Arista Networks (ANET) Q3 FY26 Earnings Call Transcript

Operator00:00

Welcome to the third quarter 2026 Arista Networks financial results earnings conference call.

Operator00:15

During the call all participants will be in a listen only mode. After the presentation we will conduct a question and answer session. Instructions will be provided at that time. If you need to reach an operator at any time during the conference please press the star key followed by zero.

Operator00:28

As a reminder this conference is being recorded and will be available for replay from the investor relations section on the Arista website following this call. Mr. Rudolph Araujo, Arista's head of investor advocacy you may begin.

Rudolph Araujo00:51

Thank you Regina. Good afternoon everyone and thank you for joining us. With me in today's call are Jayshree Ullal, Arista Networks chairperson and chief executive officer and Chantelle Breithaupt, Arista's chief financial officer. This afternoon Arista Networks issued a press release announcing its fiscal third quarter results for the period ending September 30th 2026. If you want a copy of this release you can find it on our website.

Rudolph Araujo01:28

During the course of this conference call Arista Networks management will make forward looking statements including those relating to our financial outlook for the fourth quarter of the 2026 fiscal year longer term business model and financial outlooks for 2027 and beyond our total addressable market and strategy for accessing those market opportunities across AI campus data center and other segments inventory levels and management lead times purchase commitments component supply and product innovation which are subject to the risks and uncertainties that we discuss in detail in our documents filed with the SEC, specifically in our most recent form 10-Q and form 10-K and which could cause actual results to differ materially from those anticipated by these statements.

Rudolph Araujo02:00

These forward looking statements apply as of today and you should not rely on them as representing our views in the future. We undertake no obligation to update these statements after this call. This analysis of our Q3 results and our guidance for Q4 2026 and FY 2027 is based on non-GAAP financial measures and excludes stock based compensation expense, intangible asset amortization, and other non-recurring items as well well as the income tax effect of these non-GAAP exclusions including the recognition of direct access tax benefits associated with stock based awards.

Rudolph Araujo02:15

A full reconciliation of our selected GAAP to non-GAAP historical results is provided in our earnings release. A reconciliation of our FY27 non-GAAP guidance to the most directly comparable GAAP measures is not available without unreasonable effort.

Rudolph Araujo02:17

With that, I will turn the call over to Jayshree.

Prepared remarks

Jayshree Ullal02:41

Thank you, Rudy. And welcome everyone to our third quarter 2026 earnings call. Arista just delivered a standout quarter of 3.66 billion in revenue which is translating to our annual growth of 58.5%. This marks our largest ever year over year revenue growth in the history of being a public company.

Jayshree Ullal02:57

Before we dive into the financial specifics I would like to emphasize our rapid Arista 2.0 success. success a strategy we embarked upon just three years ago. It has generated meaningful customer outcomes to become the central network nervous system for us.

Jayshree Ullal03:17

In the 2000 era the industry had accepted a status quo plagued by fragile overly complex disparate and vulnerable operating systems Arista pioneered the universal cloud network and the AI lace spine architecture based upon our rock solid high quality foundation of our differentiated EOS.

Jayshree Ullal03:31

That one network operating system with a published subscribed state and data driven foundation has governed us with five A's agile security automation availability analytics and AI principles.

Jayshree Ullal04:04

By extending our single EOS operating system from the data center all the way from the universal spine to many forms of edge leaf functions we deliver structural and secure network harmony. our Arista 2.0 transformation from data centers to centers of data can be characterized as the age of network intelligence learning from vast repositories of stream data it has driven our strategy across locations be it client to branch to campus to data to cloud and AI centers for our customers.

Jayshree Ullal04:24

Based on our network data lake architecture we offer our customers automated and conversational troubleshooting agentic companions devoid of manual hunting through text heavy logs our systems proactively begin identifying and isolating issues for networked workloads workflows and work streams.

Jayshree Ullal04:38

In 2026 the network centric acceleration is well underway our customers have increasingly coalesced the back end and the front end of AI and data centers. Arista has long championed standards based ethernet.

Jayshree Ullal04:48

Customers have welcomed our open approach to modernizing cloud campus data centers WAN centers and now AI centers with a lower total cost of ownership.

Jayshree Ullal05:03

Recently we were recognized with the leader status from Forrester for the highest strength of innovation and data center portfolio. We were also recognized by Gartner Magic Quadrant leadership for campus wired and wireless and data center segments.

Jayshree Ullal05:14

As agentic AI models increase in parallelism compute diversity and density we have the choice of many more training and inference accelerators.

Jayshree Ullal05:28

The industry we believe is shifting from compute centric vertical stack to a holistic network centric approach Arista is committed to unleashing and breaking down the barriers between compute and networking.

Jayshree Ullal05:36

Arista customers can now construct an open network platform capable of handling heterogeneous models and diverse accelerators at scale.

Jayshree Ullal05:53

Our Etherlink portfolio of at least 25 switches for scale up scale out and scale across is optimally designed to improve XPU utilization job completion time and token latency for these intense training and inference workloads.

Jayshree Ullal06:09

In October of 2026 at the Open Compute Project conference Arista showcased our rack scale up designs partnering closely with several AI accelerators infused with our Arista network diagnostics layer.

Jayshree Ullal06:28

Based on ESun Ethernet for scale up rack options these include orthogonal designs cable intensive backplanes and heterogeneous cross rack designs co-designed with many of our partners including ARM, Microsoft Maya, AMD's Helios, Qualcomm, Meta's MTIA and many more ahead.

Jayshree Ullal07:06

We expect scale up trials to begin in 2027 2027 driving Ethernet to larger radix of 126 to 144 within a rack and across a thousand across racks with production expected for scale up in 2028. We are witnessing the migration from highly centralized training compute to disaggregated and distributed inference prefill and decode demanding much more intelligent networking and co-location of compute storage and KV cache resources rather than simply focusing on raw feeds and speeds and flops of compute.

Jayshree Ullal07:44

A well designed network is becoming a foundational cornerstone for optimal token efficiency Arista's decades of EOS engineering in both multi-planar and distributed model routing at scale be it ARP address resolution protocols or FIB tables forward information base or access lists with rapid reconvergence comes to the rescue our Etherlink products are inherently designed to actively understand parameters at a deep level including latency and bandwidth profiles of multi-tenancy to intelligently steer workloads for optimal placement between local and remote domains.

Jayshree Ullal08:01

The need for visibility into ports, packet queues, flows, buffer utilization, and pot latency across the entire scale out and scale across fabric validates real AI system level performance to avoid idling of precious compute cycles.

Jayshree Ullal08:12

It assures immediate and network wide insight to the root cause as well as rapid recovery of the AI system with smart system upgrades across millions of accelerators.

Jayshree Ullal08:28

When we initially began this transformational AI journey we spoke about four or five AI customers with approximately 50 to 100,000 Nvidia GPUs and in fact we were largely staring at a proprietary network cycles such as InfiniBand.

Jayshree Ullal08:46

In 2026 we are in a super cycle of AI having already surpassed 100 Etherlink customers by the end of 27 we are forecasting greater than 10 gigawatts of deployment across 10 or more different types of compute accelerators.

Jayshree Ullal09:00

What a stark inflection in just three years. Central to this AI super cycle is also the expansion of Aristaista Ava our autonomous virtual assist to support efficient AI in the enterprise.

Jayshree Ullal09:17

But providing that open programmable interface within EOS and utilizing the model context protocol MCP Ava allows emerging AI agents to reason to interact with the network stack and perform advanced multi-domain event correlation across the entire enterprise.

Jayshree Ullal09:35

With exponential rise of generated AI attacks and the ever increasing cyber threats securing the network is key and integral and our responsibility. I would like to invite Ken Duda our founder president and CTO to shed some light on this problem.

Jayshree Ullal09:35

Ken?

Ken Duda10:59

Thanks Jayshree. It's hard to overstate the impact of AI on networking. First the good news Ava which is Arista's autonomous virtual assistant fueled by real time data Ava is incredibly powerful it seamlessly navigates networking and security infrastructure from campus to WAN to data center to cloud continuously monitoring and troubleshooting isolating root causes without manual labor intensive tasks having seen what Ava can do I can't imagine managing my own infrastructure without it and I expect many of our customers will feel the same way the bad news of course is the massive challenge AI poses for us and our customers by discovering and exploiting security vulnerabilities this threat landscape demands secure and robust networking over the past few months we've been collaborating with Anthropic Google OpenAI and many others to integrate new AI enabled security capabilities from Frontier models into our existing software security pipeline we are being invited early as a key infrastructure provider into partnerships like Project Glasswing folding AI driven vulnerability discovery and assessment into our established security vulnerability management process true network security has become a must have not a nice to have.

Ken Duda11:20

And Arista's Arista's EOS operating system is the ideal architectural foundation based on four key principles. First, a single high quality operating system Arista has maintained one of the lowest CVE counts less than 100 in the industry over the last two decades while others are rising exponentially.

Ken Duda11:54

Due in part to the simple fact that multiple networking operating systems tend to have more vulnerabilities than just one. Second, limiting vulnerability impact through process isolation. EOS keeps each software agent management plane or control plane architecturally separate from each other and also from hardware forwarding so traffic keeps moving even if there is a defect in one component EOS state sharing architecture also resists lateral movement so a defect in one component typically cannot be exploited to attack other agents within the switch.

Ken Duda12:07

Third, we provide a seamless upgrade process isolation also means that we can ship a targeted fix to the affected component and install the fix without a maintenance window or network disruption.

Ken Duda12:21

And fourth, delivering a compliance dashboard to stay current. When a security advisory lands, Arista Cloud Vision brings real time visibility that turns a stressful advisory day into a manageable one.

Ken Duda12:44

In addition to providing secure switches we also provide zero trust networking or ZTN technology to help our customers build secure infrastructure. I'd especially like to highlight macro segmentation services or MSS a ZTN feature allowing for dynamic security enforcement preventing undesired interactions among users devices and applications. applications.

Ken Duda13:01

Second we provide network detection and response or NDR services that profile analyze and proactively detect sophisticated security threats. And finally once workload traffic leaves the confines of the local data center it becomes even more vulnerable to malicious actors.

Ken Duda13:18

So we offer protection with wire speed ubiquitous link and tunnel encryption native in every port with zero performance degradation. I hope this was a helpful summary of how Arista is helping customers take advantage of AI while improving security to meet the new challenges.

Ken Duda13:19

Back over to you, Jayshree.

Jayshree Ullal13:53

Thank you, Ken. It was useful for me too. uh with Arista's uncompromised ZTN approach we can systematically address the security hazards and parabolic attacks our CVE count our vulnerability count is often 10 to 50 times better than alternatives our customer momentum this year has been significant in the enterprise in the providers across data center campus and AI because we are addressing security proactively I would like to invite Todd Nightingale our president and chief operating officer to describe more about this over to you Todd

Todd Nightingale14:18

Thanks Jayshree we're seeing phenomenal growth across our enterprise business driven by customers building mission critical networks which benefit from Arista's industry leading quality and reliability as the entire industry responds to AI powered attack exposure customers are motivated by the fact that keeping their infrastructure current with security updates will protect segment and defend against vulnerabilities beyond the network.

Todd Nightingale14:29

Arista won a strategic deal at an Asian web services company as they shifted their focus strategically onto speed, scale, and resilience in the new AI era.

Todd Nightingale14:36

Reliability was the key to the engagement as their teams were frustrated by long standing quality issues with their existing vendor.

Todd Nightingale14:52

Arista was able to demonstrate reliability and scalability while leveraging standards based technology and a powerful EVPN VXLAN architecture on our 100 and 400 gig platforms this deployment will operate as the front end for their AI deployments moving forward.

Todd Nightingale14:59

In the healthcare sector leading hospitals are selecting Arista for strategic data center deployment.

Todd Nightingale15:14

One important hospital group chose Arista following an exhaustive zero trust networking evaluation. Their primary business goal was to protect sensitive patient data through advanced network segmentation while enabling seamless integration to cloud environments.

Todd Nightingale15:23

Arista secured this win by delivering an automated high performance fabric that perfectly aligned with their trust nothing verify everything security mandate.

Todd Nightingale15:34

By centralizing routing on Arista's R3 spines we provided a powerful streamlined layer for traffic management tailored to modern healthcare workloads with a robust leaf spine topology.

Todd Nightingale15:49

We deployed Cloud Vision as a service alongside the Arista AVB framework for cloud based automation and deep visibility and by integrating Arista's segmentation service MSS the customer can now dynamically automate the entire system.

Todd Nightingale16:12

In the hospitality sector an award we an award winning regional resort and casino selected Arista to modernize its expanding operations. Realizing their legacy network was a bottleneck for innovation they architected a truly unified standards based architecture across their data center and campus environments to support new guest experiences and rapid rapidly scale their services.

Todd Nightingale16:25

Arista's routing and switching platforms alongside campus access switches are delivering quality and reliability key to performing in mission critical applications like their demanding casino gaming floor network.

Todd Nightingale16:33

They utilize Cloud Vision and AVD to automate device provisioning and gain the deep real time visibility required to optimize network performance.

Todd Nightingale16:45

In all three of these examples Arista's differentiated EOS provided unmatched quality and reliability and integrated seamlessly with their overarching security ecosystem partners. partners.

Todd Nightingale17:06

Additionally our TAC delivered the flawless experience and peace of mind to de-risk these modern enterprise migrations to Arista. 2026 2026 has really been an exciting year building momentum across our entire enterprise business around the world in data center campus and AI build outs thank you

Jayshree Ullal17:31

Thank you Todd wow that momentum is indeed unprecedented I haven't experienced anything like this until you arrived we are pleased with Arista's accelerated networking progress across all our sectors our commitment to fulfilling this accelerated demand in the second half of 2026 is really playing out well with our improved execution in supply chain partnering closely with our vendors. vendors.

Jayshree Ullal17:43

I want to give a special kudos to you and your entire manufacturing team led by Eugenia for the tireless work and progress despite the widespread industry wide supply chain constraints and shortages.

Jayshree Ullal17:55

With this backdrop we are now increasing our annual guidance for the fourth time in 2026 to 13.3 billion which represents a 48% annual growth.

Jayshree Ullal18:12

At Arista we find ourselves in a position to address this ever increasing total accessible market not even not just available market which now stands at north of 200 200 billion in 2030 2030 therefore representing a multi-year growth opportunity for us.

Jayshree Ullal18:25

Our first look at 2027 guidance range puts us in the 38 to 40% range for growth annually to approximately 18.5 billion.

Jayshree Ullal18:44

Within this envelope we expect our AI fabrics target to be the fastest growing segment and to double to approximately 7 billion while our cognitive campus represents a healthy growth of 60% much faster than the market to approximately 2 billion in 2027.

Jayshree Ullal19:17

We do live in exciting times as we harness the power of cloud and AI revolution it has certainly surpassed my expectations as we exceeded our original 10 billion dollar goal this year to enter revenue dollars in the teens for both 2026 and 2027. we do so in the typical Arista way bringing our unique combination of innovations quality profitability efficiency and zero debt making our financials very pristine.

Jayshree Ullal19:32

Our results would not be possible without the cohesive Arista leadership and team our elite customers and partners and of course our supportive shareholders. And And with that over to you Chantelle Chantelle to shed more light on our impressive financials.

Chantelle Breithaupt20:22

Thank you Jayshree. This quarter we delivered record high revenue growth since our IPO at 58.5% partnered with robust operating margin above 49% at the same time we invested ahead of demand in R&D inventory and supply commitments to support the AI opportunity in front of us congratulations to the Arista team for being named to the S&P 100 in September a great achievement within a short time frame let's dive into the financial details to start off total revenues in Q3 were approximately 3.66 billion dollars up 58.5% year over year and above our guidance of 3.3 billion this significant growth was driven by our continued strength in both AI and enterprise customers international revenues for the quarter came in at 682.5 million dollars or 18.6% of total revenue down from 23% last quarter.

Chantelle Breithaupt20:29

This quarter over quarter change was primarily influenced by a shift in the geographic mix of sales to our large global customers.

Chantelle Breithaupt20:33

Year over year double digit growth was achieved in all three geographic segments.

Chantelle Breithaupt20:48

The overall gross margin in Q3 was 64% down from 65.2% in the prior year with supply chain efficiency working to partially offset product cost inflation and up from 63.4% in the prior quarter driven by end customer mix.

Chantelle Breithaupt20:57

Operating expenses for the quarter were $545.3 million or 14.9% of revenue up from the last quarter at $411 million.

Chantelle Breithaupt21:28

Our R&D spending came in at $408.5 $408.5 million or 11.2% of revenue up from the last quarter at $278.1 million. Arista continues to demonstrate its commitment and focus on network innovation with additional investment in liquid cooling high radix switching and leading AI software Sales and marketing expense was $110.9 million or 3% of revenue down slightly from 3.6% of revenue last quarter representative of the highly efficient Arista go-to-market methodology.

Chantelle Breithaupt21:37

Our G&A costs came in at $25.9 million or 0.7% of revenue up slightly from $23.1 million last quarter.

Chantelle Breithaupt21:40

As we continue to focus on our critical corporate systems and processes.

Chantelle Breithaupt21:50

Our operating income for the quarter was 1.8 billion dollars or 49.1% of revenue demonstrating our ability to invest in innovation while expanding profitability.

Chantelle Breithaupt21:58

Other income expense for the quarter was a favorable 138.6 million dollars and our effective tax rate was 20.9%.

Chantelle Breithaupt22:05

Overall this resulted in net income for the quarter of 1.53 billion dollars or 41.9% of revenue.

Chantelle Breithaupt22:17

Our diluted share number was 1.278 billion shares resulting in a diluted earnings per share for the quarter of 1.20 up significantly with a growth of 55.8% from 77 77 cents in the prior year period.

Chantelle Breithaupt22:38

Now turning to the balance sheet. Cash cash equivalents and marketable securities ended the quarter at approximately 14.4 billion dollars up from 13.3 billion dollars at the end of Q2. Of the 1.5 billion dollar stock repurchase program approved in May of 2025 817.9 2025 817.9 million dollars remain available for repurchase in future quarters.

Chantelle Breithaupt22:45

The actual timing and amount of future repurchases will be dependent on market and business conditions stock price and other factors.

Chantelle Breithaupt22:53

Now turning to operating cash performance for the third quarter we generated approximately 1.2 billion dollars of cash from operations.

Chantelle Breithaupt23:00

This was driven by a robust earnings performance coupled with an intentional inventory build to meet our growing customer demand.

Chantelle Breithaupt23:07

DSOs came in at 59 days down from 68 days in Q2 due to the timing of customer shipments and invoicing.

Chantelle Breithaupt23:12

Our inventory turns dropped slightly from 1.7 in Q2 to 1.6 for the quarter.

Chantelle Breithaupt23:17

We ended the quarter with 3.2 billion dollars in inventory up from 2.5 billion last quarter.

Chantelle Breithaupt23:24

Inventory level fluctuations are expected to continue as we work through the balancing of component timing and availability.

Chantelle Breithaupt23:32

This could result in quarters of elevated inventory balances affecting the timing of cash flow from operations ahead of customer deployments.

Chantelle Breithaupt23:46

Our purchase commitments at the end of the quarter were 11.4 billion dollars up from 9.7 9.7 billion dollars at the end of Q2. As mentioned in prior quarters this expected activity mostly represents purchases for chips related to new products and AI deployments.

Chantelle Breithaupt23:54

Our total deferred revenue balance was approximately 6.8 billion dollars down from 6.9 billion dollars in the prior quarter.

Chantelle Breithaupt23:57

The majority of the deferred revenue balance is product related.

Chantelle Breithaupt24:08

Our product deferred revenue decreased 86 million dollars sequentially versus last quarter. We remain in a period of ramping our new products winning new customers and expanding new use cases including AI.

Chantelle Breithaupt24:15

These trends have resulted in increased customer specific acceptance clauses and an increase in the volatility of our product deferred revenue balances.

Chantelle Breithaupt24:22

As mentioned in prior quarters the deferred balance can move significantly on a quarterly basis independent of underlying business drivers.

Chantelle Breithaupt24:29

Accounts payable days were 48 days down from 57 days in Q2 reflecting the timing of inventory receipts and payments.

Chantelle Breithaupt24:41

Capital expenditures for the quarter were $100.7 million. Our construction work to build expanded facilities in Santa Clara remains on track and we expect construction to be completed in the coming months.

Chantelle Breithaupt25:42

As we look ahead the momentum is strong we are grateful to our customers and proud of our team's continuous ability to rise to meet the demands of the networking industry for the fourth quarter we are forecasting a range of revenue between 3.9 and 4 billion dollars this positions fiscal year 2026 revenue just over 13.3 billion dollars at the midpoint our fourth quarter gross margin outlook is 63 to 64% and operating margin is between 48 and 49% Diluted EPS is forecasted to be between $1.26 and $1.30 with approximately 1.28 billion diluted shares and the effective tax rate is expected to be approximately 21%. Looking further ahead to 2027 the momentum continues for fiscal year 2027 the revenue growth outlook is between 38 and 40% equating to approximately 18.5 billion dollars at the midpoint gross margin continues to be in a range of 62 to 64% and an operating margin of approximately 49%.

Chantelle Breithaupt25:57

Our effective tax rate is expected to be approximately 21%. In closing there is a lot to be excited about here at Arista we will continue to be focused on our innovation execution and delighting customers in the Arista way now back to you Rudy for Q&A

Rudolph Araujo26:14

Thank you Chantelle we will now move to the Q&A portion of the Arista earnings call to allow for greater participation I'd like to request that everyone please limit themselves to one question your line will be placed in mute after your question thank you for your understanding Regina please take it away

Questions and answers

Operator26:27

We will now begin the Q&A portion of the Arista Arista earnings call. To ask a question during this time simply press star then the number one on your telephone keypad. If you'd like to withdraw your question press star one again.

Operator26:36

Please pick up your handset before asking questions to ensure optimal sound quality. Our first question comes from the line of Michael Ng with Goldman Sachs please go ahead.

Michael Ng27:12

Uh good morning thank you very much for the question um I I wanted to ask about um your comment around the greater than 10 gigawatts of deployments across 10 plus compute accelerators for next year um could you just talk a little bit about whether that is an industry number or an Arista specific number in terms of those deployments and how does the diversification of compute potentially create more opportunities for Arista networking relative to you know just having a you know handful of you know compute suppliers thank you very much

Jayshree Ullal28:11

Yeah yeah thanks Michael um as you know I think much of AI even in our world started initially being compute centric and we're seeing that change to network centric and as so as part of the accelerated networking strategy we are supporting three types of AI fabrics scale up scale out and scale across so our guess is by the end of 27 we will deploy largely in 26 and 27 is where the exponential ramp happened across or greater than 10 gigawatts now some of that much of that gigawatt may be new but remember in scale across we can also have existing gigawatts being deployed so we're talking about new distributed 10 gigawatts but they may already be multiple gigawatts deployed across so the rationale here is while we are new to scale up we are touching a variety of XPUs and scale out and scale across the rack and across data centers.

Jayshree Ullal28:21

And we already know with our scale across we are touching multiple XPUs four or five of them with the advent of scale up we will add another five in 2027.

Operator28:29

Our next question will come from the line of Meta Marshall with Morgan Stanley please go ahead.

Meta Marshall28:58

Great thanks and congrats on the quarter. I guess just Jayshree if you could give an update just on how you see that mix of scale across and scale out and scale up just as a mix of your business clearly scale up nothing today I think last quarter you had said you expected a third of the demand this year to be from scale across just as you continue to increase your guidance and as you look into 27 just what do you see those mixes being thanks

Jayshree Ullal29:05

Yeah, I think in 27, Meta, thank you for the kind wishes, we've been working hard for this day.

Jayshree Ullal30:24

The the scale up will still be in early trials so I don't think there's a material number associated with scale up in 27. I do think it could contribute in 28. So then that if scale up is virtually zero then we're basically left with most of the use case being scale out and scale across and as you've heard us say in the past scale across we think will be at least a third it'll probably go higher in 27 and so the split this year is roughly 70 30 the split next year may be I I can't venture to guess but I think the 70 may come down and the 30 would go up when it comes to scale across because it's a very strong use case for us Arista's highly differentiated with our 7800 scale across platform and unsurprisingly the word scale means a lot to us there and our customers scale for security scale for performance scale for reliability and there's just you know no room for error when you're connecting millions of XPUs so we feel very comfortable that these are our two strongest use cases I also think it'll fuel I mean a lot of this is back-end AI AI fabric we will come back to revisit the question of front end as well as we move to more inference and the line between back and front becomes thinner

Operator30:29

Our next question will come from the line of Ben Reitzes with Melius Research please go ahead

Ben Reitzes31:00

Hey how you doing Jayshree pretty good quarter and guide there so I just want you've previously referred to potentially two 10% plus customers into the fourth quarter do you mind talking about whether they land they're landing in that range and you know what the use cases are for and if you're excited about those customers still and into 27 thanks a lot

Jayshree Ullal31:06

Yeah yeah yeah yeah so you know I guess diversity is the name of the game and the theme today right Chantelle

Chantelle Breithaupt31:07

that's right

Jayshree Ullal31:07

speaker_F|>

Jayshree Ullal31:36

We have diverse accelerators we have diverse models we want to have diverse 10% customers too so as you said before you know our dearest ones are M&M M&M we fully expect our top prior 10% customers to continue to be with us in 26 and we hope beyond and we expect to add at least one maybe two and a lot of that that depends on whether Todd and Eugenia can ship enough product so we'll let them decide and we'll give them all the way into December 31st

Jayshree Ullal31:39

We'll take every day.

Jayshree Ullal31:45

So we're feeling pretty good about at least three and maybe four.

Operator31:52

Our next question will come from the line of George Notter with Wolfe Research please go ahead

George Notter32:08

Hi guys thanks very much I was just curious about the big sequential jump in R&D it was really really significant I'm just wondering if that included some one time items also is this the new run rate in R&D going forward any perspective there would be great thanks a lot

Jayshree Ullal32:12

Okay so over to you Ken why did you spend so much money this year

Ken Duda32:45

So much new stuff the opportunity is humongous in AI these AI accelerating systems um are we are our success with the hyperscaler AI companies depends on our ability to partner is is based on our understanding of each of their unique requirements and constraints and also there's a new technology introduction around liquid cooling this requires a major infrastructure upgrades and technology upgrades in our part so I think that's what's really driving the expansion spending there

Chantelle Breithaupt33:02

And sorry George and just in your comment as the new run rate I'll still put the framework at you know anywhere between 9 and 11% as we work through so some quarters like we've talked about we'll hit this range as we have specific investments and so I would still keep it in that 9 to 11 11 more to come as we guide next year in more detail

Chantelle Breithaupt33:07

But I noticed the prototype bill was very high this quarter Ken

Ken Duda33:10

that's right because all the opportunities in the hyperscale AI space

Jayshree Ullal33:14

Yeah thank you George

Operator33:22

Our next question will come from the line of Amit Daryanani with Evercore ISI please go ahead

Amit Daryanani34:10

Yep. Thanks a lot and congrats on a really good set of numbers over here. Jesse you talked initially about the industry moving towards a more networking network centric architecture you know as customers deploy different type of accelerators does Arista become involved earlier in designing the overall systems rather than connecting them afterward and you know as you have to work with a more distributed disaggregated compute network does that change your networking content per deployment I I know you talked about 10 gigawatts I'm wondering does the network intensity start to change as well and then maybe for Chantelle as you think about this 38 40% guide for 27 which is extremely impressive can you just touch on your confidence around the supply chain execution to meet this demand what's in the bag versus what still needs to be closed thank you very much

Jayshree Ullal35:23

Amit this is a very good question I think until now we've enforced our architecture mostly on scale out and scale across and a lot of that had to do with distributed power location moving to regional edge edges a very software defined type of network with the intensity like I described of packets flows performance predictable latency etc as we start participating with new accelerators we get a greater chance early in the cycle to see the behavior of these accelerators two or three examples I'd like to highlight is our close work with Cerebras our work with Microsoft and Maya these are these have been going on the last couple of years and has allowed us to tune our buffers tune our software performance and maximize the IO throughput if you will the recognition of those scale up designs are still in the works but they're already manifesting itself in scale out and scale across so you bring up a very good point not only in the actual work we're doing with these accelerators but the aggregate impact it has on our network design in terms of scale performance and reliability

Chantelle Breithaupt36:04

Yeah and then I think to part two of your question Amit and thank you for the kind words at the beginning I think so I am confident in the guide and I am confident in the supply chain what makes me confident in the supply chain is internally Todd and Eugenia and the team doing a fantastic job every day being scrappy to make sure we can do what we need to do to deliver to our customers and also have confidence a lot of great conversations and agreements with our some of our key suppliers and that's why you see our purchase commitments increasing because we have that confidence so internally externally confident far as visibility you know I think we have two quarters of visibility as we always have and we lean into the other two but given our highly fungible portfolio you know we're pretty clear where to make that bet so we're pretty excited about next year thank you

Operator36:09

Our next question will come from the line of Tim Long with Barclays please go ahead

Tim Long36:44

Thank you um maybe if we could shift a little bit and talk about the campus and branch um you know pretty good year this year and guiding it to 60% next year um could you talk a little bit about kind of you know what's enabling you to grow so much faster than the industry and is is this something that you see as you know a multi-year type of dynamic obviously you got strength in you know enterprise data centers but curious what else is helping this you know much higher than industry growth thank you

Jayshree Ullal37:43

Yeah, thanks for the question. You know, in a lot of ways, I think the enterprise campus market is coming to us. Arista has always led the way in quality and reliability and over the past few years just practically every significant enterprise has shifted gears and really considered their campus networks their branch networks mission critical with the highest need for reliability this is only accelerated because of the glass wing and methis effect where people are really focused deeply not only on providing the highest level of reliability but being able to do that as they rapidly patch and adjust their infrastructure over time and the differentiation with EOS and the ability for Arista software to be able to do this with practically no downtime with extremely high uptime it's highly differentiated in the market and I really think that's the core of what's driving market share gains here.

Jayshree Ullal38:00

I think the other thing that makes this an incremental process is that campus refresh cycles are pretty long believing customers that understand the Arista advantage may take some time to adopt us simply because of the schedule in which they depreciate and upgrade their gear so I think we can expect this to be a multi-year cycle.

Operator38:09

Our next question will come from the line of David Vogt with UBS please go ahead

David Vogt38:40

Great thanks guys for taking my question. So maybe Chantelle Chantelle one for you and I'll wrap two together in one question. Can you kind of help us understand sort of your purchase commitment dynamic and your deferred revenue dynamic against the strong revenue guide that you provided for 2027 2027? So obviously we recognize that you're confident in the number but you know deferred revenue I understand that it's volatile and it varies quarter to quarter but just help us understand how to think about that metric in the context of a 38 to 40% guide particularly also with purchase commitments going up you know a couple of billion dollars sequentially.

Chantelle Breithaupt39:44

Yeah, thank you. Thanks, David. I think there's a few things. I don't know if they correlate directly, but they're all in purpose and design to serve the customers as we need to exiting Q4 and into 2027. Purchase commitments, you know, from that perspective there are some things additionally we added now we have memory in there as memory agreement which has done that so that's a multi-year agreement that you'll see as the queue comes out and I think of the purchase commitment side you can probably expect that to go up a little bit more as we exit at Q4 you know as we get ready for this 2027 guide we have as far as the deferred revenue actually had the largest churn in and out and still remained flat and still delivered a 58.5% revenue growth quarter which I think is a fantastic outcome so there you're seeing you know you're seeing things exit again released and things to get booked back to the deferred balance which I think is a really healthy sign of the demand that's fueling that 30 to 38 excuse me to 40% revenue growth next year so I think they're all related purchase commitments grow to serve that demand and the deferred staying flat to deliver that outcome to the P&L and we're pretty excited to see how that continues through 2027.

Operator39:52

Our next question will come from the line of Simon Leopold with Raymond James please go ahead.

Simon Leopold40:20

Appreciate that. I wanted to get one quick clarification. You gave us targets for 2027 for campus and AI just wanted to check on what the baselines are for 2026 and the question was really on a topic that that I think Andy's been vocal about but your thoughts about the evolution of switching with the inclusion of either CPO or NPO what does that mean to Arista?

Jayshree Ullal40:22

Thank you.

Jayshree Ullal40:30

Okay, just to clarify, the baseline upon our 38 to 40% is the 26 guide we gave of 13

Jayshree Ullal40:31

Yeah, 13.3

Jayshree Ullal40:32

13.3

Jayshree Ullal40:37

Yeah. And within that AI is 3.5 and campus is 1.25. Yeah,

Jayshree Ullal42:22

we're staying with the target numbers because we'll only know actuals after we ship everything end of the year. and to your second question on optics you know optics is very integral to Arista's strategy you know Andy Beschenstein our chief architect lives and breathes this uh it doesn't mean we build everything but we actually systematically put it together uh we first of all strongly believe in copper when you can and optics if you must because minute you go beyond the one or two meter radius the flexibility of pluggable optics and lasers is probably the most widely deployed and accepted Andy was a pioneer of OSFP that gave us a very wide density of thermal limits and widely used and now our new you know coherent optics LPO modules is something that goes long distance without requiring DSP and then to meet higher front panel density we're very excited about extra pluggable optics that can that is being supported by over 150 150 vendors so we think the world is going to remain in a very majority fashion on pluggable optics having said that I think there's always room for complementing the pluggables with a strong adoption at higher speeds to what we call near packaged optics or open CPO we don't want to build proprietary co-packaged optics and to solve the these constraints Arista has been pioneering this open CPO CPO that instead of soldering components we can use socketed optical engines and pigtail fibers to allow these modules to be pre-tested etc so we are big fans of these we think they'll come onto the market in the 28 to 30 time frame it's not imminent but meanwhile long live pluggable optics

Operator42:29

Our next question will come from the line of Joseph Cardoso with JPMorgan please go ahead

Unidentified speaker43:14

Hi good afternoon and congrats on the results as well. You know maybe the question that I wanted to touch on and maybe it kind of dovetails off of the clarification on the last one you know when we take a look at the initial full year guide for 2027 particularly as it relates to maybe the non-AI non-campus business I think growth is being implied to moderate from the strong 2026 levels just wondering if you can kind of touch on the underlying assumptions or factors that's maybe driving a little bit more moderation here into 2027 and whether that's maybe just tough compares or conservatism in terms of supply etc just trying to understand directionally what's you know the drivers of the 2027 forecast that relates to the maybe core business thank you

Jayshree Ullal44:11

Well thank you Joe well listen when some things are growing 60 and 100% and then you say the overall growth is 38 to 40 then obviously some of the things are not growing as fast right we're very comfortable that everything is everything's going to grow double digits some more some less and we're also very comfortable that given a first guide literally over a year before that the all sectors are doing well for us AI enterprise specialty cloud providers front end networks so we started out 2026 wondering if front end would grow so it's a cyclical thing when the back end grows the front end may go a little slower when the back end slows down the front end may grow a little faster so I wouldn't read any conservatism into these numbers these are wildly higher and optimistic than we had once projected so enjoy them for a moment and hopefully they'll get better

Operator44:18

Our next question will come from the line of James Fish with Piper Sandler please go ahead

James Fish44:29

Hey fantastic quarter and guide here to start for 27 ladies and Ken and of course

James Fish44:31

We have two gentlemen and two ladies.

James Fish45:05

And and Todd I don't I didn't forget about you Todd but look I appreciate the early outlook but you guys always talk about one to two quarters of visibility you tend to be a very prudent team and so maybe going back to I think it was Amit's question I guess the confidence in providing this durability at this scale this early and why you know we're going to see this kind of strength persist why Arista for scale up in 2028 thanks

Jayshree Ullal45:09

Well I'll just go back and thank you for the kind

Jayshree Ullal45:11

Words to the ladies and gentlemen

Chantelle Breithaupt46:45

that's right to all of us I think that so I'll I'll just go back and reiterate the confidence level you know there was a lot of thought obviously put into a guide this strong this early so there's a lot of attention paid with Todd and Ken and Jayshree Jayshree and myself and team you know so we had to get comfortable first and we're very comfortable with all the things we've done to secure what we need to go ahead and again the two quarters visibility two years of relationship and technical conversation so somewhere between the second half lands and it's the usual kind of cadence we have so nothing's changed there um I think from and then the second part of your question was about scale up going into 2027 2028 yeah um so so listen I I think scale up's been a tough market for us because it doesn't have all the software advantages that we bring but it absolutely has the hardware skills and all the non-NVIDIA accelerators that Arista is in the best position to connect to so this movement from standalone basic switches to rack scale is something that you know Andy Alex Hugh Holbrook the entire team has been working on and co-developing for a couple of years it's hard work just as we were staring at InfiniBand and now we can go of course it's going to be Ethernet we're looking forward to a time where we were staring at you know proprietary UA Link or NVLink and we're going to go of course it's going to be ESun but these type of migrations do are multi-year and so we're very confident not only in our 27 guide but a promising 28 ahead as well and the reason we are is because even though we have two quarters of visibility we have two years of work behind it

Operator46:55

Our next question will come from the line of Tal Liani with Bank of America please go ahead

Tal Liani47:01

Hi guys, hi ladies and gentlemen sorry I'll start from the beginning

Tal Liani47:04

Thank you

Tal Liani47:46

Uh the call last time uh and you raised the guidance uh substantially and now you're doing it again and on the other hand I I heard Chantelle's explanation about deferred revenues but the sequentials are slowing down if I look at total deferred and current deferred are slowing down but you are feeling more comfortable with next year and you're guiding well well above the street so the question is when you look at orders versus recognizing from deferred because of availability of components, because of releasing kind of deferred revenues because of completion of build out, etc.

Tal Liani48:10

So what are the drivers for like same question but from different angles, what are the drivers for the growth? Is it orders or is there some part there of recognition of historical orders? And then is deferred revenue actually losing some of its predicting ability just because I see some decoupling between the deferred revenue trends and revenue growth trends?

Jayshree Ullal48:28

Okay. Let me start and then Lady Chantelle, will you take over? So I think first you, Tal, we missed you last quarter. Because we don't get this level of detail from anyone else on exactly what are the puts and takes.

Jayshree Ullal48:43

I just broadly look at you and say, hey, it's great demand. And if you want to dissect demand into how much is sitting into deferred, how much is sitting into our orders, how much is getting shipped into revenue, you're turning demand into a physics problem that I don't have the answer for.

Jayshree Ullal48:55

Because I don't predict or forecast deferred. Deferred is a strong function of a new use case or a new product that eventually is not a new use case or a new product.

Jayshree Ullal49:35

So we had millions of dollars come out of deferred because the use case was satisfied. We had millions of dollars go in as deferred and generally that number if you look at it over the last few quarters or if you look at it over the entire year is trending up but you deferred is never going to be infinite it is going to come out and other new deferred will go out go in or the product becomes familiar and less new right so it's important to just look at this big picture and say we got demand in AI in enterprise in campus in data centers and we're just in the best position we've been in a long time in my 18 year career at Arista.

Jayshree Ullal49:36

Over to you Chantelle, you want to

Chantelle Breithaupt49:52

The only thing I think it was very well said and I think that's the right perspective to take on this so we don't get too lost in the weeds on quarter to quarter basis. We're very confident in the demand and the guide deferred is a balance sheet account that you know will reflect whatever happens in the quarter so that is what it is.

Chantelle Breithaupt50:09

The only thing I would add like I said before Tal we did miss you last quarter was that we anticipate the end of this year from a deferred balance to be higher than we ended last year which shows that you know the P&L did what the P&L needed to do without deferred and so if that helps you feel more comfortable with that then that's the only thing I'd leave you with.

Operator50:17

Our next question will come from the line of Ryan Koontz with Needham Company. Please go ahead.

Ryan Koontz50:45

Alright thanks for the question. I wanted to follow up on some of your scale up commentary and ask about some of the technical design changes a little bit here with obviously you know including more optics and including liquid cooling and how will that change your fulfillment model what things are you including in your sale versus partner to reference third parties in maybe you can expand a little bit on your product plans around scale up and how we should think about the product changes

Todd Nightingale51:09

Yeah actually that's a really good question Ryan we're still figuring it out ourselves because Arista's value in the rack scale is still the switch but however we have to design the whole rack and then work with different partners differently on whether they want the whole rack from us or the rack gets shipped through our manufacturing partners while we you know basically ascertain the switch.

Todd Nightingale51:28

So each different Stokes for different folks because you've got three different designs going on with the orthogonal the cable black plane and the cross rack designs each one is a little bit different give us a chance in the next few quarters to share with you what's going on with each one because there isn't one answer to your question.

Todd Nightingale51:39

The but the one one last thing I do want to add to that is that what's very clear is there's a lot of switches swimming in water. A lot of it's liquid cooled.

Operator51:47

Our next question will come from the line of Karl Ackerman with BNP Paribas. Please go ahead.

Karl Ackerman52:13

Yes, thank you very much. Um Chantelle or Jayshree, I'd like to ask a question that was similar to Piers but in a slightly different way. In the context of your 2027 revenue outlook, can you speak to whether your revenue outlook is predicated on new permitting or financing of power shell infrastructure to achieve these forecasts and as you address that can you speak to whether you require an aggressive draw down of your deferred revenue balance to achieve your outlook.

Karl Ackerman52:16

I think I know the answer but we love your view. Thank you.

Jayshree Ullal52:18

What do you think our answer is?

Jayshree Ullal52:22

Yeah.

Jayshree Ullal52:27

So nice to sometimes ask a question ourselves.

Karl Ackerman52:32

I don't think you need to, but I would love clarification.

Jayshree Ullal52:33

Okay, go for it.

Chantelle Breithaupt52:57

Yeah, we're not, we don't guide deferred. So I think that was the answer you were expecting to second hand. I would say from the perspective of the guide next year, we are looking at what we know ahead of us, two quarters visibility, you know, taking a lean on the second half of the next year in the sense of what we've had conversations with some of our largest customers the run rate we have in Todd's business in the sense of enterprise and all that comes together but we don't guide deferred and so

Chantelle Breithaupt53:00

This question was are we counting on data center

Chantelle Breithaupt53:04

The first part the second part was are we preparing to draw down deferred to hit the number

Chantelle Breithaupt53:05

Yeah

Chantelle Breithaupt53:05

So

Chantelle Breithaupt53:13

So we don't guide deferred but I would say that we see a very strong you know demand signal and demand environment back to the momentum theme that Jayshree if you want to comment

Jayshree Ullal53:28

Right exactly so I think while we don't guide deferred let me be clear that we do see plenty of new use cases and new product 2027 like 26 is going to be filled with lots of new products

Operator53:36

Our next question will come from the line of Jen Marco Conte with Deutsche Bank. please go ahead

Unidentified speaker53:53

Yeah thank you for that uh congrats on the quarter great numbers um as SU144 moves towards production in 28 how should we think about gross margin economics relative to your existing switching portfolio and how much customer commits do you already have behind those programs

Jayshree Ullal53:58

You're talking about 27 or 28?

Jayshree Ullal53:59

What's the question?

Unidentified speaker54:06

And 28. It's about gross margin. for

Jayshree Ullal54:19

Look, since we went public, our long-term gross margin has always been in the 60 to 65. I think we've tightened the range now to more like 62 to 64. We don't see any change.

Operator54:29

Our next question will come from the line of Daniel Yu with Bernstein. Please go ahead.

Unidentified speaker54:43

Well, congrats on a great quarter. Um I just want to ask how concentrated is the customer base for scale across? Should we think about this as really being driven by the cloud titans for synchronous training? Or are we also seeing scale across deployments even among smaller customers or for inference use cases?

Jayshree Ullal55:26

Yeah, no, I think there are both small use cases and colos for scale across which would be our smaller footprint switching and routing platforms like the 7280 but the concentration of our large customers also is high with our larger customers opting for the very large AI spines across data centers and requiring that kind of 576 port density and you know terabit scale and multi gigawatt deployments for security and performance so we do see both but I think the revenue concentration favors the 7800 the location concentration of multiple sites favors the 7280.

Operator55:35

Our next question will come from the line of Sean O'Loughlin with TD Cowen. Please go ahead.

Sean O'Loughlin55:42

Great. Thanks for squeezing me in and congrats on the fantastic results ladies and gentlemen.

Sean O'Loughlin56:10

Wanted to just check in broadly on where we are actually in the front end cycle. I think we've spent so much time talking about you know scale out scale across back end deployments and the focus on 800 gig and above in those deployments that maybe we collectively have lost track of where we are in the sort of more traditional front end compute and just wondering if you could comment on that and what you see in terms of market trends on the front end specifically. specifically.

Unidentified speaker56:11

Thanks.

Jayshree Ullal56:27

Yeah, no, Sean, it's a very good question. I think there are, it's like a sine wave. When everybody's focused on the back end, then there's, you know, in those customers, they're thinking less about the front end. And then sometimes when they're focusing a lot on the front end, they're not worrying as much about the back.

Jayshree Ullal57:05

If you look at it over a period of time, like six quarters to two years, you can capture both. But in a given year, you know, we had one 10% 10% customer, for example, put a lot of thought into the you know multi hundred gig refresh of their front end before enhancing their back end and so that particular year their front end was very high but their back end was low the following year maybe the reverse so if you tend to look at it over multiple quarters and years they even out but if you tend to look at it in a concentrated period of time you'll usually see more of one than the other right now in general we're seeing more back end and AI fabrics and I think the front end will catch up later.

Operator57:16

Our next question will come from the line of Antoine Chkaiban with New Street Research. Please go ahead.

Antoine Chkaiban57:43

Hi, thanks for taking my question and congratulations on the very strong set of results. Um can maybe one for you I want to ask about Ava um with all the recent high profile infrastructure security breaches we've been hearing about um it looks like the technology can address a very large opportunity so how should we think about sizing it how do you plan to monetize Ava and is that going to fall into product or could this drive actually a meaningful acceleration in your services revenue?

Jayshree Ullal58:01

We are early days in understanding all of that. We have just turned the Ava on as an alpha feature for customer trial within our Cloud Vision service and we are currently working on pricing models. I don't think I have any forecast or data to share with you at this time on that.

Jayshree Ullal58:46

But I think it's very promising Antoine because you know back again to Ken's point that he repeatedly makes with me is the architecture of EOS is so sound that adding Ava or Cloud Vision you know as capability to look at deeper details and get more analysis starts with the foundation right so we feel very privileged that we can sit here and we can talk about oh my God our vulnerabilities doubled from 30 to 67 and we fixed them and therefore we can go apply Ava everybody else is dealing with a game of whack-a-mole where they've got thousands of vulnerabilities and no Ava can possibly keep track of it um so I think we feel in a very good position to monetize Ava in the next few years

Operator58:56

Our next question will come from the line of Ben Bollin with Cleveland Research please go ahead

Ben Bollin59:24

Good afternoon, everyone. Thanks for taking my question. Jayshree and Todd, I suppose, I'm interested in your thoughts on where lead times are across the portfolio if we kind of carve it up into enterprise centric and hyperscale centric just what those look like today and I was hoping Todd could talk maybe a little bit more big picture about the go to market effort the execution within you know enterprise share capture and how that's building and where that goes from here thanks

Todd Nightingale1:00:10

Yeah, on the lead times, and it goes both for the component lead times and the finished good lead times. In the enterprise side of our business, we tend to have shorter lead times somewhat shorter and that's driven by the fact that those switches are not always in the absolute cutting edge they're not leading brand new technologies requiring the highest process silicon etc and we're able to they're also tend to be at a lower price point we're able to hold a little bit more buffered inventory there so we tend to have lower component lead times there and lower lead times to our customers on the AI side on the ultra advanced hyperscaler data center lead times tend to be a little bit longer.

Todd Nightingale1:00:48

As far as the build out on the go to market side you know we were really we have been just really pleased with the momentum we've seen this year and the maturity that's being built into the whole go to market on the kind of thought leadership side and the awareness side we saw great momentum on the from webinars and from events in fact we have our large our largest customer event coming up in December which we're very excited about and on the sales execution side it's been just phenomenal efficiency from that team and we're looking forward to continuing to build out next year.

Jayshree Ullal1:01:08

I just want to add Todd also I see that you and Chris Schmidt you really heightened the investment not only in the United States but with key verticals and international as well so I think all of the go to market investments we've been making over the last year and in fact the last three years is really paying off

Todd Nightingale1:01:09

Absolutely

Operator1:01:12

Hey Regina we have time for one last question

Operator1:01:18

Our final question will come from the line of Meta Marshall with Susquehanna. Please go ahead.

Meta Marshall1:01:42

Yes, thanks for taking my question. I have two quick follow-ups. Going back to your revenue guide for 27, 18.5 billion, should we assume that all the silicon have been planned for? And then the second question, if you could elaborate on the mix between cloud and enterprise I just want to get a better understanding how enterprises are investing as it relates to hyperscalers. Thank you.

Jayshree Ullal1:01:49

Sorry, sorry, you asked, is all the silicon planned for already in the 18 and a half billion?

Meta Marshall1:02:19

Um should we since you are providing initial assessment on 2027 revenue target should we assume that you have already planned with your suppliers and silicon is secured for both compute and memory and there are some that that argue that Tides is going to get worse in 27 and just want to make sure that there is no downside to this target as it relates to inventory management.

Meta Marshall1:02:20

And supply chain.

Jayshree Ullal1:02:54

Understand, understand. Yeah, we're, we work very, very closely. We we we're sort of proud of our strategic partnerships and we've been investing heavily in long term strategic agreements in order to secure supply not just in silicon but PCB capacity memory which Chantelle mentioned earlier so we're incredibly you know we have very high confidence in the ability to deliver supply to the forecast we of course we would not want to place everything to five quarters lead time for all of next year so not every order is placed.

Operator1:03:08

This concludes Arista Networks third quarter 2026 earnings call. We've posted presentations that provide additional information on our results which you can access on the investor section of our website.

Operator1:03:12

Thank you for joining us today and for your interest in Arista.

Closing

Operator1:03:17

Thank you for joining ladies and gentlemen this concludes today's call and you may now disconnect.