Arista Networks Q3 2025 Earnings Net Income Surges 14%

Arista Networks (ANET) delivered a strong third-quarter performance, exceeding revenue and EPS estimates. The company maintained its Q4 guidance, with revenue and margin projections slightly above consensus. Despite robust results, shares fell 10% post-earnings, reflecting mixed market sentiment.

Revenue

Arista Networks reported total revenue of $2.31 billion in Q3 2025, a 27.5% year-over-year increase from $1.81 billion. Product revenue led the way at $1.91 billion, while service revenue contributed $396.60 million, reflecting sustained demand across its data center and networking solutions.

Earnings/Net Income

The company’s EPS rose 15.3% to $0.68, driven by improved operational efficiency. Net income surged 14.0% to $853 million, underscoring Arista’s disciplined cost management and pricing power. The EPS growth reflects strong operational efficiency and effective cost management.

Post-Earnings Price Action Review

Following the earnings release, Arista’s stock edged up 0.45% in the latest trading day but declined 2.05% for the week. Month-to-date, shares climbed 5.53%, though a post-earnings drop of 10% highlighted investor caution. The stock’s mixed performance suggests uncertainty about future guidance despite strong financial results.

CEO Commentary

Chairperson and CEO Jayshree Ullal emphasized Arista’s 4.7% sequential revenue growth, attributing success to its “centers of data” strategy. Leadership appointments, including CTO Kenneth Duda, and innovations like AI-driven network operations underscored the company’s long-term vision.

Guidance

Arista projected Q4 2025 revenue of $2.3–$2.4 billion, with non-GAAP gross and operating margins of 62–63% and 47–48%, respectively. The guidance excludes stock-based compensation and other non-recurring items, maintaining alignment with current market expectations.

Additional News

1. Evercore ISI Upgrade: Arista was added to Evercore ISI’s “TAP” outperform list, with analysts forecasting another earnings beat and revenue upside.

2. Institutional Investment: KDT Advisors LLC invested $223,000 in ANET, while Golden State Wealth Management and others increased holdings, signaling institutional confidence.

3. Insider Selling: CEO Jayshree Ullal sold 1.25 million shares, reducing her stake by 18.82%, raising questions about insider sentiment.

Arista Networks remains a key player in data center networking, with Microsoft and Meta as major clients. Its focus on AI infrastructure and cloud solutions positions it for sustained growth, though valuation concerns and insider selling warrant caution.

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