Zhi Tong Cai Jing·2025-11-04 23:37Core Viewpoint - Arista Networks reported better-than-expected Q3 financial results driven by robust capital expenditures in artificial intelligence (AI), yet the stock fell 10% in after-hours trading despite a nearly 40% year-to-date increase in share price [1][2] Financial Performance - Adjusted earnings per share (EPS) for the quarter were $0.75, exceeding the market expectation of $0.71; GAAP EPS was $0.67, also above the anticipated $0.66 [1] - Total revenue for the quarter reached $2.31 billion, a 27% year-over-year increase, surpassing the market expectation of $2.27 billion [1] - Adjusted gross margin was 65.2%, exceeding expectations by 1 percentage point [1] Future Outlook - For Q4, the company expects revenue between $2.3 billion and $2.4 billion, with a midpoint of $2.35 billion, slightly above the market expectation of $2.33 billion [2] - Adjusted gross margin is projected to be between 62% and 63%, while the market expectation is 63.2%; adjusted operating margin is expected to be between 47% and 48% [2] - The CEO highlighted the company's strong data center strategy and its recognition among clients and analysts, reinforcing its position as a strategic network supplier [2] Growth Projections - During the analyst day in September, Arista projected a 20% revenue growth for FY2026, targeting $10.5 billion, with AI network business revenue expected to grow 70% from $1.5 billion this year to approximately $2.75 billion by 2026 [2]