Arista Networks posts strong Q3 earnings and lifts 2027 revenue outlook amid AI‑driven sell‑off
Arista Networks reported Q3 adjusted earnings per share of $1.20, a 55.8% increase year‑over‑year, and adjusted operating margin of 49.1%. The company raised its 2026 revenue forecast to about $13.3 billion and projected 2027 revenue of roughly $18.5 billion, driven by AI networking growth. Despite the upbeat results, the stock fell about 14% in the week as a broader AI‑hardware sell‑off pressured the sector.
Why it matters
The higher revenue guidance suggests stronger future cash flow, but the share‑price decline reflects market sentiment risk for AI‑related stocks. Investors will watch whether the 2027 outlook holds and if the 64% gross margin can be sustained.
Key facts
- 1Adjusted diluted EPS rose 55.8% to $1.20 from $0.77 year‑over‑year. finance.yahoo.com
- 2Adjusted operating margin increased to 49.1% from 48.6% a year earlier. finance.yahoo.com
- 3Management now expects 2026 revenue of about $13.3 billion, up 48% YoY. finance.yahoo.com
- 4Guidance for 2027 revenue is about $18.5 billion, roughly 38‑40% growth. finance.yahoo.com
- 5Q3 revenue grew 58.5% to $3.66 billion, beating the $3.3 billion guide. tikr.com
- 6Adjusted gross margin for the quarter was 64.0%, above the 63% target. tikr.com
Open questions
- 2027 revenue guidance is reported as $18.5 billion in material 1 and $18.55 billion in material 2.
Summary written by AlphAI AI Desk from 2 of 2 sources. Not investment advice. Figures are as stated by the linked sources.