Arista's Revenue Jumps 58.5% To $3.66 Billion, Topping Its Own $3.3 Billion Guidance
The networking company forecast fourth-quarter revenue of $3.9 billion to $4.0 billion, above the quarter it just reported.
Arista Networks, which makes the switches, routers and software that connect data centers and AI computing clusters, said third-quarter revenue rose 58.5% from a year earlier to about $3.66 billion, above its own $3.3 billion guidance. Management called it the company's highest year-over-year revenue growth since its IPO, according to an 8-K filed Tuesday.
Product sales drive the quarter
Revenue rose 20.5% from the second quarter. Product sales reached $3.19 billion, up from $1.91 billion a year earlier, while service revenue rose to $467.6 million from $396.6 million.
Net income came to $1.56 billion, against $853.0 million a year earlier. Diluted earnings per share were $1.22 on standard accounting, versus $0.67, and $1.20 on an adjusted basis, versus $0.77.
The adjusted operating margin was 49.1%, against 48.6% a year earlier. Standard gross margin slipped to 63.6% from 64.6%. Other income was $273.1 million, up from $98.9 million, and the adjusted figures exclude a $134.5 million gain on strategic investments.
CEO Jayshree Ullal said the quarter had "record profitability, surpassing even my high expectations." CFO Chantelle Breithaupt called it "a true trifecta" of record revenue growth, net income and earnings per share.
The AI networking business
Arista's products run on its own EOS operating system. Customers include large cloud and AI companies, specialty AI providers and enterprises. In its annual report for 2025, two customers accounted for 26% and 16% of revenue.
During the quarter, Arista and partners including AMD, Arm, Broadcom, Meta, Microsoft and Qualcomm launched open, standards-based rack-scale designs for AI networks. The company was also added to the S&P 100 in September.
Guidance and the balance sheet
For the fourth quarter, Arista expects revenue of $3.9 billion to $4.0 billion, an adjusted operating margin of 48% to 49% and adjusted earnings of $1.26 to $1.30 per share.
Current deferred revenue, which is billings for products and services not yet recognized as sales, stood at $5.1 billion at September 30, up from $4.0 billion at the end of 2025. Inventories rose to $3.21 billion from $2.25 billion, and cash and marketable securities totaled about $14.4 billion in combined balances ($2.29 billion plus $12.07 billion).
Executives were due to discuss the results on a 1:30 p.m. Pacific conference call Tuesday, with the stock's first full session on the report coming Wednesday.
Sources
- 8-K Filing — Arista Networks, Inc. (ANET) — SEC EDGAR
- Exhibit ex991q326-earningsrelease.htm — Arista Networks, Inc. 8-K exhibit — SEC EDGAR
