Arista Networks (ANET) investor relations material

Executive summary

• Q3 revenue was $3,657.6M, up 58.5% YoY and the highest YoY growth quarter since IPO; results exceeded guidance on strong product demand.

• AI, cloud and enterprise demand fueled growth, alongside rising relevance of generative and agentic AI networking.

• FY2027 revenue growth guidance is 38%–40%, with ~$7B in AI fabrics and ~$2B in campus revenue targeted.

Financial highlights

• Q3 product revenue was $3,190.0M, up 66.9% YoY; service revenue was $467.6M, up 17.9%.

• Non-GAAP operating income was $1,795.8M, up 60.1% YoY, with a 49.1% operating margin; non-GAAP net income was $1,531M and diluted EPS was $1.20.

• GAAP net income was $1,560.4M versus $853.0M YoY; GAAP diluted EPS was $1.22 versus $0.67.

• Non-GAAP gross margin was 64.0%, down from 65.2% YoY; product and customer mix lifted results above guidance, while supply-chain efficiency partly offset product cost inflation.

• Non-GAAP operating expenses were $545.3M, or 14.9% of revenue; R&D investment included liquid cooling, high-radix switching and AI software.

Outlook and guidance

• Q4 revenue guidance is $3.9B–$4.0B, with non-GAAP gross margin of 63%–64%, operating margin of 48%–49% and diluted EPS of $1.26–$1.30.

• FY2026 revenue is expected just above $13.3B at the Q4 midpoint, representing 48% annual growth.

• FY2027 revenue growth guidance is 38%–40%; non-GAAP gross margin is 62%–64%, operating margin ~49% and tax rate 21%.

• FY2027 targets include ~$7B in AI fabrics revenue and ~$2B in campus revenue, with campus growth of 60%.

• Scale-up trials are expected in 2027, with production expected in 2028; scale-up revenue is not expected to be material in 2027.