Arista Networks, which provides networking for large data center and campus environments, reported better-than-expected third quarter financial results on Monday.
Non-GAAP net income for the third quarter was $236.9 million, or $2.96 per diluted share. Revenue was $748.7 million, an increase of 23.7% year-over-year.
Analysts were expecting earnings of $2.71 per share on revenue of $738.13 million. Arista had been predicting a revenue between $725 million and $745 million.
The report sent Arista shares up by 4.71% in late trading.
Jayshree Ullal, Arista's president and CEO, said the company is experiencing strong demand for its client to cloud networking portfolio across all customer sectors.
"Despite a challenging supply chain environment, I am pleased with our delivery of another record quarter of Arista's financial results in Q3 2021," Ullal said.
For the fourth quarter of 2021, Arista expects revenue between $775 million to $795 million as well as a non-GAAP operating margin of approximately 37%.
"The business continued to perform well in the quarter, exceeding on all key financial metrics, while the team navigates a difficult supply environment," said Ita Brennan, Arista's CFO.
In September, it was announced that Arista was chosen to build a national campus network for Australian Securities Exchange.
During the earnings call, Ullal said the company is buying more parts than usual because of the supply chain crunch.
"We are clearly in the midst of an acute supply chain crisis with increased prices and long lead times. We are changing our Arista mindset from our historical build to forecast and orders to build to invest, doubling our purchase commitments in excess of $2 billion and planning for the next 1 to 2 years," Ullal said.
Ullal added that the company was raising prices of corresponding chip price hikes.
"Lead times of many components have extended to 50 to 80 weeks with price hikes ranging from 15% to as high as 200% across our entire supply chain of copper, steel, substrate, printed circuit board, memory, silicon ICs, connectors, freight and labor," Ullal said. "Arista has been deliberate and thoughtful about price increases so far, as we shared with you, but we have recently announced increased list prices effective November 4, 2021, averaging about an approximately 10% to offset the very high escalating costs."
The company is hosting its Analyst Day meeting this evening.