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What were the key takeaways from Arista Networks’s earnings call?

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- **Record Growth**: Q3 2025 revenue up 27.5% YoY to $2.31 billion, with AI-related revenue on track to meet $1.5 billion FY25 target.
- **AI Leadership**: FY26 AI revenue target of $2.75 billion, driven by Etherlink portfolio and NVIDIA collaboration. Promoted CTO Ken Duda and hired SVP Tyson Lamoreaux to accelerate AI innovation.
- **Financial Strength**: Q3 2025 gross margin 65.2%, operating margin 48.6%, with FY26 guidance for 62-64% gross margin and 43-45% operating margin.
- **Supply Chain Challenges**: CEO noted supply chain constraints causing quarterly revenue variability, but FY26 guidance reflects long-term confidence in AI and cloud growth.
- **Strategic Investments**: $10.1 billion cash balance, with $1.4 billion remaining under share buyback program. Expanding enterprise go-to-market with VeloCloud acquisition and channel investments.

**【CEO Summary Section】**
- Q3 2025 revenue of $2.31 billion, up 27.5% YoY, driven by AI and cloud growth. AI-related revenue target of $1.5 billion for FY25 is on track, with FY26 AI target at $2.75 billion.
- Emphasized leadership in AI networking with Etherlink portfolio, supporting multi-planar networks and NVIDIA collaboration. Promoted Ken Duda to President & CTO, highlighting engineering and AI expertise.
- Announced Tyson Lamoreaux as SVP of Cloud & AI Networking, leveraging his AWS and AI network experience to accelerate customer wins.
- Highlighted $10.65 billion FY26 revenue guidance (20% growth), with $2.75 billion from AI and $1.25 billion from campus segments.
- Discussed convergence of compute and networking, with Arista's role in rack solutions and open standards (ESUN, UEC).

**【CFO Financial Commentary】**
- Q3 2025 GAAP net income: $962.3 million (41.7% of revenue), Non-GAAP EPS: $1.08 (up 25% YoY). Gross margin: 65.2%, operating margin: 48.6%.
- FY25 guidance: $8.87 billion revenue (26-27% growth), 64% gross margin, 48% operating margin.
- FY26 outlook: $10.65 billion revenue (20% growth), 62-64% gross margin, 43-45% operating margin.
- Q4 2025 guidance: $2.3-2.4 billion revenue, 62-63% gross margin, 47-48% operating margin.
- Cash balance: $10.1 billion, with $1.4 billion remaining under share buyback program.

**【Q&A Highlights】**
- **Demand & Supply Chain**: CEO Jayshree Ullal stated demand remains strong, but quarterly revenue variability reflects supply constraints (e.g., 38-52 week component lead times). FY26 guidance accounts for potential supply chain challenges.
- **Gross Margin Dynamics**: CFO Chantelle Breithaupt noted AI and cloud titans drive lower product margin mix, but services (81-82% gross margin) offset pressure. Q4 2025 gross margin guidance of 62-63% reflects this dynamic.
- **Blue Box Strategy**: CEO emphasized blue box (custom hardware without EOS) is niche (single-digit customers), with lower margins but strategic value in scale-up AI deployments.
- **Neo Cloud Growth**: Todd Nightingale highlighted enterprise go-to-market expansion, with VeloCloud acquisition driving campus growth and channel investments targeting new logos.
- **AI Center of Excellence**: Tyson Lamoreaux reported deep customer engagement across cloud, AI, and enterprise, with wins exceeding expectations in multi-planar network architectures.


Arista Networks Inc (ANET) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

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Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

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Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

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Basic EPS from Discontinued Operations

Diluted EPS

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Diluted EPS from Discontinued Operations

ANET

ANET fundamentals

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