Tech & AI
Arista Networks Revenue Jumps 58.5% as AI Data-Centre Demand Lifts Guidance
The network-equipment maker reported $3.66 billion of third-quarter sales and guided to as much as $4.0 billion for the fourth.
HedgeWeekly Tech & AI Desk ·
Arista Networks said revenue for the quarter ended September 30 rose 58.5% from a year earlier to $3.66 billion, ahead of the roughly $3.3 billion it had guided to. Sales climbed 20.5% from the prior quarter, and chief executive Jayshree Ullal described it as the fastest annual growth since the company listed.
Profitability stayed high for a hardware business. Gross margin was 64.0% on an adjusted basis, and adjusted earnings were $1.20 a share against $0.77 a year ago. On a standard accounting basis, earnings were $1.22 a share, compared with $0.67.
For the fourth quarter Arista guided to revenue of $3.9 billion to $4.0 billion, an adjusted operating margin of 48% to 49% and adjusted earnings of $1.26 to $1.30 a share. The release gave no separate dollar figure for AI sales, but pointed to new designs that link up to 144 AI accelerators, the chips that train and run models, in a single rack.
Why it matters: Arista sells the switches that tie AI chips together inside data centres, so its growth is a read-through on how much cloud providers are still spending on AI capacity. Investors will watch whether the guided 48% to 49% operating margin holds as volumes rise, and whether customer concentration or spending delays emerge in the coming quarters.