Arista Networks, Inc. (NYSE:ANET) and Vertiv Holdings Co (NYSE:VRT) both benefited from rising deferred revenue during the first half of 2026, but the contribution was much larger relative to Vertiv’s operating cash flow. The companies rank eighth and tenth, respectively, in our 10 Best AI Infrastructure Stocks to Buy for the Long Term. The key question is how much of their cash generation depends on payments received before revenue is earned.
The same accounting benefit has different weight
For the six months ended June 30, Arista reported $2.777 billion of operating cash flow, including a $1.494 billion positive contribution from deferred revenue. That contribution equaled 53.8% of operating cash flow. Purchases of property and equipment were $84.2 million, leaving $2.692 billion after that investment.
Vertiv reported $1.867 billion of operating cash flow over the same six months, including $1.823 billion from deferred revenue, or 97.6% of operating cash flow. Subtracting $285.9 million of capital expenditure and $2.6 million of capitalized software leaves $1.578 billion. Customer funding supported growth while inventory and receivables absorbed cash.
These percentages describe contributions to cash flow. Deferred revenue reflects payments ahead of revenue recognition and can support healthy growth. It also brings future delivery or service obligations, so investors cannot assume the same annual increase will recur indefinitely.
Removing one inflow is a diagnostic, not a forecast
Subtract only the deferred-revenue contribution and investment from each reported operating cash flow. Arista retains about $1.199 billion; Vertiv shows negative $245 million. This deliberately incomplete calculation isolates sensitivity to one inflow. It does not match related costs, reverse all working-capital changes or estimate normalized free cash flow. Calling the negative result a forecast of cash burn would be misleading.
Arista therefore shows more remaining cash under this narrow test. Vertiv’s defense is that advances finance real customer orders and can reduce external funding needs as demand expands. The risk emerges if advances slow while delivery and expansion costs continue.
Vertiv also announced a September agreement to acquire UtilityInnovation Group for $1.45 billion in cash at closing, plus up to $1.15 billion contingent on earnings targets. The announcement expected a fourth-quarter close. That prospective commitment makes conversion of orders into cash after obligations particularly relevant.
October 16 trailing free-cash-flow multiples displayed by Stock Analysis were near 45 for Arista and 28 for Vertiv. The cheaper historical multiple cannot settle cash durability. Our earlier analysis tests how much deterioration would erase Vertiv’s cash-flow valuation advantage.
Q2 2026 hedge-fund holders rose to 91 from 85 for Arista and to 112 from 96 for Vertiv; the tracked fund population changed. Arrowstreet cut Arista shares 10%, while AQR added 1% to Vertiv shares. September 30 short interest was 1.0% of float for Arista and 14.38 million shares for Vertiv.
Arista’s first-half cash was less dependent on growth in deferred revenue. Vertiv can justify confidence if customer advances translate into profitable deliveries and sustained cash after investment. Watching those obligations mature is more informative than annualizing a strong cash quarter.
