ANET · Earnings call · 2026Q3T · Full report
Gross Margin Drivers
Arista Networks, Inc. · 2026-11-03 · Importance 26 · Surprise 24 · No source text
CEO Jayshree Ullal said Arista’s long-term gross margin range, historically 60% to 65%, has tightened to 62% to 64%. She said management sees no change to that range in response to a question about the SU-144 program. The discussion concerned the program’s expected production progression in 2027 and 2028, but management did not quantify SU-144-specific margin economics.
Key facts
- Arista's Q4 gross margin outlook was 63% to 64% and operating margin outlook was 48% to 49%.
- Arista's long-term gross margin range has been 60% to 65% since it went public and has been narrowed to 62% to 64%, with no expected change.
- Arista's Q3 gross margin was 64%, down from 65.2% a year earlier and up from 63.4% in the prior quarter; supply chain efficiency partly offset product cost inflation, while sequential improvement was driven by end-customer mix.
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| margin | negative | committed | -0.5% | Arista's Q4 gross margin outlook was 63% to 64% and operating margin outlook was 48% to 49%. |