Stock Analysis on Net

Arista Networks Inc. (NYSE:ANET)

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

Microsoft Excel
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.