Arista Networks Surpasses Q2 Expectations, Guides 25% Revenue Growth in 2025

Arista Networks reported Q2 results that beat expectations, with 65.6% gross margin and 48.8% operating margin, beating guidance and Street estimates. Free cash flow was $1.18 billion, above consensus and BofA's model. The company raised its revenue growth forecast to 25% in 2025, up from 17%. Analysts raised their price targets and maintained bullish calls, with J.P. Morgan predicting $10 billion in revenue by 2026. Arista may outpace legacy peers if it can sustain margins and ride the cloud capex wave.

Arista Networks Inc. (ANET) reported robust second-quarter 2025 earnings, surpassing expectations with a 65.6% gross margin and 48.8% operating margin, both exceeding guidance and Street estimates. The company's free cash flow of $1.18 billion exceeded consensus and BofA's model. Arista Networks raised its revenue growth forecast to 25% for 2025, up from the previous 17% projection. Analysts have responded by raising their price targets and maintaining bullish calls, with J.P. Morgan predicting $10 billion in revenue by 2026. The company's performance underscores its ability to sustain margins and capitalize on the cloud capex wave, potentially outpacing legacy peers.

Arista Networks' Q2 2025 revenue hit $2.21 billion, a 30.4% year-over-year increase, and earnings per share (EPS) of $0.73, up 37.7% YoY, surpassing Wall Street forecasts [3]. The company's 21.3% data center Ethernet switch market share, driven by Etherlink AI platforms with 800 Gbps capabilities, highlights its market leadership. Arista's strategic acquisitions, such as VeloCloud, have further strengthened its position in the SD-WAN market and expanded its enterprise footprint. Meanwhile, competitors like Cisco and Juniper face challenges, including Cisco's delayed 800 Gb/s switch roadmap and Juniper's acquisition uncertainty by HPE, creating opportunities for Arista to consolidate its market share.

Arista's financial strength is evident in its record cash from operations of $1.2 billion, enabling aggressive share repurchases of $196 million in Q2 under a $1.5 billion program. The company's $10 billion revenue target by 2026, two years ahead of schedule, is supported by its 48.8% operating margins and $1.2 billion operating cash flow. Analysts project Arista's revenue could nearly triple to $19.45 billion by 2029, with net income reaching $7.67 billion, driven by AI workloads and SaaS expansion [3].

Arista Networks' impressive Q2 2025 results and elevated revenue forecast reflect its robust position in the AI and cloud sectors. The company's ability to sustain margins and capitalize on the cloud capex wave positions it well to outpace legacy peers. As Arista continues to innovate and expand its market share, investors can expect to see sustained growth and strong financial performance.

References:
[1] https://www.gurufocus.com/news/3038136/arista-networks-anet-boosts-2025-revenue-forecast-amid-strong-q2-results
[2] https://finance.yahoo.com/news/arista-beats-q2-earnings-estimates-124300974.html
[3] https://www.ainvest.com/news/arista-networks-powerhouse-data-center-infrastructure-2025-q2-earnings-implications-2508/