Arista Networks Q3 Revenue Jumps 58.5% to $3.66 Billion, Tops Guidance; Sees Q4 Up to $4.0 Billion

Arista Networks reported third-quarter revenue of $3.66 billion, up 58.5% from a year earlier and above its $3.3 billion guidance, as the networking company posted what it called its highest year-over-year revenue growth since its IPO.

GAAP net income rose 82.9% to $1.56 billion, or $1.22 per diluted share, from $853.0 million, or $0.67, according to the earnings release Arista filed with an 8-K on Tuesday. Adjusted EPS climbed 55.8% to $1.20 from $0.77. Adjusted EPS came in below the GAAP figure because the non-GAAP measure strips out a $134.5 million gain on strategic investments.

"Arista registered another momentous quarter with the highest year-over-year revenue growth since our IPO and record profitability, surpassing even my high expectations," Chairperson and CEO Jayshree Ullal said in the release.

Fourth-quarter outlook

Arista guided fourth-quarter revenue to $3.9 billion to $4.0 billion, which would be a 6.6% to 9.4% sequential increase from the third quarter. It expects non-GAAP operating margin of 48% to 49% and adjusted EPS of $1.26 to $1.30.

Products drive the jump

Product revenue surged 66.9% to $3.19 billion, while service revenue grew 17.9% to $467.6 million. Revenue rose 20.5% from the second quarter, the company said.

Profitability widened even as gross margin slipped. GAAP operating margin rose to 44.9% from 42.4%, and non-GAAP operating margin reached 49.1%, up from 48.6%. GAAP gross margin eased to 63.6% from 64.6%.

During the quarter, Arista launched open, standards-based rack-scale architectures for scale-up and scale-out AI networks with partners including AMD, Arm, Broadcom, d-Matrix, Meta, Microsoft and Qualcomm. The lineup includes the liquid-cooled Etherlink SU-144 architecture, which supports up to 144 accelerators per rack in a single hop. Arista was also added to the S&P 100 in September.

Balance sheet

Cash, cash equivalents and marketable securities totaled $14.36 billion at Sept. 30. Total deferred revenue, current and non-current, rose 27.3% since the end of 2025 to $6.84 billion, and inventories climbed to $3.21 billion from $2.25 billion.

Arista did not repurchase any stock in the first nine months of 2026, compared with $983.0 million in buybacks a year earlier, according to its cash flow statement. Operating cash flow for the nine months was $3.98 billion.

By the numbers

• Revenue: $3.66 billion, up 58.5%
• GAAP EPS: $1.22, up from $0.67
• Adjusted EPS: $1.20, up 55.8%
• Non-GAAP operating margin: 49.1%
• Q4 revenue guidance: $3.9 billion to $4.0 billion
• Q4 adjusted EPS guidance: $1.26 to $1.30

Sources

1. Arista Networks Form 8-K with third-quarter 2026 earnings release, filed Nov. 3, 2026 (accession 0001596532-26-000252)

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