Fact Summary
In its Q2 2026 earnings release (2026-08-04), Arista Networks (ANET) reported revenue of $3.036B (+37.7% year-over-year), surpassing $3 billion in quarterly revenue for the first time, with non-GAAP diluted EPS of $1.02 (+39.7% year-over-year). As of 2026-08-17, market capitalization stood at $254,515,133,966.4 (1,261,224,648 shares outstanding), and the closing price on that date was $201.80, up +1.50% from the prior trading day. During the same period, SEC Form 4 filings disclosed that CEO Jayshree Ullal and co-founder Andreas Bechtolsheim continued to sell shares under Rule 10b5-1 trading plans adopted in November 2025 and February 2026, respectively.
Change Context Note
Short interest stood at 12,540,000 shares as of the 2026-08-15 settlement date, down 30.2% from the prior settlement date (2026-07-31), coinciding with the period following the 2026-08-04 earnings release. On individual trading days, the stock fell 3.3% on 2026-08-13 (closing at $203.62) and reportedly declined roughly another 3% on 2026-08-15.
Business Overview
Founded in October 2008 and headquartered in Santa Clara, California, Arista Networks is a data-driven networking company that provides next-generation data center and campus Ethernet switching/routing hardware along with Arista EOS software. Founder, CEO, and Chairman of the Board is Jayshree Ullal, and headcount as of December 2024 was 4,465 employees (no updated figure available since).
Customer composition, based on the most recent fiscal year (exact year unconfirmed), is reported as approximately 48% Cloud and AI Titans, 35% Enterprise, and 17% Providers. The exact revenue shares of two customers, Microsoft and Meta, are unconfirmed due to discrepancies across sources (20%/26%, 15%/16%), but their combined share is relatively high at roughly 35–42% (based on 10-K search summary, including secondary interpretation).
5-Year Financial Trend
| Period | Revenue | Operating Margin | Net Margin | Debt Ratio |
|---|---|---|---|---|
| FY2021 | $2.95B | 31.37% | 28.53% | 44.13% |
| FY2022 | $4.38B | 34.86% | 30.87% | 38.68% |
| FY2023 | $5.86B | 38.52% | 35.62% | 37.92% |
| FY2024 | $7.00B | 42.05% | 40.73% | 40.51% |
| FY2025 | $9.01B | 42.82% | 38.99% | 57.21% |
Revenue growth peaked in FY2022 (+48.63% YoY), decelerated through FY2024, then reaccelerated to +28.61% in FY2025. The FY2025 debt ratio jumped sharply from the prior year (40.51%→57.21%), though a detailed breakdown (borrowings, deferred revenue, accounts payable) is unconfirmed.
2026 Quarterly Results
| Period | Revenue | Operating Margin | Net Margin | YoY Revenue Growth |
|---|---|---|---|---|
| Q1 2026 | $2.709B | 42.74% | 37.76% | +35.1% |
| Q2 2026 | $3.036B | 45.40% | 39.96% | +37.7% |
Q2 2026 revenue (reported 2026-08-04) was $3.036B, surpassing $3 billion in quarterly revenue for the first time, with non-GAAP diluted EPS of $1.02 (+39.7% year-over-year). Non-GAAP gross margin for the same quarter was 63.4%, down 220bp from 65.6% a year earlier, of which the company attributed 20-30bp to tariff-related costs (per earnings release materials).
Competitive Landscape and Valuation Comparison
| Company | P/E (trailing) | PSR | EV/EBITDA |
|---|---|---|---|
| Arista(ANET) | 62.92x | 24.15x | 51.98x |
| Cisco(CSCO) | 33.90x | 7.00x | 24.52x |
| Nvidia(NVDA) | 34.46x | 21.05x | 31.99x |
Based on 2025 industry aggregate data (secondary source, Fierce Network), data center switching market share is reported as Cisco 27.3%, Nvidia 25.9%, and Arista 18.9%. HPE completed its acquisition of Juniper Networks on 2025-07-02 (approximately $13.4B total), reshaping the competitive landscape from separate Arista-vs-Juniper competition to Arista vs. the combined HPE Networking business unit.
Valuation (Factual Multiples)
TTM (sum of Q3 2025 through Q2 2026) revenue is calculated at $10.541B, with operating margin of 43.14% and net margin of 38.38% (derived from confirmed financial data, A). EV/EBITDA and forward multiples are withheld in this report due to unconfirmed depreciation and consensus estimate data.
Governance and Capital Structure
The Bechtolsheim Family Trust's stake (approx. 14.6%, as of 2026-04-02) was confirmed via a secondary aggregation source (tikr.com) citing the 2026 DEF 14A; cross-referencing against the primary filing has not been completed (C). Vanguard Capital Management LLC and affiliates' 6.25% stake as of 2026-03-31 was confirmed from the original SC 13G filing (A). The combined insider holding of 16.71% is an aggregate figure from stockanalysis.com with an unspecified methodology (C).
| Filing Date | Summary |
|---|---|
| 2026-08-05 | Jayshree Ullal disposed of 763,029 common shares under a 10b5-1 plan |
| 2026-08-06 | Andreas Bechtolsheim disposed of 111,848 common shares |
| 2026-08-10 | Andreas Bechtolsheim exhausted direct holdings (0 shares); disposed of 272,909 shares indirectly (family trust) |
| 2026-08-14 | Trust affiliated with Jayshree Ullal disposed of 573,509 shares (approx. $119.3M) |
All recently confirmed insider transactions were sales under previously adopted Rule 10b5-1 trading plans, and no disclosures of new share acquisitions were identified during the review period. Of the nine-member board, seven are independent directors; Jayshree Ullal serves as both CEO and Chairman of the Board, with a separate Lead Independent Director (Daniel Scheinman).
Supply and Demand Trends
Trading volume spiked to 20,140,845 shares on the 2026-08-05 earnings release date, roughly 2-3x the average. Top institutional holders are reported as BlackRock (91,383,843 shares), Vanguard affiliates (68,688,349 shares), State Street (48,165,803 shares), and FMR (Fidelity, 47,349,865 shares), in that order (based on 13F as of 2026-06-30, HoldingsChannel aggregation, C).
Macro Environment
| Factor | Value as of Reference Date |
|---|---|
| US Federal Funds Rate | 3.50-3.75% (held at 2026-07-29 FOMC meeting) |
| US Dollar Index (DXY) | Approx. 99.5 (2026-08-17) |
| Semiconductor Section 232 Tariff | 25% on advanced logic semiconductors (effective 2026-01-14) |
| US Tariff on Chinese Electronics | Effective rate approx. 37.5% (as of 2026-07-24) |
Combined 2026 capital expenditure plans for hyperscalers including Microsoft, Amazon, Alphabet, and Meta are estimated at approximately $725B, an expansion from roughly $410B in 2025 (based on each company's earnings releases, C), a variable directly tied to orders from ANET's largest customer group, the Cloud and AI Titans segment (approx. 48% of revenue). International revenue share was 23% as of Q2 2026 (with US revenue comprising approximately 77% of total revenue), indicating that the US hyperscaler capital expenditure cycle is the dominant variable, more so than exchange rates.
Risk Factors (Based on Disclosures)
- Customer concentration: High revenue dependence on a small number of large customers such as Microsoft and Meta (Cloud and AI Titans segment accounts for approximately 48% of revenue). In 2023, Meta's capital expenditure reduction caused Meta's share of revenue to decline from approximately 21% to 15%.
- Supply chain: Reliance on a small number of suppliers such as Broadcom for core switching silicon, with no long-term supply agreements in place.
- Export controls and trade regulations: The 10-Q identifies a risk factor related to tightened US export controls on China, noting that revenue recognition could be delayed if export licenses are delayed.
- Intensifying competition: Nvidia (Spectrum-X, NVLink) is rapidly expanding share in AI cluster networking, and HPE's completed acquisition of Juniper (2025-07-02) has reshaped the competitive landscape.
- Financial structure: The FY2025 debt ratio jumped sharply from the prior year (40.51%→57.21%), with a detailed breakdown unconfirmed.
- Past intellectual property litigation: A patent and copyright dispute with Cisco was settled for approximately $400M in August 2018, and no new major litigation has been identified as of 2026.
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Fact Highlights
Generated by FomoLog Agent · Data sources: Korea Exchange · NASDAQ · DART · SEC EDGAR