Surged after hours! Arista Networks (ANET.US) achieved record revenue and profit growth in Q3, with Q4 performance guidance exceeding expectations

According to Zhihui Finance APP, after the U.S. stock market closed on Tuesday, Arista Networks (ANET.US) announced its results for the third quarter of 2026 ending September 30: revenue was 3.6576 billion USD, up 20.5% quarter-on-quarter and 58.5% year-on-year, marking the highest single-quarter year-on-year growth rate since its IPO in 2014. The revenue exceeded the company's guidance of approximately 3.3 billion USD by 10.8%, and was nearly 10% higher than the consensus estimate (about 3.334 billion USD) from analysts.

In terms of profit, non-GAAP diluted earnings per share were 1.20 USD, surpassing the consensus estimate (approximately 1.08 USD) by 0.12 USD, a year-on-year increase of 55.8%. GAAP diluted earnings per share were 1.22 USD, up 82.1% year-on-year. This quarter, GAAP earnings per share were even higher than the non-GAAP figures, mainly because GAAP results included 134.5 million USD in strategic investment gains (excluded from non-GAAP). Other net income increased from 98.9 million USD in the same period last year to 273.1 million USD. When assessing operation quality, non-GAAP metrics should be used. Non-GAAP operating margin was 49.1%, up 0.5 percentage points year-on-year; non-GAAP gross margin was 64.0%, down 1.2 percentage points year-on-year.

Guidance is the biggest highlight this quarter. The company expects fourth quarter revenue of 3.9–4.0 billion USD, higher than the market expectation of about 3.6 billion USD; non-GAAP diluted earnings per share are forecast at 1.26–1.30 USD, exceeding the expected 1.15 USD; non-GAAP operating margin is projected at 48%–49%. With cumulative revenue of 9.402 billion USD for the first three quarters and the new guidance, this implies full-year 2026 revenue of about 13.3–13.4 billion USD.

The balance sheet reveals inventory expansion: inventory grew 42.8% from the beginning of the year to 3.21 billion USD; total deferred revenue (including non-current) increased 27.3% to 6.84 billion USD; total cash and marketable securities reached 14.359 billion USD.

Chairman and CEO Jayshree Ullal stated that revenue growth and profitability both set records since the company went public; CFO Chantelle Breithaupt remarked that revenue, net profit, and earnings per share all achieved “three record highs.” On the product side, the company this quarter jointly launched, together with AMD, Arm, Broadcom, Meta, Microsoft, and Qualcomm, a rack-level AI network architecture based on open Ethernet standards, supporting 144 accelerators per rack and scalable across racks to 1,024 XPUs. In September, the company was added to the S&P 100 index.

After the earnings announcement, as of this release, the company’s after-hours share price was up 12.36%.