Aug 4, 2026 earnings call — Arista raises guidance, cites AI and supply improvements
Raised 2026 revenue guidance to $12.6 billion, citing AI fabrics demand and improved supply chain.
Revenue $3.0B (est $2.8B) · EPS $1.02 (est $0.89)
Key quotes
"SSU is Arista's Smart System Upgrade, the ability to upgrade switch software without any disruption."
"And finally, Arista is leaning in with our increased multiyear purchase commitments, now almost tripling from a year ago at $3.6 billion to approximately $9.7 billion by the end of Q2 2026."
"Given our improving stance in supply chain, we are excited to increase our guidance for the third time this year to $12.6 billion revenue in 2026."
Analyst Q&A 14
Integrated platform versus white-box
Q (Amit Daryanani · Evercore): The analyst asked if growing AI networking complexity makes integrated platforms more valuable than white box and whether customers are rethinking build versus buy for AI infrastructure across hyperscalers and frontier labs.
A: Management said Arista's strategy has accelerated and described three AI network types. They said white box is tactical for simple scale-up or scale-out, but system-wide features and consistent performance make integrated hardware and software more important.
"So I would say white box is certainly a tactical solution that we tend to see more in use cases that are simple, scale-up or scale-out where the actual amount of software and system requirements are low." — Jayshree Ullal (CEO·CHAIR)
Why guidance changed this quarter
Q (David Vogt · UBS): The analyst asked why calendar 2026 revenue guidance rose while the AI target stayed unchanged and only campus changed, and what customer trends drove that decision.
A: Management said they expect both AI and campus numbers to increase, but they are not fixing a single split yet. They said the final mix depends on what products they ship and want flexibility for customers and shipping choices.
"And that I would like to reserve that $1.1 billion question to, well, it depends on how we ship." — Jayshree Ullal (CEO·CHAIR)
Supply chain improvements and vendor options
Q (Michael Ng · Goldman Sachs): The analyst asked for more detail on supply chain actions this quarter: vendor qualification, memory capacity, pricing, and customer advocacy.
A: Management warned industry supply issues last years and said Arista took steps in H1 to improve results in H2. They described tight silicon relationships, adding vendor optionality, qualifying new vendors quickly, and improving terms and lead times to be more nimble.
"we've been able to work pretty hard at adding optionality, qualifying new vendors very quickly through our engineering teams, and that helps us bring multiple paths to delivery possible through the supply chain." — Todd Nightingale (COO)
Future of optics and co-packaged options
Q (George Notter · Wolfe): The analyst asked how changing technologies like CPO, NPO, XPO will change the mix and whether that helps or hurts Arista long term.
A: Management said it depends on use case: scale-up often favors copper and pluggable optics, while open co-packaged optics (open CPO) is their preferred single approach. They said open CPO is early and will take time, and most of the world will stay on pluggable optics and copper for now.
"Arista is not a fan of 5 different proprietary implementations." — Jayshree Ullal (CEO·CHAIR)
Landing AI labs and security webinar
Q (Benjamin Reitzes · Melius): The analyst asked about progress signing AI labs as customers and the potential >10% customer in Q4 mentioned in the press release and webinar.
A: Management said vulnerabilities are top of mind and highlighted EOS architecture and commitment to security. They said they must work with model providers and security vendors, will host a webinar on Sept 8, and Ken added Arista supports industry diversity through open standards like MRC.
"I just want to acknowledge Ken's architectural design of EOS and how we have the lowest vulnerabilities and we're absolutely committed to building that rock-solid foundation." — Jayshree Ullal (CEO·CHAIR)
Possibility of another 10% customer
Q (Aaron Rakers · Wells Fargo): The analyst asked if Arista still expects to add another 10%+ customer and whether the two big Microsoft and Meta customers remain 10%+ given the updated guide.
A: Management said they will increase revenue by $1 billion or more and remain committed to Microsoft and Meta. They said they fully expect one, maybe two 10% customers, and want flexibility on which products and customers qualify.
"But look, we're going to increase the number by $1 billion or more." — Jayshree Ullal (CEO·CHAIR)
Support for non-NVIDIA XPUs and NVLink alternatives
Q (Karl Ackerman · BNP Paribas): The analyst asked about partnerships with Neoclouds using custom XPUs and whether alternatives to NVLink or optical circuit switches for scale-up exist and Arista's opportunity.
A: Management said the market is still NVIDIA-dominated and NVLink vertical stacks limit Arista's role in many scale-up cases. They said non-NVIDIA accelerators like AMD MI and Google TPU present opportunities where Arista can work on custom racks and tune networks, but change from proprietary NVLink will take time.
"And I think we all can safely say it's a high percentage of the GPUs we connect to." — Jayshree Ullal (CEO·CHAIR)
1.6T product timing and refresh cycles
Q (James Fish · Piper Sandler): The analyst asked how many customers are qualifying or deploying the 1.6T, whether it's a production-scale growth driver next year, and about upgrade/refresh cycle impacts on the annual guide.
A: Management said 1.6T will be in trials in H2, will take about a half year to reach production because of liquid cooling and infrastructure needs, and customers in trials will be single digits but very large. Chantelle said they're excited about new logos, international growth, and land-and-expand, and allocation of the $1.1 billion will determine specifics.
"it will definitely take a half a year to get to production with the advent of liquid cooling and all the infrastructure the customer has to put in" — Jayshree Ullal (CEO·CHAIR)
Gross margin drivers this quarter
Q (Matthew Niknam · Truist): The analyst asked how much of the sequential gross margin improvement came from tariff refunds versus mix or pricing relief.
A: Management said versus guide, about 20 to 30 bps came from a tariff refund and the rest was mix. They said they are not yet seeing price increases flow through because of backlog, and price effects will show later in the year or next year.
"So I would put that 20 to 30 for the quarter versus the guide." — Chantelle Breithaupt (CFO)
Source of the incremental $1 billion revenue
Q (Simon Leopold · Raymond James): The analyst asked for more color on where the incremental $1 billion will come from if not from AI or campus.
A: Management said the incremental $1.1 billion will come from across their core product sectors, including front-end data center, enterprise, campus, routing, and international growth. They said they expect contributions from multiple teams and will know the exact breakdown once shipments occur.
"So I'd like to first make the observation that it isn't going to be flat, but we couldn't answer that question in Q1." — Jayshree Ullal (CEO·CHAIR)
Scale-across build-outs and customers
Q (John Jeffrey Hopson · Needham): The analyst asked whether scale-across build-outs are concentrated with cloud titans or could extend to Neocloud customers.
A: Management said scale-across is currently dominated by cloud and AI titans, but they are already seeing it apply to several Neoclouds. They added enterprise sees less of it, and ongoing scarcity of power, space, and compute will keep scale-across important.
"So currently, our scale-across is dominated by the cloud and AI titans." — Jayshree Ullal (CEO·CHAIR)
Size of scale-across market and Arista capture
Q (Antoine Chkaiban · New Street): The analyst asked how large the overall scale-across opportunity is today relative to the $1.2 billion and how much Arista can capture of the $15–20 billion opportunity in 2030.
A: Management said market research points to about $15 billion, maybe $20 billion with optics, by 2030. They said in 2026 the market may be $3–4 billion while Arista captures $1.2 billion, with rapid growth to the 2030 estimate.
"The market research is suggesting that it's going to be about a $15 billion, if you add some of the optics, maybe $20 billion in 2030." — Jayshree Ullal (CEO·CHAIR)
Why customers move from white box to EOS
Q (Meta Marshall · Morgan Stanley): The analyst asked about trends where customers start with white box but then move to EOS, and what Arista sees as it adds customers.
A: Management said customers value EOS for operational simplicity, deep AI features, and reliability against vulnerabilities, which reduces staffing and operational cost. They said white box remains an option for ultra-low cost or customers with large operations, but Arista's EOS and NetDL are compelling in current scarcity conditions.
"And the third is reliability and vulnerability, which is becoming top and center." — Jayshree Ullal (CEO·CHAIR)
Customer visibility given supply tightness
Q (Adrienne Colby · Citi): The analyst asked how far out Arista's visibility into customer demand extends amid tight supply and high demand.
A: Management said they still have about two quarters of visibility. They said their guidance is based on supply they are confident they can secure, and if supply improves they could do better in the year.
"I think with the -- we still have the same kind of 2 quarters of visibility that we referred to." — Chantelle Breithaupt (CFO)