Arista Networks (ANET) Q1 2025 earnings summary

Executive summary

• Achieved record Q1 2025 revenue of $2.005 billion, up 27.6% year-over-year, driven by strong demand in AI, cloud, and enterprise networking, and recognized as a leader in Gartner's 2025 Magic Quadrant for Data Center Switching.

• Net income reached $826.2 million (non-GAAP) and $813.8 million (GAAP), with diluted EPS of $0.65 (non-GAAP) and $0.64 (GAAP), reflecting robust operational performance.

• Maintained leadership in high-speed data center switching, with continued market share gains versus Cisco and over 10,000 customers.

• Board authorized a new $1.5 billion stock repurchase program in May 2025, following a record $787.1 million in Q1 repurchases.

• Strong liquidity with $8.1 billion in cash and marketable securities at quarter-end.

Financial highlights

• Q1 2025 revenue was $2.005 billion, up 27.6% year-over-year, with product revenue at $1.69 billion and service revenue at $312.3 million.

• Non-GAAP gross margin was 64.1%, GAAP gross margin 63.7%; non-GAAP operating margin 47.8%, GAAP operating margin 42.8%.

• Net income was $826.2 million (non-GAAP) and $813.8 million (GAAP); diluted EPS was $0.65 (non-GAAP) and $0.64 (GAAP).

• Cash and investments ended at $8.15 billion; operating cash flow was $641.7 million.

• $787.1 million in stock repurchases in Q1, with an additional $100 million in April and a new $1.5 billion buyback program authorized.

Outlook and guidance

• Q2 2025 revenue guidance is approximately $2.1 billion, with non-GAAP gross margin of ~63% and non-GAAP operating margin of ~46%.

• Full-year 2025 revenue expected to reach ~$8.2 billion, with non-GAAP gross margin in the 60%-62% range and operating margin at 43-44%.

• Guidance remains cautious due to macroeconomic and tariff uncertainties, with updates planned as conditions clarify.