Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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Long-term Activity Ratios (Summary)
Arista Networks Inc., long-term (investment) activity ratios
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset) | ||||||
| Total asset turnover | ||||||
| Equity turnover |
Based on: 10-K (reporting date: 2025-12-31), 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).
An examination of long-term activity ratios reveals fluctuating performance across the observed period. Generally, the company demonstrates a capacity to generate revenue from its assets and equity, though trends are not consistently positive.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio exhibits a significant upward trend from 2021 to 2024, increasing from 37.49 to 70.85. This indicates a growing efficiency in utilizing fixed assets to generate revenue. However, a substantial decrease is observed in 2025, falling to 44.34, suggesting a potential decline in asset utilization efficiency during that year.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- Similar to the standard net fixed asset turnover, this ratio also demonstrates an increasing trend from 2021 to 2024, rising from 20.50 to 46.44. This suggests improved revenue generation relative to total fixed assets, including those acquired through operating leases. The ratio remains constant in 2025 at 44.34, mirroring the decline observed in the standard net fixed asset turnover.
- Total Asset Turnover
- The total asset turnover ratio shows initial improvement from 0.51 in 2021 to 0.65 in 2022, but then declines to 0.59 in 2023 and further to 0.50 in 2024. A continued downward trend is apparent in 2025, with the ratio reaching 0.46. This indicates a decreasing efficiency in generating revenue from all assets held by the company.
- Equity Turnover
- The equity turnover ratio increases from 0.74 in 2021 to 0.90 in 2022, then decreases to 0.81 in 2023 and 0.70 in 2024. A slight recovery is noted in 2025, with the ratio rising to 0.73. This suggests a fluctuating ability to generate revenue from shareholder equity, with a general downward trend over the period.
The divergence in trends between the net fixed asset turnover and the total asset turnover suggests that changes in other asset classes, beyond fixed assets, are influencing overall asset utilization. The decline in both total asset and equity turnover in the later years warrants further investigation to determine the underlying causes and potential implications for future performance.
Net Fixed Asset Turnover
Arista Networks Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue | ||||||
| Property and equipment, net | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Apple Inc. | ||||||
| Cisco Systems Inc. | ||||||
| Dell Technologies Inc. | ||||||
| Super Micro Computer Inc. | ||||||
| Net Fixed Asset Turnover, Sector | ||||||
| Technology Hardware & Equipment | ||||||
| Net Fixed Asset Turnover, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Net fixed asset turnover = Revenue ÷ Property and equipment, net
= ÷ =
2 Click competitor name to see calculations.
The net fixed asset turnover ratio exhibits a generally increasing trend from 2021 to 2023, followed by a significant decline in the most recent year presented. This indicates a changing relationship between revenue generated and the investment in fixed assets.
- Overall Trend
- From 2021 to 2023, the net fixed asset turnover ratio increased consistently, moving from 37.49 to 57.69. This suggests improving efficiency in utilizing fixed assets to generate revenue. However, 2024 shows a substantial increase to 70.85, and 2025 experiences a marked decrease to 44.34. This recent fluctuation warrants further investigation.
- Year-over-Year Changes
- The period between 2021 and 2022 saw an increase of 23.1% in the ratio. The increase from 2022 to 2023 was 25.1%. These increases suggest the company was becoming more effective at generating sales from its existing property, plant, and equipment. The jump from 2023 to 2024 was 23.1%, but the subsequent decline from 2024 to 2025 was 37.6%.
- Revenue and Fixed Asset Relationship
- Revenue increased consistently throughout the period, from US$2,948,037 thousand in 2021 to US$9,005,700 thousand in 2025. Property and equipment, net, also increased, but at a slower rate until 2025, where it experienced a significant jump. The substantial increase in property and equipment in 2025, coupled with a decrease in revenue growth, likely contributed to the lower net fixed asset turnover ratio observed in that year.
- Potential Implications
- The declining ratio in 2025 could indicate several factors. It may suggest overinvestment in fixed assets, a slowdown in sales relative to asset investment, or inefficiencies in asset utilization. Alternatively, the large investment in fixed assets in 2025 may be related to planned future growth that has not yet materialized in revenue. Further analysis is needed to determine the underlying cause.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Arista Networks Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue | ||||||
| Property and equipment, net | ||||||
| Operating lease right-of-use assets (included in Other assets) | ||||||
| Property and equipment, net (including operating lease, right-of-use asset) | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Apple Inc. | ||||||
| Cisco Systems Inc. | ||||||
| Dell Technologies Inc. | ||||||
| Super Micro Computer Inc. | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Technology Hardware & Equipment | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Revenue ÷ Property and equipment, net (including operating lease, right-of-use asset)
= ÷ =
2 Click competitor name to see calculations.
The analysis reveals a consistently increasing trend in revenue alongside fluctuations in net fixed assets, resulting in a significant upward trend in the net fixed asset turnover ratio over the observed period. This indicates increasing efficiency in utilizing fixed assets to generate revenue.
- Revenue
- Revenue demonstrates a strong and consistent upward trajectory, increasing from US$2,948,037 thousand in 2021 to US$9,005,700 thousand in 2025. This represents substantial growth over the five-year period.
- Property and equipment, net (including operating lease, right-of-use asset)
- Net fixed assets experienced an initial increase from US$143,816 thousand in 2021 to US$157,470 thousand in 2023. A slight decrease was observed in 2024 to US$150,801 thousand, followed by a more substantial increase to US$203,100 thousand in 2025. While generally increasing, the asset base did not grow as rapidly as revenue.
- Net fixed asset turnover (including operating lease, right-of-use asset)
- The net fixed asset turnover ratio increased markedly from 20.50 in 2021 to 46.44 in 2024. This signifies a substantial improvement in the efficiency with which the company generates revenue from its fixed asset base. A slight decrease to 44.34 was observed in 2025, though the ratio remains significantly higher than in earlier years. The consistent increase suggests effective asset management and/or a business model requiring relatively lower levels of fixed assets to support revenue growth.
The combination of rising revenue and relatively stable, though ultimately increasing, net fixed assets has driven a significant improvement in the net fixed asset turnover ratio. The slight dip in the ratio in 2025 warrants monitoring to determine if it represents a temporary fluctuation or the beginning of a new trend.
Total Asset Turnover
Arista Networks Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Apple Inc. | ||||||
| Cisco Systems Inc. | ||||||
| Dell Technologies Inc. | ||||||
| Super Micro Computer Inc. | ||||||
| Total Asset Turnover, Sector | ||||||
| Technology Hardware & Equipment | ||||||
| Total Asset Turnover, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Total asset turnover = Revenue ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The total asset turnover ratio exhibits a fluctuating pattern over the five-year period. Initially, the ratio increased before declining, suggesting changes in the efficiency with which assets are used to generate sales.
- Overall Trend
- The total asset turnover ratio demonstrates an initial increase followed by a consistent decline. The ratio moved from 0.51 in 2021 to a peak of 0.65 in 2022, then decreased to 0.46 by 2025.
- 2021 to 2022
- A notable increase in the total asset turnover ratio occurred between 2021 and 2022, rising from 0.51 to 0.65. This indicates improved efficiency in asset utilization during this period, with a greater proportion of sales being generated from each dollar of assets. This improvement coincided with a substantial increase in revenue.
- 2022 to 2025
- From 2022 to 2025, the total asset turnover ratio experienced a consistent downward trend, decreasing from 0.65 to 0.46. While revenue continued to increase in absolute terms, the rate of revenue growth did not outpace the growth in total assets. This suggests that the company required increasingly larger asset bases to generate additional sales, potentially indicating diminishing returns on asset investment or an accumulation of less productive assets.
- Magnitude of Change
- The decline from 2022 to 2025 represents a 29.23% decrease in the total asset turnover ratio. This is a significant reduction, warranting further investigation into the underlying causes. The continued growth in total assets, exceeding the growth in revenue, is the primary driver of this decline.
The observed trend suggests a potential need to evaluate asset management strategies and identify opportunities to improve asset utilization efficiency. Further analysis should investigate the composition of assets and their contribution to revenue generation.
Equity Turnover
Arista Networks Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue | ||||||
| Stockholders’ equity | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Apple Inc. | ||||||
| Cisco Systems Inc. | ||||||
| Dell Technologies Inc. | ||||||
| Super Micro Computer Inc. | ||||||
| Equity Turnover, Sector | ||||||
| Technology Hardware & Equipment | ||||||
| Equity Turnover, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Equity turnover = Revenue ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The equity turnover ratio exhibits fluctuations over the observed five-year period. While revenue consistently increased, the relationship between revenue and stockholders’ equity has varied, resulting in a non-linear pattern in the equity turnover ratio.
- Overall Trend
- The equity turnover ratio generally remained within a relatively narrow range, fluctuating between 0.70 and 0.90. There is no strong, consistent upward or downward trend across the entire period. The ratio experienced an initial increase, followed by declines and a slight recovery.
- Year-over-Year Changes
- From 2021 to 2022, the equity turnover ratio increased from 0.74 to 0.90, indicating a more efficient utilization of equity to generate revenue. However, this was followed by a decrease to 0.81 in 2023. A more pronounced decline occurred between 2023 and 2024, with the ratio falling to 0.70. The ratio showed a modest increase in 2025, reaching 0.73.
- Relationship to Revenue and Equity
- Revenue demonstrated consistent growth throughout the period. Stockholders’ equity also increased each year, but at varying rates. The initial increase in equity turnover (2021-2022) suggests revenue growth outpaced the growth in equity. The subsequent declines (2023-2024) indicate that equity growth began to exceed revenue growth, leading to a less efficient use of equity in generating sales. The slight recovery in 2025 suggests a rebalancing of these growth rates.
The fluctuations in the equity turnover ratio suggest a dynamic relationship between revenue generation and equity financing. Further investigation into the factors driving changes in equity, such as retained earnings, share issuances, and share repurchases, would provide a more comprehensive understanding of these trends.