Arista Networks (ANET) investor relations material

Executive summary

• Q1 2026 revenue reached $2.71 billion, up 35.1% year-over-year, driven by strong AI, cloud networking, and specialty provider demand, with notable customer wins and high customer satisfaction (NPS 89, 94% approval).

• Net income rose to $1.11 billion (non-GAAP), up 31% year-over-year, with diluted EPS at $0.87 (non-GAAP) and $0.80 (GAAP).

• Operating cash flow hit a record $1.69 billion, reflecting robust profitability and deferred revenue growth.

• Gross margin was 62.4% (non-GAAP) and 61.9% (GAAP), down from the prior year due to customer mix and supply chain pressures.

• Operating expenses increased, supporting R&D, sales, and integration of acquisitions.

Financial highlights

• Product revenue grew 36.6% to $2.31 billion; service revenue increased 27.3% to $397.7 million.

• Operating income was $1.29 billion (non-GAAP) and $1.16 billion (GAAP); operating margin was 47.8% (non-GAAP) and 42.7% (GAAP).

• Cash, equivalents, and marketable securities totaled $12.35 billion; cash and equivalents were $2.79 billion.

• Deferred revenue rose to $6.2 billion, driven by multi-year support contracts and new product cycles.

Outlook and guidance

• FY 2026 revenue guidance raised to $11.5 billion (+27.7% to 28% year-over-year), with AI fabrics revenue goal of $3.5 billion.

• Q2 2026 guidance: revenue ~$2.8 billion, gross margin 62–63%, operating margin 46–47%, EPS ~$0.88.

• Gross margin guidance for 2026 is 62–64%, with operating margin at ~46%.

• Management expects continued volatility in revenue and margins due to customer concentration and supply chain constraints.