Arista Networks (NYSE:ANET) shares are trading lower premarket on Wednesday. The company reported first-quarter financial results that beat analyst estimates Tuesday after market close.

Earnings Snapshot

Arista Networks reported first-quarter revenue of $2.71 billion, up 35.1% year-over-year. The revenue total beat a Street consensus estimate of $2.61 billion according to data from Benzinga Pro.

Revenue is driven by strong demand from AI and specialty cloud providers.

The company reported earnings per share of 87 cents for the quarter, beating a Street consensus estimate of 81 cents per share.

First quarter gross margin stood at 62.4%, influenced by customer mix and higher supply chain costs.

Outlook

The company is guiding for second-quarter revenue of $2.8 billion. The current Street consensus estimate is $2.77 billion.

Arista expects second-quarter adjusted earnings per share to be 88 cents per share vs. the consensus estimate of 85 cents per share.

For the full year, the company sees revenue growth of 27.7% to $11.5 billion, with AI-related revenue now projected at $3.5 billion, reflecting continued robust demand.

Arista Networks reiterated strong demand trends, led by AI networking and Ethernet-based AI fabric deployments.

The company is seeing diversified growth across cloud and enterprise verticals, while also preparing for expanded scale-up capabilities in 2027, with scale-out and scale-across expected to drive 2026 performance.

The company also lifted its AI networking revenue target to $3.5 billion, reflecting faster adoption of AI infrastructure solutions.

Key Conference Call

Supply constraints—particularly in wafers and semiconductors—remain a key challenge, with potential impacts on lead times and margins.

The company continues to advance its AI networking strategy across scale-up, scale-out, and scale-across architectures, supported by innovations such as its XPO optics platform, which has gained strong industry traction.

Deferred revenue is also rising as new products move through qualification cycles and are recognized over multiple quarters.

Management noted that AI demand continues to outstrip supply, though strong execution in procurement and supply chain management is helping meet customer requirements.

Overall, the company emphasized its leadership in AI networking and Ethernet-based AI fabric transformation, supporting continued growth momentum in FY2026.

ANET Price Action: Arista Networks shares were down 8.94% at $155.00 during premarket trading on Wednesday, according to Benzinga Pro data.

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