Arista Networks Earnings Top Estimates
Arista Networks earnings beat on Nov. 3, with record revenue and raised 2026 guidance plus an initial 2027 outlook, prompting trader reassessment.
KEY TAKEAWAYS
- Q3 revenue was about $3.7 billion, up 58.5% year-over-year.
- Management raised full-year 2026 revenue guidance to about $13.3 billion.
- Issued initial 2027 revenue outlook of 38.0%-40.0%, about $18.5 billion at midpoint.
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Arista Networks earnings released on Nov. 3 showed the strongest revenue growth since its 2014 IPO. The company raised full-year guidance and issued an initial 2027 outlook tied to demand for AI-related networking.
Third-Quarter Results and Margins
Arista Networks said in a Nov. 3 earnings release that third-quarter revenue for the period ended Sept. 30, 2026, reached approximately $3.66 billion, up 58.5% year over year and 20.5% sequentially. The company described this as its highest annual growth since its 2014 IPO. GAAP net income was about $1.56 billion, or $1.22 diluted earnings per share (EPS), compared with $853 million, or $0.67 a share, a year earlier. Non-GAAP diluted EPS was $1.20.
Non-GAAP operating margin rose to 49.1%, while GAAP operating margin was 44.9%, up from 48.6% and 42.4%, respectively, in the prior year. The earnings-call transcript reported a gross margin of 64.0%, compared with 65.2% a year earlier and 63.4% in the prior quarter. Management attributed the momentum to demand across customer sectors and networking needs linked to generative and agentic artificial intelligence.
Jayshree Ullal, chairperson and chief executive officer, said, “Arista registered another momentous quarter.” [source:1]
Guidance and Outlook
Arista guided fourth-quarter revenue to a range of $3.9 billion to $4.0 billion, with non-GAAP operating margin expected between 48% and 49%, and non-GAAP diluted EPS projected at $1.26 to $1.30. Management indicated a fourth-quarter gross-margin outlook of 63% to 64%.
The company raised full-year 2026 revenue guidance to approximately $13.3 billion and provided an initial 2027 revenue-growth outlook of 38% to 40%, corresponding to about $18.5 billion at the midpoint. For 2027, management expects gross margins of 62% to 64% and an operating margin near 49%. The projected fourth-quarter gross-margin range is below the recently reported third-quarter level at the top end, while the operating-margin range remains close to the quarter’s non-GAAP rate.
The results exceeded consensus revenue of $3.33 billion and adjusted EPS of $1.08. [source:1][3]
