Jayshree Ullal -- President and Chief Executive Officer
"Thank you, Charles. Thank you, everyone, for joining us this afternoon for our first-quarter of 2018 earnings call. I am pleased to report that we had a good quarter, given the normal seasonality. We demonstrated a predictable profitable growth with non-GAAP revenue of $472.5 million, as we grew more than 40% year over year.
Non-GAAP earnings per share was $1.66 with services contributing 13.7% of overall sales. From a geographic perspective, our customers in the Americas contributed 67% of the total revenue, while the rest of the international theaters [Inaudible] progressed steadily in the quarter. We delivered non-GAAP gross margins of 64.4% in a highly dynamic and competitive industry. Our top 10 customers included four out of five verticals.
Cloud titans contributed strongly in Q1 and ranked as our No. 1 vertical, followed by enterprises at No. 2. Service providers and cloud specialized providers pretty much tied at No.
3, followed by financial. Our new-customer acquisition continues to be healthy, as we exceeded 5,000 cumulative customers this quarter, and we continued to perform well with FlexRoute, our routing license, and CloudVision software customers as well. At Arista, we have always embraced open networking trends by designing our platforms with merchants silicon diversity, while using modern software to form l differentiated cloud networks. On March 29, Arista introduced the latest data center fixed leaf models based on Broadcoms Trident 3 and Tomahawk 2 silicon.
Arista 7050X3 and 7260X3 platforms run on the single EOS software image and CloudVision for operational consistency. Some of the key innovations include intelligent buffering and automated network load balancing, path and latency monitoring, new protocols such as segment routing in a fully featured VXLAN stack, high availability with hidden software upgrades, low-power 25-gig 100-gig fixed system that are double the capacity of the predecessors, and cloud-scale performance with 12.8 terabit scale and 4.2 billion packets per second of packet forwarding. On OCP's event in March 2018 in San Jose, Arista demonstrated disaggregated EOS via collaboration with two key cloud partners, Facebook with Wedge 100 and Microsoft with SONiC. As many of you may know, we began our Microsoft journey back in 2015 or '16 with SAI, Switch Abstraction Interface, via cold contributions to this initiative.
This year, Arista and Microsoft expanded the sonic initiative across the flagship Arista 7500 as the only modular chassis supporting Microsoft Management stack. Arista also supports EOS and containerized EOS on Facebook's open Wedge 100. This allows customization of scripts for automating network operations flows. And in both these cases, Arista's advanced EOS SDK is demonstrated in full action.
This quarter we also participated in routing interoperability at the MPLS + SDN + NFV World Congress event in Paris. We're gratified to be recognized for the first time in the [Inaudible] for hardware platforms and SDN as a leader with a top score in both strategy and current offering in Q1 2018. We're also proud to be recognized as one of the top 10 employers in the Bay Area's Best Places to Work in the large employee category, ranked No. 9 out of 130 eligible companies.
As I look at Q1 2018 and reflect on our start, I am pleased with our performance and the trajectory ahead. In particular, we are now well beyond the overhead and delays of customer certifications that we have been experiencing during the past three quarters, having successfully completed most of the certification. And in light of the recent IPC suspensions on the remedial orders of the 668 patent as well as the expiration of the 577 patent on June 30, we pretty much expect to return to normalcy in the second half 2018 with respect to 945."
Ita Brennan -- Chief Financial Officer
"Thanks, Jayshree, and good afternoon. This analysis of our Q1 results and our guidance for Q2 '18 is based on a non-GAAP and includes all non-cash stock-based compensation impacts 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. Total revenues in Q1 were $472.5 million, up 41% year over year and above our guidance of $450 million to $468 million.
We were pleased with the overall demand in the quarter, with particular strength from our cloud titan vertical. Service revenues represented approximately 13.7% of revenues, up slightly from prior quarters. International revenue for the quarter came in at $157 million, or 33% of total revenue, consistent with the prior period. While some of this continued strength in international mix was related to deployments by our U.S.
cloud titan customers, we also experienced healthy growth from our in-region international businesses in the period. Overall gross margin in Q1 was 64.4%, down from 65.9% last quarter but about the midpoint of our guidance of 63% to 65%. This reflected unanticipated return to a more typical customer mix for the first quarter. Operating expenses for the quarter were $137.4 million, down from $139.4 million last quarter.
R&D spending came in at $91.4 million, or 19.3% of revenue, down from $96 million last quarter, with reduced prototype spending offset by headcount additions. Sales and marketing expense was $36.2 million, or 7.7% of revenue, up from $33.5 million last quarter, reflecting growth in headcount. Our operating income for the quarter was $166.7 million, or 35.3% of revenue. Other income and expense for the quarter was a favorable $4.2 million, and our effective tax rate was 21.5%.
The higher-than-anticipated tax rate reflects updated guidance in relation to the recently adopted tax act. This resulted in net income for the quarter of $134.1 million, or 28.4%. Our diluted share number for the quarter was 80.7 million shares, resulting in a diluted earnings-per-share number of $1.66, up 79% in the prior year. Legal expenses associated with the ongoing lawsuits came in $7.1 million for the quarter and are excluded from our non-GAAP results.
Now, turning to the balance sheet. Cash, cash-equivalents, and investments ended the quarter at approximately $1.7 billion. We generated $195.5 million of cash from operations in the March quarter, which reflects strong net income performance combined with overall improvements in working capital requirements. DSOs came in at 39 days, down from 49 days in Q4, reflecting the timing of billings and collections in the quarter.
Inventory turns were 2.2 times, up from 1.8 times in Q4. Inventory decreased to $268.1 million in the quarter, down from $306.2 million in the prior period. This reflects reductions in both raw materials and finished goods as we continued optimize on supply chain. In addition, we maintained further $24 million of inventory deposits recorded in other assets, compared to $34 million last quarter.
Our total deferred-revenue balance was $456.1 million, down from $515.3 million in Q4. The product deferred revenue declined by approximately $50 million in the quarter, with customers completing many of their 945-related qualification. In addition, as part of our adoption of ASU 606, reclassified approximately $19 million of software-related deferred revenue to other contract liabilities on the balance sheet. As we go forward, you should expect lower levels of product deferred revenue, given the relative maturity of the R-Series platform, completion of any remaining 945-related certifications and the adoption of ASU 606.
As a reminder, any such decline in deferred product revenue is not in and of itself an indication of change in the underlying demand trends of the business. Accounts payable days were 38 days, up from 30 days in Q4, reflecting the timing of inventory receipts from payments. Capital expenditures for the quarter were $6.3 million. Now turning to our outlook for the second quarter and beyond.
We are pleased with the momentum of the business in the first quarter with the strong demand, particularly from our cloud customers. As we look forward to the remainder of 2018, we believe that we are well-positioned to benefit from the continuing growth in cloud networking across our customer base. Given some tough 2017 comparables, we believe that the current consensus for the balance of the year, which calls for year-over-year growth in the mid-20% range, remains relevant. Our gross margin guidance from the second quarter of 62% to 64% reflects an anticipated mix toward cloud revenues in the quarter.
We now expect our go-forward non-GAAP tax rate to be in the range of 21% to 22%, reflecting further guidance of elements of the recently adopted tax act. With this as a backdrop, our guidance for the second quarter, which is based on non-GAAP results and excludes any noncash stock-based compensation impact and any legal costs associated with the ongoing lawsuits is as follows; revenues of approximately $500 million to $514 million, gross margin of approximately 62% to 64%, operating margin of approximately 32% to 34%. Our effective tax rate is expected to be approximately 21.5% with diluted shares of approximately $81 million. Please note that based on our current outlook, we expect cost associated of the ongoing lawsuits to be approximately $6 million for the quarter."
Arista Networks (ANET) Q1 2018 Earnings Conference Call Transcript -- The Motley Fool
