Arista Networks (ANET) shares are experiencing a pre-market plunge of 5.03% on Wednesday following the release of its first-quarter earnings report and second-quarter guidance. Despite beating earnings per share (EPS) expectations, the cloud networking company's revenue fell short of analyst estimates, and its outlook for the upcoming quarter raised concerns among investors.

For the first quarter, Arista Networks reported non-GAAP earnings of $0.65 per share, surpassing the analyst consensus estimate of $0.60. However, the company's quarterly revenue of $2 billion missed the consensus estimate of $2.02 billion. While this marks the first time Arista has surpassed $2 billion in quarterly revenue, it wasn't enough to meet market expectations.

Adding to investor worries, Arista provided a cautious outlook for the second quarter. The company expects Q2 revenue of $2.1 billion, which falls below the analyst projection of $2.11 billion. Moreover, Arista warned of potential declines in both gross and operating margins on a non-GAAP basis for Q2. The company guided for a non-GAAP gross margin of about 63% and a non-GAAP operating margin of approximately 46%, down from 64.1% and 47.8% respectively in Q1. This forecast of margin pressure appears to be a significant factor in the stock's pre-market decline.