By Stephen Nakrosis

Shares of Arista Networks retreated after the company said that both gross margin and operating margin on a non-GAAP basis may decline in the second quarter.

The stock was down 7.5% to $83.89 in post-market trading Tuesday. Shares, which finished regular session up less than 1% at $90.77, have dropped 33% this year.

Arista's forecast for the current quarter was included in its latest financial results that were released after the bell.

The company reported first quarter non-GAAP gross margin of 64.1% and a non-GAPP operating margin of 47.8%. It guided for those numbers to decline in the second quarter, with non-GAPP gross margin of about 63% and a non-GAPP operating margin of about 46%.

The cloud networking company reported first-quarter net income of $813.8 million, for earnings per share of 64 cents, compared with $637.7 million and earnings of 50 cents a year earlier. That beat the estimate for net income of $757.5 million and earnings of 56 cents analysts expected, according to FactSet.

Arista recorded revenue of $2 billion in the quarter, ahead of the $1.98 billion that was expected according to a survey by FactSet.

For the second quarter, the company expects revenue of $2.01 billion, just missing the $2.02 billion expected by analysts.

Also on Tuesday, Arista said its board approved an additional $1.5 billion share repurchase plan.

Write to Stephen Nakrosis at stephen.nakrosis@wsj.com

(END) Dow Jones Newswires

For the second quarter, Arista expects revenue of $2.1 billion. "Arista Networks' Shares Lower After Warning of Possible Declines in 2Q," at 7:09 p.m. ET on May 6 incorrectly stated the company expects revenue of $2.01 billion, which would miss the $2.02 billion expected by analysts.

(END) Dow Jones Newswires

May 07, 2025 06:31 ET (10:31 GMT)

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