Common-Size Income Statement
Quarterly Data
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Arista Networks Inc., common-size consolidated income statement (quarterly data)
Based on: 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 common-size income statement reveals a shifting revenue mix and evolving profitability trends over the observed period. Product revenue consistently represents the majority of total revenue, though its relative contribution gradually declines from 80.76% in March 2021 to 82.82% in September 2025, before increasing to 84.24% in December 2025. Conversely, service revenue’s proportion of total revenue increases over time, demonstrating a growing emphasis on service offerings.
- Revenue Composition
- The consistent 100% value for revenue across all periods confirms the statement’s normalization. The increasing percentage of service revenue suggests a potential strategic shift towards higher-margin service-based income, although further investigation into the profitability of each segment is warranted.
Cost of revenue as a percentage of revenue exhibits an increasing trend, rising from 32.72% in March 2021 to 37.14% in September 2025. This increase in cost of revenue is partially offset by improvements in gross profit margin, which initially declines from 63.71% to 60.33% before recovering to 62.86% in September 2025.
- Gross Profit
- The initial decline in gross profit margin, followed by a recovery, suggests potential cost management initiatives or pricing adjustments. The fluctuation in gross profit margin warrants further investigation to understand the underlying drivers, such as changes in product mix, raw material costs, or manufacturing efficiency.
Operating expenses demonstrate a notable decrease as a percentage of revenue, particularly between 2021 and 2022. Research and development expenses, sales and marketing expenses, and general and administrative expenses all show reductions relative to revenue. However, operating expenses begin to increase again in later periods. Income from operations shows a corresponding increase, peaking at 44.73% in June 2025.
- Operating Expenses
- The initial reduction in operating expenses as a percentage of revenue likely reflects improved operational efficiency or strategic cost controls. The subsequent increase in operating expenses suggests potential reinvestment in growth initiatives or increased competitive pressures. The impact of these expense changes on overall profitability is evident in the trend of income from operations.
Other income (expense), net, fluctuates throughout the period, with a notable increase in June 2023 and a peak in December 2024. The provision for income taxes also varies, impacting the final net income margin. Net income as a percentage of revenue demonstrates a generally upward trend, increasing from 27.02% in March 2021 to 38.42% in September 2025, before decreasing to 36.95% in December 2025.
- Net Income
- The overall increase in net income margin indicates improving profitability. Fluctuations in other income and the provision for income taxes contribute to the variability in net income. The slight decrease in net income margin in December 2025 warrants monitoring to determine if it represents a temporary anomaly or the beginning of a new trend.