Arista Networks Grows Revenue 58.5%, Its Fastest Since IPO, and Guides Q4 Above Estimates

ANET reported third-quarter revenue of about $3.66 billion on Tuesday, up 58.5% from a year earlier and well above its own $3.3 billion guidance. The company called it the highest year-over-year growth since its IPO. Non-GAAP earnings of $1.20 per share beat the $1.08 Zacks consensus, and revenue topped the $3.31 billion Zacks estimate. Shares rose more than 6% in after-hours trading shortly after the release. Investing.com's earnings-call coverage later put the gain at 12.1%, to $190.46.

Timing matters for reading the move. Arista had already climbed 3.53% by late morning on Tuesday, before the report, and closed the regular session at $169.91. Some early coverage presented that intraday gain as a reaction to the results, but the release did not come out until after the close.

Profitability held up as revenue surged. Non-GAAP operating margin was 49.1%, versus 48.6% a year earlier, and management cited record profitability. Non-GAAP gross margin, however, slipped to 64.0% from 65.2%. For the fourth quarter, Arista guided revenue to $3.9 billion to $4.0 billion and non-GAAP EPS to $1.26 to $1.30, above consensus estimates of about $3.6 billion and $1.15.

The guide still implies a sharp sequential slowdown: it is roughly 7% to 9% above third-quarter revenue, after 20.5% sequential growth this quarter. That is why a Motley Fool take syndicated by The Globe and Mail framed the outlook as slowing. Both readings hold: growth is cooling from a record pace, yet the guide sits above where analysts were. What to watch is whether gross margin stabilizes as AI networking demand scales, and whether a valuation that MarketBeat flagged after a long multi-year run can absorb slower sequential growth.