Arista Networks Stock Earnings Reports

Arista reported Q3 FY2025 revenue of $2.31 billion, up 27.5% year-over-year, with non-GAAP gross margin of 65.2% and non-GAAP operating margin of ~48.6%. Software and services comprised ~18.7% of revenue. Management emphasized strong demand driven by cloud and AI customers (including large LLM players and neo-clouds), continued momentum in AI networking (Etherlink, ESUN, UEC, AVA), and leadership/team changes (promotion of Ken Duda to President & CTO; hiring of Tyson Lamoreaux; Todd Nightingale as President & COO). Balance sheet remains strong with $10.1 billion in cash, and $1.4 billion available under the current $1.5 billion repurchase authorization. Inventory and purchase commitments rose as the company ramped new products (inventory $2.2B; purchase commitments + inventory $7B). Q4 guidance: revenue $2.3B–$2.4B, gross margin 62%–63%, operating margin ~47%–48%, effective tax ~21.5%, ~1.281B diluted shares. FY2025 guide midpoint implies ~26%–27% growth (~$8.87B). FY2026 outlook (presented at Analyst Day and reiterated): revenue target of $10.65B (approx. 20% growth), including an AI center target of $2.75B and campus target of $1.25B; gross margin ~62%–64%; operating margin ~43%–45%. Management attributes some quarter-to-quarter lumpiness to shipment/timing and supplier lead times (component lead times of ~38–52 weeks), but stressed continued strong demand and strategic investments in AI, campus, and go-to-market expansion.