Arista Q3 Earnings Beat Estimates on Solid Top-Line Improvement

Arista Networks, Inc. ANET reported strong third-quarter 2025 results, with revenues and adjusted earnings soaring year over year, driven by robust demand trends. Innovative product launches and steady customer additions backed by the company’s best-in-class portfolio strength led to top-line expansion, while steady margin improvement contributed to earnings growth. Both the bottom and the top lines beat the respective Zacks Consensus Estimate.

Net Income

GAAP net income in the reported quarter increased to $853 million or 67 cents per share from $748 million or 58 cents per share in the year-ago quarter, propelled by higher revenues.

On a non-GAAP basis, net income was $962.3 million or 75 cents per share compared with $769 million or 60 cents per share in the year-earlier quarter. The bottom line beat the Zacks Consensus Estimate by 3 cents.

Revenues

Revenues surged to $2.31 billion from $1.81 billion in the prior-year quarter, driven by strength across the product portfolio. The company introduced various solutions for cloud, Internet service providers and enterprise networks to meet the rising demands of AI/ML-driven network architectures. These innovations enabled Arista to deliver a superior customer experience and increase customer engagement. The top line beat the consensus estimate of $2.24 billion. 

Net quarterly sales from Products totaled $1.91 billion compared with $1.52 billion in the year-ago quarter. Service revenues increased to $396.6 million from $287.1 million. Arista witnessed positive demand trends owing to its strong product portfolio, which is highly scalable, programmable and provides data-driven automation, analytics and world-class support services.

Net sales from the Americas contributed approximately 80% to total revenues, while international revenues accounted for the remainder. Driven by its relentless pursuit of innovative products, Arista maintains a strong leadership position in the Data Center and Cloud Networking vertical.

Other Details

Non-GAAP gross profit rose to $1.51 billion from $1.17 billion for respective margins of 65.2% and 64.6%. The margin was above the company’s guidance and was buoyed by improved inventory management and supply-chain discipline.

Total operating expenses were $512 million, up from $376.4 million in the year-ago quarter. Research & development costs rose to $326 million from $235.8 million. Sales and marketing expenses also increased to $151.2 million from $106.8 million due to a rise in headcount, new product introduction costs and higher variable compensation expenditures. Operating income for the quarter was $978.2 million, up from $785.3 million.

Cash Flow & Liquidity

In the first nine months of 2025, Arista generated $3.11 billion of net cash from operating activities compared with $2.68 billion in the year-ago period. As of Sept. 30, 2025, the company had $2.33 billion in cash and cash equivalents and $309.6 million in other long-term liabilities. Arista has $1.4 billion worth of shares available for repurchase under its $1.5 billion share buyback program.

Outlook

For the fourth quarter of 2025, management expects revenues to be between $2.3 billion and $2.4 billion, driven by healthy growth momentum and solid demand trends. Non-GAAP gross margin is expected to be 62%-63% and non-GAAP operating margin about 47%-48%.

Revenues for 2025 are likely to grow 26%-27% year over year to approximately $8.87 billion, with a gross margin of 64% and an operating margin of 48%. Revenues for 2026 are expected to be roughly $10.65 billion, up 20% year over year.

Zacks Rank

Arista currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Keysight Technologies, Inc. KEYS is scheduled to release fourth-quarter fiscal 2025 earnings on Nov. 24. The Zacks Consensus Estimate for earnings is pegged at $1.83 per share, suggesting a growth of 10.9% from the year-ago reported figure.

Keysight has a long-term earnings growth expectation of 11.5%. Keysight delivered an average earnings surprise of 4.7% in the last four reported quarters.

Akamai Technologies, Inc. AKAM is slated to release third-quarter 2025 earnings on Nov. 6. The Zacks Consensus Estimate for earnings is pegged at $1.64 per share, indicating a 3.1% growth from the year-ago reported figure.

Akamai has a long-term earnings growth expectation of 4.9%. Akamai delivered an average earnings surprise of 7.1% in the last four reported quarters.

AST SpaceMobile, Inc. ASTS is set to release third-quarter 2025 earnings on Nov. 10. The Zacks Consensus Estimate for earnings is pegged at a loss of 18 cents per share, implying a growth of 25% from the year-ago reported figure.

AST SpaceMobile has a long-term earnings growth expectation of 28.3%. The Zacks Consensus Estimate for revenues is pegged at $20.74 million, implying a growth of 1,785.4% from the year-ago reported figure.

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This article originally published on Zacks Investment Research (zacks.com).

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