Arista Networks, Inc. Earnings Quote from Jayshree Ullal

Arista Networks, Inc. 2026 Q2: Financial Performance summary

• Balance sheet and cash: cash, cash equivalents and marketable securities ended at ~$13.3 billion (up from $12.4 billion at Q1); repurchases were not made in Q2 with $817.9 million remaining available from the $1.5 billion program approved in May 2025.
• Cash flow working capital: cash from operations was ~$1.1 billion; DSOs were 68 days (up from 64); inventory turns stayed at 1.7 with inventory rising to $2.5 billion; purchase commitments were $9.7 billion (up from $8.9 billion at Q1) and deferred revenue was ~$6.9 billion (up from $6.2 billion).
• Gross margin in Q2 was 63.4% (down from 65.6% in the prior year) but up from 62.4% in the prior quarter, benefiting from tariff refunds and customer mix.
• International revenues were $697.8 million (23% of total revenue), up from 15.5% last quarter, supported by strong organic growth and a shift toward large global customers.
• Operating expenses were $411.0 million (13.5% of revenue), up sequentially due to incremental investment in liquid cooling, high Radix switching, and AI optimizing software.
• Operating income was $1.5 billion (49.9% of revenue) and net income was $1.3 billion (42.9% of revenue); diluted EPS was $1.02, up 39.7% from $0.73 in the prior year.
• Total revenues in Q2 were just over $3.0 billion, up 37.7% year-over-year and above guidance of $2.8 billion, driven by AI and enterprise customers.