Overview
- Arista shares fell about 14% in after-hours trading Tuesday after the company beat Q1 estimates but flagged pressure on profitability.
- Q1 revenue rose 35% to $2.71 billion and adjusted EPS reached $0.87, while billings growth accelerated to 54%, pointing to strong demand.
- Management guided Q2 revenue to about $2.8 billion and EPS to $0.88, yet projected a 46% to 47% adjusted operating margin that undercut recent levels.
- The company set 2026 revenue growth at 27.7%, short of the roughly 28% to 30% many analysts expected, which helped drive the selloff.
- Arista unveiled XPO liquid-cooled pluggable optics that can cut networking racks by up to 75% and a universal AI spine for large AI clusters, as analysts kept positive ratings but shifted focus to supply and margin execution.