Arista Networks, Inc.

Welcome to the fourth quarter 2025 ERISA Networks Financial Results Earnings Conference Call. 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. 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. Rudolf Araujo, Arista's VP of Investor Advocacy, you may begin.

Thank you, Regina. Good afternoon, everyone, and thank you for joining us. With me on today's call are Joshi Ulal, Arista Network's Chairperson and Chief Executive Officer, and Chantel Bright, Arista's Chief Financial Officer. This afternoon, Arista Networks issued a press release announcing the results for its fiscal fourth quarter ending December 31st, 2025. If you want a copy of the release, you can access it online on our website. During the course of this conference call, Arista Networks management will make forward-looking statements, including those relating to our financial outlook for the first quarter of the 2026 fiscal year, longer-term business model, and financial outlook for 2026 and beyond. our total addressable market and strategy for addressing these market opportunities, including AI, customer demand trends, tariffs and trade restrictions, supply chain constraints, component costs, manufacturing output, inventory management, and inflationary pressures on our business, lead times, product innovation, working capital optimization, and the benefits of acquisitions, 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. These forward-looking statements apply as of today, and we 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 Q4 results and our guidance for Q1 2026 is based on non-GAAP and excludes all non-cash stock-based compensation impacts, certain acquisition required charges, and other non-recurring items. A full reconciliation of our selected GAAP to non-GAAP results is provided in our earnings release. With that, I will turn the call over to Jayshree.

Thank you, Rudy, and thank you, everyone, for joining us this afternoon for our fourth quarter and full 2025 earnings call. Well, 2025 has been another defining year for Arista. With the momentum of generative AI and cloud and enterprise, we have achieved well beyond our goal at 28.6% growth, driving a record revenue of $9 billion, coupled with non-GAAP gross margin of 64.6% for the year and a non-GAAP operating margin of 48.2%. The Arista 2.0 momentum is clear as we surpass 150 million cumulative ports of shipments in Q4-25. International growth was a good milestone in both Asia and Europe, growing north of 40% annually. As expected, we have exceeded our strategic goals of 800 million in campus and branch expansion, as well as 1.5 billion in AI center networking. Shifting to annual customer sector revenue for 2025, cloud and AI titans contributed significantly at 48%. Enterprise and financials recorded at 32%. while AI and specialty providers, which now includes Apple, Oracle, and their initiatives, as well as emerging neo-clouds, performed strongly at 20%. We had two greater than 10 customer concentration in 2025. Customer A and B drove 16 and 26% of our overall business. We cherish our privileged partnerships that have spanned 10 to 15 years of collaborative engineering. With our ever-increasing AI momentum, we anticipate a diversified customer base in 2026, including one, maybe even two additional 10% customers. In terms of annual 2025 product lines, our core cloud AI and data center products built upon a highly differentiated Arista EOS stack is successfully deployed across 10 gig to 800 gigabit Ethernet speeds with 1.6 terabit migration imminent. This includes our portfolio of EtherLink AI and our 7,000 series platforms for best-in-class performance, power efficiency, high availability, automation, agility, for both the front and back-end compute, storage, and all of the interconnect zones. Of course, we interoperate with NVIDIA, the recognized worldwide market leader in GPUs. but also realize our responsibility to broaden the open AI ecosystem, including leading companies such as AMD, Anthropic, ARM, Broadcom, OpenAI, Pure Storage, and Vastata, to name a few, that create the modern AI stack of the 21st century. Arista is clearly emerging as the gold standard terabit network to run these intense training and inference models processing tokens at teraflops. Arista's core sector revenue was driven at 65% of revenue. We are confident of our number one position in market share in high-performance switching, according to most major industry analysts. We launched our Blue Box initiative, offering enriched diagnostics of our hardware platforms, dubbed NetDI, that can run across both our flagship EOS and our open NAS platforms. We saw an excellent uptake in 800 gig adoption in 2025, gaining greater than 100 customers cumulatively for our EtherLink products. And we are co-designing several AI rack systems with 1.6T switching emerging this year. With our increased visibility, we are now doubling from 2025 to 2026 to 3.25 billion in AI networking revenue. Our network adjacencies market is comprised of routing replacing routers and our cognitive AI-driven AVA campus. Our investments in cognitive wired and wireless, zero-touch operation, network identity, scale and segmentation get several accolades in the industry. Our open modern stacking with SWAG, Switched Aggregation Group, and our recent VESPA for Layer 2 and Layer 3 wired and wireless scale are compelling campus differentiators. Together with our recent VeloCloud acquisition in July 2025, we are driving that homogenous, secure, client-to-branch-to-campus solution with unified management domains. Looking ahead, we are committed to our aggressive goal of $1.25 billion for 26 for the cognitive campus and branch. We have also successfully deployed in many routing edge, core spine, and peering use cases. In Q4, 2025, Arista launched our flagship 7800R4 spine for many routing use cases, including DCI, AI spines, with that massive 460 terabits of capacity to meet the demanding needs of multi-service routing, AI workloads, and switching use cases. The combined campus and routing adjacencies together contribute approximately 18% of revenue. Our third and final category is the network software and services based on subscription models, such as ACARE, Cloud Vision, observability, advanced security, and even some branch edge services. We added another 350 Cloud Vision customers a day, almost one new customer a day, and deployed an aggregate of 3,000 customers with Cloud Vision over the past decade. Arista's subscription-based network services and software revenue contributed approximately 17%, and please note that it does not include perpetual software licenses that are otherwise included in core or adjacent markets. Arista 2.0 momentum is clear. We find ourselves at the epicenter of mission-critical network transactions. We are becoming the preferred network innovator of choice for client to cloud and AI networking with a highly differentiated software stack and a uniform cloud vision software foundation. We are proud to power Warner Brothers distribution network streaming for 47 markets in 21 languages in the Pan-European Winter Olympics that is happening as I speak. We are now north of 10,000 cumulative customers, and I'm particularly impressed with our traction in the 5 to 10 million customer category, as well as the 1 million customer category in 2025. Arista's 2.0 vision resonates with our customers who value us for leading that transformation from incongruent silos to reliable centers of data. The data can reside as campus centers, data centers, WAN centers, or AI centers, regardless of their location. Networking for AI has achieved production scale with an all Ethernet-based Arista AI center. In 2025, we are a founding member of the Ethernet-based standards for both ScaleUp with eSUN, as well as completing the UltraEthernet Consortium 1.0 specification for ScaleOut AI networking. These AI centers seamlessly connect the back-end AI accelerators to the front-end of compute storage, WAN, and classic cloud networking. Our AI-accelerated networking portfolio, consisting of three families of EtherLink spine-leaf fabric, are successfully deployed in scale-up, scale-out, and scale-across networks. Network architectures must handle both training and inference frontier models to mitigate congestion. For training, the key metric is obviously job completion time, the amount of time taken between admitting a job, training job, to an AI accelerator cluster, and the end of a training run. For inference, the key metric is slightly different. It's the time taken to a first token, basically the amount of latency it takes for a user submitting a query to receive their first response. Arista has clearly developed a full AI suite of features to uniquely handle the fidelity of AI and cloud workloads in terms of diversity, duration, size of traffic flow, and all the patterns associated with it. Our AI for networking strategy based on AVA, Autonomous Virtual Assist, curates the data for higher level functions, Together with our published, subscribed state foundation in EOS, NetDL, or Network Data Lake, we instrument our customers' networks to deliver proactive, predictive, and prescriptive features for enhanced security, observability, and agentic AI operations. Coupled with the Arista validated designs for network simulation, digital twin, and validation functionality, Arista platforms are perfectly optimized and suited for network as a service. Our global relevance with customers and channels is increasing. In 2025 alone, we conducted three large customer events across three continents, Asia, Europe, and United States, and many other smaller ones, of course. We touched 4,000 to 5,000 strategic customers and partners in the enterprise. While many customers are struggling with their legacy incumbents, Arista is deeply appreciated for redefining the future of networking. Customers have long appreciated our network innovation and quality demonstrated by our highest net promoter score of 93% and lowest security vulnerabilities in the industry. We now see the pace of acceptance and adoption accelerating in the enterprise customer base. Our leadership team, including our newly appointed co-presidents, Ken Duda and Todd Nightingale have driven strategic and cohesive execution. Tyson Lamoureux, our newest senior vice president, who joined us with deep cloud operator experience, has ignited our hypergrowth across our AI and cloud Titan customers. Exiting 2025, we are now at approximately 5,200 employees, which also includes the recent VeloCloud acquisition. I am incredibly proud of the entire Arista A team, and thank you, all employees, for your dedication and hard work. Of course, our top-notch engineering and leadership team has always steadfastly prioritized our core Arista way principles of innovation, culture, and customer intimacy. Well, I think you would agree that 2025 has indeed been a memorable year, and we expect 2026 to be a fantastic one as well. We are amid an unprecedented networking demand with massive and a growing TAM of 100 plus billion. And so, despite all the news on the mounting supply chain, allocation, rising cost of memory, and silicon fabrication, we increased our 2026 guidance to 25% annual growth, accelerating now to $11.25 billion. And with that happy news, I turn it over to Chantelle, our CFO.