Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Arista Networks Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	2,852,054)	2,087,321)	1,352,446)	840,854)	634,557)
Depreciation and amortization	62,038)	70,630)	62,700)	50,334)	35,158)
Stock-based compensation	355,364)	296,756)	230,934)	186,875)	137,042)
Deferred income taxes	(492,874)	(370,796)	(244,382)	(99,290)	(9,144)
Amortization (accretion) of investment premiums (discount)	(60,468)	(33,518)	12,767)	26,847)	10,381)
Other	6,939)	(463)	(8,831)	17,112)	12,806)
Accounts receivable, net	(106,080)	(101,473)	(401,531)	(126,969)	10,673)
Inventories	110,608)	(655,474)	(638,948)	(170,449)	(235,318)
Other assets	(234,242)	(66,401)	(117,465)	(130,222)	(1,001)
Accounts payable	(51,635)	198,612)	31,436)	66,681)	41,161)
Other liabilities	47,823)	123,694)	70,704)	78,187)	19,830)
Deferred revenue	1,285,211)	464,958)	98,957)	278,485)	50,352)
Income taxes, net	(66,503)	20,168)	44,026)	(2,589)	28,617)
Changes in operating assets and liabilities	985,182)	(15,916)	(912,821)	(6,876)	(85,686)
Adjustments to reconcile net income to net cash provided by operating activities	856,181)	(53,307)	(859,633)	175,002)	100,557)
Net cash provided by operating activities	3,708,235)	2,034,014)	492,813)	1,015,856)	735,114)
Proceeds from maturities of marketable securities	2,058,588)	1,887,939)	1,643,824)	1,455,465)	1,545,689)
Proceeds from sale of marketable securities	48,845)	67,284)	193,782)	19,607)	772,978)
Purchases of marketable securities	(4,526,127)	(2,606,878)	(1,418,857)	(2,317,264)	(2,688,064)
Purchases of property, equipment and intangible assets	(32,032)	(34,434)	(44,644)	(64,736)	(15,384)
Cash paid for business combination, net of cash acquired	—)	1,799)	(145,087)	1,299)	(227,420)
Other investing activities	(6,628)	(3,164)	(12,691)	(19,933)	3,399)
Net cash (used in) provided by investing activities	(2,457,354)	(687,454)	216,327)	(925,562)	(608,802)
Proceeds from issuance of common stock under equity plans	60,181)	62,093)	48,411)	67,245)	57,556)
Tax withholding paid on behalf of employees for net share settlement	(58,372)	(33,563)	(32,725)	(16,482)	(8,722)
Repurchase of common stock	(423,619)	(112,279)	(670,287)	(411,645)	(395,173)
Net cash used in financing activities	(421,810)	(83,749)	(654,601)	(360,882)	(346,339)
Effect of exchange rate changes	(4,767)	675)	(3,611)	(1,816)	1,966)
Net increase (decrease) in cash, cash equivalents and restricted cash	824,304)	1,263,486)	50,928)	(272,404)	(218,061)
Cash, cash equivalents and restricted cash, beginning of period	1,939,464)	675,978)	625,050)	897,454)	1,115,515)
Cash, cash equivalents and restricted cash, end of period	2,763,768)	1,939,464)	675,978)	625,050)	897,454)

Based on: 10-K (reporting date: 2024-12-31), 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).

Over the analyzed periods, net income demonstrated a strong upward trend, increasing substantially from 634.6 million US dollars in 2020 to approximately 2.85 billion US dollars by the end of 2024. This notable growth suggests improving profitability and operational efficiency.

Depreciation and amortization expenses progressively rose through 2023, peaking at around 70.6 million US dollars, before slightly declining to 62 million US dollars in 2024. Conversely, stock-based compensation consistently increased each year, reaching 355.4 million US dollars in 2024, indicating ongoing investments in employee incentives and retention.

Deferred income taxes showed increasingly negative values, deepening from -9.1 million US dollars in 2020 to nearly -493 million US dollars in 2024, implying growing deferred tax liabilities or timing differences affecting tax recognition. The amortization (accretion) of investment premiums and discounts fluctuated, with positive values initially transitioning to negative amounts in 2023 and 2024, which may reflect adjustments in investment valuations or debt instruments.

Working capital components presented mixed dynamics. Accounts receivable, net, shifted from positive figures in 2020 to significant negative values in subsequent years, possibly indicating increased billing or collection challenges. Inventories showed negative values initially but reversed to a positive 110.6 million US dollars by 2024, suggesting inventory accumulation or revaluation. Other assets and liabilities displayed volatility; notably, accounts payable spiked to 198.6 million US dollars in 2023 before falling to a negative 51.6 million US dollars in 2024, signaling possible changes in payment policies or supplier relationships. Deferred revenue experienced substantial growth, particularly in 2024 where it more than doubled relative to 2023, reflecting increased advance payments or subscription-based revenues.

Operating cash metrics revealed variable patterns. Despite net income growth, the net cash provided by operating activities declined sharply in 2022 to 492.8 million US dollars, rebounding strongly thereafter to 3.7 billion US dollars by 2024. Adjustments to reconcile net income to net cash mirrored this volatility, with notable negative adjustments in 2022 and 2023 followed by positive swings in 2024, indicative of changes in non-cash items or operating asset and liability movements.

Investing activities showed divergent trends. Proceeds from maturities of marketable securities steadily increased, supporting cash inflows, while purchases of marketable securities markedly intensified in 2024, surpassing 4.5 billion US dollars, signaling aggressive investment or liquidity management strategies. Cash paid for business combinations was irregular, with a significant outflow in 2020 and 2022 but slight inflows or minimal activity in other years. Overall, net cash used in investing activities shifted from negative to positive in 2022 before plunging back to a substantial outflow exceeding 2.4 billion US dollars in 2024.

Financing activities generally consumed cash, with repurchase of common stock peaking at 670.3 million US dollars in 2022, then declining but remaining significant. Issuance of stock under equity plans remained relatively stable, providing modest inflows. Tax withholding payments related to net share settlements trended upward, reaching 58.4 million US dollars in 2024. Consequently, net cash used in financing activities fluctuated but remained negative across all periods.

Cash and cash equivalents fluctuated accordingly. The company experienced notable decreases in 2020 and 2021, followed by substantial increases in 2023 and 2024. The ending cash position nearly tripled from approximately 897 million US dollars at the end of 2020 to over 2.76 billion US dollars by 2024, highlighting enhanced liquidity.

Summary of Key Trends: Consistent and significant growth in net income aligns with improving operational outcomes.; Increasing stock-based compensation and deferred tax liabilities suggest ongoing investments and evolving tax positions.; Fluctuations in working capital elements reflect dynamic business activities and possible shifts in collections, payments, and revenue recognition.; Volatility in operating cash flow adjustments indicates varying non-cash impacts and changes in asset/liability management.; Investment activities became more aggressive in later years, suggesting strategic repositioning of assets.; Financing outflows were dominated by share repurchases, though equity issuances provided some inflows.; Significant improvement in cash reserves demonstrates strengthened liquidity and financial flexibility.

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Arista Networks Inc. (NYSE:ANET)

Cash Flow Statement