Stock Analysis on Net

Arista Networks Inc. (NYSE:ANET)

Analysis of Property, Plant and Equipment

Microsoft Excel

Property, Plant and Equipment Disclosure

Arista Networks Inc., balance sheet: property, plant and equipment

US$ in thousands

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Land 44,645 41,500 40,145
Equipment and machinery 144,850 122,407 90,915 70,655 64,748
Computer hardware and software 57,761 52,148 44,083 40,081 36,627
Furniture and fixtures 3,576 3,575 3,634 3,787 3,774
Leasehold improvements 34,584 30,102 30,502 31,448 31,235
Construction-in-process 4,242 2,124 2,378 1,441 265
Property and equipment, gross 289,658 251,856 211,657 147,412 136,649
Accumulated depreciation (188,078) (156,847) (133,023) (115,181) (97,376)
Property and equipment, net 101,580 95,009 78,634 32,231 39,273

Based on: 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), 10-K (reporting date: 2019-12-31).

Item Description The company
Property and equipment, gross Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Arista Networks Inc. property and equipment, gross increased from 2021 to 2022 and from 2022 to 2023.
Property and equipment, net Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Arista Networks Inc. property and equipment, net increased from 2021 to 2022 and from 2022 to 2023.

Asset Age Ratios (Summary)

Arista Networks Inc., asset age ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Average age ratio 76.76% 74.56% 77.56% 78.14% 71.26%
Estimated total useful life (years) 8 8 9 7 7
Estimated age, time elapsed since purchase (years) 6 6 7 6 5
Estimated remaining life (years) 2 2 2 2 2

Based on: 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), 10-K (reporting date: 2019-12-31).

Asset age ratio Description The company
Average age ratio As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company fixed asset base is old or new. Newer assets are likely to be more efficient. Arista Networks Inc. average age ratio of depreciable property, plant and equipment improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.
Estimated total useful life Over longer time periods, this ratio is a useful measure of company depreciation policy and can be used for comparisons with competitors. Arista Networks Inc. estimated total useful life of depreciable property, plant and equipment decreased from 2021 to 2022 and from 2022 to 2023.
Estimated time elapsed since purchase The approximate age in years of a company fixed assets. Useful for comparison purposes. Arista Networks Inc. estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2021 to 2022 and from 2022 to 2023.
Estimated remaining life Arista Networks Inc. estimated remaining life of depreciable property, plant and equipment increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Average Age

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Accumulated depreciation 188,078 156,847 133,023 115,181 97,376
Property and equipment, gross 289,658 251,856 211,657 147,412 136,649
Land 44,645 41,500 40,145
Asset Age Ratio
Average age1 76.76% 74.56% 77.56% 78.14% 71.26%

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Average age = 100 × Accumulated depreciation ÷ (Property and equipment, gross – Land)
= 100 × 188,078 ÷ (289,65844,645) = 76.76%

Asset age ratio Description The company
Average age As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company fixed asset base is old or new. Newer assets are likely to be more efficient. Arista Networks Inc. average age ratio of depreciable property, plant and equipment improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Estimated Total Useful Life

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Property and equipment, gross 289,658 251,856 211,657 147,412 136,649
Land 44,645 41,500 40,145
Depreciation expense 31,700 25,600 19,500 20,100 19,000
Asset Age Ratio (Years)
Estimated total useful life1 8 8 9 7 7

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Estimated total useful life = (Property and equipment, gross – Land) ÷ Depreciation expense
= (289,65844,645) ÷ 31,700 = 8

Asset age ratio Description The company
Estimated total useful life Over longer time periods, this ratio is a useful measure of company depreciation policy and can be used for comparisons with competitors. Arista Networks Inc. estimated total useful life of depreciable property, plant and equipment decreased from 2021 to 2022 and from 2022 to 2023.

Estimated Age, Time Elapsed since Purchase

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Accumulated depreciation 188,078 156,847 133,023 115,181 97,376
Depreciation expense 31,700 25,600 19,500 20,100 19,000
Asset Age Ratio (Years)
Time elapsed since purchase1 6 6 7 6 5

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= 188,078 ÷ 31,700 = 6

Asset age ratio Description The company
Estimated time elapsed since purchase The approximate age in years of a company fixed assets. Useful for comparison purposes. Arista Networks Inc. estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2021 to 2022 and from 2022 to 2023.

Estimated Remaining Life

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in thousands)
Property and equipment, net 101,580 95,009 78,634 32,231 39,273
Land 44,645 41,500 40,145
Depreciation expense 31,700 25,600 19,500 20,100 19,000
Asset Age Ratio (Years)
Estimated remaining life1 2 2 2 2 2

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Estimated remaining life = (Property and equipment, net – Land) ÷ Depreciation expense
= (101,58044,645) ÷ 31,700 = 2

Asset age ratio Description The company
Estimated remaining life Arista Networks Inc. estimated remaining life of depreciable property, plant and equipment increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.