Arista Networks Inc (ANET) 2016 Q1 法說會逐字稿

Welcome to the first-quarter 2016 Arista Networks' financial results earnings conference call.

歡迎參加 Arista Networks 2016 年第一季財務業績電話會議。

(Operator Instructions)

（操作員說明）

As a reminder this conference is being recorded and will be available for replay from the Investor Relation's section at the Arista website following this call. I will now turn the call over to Mr. Chuck Elliott, Director of Investor Relations. Sir, you may begin.

謹此提醒，本次會議正在錄製中，並可在本次電話會議後在 Arista 網站的投資者關係部分重播。我現在將把電話轉給投資者關係總監 Chuck Elliott 先生。先生，您可以開始了。

Thank you, operator, good afternoon, everyone, and thank you for joining us. With me on today's call are Jayshree Ullal, Arista Network's President and Chief Executive Officer and Ita Brennan, Arista's Chief Financial Officer. This afternoon Arista Networks issued a press release announcing the results for its fiscal first quarter ended March 31, 2016. If you would like a copy of the release, you can access it online at the Company's website.

謝謝接線員，大家下午好，謝謝您加入我們。參加今天電話會議的有 Arista Network 總裁兼執行長 Jayshree Ullal 和 Arista 財務長 Ita Brennan。今天下午，Arista Networks 發布了一份新聞稿，宣布截至 2016 年 3 月 31 日的第一財季業績。如果您需要該新聞稿的副本，可以在公司網站上在線訪問。

During the course of this conference call, Arista Network's management will make forward-looking statements, including those relating to our financial outlook for the second quarter of the 2016 fiscal year, industry innovation, our market opportunity and the impact of litigation, which are subject to the risks and uncertainties that we discuss in detail in our documents filed with the SEC, specifically in our most recent Form 10-Q and Form 10-K, and which could cause actual results to differ materially from those anticipated by these statements. These forward-looking statements apply as of today and you should not rely on them as representing our views in the future. We undertake no obligation to update these statements after this call.

在本次電話會議期間，Arista Network 管理層將做出前瞻性聲明，包括與我們 2016 財年第二季度的財務前景、行業創新、我們的市場機會以及訴訟影響相關的聲明，這些聲明均受我們在向SEC 提交的文件中詳細討論了風險和不確定性，特別是在我們最新的10-Q 表格和10-K 表格中，這些風險和不確定性可能導致實際結果與這些聲明中預期的結果存在重大差異。這些前瞻性陳述從今天起適用，您不應依賴它們來代表我們未來的觀點。我們不承擔在本次電話會議後更新這些聲明的義務。

Also, please note that certain financial measures we use on this call are expressed on a non-GAAP basis and have been adjusted to exclude certain charges. We have provided reconciliations of these non-GAAP financial measures to GAAP financial measures in our earnings press release.

另請注意，我們在本次電話會議中使用的某些財務指標是在非公認會計原則的基礎上表示的，並已進行調整以排除某些費用。我們在收益新聞稿中提供了這些非公認會計原則財務指標與公認會計原則財務指標的調節表。

With that, I will turn the call over to Jayshree.

這樣，我會將電話轉給 Jayshree。

Thank you, Chuck. Thank you, everyone, for joining us this afternoon for our first-quarter 2016 earnings call. I am pleased to report that we had another good quarter. Our revenue grew 35% year over year to $242.2 million while earnings per share was $0.68. This was driven by our new innovative platforms and differentiated EOS stack.

謝謝你，查克。感謝大家今天下午參加我們 2016 年第一季的財報電話會議。我很高興地報告，我們又度過了一個美好的季度。我們的營收年增 35%，達到 2.422 億美元，每股收益為 0.68 美元。這是由我們新的創新平台和差異化的 EOS 堆疊所推動的。

Services contributed 12.3% of our overall sales as cloud demand fueled our growth across our top verticals, especially the cloud titans. From a geographic perspective, our customers in the Americas generated 76% of our total revenue, while our international theaters progressed steadily in the quarter. We delivered non-GAAP gross margins of 64.4% as we grew profitably in a highly competitive and dynamic industry. We now have in excess of 3,850 cumulative customers and we have increased our market share in 2015 for our relevant 10/40/100 gigabit ethernet TAM to 12% in ports and 10% in revenue according to [Cretan] research.

由於雲端需求推動了我們頂級垂直產業（尤其是雲端巨頭）的成長，服務貢獻了我們整體銷售額的 12.3%。從地理角度來看，我們在美洲的客戶創造了我們總收入的76%，而我們的國際影院在本季度穩步成長。隨著我們在競爭激烈且充滿活力的行業中實現盈利增長，我們的非 GAAP 毛利率達到 64.4%。目前，我們累計擁有超過 3,850 家客戶，根據 [Cretan] 研究，我們在 2015 年將相關 10/40/100 千兆位元乙太網路 TAM 的市佔率提高到連接埠的 12% 和收入的 10%。

This quarter we unveiled the next generation of the Universal Spine with its many roles with the Arista 7500R Series. Defying the definitions of router and switch functions, the flagship 7500R blends the best of both with uncompromised cloud-scale performance. Arista has been a long standing pioneer of Spine since 2010, with deep and proven experience. The 7500R is inherently designed for investment protection across generations, a really rare feat in our industry. It is also our industry's first 100 terabit Spine. Combined with our innovative FlexRoute support for multiple routing protocols and rapid reconvergence of Internet tables, it supersedes prior notions of siloed places in the network for data center and core. By subsuming traditional router functions into the Spine, we are expanding our adjacency into the core and WAN router markets.

本季度，我們推出了具有多種功能的下一代 Universal Spine Arista 7500R 系列。旗艦產品 7500R 挑戰了路由器和交換器功能的定義，將兩者的優點與無與倫比的雲端規模效能融為一體。自 2010 年以來，Arista 一直是 Spine 的長期先驅，擁有深厚且經過驗證的經驗。 7500R 本質上是為跨世代投資保護而設計的，這在我們的行業中確實是罕見的壯舉。這也是我們行業第一個 100 太比特 Spine。結合我們對多種路由協定的創新 FlexRoute 支援以及網際網路表的快速重新融合，它取代了先前網路中資料中心和核心的孤立位置的概念。透過將傳統路由器功能納入 Spine，我們正在將我們的鄰接範圍擴展到核心和 WAN 路由器市場。

In Q1 2016, we demonstrated many technology partnerships as well, including the integration with Checkpoint at RSA 2016 and with Palo Alto Networks at their Ignite User Conference. Both are joined solutions for inserting security services into data center traffic flows using Arista's Macro-Segmentation Services, or MSS for short.

2016 年第一季度，我們還展示了許多技術合作夥伴關係，包括在 RSA 2016 上與 Checkpoint 的整合以及在 Ignite 用戶大會上與 Palo Alto Networks 的整合。兩者都是使用 Arista 的宏分段服務（簡稱 MSS）將安全服務插入資料中心流量的聯合解決方案。

Today I would like to share a wild-card topic with you on our cloud networking strategy. It is clear to me and us that the industry is changing, with demand for more dynamic control for specific cloud native applications. Rather than endure the perils of high operational costs of a monolithic closed OS, Arista recognized this trend very early on and required an open standard space programmable network stack, which we pioneered as Arista US. We delivered differentiated attributes on it such as self-healing, high-availability resiliency, a centralized network state database, modern scripting, granular programming and open API for inter-operability. Our product and technology strategy is resonating and is symbolic of the continued shift from enterprise IP to cloud work loads.

今天我想與大家分享一個關於我們的雲端網路策略的通配符主題。我和我們都清楚，產業正在發生變化，需要對特定雲端原生應用程式進行更動態的控制。 Arista 並沒有忍受單片封閉操作系統的高運營成本的危險，而是很早就認識到了這一趨勢，並需要一個開放標準空間可編程網絡堆棧，我們在 Arista US 中率先推出了該堆棧。我們為其提供了差異化的屬性，例如自我修復、高可用性彈性、集中式網路狀態資料庫、現代腳本、粒度編程和用於互通性的開放 API。我們的產品和技術策略引起了共鳴，象徵著從企業 IP 到雲端工作負載的持續轉變。

To cope with this inevitable shift, should networking move to a more component based approach or continue as a network stack? The answer and the choice depends on the type of customer and I want to reiterate that Arista is committed to different consumption models for the cloud. No one size fits all. We expect three delivery models for cloud networking as we enter into mainstream. One, cloud plus. Here the customers prefer best-of-breed systems like our Arista 7000 Series Leaf & Spine technology with our EOS brand of quality, high availability, extensibility across our top verticals.

為了應對這種不可避免的轉變，網路應該轉向更多基於組件的方法還是繼續作為網路堆疊？答案和選擇取決於客戶的類型，我想重申 Arista 致力於不同的雲端消費模式。沒有一種尺寸適合所有情況。當我們進入主流時，我們預計雲端網路將有三種交付模式。一、雲加。在這裡，客戶更喜歡同類最佳的系統，例如我們的 Arista 7000 系列 Leaf & Spine 技術以及我們在頂級垂直領域的 EOS 品牌的品質、高可用性和可擴展性。

Two, cloud scale. Cloud titans with engineering prowess demand hyper scale and a desire for customization and control of their application environment means they sometimes need building blocks in their lease. Examples of this include Facebook's Wedge, Microsoft's Sonic or Google's focus on open config used in conjunction with Arista's Spines or Spline technology.

二、雲規模。具有工程實力的雲端巨頭需要超大規模，並且渴望客製化和控制其應用程式環境，這意味著他們有時需要在租賃中建立區塊。這方面的例子包括 Facebook 的 Wedge、微軟的 Sonic 或 Google 專注於與 Arista 的 Spines 或 Spline 技術結合使用的開放式設定。

Three, cloud converged networks. The more IP-based enterprises are seeking converged networks. This convergence may be compute, storage, virtualization, containers or security. In conjunction with our technology partners, Arista seeks to leverage turnkey solutions such as CloudVision. Good example is the OpenStack-based announcement we made of a converged system based on Arista Networking, Mirantis and Super Microsystems announced last month. Arista will vigorously pursue all three segments to address our cloud everywhere opportunity ahead of us.

三、雲端融合網路。越來越多的基於IP的企業正在尋求融合網路。這種融合可能是運算、儲存、虛擬化、容器或安全性。 Arista 與我們的技術合作夥伴合作，尋求利用 CloudVision 等統包解決方案。一個很好的例子是我們上個月宣布的基於 OpenStack 的融合系統，該系統基於 Arista Networking、Mirantis 和 Super Microsystems。 Arista 將大力發展所有三個細分市場，以應對我們面前的雲端無處不在的機會。

As we move into the second half of 2016, Arista is planning the addition of another strategic contract manufacturing partner. We have initiated the investment in local inventory hubs to support our increasing scale of operation. We believe taking a page from the Tesla factories that we can create a world-class automated manufacturing operation and in doing so, bring more workforce to America. Naturally, we will incur some near-term costs and overheads to bring that kind of sustainable capacity and flexibility for our large customers.

進入 2016 年下半年，Arista 正計劃增加另一個戰略合約製造合作夥伴。我們已開始對當地庫存中心進行投資，以支持我們不斷擴大的營運規模。我們相信，借鑒特斯拉工廠的經驗，我們可以創造世界一流的自動化製造業務，並以此為美國帶來更多勞動力。當然，我們會承擔一些短期成本和管理費用，以便為我們的大客戶帶來這種可持續的產能和靈活性。

With that, I'd like to turn it over to Ita, our CFO, for our Q1 2016 financial details.

接下來，我想將 2016 年第一季的財務詳細資料交給我們的財務長 Ita。

Thanks, Jayshree, and good afternoon. This analysis of our Q1 2016 results and our guidance for Q2 2016 is based on non-GAAP and excludes all non-cash stock-based compensation expenses and legal costs associated with the ongoing lawsuits. A full reconciliation of our selected GAAP to non-GAAP results is provided in our earnings release.

謝謝，Jayshree，下午好。我們對 2016 年第一季業績和 2016 年第二季業績的分析是基於非公認會計準則，不包括所有非現金股票補償費用以及與正在進行的訴訟相關的法律費用。我們的收益報告中提供了我們選擇的 GAAP 與非 GAAP 績效的全面對帳。

Total GAAP revenues in Q1 were $242.2 million, up 35% year over year and above our guidance of $232 million to $240 million. Our cloud titan vertical demonstrated continued strength in the first quarter, combined with solid contributions from the other verticals. Service revenues continue to grow, reaching 12.3% of revenues for the quarter, up from 11.5% in Q4. International revenues came in at $59 million, or 24% of total revenue, up from 19% last quarter. While we continue to focus on expanding our international footprint, you should expect our geographical revenue mix to fluctuate on quarter-over-quarter basis, depending on the timing of US international deployments.

第一季 GAAP 總營收為 2.422 億美元，年增 35%，高於我們 2.32 億美元至 2.4 億美元的指引值。我們的雲端巨頭垂直領域在第一季展現了持續的實力，再加上其他垂直領域的堅實貢獻。服務收入持續成長，佔本季營收的 12.3%，高於第四季的 11.5%。國際營收為 5,900 萬美元，佔總營收的 24%，高於上季的 19%。雖然我們繼續專注於擴大我們的國際業務，但您應該預期我們的地理收入組合會逐季度波動，具體取決於美國國際部署的時間。

Overall gross margin in Q1 was 64.4%, slightly favorable to last quarter and to our guidance of 62% to 65% and reflecting the revenue mix in the period. Operating expenses for the quarter came in at $85.8 million, flat to last quarter. R&D spending was 22.7% of revenue, up from last quarter, reflecting growth in head count and continued prototype and in RE investments. Sales and marketing expense was 9.9%, down from 11.4% last quarter, reflecting reduced variable compensation offset by increased head count. Our operating income for the quarter was $70.1 million, or 29% of revenue.

第一季的整體毛利率為 64.4%，略好於上季和我們 62% 至 65% 的指導，反映了該期間的收入組合。該季度營運支出為 8,580 萬美元，與上季持平。研發支出佔營收的 22.7%，高於上季，反映了人員數量、持續原型和再生能源投資的成長。銷售和行銷費用為 9.9%，低於上季度的 11.4%，反映出可變薪酬的減少被員工數量的增加所抵消。我們本季的營業收入為 7,010 萬美元，佔營收的 29%。

Other expense for the quarter was $0.4 million and our effective tax rate was 29.6%, resulting in net income for the quarter of $49.1 million, or 20.3%. Our diluted share count for the quarter was 72.2 million shares, resulting in a diluted earnings-per-share number of $0.68, up 36% from the prior year. Legal expenses associated with the ongoing lawsuits came in at $7.1 million for the quarter, below our outlook of $9 million on the last earnings call. As a reminder, these expenses are excluded from the non-GAAP results discussed above.

本季的其他費用為 40 萬美元，有效稅率為 29.6%，因此本季的淨利潤為 4,910 萬美元，即 20.3%。本季稀釋後股票數量為 7,220 萬股，稀釋後每股收益為 0.68 美元，較上年增長 36%。本季與正在進行的訴訟相關的法律費用為 710 萬美元，低於我們上次財報電話會議上 900 萬美元的預期。提醒一下，這些費用不包括在上面討論的非公認會計準則績效中。

Now, turning to the balance sheet, cash, cash equivalents, and investments ended the quarter at $762.3 million. We generated $71 million of cash from operations in the March quarter. DSOs came in at 51 days, down from 54 days in Q4. We are pleased to see continued progress in this area during the quarter.

現在來看資產負債表，本季末的現金、現金等價物和投資為 7.623 億美元。我們在 3 月季度的營運中產生了 7,100 萬美元的現金。 DSO 的週期為 51 天，低於第四季的 54 天。我們很高興看到本季該領域持續取得進展。

Inventory turns were 3.6 times, up from 3.2 in Q4. Inventory decreased to $84 million in the quarter, down from $92.1 million in the prior period. This reduction is the result of an ongoing focus on inventory management and supply planning. Our deferred revenue balance was $219.2 million, up from $197 million in Q4. The balance continues to be largely made up of short- and long-term service contracts with some product deferrals related to acceptance terms and future deliverables. Accounts payable days were 26 days, down from 45 days in Q4, reflecting the timing of inventory receipts and payments. Capital expenditures for the quarter were $8.6 million with some incremental investments in R&D and operations.

庫存週轉率為 3.6 倍，高於第四季的 3.2 倍。本季庫存減少至 8,400 萬美元，低於上一季的 9,210 萬美元。這一減少是持續關注庫存管理和供應計劃的結果。我們的遞延收入餘額為 2.192 億美元，高於第四季的 1.97 億美元。餘額仍然主要由短期和長期服務合約組成，以及一些與驗收條款和未來可交付成果相關的產品延期。應付帳款天數為 26 天，低於第四季的 45 天，反映了庫存收付的時間。本季的資本支出為 860 萬美元，其中一些增量投資用於研發和營運。

Now turning to our outlook for the second quarter and beyond, we are pleased with our financial performance in the first quarter, with revenues and earnings per share up more than 35% on a year-over-year basis. As we look forward, we are excited about the fundamentals of the business and are seeing strong adoption of our new products across our verticals. As Jayshree outlined in her remarks, we plan to add an additional contract manufacturer beginning in Q2 2016. In terms of what this means for the financials, you should expect to see us increase inventory by approximately $50 million to $100 million as we ramp new products and build out this additional manufacturing capacity.

現在轉向我們對第二季及以後的展望，我們對第一季的財務表現感到滿意，營收和每股盈餘較去年同期成長超過 35%。展望未來，我們對業務的基本面感到興奮，並看到我們的新產品在我們的垂直領域中被廣泛採用。正如Jayshree 在她的演講中所概述的那樣，我們計劃從2016 年第二季開始增加額外的合約製造商。就這對財務意味著什麼而言，隨著我們推出新產品，您應該會看到我們的庫存增加約5,000 萬至1 億美元並建立額外的製造能力。

Turning to gross margin, our current view is that while we may see some resulting increase in costs, all other things being equal, gross margins should remain within our previously stated long-term outlook of 60% to 65%. We may also incur incremental capital expenditures in the range of $5 million to $10 million in relation to this project.

談到毛利率，我們目前的觀點是，雖然我們可能會看到成本增加，但在其他條件相同的情況下，毛利率應保持在我們之前規定的60% 至65% 的長期前景範圍內。我們也可能會因該專案而產生 500 萬至 1,000 萬美元的增量資本支出。

Now turning to our guidance for the second quarter, which is based on non-GAAP results and excludes any non-cash stock-based compensation expenses and any legal expenses associated with the ongoing lawsuits, revenues of approximately $259 million to $265 million, gross margin of approximately 62% to 65%, and operating margin of approximately 26%. Our effective tax rate is expected to be 27% to 29% with diluted shares of approximately 72.5 million. Please note that based on our current understanding, we expect costs associated with the ongoing lawsuits to be approximately $8 million for the quarter.

現在轉向我們對第二季度的指導，該指導基於非 GAAP 業績，不包括任何非現金股票補償費用以及與正在進行的訴訟相關的任何法律費用，收入約為 2.59 億至 2.65 億美元，毛利率約62%至65%，營業利益率約26%。我們的有效稅率預計為 27% 至 29%，稀釋後股份約為 7,250 萬股。請注意，根據我們目前的了解，我們預計本季與正在進行的訴訟相關的成本約為 800 萬美元。

I will now turn the call back to Chuck. Chuck?

我現在將電話轉回給查克。查克？

We will now begin the Q&A portion of the Arista earnings call. I'd like to request that everyone please limit themselves to a single question due to time constraints. Thanks, all.

我們現在將開始 Arista 財報電話會議的問答部分。由於時間有限，我想請大家只回答一個問題。謝謝大家。

(Operator instructions)

（操作員說明）

Kulbinder Garcha, Credit Suisse.

Kulbinder Garcha，瑞士信貸。

Just some clarifications Jayshree, you mentioned again that the cloud titans were strong this quarter. Are we getting to the point now whereby that vertical is disproportionately higher than the other three that you typically talk about or is it still quite balanced? Was there any specifically more than 10% customer concentration this quarter?

只是一些澄清，Jayshree，您再次提到雲端巨頭本季表現強勁。我們現在是否已經到了這個垂直度比您通常談論的其他三個不成比例地高的程度，或者它仍然相當平衡？本季是否有超過 10% 的客戶集中度？

Ita, on the gross margin pressure that you might see from the new contract OEM dynamics, is that a one-quarter phenomena? Could it last for a few quarters? Many thanks.

Ita，關於您可能從新合約 OEM 動態中看到的毛利率壓力，這是四分之一的現象嗎？能持續幾個季度嗎？非常感謝。

Thank you, Kulbinder. I think the full vertical balance continues, although very much like Q4, Q1 had a strong contribution from cloud titans. As long as you see a strong contribution from cloud titans, the gross margins tend to be lower. If you recall, we saw 64% in Q4 and we're continuing to see around 64%.

謝謝你，庫賓德。我認為完整的垂直平衡仍在繼續，儘管與第四季度非常相似，第一季也得到了雲端巨頭的巨大貢獻。只要你看到雲端巨頭的強勁貢獻，毛利率往往會較低。如果您還記得的話，我們在第四季度看到了 64%，並且我們將繼續看到 64% 左右。

I would go as far as to say perhaps 64% is becoming closer to our reality on a per-quarter basis with the possibility of it going 62% and 63%, as well. That is a reflection not just of the cloud titan mix but any volume-driven customer in any of the verticals.

我甚至可以說，按季度計算，也許 64% 越來越接近我們的現實，也有可能達到 62% 和 63%。這不僅反映了雲端巨頭的組合，也反映了任何垂直領域的任何數量驅動的客戶。

I wouldn't say there is dramatic changes but there certainly is strong acceptance of key cloud titan customers who are increasing their spend in general in the cloud and therefore with Arista. In terms of 10% concentration, we do not talk about this on a quarterly basis but we'll certainly share this to you at the end of the year.

我不會說發生了巨大的變化，但關鍵雲巨頭客戶肯定會強烈接受他們，他們總體上增加了在雲端方面的支出，因此增加了 Arista 的支出。就10%的集中度而言，我們不會按季度談論這個問題，但我們一定會在年底與您分享。

James Faucette, Morgan Stanley.

詹姆斯‧福賽特，摩根士丹利。

Thank you very much. I guess I just wanted to ask on -- we hear a lot about internal development efforts at cloud titans and I want to get your color, Jayshree, on what you feel like the objectives generally are of those cloud titans on those internal development efforts, and what their resources look like. But perhaps even more importantly, you also often talk about working with those customers to support their efforts. Can you give us some color on what you're doing to support those efforts and how does that support benefit you in the long run? Thanks.

非常感謝。我想我只是想問一下——我們聽到了很多關於雲巨頭內部開發工作的信息，Jayshree，我想聽聽您的意見，您認為這些雲巨頭在這些內部開發工作上的目標通常是什麼，以及他們的資源是什麼樣的。但也許更重要的是，您也經常談論與這些客戶合作以支持他們的努力。您能否向我們介紹一下您正在採取哪些措施來支持這些努力，以及從長遠來看，這種支持對您有何好處？謝謝。

Yes, certainly, thanks, James. We view these internal developments as important elements of application control for our cloud titans, and because we have such an open programmable EOS we definitely view them not as a threat but as an opportunity. What I mean by that is, if you look at -- let us take three examples of these that I tried to highlight earlier in my opening comments. We worked very closely with Facebook and Wedge and Xbox to make sure some of their user feed cloud native applications could work better and it is one use case in the lease.

是的，當然，謝謝，詹姆斯。我們將這些內部開發視為我們雲端巨頭應用程式控制的重要元素，並且由於我們擁有如此開放的可程式 EOS，我們絕對不會將它們視為威脅，而是將其視為機會。我的意思是，如果你看一下——讓我們舉三個例子，我在前面的開場評論中試圖強調這些例子。我們與 Facebook、Wedge 和 Xbox 密切合作，確保他們的一些用戶來源雲端原生應用程式能夠更好地運作，這是租約中的一個用例。

Another example is our contribution of drivers to sonic that was announced as part of OCP. The third example is the work that Google and ATT and many companies are doing on open config in developing higher levels of abstraction. Arista is closely working on elements of EOS and tying that with these initiatives.

另一個例子是我們對 sonic 驅動程式的貢獻，這是作為 OCP 的一部分宣布的。第三個例子是 Google 和 ATT 以及許多公司在開發更高抽象層級的開放配置方面所做的工作。 Arista 正在密切研究 EOS 的要素，並將其與這些舉措聯繫起來。

In that case, as I explained earlier, these end up being important building blocks and typically these are invests that the titans make that are not hundreds of thousands of engineers but maybe tens of engineers. What we do and they do together is more tightly coupled and better together than each one alone. From our perspective, there is always an important control of element for our cloud titans with the tremendous scale they have that we must help them with, and we look at this as joint development and joint solutions.

在這種情況下，正如我之前所解釋的，這些最終將成為重要的建置模組，通常這些巨頭的投資不是數十萬工程師，而是可能是數十萬工程師。我們和他們一起做的事情比各自單獨做的事情耦合得更緊密，效果也更好。從我們的角度來看，我們的雲端巨頭始終擁有重要的控制權，他們擁有龐大的規模，我們必須幫助他們，我們將其視為共同開發和聯合解決方案。

Jeff Kvaal, Nomura.

傑夫·科瓦爾，野村證券。

Yes, thank you very much. I would like to follow up on this interesting new wrinkle, which is the factory build. Could you take us through the thought process behind that a little bit?

是的謝謝你。我想跟進這個有趣的新問題，即工廠建造。您能否向我們介紹一下這背後的思考過程？

Could you help us understand, is this a new factory that's going to support one customer in particular? It sounds like that might be a possibility. Or is this going to be something that is going to support all of your customers? That would be helpful. Thank you.

您能否幫助我們了解一下，這是一家會特別支持某一客戶的新工廠嗎？聽起來這可能是一種可能性。或者這會支持您所有的客戶嗎？那會有幫助的。謝謝。

Sure, sure, absolutely. First of all as you've noticed, Jeff, we have a very large percentage of our large customers in the US. This is intended to support all of our customers, and in particular our large customers.

當然，當然，絕對。首先，正如您所注意到的，傑夫，我們的大客戶中有很大一部分在美國。這是為了支持我們所有的客戶，特別是我們的大客戶。

One of the things we do consistently is expand the scale of our contract manufacturers. We already have a couple of them and now we're adding a third.

我們一貫做的事情之一就是擴大合約製造商的規模。我們已經有幾個了，現在我們要補充第三個。

What I mean by that is adding capacity can come in the form of just adding capacity with our existing contract manufacturers, or adding another contract manufacturer. We felt the need to automate the facility more, bring more proximity to our headquarters and engineers with some of the new product ramp and development. Significantly increase our manufacturing capacity, and also bring several operational flexibilities to our business, including the impact of litigation.

我的意思是，增加產能可以透過增加現有合約製造商的產能或增加另一家合約製造商的形式來實現。我們認為需要使設施更加自動化，透過一些新產品的升級和開發來拉近我們的總部和工程師的距離。顯著提高我們的製造能力，並為我們的業務帶來多種營運靈活性，包括訴訟的影響。

Marc Taxay, do you want to talk about that more?

Marc Taxay，你想再談這個嗎？

There were a number of different considerations we took into account in bringing on the new contract manufacturer. In factoring the litigation to that, I think it is really important to understand that the ITC is continuing to review initial determination. That remains open. They haven't issued a final determination.

在引入新的合約製造商時，我們考慮了許多不同的因素。考慮到這一點，我認為了解 ITC 正在繼續審查初步裁決這一點非常重要。那仍然開放。他們尚未發布最終決定。

But if we do receive a final determination that is adverse, we are of course going to respect the decision of the ITC and fully comply with it. As we have said many times before, the primary strategy for us in event an adverse decision would be to implement design arounds so that our products would not be non-infringing.

但如果我們確實收到不利的最終裁決，我們當然會尊重並完全遵守ITC的決定。正如我們之前多次說過的，如果出現不利的決定，我們的主要策略是實施設計，以使我們的產品不侵權。

Paul Silverstein, Cowen.

保羅·西爾弗斯坦，考恩。

Jayshree, can you hear me?

傑什裡，你聽得到我說話嗎？

I heard Jayshree and then you cut, off, Paul.

我聽到了 Jayshree，然後你打斷了，保羅。

I guess you can hear me in part. My basic question, I apologize if you addressed this in your initial remarks, but while we all focus on the cloud side, understandably, my question would be on the balance of your business with Fortune 500 especially, but Fortune 500 and beyond. Can you give us any incremental insight in terms of the progress from both the customer breadth expansion standpoint as well as the customer depth of penetration?

我想你能聽到我的部分聲音。我的基本問題是，如果您在最初的演講中提到了這一點，我很抱歉，但雖然我們都關注雲方面，但可以理解的是，我的問題是您與財富500 強企業的業務平衡，尤其是與財富500 強及其他企業的業務平衡。您能否從客戶廣度擴展和客戶滲透深度的角度為我們提供一些增量見解？

Yes, no, actually we're very pleased with the deployment of cloud, and clearly the cloud titans are creating hyper-scale networks. But I want to reiterate, Paul, that it isn't just the cloud titans. We're seeing a nice mix of service providers, high-tech enterprise and financials, and all of them have contributed in Q1 2016 to adoption of the cloud.

是的，不，實際上我們對雲端的部署非常滿意，顯然雲端巨頭正在創建超大規模的網路。但保羅，我想重申，這不只是雲巨頭。我們看到服務提供者、高科技企業和金融機構的良好組合，他們都在 2016 年第一季為雲端的採用做出了貢獻。

I reiterate that the scale of the cloud is always far greater with the titans but the deployment of the cloud is across all four verticals. We feel good.

我重申，雲端的規模對於巨頭來說總是要大得多，但雲端的部署是跨越所有四個垂直領域的。我們感覺很好。

Jayshree, I know you don't give the mix on a quarterly basis but can you give us some sense of what the growth rate looks like for the non-signed business?

Jayshree，我知道您不會按季度提供混合數據，但您能否讓我們了解未簽約業務的成長率？

It is definitely double-digits and higher than our average growth rates.

這絕對是兩位數，並且高於我們的平均成長率。

Higher than your average growth. Perfect. One other quick follow-up.

高於你的平均成長。完美的。另一個快速跟進。

On the gross margin, I respect the fact that you want to be conservative, but given that with the benefit of large volume customers, you're still putting up relatively strong gross margin and relative to our admonitions about the risk, the down side risk from other large deals, it appears that 64%, 64%-plus is what you can generate even with these big volume purchasers. Is there anything that should change going forward relative to that 64%?

在毛利率方面，我尊重你們想要保守的事實，但考慮到大批量客戶的好處，你們仍然保持相對較高的毛利率，並且相對於我們對風險的警告，下行風險從其他大型交易來看，即使與這些大批量購買者相比，您也能獲得64%、64% 以上的收益。相對於這 64%，有什麼需要改變的嗎？

Paul, in general, I do feel strongly that you should consider our long term band to be 60% and 65%, particularly as we bring more capacity into the United States and we have some additional costs. But in addition to that, remember we're still in a very competitive environment where average ASPs for 10 gig for sure are still coming down. And while we're seeing a nice uptick in the acceptance of 100 gig, there is no reason to imagine we would trade off maintaining gross margin for market share.

Paul，總的來說，我確實強烈認為您應該考慮我們的長期範圍為 60% 和 65%，特別是當我們將更多產能引入美國並且我們有一些額外成本時。但除此之外，請記住，我們仍然處於競爭非常激烈的環境中，10 場演出的平均 ASP 肯定仍在下降。雖然我們看到 100 場演出的接受度大幅上升，但沒有理由認為我們會為了保持毛利率而犧牲市場份額。

In other words, we're still going all out for increasing our market share. In fact, when even I talk to our Board, they said you can do even better than increased market share. Given that backdrop, I would still say our long-term gross margin is in the 60% to 65% range.

換句話說，我們仍然在全力以赴地擴大我們的市場份額。事實上，當我與我們的董事會交談時，他們說你可以做得比增加市場佔有率更好。考慮到這種背景，我仍然會說我們的長期毛利率在 60% 到 65% 的範圍內。

Tai Liani, Bank of America.

泰利亞尼，美國銀行。

Hi. I have so many questions. I'll focus on one with two parts maybe. First, you highlighted the beginning the routing opportunity. Are these products or this product coming to replace the MX routers that are typically above the spine to consolidated it together? What is the opportunity. How do you size the opportunities of this market? How fast do you think it could ramp is? Is there a long qualification process ahead of you or testing with customers, et cetera?

你好。我有很多問題。我可能會專注於一個由兩部分組成的部分。首先，您強調了路由機會的開始。這些產品或此產品是否會取代通常位於主幹上方的 MX 路由器，將其整合在一起？有什麼機會。您如何評估這個市場的機會？您認為它的爬坡速度有多快？您是否需要經歷漫長的資格認證流程或與客戶進行測試等？

One just follow-up on something you said before. Can you discuss the pricing environment now given that Cisco discussed their prices for 100G or discussed their prices publicly, is this more aggressive than you had expected or do you expect this market to be more price competitive in the future versus before because of Cisco's pricing? Thanks.

這只是您之前所說的後續內容。鑑於思科已經討論了100G 的價格或公開討論了其價格，您能否討論一下現在的定價環境？這是否比您預期的更具侵略性，或者您是否認為由於思科的定價，該市場未來比以前更具價格競爭力？謝謝。

Wow, that's is a lot of one question.

哇，這是一個很多問題。

I'm not very good with math.

我數學不太好。

Oh, thank you, Tai. Regarding our routing opportunity, as I said I'm proud of the 7500R Series. It is a fantastically well designed, well architected product, a lot of third party acceptance and independent benchmarks.

哦，謝謝你，泰。關於我們的路由機會，正如我所說，我為 7500R 系列感到自豪。它是一款設計精良、架構完善的產品，並獲得了許多第三方的認可和獨立的基準測試。

I would look at the 7500R in sort of two applications. One is in the traditional data center market we already are where it is being accepted as by our existing customers as a natural 100 gig spine. We believe the qualification of the deployment of a100 gig spine will be quicker there because these are customers who already know that. By quicker I mean, it can be one to three quarters. I view that as a positive.

我會從兩種應用角度來看 7500R。一是在傳統資料中心市場，我們已經將其視為天然的 100 G 骨幹，並被我們現有的客戶接受。我們相信，在那裡部署 a100 gig 骨幹的資格認證會更快，因為這些客戶已經知道這一點。我所說的更快，可以是一到四分之三。我認為這是積極的。

In terms of the spine being a router, replacing things like the MX or others, that would be a longer qualification time because while it is -- it is not a different platform, there will be a qualification and there will be a testing there that is longer than one or two quarters. I would say over there it can be six months to a year.

就骨幹網而言，更換諸如 MX 或其他設備之類的東西，這將是一個更長的資格認證時間，因為雖然它不是一個不同的平台，但將會有一個資格認證和一個測試，長於一兩個季度。我想說在那裡可能是六個月到一年。

The material effect of the 7500R will be faster in the switching applications as a 100 gig spine and it will be second half to next year for routing applications. In general, even in the short time we've had, we launched this product March 29, so here we are with less than six weeks of data, the reception has been very positive.

7500R 作為 100 GB 主幹在交換應用中的實際效果將更快，而對於路由應用則將在下半年到明年。總的來說，即使我們的時間很短，我們還是在 3 月 29 日推出了這個產品，因此我們只得到了不到六週的數據，反應非常積極。

Got it. On pricing?

知道了。關於定價？

On pricing, no change. Competitors continue to be aggressive and we continue to be competitive.

定價方面，沒有變動。競爭對手持續咄咄逼人，我們也持續保持競爭力。

Alex Kurtz, Sterne Agee.

亞歷克斯·庫爾茨，斯特恩·阿吉。

Yes, thanks. I have two micro questions. Jayshree, there has been some discussion about changes to your go-to-market strategy. I wonder if you could address that.

對了謝謝。我有兩個微觀問題。 Jayshree，已經有一些關於改變您的上市策略的討論。我想知道你能否解決這個問題。

Mark, again, this is hypothetical, in case of product injunctions, could this domestic CM fully support your existing product portfolio?

再次強調一下，這是假設，如果出現產品禁令，這款國產CM能否完全支持你們現有的產品組合？

All right, Alex, so I'm going to ask Mark Smith, our Senior Vice-President of Worldwide Sales to address our sales strategy question. Few people realize that our engineering strategy is disruptive but so is our sales, Mark, right?

好吧，亞歷克斯，所以我要請我們的全球銷售高級副總裁馬克史密斯來解決我們的銷售策略問題。很少有人意識到我們的工程策略具有顛覆性，但我們的銷售也是如此，馬克，對吧？

Yes, thank you Jayshree. It is disruptive. I've been in the industry over 35 years. I guess that likes me old. But during that time I haven't seen a traditional sales model that resembles what we do at Arista. Our model is very differentiated from a go to market.

是的，謝謝傑什裡。這是破壞性的。我從事這個行業已經超過 35 年了。我猜那喜歡我老。但在那段時間裡，我還沒有看到類似我們在 Arista 所做的傳統銷售模式。我們的模式與進入市場的模式非常不同。

First of all, many customers -- or companies talk about customer focus, but few companies have as a flat an organization we have in sales where all of our VPs and managers all own accounts personally, along with the fact that our engineers, our engineering management and leadership team, are actively involved in every large customer.

首先，許多客戶或公司都在談論以客戶為中心，但很少有公司擁有像我們這樣的銷售部門的扁平化組織，我們所有的副總裁和經理都擁有個人帳戶，而且我們的工程師、工程人員也都擁有自己的帳戶。管理和領導團隊，都積極參與每一個大客戶。

Secondly, our product focus. As we've probably reiterated many, many times, Arista delivers best-of-breed data center switching and routing. That is all we do and our sales team become trusted advisors to customers where they are extremely competent technically to be able to help customers meet their needs.

其次，我們的產品重點。正如我們可能多次重申的那樣，Arista 提供同類最佳的資料中心交換和路由。這就是我們所做的一切，我們的銷售團隊成為客戶值得信賴的顧問，他們在技術上非常有能力幫助客戶滿足他們的需求。

The third area on our go to market is the cloud everywhere focus. We are in the business of building large clouds across the world. We call that cloud scale. We take that functionality and deliver it to our top verticals, which we call cloud class. In addition this allows us to enable our enterprise customers to build turnkey converged and hybrid cloud solutions, which we call cloud converged.

我們進入市場的第三個領域是雲端無所不在。我們致力於在全球範圍內建立大型雲端。我們稱之為雲端規模。我們採用該功能並將其交付給我們的頂級垂直行業，我們稱之為雲端類別。此外，這使我們能夠幫助我們的企業客戶建立交鑰匙融合和混合雲端解決方案，我們稱之為雲端融合。

Finally on our go to market, we have a very, very deep focus on our specific verticals where we know that we can add huge values. Many times we talk about intense focus of in cloud titans, financial services, service providers, web, and a high-tech enterprise. Rather than spreading a mile wide, we focus on going a mile deep in these verticals.

最後，當我們進入市場時，我們非常非常深入地關注我們的特定垂直領域，我們知道我們可以在這些領域增加巨大的價值。很多時候，我們談論雲端巨頭、金融服務、服務供應商、網路和高科技企業的強烈關注。我們不是廣泛傳播，而是專注於在這些垂直領域深入一英里。

Oh, thanks, Mark. You're not old, we're middle-aged. If you're old, I am too. That was a great summary. We really are proud of go to market and what Mark and the team have done to build customer intimacy, which along with our excellent products gives a total differentiated experience.

哦，謝謝，馬克。你還沒老，我們已經中年了。如果你老了，我也老了。這是一個很棒的總結。我們對進入市場以及馬克和團隊為建立客戶親密度所做的努力感到非常自豪，這與我們出色的產品一起提供了完全差異化的體驗。

Alex, did we answer your question? You said you had a micro question.

亞歷克斯，我們回答你的問題了嗎？你說你有一個微觀問題。

The other micro question could this domestic CM in the case of product injunctions allow you to continue supply of your existing product, if you have a domestic CM like you're talking about.

另一個微觀問題是，如果您有像您所說的那樣的國內 CM，那麼在產品禁令的情況下，該國內 CM 是否允許您繼續供應現有產品。

Mark, you want to take that.

馬克，你想接受這個。

Sure. Alex, as we had mentioned earlier, in the event of an adverse decision, our primary strategy there is the technical design arounds. (Multiple speakers) That is the strategy. I think your question was, would the CM here in the US support manufacturing of all of our products and the answer to that is yes.

當然。亞歷克斯，正如我們之前提到的，如果做出不利的決定，我們的主要策略是技術設計。 （多位發言者） 這就是策略。我想你的問題是，美國的CM是否支持我們所有產品的製造，答案是肯定的。

Yes, absolutely.

是的，一點沒錯。

Good. Thank you.

好的。謝謝。

Thank you, Alex.

謝謝你，亞歷克斯。

Alex Henderson, Needham.

亞歷克斯·亨德森，李約瑟。

Thank you very much. Two very quick questions. One, could you just give us some sense of what happened in the financial vertical in the quarter? There was a lot of discussion about the financial vertical being quite soft in January and February. Should we assume that maybe that was a little soft and it would come back more in later quarters?

非常感謝。兩個非常快的問題。第一，您能否讓我們了解本季金融垂直領域發生的情況？關於 1 月和 2 月金融垂直市場相當疲軟的討論有很多。我們是否應該假設這可能有點疲軟，並且會在接下來的幾季恢復更多？

The second one is just on the routing product. We talked about this with you back last year. You kind of implied it was 2017 before it was going to impact revenues in any way. Has that time line changed at all now that you've announced this product a lot sooner than I thought you would be getting it out?

第二個只是關於路由產品。我們去年就和你討論過這個問題。你有點暗示，2017 年才對收入產生任何影響。既然你們宣布這款產品的時間比我想像的要早得多，那麼時間線是否改變了？

Thanks, Alex. The financials, we're still seeing strong interest from them. Definitely they spent less in the last quarter and in the last second half, I would say. But I think going into Q2 and this year we expect their spending to be good. Maybe not super-strong but we don't see weakness the way others are describing, so pretty good.

謝謝，亞歷克斯。在財務方面，我們仍然看到他們的濃厚興趣。我想說，他們在上個季度和後半段的支出肯定減少了。但我認為進入第二季和今年，我們預計他們的支出會很好。也許不是超級強，但我們沒有像其他人描述的那樣看到弱點，所以相當不錯。

In terms of routing and routers and acceptance, six weeks don't make a trend but I have to tell you the excitement, the enthusiasm and differentiation of VR, we definitely think that we will see material impact in 2017. Maybe with a little bit of customer qualification acceleration we could still see it sooner, but we're still planning on 2017.

就路由和路由器以及接受度而言，六週並不能形成趨勢，但我必須告訴您 VR 的興奮、熱情和差異化，我們絕對認為我們將在 2017 年看到實質影響。也許有一點我們仍然可以更快看到客戶資格加速，但我們仍在2017 年進行規劃。

Okay. Great. Thank you very much.

好的。偉大的。非常感謝。

Thank you.

謝謝。

Ittai Kidron, Oppenheimer.

伊泰·基德倫，奧本海默。

I wanted to dig into the workaround situation. Good thing to hear the contract manufacturing can solve that problem if that problem arises. Can you give us updates on the work arounds, the level of preparedness and the ability to permanently solve the problem if you get the wrong court decision?

我想深入研究解決方法。如果問題出現的話，很高興聽到合約製造可以解決這個問題。如果法院判決錯誤，您能否向我們提供有關變通​​辦法、準備程度以及永久解決問題的能力的最新資訊？

I think we said this before and again I'll have Mark clarify this from a legal perspective. There are two cases in ITC, 944 and 945.

我想我們之前已經說過很多次了，我會讓馬克從法律角度澄清這一點。 ITC有兩個案件，944和945。

We have had an initial determination on 944 but as you know, it is still under commissioned review and there is no final determination. Should we get a final determination this summer, we are absolutely prepared with the right design work arounds and engineering work arounds and we're very comfortable with that.

我們已經對944做出了初步決定，但如你所知，它仍在接受委託審查中，還沒有最終決定。如果我們在今年夏天做出最終決定，我們絕對已經準備好正確的設計工作和工程工作，我們對此感到非常滿意。

945, you might have heard, has been delayed by a few months, so that is a separate case, and we have similar comfort but it is later in the year. Mark, you want to answer that?

您可能聽說過，945 號航班被推遲了幾個月，所以這是一個單獨的案例，我們也有類似的安慰，但那是在今年晚些時候。馬克，你想回答這個問題嗎？

The only thing I would to add is that with respect to the technical design arounds in the 944, we actually will have an image, a software image ready and available in Q2, actually this month.

我唯一要補充的是，關於 944 的技術設計，我們實際上將在第二季（實際上是本月）準備好並提供一個圖像、一個軟體圖像。

Perfect. We have been ready in trials in Q1 so we'll be ready for general availability in Q2.

完美的。我們已經在第一季的試驗中做好了準備，因此我們將在第二季準備好全面上市。

Very good. Good luck.

非常好。祝你好運。

Thank you, Ittai.

謝謝你，伊泰。

Simon Leopold, Raymond James.

西蒙·利奧波德，雷蒙德·詹姆斯。

Thank you for taking my question, a real simple quick clarification and question. On the clarification, Ita was pretty quick, I missed the tax rate for the quarter -- sorry, for the outlook for Q2.

感謝您提出我的問題，一個真正簡單快速的澄清和問題。在澄清方面，Ita 很快，我錯過了本季的稅率——抱歉，錯過了第二季的前景。

In terms of my question, Jayshree, last quarter I asked you for an update on partnerships because you have a number of those that I think help in terms of competing against some of the larger players. I was looking for an update and maybe some metrics on your partnership strategy with folks like Hewlett-Packard, VMware, Palo Alto.

就我的問題而言，Jayshree，上個季度我要求您提供有關合作夥伴關係的最新信息，因為我認為您有許多合作夥伴關係有助於與一些較大的參與者競爭。我正在尋找有關您與惠普、VMware、帕洛阿爾託等公司的合作夥伴策略的最新資訊以及一些指標。

Simon, thank you. You know, I did -- I remember it well and I will come back to you with metrics, but if I had to give you a qualitative answer right now I would say the partnerships are going very well. Our top partners are VMware, HP and Palo Alto Networks.

西蒙，謝謝你。你知道，我做到了——我記得很清楚，我會向你提供指標，但如果我現在必須給你一個定性的答案，我會說合作關係進展順利。我們的頂級合作夥伴是 VMware、HP 和 Palo Alto Networks。

If I had to add another set of partners that I'm getting excited about it would be in the media and entertainment space where we had a very successful broadcasting show last month, and also stay tuned for some exciting things we're doing in storage. I still owe you metrics but qualitatively, I'm very pleased.

如果我必須添加另一組讓我感到興奮的合作夥伴，那就是媒體和娛樂領域，我們上個月在那裡舉辦了一場非常成功的廣播節目，並且還請繼續關注我們在存儲方面所做的一些令人興奮的事情。我仍然欠你們指標，但從品質上來說，我很高興。

Actually, Mark, since you are with us and you deal with this much more, maybe you can broaden Simon's question and share with us how things are going in the channel and the technology partners.

事實上，馬克，既然你和我們在一起並且處理這個問題的次數更多，也許你可以擴大西蒙的問題並與我們分享渠道和技術合作夥伴的進展情況。

Actually I had the chance over the last three weeks to go to the VMware Partner Leadership Conference in Phoenix, in Tempe, and it is something that we really got quite excited about, because that week followed by the Palo Alto Ignite event in Las Vegas, what we saw was a lot more interest from the channels globally. This is real exciting to us because we, as an emerging company, we've developed a lot of the end-user customers ourselves, but now we're seeing, with the integration with our key partners, an unbelievable opportunity to provide a more comprehensive solution and it's all based on being open.

事實上，過去三週我有機會參加在坦佩鳳凰城舉行的 VMware 合作夥伴領導力大會，這讓我們感到非常興奮，因為接下來的一周是在拉斯維加斯舉行的 Palo Alto Ignite 活動，我們看到全球通路的興趣大大增加。這對我們來說確實令人興奮，因為作為一家新興公司，我們自己開發了許多最終用戶客戶，但現在我們看到，透過與我們的主要合作夥伴的整合，這是一個令人難以置信的機會，可以提供更多全面的解決方案，而這一切都基於開放。

I would say from a partnership standpoint, we're seeing more momentum, both with the combined sales organizations, with the VMware, Palo Alto, HP, et cetera, and from a product standpoint, we're able to provide better solutions as Jayshree addressed like the macro segmentation, which is getting just outstanding reviews.

我想說，從合作關係的角度來看，我們看到了更多的動力，無論是與合併後的銷售組織，還是與VMware、Palo Alto、HP 等，從產品的角度來看，我們能夠像Jayshree 一樣提供更好的解決方案就像宏觀細分一樣，它得到了出色的評價。

Thank you, Mark. You had a tax rate question, Ita.

謝謝你，馬克。 Ita，您有一個稅率問題。

The guidance was 27% to 29%.

指導值為27%至29%。

Hendi Susanto, Gabelli.

亨迪·蘇珊托，加貝利。

Good afternoon, Jayshree and Ita. Jayshree, the (inaudible) routing platform is a great new market opportunity for Arista. How should we think of customer profiles that fit your routing platform target, especially those with significantly smaller network resources than Netflix? Will your routing customers require sizeable network resources to implement it?

下午好，Jayshree 和 Ita。 Jayshree（聽不清楚）路由平台對 Arista 來說是一個巨大的新市場機會。我們應該如何考慮適合您的路由平台目標的客戶資料，尤其是那些網路資源比 Netflix 小得多的客戶資料？您的路由客戶是否需要大量網路資源來實施它？

Thank you, Hendi. No, I think it is a very natural extension from where we are. Be clear that Arista has been doing switching and routing for a long time.

謝謝你，亨迪。不，我認為這是我們所處位置的一個非常自然的延伸。需要明確的是，Arista 長期以來一直在做交換和路由。

We have been doing BGP routing for several years, we're doing multi-cast routing, we're doing VX line routing. What we've really done with the R series is expand the scale and expand the routing protocols and internet tables with flex route. Now we have selective round download, segment routing, MPLS, LVP type routing and we're really bringing in additional WAN protocols and a level of high availabilities.

我們做 BGP 路由已經好幾年了，我們正在做多播路由，我們正在做 VX 線路路由。我們對 R 系列真正所做的是擴大規模並透過靈活路由擴展路由協定和網際網路表。現在我們有選擇性循環下載、分段路由、MPLS、LVP 類型路由，並且我們確實引入了額外的 WAN 協定和一定程度的高可用性。

I don't think it is a dramatic change in our customers' learning nor in our SCM sales force understanding. But it will take time to associate Arista with that and qualify it. But in terms of technology adjacency, it is very natural.

我認為這對我們客戶的學習和我們對 SCM 銷售人員的理解來說並不是一個巨大的改變。但將 Arista 與此連結並對其進行限定還需要時間。但就技術鄰接而言，這是很自然的。

Thank you and great results.

謝謝你，取得了很好的成果。

Thank you, Hendi.

謝謝你，亨迪。

Jess Lubert, Wells Fargo Securities.

傑西·盧伯特，富國銀行證券。

Thanks for taking my question and congrats on a nice quarter. A question and clarification.

感謝您提出我的問題，並祝賀您度過了一個愉快的季度。一個問題和澄清。

First, just on the clarification, can you help us understand with the workarounds, how long the ITC's review is likely to take following the final determination? Is that something that we should expect to be weeks or months? Any kind of insight there?

首先，請澄清一下，您能否幫助我們了解解決方法，在做出最終決定後，ITC 的審核可能需要多長時間？我們應該期待幾週或幾個月的時間嗎？有什麼見解嗎？

For Ita, it looks to me looks like you under spent at least our expectations a bit on Q1, particularly on the sales and marketing side even though revenue was fairly strong. I was hoping to understand what happened there and given you've struggling expenses faster than sales for multiple quarters now, what leads you believe operating margins are likely to dip to 26% in Q2?

對於 Ita 來說，在我看來，您在第一季的支出至少低於我們的預期，特別是在銷售和行銷方面，儘管收入相當強勁。我希望了解那裡發生了什麼，鑑於您現在連續多個季度的支出速度都快於銷售速度，是什麼導致您認為第二季的營業利潤率可能會下降至 26%？

Okay, Mark, this is an earnings call, and thank you for the wishes, Jess, but once again this question is for you on what do we expect the ITC time frame to be.

好的，馬克，這是一次財報電話會議，感謝您的願望，傑西，但這個問題再次向您提出，我們預計 ITC 的時間框架是怎樣的。

I think just taking a step back, if there is an adverse decision in the ITC, full compliance with an order would be essentially having non-infringing product. I think that is the most important thing. To get clarity around that, there are different paths to get those approved, and we'll make a decision once, if there is a final determination that is adverse to us, we'll make a decision at that point as to the appropriate path to follow. In terms of -- in order to be able to get some clarity around approvals.

我認為退一步來說，如果 ITC 做出不利決定，完全遵守命令本質上就擁有非侵權產品。我認為這是最重要的。為了澄清這一點，有不同的途徑來獲得批准，我們將做出一次決定，如果最終決定對我們不利，我們將在那時就適當的途徑做出決定跟隨。就——為了能夠對批准有一定的了解。

In order to -- in terms of timing, the timing varies greatly. I don't think that we can provide you any sort of detail around the timing. It just depends upon the process.

為了——就時間而言，時間差異很大。我認為我們無法向您提供有關時間安排的任何詳細資訊。這僅取決於過程。

Yes, I think in terms of the operating expenses, I think if you look forward to Q1, we did see some good growth on the R&D side and we expect that to continue. We're obviously hiring as much talent and resources as we can find and we also have some other expenses associated with the workarounds and the design arounds and so on. That is a number I would certainly like to keep some optionality around how that number grows over the next coming quarter. That is part of why I think you are why you're seeing that spread on the OpEx.

是的，我認為就營運費用而言，如果你期待第一季度，我們確實看到研發方面出現了一些良好的成長，我們預計這種情況將持續下去。顯然，我們正在招募盡可能多的人才和資源，而且我們還有一些與解決方法和設計方法等相關的其他費用。對於這個數字，我當然希望對該數字在下一個季度的成長方式保留一些選擇。這就是為什麼我認為您在營運支出上看到這種情況的部分原因。

On the sales side, Q4 is a high variable comp quarter. Sales commissions and so on. I think we saw that, as well. We are hiring sales headcount again in all regions and as fast as Mark is finding those people, we're hiring them and it is our intention to continue to do that.

在銷售方面，第四季是一個高變數的季度。銷售佣金等。我想我們也看到了這一點。我們正在所有地區再次招募銷售人員，只要馬克找到這些人，我們就會招募他們，我們打算繼續這樣做。

I think we have increased sales headcount every quarter. Yes, there is no change there.

我認為我們每個季度都增加了銷售人員數量。是的，那裡沒有任何變化。

Would you expect sales and marketing expense to increase as a percentage of revenue going forward or is 10% or lower the new normal?

您預期未來銷售和行銷費用佔收入的比例會增加還是 10% 或更低會成為新常態？

I think longer term you should expect that to be 10% to 12% at least of revenue. How fast we get there kind of depends on our growth but certainly in my mind it should be a double-digit percentage of revenue and that is our expectation over time.

我認為從長遠來看，你應該預期這至少會佔收入的 10% 到 12%。我們達到這一目標的速度取決於我們的成長，但在我看來，它肯定應該是收入的兩位數百分比，這就是我們對一段時間的期望。

Thanks, guys.

多謝你們。

Ryan Hutchinson, Guggenheim.

瑞安·哈欽森，古根漢。

Okay. Great. Most of the questions have been asked. I guess, Jayshree, with all new chip sets there are supply constraints and we've talked about supply constraints with Jericho. I guess what I'm trying to figure out is have those supply constraints improved? Your guidance would suggest otherwise but perhaps your guidance doesn't bake in much in the way of the 7500R platform. So just try and help us understand that dynamic and how to think about it over the next, call it, 6 to 12 months.

好的。偉大的。大多數問題都被問到了。我想，Jayshree，所有新晶片組都存在供應限制，我們已經與 Jericho 討論過供應限制。我想我想弄清楚的是這些供應限制是否得到改善？您的指南可能會提出相反的建議，但也許您的指南並沒有對 7500R 平台產生太大影響。因此，請嘗試幫助我們了解這種動態以及如何在接下來的 6 到 12 個月內思考它。

Yes, so I think one of the things you heard -- thanks Ryan -- Ita say is that we're really working on building the right inventory mix of new product and existing product, and you are right, there are a lot of chips in the mix here, existing chips as well as new chips like Tomahawk and Jericho. But be clear, there is an awful lot going on with Trident and Arat, too. We're dealing with a tremendous amount of component variety with varying levels of lead times.

是的，所以我認為你聽到的一件事——謝謝瑞安——伊塔說，我們真的正在努力建立新產品和現有產品的正確庫存組合，你是對的，有很多晶片這裡混合了現有晶片以及戰斧和Jericho 等新晶片。但要明確的是，Trident 和 Arat 也發生了很多事情。我們正在處理數量龐大且交貨時間各異的組件。

Typically, those lead times require us to plan our forecast three to four months in advance because the lead times for the components can be that long. No material change there from our vendors but they're certainly working very closely with us and we factor that in like we always do. This is true, by the way, both for new products and existing products. We aren't just seeing it just on Jericho or just on one type.

通常，這些交貨時間要求我們提前三到四個月規劃我們的預測，因為組件的交貨時間可能會很長。我們的供應商沒有發生重大變化，但他們確實與我們密切合作，我們像往常一樣將這一點考慮在內。順便說一句，對於新產品和現有產品都是如此。我們不僅僅在傑里科或僅在一種類型上看到它。

The 7500R, though, is based on Jericho? Or could it be based on --

不過 7500R 是基於 Jericho 的嗎？或者它可以基於——

The 7500R specifically is based on Jericho, you're right.

7500R 具體是基於 Jericho 的，你是對的。

My question is around adoption of that platform and what is in embedded in guidance and what's not.

我的問題是關於該平台的採用以及指南中嵌入的內容和未嵌入的內容。

Okay. Got it. Separate from the supply constraints, as I said, we have had -- we announced the platform March 29. We started shipping in Q2. The acceptance and the reception has -- we are already into double-digit customers, and a tremendous amount of the expectance is a 100 gigabit spine.

好的。知道了。除了供應限制之外，正如我所說，我們於 3 月 29 日宣布了該平台。我們在第二季度開始發貨。接受和接待已經——我們已經擁有兩位數的客戶，最大的期望是 100 Gb 主幹。

Vijay Bhagavath, Deutsche Bank.

維傑‧巴加瓦斯 (Vijay Bhagavath)，德意志銀行。

Hi, Jayshree, Ita. Solid results here. Quick question and a follow-up. Question is on could you we expect a design win, Jayshree, for the 7500R, a solid product at front of the major US telcos this year? For example, AT&T's (inaudible) seems to be a good fit for NFE.

嗨，傑什裡，伊塔。這裡有可靠的結果。快速提問和跟進。問題是，Jayshree，您是否可以期待 7500R 的設計獲勝，這是今年美國主要電信公司面前的可靠產品？例如，AT&T（聽不清楚）似乎非常適合 NFE。

You're asking me something to speculate something I don't have an answer to. Let's just say I've read more press on it than I can comment on it.

你問我一些事情，讓我推測一些我沒有答案的事情。這麼說吧，我讀到的有關它的新聞比我能評論的還要多。

The more general answer, rather than specific to a Tier 1, would be the 7500 is a very natural product for large-scale cloud and service providers, both Tier 1 and Tier 2. So you would expect we're seeing a lot of interest collapsing two layers that are very costly for them today and bringing both OpEx and CapEx advantages to them.

更普遍的答案是，7500 對於大型雲端和服務提供者（無論是第1 層還是第2 層）來說是一個非常自然的產品，而不是特定於第1 層。因此，您會期望我們看到許多興趣瓦解如今對他們來說成本高昂的兩層，並為他們帶來營運支出和資本支出優勢。

Perfect. And then a bigger picture question, Jayshree, on your channel strategy. A little confused here. Over the next few years, what percentage of revenues would you expect to see come from indirect channels versus direct sales. How strategic do you view the channel for expanding and sales into enterprise and some of these Telco opportunities over the next few years?

完美的。然後是一個更大的問題，Jayshree，關於您的頻道策略。這裡有點困惑。在接下來的幾年中，您預計來自間接管道的收入與直接銷售的收入百分比是多少。您如何看待未來幾年企業擴張和銷售管道以及其中一些電信機會的策略性？

Since I have my good friend Mark Smith I am going to ask for his help here. First of all, I think there is misnomer on Arista that while we're extremely customer focused and end-customer focused, the channel is an enabler and a very large percentage of our business is enabled and even fulfilled through channels. Mark, you want to comment more on that?

因為我有我的好朋友馬克‧史密斯，所以我要在這裡尋求他的幫助。首先，我認為 Arista 的說法有誤，雖然我們非常以客戶和最終客戶為中心，但管道是一個推動者，我們很大一部分業務是透過管道實現甚至實現的。馬克，你想對此發表更多評論嗎？

First of all, internationally it's virtually100% of our business flows through channels. The benefit we have by having the best technology, is we have this elite program in our channels that actually is self-selecting, where the best networking partners actually pick up Arista. When you look at the other technology companies in this space that are providing the best solutions, they combine them with those. I think what you're going to see is the channel becoming more and more important to us over time and I think we're still early, Jayshree, in the actual development of the channel, but I think it is really important to us.

首先，在國際上，我們幾乎100%的業務都是透過通路流動的。擁有最好的技術為我們帶來的好處是，我們在頻道中擁有這個實際上是自我選擇的精英計劃，而最好的網路合作夥伴實際上會選擇 Arista。當您查看該領域提供最佳解決方案的其他技術公司時，他們會將它們與這些解決方案結合在一起。我想你會看到隨著時間的推移，這個管道對我們來說變得越來越重要，Jayshree，我認為我們在頻道的實際開發方面還處於早期階段，但我認為這對我們來說非常重要。

That's very true. And the channel for us means more than just channel partners. It also means our technology partners. So it is a much more holistic approach to that.

這是非常正確的。對我們來說，通路不僅僅意味著通路合作夥伴。這也意味著我們的技術合作夥伴。因此，這是一種更全面的方法。

Thanks Jayshree. Solid results.

謝謝傑什裡。紮實的​​成果。

Thanks, Vijay. Thanks for your support.

謝謝，維傑。感謝您的支持。

Rajesh Ghai, Macquarie.

拉傑什·蓋伊，麥格理。

Good afternoon. I wanted to follow up on a question on a response that you gave earlier to a question, Jayshree, about (technical difficulty) at cloud titans. You said you were working with them and they initiated (inaudible) drivers and other software based application control elements in their initiatives. In the future when the someone like Microsoft or Facebook begins to use their own operating system, does that mean (inaudible) in that situation, how do you continue to kind of maintain or grow the gross profit pool that you that earn from those customers (inaudible)?

午安.我想跟進您之前對 Jayshree 關於雲端巨頭（技術難度）的問題的回答。您說您正在與他們合作，他們在其計劃中啟動了（聽不清楚）驅動程式和其他基於軟體的應用程式控制元素。將來，當像微軟或Facebook 這樣的人開始使用自己的作業系統時，這是否意味著（聽不清楚）在這種情況下，你如何繼續維持或增加從這些客戶那裡賺取的毛利池（聽不見）？

Yes, Rajesh. That is an excellent question and I know it is one that many of you view as either/or. I view it as and. If we work with them closely on software stacks, then take a large titan, they generally have multiple tiers of lease and multiple tiers of fines. It is quite possible that one of those tiers of lease may be software only from Arista or maybe a joint software development from Arista and the cloud titan but it keeps a lot of opportunity available us to for us in other applications.

是的，拉傑什。這是一個很好的問題，我知道你們很多人都認為這是一個非此即彼的問題。我將其視為和。如果我們在軟體堆疊上與他們密切合作，那麼以一個大型巨頭為例，他們通常有多層租賃和多層罰款。這些租賃層之一很可能是僅來自 Arista 的軟體，或者可能是 Arista 和雲端巨頭共同開發的軟體，但它為我們在其他應用程式中保留了許多機會。

I think you are going to see different strokes and different folks and different building blocks and especially the tier zero lease could be one that we do more as software only, should the cloud titan want to go there. So we don't rule that out and in terms of profit pool it can actually be pretty good in gross margin, even if the gross margin -- percentages, even if the dollars may be lower. We view this as a portfolio. We don't view this as one particular product.

我認為你會看到不同的方式、不同的人和不同的構建塊，特別是零級租賃可能是我們僅作為軟體做更多的事情，如果雲端巨頭想要去那裡的話。因此，我們不排除這種可能性，就利潤池而言，即使毛利率可能較低，但毛利率實際上可能相當不錯。我們將其視為一個投資組合。我們不認為這是一種特定的產品。

Okay. Thank you.

好的。謝謝。

Thank you, Rajesh.

謝謝你，拉傑什。

Stanley Kovler, Citi Research.

史丹利‧科夫勒，花旗研究部。

Hi, thanks for taking my question. I wanted to ask one clarification on gross margin and then a larger question. Gross margin, should we think about the second half dipping as low as 61% for the second half, given the change in the manufacturing and just some of the customer mix? That's one.

您好，感謝您提出我的問題。我想就毛利率提出一個澄清，然後提出一個更大的問題。毛利率，考慮到製造業和部分客戶組合的變化，我們是否應該考慮下半年毛利率會低至 61%？這是一個。

On the larger question here, which is the main question, as you get more involved with the spine and the 7500R ramps, how should we think about the cloud titan exposure that you have? Are you in a position to expand your business, particularly in the spine, with customers that maybe have been more prone to using white boxes before, and now that this product is making it more attractive for them to use you for more of their network, so that's really the nature of the question. If that extends into the international growth this quarter, as well, if that is what the existing customers or that was for new customers? Thanks a lot.

關於這裡更大的問題，這是主要問題，當您更多地參與脊柱和 7500R 坡道時，我們應該如何考慮您所擁有的雲泰坦暴露？您是否能夠擴展您的業務，特別是在脊椎領域，與以前可能更傾向於使用白盒的客戶合作，現在該產品使他們更有吸引力地使用您的更多網絡，這就是問題的本質。如果這也延伸到本季的國際成長中，那麼這是現有客戶還是新客戶的情況？多謝。

Wow. Thank you, Stanley, we'll try. Ita, you want to take the gross margin question I'll address the spine.

哇。謝謝你，史丹利，我們會努力的。 Ita，你想提出毛利率問題，我來解決一下。

The way to think about the impact of the manufacturing on the gross margin is we'll start to produce volume probably in Q3 and the first time we'll really be selling products on that factory and having an impact on the financials would be in Q4, and then into 2017. I think that impact is really something to think about as you look into -- as you look into next year, right?

考慮製造業對毛利率的影響的方法是，我們可能會在第三季度開始生產，我們第一次真正在該工廠銷售產品並對財務產生影響將在第四季度，然後進入2017 年。我認為當你展望明年時，確實需要考慮這種影響，對吧？

Again, it is early to really to try to size that. I think what we're seeing we believe in all scenarios we can be in that range and then we'll refine that as we go. But it is more as a Q4 and into 2017 effect and we'll refine that as we get closer to that.

再次強調，現在真正嘗試確定其規模還為時過早。我認為我們所看到的，我們相信在所有情況下我們都可以在這個範圍內，然後我們將繼續完善它。但這更像是第四季度和 2017 年的影響，當我們接近這一目標時，我們將對其進行完善。

Yes, so with this respect to spines and white box, maturity of the white box activity or the things you see tend to see to be in the leaf in simple single chip configurations. The spine is a more difficult thing, especially in the chassis, to do.

是的，因此就刺和白盒而言，白盒活動的成熟度或您看到的東西往往在簡單的單晶片配置中的葉子中看到。脊椎是一件比較難做的事情，尤其是在底盤上。

I don't say I preclude, it but you'll see many tiers of lease, many tiers of spine. With the leaf, they will be more experimental projects, but the spine, especially with the Arista's highly differentiated product both on the architecture and on the EOS, we feel very comfortable, especially at 40, 50 and 100 gig, will be for ours to lose.

我並不是說我排除它，但你會看到很多層的租賃，很多層的脊柱。對於 Leaf，它們將是更多實驗性項目，但 Spine，尤其是 Arista 在架構和 EOS 上高度差異化的產品，我們感到非常舒服，特別是在 40、50 和 100 gig 時，將是我們的失去。

Back to the portfolio answer, I think it will be a mix and match. White box may mean they get standard hardware from somewhere but may still consider our software. Spine really I think is still very much a decision they make in totality with the vendor, because there's so much complexity in the scale, the switching, the routing, the higher deliverability, that you have to think twice before building core capability internally for that.

回到投資組合的答案，我認為這將是混合搭配。白盒可能意味著他們從某個地方獲得標準硬件，但仍可能考慮我們的軟體。我認為骨幹實際上仍然是他們與供應商共同做出的決定，因為規模、交換、路由、更高的可交付性方面非常複雜，因此在內部構建核心功能之前必須三思而後行。

Thanks. Do you expect that the spine will be a greater portion of your revenue as we head into 2017 than it was in 2016? Thank you.

謝謝。進入 2017 年，您預計脊椎在您的收入中所佔的比例是否會比 2016 年更大？謝謝。

That's hard to predict at the moment, but I think it is not going to be something that just happens suddenly one quarter or one year later. It's going to be gradual.

目前很難預測，但我認為這不會是一個季度或一年後突然發生的事情。這將是漸進的。

Thanks a lot.

多謝。

Mitch Steves, RBC Capital Markets.

米奇‧史蒂夫 (Mitch Steves)，加拿大皇家銀行資本市場部。

Hey, great quarter, guys. Just wanted a quick question on the OpEx side. Knowing that you guys are bringing some more jobs on shore, can you maybe explain, one, potentially what the strategic advantage is, and then secondly, is this going to inflate the OpEx line consistently as we go forward?

嘿，夥計們，很棒的季度。只是想問一個關於營運支出方面的簡單問題。知道你們正在為岸上帶來更多工作機會，您能否解釋一下，第一，潛在的戰略優勢是什麼，第二，隨著我們的前進，這是否會持續增加營運支出？

You may want it answered but as I said, I think we seek several strategic advantages. We've got a lot of new product going and having proximity to our engineering sites is one. If I had to summarize it in a in the shell, it would be operational flexibility to conduct our business and provide our customers with continuous product. You want to address that some more?

你可能希望得到答案，但正如我所說，我認為我們尋求幾個戰略優勢。我們有很多新產品正在開發中，而靠近我們的工程站點就是其中之一。如果我必須概括地說，那就是營運靈活性，以開展我們的業務並為我們的客戶提供持續的產品。您想進一步解決這個問題嗎？

I think in terms of the financials and how it impacts the financials, this will be a kind of a cost product cost impact if we see one, right? And like I said, I think that is something we would see Q4 and into next year, but it would be a product cost impact that obviously we would work to optimize over time, right? It is not really an OpEx impact in the sense that these would be contract manufacturing resources and jobs that Jayshree was mentioning.

我認為就財務狀況及其對財務狀況的影響而言，如果我們看到的話，這將是一種成本產品成本影響，對吧？就像我說的，我認為我們會在第四季度和明年看到這一點，但這將是對產品成本的影響，顯然我們會隨著時間的推移而努力優化，對嗎？這並不是真正的營運支出影響，因為這些是 Jayshree 提到的合約製造資源和工作。

Got it. Secondly from an enterprise perspective, outside of hyper scale, are you guys seeing share gains at this point?

知道了。其次，從企業的角度來看，除了超大規模之外，你們目前是否看到了份額的成長？

We're seeing overall share gains. Clearly the titans contributing to it but so are the three verticals, including the enterprise.

我們看到整體份額的成長。顯然，巨頭們對此做出了貢獻，但包括企業在內的三個垂直領域也是如此。

Got it. Thank you.

知道了。謝謝。

Mark Moskowitz, Barclays.

馬克·莫斯科維茨，巴克萊銀行。

Yes, thanks, good afternoon. Maybe a question here for both Jayshree and Mark. A lot of focus has been on the channel and enterprise mix during this call.

是的，謝謝，下午好。也許這裡有一個問題要問 Jayshree 和 Mark。在這次電話會議中，許多焦點都集中在通路和企業組合上。

I want to see, are we missing something here in terms of there is a bigger dynamic here whereby because of the change in how technology is being procured and implemented that a lot of folks are just going with the cloud providers or a private cloud type of apparatus. You don't have to really focus maybe on the channel or the enterprise per se as maybe traditionally was the focus.

我想看看，我們是否在這裡遺漏了一些東西，因為這裡有一個更大的動態，因為技術的採購和實施方式發生了變化，很多人只是選擇雲端提供者或私有雲類型儀器。您不必真正關注通路或企業本身，因為這可能是傳統的焦點。

Yes, I think you hit the nail on the head, quite honestly, Mark, because it is something we have been saying because we keep getting asked why is our sales and marketing so low instead of why is your sales and marketing so successful and targeted. Mark and his team have done a fantastic job of that.

是的，我認為你擊中了要害，說實話，馬克，因為這是我們一直在說的事情，因為我們不斷被問到為什麼我們的銷售和營銷如此低，而不是為什麼你的銷售和營銷如此成功和有針對性。馬克和他的團隊在這方面做得非常好。

You want comment Mark, on why it is so fantastic?

你想要評論馬克，為什麼它如此精彩？

(Laughter) No comment.

（笑聲） 沒有評論。

Okay.

好的。

I will say, Mark, one thing that I'll say is having been -- this is my fourth public company, having been in a lot of companies with a lot of good product, the big -- a big differentiator for my sales organization is product quality. You can't go to an executive briefing here at Arista if you're a prospect or customer without hearing about quality, quality, quality, quality. We look at every P1 that comes across.

我要說的是，馬克，我要說的一件事是——這是我的第四家上市公司，我曾在很多公司工作過，擁有很多好的產品，大——對我的銷售組織來說是一個很大的差異化因素是產品品質。如果您是潛在客戶或客戶，那麼您就不可能參加 Arista 的高階主管簡報，而沒有聽說過品質、品質、品質、品質。我們會注意遇到的每一個 P1。

We have a massive customer that in 2015, one of my reps up and he goes, do you realize they didn't have a single switch fail in the entire year? So I'll tell you, from a sales standpoint, the enabling us to be efficient, that's the number-one enabler is product quality.

我們有一個大客戶，在 2015 年，我的一位代表站起來，他說，你是否意識到他們一整年都沒有發生過一次交換機故障？所以我會告訴你，從銷售的角度來看，讓我們有效率的首要因素是產品品質。

Thank you, Mark.

謝謝你，馬克。

Okay. If I can clarify too, for Ita here, real quickly on gross margins. The commentary of long term to 60% to 65%, what is that trying to prepare us for? Is that due to mix related to product or customer? Or is that due to any sort of royalty dimension that could be introduced here because of the ongoing litigation. Is there any sort of preparation around us getting ready for a royalty payment that would be slight, minor drag on gross margin?

好的。如果我也能澄清一下，對於 Ita 來說，毛利率真的很快。長期到60%到65%的評論，是想讓我們做好什麼準備？這是由於與產品或客戶相關的混合造成的嗎？或是由於正在進行的訴訟而可能在此引入任何類型的特許權使用費。我們周圍是否有任何準備好支付特許權使用費，這會對毛利率造成輕微的拖累？

No, the reiteration on that on this call is around the manufacturing and the impact of bringing up a new factory and a new CM with potentially maybe a slightly disadvantaged cost structure, at least in the beginning. I think that is what we're referencing. To provide some context in terms of what would the ramp of that new factory do to gross margins, we're really just restating that, that would still stay within the 60% to 65% and that is what it was intended to do, nothing more than that.

不，這次電話會議重申的重點是製造以及建立新工廠和新 CM 的影響，成本結構可能略顯不利，至少在一開始是如此。我認為這就是我們所引用的。為了提供一些關於新工廠的產能提升對毛利率的影響的背景信息，我們實際上只是重申這一點，毛利率仍將保持在 60% 到 65% 之間，這就是它的目的，沒有什麼比那更多的。

What is really nice is that new manufacturing facility means everything is highly automated. You get to bring brand in machines and you get to spend lots of money.

真正好的一點是，新的製造設施意味著一切都高度自動化。你可以在機器上引入品牌，並且可以花很多錢。

The flip side of that you also have some increased labor and wages and overhead from that initially until we streamline the operation and get the costs out of it. Nothing different than we saw early on when we even started our first and second contract manufacturers, but it is a process and it is a multi-year process.

另一方面，從最初開始，您還會增加一些勞動力、工資和管理費用，直到我們簡化操作並消除成本。與我們早期創辦第一家和第二家合約製造商時所看到的沒有什麼不同，但這是一個過程，而且是一個多年的過程。

Thank you.

謝謝。

Thank you. Our final question here, please?

謝謝。我們的最後一個問題，好嗎？

Steve Milunovich, UBS.

史蒂夫·米盧諾維奇，瑞銀集團。

Thanks. You said that the pricing environment really hasn't changed but I was curious; your competitors have some new systems out. Cisco announced some a few months ago. The Juniper QFX10-K just started shipping last quarter. Are you seeing these products in competitive situations and is it impacting anything?

謝謝。你說定價環境確實沒有改變，但我很好奇；您的競爭對手推出了一些新系統。思科幾個月前宣布了一些消息。 Juniper QFX10-K 上季剛開始出貨。您是否在競爭激烈的情況下看到這些產品？它會產生什麼影響嗎？

No, we been always seeing different products from different companies and they have been always been aggressive and competitive. I'd say it hasn't changed. The aggression continues in the same way it always has. No different. It has always been a level of dynamic and highly competitive and highly pressured on the price, but since we've always experienced it, there is no change in the aggression.

不，我們總是看到不同公司的不同產品，而且他們一直都很積極和有競爭力。我想說它沒有改變。侵略行為一如既往地持續著。沒有什麼不同。它一直是一個充滿活力、競爭激烈、價格壓力很大的水平，但由於我們一直經歷過，所以侵略性沒有改變。

Okay. Thanks.

好的。謝謝。

Thank you.

謝謝。

Simona Jankowski, Goldman Sachs.

西蒙娜·揚科斯基，高盛。

I wanted to add context around the earlier discussion of white box adoption at the cloud titans. Is your cloud revenue primarily tilted to the leaf versus the spine? Maybe you can quantify that for us. I have a quick one for Ita as well.

我想補充一下之前關於雲巨頭採用白盒的討論的背景資訊。您的雲收入主要是向葉子傾斜還是向脊椎傾斜？也許你可以為我們量化這一點。我也為 Ita 準備了一份快速的。

No, our cloud scale and cloud titans are very much a mix of both, and sometimes it is leaf, sometimes it is spine, sometimes it is more leaf and sometimes more spine. I wouldn't read too much. I will say one thing we see in common is more rapid migration to the leaf being 25 and 50 gig and the spine being 100 gig.

不，我們的雲鱗和雲泰坦是兩者的混合體，有時是葉子，有時是脊柱，有時是更多葉子，有時更多是脊柱。我不會讀太多。我想說的是，我們看到的一個共同點是更快地遷移到 25 和 50 gig 的葉子以及 100 gig 的脊椎。

Thank you, Jayshree. Ita, you had strong services growth, much faster than products. Can you talk a little bit about what is driving that and also what kind of attach are you seeing with your customer for services.

謝謝你，傑什裡。 Ita，你們的服務成長強勁，比產品成長快得多。您能否談談是什麼推動了這一趨勢，以及您與客戶對服務的連結是怎樣的？

Simona, I think Q4 is typically -- Q4 into Q1, is typically a good, strong services quarter. You tend to see a fair amount of renewals and so on happen in that time frame. That's really what's driving that. The attach rate across the board is pretty high. Customers value the service and there aren't too many customers who would like to run a network without service coverage. I think the attach rate for all customers is pretty high.

Simona，我認為第四季通常是第四季到第一季度，通常是一個很好、強勁的服務季度。您往往會看到在該時間範圍內發生大量續訂等情況。這才是真正的推動力。整體的附著率相當高。客戶重視服務，沒有太多客戶願意在沒有服務覆蓋的情況下運作網路。我認為所有客戶的附加率都相當高。

And it is very competitively priced and brings meaningful service.

它的價格非常有競爭力，並提供有意義的服務。

Great. This concludes Arista Q1 2016 earnings call. I also want to mention that we have posted a presentation that provides additional perspective on our first-quarter 2016 fiscal results, which you can access on the investor section of our website. Thank you to everyone for joining us today.

偉大的。 Arista 2016 年第一季財報電話會議到此結束。我還想提一下，我們已經發布了一份演示文稿，提供了有關 2016 年第一季財務業績的更多觀點，您可以在我們網站的投資者部分訪問該演示文稿。感謝大家今天加入我們。

Good job, guys.

幹得好，夥計們。

Thank you for joining, ladies and gentlemen. This concludes today's call. You may now disconnect.

女士們、先生們，感謝您的加入。今天的電話會議到此結束。您現在可以斷開連線。