Delaware | 001-36468 | 20-1751121 | ||
(State or other jurisdiction of incorporation) | (Commission File No.) | (IRS Employer Identification Number) |
ITEM 2.02 | Results of Operations and Financial Condition |
Exhibit No. | Description |
99.1 | Press release issued by Arista Networks, Inc. dated February 19, 2015 |
ARISTA NETWORKS, INC. | ||
February 19, 2015 | By: /s/ Kelyn Brannon | |
Kelyn Brannon | ||
Chief Financial Officer | ||
Exhibit No. | Description |
99.1 | Press release issued by Arista Networks, Inc. dated February 19, 2015 |
• | Revenue of $173.5 million, an increase of 51.2% compared to the fourth quarter of 2013, and an increase of 11.6% from the third quarter of 2014. |
• | GAAP gross margin of 67.1%, compared to GAAP gross margin of 67.5% in the fourth quarter of 2013 and 64.9% in the third quarter of 2014. |
• | GAAP net income of $31.0 million, or $0.43 per diluted share, compared to GAAP net income of $13.7 million, or $0.23 per diluted share, in the fourth quarter of 2013. |
• | Non-GAAP net income of $37.3 million or $0.53 per diluted share, compared to non-GAAP net income of $17.5 million, or $0.27 per diluted share, in the fourth quarter of 2013. |
• | Operating cash flow of $15.8 million, compared to $6.0 million of operating cash used in the fourth quarter of 2013. |
• | Revenue of $584.1 million, an increase of 61.7% compared to fiscal year 2013. |
• | GAAP gross margin of 67.1%, compared to GAAP gross margin of 66.0% in fiscal year 2013. |
• | GAAP net income of $86.9 million, or $1.29 per diluted share, compared to GAAP net income of $42.5 million, or $0.72 per diluted share, in fiscal year 2013. |
• | Non-GAAP net income of $105.5 million or $1.54 per diluted share, compared to non-GAAP net income of $52.6 million, or $0.84 per diluted share, in fiscal year 2013. |
• | Operating cash flow of $114.5 million, compared to $34.6 million in fiscal year 2013. |
• | Revenue between $164 and $172 million. |
• | Non-GAAP gross margin in the range of 63% to 66% and |
• | Non-GAAP operating margin in the range of 22% to 25%. |
Media Contact Amanda Jaramillo Corporate Communications (408) 547-5798 amanda@arista.com | Investor Contact Chuck Elliott Product and Investor Advocacy (408) 547-5549 chuck@arista.com |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Revenue | $ | 173,489 | $ | 114,766 | $ | 584,106 | $ | 361,224 | |||||||
Cost of revenue | 57,049 | 37,293 | 192,015 | 122,686 | |||||||||||
Gross profit | 116,440 | 77,473 | 392,091 | 238,538 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 44,344 | 31,352 | 148,909 | 98,587 | |||||||||||
Sales and marketing | 25,016 | 17,412 | 85,338 | 55,115 | |||||||||||
General and administrative | 8,078 | 6,204 | 32,331 | 18,688 | |||||||||||
Total operating expenses | 77,438 | 54,968 | 266,578 | 172,390 | |||||||||||
Income from operations | 39,002 | 22,505 | 125,513 | 66,148 | |||||||||||
Other income (expense), net: | |||||||||||||||
Interest expense—related party | — | (439 | ) | (782 | ) | (1,739 | ) | ||||||||
Interest expense | (768 | ) | (1,360 | ) | (5,498 | ) | (5,380 | ) | |||||||
Other income (expense), net | (151 | ) | (631 | ) | 2,275 | (754 | ) | ||||||||
Total other income (expense), net | (919 | ) | (2,430 | ) | (4,005 | ) | (7,873 | ) | |||||||
Income before provision for income taxes | 38,083 | 20,075 | 121,508 | 58,275 | |||||||||||
Provision for income taxes | 7,046 | 6,333 | 34,658 | 15,815 | |||||||||||
Net income | $ | 31,037 | $ | 13,742 | $ | 86,850 | $ | 42,460 | |||||||
Net income attributable to common stockholders: | |||||||||||||||
Basic | $ | 30,251 | $ | 6,970 | $ | 68,889 | $ | 20,777 | |||||||
Diluted | $ | 30,328 | $ | 7,415 | $ | 70,524 | $ | 21,780 | |||||||
Net income per share attributable to common stockholders: | |||||||||||||||
Basic | $ | 0.48 | $ | 0.24 | $ | 1.42 | $ | 0.76 | |||||||
Diluted | $ | 0.43 | $ | 0.23 | $ | 1.29 | $ | 0.72 | |||||||
Weighted-average shares used in computing net income per share attributable to common stockholders: | |||||||||||||||
Basic | 63,186 | 28,487 | 48,427 | 27,320 | |||||||||||
Diluted | 70,219 | 32,470 | 54,590 | 30,051 |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
GAAP gross profit | $ | 116,440 | $ | 77,473 | $ | 392,091 | $ | 238,538 | |||||||
GAAP gross margin | 67.1 | % | 67.5 | % | 67.1 | % | 66.0 | % | |||||||
Stock-based compensation expense | 543 | 151 | 1,535 | 408 | |||||||||||
Non-GAAP gross profit | $ | 116,983 | $ | 77,624 | $ | 393,626 | $ | 238,946 | |||||||
Non-GAAP gross margin | 67.4 | % | 67.6 | % | 67.4 | % | 66.1 | % | |||||||
GAAP income from operations | $ | 39,002 | $ | 22,505 | $ | 125,513 | $ | 66,148 | |||||||
Stock-based compensation expense | 8,050 | 3,760 | 27,619 | 10,159 | |||||||||||
Non-GAAP income from operations | $ | 47,052 | $ | 26,265 | $ | 153,132 | $ | 76,307 | |||||||
Non-GAAP operating margin | 27.1 | % | 22.9 | % | 26.2 | % | 21.1 | % | |||||||
GAAP net income | $ | 31,037 | $ | 13,742 | $ | 86,850 | $ | 42,460 | |||||||
Stock-based compensation expense | 8,050 | 3,760 | 27,619 | 10,159 | |||||||||||
Realized gain on note receivable | — | — | (4,000 | ) | — | ||||||||||
Income tax effect on non-GAAP exclusions | (1,750 | ) | — | (4,931 | ) | — | |||||||||
Non-GAAP net income | $ | 37,337 | $ | 17,502 | $ | 105,538 | $ | 52,619 | |||||||
Weighted average shares used in computing GAAP diluted income per share attributable to common stockholders | 70,219 | 32,470 | 54,590 | 30,051 | |||||||||||
Additional weighted average dilutive shares1 | — | 32,282 | 13,797 | 32,282 | |||||||||||
Non-GAAP weighted average diluted shares | 70,219 | 64,752 | 68,387 | 62,333 | |||||||||||
GAAP diluted net income per share attributable to common stockholders | $ | 0.43 | $ | 0.23 | $ | 1.29 | $ | 0.72 | |||||||
Net income attributable to participating securities | 0.01 | 0.19 | 0.30 | 0.69 | |||||||||||
Non-GAAP adjustments to net income | 0.09 | 0.12 | 0.34 | 0.34 | |||||||||||
Non-GAAP adjustments to diluted shares | — | (0.27 | ) | (0.39 | ) | (0.91 | ) | ||||||||
Non-GAAP diluted net income per share | $ | 0.53 | $ | 0.27 | $ | 1.54 | $ | 0.84 | |||||||
Summary of Stock-Based Compensation Expense | |||||||||||||||
Cost of revenue | $ | 543 | $ | 151 | $ | 1,535 | $ | 408 | |||||||
Research and development | 4,688 | 2,015 | 14,986 | 5,464 | |||||||||||
Sales and marketing | 1,897 | 1,126 | 7,643 | 2,985 | |||||||||||
General and administrative | 922 | 468 | 3,455 | 1,302 | |||||||||||
Total | $ | 8,050 | $ | 3,760 | $ | 27,619 | $ | 10,159 |
December 31, 2014 | December 31, 2013 | ||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 240,031 | $ | 113,664 | |||
Marketable securities | 209,426 | — | |||||
Accounts receivable, net | 96,982 | 77,999 | |||||
Inventories | 80,519 | 67,094 | |||||
Deferred tax assets | 12,252 | 12,356 | |||||
Prepaid expenses and other current assets | 40,269 | 7,653 | |||||
Notes receivable | — | 4,000 | |||||
Total current assets | 679,479 | 282,766 | |||||
Property and equipment, net | 71,558 | 67,204 | |||||
Deferred tax assets | 11,510 | 4,541 | |||||
Other assets | 48,476 | 10,009 | |||||
TOTAL ASSETS | $ | 811,023 | $ | 364,520 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable | $ | 32,428 | $ | 20,111 | |||
Accrued liabilities | 40,369 | 21,539 | |||||
Deferred revenue | 60,327 | 41,306 | |||||
Convertible notes payable, related party | — | 24,743 | |||||
Accrued interest payable, related party | — | 4,484 | |||||
Convertible notes payable | — | 74,050 | |||||
Accrued interest payable | — | 12,967 | |||||
Other current liabilities | 11,249 | 10,144 | |||||
Total current liabilities | 144,373 | 209,344 | |||||
Income taxes payable | 17,323 | 14,716 | |||||
Lease financing obligations, non-current | 42,547 | 43,152 | |||||
Other long-term liabilities | 51,122 | 19,576 | |||||
TOTAL LIABILITIES | 255,365 | 286,788 | |||||
STOCKHOLDERS’ EQUITY: | |||||||
Convertible preferred stock | — | 5,992 | |||||
Common stock | 7 | 3 | |||||
Additional paid-in capital | 426,171 | 28,737 | |||||
Retained earnings | 129,814 | 42,964 | |||||
Accumulated other comprehensive income (loss) | (334) | 36 | |||||
TOTAL STOCKHOLDERS’ EQUITY | 555,658 | 77,732 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 811,023 | $ | 364,520 |
Year Ended December 31, | |||||||
2014 | 2013 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 86,850 | $ | 42,460 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 10,021 | 5,044 | |||||
Stock-based compensation | 27,619 | 10,159 | |||||
Deferred income taxes | (6,774 | ) | (8,831 | ) | |||
Provision for bad debts | 860 | 191 | |||||
Realized gain on notes receivable | (4,000 | ) | — | ||||
Amortization of debt discount | 527 | 1,118 | |||||
Write-off of debt discount on notes payable | 680 | — | |||||
Excess tax benefit on stock based-compensation | (17,436 | ) | (882 | ) | |||
Other | 348 | — | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (19,844 | ) | (28,289 | ) | |||
Inventories | (13,425 | ) | (49,179 | ) | |||
Prepaid expenses and other current assets | (32,616 | ) | 2,981 | ||||
Other assets | (4,261 | ) | (305 | ) | |||
Accounts payable | 14,007 | 3,865 | |||||
Accrued liabilities | 18,874 | 11,967 | |||||
Deferred revenue | 47,564 | 34,127 | |||||
Interest payable | (1,630 | ) | 4,501 | ||||
Interest payable—related party | 670 | 1,500 | |||||
Income taxes payable | 4,377 | 2,141 | |||||
Other liabilities | 2,105 | 2,080 | |||||
Net cash provided by operating activities | 114,516 | 34,648 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchases of property and equipment | (13,134 | ) | (20,316 | ) | |||
Purchases of marketable securities | (210,019 | ) | — | ||||
Proceeds from repayment of notes receivable | 8,000 | 1,000 | |||||
Change in restricted cash | 4,040 | — | |||||
Other investing activities | (38,249 | ) | (175 | ) | |||
Net cash used in investing activities | (249,362 | ) | (19,491 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Proceeds from initial public offering, net of issuance cost | 239,315 | — | |||||
Repayment on notes payable | (20,000 | ) | — | ||||
Principal payments of lease financing obligations | (793 | ) | — | ||||
Proceeds from issuance of common stock upon exercising options, net of repurchases | 25,379 | 9,004 | |||||
Excess tax benefit on stock-based compensation | 17,436 | 882 | |||||
Net cash provided by financing activities | 261,337 | 9,886 | |||||
Effect of exchange rate changes | (124 | ) | (34 | ) | |||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 126,367 | 25,009 | |||||
CASH AND CASH EQUIVALENTS—Beginning of period | 113,664 | 88,655 | |||||
CASH AND CASH EQUIVALENTS—End of period | $ | 240,031 | $ | 113,664 |