Surges after hours! Arista Networks (ANET.US) Q3 revenue and profit growth hit a record high, Q4 guidance beats expectations.

On Tuesday after the U.S. market close, Arista Networks (ANET.US) reported third-quarter 2026 results for the period ended September 30: revenue of US$3.6576 billion, up 20.5% quarter-over-quarter and 58.5% year-over-year, the highest single-quarter year-over-year growth rate since its 2014 IPO, exceeding the company's guidance of approximately US$3.3 billion by 10.8% and beating the analyst consensus of approximately US$3.334 billion by nearly 10%. On the profit side, non-GAAP diluted earnings per share were US$1.20, beating the consensus of approximately US$1.08 by US$0.12 and up 55.8% year-over-year; GAAP diluted earnings per share were US$1.22, up 82.1% year-over-year. GAAP earnings per share for the quarter were actually higher than the non-GAAP figure, mainly because GAAP results included US$134.5 million in strategic investment gains (excluded from non-GAAP), with net other income rising to US$273.1 million from US$98.9 million a year earlieroperating quality should be measured on the non-GAAP line. Non-GAAP operating margin was 49.1%, up 0.5 percentage points year-over-year; non-GAAP gross margin was 64.0%, down 1.2 percentage points year-over-year. Guidance was the biggest highlight of the quarter. The company expects fourth-quarter revenue of US$3.9 billionUS$4.0 billion, above market expectations of approximately US$3.6 billion, and non-GAAP diluted earnings per share of US$1.26US$1.30, above expectations of approximately US$1.15; non-GAAP operating margin of 48%49%. Based on cumulative revenue of US$9.402 billion for the first three quarters plus estimates, this implies full-year 2026 revenue of approximately US$13.3 billionUS$13.4 billion. The balance sheet reveals inventory expansion: inventories rose 42.8% from the beginning of the year to US$3.210 billion, total deferred revenue (including non-current) rose 27.3% to US$6.840 billion, and cash and marketable securities totaled US$14.359 billion. Chairman and CEO Jayshree Ullal said the quarter's revenue growth and profitability both set records since the IPO; CFO Chantelle Breithaupt said revenue, net profit and earnings per share all "hit record highs." On the product side, the company this quarter, together with AMD, Arm, Broadcom Inc., Meta, Microsoft Corporation, Qualcomm and others, launched a rack-scale AI network architecture based on open Ethernet standards, with a single rack supporting 144 accelerators and scaling across racks to 1,024 XPUs; in September the company was added to the S&P 100 index. After the results were announced, as of press time, the company's shares were up 12.36% in after-hours trading.