Arista Networks, Inc. ($ANET)

Hello, and welcome to Needham's 21st Annual Technology, Media & Consumer Conference. I'm Ryan Koontz. I'm Really excited to host Arista Networks here today joined by CFO, Chantelle Breithaupt; and John McCool, SVP as well as Rudy Araujo, VP of IR. So welcome guys. How are you going?

Great. Thank you. Thanks for having us again.

Excellent. Super Well, Chantelle, let's start with your excellent quarter you guys had. Can you maybe walk us through how you felt about the results, obviously, beating expectations, and what's some of the kind of key demand drivers in your first quarter were?

Yes. Thank you. We were very excited as a company to report our results. I'm very proud of them as a team. We're very pleased with the 35% revenue growth. And if you take that, Ryan, with the change in deferred revenue, it's actually 54% of revenue forward-looking kind of growth, so we're very excited by that, right? We raised FY '26 again to the $11.5 billion, twice in the last two sessions with you guys raised the year, which is great. And if you guys go look, I encourage you all on the call to go look at our latest earnings deck where we actually also raised our 3-year CAGR outlook to be 20-plus percent. So a lot of great news, a lot of great momentum. So super excited. As Jayshree said, we've never seen more demand than we see at this time. And we're really encouraged. We're encouraged by the progress we see in AI and the adoption of our 800-gig Etherlink portfolio. We're proud to be winning new logos across all the sectors, all our customer sectors. And the proof of concepts for Campus are really working well. We have a high win rate when we can get in there and look at the Campus where we're only 3% market share today. EPS growth, I think, was stellar. So sum it all up, we're super excited and feeling the momentum.

Excellent. And within the quarter, hyperscalers, your big customer is obviously a big contributor there. Some of your Neoclouds, I'm sure. Can maybe walk us through your thoughts about how your different customer segments contributed in Q1?

Yes. I think that we said it was a really great quarter across the board, but in the sense that we saw some really strong performance from the AI specialty provider segment, which, of course, is across the AI portfolio. So I think that's continuing to do well. And so from that perspective, I think all of those segments are showing really great signs for the year.

Super. Yes, you mentioned the nice step-up in deferred. I think it was up 100% year-over-year, it's just incredible. I mean, can you remind us again what's going into deferred, and what's driving that acceleration here for investors that they should be paying attention to?

Yes. I think it's really important for investors to understand and to go look at the earnings deck because we have some analysis and trending, which I think helpful to position where deferred is for Arista over time. But just to remind, what goes into deferred, so we talked about the $3.5 billion of AI revenue in the P&L this year. But most of what's sitting in deferred is AI use case and product. And so you have to look at both combined to look at the AI demand that we're seeing across the board. And it's not that we just put it in once and it's aged over 2 years, things come in and out of the deferred into the P&L. So it's rotating, it's refreshing. And so I think from that perspective, it's important to look at the earnings deck pages we have. But it's a sign of growth and momentum in the sense of the AI demand that we're seeing.

It's clear, incredible demand environment right now for yourselves and a lot of your peers and your ecosystem partners, I'm sure. And with regards to your full year, raising that to 28%, what were some of the puts and takes there? Coming out of the quarter, I think some of the investors were maybe a little disappointed that you guys didn't pull the second half up as much. And how would you characterize your constraints there on your ability to raise your full year a little more relative to your supply environment?

Yes. I don't think the year guide was in the sense of necessarily tying it to the supply environment for this year. I think -- and John will take us through probably a little bit during your questions in the sense of the supply environment. It's a when not if to us. I think you have to take our -- I think I would take it the inverse way, Arista raising twice, and we never assume 100% of everything is going to work in our guidance philosophy. So I would take it as, hey, Chantelle and Jayshree, raised twice in the last 2 quarters, and we're only in May. So let's keep watching the future quarters. And if everything can fall into place, we'll see where we can get to. I think that's how I would take it versus always trying to meet what people expect from us from a guidance perspective. That's not new. So we...

What do we get that? Trying to be conservative as you guys are, and beat and raise, we like that.

If I have to choose a philosophy, I would choose that one.

For sure. And John, how would you characterize the supply environment and some of the puts and takes, and what you guys have been successful in doing. You obviously tie up a lot of capital in terms of commitments with your strategic big partners like Broadcom, kind of walk us through your thoughts are on some of the things that are going well and some of the challenges you're feeling right now on supply.

Sure. Let me start with the going well. If you think about Chantelle's comments on deferred, the actual supply chain team had to deliver both the deferred revenue plus the revenue that was recognized. So 54% growth year after year. So we have a lot of busy folks and our suppliers are very eager to support us to fill this demand. That said, the entire supply chain environment with the AI demand is really pressing capacity on foundries. First, we saw that with memory and how that played through. There's a lot more fabs with memory on silicon, there's some concentration in those fab cycles. So that's what we're up against is an environment that's really booming across the board and really having to drive that and to turn it into finished goods and ship. So we're really comfortable with our execution so far and we'll continue to drive it.

In regards to your updated guidance, do you feel like you have everything you need in place in terms of supply chain to execute on the guide and hopefully, chase some upside there?

We're very comfortable with the guide on both margin and revenue, for sure.

Excellent. And can you maybe walk us through how you use purchase commitments to really lock in that supply, your purchase commitments were up pretty strong, is that around memory?

Yes. I mean that's -- it's across the board, but in the areas where there are constraints, specifically, as we look ahead into 2027, and what we're seeing from the demand environment, but it also helps us in short term, get very tighter with those suppliers in terms of our demand today.

Yes. And the only thing I would add, John, to your comments is that raised to $8.9 billion, it is across everything. The majority, I would say, is chip related, and it's a 52-week lead time, right, John? So we're leaning into your point into '27. So getting ahead of making sure that, that's sorted for what we need to deliver in '27.

TSMC guys are going to be pretty busy. I think...

I think they've been busy for a while.

Yes. Great. Well, maybe shifting to customers and what's happening in the AI domain. It's been a huge success story for you. I remember back a couple of years, a lot of questions, what was Arista's role in the AI back end. And you've certainly proving that out, and you're knocking down some great wins. I think in the quarter, you announced that your fourth AI customer had moved their back end from InfiniBand over to Ethernet. What brought that customer over? And how do you feel about that going forward, all of your AI accounts there?

It was the same trend we've seen on other ones. That particular customer was kind of early on had made some investments in InfiniBand and the full NVIDIA stack. But the compelling reason to move to Ethernet is multi-vendor supported, agnostic to the endpoint. So NVIDIA GPU, AMD, something you build on your own inference engine. Same capability as your front-end network, your back-end networks, so the operational simplicity around it. And I would just add, you're seeing the same dynamic around NVLink and ESUN, starting to come up the industry rally around that and while that's not a near-term thing in terms of revenue, I think that also has bearing us in terms of the architecture going forward.

Super interesting. Wow. Maybe Chantelle talking about price a little bit. I think you announced some price changes to offset the memory costs. How is that flowing through the income statement here relative to price changes?

Yes. I think that -- back to John's point, I think the supply chain team has done great work over the last few quarters. And you've seen various companies talk about different quarters in the last 3 to 4 where memory has been in their conversation. Our philosophy or our approach and strategy was to understand the market, understand where we thought the pricing was going to go a cost to us. And the kind of the added measure twice, cut once. So we want to be sure we had a pretty good line of sight and visibility into what the cost was going to be for us for the next few quarters. And so with that, Ryan, we did a price increase, which customers never love, but at least it was a well-known topic. Our goal was to be margin neutral over the time of the backlog converting to new orders. And so I would say that kept us in our 62% to 64% gross margin guide, which we've been talking about for, I think, 3 or 4 quarters now. So I'm super excited. We've been able to hold it, through it. We've earned the value and trust of our customers to have those commercial conversations. So we're pleased with the result, but never like to deliver a price increase to the customer. So I think margin neutral is landed. And that's allowed us to keep our guide.

Sure. I mean everyone in the hardware industry is feeling that one pretty hard. And are you guys exposed to both DDR4 and DDR5 across the portfolio?

Yes, not the same equal weighting, but yes, to both technically. Yes.

Great. As you think about your AI revenue bogey here of $3.5 billion, which is raised from $3.25 billion. That counts -- does that counts your 4 large customers there and not others that you've added -- new logos that you add?

Yes. I think that $3.5 billion, the way I like to look at it as you look at it as a percentage of the $11.5 billion, we're talking 30% of our revenue not too many years into AI totally is a pretty good win rate. I think that -- but it covers more than the 4 customers. I think that you heard a couple of quarters back, you could technically count about 100 customers across to Neocloud, some large enterprise, the 4 we talked about. The 4 initial pilots were just to take you along the journey with us as investors and the community, how it was going with the larger ones, but it covers AI, we think, is the predominant use case. So we're proud to work with some of the largest customers, with some of the smaller ones that are starting to get into their inference conversation.

I'd like to explore that, if we could. Just discussing some of the Neoclouds, what the Neocloud kind of procurement model, how that might differ from a hyperscaler type model? And then maybe talk about inference, could you guys dive into that?

Sure. Yes, I can probably jump in on that one, Ryan. So I think the Neoclouds have kind of evolved a little bit, right? Like I think when they started, A lot of it was looking for a rinse and repeat kind of reference architecture kind of model, frankly, they needed allocations of compute -- bound them on networking decisions, right? I think what they realized is they were all starting to look the same, right? So how do you differentiate in the crowded Neocloud market in terms of what you bring to the table. And I think what they realized is the network is actually pretty critical to that differentiation, right, because the network can mean the difference between job completion times, taking longer or shorter, it can mean the difference between power utilization being higher or lower. It could be the difference between time to first token and when we start talking about inferencing, et cetera. So what we're starting to find now is that they are actually realizing that they can't just be bound into these agreements based on what's good for compute because having the best-in-class compute is no use if you've got a substandard network, right? So that is opening up the market for sure. I think the other thing is they are definitely not buying at the same levels as the largest hyperscalers, right? So that's perhaps stating the obvious. But they are also the folks that need a little bit more handholding, right? They don't have the experience necessarily of having built these large cloud networks, et cetera. So we're also seeing a higher attach with CloudVision, for instance, and with our Op capabilities that gives you AI Ops kind of visibility into it. So that's kind of a little bit of an interesting dynamic there relative to the hyperscalers.

Super interesting. And maybe to follow that up, you guys have talked about both scale across as well as scale out kind of that dynamic, can you maybe unpack that for us a little bit and where you've come from and how you see the market evolving in the back end there for you in terms of opportunity and what's driving your revenue?

Yes. I think we -- it's interesting to us because we saw a similar dynamic in the beginning of cloud. Once we were able to connect all the servers in the data center on a 2-tier spine leaf architecture the question is how do you expand because I don't have the physical capacity in this data center for more CPUs. Now it's GPUs. So scale across is becoming kind of the next generation of the leaf spine architecture and the Universal Spine to interconnect. So we see all different use cases, but specifically where you want one logical AI cluster across multiple physical instances.

And scale across sounds like it's in the pretty early stages of build-out. Is that right?

I would say relative to scale out. And I think in the sense of -- and I know Rudy, you're going to jump in. This is a very exciting topic for us. I think -- so the only thing I would say is that it's fairly new, but you can see how it might be required because a lot of this is when you need these kind of federated space land access to power cooling scenarios, and I think that's part of what's driving that need. But Rudy, I know you want to take that on.

Yes, I was going to say exactly that. And the other side of that point is, as you start talking about inferencing, Ryan, you brought this up. Inferencing is increasingly like how do I get as close to the edge as possible, right? Because if you're sitting in New York right now and you're asking -- you're trying -- you've got an agent running on your device and you're trying to interact with the model, you don't want to be waiting seconds [indiscernible] over time. And so that's the other thing that's going to drive, I think, scale across. So we're very excited about it, partly also because it's a very unique product set that it takes to be successful there, right? And we've shown success there. We've got the products frankly, a lot of our competitors that we would run into and scale out don't have the product set to compete and scale across, right? So I think we feel very good about it, but it is relatively early to the point the Chantelle and John was making.

Excellent. Yes, that's great. And unless we forget about good old cloud, front-end cloud. And I think the back end has pretty much sucked all the thought out of the room and the attention. But maybe tell us what's happening in the front-end networks these days. That's been your core business, where you've been such a dominant leader for so long. How is the front-end changing to adapt to some of the new AI requirements? And what are you seeing happening in the boring old cloud business?

Yes. I mean it's funny, right? I mean, I forgot -- at least in the analyst world or in the world it is. I mean, for us, it's certainly a tremendously important piece of the puzzle, right? From an upgrade cycle perspective, if I can call it that, most customers in the front end are still in the 400-gig era, right? At least at the hyperscaler level. Some of them are maybe in the 100-, 200-gig era because frankly, the applications that we're using today are working just fine, right? I mean, we're on a web conference, we're all coming in nice and clear, going over those 200-, 400-gig networks. It is triggering a cycle, especially as this agentic traffic pattern starts to become more commonplace, it is going to trigger that cycle. Probably next year is where you start to see the front-end networks kind of get upgraded. I mean we're certainly having conversations right now, it's in maybe more planning phases right now. But maybe next year is when you start to see the 800-gig kind of upgrade just as the AI clusters start to go into the 1.6 era, right? So there's probably a little generational gap between the front end and the back end kind of naturally if you would. The other thing, by the way, is again, inferencing is having a huge impact there. And frankly, we didn't touch on this, but inferencing is also having an impact and the agentic is also having an impact on the enterprise side, and I think we can talk about that as well. I know it's not front end, but I just wanted to kind of get a...

I'd like to hear that on soon.

Yes.

That's great, Rudy. Yes. On the enterprise side, you're having these early discussions, I'm sure with big Fortune 50 types and financials. And I can imagine those are the leaders leaning in here. Like where are those discussions with you about architecture and build-out? Who's going to hold their hand to go do these sorts of things? I mean, do you think there are traditional guys like your competitors that are maybe more deeper entrenched in enterprise that are going to get their fair share there? How do you think about the enterprise kind of AI build-out to complement where they already have quite a bit of private cloud out there, I'm sure, where you guys are very strong.

Yes. I think one thing I'll add, or at least start with and the team can chime in. I think one thing that we've heard from some of the larger customers because part of that $3.5 billion is with enterprise customers, as we mentioned. So part of what they are starting to think about as they go through their refresh cycles as they think about new data center builds, Campus and data center, to be fair, is what is their AI landscape, what is their AI goal in the company. And one thing that we're finding is really great in the conversations when you can have one operating system like EOS across all of those components, it's super easy to have agentic AI sit on top of that because you're only having to hook into one operating system. You can imagine having an agentic AI kind of portfolio where you're trying to go over different operating systems, not as easy to hook in, not as easy to be ubiquitous experience. I think that's a great -- like Ken thought about that maybe 20 years ago, not sure, but he designed something perfectly built for it. That's the things we hear from customers. We're hearing them pull in their campus refresh earlier to try to get into this get ready for at the edge agentic AI inference. Those are some of the things we're hearing. But Rudy or John, anything you want to add?

Yes. I think Chantelle, you hit the -- maybe the most important thing I hear from customers, right, they're realizing that AI within the enterprise is not just a Campus issue. It's not just a data center issue. It goes across the branch, the Campus. To Chantelle's point, that unified operating platform across all of those is really something that's exciting. It's frankly the other thing they're asking us and we've heavily invested in is what is our AI strategy for -- AI for networking, right? Not just we've talked a lot about AI, but AI for networking and AI for Ops. And we've continued to invest there in AVA, which is our Autonomous Virtual Assist, driving better outcomes, if you will, for customers and being able to do everything from root cause analysis, to helping them automate as much of the network operations as they like, right? Like this is not about, hey, you don't need a network operator anymore. It's about how can we augment what the network operator is doing and make their life more efficient, if you will.

Really great, Rudy. Let's shift gears to one of my favorite topics coming out of OFC, which was the XPO announcement. And I went in very excited to hear about it because I hadn't done a ton of work on it myself. I was probably a little behind. But wow, I walked away from OFC and saw just the broad industry endorsement and was so impressed. So can you maybe walk us through kind of how you got there, how you built such strong support and what it means to Arista for that to be adopted as an industry standard?

We have a very passionate founder, Andy Bechtolsheim, who...

Yes, you do.

Over many decades, has really led the definition of many MSAs working with these partners. It goes way back in terms of his development. The most recent before this was OSFP. And we anticipated that at some point, the thermal dissipation would be such that the conventional state-of-the-art would not be able to contain that. And that really was an enabler to the products you see today and our leadership in those deployments. And we're seeing the same thing happen as we go to 1.6T and beyond. The OSFP form factor was great, but won't be able to carry the industry on the next generation. So he's been working with the team here at Arista and the optics team with those partners and building it out and we engage with them in testing and definition. So it's been a real great collaboration with the industry.

Yes. It's a super cool solution. Go ahead, Chantelle.

No, no. Okay. I don't want to stop you from saying it's super cool. What were you going to say?

No. Go ahead.

But I think that we're very proud because it's industry-leading, right? But as far as what it means for us, it's open to the industry and may all people play competitively in it. But I think for us, again, it's another thing where we've been kind of ready. We've got our product portfolio already thinking about it for the next generation of things. So I think it just place us well to be ready for something that the whole industry, hopefully, and our customers, more importantly, will benefit from for years to come, right? And so...

For sure. Yes.

The other aspect of this that sometimes I think doesn't get fully absorbed is the front panel density that this can add, right? So being able to shrink those racks opens up a whole bunch of other scale-up technologies from RF to micro LEDs, et cetera, that are far more power efficient, right? So it opens up, I think, an entirely somewhat tangential benefit but a super important benefit as these clusters start to get more and more dense. And the front panel density was becoming a limiting factor, right? Not to forget, by the way, the sheer amount of sheet metal, less sheet metal that you need and the structural cost that, frankly, aren't paying the bills, right? Like they just deadweight, if you will.

Yes. I think the stat we would throw out there is 40-plus percent footprint reduction, just to give the audience an idea of what we're talking about.

Yes. And so really, you're saying not just for scale out, but there are other applications for that same technology that you can embed on that sled that XPO...

Yes. Scale up is probably the most interesting one because getting to the point where it was as easy definition, right? If you're within the rack and scale up, if you go outside the rack and scale up, well, we realized that we need more compute in that scale-up domain. And so now we're thinking of ways to go across multiple racks, but still stay within that coherent memory kind of scale-up the domain. Well, technologies like this are going to enable that, right, because it gives you a lower power way to interconnect these across a larger physical distance, where copper is really going to struggle, right? So not only is there a direct benefit from an optical perspective, but I think it opens up other avenues. And like everything Andy always does, right, it's a completely open standard based, there's nothing proprietary, there's no like, hey, you have to have Arista to get this to work. But I think to Chantelle's point, it really continues to show the thought leadership that we bring to the table and how we move the industry forward with these open standards.

Super cool. So when do we start seeing products in customers' hands and supply chain start to ramp? What's the time frame that this starts to impact the industry?

So I think this is really something that will probably be most impactful, in the 3.2T era, 1.6T, you're still going to continue to see. And frankly, I think if Andy was here, he'd tell you, OSFP is not going away, right? There is a vast majority of optics out there for the foreseeable future will be OSFP. Especially when you count the enterprise and things like that. But I think for XPO specifically, you'll start to see the first products, I think, come out next year and really very large ramps in that 3.2 terabit era, where its value is much more impactful than to John's point, right, where OSFP would struggle.

Right. And the only other thing I would add to that is, I think about a quarter ago, so everyone thought 3.2T was when we'd have to go to CPO. And I think this shows that now we have a whole longevity even at 3.2, that's not required.

Exactly. Great. Maybe shifting to the Neocloud. I know we touched on them already. But you talked about a more consultative sale. Can you maybe unpack that a little bit for us in terms of what your role is in working with them, they're not probably as deep and sophisticated as some of these hyperscalers have been doing this for decades. So how is Arista's role evolving with the Neoclouds and AI specialists?

Yes, I can start and the group can chime in. So I think -- I personally think Neoclouds is a fascinating segment. Every one of them is different and a pleasure to work with. But they all -- they come to us differently. Generally, they come to us because they know we have the bigger cloud experience. So they would like more of that like what Rudy and John described. But there are different scenarios that we come into it. There's a scenario where the team has experience, and they know us and it's a best-of-breed open conversation, high win rate there because everything -- our portfolio of Etherlink suits that very well and all the things that Rudy mentioned. Then there's the example like what Ken Duda mentioned in our earnings call, where the first try of it with the team, team capable, but in a different scenario. They went with a different solution. And now they've come to us because they realized the capabilities required of their incumbent technology and architecture didn't serve their scale-out needs. And so Ken Duda did a very good job, I think, articulating that scenario, we see those. And we see things that when people feel emboldened to go to different XPU vendors they come to us because they know we're agnostic to the XPU. So we see, they come at us from different angles, but we are known as being a great provider to them for their AI needs. I don't know, Rudy and John, if there's anything you want to add, but...

Yes. I mean I think in terms of the selling process, the only I would add is, look what's done well for Arista is this deep engineering to engineering partnership, right? Like so having our really folks that are working on some of these largest networks be in that consultative selling process with the Neocloud is something that they appreciate because, frankly, they are breaking new ground. And they're trying to do this at kind of the speed of light, so to speak, right? What normally might have taken a year or 2 years to ramp, you don't have that luxury anymore. The only other thing I'd add, and I'll tie this back to your previous question about optics, right? Like one of the things that they appreciate about working with us is we don't lock them into, well, if you want to do this, you have to go down the CPO route, right? Like we still give them that optionality. If they want to go down CPO, we're thinking about open CPO and things of that nature, XPO is obviously there. LPO is an option, traditional OSFP fully retimed, like whatever -- they don't feel as locked in, and I think that's something that they're really beginning to appreciate because as I was saying earlier, ultimately, they've got to bring dollars and cents in the door and from their end customers. And to be able to do that, they need to be able to differentiate from the Neocloud down the street, right? And how do they do that? They're all running the exact same architecture, if you will.

Sure. Makes sense. I want to go back and touch on agentic. It's going to come up more and more and more. I think it's really starting to impact the company's core business with all the different agents that are being rolled out. How is that affecting the architecture of your customers? We hear about more CPU content, locating CPUs closer to GPU clusters. I mean, how does this affect Arista's demand equation and the conversations you're having with customers in terms of agentic infrastructure?

Do you guys want to start? Or do you want to start?

Yes, I can start. So Chantelle kind of touched on this a little bit earlier, right? Like people are starting to think about, okay, what does this new bandwidth pattern on the -- look like, right? In our traditional world, maybe it's a little bit more bursty, right? You go to a ChatGPT, kind of more chatbot, kind of a world of LLM or generative AI. It is still bursty, but maybe the burst are slightly bigger, if I can use that term. You get to an agentic thing, and these things are talking to each other all the time, right? So how do you kind of manage through that process? So as Chantelle had touched on that, right, WiFi 7 is becoming maybe a sooner cycle than you normally would have seen with these WiFi migrations. They're also thinking about things like what does that mean from a power Ethernet perspective, right? Because now you've got all these smart devices that are all across your environment that are also becoming agents in themselves. So how do you enable that? How do you enable them to be securely connected to your network, right? So Zero Trust Networking is another aspect to the conversation that they're having. And then frankly, kind of the bread and butter stuff around things like routing and encryption on the wire and multi-tenancy, like stuff that, frankly, I think most people would think is boring until maybe 6 months a year ago, but it's becoming super important now. And again, I'll repeat what I said earlier, we're one of the few folks that has the products to play in that space, right? So we like our shot as we get into that. The competitive -- it's not that there's no competitors, but it is a different competitive environment than I think you see with maybe scale out, for instance.

And I think that -- sorry, go ahead, John.

Just one of those boring parts that Rudy has talked about that's baked into the architecture. Whenever we see like a mission-critical application, we see a thrust in those customers looking at observability, what's happening on my network. So now you can imagine all these agentic communications, this new type of workload. What kind of visibility can you provide, customers can see what's actually going on. That's going to be pretty important as well.

Is that where your telemetry kind of has a lot to offer?

Absolutely, not just the telemetry itself, but the architecture of the state-based architecture and be able to stream information is going to be critical.

Yes. That's a big differentiator for you guys. I've heard a lot about that. With regards to 1.6T coming, how are you thinking that the long-awaited Tomahawk 6, how is that going to impact your mix and demand? And is this just a normal generation? Or does this bring any kind of accelerators to the demand equation to keep up with all this bandwidth?

Well, I think we're not preannouncing anything, just to be clear in the conversation the way you asked the question, but I think you could count on us to be ready when the cycle is there to be ready with the great products we usually do. So take that as we'll be ready when the market is ready and everything comes together from an ecosystem perspective. I think -- I don't know if there's anything there, Rudy, or John, we talked about in the sense of accelerating at this time. Clearly, there's a demand in the portfolio in the customer set. But Rudy, anything you want to add?

Yes. I mean I guess just one interesting data point, right? Like I think we released 100 gig products. I mean John will probably keep honest here, in 2019, I think, give or take. The 800-gig products came out in 2024, right? So that what, 5 years? It's not going to take 5 years to get to. I know we're preannouncing product, but I can tell you it's not going to be 5 years to get to 1.6T, right? And people are already talking about 3.2T. So in that sense, the pace of innovation is absolutely rapid, right? I don't think it's anything we've seen in the world before. And frankly, that's why when Jayshree says, look, this demand environment is nothing like I've ever seen before. And by the way, she's seen a lot right in this industry. That's the say probably. But in terms of how customers think about it, it is the next generation of networking. The uniqueness of course, is the cooling infrastructure is changing, right? Like I want to see a mix of air cool and liquid cool, right? So that's, I think, an interesting dynamic that customers are still kind of trying to get their hands around because this is breaking new ground for everyone, right? And it's part of the reason why Chantelle talked about new use cases, new products, et cetera, like this is some of that complexity that comes in, right? It's not just about can we ship the product out the door. It's can the customer also be able to absorb that and get value out of it, right? And that's where I think we continue to partner. It's a model that's worked really well for us, and we see no reason to change from that, right?

Yes, the shift to liquid cool data centers. I mean, I didn't see this coming. The mechanical engineering will be so cool again.

It's back.

It is. Let me just wrap it up here. But let's talk briefly about Campus and your progress in Campus and WiFi a little. Can we touch on that briefly?

Yes, I would love to. I think that if you look at -- I think last year was our first real external kind of accountability model, and we hit that revenue of $800 million. We raised the target this year to $1.25 billion. So 55% growth for ourselves with you guys to hold ourselves accountable. Super excited. You've heard others talk about, there's a great refresh cycle happening in the next couple of years. We're definitely participating. We're winning in campus, not even being in the data center yet, which validates our portfolio. Our proof of concepts are very well received. I think that -- so we're just -- we're super excited with campus. Our portfolio is there to meet their needs, including this agentic AI conversation. Rudy, anything you wanted to add on the -- or John? Because I know, we're out of time.

That 55% in context, right? I think it's a market that's growing single digits. We are starting from a low base. I mean our share is probably in the 3%, 4%, 5% range today. But I mean, that is just tremendous growth. So I think just as much as we're excited about the AI opportunity, I think the Campus opportunity is incredibly exciting, especially because there's far more customers building Campuses than there are customers building AI, right? So it's a different selling motion. It's a little bit slower of a ramp, et cetera. But it is a long game, and we're in it for sure.

That is great. Well, super. I mean, I really appreciate you guys joining today. Any last comments you wanted to make Chantelle to investors just wrapping up where Arista is delivering?

We raised our year twice in the last 2 quarters. We had 55% across the P&L in deferred revenue, exceeded EPS expectations, and so we'll continue to deliver value to you guys. And hopefully, you're as excited as we are in the demand that we've pervaded to you today.

For sure. Well, thanks for joining. Really appreciate it.

Thank you. Have a good day.

Bye.

Bye.