Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Arista Networks Inc., income tax expense (benefit), continuing operations

US$ in thousands

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Federal	751,279)	574,449)	359,158)	137,203)	78,843)
State	114,731)	106,866)	76,321)	38,478)	21,135)
Foreign	39,771)	24,186)	38,250)	13,391)	12,891)
Current provision for income taxes	905,781)	705,501)	473,729)	189,072)	112,869)
Federal	(504,730)	(372,270)	(219,568)	(98,534)	(17,592)
State	(42,781)	(41,152)	(34,689)	(16,289)	(849)
Foreign	54,710)	42,626)	9,878)	15,776)	9,878)
Deferred tax benefit	(492,801)	(370,796)	(244,379)	(99,047)	(8,563)
Provision for income taxes	412,980)	334,705)	229,350)	90,025)	104,306)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

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Item	Description	The company
Current provision for income taxes	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Arista Networks Inc. current provision for income taxes increased from 2022 to 2023 and from 2023 to 2024.
Deferred tax benefit	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Arista Networks Inc. deferred tax benefit decreased from 2022 to 2023 and from 2023 to 2024.
Provision for income taxes	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Arista Networks Inc. provision for income taxes increased from 2022 to 2023 and from 2023 to 2024.

Arista Networks Inc., effective income tax rate (EITR) reconciliation

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
U.S. federal statutory income tax rate	21.00%	21.00%	21.00%	21.00%	21.00%
State tax, net of federal benefit	1.75%	2.13%	2.09%	1.89%	2.23%
Taxes on foreign earnings differential	-2.38%	-1.96%	-2.24%	-2.13%	-0.92%
Tax credits	-2.79%	-2.74%	-2.24%	-2.70%	-2.64%
Change in valuation allowance	0.00%	0.00%	0.00%	0.01%	-0.18%
Stock-based compensation	-4.96%	-4.59%	-4.07%	-8.32%	-5.65%
Acquisition and integration costs	0.00%	0.01%	0.05%	0.03%	0.27%
Other, net	0.03%	-0.04%	-0.09%	-0.11%	0.01%
Effective tax rate	12.65%	13.81%	14.50%	9.67%	14.12%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

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Item	Description	The company
Effective tax rate	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Arista Networks Inc. effective tax rate decreased from 2022 to 2023 and from 2023 to 2024.

Arista Networks Inc., components of deferred tax assets and liabilities

US$ in thousands

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Intangible assets	273,867)	322,325)	355,521)	385,291)	392,053)
Reserves and accruals not currently deductible	135,167)	120,973)	63,517)	34,648)	80,550)
Deferred revenue	566,273)	295,268)	182,594)	146,745)	—)
Tax credits	130,188)	118,123)	100,284)	85,390)	68,592)
Lease financing obligation	13,719)	15,485)	15,072)	17,845)	22,080)
Capitalized research and development expenses	634,534)	417,095)	228,946)	28,012)	23,656)
Stock-based compensation	38,631)	28,079)	25,480)	19,760)	18,548)
Net operating losses	25,916)	34,274)	29,469)	21,284)	23,998)
Other	3,593)	1,328)	8,721)	3,430)	3,873)
Gross deferred tax assets	1,821,888)	1,352,950)	1,009,604)	742,405)	633,350)
Valuation allowance	(179,789)	(146,268)	(132,689)	(109,985)	(82,638)
Deferred tax assets	1,642,099)	1,206,682)	876,915)	632,420)	550,712)
US tax on foreign earnings	(189,823)	(245,074)	(286,625)	(302,746)	(317,970)
Right of use asset	(11,571)	(12,935)	(12,383)	(14,892)	(18,764)
Other	(287)	(2,881)	(3,037)	(1,561)	(383)
Deferred tax liabilities	(201,681)	(260,890)	(302,045)	(319,199)	(337,117)
Net deferred tax assets (liabilities)	1,440,418)	945,792)	574,870)	313,221)	213,595)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

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Item	Description	The company
Gross deferred tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Arista Networks Inc. gross deferred tax assets increased from 2022 to 2023 and from 2023 to 2024.
Deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Arista Networks Inc. deferred tax assets increased from 2022 to 2023 and from 2023 to 2024.
Net deferred tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Arista Networks Inc. net deferred tax assets (liabilities) increased from 2022 to 2023 and from 2023 to 2024.

Arista Networks Inc., deferred tax assets and liabilities, classification

US$ in thousands

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
	Deferred tax assets, non-current	1,440,418)	945,792)	574,912)	442,295)	441,531)
	Deferred tax liabilities, non-current	—)	—)	42)	129,074)	227,936)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

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Item	Description	The company
Deferred tax assets, non-current	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	Arista Networks Inc. deferred tax assets, non-current increased from 2022 to 2023 and from 2023 to 2024.
Deferred tax liabilities, non-current	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.

Arista Networks Inc., adjustments to financial statements

US$ in thousands

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Adjustment to Total Assets
Total assets (as reported)	14,043,921)	9,946,806)	6,775,410)	5,734,429)	4,738,919)
Less: Noncurrent deferred tax assets, net	1,440,418)	945,792)	574,912)	442,295)	441,531)
Total assets (adjusted)	12,603,503)	9,001,014)	6,200,498)	5,292,134)	4,297,388)
Adjustment to Total Liabilities
Total liabilities (as reported)	4,049,114)	2,727,747)	1,889,590)	1,755,829)	1,418,628)
Less: Noncurrent deferred tax liabilities, net	—)	—)	42)	129,074)	227,936)
Total liabilities (adjusted)	4,049,114)	2,727,747)	1,889,548)	1,626,755)	1,190,692)
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported)	9,994,807)	7,219,059)	4,885,820)	3,978,600)	3,320,291)
Less: Net deferred tax assets (liabilities)	1,440,418)	945,792)	574,870)	313,221)	213,595)
Stockholders’ equity (adjusted)	8,554,389)	6,273,267)	4,310,950)	3,665,379)	3,106,696)
Adjustment to Net Income
Net income (as reported)	2,852,054)	2,087,321)	1,352,446)	840,854)	634,557)
Add: Deferred income tax expense (benefit)	(492,801)	(370,796)	(244,379)	(99,047)	(8,563)
Net income (adjusted)	2,359,253)	1,716,525)	1,108,067)	741,807)	625,994)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Arista Networks Inc., Financial Data: Reported vs. Adjusted

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Arista Networks Inc., adjusted financial ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net Profit Margin
Reported net profit margin	40.73%	35.62%	30.87%	28.52%	27.38%
Adjusted net profit margin	33.69%	29.29%	25.29%	25.16%	27.01%
Total Asset Turnover
Reported total asset turnover	0.50	0.59	0.65	0.51	0.49
Adjusted total asset turnover	0.56	0.65	0.71	0.56	0.54
Financial Leverage
Reported financial leverage	1.41	1.38	1.39	1.44	1.43
Adjusted financial leverage	1.47	1.43	1.44	1.44	1.38
Return on Equity (ROE)
Reported ROE	28.54%	28.91%	27.68%	21.13%	19.11%
Adjusted ROE	27.58%	27.36%	25.70%	20.24%	20.15%
Return on Assets (ROA)
Reported ROA	20.31%	20.98%	19.96%	14.66%	13.39%
Adjusted ROA	18.72%	19.07%	17.87%	14.02%	14.57%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Arista Networks Inc. adjusted net profit margin ratio improved from 2022 to 2023 and from 2023 to 2024.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Arista Networks Inc. adjusted total asset turnover ratio deteriorated from 2022 to 2023 and from 2023 to 2024.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Arista Networks Inc. adjusted financial leverage ratio decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Arista Networks Inc. adjusted ROE improved from 2022 to 2023 and from 2023 to 2024.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Arista Networks Inc. adjusted ROA improved from 2022 to 2023 but then slightly deteriorated from 2023 to 2024.

Arista Networks Inc., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
As Reported
Selected Financial Data (US$ in thousands)
Net income	2,852,054)	2,087,321)	1,352,446)	840,854)	634,557)
Revenue	7,003,146)	5,860,168)	4,381,310)	2,948,037)	2,317,512)
Profitability Ratio
Net profit margin¹	40.73%	35.62%	30.87%	28.52%	27.38%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income	2,359,253)	1,716,525)	1,108,067)	741,807)	625,994)
Revenue	7,003,146)	5,860,168)	4,381,310)	2,948,037)	2,317,512)
Profitability Ratio
Adjusted net profit margin²	33.69%	29.29%	25.29%	25.16%	27.01%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

¹ Net profit margin = 100 × Net income ÷ Revenue
= 100 × 2,852,054 ÷ 7,003,146 = 40.73%

² Adjusted net profit margin = 100 × Adjusted net income ÷ Revenue
= 100 × 2,359,253 ÷ 7,003,146 = 33.69%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Arista Networks Inc. adjusted net profit margin ratio improved from 2022 to 2023 and from 2023 to 2024.

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
As Reported
Selected Financial Data (US$ in thousands)
Revenue	7,003,146)	5,860,168)	4,381,310)	2,948,037)	2,317,512)
Total assets	14,043,921)	9,946,806)	6,775,410)	5,734,429)	4,738,919)
Activity Ratio
Total asset turnover¹	0.50	0.59	0.65	0.51	0.49
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Revenue	7,003,146)	5,860,168)	4,381,310)	2,948,037)	2,317,512)
Adjusted total assets	12,603,503)	9,001,014)	6,200,498)	5,292,134)	4,297,388)
Activity Ratio
Adjusted total asset turnover²	0.56	0.65	0.71	0.56	0.54

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

¹ Total asset turnover = Revenue ÷ Total assets
= 7,003,146 ÷ 14,043,921 = 0.50

² Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 7,003,146 ÷ 12,603,503 = 0.56

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Arista Networks Inc. adjusted total asset turnover ratio deteriorated from 2022 to 2023 and from 2023 to 2024.

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
As Reported
Selected Financial Data (US$ in thousands)
Total assets	14,043,921)	9,946,806)	6,775,410)	5,734,429)	4,738,919)
Stockholders’ equity	9,994,807)	7,219,059)	4,885,820)	3,978,600)	3,320,291)
Solvency Ratio
Financial leverage¹	1.41	1.38	1.39	1.44	1.43
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted total assets	12,603,503)	9,001,014)	6,200,498)	5,292,134)	4,297,388)
Adjusted stockholders’ equity	8,554,389)	6,273,267)	4,310,950)	3,665,379)	3,106,696)
Solvency Ratio
Adjusted financial leverage²	1.47	1.43	1.44	1.44	1.38

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

¹ Financial leverage = Total assets ÷ Stockholders’ equity
= 14,043,921 ÷ 9,994,807 = 1.41

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 12,603,503 ÷ 8,554,389 = 1.47

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Arista Networks Inc. adjusted financial leverage ratio decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
As Reported
Selected Financial Data (US$ in thousands)
Net income	2,852,054)	2,087,321)	1,352,446)	840,854)	634,557)
Stockholders’ equity	9,994,807)	7,219,059)	4,885,820)	3,978,600)	3,320,291)
Profitability Ratio
ROE¹	28.54%	28.91%	27.68%	21.13%	19.11%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income	2,359,253)	1,716,525)	1,108,067)	741,807)	625,994)
Adjusted stockholders’ equity	8,554,389)	6,273,267)	4,310,950)	3,665,379)	3,106,696)
Profitability Ratio
Adjusted ROE²	27.58%	27.36%	25.70%	20.24%	20.15%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

¹ ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 2,852,054 ÷ 9,994,807 = 28.54%

² Adjusted ROE = 100 × Adjusted net income ÷ Adjusted stockholders’ equity
= 100 × 2,359,253 ÷ 8,554,389 = 27.58%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Arista Networks Inc. adjusted ROE improved from 2022 to 2023 and from 2023 to 2024.

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
As Reported
Selected Financial Data (US$ in thousands)
Net income	2,852,054)	2,087,321)	1,352,446)	840,854)	634,557)
Total assets	14,043,921)	9,946,806)	6,775,410)	5,734,429)	4,738,919)
Profitability Ratio
ROA¹	20.31%	20.98%	19.96%	14.66%	13.39%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income	2,359,253)	1,716,525)	1,108,067)	741,807)	625,994)
Adjusted total assets	12,603,503)	9,001,014)	6,200,498)	5,292,134)	4,297,388)
Profitability Ratio
Adjusted ROA²	18.72%	19.07%	17.87%	14.02%	14.57%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 2,852,054 ÷ 14,043,921 = 20.31%

² Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 2,359,253 ÷ 12,603,503 = 18.72%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Arista Networks Inc. adjusted ROA improved from 2022 to 2023 but then slightly deteriorated from 2023 to 2024.

Arista Networks Inc. (NYSE:ANET)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

Arista Networks Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Arista Networks Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)