Arista Tops Q4 Earnings Estimates on Solid Revenues, Record Net Income

Arista Networks, Inc. ANET reported strong fourth-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 $955.8 million or 75 cents per share from $801 million or 62 cents per share in the year-ago quarter, propelled by higher revenues.

On a non-GAAP basis, net income was a record high at $1.05 billion or 82 cents per share compared with $849.6 million or 66 cents per share in the year-earlier quarter. The bottom line beat the Zacks Consensus Estimate by 7 cents.

For 2025, Arista recorded GAAP earnings of $3.51 billion or $2.75 per share compared with $2.85 billion or $2.23 in 2024. Non-GAAP earnings for 2025 were up to $3.81 billion or $2.98 per share from $2.97 billion or $2.32 per share in 2024.

Revenues

Quarterly revenues surged to $2.49 billion from $1.93 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 $2.37 billion. For 2025, total revenues increased to $9.01 billion from $7 billion in 2024.

Net quarterly sales from Products totaled $2.09 billion compared with $1.61 billion in the year-ago quarter. Service revenues increased to $392.1 million from $322.3 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 79% 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 $1.58 billion from $1.24 billion for respective margins of 63.4% and 64.2%. The margin was above the company’s guidance but declined year over year due to a higher mix of sales to cloud and AI Titan customers in the quarter.

Total operating expenses were $530.9 million, up from $431.4 million in the year-ago quarter. Research & development costs rose to $348.4 million from $285 million. Sales and marketing expenses also increased to $139.1 million from $111 million due to a rise in headcount, new product introduction costs and higher variable compensation expenditures. However, operating income for the quarter increased to $1.03 billion from $799.6 million on higher revenues.

Cash Flow & Liquidity

In 2025, Arista generated $4.37 billion of net cash from operating activities compared with $3.71 billion in 2024. As of Dec. 31, 2025, the company had $1.96 billion in cash and cash equivalents and $331.8 million in other long-term liabilities compared with the respective tallies of $2.76 billion and $252.8 million a year ago. Arista has $817.9 billion worth of shares available for repurchase under its $1.5 billion share buyback program.

Outlook

For the first quarter of 2026, management expects revenues to be approximately $2.6 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 46%.

Revenues for 2026 are likely to grow 25% year over year, with a gross margin of 62-64% and an operating margin of 46%.  

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 first-quarter fiscal 2026 earnings on Feb. 23. The Zacks Consensus Estimate for earnings is pegged at $1.99 per share, suggesting a growth of 9.3% from the year-ago reported figure.

Keysight has a long-term earnings growth expectation of 13.3%. Keysight delivered an average earnings surprise of 4.2% in the last four reported quarters.

Akamai Technologies, Inc. AKAM is slated to release fourth-quarter 2025 earnings on Feb. 19. The Zacks Consensus Estimate for earnings is pegged at $1.75 per share, indicating 5.4% growth from the year-ago reported figure.

Akamai has a long-term earnings growth expectation of 6%. Akamai delivered an average earnings surprise of 10.5% in the last four reported quarters.

Workday, Inc. WDAY is set to release fourth-quarter fiscal 2026 earnings on Feb. 24. The Zacks Consensus Estimate for earnings is pegged at $2.30 cents per share, implying a growth of 19.8% from the year-ago reported figure.

Workday has a long-term earnings growth expectation of 21.7%. Workday delivered an average earnings surprise of 9.1% in the last four reported quarters.

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

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