Arista Forecasts $18.5 Billion in 2027 Revenue as Growth Reaches 40%
Key Facts
Arista Networks issued its preliminary forecast for fiscal 2027, projecting revenue growth of 38% to 40%, equivalent to about $18.5 billion at the midpoint. Management announced the outlook during its third-quarter earnings call on November 3, 2026. The target follows quarterly revenue of $3.66 billion, setting the growth plan against strong performance already achieved. The company said quarterly revenue rose 58.5% year on year and 20.5% from the second quarter. The $18.5 billion figure is an estimate at the midpoint of the growth range, not a realized result or a guarantee.
Third-quarter revenue exceeded Arista's previous guidance of $3.3 billion. The company described the 58.5% annual increase as the highest since its public listing. The chief financial officer attributed the performance to "continued strength in demand from AI and enterprise customers." The company plans to double revenue from its AI networking business to about $7 billion in 2027, making it its fastest-growing business. In campus networking, it expects 60% growth and revenue of about $2 billion in the same year.
Management links these targets to a shift it describes as moving from a compute-centric architecture to a network-centric approach. It also expects company-supported network deployments to exceed 10 gigawatts by the end of 2027, across 10 or more types of computing accelerators. Arista announced its "Etherlink SU-144" architecture, capable of supporting up to 144 accelerators in a single rack in one hop. The architecture can be expanded, according to the company, to 1,024 processors by connecting racks. The company positions these products within the strategy it is betting on to expand its AI-related networking business.
But part of the product roadmap remains at an early stage: Arista expects to begin design trials for in-rack scaling in 2027, with production to start in 2028. Management said it does not expect this use case to make a material contribution to 2027 revenue. Meanwhile, the company's inventory rose to $3.2 billion at the end of the third quarter, from $2.5 billion in the previous quarter. Purchase commitments increased to $11.4 billion, compared with $9.7 billion at the end of the second quarter. Management said most of these commitments are tied to buying chips for new products and deploying AI applications, warning that inventory fluctuations could affect cash-flow timing ahead of customers' product deployments.
International revenue was $682.5 million, or 18.6% of total third-quarter revenue, compared with 23% in the previous quarter. The chief financial officer attributed the lower share to changes in the geographic sales mix among large global customers. On profitability, non-GAAP operating margin was 49.1%, compared with 48.6% in the corresponding quarter of 2025. Non-GAAP diluted earnings per share were $1.20, versus $0.77 a year earlier. The company's revenue in fiscal 2025 was $9.006 billion, up 28.6% from 2024.
For its next-quarter outlook, Arista set revenue at $3.9 billion to $4 billion for the fourth quarter of 2026. It also forecast a non-GAAP operating margin of 48% to 49% and diluted earnings per share of $1.26 to $1.30. Shares closed the regular session on November 3 at $169.91, up 3.52%, before rising to $190.46 in after-hours trading, a gain of 12.1%. Chief Executive Jayshree Ullal said the momentum reflects "the company's increasing relevance in the era of generative and agentic AI." The company's outlook extends beyond next year: it targets deployments exceeding 10 gigawatts across multiple accelerator types by the end of 2027, while it does not expect commercial production of in-rack scaling designs before 2028.