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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: Jun 30, 2026 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 85.82 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 14.18 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% 100.00%
Product -34.51 -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 -2.57 -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 -37.07% -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 62.93% 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 -11.47 -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 -4.95 -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 -1.11 -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 -17.53% -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 45.39% 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 4.16 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 49.55% 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 -9.60 -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 39.95% 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: 2026-06-30), 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 operational leverage and expanding profit margins. While revenue composition shifted slightly toward product sales, the most prominent trend is the systemic reduction of operating expenses as a percentage of revenue, which has directly accelerated the growth of operating and net income margins.

Revenue Stream Composition
A shift in the revenue mix is evident, with product revenue increasing from 80.76% in early 2021 to a peak of 86.73% by March 2023, eventually stabilizing between 84% and 86%. Conversely, service revenue declined from approximately 19% to a low of 13.27% in March 2023 before recovering to fluctuate between 14% and 17% in subsequent periods.
Gross Profitability and Cost of Revenue
Gross profit margins have remained relatively resilient, generally oscillating between 59.5% and 65.3%. The cost of revenue peaked as a percentage of sales at 40.47% in March 2023, correlating with the period of lowest gross margin. However, a recovery trend is observed toward the end of the period, with gross margins returning to the 62-65% range.
Operating Expense Efficiency
A consistent downward trend in operating expenses as a percentage of revenue indicates strong economies of scale. Research and development expenses dropped from 19.85% to 11.47%, sales and marketing expenses decreased from 10.64% to 4.95%, and general and administrative costs fell from 2.32% to 1.11%. Total operating expenses were reduced from 32.80% of revenue to 17.53% over the timeframe.
Operating and Net Income Trends
Operating margins expanded significantly, rising from 30.90% in March 2021 to 45.39% by June 2026. This growth was further supported by an increase in other income, which rose from negligible levels to consistently contribute between 4% and 5% of revenue in later quarters. Consequently, net income margins improved from 27.02% to a peak of 41.49%, settling near 39.95% by the end of the period, despite fluctuations in the provision for income taxes.

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