Chantelle Breithaupt has been successfully managing the finances of major US companies for more than a quarter of a century. After holding positions at GE and Cisco, she took over as CFO for the first time at the beginning of 2021. Breithaupt recently moved from software company Aspen Technologies to Arista Networks. In terms of the size of her employers, she made another big leap upwards: While Aspen's capitalization is just over USD 13 billion, Arista brings more than USD 90 billion to the stock market scales. In the past 12 months alone, the shares of the specialist for cloud-based network solutions have risen by more than three quarters. The latest addition makes Arista Networks' executive board even more female. Jayshree V. Ullal has been appointed CEO. She has been with the company since it was founded in 2008 and was responsible for the successful IPO of the Silicon Valley company in June 2014.
Arista Networks entered its 10th anniversary year on the stock exchange with a strong set of figures. For 2023, the company reported revenue growth of a good third to USD 5.86 billion, while operating profit increased by almost half to USD 2.3 billion. Within five years, Arista has more than doubled its revenue and increased its earnings by a factor of 2.8. As a result, the operating margin expanded by around 5 percentage points to 44.9%. This success was made possible by the early specialization in high-speed Ethernet ports. In addition to the general digital transformation, the megatrend of artificial intelligence (AI) is also driving business forward. The associated applications require the fastest possible handling of particularly large volumes of data. This requires scalable and loss-free networks with enormous bandwidth. Arista ensures the smooth connection of processors, computers and storage devices with switch devices, among other things.
The Californian company's technology is used by cloud service providers, internet providers, financial service providers and public authorities. In recent years, the company has expanded its business with companies from sectors such as media, healthcare, oil and the manufacturing industry. In its latest annual report, Arista cites Meta Platforms and Microsoft as important customers from the cloud segment. In 2022 and 2023, the Facebook parent company and the software giant were each responsible for more than 10% of Group revenue. Although Arista Networks exceeded expectations with its latest figures, Wall Street initially reacted negatively. In the days following the publication, the NASDAQ share fell by up to almost a tenth. In addition to profit-taking, the setback was probably partly due to the outlook. The new CFO is forecasting a gross margin for the first quarter of 2024 that is slightly below expectations. Whether she was too cautious will become clear on April 29. Arista Networks will then publish its interim report for the first three months of the year.
In the meantime, Arista has more than made up for the share price loss outlined above. In March, the share price climbed above the USD 300 mark for the first time. For investors for whom the chart is too steep, Leonteq has launched an alternative - the Softcallable Barrier Reverse Convertibles (BRC) on Arista Networks. In the product currency CHF, the guaranteed coupon is 10% p.a. For an allocation in USD, the distribution is 400 basis points p.a. higher. The barrier is 60% of the initial level. As long as the underlying does not fall to or below this level, product holders receive the nominal in full on the redemption date. Otherwise, the partial protection expires and the product is exposed to the price risk of Arista Networks. Please also note the soft callable function. It makes early termination and redemption possible. The issuer is Basler Kantonalbank. In addition to the attractive conditions, this ensures a high level of security for the promised payments. Standard & Poor's currently gives BKB an AA+ rating with a stable outlook and Fitch even gives it an AAA rating.
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