Arista Networks develops cloud-networking products and software for data-center, campus, routing, and AI-networking environments.
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ANET · Information Technology · Communications Equipment
Arista Networks, Inc.
Arista Networks develops cloud-networking products and software for data-center, campus, routing, and AI-networking environments.
ReportedCalculatedEstimatedForecastScenario Assumption
Executive summary
The questions under review.
The company is being studied for Ethernet-based AI networking demand, execution quality, and customer concentration.
Can AI and enterprise networking growth remain durable as customer and competitive risks evolve?
Monitor cloud-titan demand, enterprise adoption, product mix, and product and service margins.
Under Review. Primary-source evidence is documented below, while the five-year model and valuation output remain incomplete.
What growth duration and normalized margin justify the embedded expectations?
Investment thesis
Scenarios before conviction.
Bull case
Scenario Assumption — operating drivers exceed the verified base evidence without requiring materially weaker economics.
Base case
Scenario Assumption — reported operating drivers develop within management's disclosed framework; no point valuation is published.
Bear case
Scenario Assumption — operating conversion, margins, or cash generation weaken relative to the cited evidence.
What the market may be missing
Research in progress. No differentiated conclusion has been published.
Conditions required
Required evidence will be defined after current filings and investor materials are reviewed.
What would invalidate the thesis
Invalidation criteria are pending completion of the initial research record.
Business overview
Understand the operating system.
Business model
Research in progress. Evidence and source citations have not yet been entered.
Revenue sources
Research in progress. Evidence and source citations have not yet been entered.
Customer base
Research in progress. Evidence and source citations have not yet been entered.
Geographic exposure
Research in progress. Evidence and source citations have not yet been entered.
Recurring versus transactional revenue
Research in progress. Evidence and source citations have not yet been entered.
Competitive advantages
Research in progress. Evidence and source citations have not yet been entered.
Capital intensity and cyclicality
Research in progress. Evidence and source citations have not yet been entered.
Industry structure
Research in progress. Evidence and source citations have not yet been entered.
Latest verified evidence
Arista's official Q1 2026 release provides reported revenue, GAAP and non-GAAP margins, EPS, cash flow, and management outlook.
Segment analysis
Review disclosed business segments.
| Segment | Revenue | Growth | Operating income | Operating margin | Share of total | Key driver | Source |
|---|---|---|---|---|---|---|---|
| Cloud networking (single reportable segment) | 9,005.7 | 28.6% | 3,856.1 | 42.8% | 100.0% | Cloud-titan spending, AI networking, enterprise adoption, and product-service mix. | Annual report |
Operating components
Build From Operating Components
| Component | Historical evidence | Unit | Revenue relationship | Margin relationship | Cash-flow relationship | Key uncertainty | Analyst interpretation |
|---|---|---|---|---|---|---|---|
| Cloud and AI networking demandReported | Q1 2026 revenue was $2.709 billion, up 35.1% year over year. | USD | Switching, routing, campus, and services demand determine revenue. | Product mix and supply-chain costs influence gross margin. | Collections and inventory affect operating cash flow. | Cloud-customer concentration and deployment timing. | Growth is strong, but customer and product concentration must be monitored. |
| Operating leverageReported | Q1 2026 GAAP operating margin was 42.7%; non-GAAP operating margin was 47.8%. | Operating margin | Scale supports operating leverage. | Mix, pricing, and investment pace determine durability. | High margin can support cash generation, subject to working capital. | Sustainability through product and customer cycles. | Keep GAAP and non-GAAP margin evidence separate. |
Historical financials
Five Years of Evidence — Not Invented Precision
| Period | Revenue | Growth | Gross profit | Gross margin | Operating income | Operating margin | EBITDA | EBITDA margin | Net income | EPS | Operating cash flow | Capital expenditures | FCF | Cash | Debt | Diluted shares | Source |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| FY2021 | 2,948 | Not applicable | 1,880.8 | 63.8% | 924.7 | 31.4% | 975.1 | 33.1% | 840.9 | 2.63 | 1,015.9 | 64.7 | 951.2 | 620.8 | 0 | 319.2 | SEC filed annual reports / XBRL company factsUSD |
| FY2022 | 4,381.3 | 48.6% | 2,675.7 | 61.1% | 1,527.1 | 34.9% | 1,589.8 | 36.3% | 1,352.4 | 1.07 | 492.8 | 44.6 | 448.2 | 671.7 | 0 | 1,265.8 | SEC filed annual reports / XBRL company factsUSD |
| FY2023 | 5,860.2 | 33.8% | 3,630.3 | 61.9% | 2,257.3 | 38.5% | 2,327.9 | 39.7% | 2,087.3 | 1.65 | 2,034 | 34.4 | 1,999.6 | 1,938.6 | 0 | 1,268.5 | SEC filed annual reports / XBRL company factsUSD |
| FY2024 | 7,003.1 | 19.5% | 4,491.3 | 64.1% | 2,944.6 | 42.0% | 3,006.6 | 42.9% | 2,852.1 | 2.23 | 3,708.2 | 32 | 3,676.2 | 2,762.4 | 0 | 1,281.1 | SEC filed annual reports / XBRL company factsUSD |
| FY2025 | 9,005.7 | 28.6% | 5,768.7 | 64.1% | 3,856.1 | 42.8% | 3,928.7 | 43.6% | 3,511.4 | 2.75 | 4,371.9 | 119.5 | 4,252.4 | 1,963.9 | 0 | 1,275.7 | SEC filed annual reports / XBRL company factsUSD |
Revenue build
Model the actual economic drivers.
Cloud networking (single reportable segment)
Cloud-titan spending, AI networking, enterprise adoption, and product-service mix.
Review primary sourceEstimates
Current-period calculations are not reported results.
No analyst estimate is published. Reported results and management guidance remain labeled separately in the source record.
Forecasts
Forward expectations begin with operating drivers.
| Period | Metric | Base case | Bull case | Bear case | Operating-driver build | Difference from guidance | Main sensitivity | Principal risk |
|---|---|---|---|---|---|---|---|---|
| Next fiscal year | Revenue and cash-flow directionForecast | Scenario Assumption — positive operating conversion continues, but growth moderates from the strongest recent period. | Scenario Assumption — demand, mix, and execution remain above the recent reported trend, supporting stronger cash conversion. | Scenario Assumption — demand timing, pricing, mix, or execution weakens enough to pressure revenue and cash conversion. | Build from cloud-titan demand, AI-networking adoption, enterprise mix, product and service margin, inventory, and operating expenses. | This is a Luna1 directional scenario, not management guidance and not an external consensus estimate. | Conversion of the cited operating drivers into reported revenue and cash flow | The operating evidence may not persist through the next fiscal year |
| Assumption | Historical basis | Management evidence | Luna1 interpretation | Base | Bull | Bear | Last updated |
|---|---|---|---|---|---|---|---|
| Q2 2026 management outlook | Current reported period and prior-year comparison | Management guided to approximately $2.8 billion revenue and 46%–47% non-GAAP operating margin. | Directionally relevant, but insufficient by itself for a point forecast. | Recent reported momentum moderates toward a normalized pace. | Demand and operating conversion remain above the recent trend. | Demand, pricing, mix, or execution falls below the recent trend. | July 28, 2026 |
Valuation
Make every assumption visible.
Methods
- Discounted cash flow
- Comparable-company analysis
- Historical trading range
- Scenario analysis
- Weighted valuation conclusion
Primary model inputs
- Revenue forecast
- EBIT and tax rate
- NOPAT
- D&A, capital expenditures, and working capital
- Unlevered free cash flow
- WACC and terminal growth
- Enterprise-to-equity value bridge
- Diluted shares and implied value per share
WACC versus terminal growth
Sensitivity table will render after sourced assumptions are entered.
Revenue growth versus operating margin
Sensitivity table will render after sourced assumptions are entered.
| Selected method | Growth-duration DCF and normalized earnings multiple |
|---|---|
| Why it fits | Arista's high margins and growth require explicit assumptions for customer concentration, competitive intensity, and reinvestment. |
| Valuation date | July 28, 2026 |
| Share-price date | No market-price source connected |
| Share count | Requires verification from the cited primary-source record. |
| Net debt or cash | Requires verification from the cited primary-source record. |
| Forecast period | Not published; operating forecast remains incomplete |
| Discount rate | Not published |
| Terminal assumption | Not published |
| Scenario range | Not published |
| Major sensitivities | Growth duration, margins, capital intensity, and valuation multiple |
| Calculation source | No valuation output is published until reported inputs and market data are verified. |
| Limitations | The site has no licensed real-time market-data feed. This framework is not a price target. |
Comparable companies
Comparable evidence remains separate from valuation output.
| Company | Ticker | Market capitalization | Enterprise value | Revenue growth | EBITDA margin | EV/Revenue | EV/EBITDA | P/E | FCF yield | Price-to-book |
|---|
Comparable-company data has not been entered. The model supports market capitalization, enterprise value, growth, margins, valuation multiples, free-cash-flow yield, and price-to-book where appropriate.
Catalysts
What could change the evidence.
Earnings
Research in progress. Evidence and source citations have not yet been entered.
Product cycle
Research in progress. Evidence and source citations have not yet been entered.
Industry demand
Research in progress. Evidence and source citations have not yet been entered.
Margin expansion
Research in progress. Evidence and source citations have not yet been entered.
Capital allocation
Research in progress. Evidence and source citations have not yet been entered.
Regulatory or macro catalyst
Research in progress. Evidence and source citations have not yet been entered.
Strategic partnerships
Research in progress. Evidence and source citations have not yet been entered.
M&A
Research in progress. Evidence and source citations have not yet been entered.
Customer adoption
Research in progress. Evidence and source citations have not yet been entered.
Risks
What could break the thesis.
Valuation risk
Research in progress. Evidence and source citations have not yet been entered.
Execution risk
Research in progress. Evidence and source citations have not yet been entered.
Cyclical risk
Research in progress. Evidence and source citations have not yet been entered.
Customer concentration
Research in progress. Evidence and source citations have not yet been entered.
Competitive risk
Research in progress. Evidence and source citations have not yet been entered.
Regulatory risk
Research in progress. Evidence and source citations have not yet been entered.
Balance-sheet risk
Research in progress. Evidence and source citations have not yet been entered.
Technology risk
Research in progress. Evidence and source citations have not yet been entered.
Macro risk
Research in progress. Evidence and source citations have not yet been entered.
Thesis-specific risk
Research in progress. Evidence and source citations have not yet been entered.
Thesis monitoring
Evidence that strengthens or challenges the case.
Ethernet-based AI and cloud networking demand may support durable growth and high margins.
Q1 2026 revenue grew 35.1% and GAAP operating margin was 42.7%.
Cloud-customer concentration, supply-chain shifts, and high embedded expectations remain risks.
Revenue growth and GAAP operating margin
Cash flow from operations and customer concentration
Growth duration
A major customer slows or insources networking
Q2 2026 results
Not officially verified
Under Review
July 28, 2026
Earnings history
Verified quarterly evidence.
| Quarter | Revenue | Revenue growth | EPS | EPS growth | Gross margin | Operating margin | Guidance | Earnings reaction | Analyst note |
|---|
No earnings records or dated quarterly updates have been published. This section will remain empty until revenue, EPS, margins, guidance, market reaction, analyst notes, and source links are verified.
Research notes
Research changes and open questions.
No dated notes have been published. Earnings, investor-day, product, industry, valuation, thesis, and portfolio-lesson notes require a verified date and source.
Downloads
Branded documents—published only when complete.
ANETArista Networks, Inc.
Equity Research and Valuation Report
Prepared by Shy Lee- Last updated
- Updated July 28, 2026
- Format
- File size
- Available after publication
- Status
- In progress
ANETArista Networks, Inc.
Integrated Valuation Model
Prepared by Shy Lee- Last updated
- Updated July 28, 2026
- Format
- XLSX
- File size
- Available after publication
- Status
- In progress
Sources and disclosures
Evidence before publication.
| Document | Publisher | Publication date | Reporting period | Type | Relevant section | Date accessed |
|---|---|---|---|---|---|---|
| Q1 2026 financial results | Arista Networks, Inc. | May 5, 2026 | Quarter ended March 31, 2026 | Earnings release | Results, margins, cash flow, and outlook | July 28, 2026 |
| SEC filings | Arista Networks, Inc. | Ongoing archive | Multiple periods | Investor relations | Company filing archive | July 28, 2026 |
Source: Company filings, investor-relations materials, and Luna1 Research estimates. Estimates are labeled Luna1 Research Estimate; scenarios are labeled Illustrative Scenario.
Educational disclosure: This research is for educational and informational purposes only and is not investment advice. Luna1 Research may hold or monitor securities discussed on the platform.
Research completeness
What is supported, partial, or still missing.
| Section | Status | Audit note |
|---|---|---|
| Executive summary | Complete | Company purpose and research question are stated. |
| Business overview | Partial | Current primary-source evidence is present; multi-period model work remains incomplete. |
| Segment data | Complete | Latest disclosed segment or single-reportable-segment values are sourced to the annual filing. |
| Five-year financial history | Complete | Five fiscal-year rows cite filed annual reports; non-applicable or undisclosed measures are labeled explicitly. |
| Operating-component build | Partial | Company-relevant drivers and source links are present; undisclosed metrics are labeled. |
| Estimate section | Partial | Only management-guidance-derived or calculated estimates are shown. |
| Forecast section | Partial | No unsupported analyst point forecast is published. |
| Valuation | Partial | Method and required inputs are documented; market-dependent output is withheld. |
| Bull case | Partial | Scenario requires verified forecast inputs. |
| Base case | Partial | Scenario requires verified forecast inputs. |
| Bear case | Partial | Scenario requires verified forecast inputs. |
| Catalysts | Partial | Catalyst categories are present; dated event verification remains ongoing. |
| Risks | Partial | Risk categories are present; filing-specific citations remain ongoing. |
| Earnings update | Partial | Latest cited release is linked; full quarterly history is incomplete. |
| Source list | Partial | Primary sources are listed; a five-year source archive remains incomplete. |
| Performance tracking | Missing | No verified publication price and benchmark series are connected. |
| Thesis-monitoring indicators | Complete | Quarterly and annual monitoring fields are defined. |
Analyst