Arista Networks Inc. (NYSE:ANET)

The financial results over the five-year period demonstrate a consistent upward trajectory in key performance metrics.

Revenue

Overall revenue increased markedly from approximately $2.32 billion in 2020 to $7.00 billion in 2024. Revenue from product sales showed strong growth, rising from $1.83 billion to $5.88 billion, while service revenue also increased substantially, more than doubling from around $487 million to $1.12 billion. The combined effect was a significant expansion of the total revenue base.

Cost of Revenue

Costs associated with product sales escalated from approximately $750 million to $2.30 billion over the period, reflecting the higher volume of products sold. Similarly, service costs increased steadily from $85.7 million to about $213 million. The total cost of revenue thereby rose sharply in alignment with revenue growth, reaching $2.51 billion in 2024.

Gross Profit

Gross profit expanded considerably, more than tripling from about $1.48 billion to $4.49 billion in 2024. This reflects both increased sales and effective management of cost structures relative to revenue growth, resulting in strong gross margin improvements.

Operating Expenses

Operating expenses grew steadily but at a slower rate compared to gross profit. Research and development costs increased from $487 million to nearly $1 billion, signaling sustained investment in innovation. Sales and marketing expenses rose from $229 million to $427 million, and general and administrative costs also increased modestly from $66 million to $123 million. Total operating expenses escalated from $782 million to $1.55 billion, representing disciplined expense management amidst expansion.

Operating Income

Income from operations showed robust growth, increasing more than fourfold from roughly $700 million to nearly $2.94 billion. The growth rate outpaced that of both revenue and expenses, indicating improved operational efficiency and profitability.

Other Income and Interest

Interest income and other income contributions were relatively volatile but generally increased, particularly from 2022 onwards. Interest income rose from $7.2 million in 2021 to $311 million in 2024, contributing materially to overall profitability. Other income net also moved positively, reaching over $320 million in 2024.

Income Before Taxes and Net Income

Pre-tax income expanded strongly, from $739 million in 2020 to over $3.26 billion in 2024. Provision for income taxes increased correspondingly but at a lower proportional rate, rising from $104 million to $413 million, indicating a fairly stable effective tax rate. Net income more than quadrupled, from $635 million to $2.85 billion, underscoring the company's significant profitability improvement over the analyzed period.

In summary, the company exhibited consistent growth in revenue, cost of revenue, and operating expenses, combined with substantial improvements in gross profit and operating income. Effective cost management and growing other income streams contributed to rising net income, highlighting strong overall financial health and operational performance trends.