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Arista Networks Inc. (NYSE:ANET)

Common-Size Income Statement
Quarterly Data

Arista Networks Inc., common-size consolidated income statement (quarterly data)

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3 months ended: Mar 31, 2026 Dec 31, 2025 Sep 30, 2025 Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021
Product 85.32 84.24 82.82 85.13 84.42 83.30 84.14 84.20 84.57 85.06 85.17 86.47 86.73 85.99 85.71 84.21 82.63 81.02 80.69 80.09 80.76
Service 14.68 15.76 17.18 14.87 15.58 16.70 15.86 15.80 15.43 14.94 14.83 13.53 13.27 14.01 14.29 15.79 17.37 18.98 19.31 19.91 19.24
Revenue 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Product -35.51 -34.30 -32.30 -32.08 -33.55 -33.34 -32.76 -31.97 -33.20 -32.19 -34.64 -36.58 -37.66 -36.97 -36.76 -35.71 -33.50 -32.85 -32.50 -31.92 -32.72
Service -2.60 -2.85 -3.15 -2.67 -2.79 -2.89 -3.09 -3.12 -3.07 -2.95 -2.93 -2.82 -2.81 -2.77 -2.91 -3.14 -3.35 -3.75 -3.57 -3.87 -3.57
Cost of revenue -38.10% -37.14% -35.44% -34.75% -36.35% -36.23% -35.85% -35.09% -36.27% -35.13% -37.57% -39.40% -40.47% -39.74% -39.67% -38.85% -36.85% -36.60% -36.07% -35.79% -36.29%
Gross profit 61.90% 62.86% 64.56% 65.25% 63.65% 63.77% 64.15% 64.91% 63.73% 64.87% 62.43% 60.60% 59.53% 60.26% 60.33% 61.15% 63.15% 63.40% 63.93% 64.21% 63.71%
Research and development -12.69 -14.00 -14.12 -13.45 -13.29 -14.76 -13.02 -15.82 -13.26 -13.73 -14.07 -15.74 -14.90 -14.93 -15.96 -16.94 -19.61 -19.15 -20.45 -20.26 -19.85
Sales and marketing -5.23 -5.59 -6.55 -5.74 -5.82 -5.75 -5.90 -6.18 -6.69 -6.85 -6.76 -6.72 -6.92 -6.70 -6.92 -7.55 -9.21 -9.07 -9.31 -9.98 -10.64
General and administrative -1.24 -1.74 -1.51 -1.33 -1.71 -1.83 -1.87 -1.52 -1.77 -2.75 -1.68 -1.81 -1.85 -1.87 -1.99 -2.18 -2.64 -2.94 -3.00 -2.95 -2.32
Operating expenses -19.16% -21.34% -22.18% -20.52% -20.82% -22.34% -20.79% -23.52% -21.72% -23.33% -22.51% -24.27% -23.67% -23.49% -24.87% -26.66% -31.45% -31.16% -32.77% -33.20% -32.80%
Income from operations 42.74% 41.52% 42.38% 44.73% 42.84% 41.42% 43.36% 41.39% 42.01% 41.54% 39.93% 36.33% 35.86% 36.76% 35.46% 34.50% 31.70% 32.24% 31.16% 31.01% 30.90%
Other income (expense), net 4.19 4.20 4.28 4.26 4.80 4.62 5.39 4.19 3.99 3.54 2.77 3.86 0.90 1.33 0.58 -0.05 3.59 0.18 0.18 0.24 0.24
Income before income taxes 46.93% 45.72% 46.66% 48.99% 47.64% 46.05% 48.75% 45.58% 46.00% 45.08% 42.70% 40.19% 36.76% 38.09% 36.04% 34.44% 35.28% 32.42% 31.34% 31.26% 31.14%
Provision for income taxes -9.17 -7.30 -9.71 -8.68 -7.04 -4.55 -7.45 -6.21 -5.41 -5.24 -6.57 -6.48 -4.46 -4.61 -5.96 -6.01 -4.24 -3.40 -1.38 -3.42 -4.12
Net income 37.76% 38.42% 36.95% 40.31% 40.59% 41.49% 41.30% 39.37% 40.58% 39.84% 36.13% 33.72% 32.30% 33.48% 30.08% 28.43% 31.04% 29.02% 29.96% 27.84% 27.02%

Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).

The financial trajectory over the analyzed period is characterized by significant expansion in operating margins and a marked increase in operational efficiency. A consistent trend of reducing operating expenses as a percentage of revenue has been the primary driver of profitability growth, offsetting fluctuations in gross margin.

Revenue Composition
A shift in the revenue mix is observed, with product sales increasing from approximately 80.76% in early 2021 to 85.32% by March 2026. Conversely, service revenue, which began at 19.24%, experienced a decline, reaching a low of 13.27% in March 2023 before stabilizing between 14% and 17% in subsequent periods.
Gross Profitability
Gross margins exhibited moderate volatility, initially trending downward from 63.71% in March 2021 to a low of 59.53% in March 2023. A recovery followed, with margins peaking at 65.25% in June 2024. Toward the end of the period, a slight contraction is noted, with the margin settling at 61.90% by March 2026.
Operating Expense Efficiency
There is a substantial and sustained reduction in operating expenses relative to revenue. Total operating expenses fell from 32.80% in March 2021 to 19.16% by March 2026. This was achieved through reductions across all primary categories: research and development decreased from 19.85% to 12.69%, sales and marketing dropped from 10.64% to 5.23%, and general and administrative expenses declined from 2.32% to 1.24%.
Operating and Net Income Trends
Income from operations shows a strong upward trend, rising from 30.90% in March 2021 to a peak of 44.73% in June 2025, ending at 42.74% in March 2026. Net income followed a similar positive trajectory, increasing from 27.02% to a peak of 41.49% in September 2024. The impact of higher tax provisions, which rose from 4.12% to 9.17% over the period, partially moderated the final net income growth.
Other Income Contributions
A notable increase in other income, net, is evident. While this item was negligible in 2021 (averaging approximately 0.2%), it grew to represent a consistent contribution of between 4% and 5% of revenue from 2023 through 2026, providing an additional buffer to the pre-tax income.

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