloomberg]

Great. Thank you.

[Liz Stine, Director of Investor Relations at Arista Networks]

Thanks, Woo Jin.

[Jayshree Ullal, President and CEO at Arista Networks]

Thank you.

[Liz Stine, Director of Investor Relations at Arista Networks]

This concludes the Arista Networks third quarter 2023 earnings call. We have posted a presentation which provides additional information on our results, which you can access on the Investors section of our website. As a reminder, Arista will be hosting our 2023 Cloud and AI Innovators Analyst Day on Thursday, November 9th. If you are interested in attending virtually, you may register from the Investors section of our website. Thank you for joining us today, and thank you for your interest in Arista.

[Operator]

Thank you for joining. Ladies and gentlemen, this concludes today's call. You may now disconnect.

Participants

Executives

• Anshul Sadana, COO
• Ita Brennan, CFO
• Jayshree Ullal, President and CEO
• Liz Stine, Director of Investor Relations

Analysts

• Aaron Rakers, Managing Director and Senior Equity Analyst at Wells Fargo
• Amit Daryanani, Senior Managing Director at Evercore ISI
• Antoine Chkaiban, Equity Research Analyst at New Street Research
• Atif Malik, Managing Director and Senior Analyst at Citi
• Ben Bollin, Analyst and Partner at Cleveland Research
• Ben Reitzes, Managing Director at Melius Research
• David Vogt, Managing Director and Senior Equity Research Analyst at UBS
• Erik Suppiger, Managing Director and Senior Equity Research Analyst at JMP Securities
• Ittai Kidron, Managing Director and Senior Analyst at Oppenheimer
• James Fish, Managing Director and Senior Research Analyst at Piper Sandler
• Karl Ackerman, Managing Director of Equity Research at BNP Paribas Exane
• Matt Niknam, Managing Director at Deutsche Bank
• Meta Marshall, Executive Director and Senior Equity Analyst at Morgan Stanley
• Michael Ng, VP and Senior Equity Analyst at Goldman Sachs
• Samik Chatterjee, Executive Director at JPMorgan
• Sebastien Naji, Equity Research Associate at William Blair
• Simon Leopold, Managing Director and Senior Equity Analyst at Raymond James
• Tal Liani, Managing Director and Senior Equity Analyst at Bank of America
• Tim Long, Managing Director and Senior Equity Research Analyst at Barclays
• Woo Jin Ho, Analyst at Bloomberg