Arista Reports First $3B Quarter, Raises Guidance

The results point to sustained hyperscaler AI spending that could be threatened by rising production costs and heavy reliance on a few large customers.

Overview

Arista reported Q2 revenue of about $3.036 billion and non‑GAAP EPS of $1.02, beating Wall Street estimates and marking its first $3 billion‑plus quarter.
Management raised full‑year revenue guidance to roughly $12.6 billion and gave Q3 revenue guidance near $3.3 billion with non‑GAAP EPS of $1.06 to $1.08.
The company introduced the 7060XE7 AI fabric switches, a 1.6‑terabit platform with liquid‑cooled options and up to 100 Tbps of system bandwidth to serve large AI clusters.
Profitability showed mixed signals: non‑GAAP operating margin expanded to about 49.9% while non‑GAAP gross margin slipped to 63.4% as Arista added manufacturing capacity and faced higher component costs.
Investors pushed the stock higher after the quarter, reversing a mid‑summer lull and lifting gains about 50% since February, but concentrated revenue exposure to Microsoft and Meta leaves the outlook sensitive to hyperscaler budget shifts.