Arista Guides 2027 Revenue Up 38% To 40%, About $18.5 Billion, A Year Ahead Of Schedule
CEO Jayshree Ullal said AI fabrics should double to about $7 billion, and told analysts not to read conservatism into the forecast.
Arista Networks, which makes the switches, routers and software that connect data centers and AI computing clusters, gave a first look at 2027 on its earnings call: revenue growth of 38% to 40%, or about $18.5 billion. CEO Jayshree Ullal said the forecast sits on a 2026 base of $13.3 billion, an outlook the company raised for the fourth time this year.
AI doubles, campus grows 60%
Ullal said on the call that within the 2027 envelope, she expects AI fabrics to be the fastest-growing segment and to double to about $7 billion. Campus networking should grow 60% to about $2 billion, she said.
Chief Financial Officer Chantelle Breithaupt put the 2026 baselines inside the $13.3 billion at $3.5 billion for AI and $1.25 billion for campus. For 2027 she also guided gross margin of 62% to 64% and operating margin of about 49%.
Third-quarter revenue was about $3.66 billion, up 58.5% from a year earlier and above the company's $3.3 billion guidance, Breithaupt said. Diluted earnings per share were $1.20. For the fourth quarter, Arista forecasts revenue of $3.9 billion to $4 billion.
"I wouldn't read any conservatism"
An analyst at a firm identified only as JP Morgan's call line asked whether slower growth outside AI and campus reflected tough comparisons or caution about supply. Ullal answered that when some businesses grow 60% and 100%, a blended 38% to 40% means others grow more slowly. "I wouldn't read any conservatism into these numbers," she said, calling them "wildly higher and optimistic than we had once projected."
She framed the outlook against Arista's own goals: the company passed its original $10 billion target this year and now expects revenue in the teens of billions for both 2026 and 2027. When the AI push began, she said, Arista talked about four or five AI customers; it has now passed 100 EtherLink customers and forecasts more than 10 gigawatts of deployments across 10 or more types of accelerators by the end of 2027.
Visibility and supply questions
An analyst at Piper Sandler noted that management usually cites one to two quarters of visibility and asked how it could guide this far out. Breithaupt said the company has two quarters of visibility, plus "two years of relationship" and technical conversations with customers.
Analysts at UBS and Bank of America pressed on deferred revenue, which was about $6.8 billion, down from $6.9 billion in the prior quarter, while purchase commitments rose to $11.4 billion from $9.7 billion. Breithaupt said Arista does not guide deferred revenue, expects year-end deferred balances to exceed last year's, and pointed to a new multi-year memory agreement in its commitments. She expects commitments to rise a little more by the end of the fourth quarter.
Arista's customers include two that Ullal expects to remain above 10% of revenue; she said the company is "feeling pretty good about at least three and maybe four."
Scale-up arrives later
Ullal said scale-up networking, which links accelerators within a rack, should see trials begin in 2027, with production in 2028. Management will share details on rack designs over the next few quarters, she said.
Arista's market value stood at $207.0 billion after the report on Tuesday, and Ullal's advice to analysts on the 2027 numbers was to "enjoy them for a moment."
