Comments: ๐ธ โArista registered another momentous quarter with the highest year-over-year revenuegrowth since our IPO and record profitability, surpassing even my high expectationsโ โ Jayshree Ullal, Chairperson and CEO
๐ธ โThis quarter brought a true trifecta for our company, setting new record highs in revenuegrowth, net income, and EPS.โ โ Chantelle Breithaupt, CFO
Wall St Engine, an account that posts earnings figures on X, shared this card on Arista’s quarter at 21:11 UTC on 3 November. Its revenue, earnings-per-share, margin and outlook figures match the company’s release; the estimates in brackets are as cited by the account and we have not verified them. Its deferred revenue figure of $5.10 billion is the current portion only; the release also lists $1.74 billion of non-current deferred revenue.
ARISTA NETWORKS $ANET JUST POSTED ITS FASTEST REVENUE GROWTH SINCE GOING PUBLIC IN 2014
Revenue hit $3.66B last quarter, up +58.5% from $2.31B a year ago and +20.5% from just 3 months earlier.
Arista had guided to $3.3B. It beat its own forecast by about $360M.
CEO Jayshree Ullal said results came in “surpassing even my high expectations,” and pointed to “our increased relevance for the generative and agentic AI era.”
Net income rose +83% to a record $1.56B, and Arista kept almost half of every dollar of revenue as adjusted operating profit (49.1%).
Wolf Financial posted at 21:29 UTC that Arista had its fastest revenuegrowth since going public in 2014. Its revenue, net income and margin figures match the release. By our arithmetic from Arista’s XBRL filings, 58.5% is the highest of the 47 earlier quarters from September 2014 on with a year-earlier comparison; the quarter to June 2014 showed 65.2%.
Arista Networks ended September with $6.84 billion of deferred revenue, $26 million less than at the end of June, according to the balance sheet in the earnings release it filed with the SEC on 3 November. By our arithmetic from its filings, it is the first quarter-on-quarter decline since the quarter ended June 2023, after 12 straight increases.
The dip came in a record quarter. Revenue rose 58.5% from a year earlier to $3.66 billion, which Arista says is its highest year-over-year growth since its IPO. Deferred revenue was 1.87 times the quarter’s revenue, against 2.26 times at the end of June, by our arithmetic.
Chair and chief executive Jayshree Ullal called it “another momentous quarter with the highest year-over-year revenuegrowth since our IPO and record profitability, surpassing even my high expectations”.
Business Pill · Backlog
An evergreen Business Engineer explainer on revenue that is signed but not yet earned. It teaches the general idea only and does not discuss Arista.
The key insight: By our arithmetic, Arista’s total deferred revenue fell $26 million to $6.84 billion in a quarter when revenue grew 58.5%, its first quarter-on-quarter decline since June 2023, and the balance fell to 1.87 times quarterly revenue from 2.26 times.
What Arista Reported
Third-quarter revenue was $3.658 billion, up 20.5% from the second quarter and 58.5% from $2.308 billion a year earlier, against guidance of $3.3 billion. Product revenue was $3.190 billion, up from $1.912 billion; service revenue was $468 million, up from $397 million.
GAAP gross margin was 63.6%, against 64.6% a year earlier, and non-GAAP gross margin 64.0%, against 65.2%. GAAP operating margin rose to 44.9% from 42.4%. Net income was $1.560 billion, up from $853 million, and included $134.5 million of gains on strategic investments that Arista excludes from its non-GAAP figures.
Arista’s quarterly revenue and total deferred revenue at each quarter end, Q1 2025 to Q3 2026, $ million, from its 8-K Exhibit 99.1 release of 3 November 2026 and earlier 10-Q and 10-K filings (SEC XBRL). Fourth-quarter 2025 revenue, the deferred-revenue totals and the $26 million change are our arithmetic.
The Deferred Revenue Line
Current deferred revenue was $5.102 billion at 30 September, against $5.101 billion at 30 June in Arista’s 10-Q. Non-current deferred revenue was $1.737 billion, against $1.765 billion. The total of $6.840 billion compares with $6.866 billion at the end of June and $5.372 billion at the end of 2025.
In our reading of Arista’s XBRL filings, the total had risen every quarter from September 2023 to June 2026, from $1.085 billion to $6.866 billion. The previous decline was $7 million, in the quarter ended June 2023.
The release does not explain the movement. It does not say what share of deferred revenue relates to AI customers or to product acceptance terms.
What the Outlook Says
Arista expects fourth-quarter revenue of $3.9 billion to $4.0 billion, a non-GAAP operating margin of 48% to 49% and non-GAAP earnings per share of $1.26 to $1.30.
Fourth-quarter 2025 revenue was $2.488 billion, by our arithmetic from the 10-K. The $3.95 billion midpoint would be about 59% above that. With nine-month revenue of $9.402 billion, the range puts 2026 revenue at $13.30 billion to $13.40 billion, about 48% above 2025’s $9.006 billion, by our arithmetic.
Where the Money Sits
Inventories were $3.210 billion at 30 September, up from $2.247 billion at the end of 2025. Cash, cash equivalents and marketable securities totalled $14.36 billion, by our arithmetic. Arista reported no share repurchases in the first nine months of 2026, against $983 million a year earlier. Research and development spending was $487 million in the quarter, up from $326 million.
Against the Card on X
Wall St Engine, an account that posts earnings figures on X, put revenue at $3.66 billion against an estimate of $3.33 billion, adjusted earnings per share at $1.20 against $1.08, and cited an estimate of $3.6 billion for fourth-quarter revenue. We have not verified the estimates. Its “Deferred Revenue: $5.10B” is the current portion only; adding the non-current $1.74 billion gives $6.84 billion.
Wolf Financial, another account on X, posted that Arista “JUST POSTED ITS FASTEST REVENUE GROWTH SINCE GOING PUBLIC IN 2014”, and that it beat its own $3.3 billion forecast by about $360 million. Its revenue, growth, net income (up 83% to $1.56 billion) and 49.1% adjusted operating margin figures match the release. We checked the growth claim against Arista’s quarterly revenue in its XBRL filings. By our arithmetic, 58.5% is higher than in any of the 47 earlier quarters from September 2014 onward that have a year-earlier comparison; the previous high was 57.2%, in the third quarter of 2022. The data show 65.2% for the quarter to June 2014, the year Arista went public, and carry no year-earlier figures for the first and fourth quarters of 2014.
How Each Side Reads These Figures
For readers who see strength, the figures include revenue up 58.5%, results above Arista’s own $3.3 billion guidance, a GAAP operating margin of 44.9% and a fourth-quarter outlook of $3.9 billion to $4.0 billion.
For readers who see caution, the figures include the first decline in deferred revenue since 2023, a lower gross margin than a year earlier, and inventories up $963 million since December. We cite no analysts’ views here.
As we read it, the deferred line and the revenue line moved in opposite directions this quarter: revenue rose $622 million from the second quarter while the deferred balance stopped growing, which is consistent with more of the balance being recognised than added, though the release does not say so.
As we read it, the decline sits in the non-current portion, which fell $28 million, while current deferred revenue was flat at about $5.10 billion, so the card’s $5.10 billion figure misses where the change happened.
As we read it, the outlook keeps the growth rate intact on paper: a $3.95 billion midpoint would be about 59% above the fourth quarter of 2025, close to the third quarter’s 58.5%, by our arithmetic.
Jayshree Ullal, chairperson and CEO, Arista Q3 2026 earnings release
“This strong momentum across customer sectors highlights our increased relevance for the generative and agentic AI era.”
Three Implications
FOR INVESTORS TRACKING ARISTA Revenue was $3.658 billion against guidance of $3.3 billion; total deferred revenue was $6.840 billion, $26 million below June, by our arithmetic; the fourth quarter is guided to $3.9 billion to $4.0 billion.
FOR AI NETWORK BUYERS Arista says it launched rack-scale architectures for AI networks with AMD, Arm, Broadcom, d-Matrix, Meta, Microsoft and Qualcomm, supporting up to 144 accelerators per rack in a single hop.
FOR READERS FOLLOWING THE BALANCE SHEET Inventories rose to $3.210 billion from $2.247 billion in December, cash and marketable securities totalled $14.36 billion by our arithmetic, and the release shows no share repurchases in the first nine months.
The framework puts it this way: “It is a layered industrial stack — and at any given moment, the binding constraint sits at a different layer than it did six months ago.”
As we read it, Arista sits in the networking layer of that stack, and its release ties this quarter to scale-up and scale-out AI fabrics. The framework was published in May 2026 and does not discuss Arista’s quarter.
This piece is based on Arista’s third-quarter 2026 earnings release, filed as Exhibit 99.1 to its 8-K of 3 November 2026, and its earlier 10-Q and 10-K filings as tagged in SEC XBRL data. The total deferred revenue, the first decline since 2023, the ratios to revenue, fourth-quarter 2025 revenue and the implied 2026 total are our arithmetic, not company statements.
The release gives no AI networking revenue figure and no customer concentration figure, so neither is covered here. The 10-Q for the quarter had not been filed when we read the release, so its risk factors are not covered. Arista scheduled its call for 1:30 p.m. Pacific Time (21:30 UTC); we had not heard it when we wrote this piece. We did not contact Arista.
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Arista grew revenue 58.5% to $3.66 billion, yet its total deferred revenue slipped $26 million to $6.84 billion, the first quarterly decline since mid-2023 in our reading of its filings. The release does not say why.
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A note on sourcing. Every company figure comes from Arista’s third-quarter 2026 earnings release, filed with the SEC as Exhibit 99.1 to its 8-K of 3 November 2026, and from its earlier 10-Q and 10-K filings as tagged in SEC XBRL data, read on 3 November. The estimates are as posted by Wall St Engine on X and are not verified. Total deferred revenue, the first decline since 2023, the ratios, fourth-quarter 2025 revenue and the implied 2026 total are our arithmetic. We did not contact Arista.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
