Arista Networks’ stock jumps after-hours on another strong earnings and revenue beat – News

A solid earnings and revenue beat followed by strong guidance above-consensus sent shares of Arista Networks Inc. leaping more than 12% in extended trading today.

The networking company reported fourth-quarter adjusted earnings of 82 cents per share, comfortably ahead of the 76-cent-per-share analyst forecast. Revenue for the period rose 29% from a year ago, to $2.49 billion, topping the $2.38 billion consensus, thanks to strong demand for client-to-cloud networking in artificial intelligence, data center, campus and routing environments.

Arista Chairperson and Chief Executive Jayshree Ullal (pictured) hailed the company’s strong finish to fiscal 2025, saying that the year validates its “Arista 2.0 momentum.” She added that the company “exceeded both our AI networking and campus expansion goals, delivering profitable growth and revenue of $9 billion” for the full year.

Arista has grown tremendously since the start of the AI boom that followed the emergence of ChatGPT in late 2022. It has become one of the prime beneficiaries of AI demand because it sells the premium data center networking switches and high-performance routers that are critical for the performance of large clusters of graphics processing units.

The most powerful large language models are run on thousands of GPUs, and those chips need to work in perfect synchronization with one another. That’s what Arista’s networking equipment enables, and it’s why customers such as Meta Platforms Inc. and Deutsche Börse have bought millions of dollars worth of its products.

Investors were pleased to see that Arista’s profitability remained strong, even though its margins declined slightly during the quarter. The company delivered net income of $955.8 million, up from $801 million a year earlier, but its gross margin came to 62.9%, down from 64.6% in the third quarter.

For the current quarter, Arista said it’s shooting for revenue of around $2.6 billion at the midpoint of its guidance range, well ahead of Wall Street’s $2.46 billion target.

In December, Arista announced new campus products including the latest edition of its Virtual ES with Path Aliasing, or VESPA offering, which it said will make it simpler for companies to deploy large-scale mobility domains. It also expanded its agentic AI tool, the Autonomous Virtual Assistant, which automates network operations on behalf of customers.

Arista is keen to grow its presence in campus networking environments. The company is well-established in hyperscale data centers, but it has struggled to take market share from rivals like Cisco Systems Inc. in smaller networks that interconnect multiple buildings across locations such as universities, hospitals and business campuses.

Today’s after-hours gains means Arista’s stock is up just over 3% in the year to date, and 23% in the last 12 months.

Photo: Morgan Stanley/YouTube