Cloud networking firm Arista Networks Inc. turned in another solid quarterly performance today, beating expectations on earnings and revenue again to send its stock up in after-hours trading.

The company reported a first-quarter profit before certain costs such as stock compensation of $2.50 per share on sales of $667.6 million, amounting to solid revenue growth of 27% from the same period one year ago. Wall Street had been looking for a profit of just $2.38 per share on revenue of $642.12 million.

Overall, Arista reported a healthy operating profit of $198.8 million for the quarter.

Arista sells high-speed networking switches primarily to hyperscale data center operators such as Facebook Inc. and Microsoft Corp. In addition, the company also rivals the much larger Cisco Systems Inc. in the competitive market for enterprise campus switches.

Besides hardware, Arista sells network management and security software that’s infused with artificial intelligence to identify the root cause of faults, monitor user experience and identify any network threats. The company has been adding new capabilities to its security software following its September 2020 acquisition of Awake Security Inc.

Arista Chief Executive Jayshree Ullal (pictured) said the company’s strong performance during the quarter was thanks to this focus on AI.

“Arista begins the 2021 year with a flying start,” Ullal said in a statement. “Clearly, the focus on our cognitive cloud networking suite is resonating with customers across diverse data sets and applications.”

It’s noteworthy that Arista has performed well throughout the COVID-19 pandemic, and that today’s results are the sixth straight quarter that the company has beaten analysts’ expectations.

“Arista Networks is great example of how good things happen when you have attractive products and manage a company commercially prudently during pandemic times,” said Constellation Research Inc. analyst Holger Mueller. “On the product side Arista is doing well with the focus on AI-powered security networking, and on the commercial side it grew revenue by roughly 30%, while its costs only went up 20%. Now management has to deliver in equal fashion for the rest of the year.”

Arista Chief Financial Officer Ita Brennan said the results validate the company’s business diversification initiatives, noting that it shows healthy demand for its products across all markets.

Looking ahead, Arista has forecast second-quarter revenue of between $675 million and $695 million. That means the company will likely beat Wall Street’s targets again, with analysts forecasting sales of just $649.84 million.

Arista’s stock rose more than 3% in the after-hours session.

Photo: SiliconANGLE