We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
ANET Q2 Earnings Call Centers on Supply Gains and 2026 Raise
Read MoreHide Full Article
Key Takeaways
Arista now expects 2026 revenues of about $12.6B, up 40%, after its third outlook raise.
Added suppliers and capacity lifted shipments, while purchase commitments rose to $9.7B.
Etherlink customers topped 100 as 1.6-terabit platforms enter trials before a 2027 production ramp.
Arista Networks, Inc. (ANET - Free Report) used its second-quarter call to emphasize that improved component access is converting strong demand into higher shipments across artificial intelligence (AI), data center, campus and routing.
Management raised its 2026 revenue outlook for the third time this year, while focusing on execution, customer mix and demand beyond AI fabrics.
ANET Raises Its 2026 Revenue Outlook
Chairperson and chief executive officer Jayshree Ullal said Arista now expects 2026 revenues of approximately $12.6 billion, representing 40% growth. The outlook is $1.1 billion above the May projection and $2.1 billion above the prior Analyst Day goal.
Chief financial officer Chantelle Breithaupt guided third-quarter revenues to approximately $3.3 billion, with a non-GAAP operating margin of 48% to 49% and non-GAAP earnings of $1.06 to $1.08 per share.
Second-quarter revenues reached $3.04 billion, ahead of the Zacks Consensus Estimate of $2.83 billion and up 37.7% year over year. Non-GAAP earnings rose 39.7% to $1.02 per share, beating the consensus estimate of $0.89.
Arista Networks, Inc. Price, Consensus and EPS Surprise
President and chief operating officer Todd Nightingale said the company added suppliers, improved delivery terms and expanded manufacturing and distribution capacity. Arista now works with three contract manufacturers and three distribution facilities across the United States, Asia and Mexico.
Management secured memory supply for 2026 and extended visibility into 2027 across DDR4, DDR5 and NAND. It also established a liquid-cooling supply chain for next-generation AI systems.
Purchase commitments rose to $9.7 billion from $8.9 billion in the first quarter and about $3.6 billion a year earlier. Ullal cautioned that industry constraints could persist until 2028, despite Arista's progress.
ANET Builds Out Its AI Fabric Advantage
Ullal said cumulative Etherlink customers now exceed 100, up from four to five customers discussed in 2024. The company is extending its portfolio with the 7060XE7, which supports 1.6-terabit throughput, 100 terabits of system capacity and liquid-cooling options.
Co-founder, President and chief technology officer Kenneth Duda highlighted Smart System Upgrade, Multipath Reliable Connection and SRv6-based routing. Management framed those capabilities as tools to reduce downtime, avoid congestion and improve accelerator utilization.
Arista expects 1.6-terabit platforms to remain in trials during the second half of 2026, with production ramping in 2027. Ullal said initial evaluations involve a small number of large customers.
Arista Sees Broader Growth Beyond AI
A UBS analyst questioned why the higher annual outlook did not include a larger stated AI or campus target. Ullal responded that all product sectors should grow, while management retains flexibility to prioritize shipments based on supply.
A Raymond James analyst pressed on the incremental $1.1 billion. Ullal pointed to core data center front-end systems, enterprise demand, routing, campus and AI as contributors.
Breithaupt also cited new customer wins, international expansion and land-and-expand activity between campus and data center deployments. The guidance increase was broader than a single product cycle.
ANET Defends Its System-Level Approach
An Evercore ISI analyst asked whether rising AI-network complexity strengthens integrated systems relative to white-box alternatives. Ullal said simple deployments can still use lower-cost white-box equipment, but larger scale-out and scale-across networks require more software, reliability and traffic engineering.
A Morgan Stanley analyst asked why newer cloud operators choose Arista's blue-box systems. Ullal emphasized operating efficiency, EOS feature depth and reliability, while acknowledging that large customers with extensive engineering staffs may continue using white-box products.
A Wells Fargo analyst asked about customer concentration. Ullal said Microsoft and Meta remain key partners and expects one, and potentially two, customers to represent at least 10% of revenue as shipments scale.
Arista Keeps Execution at the Center
Management's tone remained confident on demand but measured on supply. Breithaupt said customer visibility remains about two quarters and the annual outlook reflects supply the company is confident it can secure.
The call left Arista focused on converting commitments into shipments, scaling new AI platforms and broadening growth across established networking categories without relaxing operating discipline.
Zacks Signals Show Mixed Style Support
ANET carries a Zacks Rank #2 (Buy), a favorable indicator tied to earnings-estimate revisions over the next one to three months. Its Growth Score of A is the strongest style signal, while the Value Score of F and Momentum Score of D indicate weaker positioning on those dimensions.
The VGM Score of C shows a middle-range combined profile rather than the A or B scores that pair most strongly with a top Zacks Rank. The Zacks Rank can change as analysts revise estimates following the newly reported results.
View the Zacks #1 Rank List
Image: Bigstock
ANET Q2 Earnings Call Centers on Supply Gains and 2026 Raise
Key Takeaways
Arista Networks, Inc. (ANET - Free Report) used its second-quarter call to emphasize that improved component access is converting strong demand into higher shipments across artificial intelligence (AI), data center, campus and routing.
Management raised its 2026 revenue outlook for the third time this year, while focusing on execution, customer mix and demand beyond AI fabrics.
ANET Raises Its 2026 Revenue Outlook
Chairperson and chief executive officer Jayshree Ullal said Arista now expects 2026 revenues of approximately $12.6 billion, representing 40% growth. The outlook is $1.1 billion above the May projection and $2.1 billion above the prior Analyst Day goal.
Chief financial officer Chantelle Breithaupt guided third-quarter revenues to approximately $3.3 billion, with a non-GAAP operating margin of 48% to 49% and non-GAAP earnings of $1.06 to $1.08 per share.
Second-quarter revenues reached $3.04 billion, ahead of the Zacks Consensus Estimate of $2.83 billion and up 37.7% year over year. Non-GAAP earnings rose 39.7% to $1.02 per share, beating the consensus estimate of $0.89.
Arista Networks, Inc. Price, Consensus and EPS Surprise
Arista Networks, Inc. price-consensus-eps-surprise-chart | Arista Networks, Inc. Quote
Arista Expands Supply Commitments
President and chief operating officer Todd Nightingale said the company added suppliers, improved delivery terms and expanded manufacturing and distribution capacity. Arista now works with three contract manufacturers and three distribution facilities across the United States, Asia and Mexico.
Management secured memory supply for 2026 and extended visibility into 2027 across DDR4, DDR5 and NAND. It also established a liquid-cooling supply chain for next-generation AI systems.
Purchase commitments rose to $9.7 billion from $8.9 billion in the first quarter and about $3.6 billion a year earlier. Ullal cautioned that industry constraints could persist until 2028, despite Arista's progress.
ANET Builds Out Its AI Fabric Advantage
Ullal said cumulative Etherlink customers now exceed 100, up from four to five customers discussed in 2024. The company is extending its portfolio with the 7060XE7, which supports 1.6-terabit throughput, 100 terabits of system capacity and liquid-cooling options.
Co-founder, President and chief technology officer Kenneth Duda highlighted Smart System Upgrade, Multipath Reliable Connection and SRv6-based routing. Management framed those capabilities as tools to reduce downtime, avoid congestion and improve accelerator utilization.
Arista expects 1.6-terabit platforms to remain in trials during the second half of 2026, with production ramping in 2027. Ullal said initial evaluations involve a small number of large customers.
Arista Sees Broader Growth Beyond AI
A UBS analyst questioned why the higher annual outlook did not include a larger stated AI or campus target. Ullal responded that all product sectors should grow, while management retains flexibility to prioritize shipments based on supply.
A Raymond James analyst pressed on the incremental $1.1 billion. Ullal pointed to core data center front-end systems, enterprise demand, routing, campus and AI as contributors.
Breithaupt also cited new customer wins, international expansion and land-and-expand activity between campus and data center deployments. The guidance increase was broader than a single product cycle.
ANET Defends Its System-Level Approach
An Evercore ISI analyst asked whether rising AI-network complexity strengthens integrated systems relative to white-box alternatives. Ullal said simple deployments can still use lower-cost white-box equipment, but larger scale-out and scale-across networks require more software, reliability and traffic engineering.
A Morgan Stanley analyst asked why newer cloud operators choose Arista's blue-box systems. Ullal emphasized operating efficiency, EOS feature depth and reliability, while acknowledging that large customers with extensive engineering staffs may continue using white-box products.
A Wells Fargo analyst asked about customer concentration. Ullal said Microsoft and Meta remain key partners and expects one, and potentially two, customers to represent at least 10% of revenue as shipments scale.
Arista Keeps Execution at the Center
Management's tone remained confident on demand but measured on supply. Breithaupt said customer visibility remains about two quarters and the annual outlook reflects supply the company is confident it can secure.
The call left Arista focused on converting commitments into shipments, scaling new AI platforms and broadening growth across established networking categories without relaxing operating discipline.
Zacks Signals Show Mixed Style Support
ANET carries a Zacks Rank #2 (Buy), a favorable indicator tied to earnings-estimate revisions over the next one to three months. Its Growth Score of A is the strongest style signal, while the Value Score of F and Momentum Score of D indicate weaker positioning on those dimensions.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The VGM Score of C shows a middle-range combined profile rather than the A or B scores that pair most strongly with a top Zacks Rank. The Zacks Rank can change as analysts revise estimates following the newly reported results.