Arista Networks, Inc.

Q2 revenue was just over $3 billion, up 37.7% year over year and above the company’s $2.8 billion guide. Gross margin was 63.4%, down from 65.6% in the prior year and up from 62.4% in Q1; operating income was $1.5 billion, or 49.9% of revenue; net income was $1.3 billion, or 42.9% of revenue; and diluted EPS was $1.02 versus $0.73 a year ago, up 39.7%. Cash, cash equivalents and marketable securities ended at about $13.3 billion, and operating cash flow was about $1.1 billion. For Q3, Arista guided to revenue of approximately $3.3 billion, gross margin of approximately 63%, operating margin of 48% to 49%, and diluted EPS of $1.06 to $1.08. For full-year 2026, the company raised revenue growth guidance to 40%, or about $12.6 billion, with gross margin still expected to be 62% to 64%, operating margin 48% to 49%, and tax rate 21.5%.

Jayshree Ullal framed the quarter as evidence that Arista is benefiting from broad AI demand and improving supply chain execution. She emphasized that the company is now seeing demand for its first $3 billion quarter, that Etherlink AI fabrics have surpassed 100 cumulative customers, and that scale-across is becoming a meaningful long-term opportunity because customers need to connect distributed compute under tight power and space constraints. Her tone was confident and expansive, but she repeatedly stressed that supply remains an industry-wide issue and that Arista is still working through it.

Chantelle Breithaupt focused on the conversion of demand into results and raised outlook. She cited Q2 revenue just over $3 billion, gross margin of 63.4%, operating margin of 49.9%, EPS of $1.02, cash of about $13.3 billion, and operating cash flow of about $1.1 billion. She also highlighted $9.7 billion of purchase commitments, inventory of $2.5 billion, deferred revenue of about $6.9 billion, and capex of $29.7 million, while saying the company is maintaining full-year gross margin guidance of 62% to 64% and lifting operating margin guidance to 48% to 49%.

Analysts focused on whether more complex AI networking favors Arista over white box approaches, how supply-chain fixes are progressing, the mix of CPO/NPO/XPO technologies, and whether the company can add more 10%+ customers. Management said complex AI networks increase the value of Arista’s integrated hardware/software platform, described the supply chain as materially improved but still tight industry-wide, and said open CPO is early and likely to play out over time. On customer concentration, Jayshree said Arista remains committed to Microsoft and Meta and still expects one or maybe two 10% customers, while also implying more flexibility in how revenue is distributed across product lines.