Arista Networks just reported Q3 results. Here’s why the stock is falling.

Arista Networks (NYSE:ANET) shares fell 9% in late trading on Thursday, erasing earlier gains, even after the networking equipment maker offered up third-quarter results and guidance for the coming quarter that were better-than-expected and announced a stock split.

For the period ending September 30, Arista said it earned an adjusted $2.40 per share as revenue rose 20% year-over-year to come in at $1.81B as the company continues to benefit from spending increases tied to cloud computing and artificial intelligence.

Analysts were expecting earnings of $2.08 per share on $1.75B in revenue.

“Arista remains at the forefront of next generation centers of data across client-to-cloud and AI focused locations,” said Jayshree Ullal, Chairperson and CEO of Arista Networks. “Our Q3 2024 results once again demonstrate our continued commitment to customer priorities as well as delivering strong financial results.”

Looking to the next quarter, Arista anticipates revenue to be between $1.85 and $1.9B. Adjusted gross margins are expected to be between 63% and 64%, while adjusted operating margins are forecast to be around 44%. Analysts were expecting $1.8B in revenue and adjusted operating margins of around 43.5%.

In addition, the company’s board of directors announced a four-for-one stock split, effective December 3, while the first day of trading split adjusted will be December 4.

Peers Cisco (CSCO) and Juniper Networks (JNPR) were higher in late trading on the back of Arista’s results.

The company will host a conference call at 4:30 p.m. EST to discuss the results.

(This story has been updated to reflect the stock has turned negative in extended trading.)