Adrienne Colby

Adrienne Colby asked for an update on the progress of Arista's large AI customers, specifically the fourth customer's ramp to 100,000 GPUs, the next steps for the three customers who have already surpassed that threshold, and the potential return of a fifth customer facing funding challenges.

Answer

CEO Jayshree Ullal confirmed that all four customers are deploying AI with Ethernet. Three have cumulatively deployed over 100,000 GPUs and are now growing, migrating to other centers, with power being the main constraint. The fourth customer is migrating from InfiniBand and is currently below 100,000 GPUs but is expected to reach that level this year. No update was provided on the fifth customer with funding challenges.

Adrienne Colby requested an update on the risks associated with large AI customers, specifically the progress of the fourth customer in ramping to 100,000 GPUs, the next steps for the three customers who have already surpassed that threshold, and the potential return of a fifth customer facing funding challenges.

Answer

Jayshree Ullal, Arista's Chairperson and CEO, confirmed that Arista is deploying AI with Ethernet in all four customers. She stated that three customers have cumulatively deployed over 100,000 GPUs and are now expanding to other centers, with power being a key constraint. The fourth customer is migrating from InfiniBand and is still below 100,000 GPUs but is expected to reach that level in 2026. She did not provide an update on the fifth customer.

Adrienne Colby, on behalf of Atif Malik at Citigroup Inc., requested color on the accelerated EMEA order growth and asked about the expected timing for sovereign AI order flow and revenue recognition.

Answer

CEO Chuck Robbins attributed the 10% EMEA order growth to strength in the UK, Germany, and Saudi Arabia, with mid-teens growth in Enterprise and SP. Regarding sovereign AI, he expects order flow to begin in the middle to second half of fiscal 2026, with revenue recognition to follow.

Speaking for Atif Malik of Citi, Adrienne Colby asked for an update on the AI sales pipeline versus orders and on the search for a new head of go-to-market.

Answer

CEO Chuck Robbins stated that the company no longer provides AI pipeline figures, as the strong order results now validate their position in the market. He also announced that Jeff Sharritts had recently been appointed as the new head of go-to-market.

Adrienne Colby, on behalf of Atif Malik at Citigroup, requested an update on the AI sales pipeline versus orders and asked about the status of the search for a new head of go-to-market.

Answer

CEO Chuck Robbins stated that the company no longer provides AI pipeline metrics, as the strong order results now validate their position in the market. He also announced that Oliver Tuszik, who previously led the EMEA region, had recently been appointed as the new head of go-to-market.

Adrienne Colby of Citigroup Inc. asked for clarification on why gross margin expectations for the second half of the year were lowered, and also inquired about the pipeline for MOFN (Metro Optical Fiber Network) opportunities beyond India.

Answer

CFO Jim Moylan explained that the gross margin outlook was revised to the low end of the 42-44% range because demand for lower-margin RLS systems and pluggables "greatly exceeded" prior expectations. President and CEO Gary Smith noted that MOFN activity, which supports cloud build-outs, is strong globally, with significant opportunities seen across North America and Europe in addition to India.

Adrienne Colby of Citigroup inquired about the dynamics within the Cloud Service Provider segment, specifically asking about order linearity during the quarter and any signs of strategic shifts among cloud customers.

Answer

CEO Gary Smith responded that Ciena has seen very solid, accelerating order growth from multiple cloud players with no negative linearity, driven by machine-to-machine learning and global data center build-outs. CFO Jim Moylan added that cloud providers accounted for half of the overall orders in Q1, which were more than double the volume from the same quarter last year.