Arista Networks, Inc (ANET) has reported 78.66 percent jump in profit for the quarter ended Sep. 30, 2016. The company has earned $51.26 million, or $0.69 a share in the quarter, compared with $28.69 million, or $0.39 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $61.18 million, or $0.83 a share compared with $42.42 million or $0.59 a share, a year ago. 

Revenue during the quarter surged 33.42 percent to $290.26 million from $217.55 million in the previous year period. Gross margin for the quarter contracted 93 basis points over the previous year period to 64.22 percent. Total expenses were 78.29 percent of quarterly revenues, down from 85.61 percent for the same period last year. This has led to an improvement of 733 basis points in operating margin to 21.71 percent.

Operating income for the quarter was $63.02 million, compared with $31.30 million in the previous year period.

However, the adjusted operating income for the quarter stood at $87.16 million compared to $59.46 million in the prior year period. At the same time, adjusted operating margin improved 270 basis points in the quarter to 30.03 percent from 27.33 percent in the last year period.

"I am pleased with our record Q3 2016 earnings and our cumulative shipments of 10 million cloud networking ports," stated Jayshree Ullal, Arista president and chief executive officer. "These milestones highlight Arista's customer enthusiasm for our new 7000 series products and the inevitable shift from legacy to cloud networking."

For the fourth-quarter, Arista Networks, Inc projects revenue to be in the range of $310 million to $320 million.                                             

The company has spent $319.55 million cash to meet investing activities during the nine month period as against cash inflow of $39.44 million in the last year period

Cash flow from financing activities was $54.15 million for the nine month period, down 2.02 percent or $1.12 million, when compared with the last year period.

Cash and cash equivalents stood at $500.48 million as on Sep. 30, 2016, up 19.59 percent or $81.98 million from $418.50 million on Sep. 30, 2015.

Working capital increases sharply
Arista Networks, Inc has recorded an increase in the working capital over the last year. It stood at $969.10 million as at Sep. 30, 2016, up 39.21 percent or $272.96 million from $696.13 million on Sep. 30, 2015. Current ratio was at 3.73 as on Sep. 30, 2016, down from 4.09 on Sep. 30, 2015.

Cash conversion cycle (CCC) has decreased to 71 days for the quarter from 142 days for the last year period. Days sales outstanding went down to 53 days for the quarter compared with 60 days for the same period last year.

Days inventory outstanding has decreased to 72 days for the quarter compared with 128 days for the previous year period. At the same time, days payable outstanding went up to 54 days for the quarter from 46 for the same period last year.