ANET · Earnings call · 2026Q2T · Full report
Operating Income and Margins
Arista Networks, Inc. · 2026-08-04 · Importance 75 · Surprise 60 · In source text
Q2 operating income reached approximately $1.5 billion, equal to a 49.9% operating margin. Management increased the 2026 operating-margin target to a range of 48% to 49%, reflecting stronger operating leverage despite investments in AI-related products and supply-chain capacity. Q3 guidance calls for an operating margin between 48% and 49% on approximately $3.3 billion of revenue. Q2 net income was $1.3 billion, or 42.9% of revenue, and diluted EPS increased 39.7% year over year to $1.02.
Key facts
- Arista increased its fiscal 2026 operating margin target to a range of 48% to 49% while maintaining an expected tax rate of 21.5%.
- Operating income for the quarter was $1.5 billion or 49.9% of revenue.
- Net income for the quarter was $1.3 billion or 42.9% of revenue.
- Diluted earnings per share for the quarter was $1.02 based on 1.276 billion diluted shares, a 39.7% increase from $0.73 in the prior year.
- Other income and expense for the quarter was a favorable $120.3 million.
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| margin | positive | committed | — | Arista increased its fiscal 2026 operating margin target to a range of 48% to 49% while maintaining an expected tax rate of 21.5%. |
| operating_income | positive | realized | — | Operating income for the quarter was $1.5 billion or 49.9% of revenue. |
| net_income | positive | realized | — | Net income for the quarter was $1.3 billion or 42.9% of revenue. |