Arista Networks, Inc. (NYSE:ANET) Q4 2022 Earnings Call Transcript

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Ita Brennan: Yes. Maybe I will take that one first, Jim. I am not quite ready yet to call kind of a turns number for the end of the year. I think inventory dollars probably grow, certainly through the first half. And then hopefully, we can flatten out from there. We will look for optimization, but there is still a fair amount of kind of long lead time items that we need to kind of carry and buffer. So, I will come back to you as we kind of go through the year. But I think certainly for the first half, you should be looking for inventory to probably continue to grow on an absolute dollar basis.

Jayshree Ullal: Thank you, James, for the wishes. I think in one word, I would say momentum. Our enterprise customers are really looking for an alternative to what they have got. There is a lot of fatigue in the system. And what’s driving my optimism, where there is backlog from prior demand or present demand, is they are really hungry, and Arista presents that alternative.

Liz Stine: Next question operator.

Operator: Your next question comes from the line of David Vogt with UBS. Please go ahead. Your line is open.

David Vogt: Great. Thank you everyone for taking my call. I just want to pivot back to Meta for a second. And so in addition to the new architecture that they have been talking about, and I think Anshul addressed it, the company also talked about potentially using more colocation and maybe other public company assets to kind of meet its capital intensity needs going forward. Would just love to kind of get your thoughts on how that impacts your spending going €“ they are spending on Arista gear going forward. And then just going also on the titan mix percentages, if the rest of the business is growing at the rates that we think it’s going to grow in 2023 to end up somewhere between the €˜21 and €˜22 level, does that suggest that the titans business in total grows kind of in the low teens in €˜23 off of triple-digit growth in €˜22? Thanks.

Jayshree Ullal: And just to answer that one, it is definitely not going to be triple-digit in €˜23. We can say that with certainty. That was a beautiful year and one for the history books. Anshul, you want to take the rest?

Anshul Sadana: Sure. On the Meta question, David, experience and so on, I think the high-level message to us is similar around their business efficiently as efficiently as possible and optimize. So, projects are nice to have. Obviously, those are getting cut back. And as you mentioned, in base like colos and so on, you don’t need a very large architecture to start with. If you only have a 3-megawatt side, as an example, you have a smaller cluster size. But our products already fit very well in all of these use cases. So, we don’t believe there is any significant impact to networking from what we can tell today in the near-term, right. We don’t have visibility, that’s many, many years out today. But the message we have been given is basically no big impact to networking as far as we are concerned.

David Vogt: Great.

Liz Stine: Thank you, David.

Operator: Our next question comes from the line of Tom Blakey with KeyBanc Capital Markets. Please go ahead. Your line is open.

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