Arista Networks grew 58.5% and got paid in cash; the first crack is a $26 million dip in deferred revenue
Arista, whose switches wire the servers inside AI data centers, printed its fastest growth since its 2014 IPO and collected the quarter in cash while rivals financed theirs. After a 16% after-hours move the stock already prices 49% operating margins and another quarter near 59% growth; the dip in deferred revenue is the line that tests both.
Vincent Jiang · 3 min read
The fastest quarter since the IPO
Arista Networks+11.49% — Arista Networks, up 11.49 percent today, whose switches connect the servers inside AI data centers, reported third-quarter revenue of $3.66 billion on November 3, 2026, up 58.5% year over year and the fastest growth since its 2014 IPO, against the company's own $3.3 billion forecast 123. Chief executive Jayshree Ullal said the quarter surpassed "even my high expectations" 1.
Non-GAAP earnings of $1.20 a share (the measure excludes stock-based compensation and similar items) beat the $1.08 analyst consensus 23. The fourth-quarter guide of $3.9 billion to $4.0 billion, about 59% growth at the midpoint, sits well above the $3.60 billion consensus, and shares rose about 16% in late trading 34. AMD+8.56% — AMD, up 8.56 percent today, whose accelerators fill rival racks, added to the case: data center revenue of $8.55 billion, up 97%, and a December-quarter guide near $17 billion 45.
Growth has climbed four straight quarters to 58.5%, the fastest since Arista's 2014 IPO
- Year-over-year revenue growth
- Estimate
Data
| Year-over-year revenue growth | |
|---|---|
| Q4 2024 | 25.3% |
| Q1 2025 | 27.6% |
| Q2 2025 | 30.4% |
| Q3 2025 | 27.5% |
| Q4 2025 | 28.9% |
| Q1 2026 | 35.1% |
| Q2 2026 | 37.7% |
| Q3 2026 | 58.5% |
| Q4 2026 guide (estimate) | 59% |
Paid in cash, unlike the neighbors
Nine-month operating cash flow of $3.98 billion ran ahead of Arista's $3.80 billion of net income, and the balance sheet carries $14.36 billion of cash and securities with no borrowings 1. This site documented the financing side of the buildout on November 1, when Dell's cash from operations fell 13% even as servers stayed two-thirds of its revenue; tonight is the counter-test 1.
Celestica+2.92% — Celestica, up 2.92 percent today, which assembles AI racks, grew third-quarter revenue 83% but props up free cash flow by selling its receivables, and it guides to negative free cash flow in 2027 6. Super Micro+9.72% — Super Micro, up 9.72 percent today, the AI server maker due to report after the bell, burned $6.8 billion of operating cash in fiscal 2026 on preliminary September-quarter revenue of $18.5 billion to $19.5 billion 7. Arista collects its customers' cash before revenue is recognized; Celestica and Super Micro finance their customers' builds.
The $26 million line to watch
Meta+1.60% — Meta, up 1.60 percent today, one of the cloud giants Arista named alongside Microsoft+1.57% — Microsoft, up 1.57 percent today in its rack-scale AI launch, went to the bond market for $20 billion to $25 billion the same day 18. S&P Global Ratings$123B — S&P Global Ratings, private, latest valuation $123B, the credit-rating agency, has Meta's outlook at negative and projects a $71 billion free operating cash flow deficit for 2027 89. What a holder at tonight's price owns is 49% operating margins, funded downstream by customers who borrow $25 billion at a time 1.
Inventory up $963 million, deferred revenue down $26 million
Two lines inside the beat point the other way. Inventory reached $3.21 billion after a $963 million nine-month build, parts stocked ahead of deployments 1. Total deferred revenue, the cash customers pay before a sale is recognized, fell $26 million from the prior quarter, its first drop since the second quarter of 2023, leaving $5.10 billion current 14.
Deferred revenue climbed for 12 straight quarters; Q3 2026 brought the first dip
Data
| Total deferred revenue | |
|---|---|
| Q3 '23 | $1.2B |
| Q4 '23 | $1.51B |
| Q1 '24 | $1.66B |
| Q2 '24 | $2.12B |
| Q3 '24 | $2.51B |
| Q4 '24 | $2.79B |
| Q1 '25 | $3.09B |
| Q2 '25 | $4.06B |
| Q3 '25 | $4.69B |
| Q4 '25 | $5.37B |
| Q1 '26 | $6.2B |
| Q2 '26 | $6.87B |
| Q3 '26 | $6.84B |
A $26 million dip on a $3.66 billion quarter is timing until it repeats 5. The tell is the January quarter's deferred-revenue line, with Nvidia's+1.62% — Nvidia, up 1.62 percent today report on November 17 in between 5.
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