Arista Networks, Inc.

Welcome to the fourth quarter 2021 Arista Network's 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 start button followed by the number zero. As a reminder, this conference call is being recorded and will be available for replay from the investor relations section of the Arista website following this call. Mr. Venk Nathamuni, Arista's head of corporate and finance and investor relations, you may begin.

Thank you, operator. Good afternoon, everyone, and thank you for joining us. With me on today's call are Jayshree Ullal, Arista Network's president and chief executive officer, and Ida Brennan, Arista's chief financial officer. This afternoon, Arista Networks issued a press release announcing the results of its fiscal fourth quarter ending December 30, 2021. If you would like a copy of the press release, you can access it online at our website. During the course of this conference call, Arista Networks management will make forward-looking statements, including those relating to our financial outlook for the first quarter of fiscal year 2022, the longer-term financial outlook for 2022 and beyond, our total addressable market and strategy for addressing these market opportunities, the potential impact of COVID-19, supply chain constraints, manufacturing capacity, and inventory purchases on our business, product innovation, and finally, the benefits of acquisitions. These statements are subject to risks and uncertainties that we discuss in detail in our SEC filings, specifically in our most recent Form 10Q and Form 10K which could cause actual results to differ materially from those anticipated by these statements. These forward-looking statements apply as of today and should not be relied on as representing our views in the future, and we undertake no obligation to update these statements after this call. Also, please note that certain financial measures we use on this 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, let me now turn the call over to Jayshree.

Thank you, Venk, and welcome to your first earnings call at Arista. We're excited to have you on board as our executive head of corporate development, IR, and finance. Thank you, everyone, for joining us this afternoon for our fourth quarter 2021 earnings call. If there's one thing the pandemic has taught us, it is that it comes with variant surprises. With vaccines and booster choices, we certainly hope that all of you and your families are safe during the latest spread of the Omicron variant. I am proud of our employees for adapting and thank our partners and customers for placing their trust in us during these ever-changing times. Back to Q4 2021, we delivered revenues of $824.5 million for the quarter with a non-GAAP earnings per share of 82 cents. Services and software support renewals contributed approximately 21% of the revenue. Our non-GAAP gross margins of 64.3% was influenced by increasing supply chain costs. We registered a record number of million-dollar customers as a direct result of our momentum in the enterprise and campus fraction that we have experienced throughout the year. We have now surpassed in excess of 8,000 cumulative customers. In terms of Q4 2021 verticals, Cloud Titans was our largest vertical, followed by the enterprise, followed by the specialty cloud providers at third place, financials at fourth place, and service providers at fifth place. All the verticals grew well at double digit percentages in 2021. In terms of Q4 geographical mix, international contributions was strong at 29% with the Americas at 71% for the quarter. Shifting to annual sector revenue for the year in 2021, Cloud Titans registered approximately 30% of the revenue. Enterprise and financials came in at approximately 40%, and the providers at approximately 30%. Microsoft was the only greater than 10% customer at a 15% contribution. We do expect Meta, formerly Facebook, to become our second 10% revenue customer in 2022 as we improve lead times. I would now like to invite Anshul Sadana, our Chief Operating Officer, to shed more light on our cloud tightening execution.