Common-Size Income Statement
Quarterly Data
Arista Networks Inc., common-size consolidated income statement (quarterly data)
Based on: 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), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
- Revenue Composition
- The percentage of revenue derived from product sales exhibited a generally increasing trend from 78.56% in early 2020 to a peak above 86% in 2023, before slightly fluctuating and settling around the low 80s by late 2025. Conversely, the share of services revenue declined over the same period, falling from roughly 21.44% to as low as about 13% before displaying mild volatility and a slight recovery towards 17% at the end of the forecast horizon.
- Cost of Revenue and Gross Profit
- Cost of revenue as a percentage of total revenue rose from approximately 35.33% in early 2020 to rates approaching or exceeding 40% by the end of 2022, indicating increasing cost pressures. Subsequently, this percentage receded somewhat, fluctuating around mid-30% levels through to 2025. Gross profit margins mirrored this pattern inversely; starting at around 65%, declining to just below 60% at late 2022, and then recovering to maintain stable margins in the low to mid-60% range by 2025.
- Operating Expenses
- Operating expenses, comprising research and development (R&D), sales and marketing, and general and administrative (G&A), declined significantly as a percentage of revenue over the period. R&D expenses decreased from around 21.63% to approximately 13-15%, showing a clear downward trend. Sales and marketing expenses exhibited a notable reduction from nearly 11% to below 7%, with fluctuations but an overall decline. G&A expenses also decreased steadily from 3.51% to around 1.5-2%. Overall operating expenses fell from roughly 36% in 2020 to a range close to 20-23% by the end of the observed period, reflecting increased operational efficiency or cost management.
- Profitability
- Income from operations improved substantially, increasing from just under 29% to a range consistently above 40% by 2025. This reflects improving operating leverage despite the earlier rise in cost of revenue. Net income as a percentage of revenue showed a consistent upward trend from approximately 26.5% in early 2020 to peak near 41.5% in the early 2025 period before slightly moderating towards the end. Income before income taxes followed a similar pattern, increasing from about 31% to close to 49%, indicating strong profitability growth.
- Taxation
- The provision for income taxes as a percentage of revenue varied considerably, moving between roughly -1.4% and -9.7%, suggesting variable effective tax rates or tax benefits. The general trend was towards a somewhat increasing tax burden as a percentage of revenue, especially in later periods, reflecting higher absolute income levels or changes in tax strategy.
- Other Income (Expense), Net
- Other income and expense, net, were generally small but positive, fluctuating between near zero and peaks above 5%. There was an increase in volatility and magnitude in the latter periods, sometimes representing a meaningful contribution to income before taxes.
- Summary
- The overall financial profile shows increasing reliance on product revenue, with service revenue share declining but showing signs of modest recovery. Cost pressures on revenue rose initially but were followed by improvements in cost management, particularly in operating expenses. Profitability strengthened markedly, as reflected in gains in operating income and net income margins. Tax expenses exhibited variability but trended higher in relation to revenue. The company demonstrates enhanced operational efficiency and improved profitability over the observed timeframe.