Arista Networks Sees $18.5 Billion in 2027 Revenue After 58.5% Quarterly Growth
Key Facts
Arista Networks said on November 3 that revenue reached $3.66 billion in the third quarter ended September 30, 2026, up 58.5% year over year and 20.5% from the second quarter. The company said the result exceeded its previous guidance of $3.3 billion. That rapid growth underpins management’s forecast for revenue of about $18.5 billion in fiscal 2027. Management estimated annual revenue growth of between 38% and 40% that year. On November 10, EL7 data showed the company’s shares closing at $185.02, compared with $186.17 in the previous session.
Revenue growth was accompanied by an improvement in the non-GAAP operating margin, which reached 49.1% in the third quarter, compared with 48.6% in the same period of 2025. Non-GAAP diluted earnings per share were also $1.20, up from $0.77 a year earlier. The company is targeting fourth-quarter revenue of between $3.9 billion and $4.0 billion, with a non-GAAP operating margin of between 48% and 49%. The forecast puts next quarter’s revenue above the third-quarter result, with a target margin near the recently reported level. The 2027 outlook ties targeted revenue growth to expansion across the company’s various businesses.
Management said AI networking would be its fastest-growing segment and that it aims to double revenue from the business to about $7 billion in 2027. In enterprise and university networking, known inside the company as “campus,” it forecast 60% growth to about $2 billion that year. These targets reflect the broadening demand the company cited among AI and enterprise customers. Reaching the announced 2027 total forecast depends on both businesses continuing to grow along the paths management outlined. That provides an operational context for the expected growth, alongside the strong year-over-year revenue comparison recorded in the third quarter.
Supply data showed the company ended the third quarter with inventory valued at $3.2 billion, up from $2.5 billion at the end of the second quarter. The chief financial officer said the inventory increase was intentional to meet customer demand. Purchase commitments also rose to $11.4 billion at the end of the third quarter, from $9.7 billion at the end of the second quarter. Management said most of the expected activity under those commitments relates to buying chips for new products and deploying AI applications. These figures put supply plans at the center of the company’s ability to meet the demand underpinning its forecasts.
In the initial reaction to the third-quarter results, Arista shares rose 3.52% during the November 3 session to $169.91, then climbed 12.1% after the close to $190.46. The company said third-quarter revenue growth was its highest year-over-year rate since its IPO. It added that it was included in the S&P 100 in September 2026. In the following weeks, EL7 data showed the closing price declining from $186.17 on November 9 to $185.02 on November 10. The company is scheduled to participate in the UBS Global AI and Technology Conference on December 1, followed by the Wells Fargo TMT Summit on December 7, 2026.