Arista (NYSE: ANET) revenue jumps 58.5%, its fastest growth since the IPO

Posted by Kim Johansen on Nov 4th, 2026

What happened

Arista Networks, Inc. (NYSE: ANET) beat its own third-quarter revenue guidance of $3.3 billion. It reported $3.66 billion for the quarter ended Sept. 30.

Revenue rose 20.5% from the second quarter of 2026 and 58.5% from the third quarter of 2025. The company said that was its highest year-over-year revenue growth since its IPO.

Jayshree Ullal, Arista's chairperson and CEO, said record profitability beat even her high expectations. Chief Financial Officer Chantelle Breithaupt said the quarter set records in revenue growth, net income and EPS.

Key numbers

Metric	Latest	Change	Source
Q3 2026 revenue	$3.66 billion	from $2.31 billion, +58.5%	SEC 8-K, Exhibit 99.1
GAAP net income	$1.56 billion	from $853.0 million, +82.9%	Calculated from SEC 8-K
GAAP diluted EPS	$1.22	from $0.67, +82.1%	Calculated from SEC 8-K
Non-GAAP operating margin	49.1%	from 48.6%, +0.5 percentage points	Calculated from SEC 8-K
GAAP gross margin	63.6%	from 64.6%, -1.0 percentage points	Calculated from SEC 8-K
Q4 2026 revenue guidance	$3.9 – $4.0 billion		SEC 8-K, Exhibit 99.1

Where the growth came from

Product sales drove the quarter. Product revenue was $3.19 billion against $1.91 billion a year earlier, a 66.9% increase by OptimistFi's calculation. Service revenue rose 17.9% to $467.6 million from $396.6 million.

The balance sheet shows the build behind that growth. Inventories stood at $3.21 billion on Sept. 30, up 42.8% from $2.25 billion on Dec. 31, 2025. Current deferred revenue rose to $5.10 billion from $4.00 billion. The non-current portion rose to $1.74 billion from $1.37 billion.

Cash from operations for the nine months was $3.98 billion, up 27.9% from $3.11 billion a year earlier. Growth in inventories used $962.8 million of cash, against $321.1 million in the first nine months of 2025. Arista ended September with $2.29 billion in cash and $12.07 billion in marketable securities.

Stock perps: every US stock that trades as a perpetual future, by leverage, live

Margins and earnings

Operating profit grew faster than sales. Operating expenses rose 33.5% to $683.3 million from $512.0 million, far slower than revenue. GAAP operating margin reached 44.9% against 42.4% a year earlier. Non-GAAP operating margin was 49.1% against 48.6%.

Gross margin moved the other way. GAAP gross margin slipped to 63.6% from 64.6%. Non-GAAP gross margin fell to 64.0% from 65.2%. The margin gain came from operating costs, not from the gross line.

Diluted earnings per share were $1.22 on a GAAP basis and $1.20 non-GAAP, up from $0.67 and $0.77 a year earlier. GAAP net income rose 82.9% to $1.56 billion from $853.0 million.

Other income, net, which sits below operating income, was $273.1 million against $98.9 million a year earlier. So not all of the earnings rise comes from operations. The non-GAAP reconciliation adjusts for gains and losses on strategic investments and the tax impact of the OBBB Act, among other items.

Why it matters

OptimistFi has argued that Arista compounds value if its software-led, high-speed networking platform stays the preferred choice of large customers. A quarter that beat guidance by this margin, with operating margin up, supports that view.

The company also said it launched open, standards-based rack-scale designs for AI networks with AMD, Arm, Broadcom, d-Matrix, Meta, Microsoft and Qualcomm. Its Etherlink SU-144 design supports up to 144 accelerators per rack in a single hop.

The release still carries limits. Arista's own risk list names sole-source components, shortages and long lead times. It also names reliance on a main merchant silicon vendor and tariffs. A limited number of customers make large purchases that account for a substantial part of revenue. Gross margin fell, and the Q4 outlook is guidance, not a result.

What's next

For the fourth quarter of 2026, Arista expects revenue of $3.9 billion to $4.0 billion and non-GAAP operating margin of 48% to 49%. It expects non-GAAP diluted earnings per share of $1.26 to $1.30. The top of the margin range sits below the third quarter's 49.1%.

The test is Arista's fourth-quarter 2026 results report. Revenue below $3.9 billion or margin under 48% would weaken the case. Results inside or above the ranges would extend it.