Arista Networks, Inc. Reports Third Quarter 2025 Financial Results
Third Quarter Financial Highlights
"Our centers of data strategy is resonating well across customers and analysts because it delivers a superior client to campus to cloud/data and AI centers experience," said Jayshree Ullal, Chairperson and CEO of Arista Networks. “After yet another strong performance in Q3 2025, Arista is well-positioned as a strategic networking provider with continued durable execution.”
-
Revenue of
$2.30 8 billion4.7% compared to the second quarter of 2025, and an increase of27.5% from the third quarter of 2024. -
GAAP gross margin of
64.6% , compared to GAAP gross margin of65.2% in the second quarter of 2025 and64.2% in the third quarter of 2024. -
Non-GAAP gross margin of
65.2% , compared to non-GAAP gross margin of65.6% in the second quarter of 2025 and64.6% in the third quarter of 2024. -
GAAP net income of
$853.0 million $0.67 $747.9 million $0.58 -
Non-GAAP net income of
$962.3 million $0.75 $769.0 million $0.60
Commenting on the company's financial results, Chantelle Breithaupt, Arista’s CFO, said, "We are proud to have delivered
Company Highlights
- Arista Networks appointed Kenneth Duda as President and Chief Technology Officer and Tyson Lamoreaux as Senior Vice President of Cloud and AI Networking - Mr. Duda’s expanded role will oversee cloud and AI systems engineering and business development. Mr. Lamoreaux has over 25 years of experience in networking and systems. He has joined Mr. Duda’s team.
- Arista Networks to collaborate with industry leaders to deliver Ethernet for Scale-Up Networks (ESUN) – ESUN was unveiled at the OCP Global Summit in October 2025 as an open OCP workstream committed to the goal of open standards-based solutions for scale-up, based on Ethernet, and open to all.
- Arista Networks announced AI agents to streamline network operations – By combining the power of open standards like MCP with the robust data and programmability of Arista's EOS and NetDL, Arista is empowering network engineers to build, manage, and secure the networks of the future.
- Arista introduced an observability blueprint for modern AI workloads - Arista CloudVision AI delivers end-to-end visibility, intelligence, and security, from the physical network and systems to job-level performance. This enables network teams to become active partners in AI success, preventing costly inefficiencies and enabling safe, autonomous operations at scale.
Financial Outlook
For the fourth quarter of 2025, we expect:
-
Revenue of
$2.3 -$2.4 billion -
Non-GAAP gross margin of 62
-63% ; and -
Non-GAAP operating margin of 47
-48% .
Guidance for non-GAAP financial measures excludes certain items, including stock-based compensation expense, intangible asset amortization, and potential non-recurring charges or benefits. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort because these exclusions can be uncertain or difficult to predict, including stock-based compensation expense, which is impacted by the timing of employee stock transactions, the company’s future hiring and retention needs and the future fair market value of the company’s common stock. The actual amount of these exclusions will have a significant impact on the company’s GAAP gross margin and GAAP operating margin.
Prepared Materials and Conference Call Information
Arista's executives will discuss the third quarter 2025 financial results on a conference call today at 1:30 PM Pacific Time. To listen to the call via telephone, dial (888) 330-2502 in
The financial results conference call will also be available via live webcast on Arista's investor relations website at https://investors.arista.com/. Shortly after the conclusion of the conference call, a replay of the audio webcast will be available on Arista’s investor relations website.
Forward-Looking Statements
This press release contains “forward-looking statements” regarding our future performance, including but not limited to quotations from management, statements in the section entitled “Financial Outlook,” such as estimates regarding revenue, non-GAAP gross margin, and non-GAAP operating margin for the fourth quarter of 2025, statements regarding Arista’s products, innovation, leadership and ability to execute and succeed in data-driven, client-to-cloud networking for large AI, datacenter, campus, and routing environments. Forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause actual results, performance or achievements to differ materially from those anticipated in or implied by the forward-looking statements including but not limited to risks associated with: escalated or escalating
Non-GAAP Financial Measures
This press release and accompanying table contain certain non-GAAP financial measures, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, and non-GAAP diluted net income per share. These non-GAAP financial measures exclude stock-based compensation expense, intangible asset amortization, (gains)/losses on strategic investments, and the income tax effect of these non-GAAP exclusions, as well as the one-time impact on our tax provision resulting from the enactment of the One Big Beautiful Bill Act (“OBBB Act”). In addition, non-GAAP financial measures exclude net tax benefits associated with stock-based awards, which include excess tax benefits and other discrete indirect effects of such awards. The company uses these non-GAAP financial measures internally in analyzing its financial results and believes that these non-GAAP financial measures are useful to investors as an additional tool to evaluate ongoing operating results and trends. In addition, these measures are the primary indicators management uses as a basis for its planning and forecasting for future periods.
Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for the comparable GAAP financial measures. Non-GAAP financial measures are subject to limitations and should be read only in conjunction with the company's consolidated financial statements prepared in accordance with GAAP. Non-GAAP financial measures do not have any standardized meaning and are, therefore, unlikely to be comparable to similarly titled measures presented by other companies. A description of these non-GAAP financial measures and a reconciliation of the company’s non-GAAP financial measures to their most directly comparable GAAP measures have been provided in the financial statement tables included in this press release, and investors are encouraged to review the reconciliation.
About Arista Networks
Arista Networks is an industry leader in data-driven, client-to-cloud networking for large AI, data center, campus, and routing environments. Its award-winning platforms deliver availability, agility, automation, analytics, and security through an advanced network operating stack. For more information, visit www.arista.com.
ARISTA, CloudVision, and Etherlink are among the registered and unregistered trademarks of Arista Networks, Inc. in jurisdictions around the world. Other company names or product names may be trademarks of their respective owners. Additional information and resources can be found at www.arista.com.
ARISTA NETWORKS, INC. Condensed Consolidated Income Statements (Unaudited, in millions, except per share amounts) |
||||||||||||
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
||||
Revenue: |
|
|
|
|
|
|
|
|
||||
Product |
|
$ |
1,911.7 |
|
$ |
1,523.8 |
|
$ |
5,481.2 |
|
$ |
4,275.9 |
Service |
|
|
396.6 |
|
|
287.1 |
|
|
1,036.7 |
|
|
796.8 |
Total revenue |
|
|
2,308.3 |
|
|
1,810.9 |
|
|
6,517.9 |
|
|
5,072.7 |
Cost of revenue: |
|
|
|
|
|
|
|
|
||||
Product |
|
|
745.5 |
|
|
593.3 |
|
|
2,125.5 |
|
|
1,655.4 |
Service |
|
|
72.6 |
|
|
55.9 |
|
|
187.5 |
|
|
157.0 |
Total cost of revenue |
|
|
818.1 |
|
|
649.2 |
|
|
2,313.0 |
|
|
1,812.4 |
Gross profit |
|
|
1,490.2 |
|
|
1,161.7 |
|
|
4,204.9 |
|
|
3,260.3 |
Operating expenses: |
|
|
|
|
|
|
|
|
||||
Research and development |
|
|
326.0 |
|
|
235.8 |
|
|
888.9 |
|
|
711.7 |
Sales and marketing |
|
|
151.2 |
|
|
106.8 |
|
|
394.3 |
|
|
316.3 |
General and administrative |
|
|
34.8 |
|
|
33.8 |
|
|
98.5 |
|
|
87.3 |
Total operating expenses |
|
|
512.0 |
|
|
376.4 |
|
|
1,381.7 |
|
|
1,115.3 |
Income from operations |
|
|
978.2 |
|
|
785.3 |
|
|
2,823.2 |
|
|
2,145.0 |
Other income (expense), net |
|
|
98.9 |
|
|
97.6 |
|
|
289.1 |
|
|
231.1 |
Income before income taxes |
|
|
1,077.1 |
|
|
882.9 |
|
|
3,112.3 |
|
|
2,376.1 |
Provision for income taxes |
|
|
224.1 |
|
|
134.9 |
|
|
556.7 |
|
|
325.0 |
Net income |
|
$ |
853.0 |
|
$ |
748.0 |
|
$ |
2,555.6 |
|
$ |
2,051.1 |
Net income per share (1): |
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.68 |
|
$ |
0.59 |
|
$ |
2.03 |
|
$ |
1.63 |
Diluted |
|
$ |
0.67 |
|
$ |
0.58 |
|
$ |
2.00 |
|
$ |
1.60 |
Weighted-average shares used in computing net income per share(1): |
|
|
|
|
|
|
|
|
||||
Basic |
|
|
1,258.0 |
|
|
1,257.9 |
|
|
1,258.1 |
|
|
1,255.0 |
Diluted |
|
|
1,276.6 |
|
|
1,281.8 |
|
|
1,275.7 |
|
|
1,280.3 |
(1) |
Prior period results have been adjusted to reflect the four-for-one stock split effected in December 2024. |
ARISTA NETWORKS, INC. Reconciliation of Selected GAAP to Non-GAAP Financial Measures (Unaudited, in millions, except percentages and per share amounts) |
||||||||||||||||
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
||||||||
GAAP gross profit |
|
$ |
1,490.2 |
|
|
$ |
1,161.7 |
|
|
$ |
4,204.9 |
|
|
$ |
3,260.3 |
|
GAAP gross margin |
|
|
64.6 |
% |
|
|
64.2 |
% |
|
|
64.5 |
% |
|
|
64.3 |
% |
Stock-based compensation expense |
|
|
8.0 |
|
|
|
4.1 |
|
|
|
19.3 |
|
|
|
11.5 |
|
Intangible asset amortization |
|
|
7.0 |
|
|
|
4.2 |
|
|
|
12.8 |
|
|
|
12.6 |
|
Non-GAAP gross profit |
|
$ |
1,505.2 |
|
|
$ |
1,170.0 |
|
|
$ |
4,237.0 |
|
|
$ |
3,284.4 |
|
Non-GAAP gross margin |
|
|
65.2 |
% |
|
|
64.6 |
% |
|
|
65.0 |
% |
|
|
64.7 |
% |
|
|
|
|
|
|
|
|
|
||||||||
GAAP income from operations |
|
$ |
978.2 |
|
|
$ |
785.3 |
|
|
$ |
2,823.2 |
|
|
$ |
2,145.0 |
|
GAAP operating margin |
|
|
42.4 |
% |
|
|
43.4 |
% |
|
|
43.3 |
% |
|
|
42.3 |
% |
Stock-based compensation expense |
|
|
127.9 |
|
|
|
98.1 |
|
|
|
306.1 |
|
|
|
254.6 |
|
Intangible asset amortization |
|
|
15.8 |
|
|
|
6.7 |
|
|
|
26.4 |
|
|
|
20.1 |
|
Non-GAAP income from operations |
|
$ |
1,121.9 |
|
|
$ |
890.1 |
|
|
$ |
3,155.7 |
|
|
$ |
2,419.7 |
|
Non-GAAP operating margin |
|
|
48.6 |
% |
|
|
49.1 |
% |
|
|
48.4 |
% |
|
|
47.7 |
% |
|
|
|
|
|
|
|
|
|
||||||||
GAAP net income |
|
$ |
853.0 |
|
|
$ |
747.9 |
|
|
$ |
2,555.6 |
|
|
$ |
2,051.1 |
|
Stock-based compensation expense |
|
|
127.9 |
|
|
|
98.1 |
|
|
|
306.1 |
|
|
|
254.6 |
|
Intangible asset amortization |
|
|
15.8 |
|
|
|
6.7 |
|
|
|
26.4 |
|
|
|
20.1 |
|
(Gains)/losses on strategic investments |
|
|
— |
|
|
|
(12.4 |
) |
|
|
(10.9 |
) |
|
|
(12.4 |
) |
Tax impact of the OBBB Act(1) |
|
|
34.6 |
|
|
|
— |
|
|
|
34.6 |
|
|
|
— |
|
Tax benefits on stock-based awards |
|
|
(49.0 |
) |
|
|
(57.7 |
) |
|
|
(156.7 |
) |
|
|
(193.1 |
) |
Income tax effect on non-GAAP exclusions |
|
|
(20.0 |
) |
|
|
(13.6 |
) |
|
|
(43.1 |
) |
|
|
(40.9 |
) |
Non-GAAP net income |
|
$ |
962.3 |
|
|
$ |
769.0 |
|
|
$ |
2,712.0 |
|
|
$ |
2,079.4 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP diluted net income per share (2) |
|
$ |
0.67 |
|
|
$ |
0.58 |
|
|
$ |
2.00 |
|
|
$ |
1.60 |
|
Non-GAAP adjustments to net income per share (2) |
|
|
0.08 |
|
|
|
0.02 |
|
|
|
0.13 |
|
|
|
0.02 |
|
Non-GAAP diluted net income per share (2) |
|
$ |
0.75 |
|
|
$ |
0.60 |
|
|
$ |
2.13 |
|
|
$ |
1.62 |
|
Weighted-average shares used in computing diluted net income per share (2) |
|
|
1,276.6 |
|
|
|
1,281.8 |
|
|
|
1,275.7 |
|
|
|
1,280.3 |
|
Summary of Stock-Based Compensation Expense: |
|
|
|
|
|
|
|
|
||||||||
Cost of revenue |
|
$ |
8.0 |
|
|
$ |
4.1 |
|
|
$ |
19.3 |
|
|
$ |
11.5 |
|
Research and development |
|
|
74.6 |
|
|
|
58.3 |
|
|
|
184.8 |
|
|
|
152.9 |
|
Sales and marketing |
|
|
32.9 |
|
|
|
21.0 |
|
|
|
71.6 |
|
|
|
56.6 |
|
General and administrative |
|
|
12.4 |
|
|
|
14.7 |
|
|
|
30.4 |
|
|
|
33.6 |
|
Total |
|
$ |
127.9 |
|
|
$ |
98.1 |
|
|
$ |
306.1 |
|
|
$ |
254.6 |
|
(1) |
Represents a one-time deferred tax provision arising from the remeasurement of our basis difference associated with the |
|
(2) |
Prior period results have been adjusted to reflect the four-for-one stock split effected in December 2024. |
ARISTA NETWORKS, INC. Condensed Consolidated Balance Sheets (Unaudited, in millions) |
|||||||
|
|
September 30, 2025 |
|
December 31, 2024 |
|||
ASSETS |
|
|
|
|
|||
CURRENT ASSETS: |
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
2,326.6 |
|
$ |
2,762.4 |
|
Marketable securities |
|
|
7,779.6 |
|
|
5,541.1 |
|
Accounts receivable |
|
|
1,489.4 |
|
|
1,140.5 |
|
Inventories |
|
|
2,155.7 |
|
|
1,834.6 |
|
Prepaid expenses and other current assets |
|
|
1,433.5 |
|
|
632.3 |
|
Total current assets |
|
|
15,184.8 |
|
|
11,910.9 |
|
Property and equipment, net |
|
|
172.6 |
|
|
98.8 |
|
Goodwill |
|
|
416.2 |
|
|
268.5 |
|
Deferred tax assets |
|
|
1,665.4 |
|
|
1,440.4 |
|
Other assets |
|
|
609.8 |
|
|
325.3 |
|
TOTAL ASSETS |
|
$ |
18,048.8 |
|
$ |
14,043.9 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|||
CURRENT LIABILITIES: |
|
|
|
|
|||
Accounts payable |
|
$ |
481.0 |
|
$ |
381.1 |
|
Accrued liabilities |
|
|
471.0 |
|
|
435.3 |
|
Deferred revenue |
|
|
3,520.7 |
|
|
1,727.3 |
|
Other current liabilities |
|
|
193.9 |
|
|
188.5 |
|
Total current liabilities |
|
|
4,666.6 |
|
|
2,732.2 |
|
Deferred revenue, non-current |
|
|
1,165.5 |
|
|
1,064.1 |
|
Other long-term liabilities |
|
|
309.6 |
|
|
252.8 |
|
TOTAL LIABILITIES |
|
|
6,141.7 |
|
|
4,049.1 |
|
STOCKHOLDERS’ EQUITY: |
|
|
|
|
|||
Common stock |
|
|
0.1 |
|
|
0.1 |
|
Additional paid-in capital |
|
|
2,784.1 |
|
|
2,465.4 |
|
Retained earnings |
|
|
9,115.1 |
|
|
7,542.5 |
|
Accumulated other comprehensive income (loss) |
|
|
7.8 |
|
|
(13.2 |
) |
TOTAL STOCKHOLDERS’ EQUITY |
|
|
11,907.1 |
|
|
9,994.8 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
18,048.8 |
|
$ |
14,043.9 |
|
|
|
|
|
|
|||
ARISTA NETWORKS, INC. Condensed Consolidated Statements of Cash Flows (Unaudited, in millions) |
||||||||
|
|
Nine Months Ended September 30, |
||||||
|
|
2025 |
|
2024 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
||||
Net income |
|
$ |
2,555.6 |
|
|
$ |
2,051.1 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation, amortization and other |
|
|
49.8 |
|
|
|
46.7 |
|
Stock-based compensation |
|
|
306.1 |
|
|
|
254.6 |
|
Deferred income taxes |
|
|
(202.5 |
) |
|
|
(376.7 |
) |
Other |
|
|
(23.5 |
) |
|
|
(42.7 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
||||
Accounts receivable, net |
|
|
(348.9 |
) |
|
|
(96.5 |
) |
Inventories |
|
|
(321.1 |
) |
|
|
175.2 |
|
Other assets |
|
|
(683.7 |
) |
|
|
(173.1 |
) |
Accounts payable |
|
|
98.1 |
|
|
|
(142.0 |
) |
Deferred revenue |
|
|
1,765.7 |
|
|
|
1,001.1 |
|
Income taxes, net |
|
|
(105.2 |
) |
|
|
59.8 |
|
Other liabilities |
|
|
19.6 |
|
|
|
(80.2 |
) |
Net cash provided by operating activities |
|
|
3,110.0 |
|
|
|
2,677.3 |
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
||||
Proceeds from maturities of marketable securities |
|
|
2,590.3 |
|
|
|
1,427.3 |
|
Proceeds from sale of marketable securities |
|
|
41.4 |
|
|
|
44.9 |
|
Purchases of marketable securities |
|
|
(4,816.3 |
) |
|
|
(2,593.4 |
) |
Purchases of property and equipment |
|
|
(82.5 |
) |
|
|
(19.6 |
) |
Cash paid for business combinations, net of cash acquired |
|
|
(300.0 |
) |
|
|
— |
|
Other |
|
|
(10.0 |
) |
|
|
(6.6 |
) |
Net cash used in investing activities |
|
|
(2,577.1 |
) |
|
|
(1,147.4 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
||||
Proceeds from issuance of common stock under equity plans |
|
|
56.9 |
|
|
|
55.5 |
|
Tax withholding paid on behalf of employees for net share settlement |
|
|
(44.3 |
) |
|
|
(47.5 |
) |
Repurchases of common stock |
|
|
(983.0 |
) |
|
|
(299.8 |
) |
Net cash used in financing activities |
|
|
(970.4 |
) |
|
|
(291.8 |
) |
Effect of exchange rate changes |
|
|
1.7 |
|
|
|
(1.1 |
) |
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
|
|
(435.8 |
) |
|
|
1,237.0 |
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH —Beginning of period |
|
|
2,763.8 |
|
|
|
1,939.5 |
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH —End of period |
|
$ |
2,328.0 |
|
|
$ |
3,176.5 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20251104642462/en/
Investor Contacts:
Arista Networks, Inc.
Investor Advocacy
Rudolph Araujo
Rod Hall
+1 (408) 547-8080
ir@arista.com
Source: Arista Networks, Inc.
