Arista Networks Inc at Morgan Stanley Technology, Media & Telecom Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Meta Marshall - Morgan Stanley - Analyst : <_ALACRA_META_ABSTRACT>Let's see. Given the controversy kind of coming out of the quarter around Meta's revenue decline and revenues in 2024, let's maybe just kind of start with the elephant in the room of just like how you see Meta as a customer and whether that relationship has changed over the last year? John McCool - Arista Networks Inc - Chief Platform Officer, Senior Vice President - Engineering Operations That's great, thanks. So the relationship with Meta still remains very strong. We completed our 7700 R4 product. This is what we call our distributed Ethernet switch. That's the third generation of co-designed products that we've done with Meta. We continue to be strongly engaged with them. I think it's important to remember we had some phenomenal growth at Meta in 2022 and 2023 as we went through the 400-gig cycle, and we did reiterate that we expect them to be an over 10% customer this year.

Question: Meta Marshall - Morgan Stanley - Analyst : Okay, got it. And so just from a kind of software value though, like let's just kind of reiterate kind of the differences of where you guys see your kind of value add to customers and how that has not changed versus kind of what they would need to do if they were going to use white box.

Question: Meta Marshall - Morgan Stanley - Analyst : White box in general.

Question: Meta Marshall - Morgan Stanley - Analyst : Got it. There's been some discussion as well about fabrics in the back end of the network that kind of diminished the value of Arista. Does this change the value proposition of Arista, or is it again just kind of competitive noise as we've discussed with the past few questions? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 5:15PM, ANET.N - Arista Networks Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Meta Marshall - Morgan Stanley - Analyst : Got it. You've made the point on the Q4 call that the network opportunity or Jayshree made the point that the network opportunity is so large, there's room for multiple players. But in a market concerned with white box or InfiniBand or Spectrum X, where does Arista find kind of the core value proposition and how do you kind of continue to shoot above your weight in terms of share in the market?

Question: Meta Marshall - Morgan Stanley - Analyst : I also realized we started the session a few minutes early, but I think we're good, so the room is filled in. But so just how is confidence in the $750 million AI revenue target changed since you guys introduced it at the Analyst Day in 2023 for all of the reasons that we just kind of talked about with the trends that you're seeing with customers?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. You've noted that three of the cloud customers are kind of these five trials that you had been talking about. These three cloud customers with 100,000 GPU clusters will largely ramp this year and another one in 2026, kind of with one of those trials falling out. Just what are the factors influencing the timing of those ramps and kind of the eventual revenue recognition we'll see?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay, got it. Jayshree has noted, or kind of you guys have noted a reciprocal 1 to 1 front end versus back-end investment kind of opportunity when it comes to AI. Just culminating in this kind of $1.5 billion AI target for 2025. Just as we think about DeepSeek for

Question: Meta Marshall - Morgan Stanley - Analyst : Okay, got it. As customers face power cooling constraints affecting their ability to deploy AI at massive scale, just how is this influencing architectural changes and are there any implications that it has for kind of overall network design?

Question: Meta Marshall - Morgan Stanley - Analyst : Well, the vast majority of the AI networking opportunity is going to remain concentrated in a handful of clouds, many of whom are your customers. How do you look at kind of competing in the opportunities outside of the cloud titans, either with startups or sovereigns, and just is that value proposition of Arista different there?

Question: Meta Marshall - Morgan Stanley - Analyst : I'm going to move away from kind of some of the AI opportunities. I maybe wanted to take questions a little bit sooner than I normally would. So are there any questions from the audience? [Tom], do you want to show it? Unidentified Participant (inaudible - microphone inaccessible) REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 5:15PM, ANET.N - Arista Networks Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Meta Marshall - Morgan Stanley - Analyst : Any more? Unidentified Participant Yeah, I have two questions. I think the first one has to do with Jayshree's comment on the call about saying how we appreciate all the enthusiasm, but would you want to anchor to our guidance and streets by size at like 25% growth. You guys are only getting at like 17%. I don't think I've ever remembered Jayshree making that comment ever to get people more anchored to the -- number one, why did you feel that was so necessary to say on the call considering that you've been beaten by 10% or more on the top line every year?

Question: Meta Marshall - Morgan Stanley - Analyst : A question right here. Unidentified Participant Within an average 100,000 super cluster, what is the TAM that's dedicated to AI spines versus AI leaves versus top of rack?

Question: Meta Marshall - Morgan Stanley - Analyst : A question back there. Unidentified Participant How should we think about customer concentration and mix going forward? We saw Meta come down as a share of revenue. I think you explained that well, but with the diversifying customer base in AI with the concentration on Meta and Microsoft come down over time. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 5:15PM, ANET.N - Arista Networks Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Meta Marshall - Morgan Stanley - Analyst : One last question. Right here. Unidentified Participant Yeah, actually the difference between those switch types were already mentioned, and I guess your technological edge would be inspiring like most. What would you say about the competitive landscape in this specific type of product?

Question: Meta Marshall - Morgan Stanley - Analyst : So maybe let's just turn back, obviously, you've had kind of two the M&Ms as your kind of major cloud titan customers over the years. Just over time there's been prospects of could another one of these titans kind of eventually become a customer or a bigger customer and they are a customer today? Just how do you think about kind of that idea of additional opportunities with additional cloud Titans? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 5:15PM, ANET.N - Arista Networks Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. You talk about kind of the second business is the enterprise business. Just how are you seeing enterprises invest in AI today and how do you view that kind of how they're going to invest both on premise or will it primarily be in the cloud?

Question: Meta Marshall - Morgan Stanley - Analyst : Are there kind of productized systems that you look to, say, hey, here is our AI solution or is it kind of a matter of this has been the Arista portfolio that has been serving you for years? It can also be used for AI just kind of -- are you targeting kind of solutions?

Question: Meta Marshall - Morgan Stanley - Analyst : Just how do you think about maybe turning back to kind of the cloud opportunity, just about the 800-gig refresh opportunity on the front end of the network. Clearly, over the past few years you guys have been doing a large 400-gig upgrade or see a big upgrade with kind of the M&Ms. Just how should we think about 800 gig eventually on the front end? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 5:15PM, ANET.N - Arista Networks Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. Another common question that we get is co-packaged optics, and just how co-packaged optics changes the opportunity for Arista?

Question: Meta Marshall - Morgan Stanley - Analyst : I mean, in a pedigree is this idea of kind of always being merchants or working with merchant silicon, open ecosystems. Does that ever change as optics become more important, or would that ever be something you guys would invest in, or do you think that that ecosystem stays open enough? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 5:15PM, ANET.N - Arista Networks Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Meta Marshall - Morgan Stanley - Analyst : Okay, perfect. Maybe returning back to the enterprise business, the campus has been another big area where you guys have had targets over the past few years. Just how do you better capitalize on kind of the success you've had in enterprise and just scaling that campus business?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay, clearly a lot of disruption in the market right now with kind of HPE Juniper. Having their pending transaction, is that creating more opportunity for you guys on the campus side, or how are you taking advantage of it on the routing side as well?

Question: Meta Marshall - Morgan Stanley - Analyst : I mean, is there any special initiatives you guys have to kind of go after those customers just given the amount of disruption or identifying who are these kind of sources, or has it been a lot more inbound?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay, and then maybe the deferred revenue balance has grown $250 million sequentially in Q4 to $2.79 billion, significant increases in service and product deferrals. How should investors think about kind of the timing of that revenue recognition or just how to read -- what the messaging should be of kind of the overall increase we're seeing in that revenue balance?

Question: Meta Marshall - Morgan Stanley - Analyst : All right, I'm going to open up one last time for questions since we started five minutes early. We can end five minutes early, but any last questions? All right, perfect. All right, well, John, thanks so much for being here today.