Arista Networks Inc. (ANET) reported a record non-GAAP operating income of $1.08 billion in Q2, up from $770.4 million last year. Operating margin improved to 48.8%. Efficient supply chain management led to gross margin improvement to 65.6%. Accounts payable day increased to 65 days, boosting cash flow and liquidity.

Competitors Hewlett Packard Enterprise (HPE) and Cisco Systems, Inc. (CSCO) reported non-GAAP operating profits. HPE’s profit increased 0.8% YoY, while Cisco saw a 13.3% increase to $5.03 billion. Both companies saw margin expansion driven by demand trends and cost discipline.

Arista’s stock has surged 56.1% in the past year, outperforming the industry. Trading at a forward P/S ratio of 19.43, the company’s earnings estimate for 2025 has increased. Arista holds a Zacks Rank #3 (Hold), with further growth potential in the semiconductor market.

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Read more at Nasdaq: ANET Rides on Strong Operating Margin Expansion: Will it Persist?