U.S. stocks edge higher; solid earnings season continues
SANTA CLARA - Arista Networks , Inc. (NYSE:ANET) shares surged 10.9% after the data-driven networking company reported second-quarter earnings that significantly exceeded analyst expectations, driven by strong demand for its AI networking solutions.
The networking equipment provider reported adjusted earnings of $0.73 per share, handily beating the analyst consensus of $0.65. Revenue jumped 30.4% YoY to $2.21 billion, surpassing the $2.1 billion consensus estimate. The company’s non-GAAP operating income crossed $1 billion for the first time, highlighting the strength of its business model amid growing AI infrastructure demands.
"Arista is well-positioned in data-driven AI networking, from client to cloud," said Jayshree Ullal, Chairperson and CEO of Arista Networks. "Our customers are decisively standardizing on our best of breed platform to bring transformational innovation and impact to their technology endeavors."
For the third quarter of 2025, Arista expects revenue of approximately $2.25 billion, with a non-GAAP gross margin of about 64% and a non-GAAP operating margin of approximately 47%.
The company’s gross margin improved to 65.6% on a non-GAAP basis, up from 64.1% in the first quarter of 2025 and 65.4% in the second quarter of 2024.
"Non-GAAP operating income crossed $1 billion for the first time at Arista, highlighting the strength of our business model and the momentum of customer demand across our portfolio," said Chantelle Breithaupt, Arista’s CFO.
During the quarter, Arista expanded its AI-driven campus and branch networking offerings, acquired the VeloCloud SD-WAN portfolio from Broadcom (NASDAQ:AVGO), and appointed Todd Nightingale as President and Chief Operating Officer. The company was also recognized in the Visionaries Quadrant of the 2025 Gartner (NYSE:IT) Magic Quadrant for Enterprise Wired and Wireless LAN Infrastructure.
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