ANET changes
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- Price
- $186.72
- Discount category
- Below intrinsic value
- Next earnings
- 2026-11-03
- Next earnings is estimate
- No
- Company name
- Arista Networks
- Sector
- Networking equipment
- About
- Arista Networks sells Ethernet switches and routers, and the software that runs and monitors them, for AI and cloud data centers, campus networks and wide area networks. All its switches run one operating system, EOS, and its CloudVision software manages the network. Its largest customers are large cloud and AI companies. Revenue was $9.006 billion in 2025. In Q2 2026, revenue was $3.036 billion: products gave $2.605 billion and services gave $430.5 million.
- Thesis
- The market doubts that Arista's fast growth can last, because a few very large customers buy most of its products. Two end customers gave 26% and 16% of revenue in 2025. Their spending on AI networks can change quickly, and they can also buy from other suppliers or use switches that they design themselves. GAAP gross margin also fell to 62.9% in Q2 2026 from 65.2% a year earlier, as supply of memory and silicon became tight and costs rose. For the gap to close, three things must be true. Revenue must keep growing fast into 2027; it grew 37.7% in Q2 2026. Gross margin must stay near the level of 2026. Growth must come from more customers, in AI back-end networks, enterprise campus and routing, so that the two largest customers matter less. The Q3 2026 report on November 3, 2026 is the next test, with guidance of about $3.3 billion of revenue. The Q4 2026 report in early 2027 gives the 2027 outlook. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is a slowdown in AI spending by its largest customers.
- Risks
- Two end customers gave 26% and 16% of revenue in 2025. If one of them spends less on networks, uses another supplier or builds its own switches, revenue can fall quickly. GAAP gross margin fell to 62.9% in Q2 2026 from 65.2% a year earlier. Supply of memory and silicon is tight, and costs are higher. If costs keep rising, the margin can fall further. Arista had $9.7 billion of purchase commitments that it cannot cancel at June 30, 2026, to meet AI demand. If demand falls, it can have excess inventory and write-downs. Tariffs and other trade measures can raise the cost of products that contract manufacturers build outside the United States.
- Balance sheet
- Cash: $13.3B Debt: $0.0M Net cash: $13.3B Arista Networks has no debt. At June 30, 2026, cash and cash equivalents were $2.29 billion and marketable securities were $11.05 billion. Customers paid in advance for much of this cash: deferred revenue was $5.10 billion in current liabilities and $1.77 billion in non-current liabilities. Cash flow from operations was $2.78 billion in the first six months of 2026. Arista had $9.7 billion of purchase commitments for components and products at June 30, 2026, of which $9.4 billion it expects to receive within 12 months. It bought back no shares in the first six months of 2026, and $817.9 million of buyback authorization was left. As of 2026-06-30.
- Checkpoints
- Nov 3, 2026: Q3 2026 results: growth and gross margin. Pending. Watch: Revenue at or above the guided $3.3 billion with a stable gross margin pass; revenue below guidance or a further fall in gross margin fail. Feb 2027 (estimate): Q4 2026 results and 2027 outlook. Pending. Watch: A 2027 outlook for fast growth from more customers passes; slower growth or a larger share from the two largest customers fails.
- Recent events
- 2026-10-06: Arista said that it will report Q3 2026 results after the market closes on November 3, 2026, with a call at 1:30 p.m. PT. 2026-08-04: Arista reported Q2 2026 results. Revenue was $3.036 billion, its first quarter above $3 billion, up 37.7%. GAAP EPS was $0.95 and non-GAAP EPS was $1.02. The GAAP gross margin was 62.9%, down from 65.2% a year earlier. For Q3 2026, Arista guided revenue of about $3.3 billion, a non-GAAP operating margin of 48% to 49% and non-GAAP EPS of $1.06 to $1.08. 2026-05-05: Arista reported Q1 2026 results. Revenue was $2.709 billion, up 35.1%, and non-GAAP EPS was $0.87. Cash flow from operations was $1.69 billion. 2026-02-12: Arista reported Q4 2025 results. Revenue for 2025 was $9.006 billion, up 28.6%, and non-GAAP EPS was $2.98. The GAAP gross margin was 62.9% in Q4 2025, down from 64.6% in Q3 2025. 2025-11-04: Arista reported Q3 2025 results. Revenue was $2.308 billion, up 27.5%, and non-GAAP EPS was $0.75. Arista named Kenneth Duda President and Chief Technology Officer.