Enterprise Value to FCFF (EV/FCFF)
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Free Cash Flow to The Firm (FCFF)
Arista Networks Inc., FCFF calculation
US$ in thousands
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).
The financial information reveals a notable pattern in both net cash provided by operating activities and free cash flow to the firm (FCFF) over the five-year period. A significant fluctuation is observed, with a substantial increase in both metrics from 2022 to 2023, followed by continued growth through 2025.
- Net Cash from Operations
- Net cash provided by operating activities decreased considerably from US$1,015,856 thousand in 2021 to US$492,813 thousand in 2022. However, a strong recovery occurred in 2023, reaching US$2,034,014 thousand. This upward trajectory continued into 2024 and 2025, with values of US$3,708,235 thousand and US$4,371,900 thousand respectively. This indicates improving operational efficiency and cash generation capabilities in the later years of the observed period.
- Free Cash Flow to the Firm (FCFF)
- FCFF mirrored the trend in net cash from operations. It declined from US$951,120 thousand in 2021 to US$448,169 thousand in 2022. A substantial increase was then recorded in 2023, reaching US$1,999,580 thousand. Further growth was evident in 2024 and 2025, with FCFF reaching US$3,676,203 thousand and US$4,252,400 thousand, respectively. The consistent growth in FCFF suggests an increasing ability to fund operations, pursue growth opportunities, and return value to investors.
The correlation between net cash from operations and FCFF is strong, suggesting that changes in operational cash flow are a primary driver of changes in FCFF. The period between 2021 and 2022 represents a period of decreased cash generation, while the subsequent years demonstrate a significant and sustained improvement in both metrics.
Interest Paid, Net of Tax
Arista Networks Inc., interest paid, net of tax calculation
US$ in thousands
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).
2 2025 Calculation
Interest paid, tax = Interest paid × EITR
= × =
The effective income tax rate exhibits fluctuations over the observed period. Beginning at 9.67% in 2021, the rate increased to 14.50% in 2022, followed by a decrease to 13.81% in 2023 and a further decline to 12.65% in 2024. The most recent year, 2025, shows an increase to 17.37%.
- Interest Paid, Net of Tax
- Values for interest paid, net of tax, are not reported for any of the years presented. The absence of this information prevents any analysis of the company’s net interest expense or its impact on profitability.
The variation in the effective income tax rate suggests potential changes in the company’s income mix, tax credits utilized, or applicable tax laws. Further investigation would be required to determine the specific drivers of these fluctuations. The lack of reported interest paid, net of tax, limits a comprehensive assessment of the company’s financial performance and capital structure.
- Tax Rate Trend
- An initial increase in the effective income tax rate is followed by a period of decline, then a final increase. This pattern could indicate temporary factors influencing the tax rate, or a shift in the company’s tax strategy. The 2025 rate represents the highest value within the observed timeframe.
Enterprise Value to FCFF Ratio, Current
Arista Networks Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Apple Inc. | |
| Cisco Systems Inc. | |
| Dell Technologies Inc. | |
| Super Micro Computer Inc. | |
| EV/FCFF, Sector | |
| Technology Hardware & Equipment | |
| EV/FCFF, Industry | |
| Information Technology | |
Based on: 10-K (reporting date: 2025-12-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Arista Networks Inc., historical EV/FCFF 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) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Apple Inc. | ||||||
| Cisco Systems Inc. | ||||||
| Dell Technologies Inc. | ||||||
| Super Micro Computer Inc. | ||||||
| EV/FCFF, Sector | ||||||
| Technology Hardware & Equipment | ||||||
| EV/FCFF, 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).
3 2025 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
The Enterprise Value to Free Cash Flow to the Firm (EV/FCFF) ratio exhibits fluctuations over the observed period. Enterprise Value demonstrates a consistent upward trajectory, while Free Cash Flow to the Firm (FCFF) also generally increases, though with more variability. The resulting EV/FCFF ratio reflects these combined movements.
- Enterprise Value
- Enterprise Value increased substantially from US$36.59 million in 2021 to US$168.41 million in 2025. The most significant increase occurred between 2022 and 2023, rising from US$40.33 million to US$78.00 million. Growth continued, albeit at a slightly reduced rate, through 2025.
- Free Cash Flow to the Firm
- Free Cash Flow to the Firm experienced a decline from US$0.95 million in 2021 to US$0.45 million in 2022. However, it rebounded strongly in subsequent years, reaching US$2.00 million in 2023, US$3.68 million in 2024, and US$4.25 million in 2025. This indicates improving cash generation capabilities.
- EV/FCFF Ratio
- The EV/FCFF ratio was 38.47 in 2021, increased significantly to 89.98 in 2022, then decreased to 39.01 in 2023. Further declines were observed in 2024 (33.39), followed by a slight increase to 39.60 in 2025. The initial increase in 2022 was driven by the decrease in FCFF coupled with the increase in EV. The subsequent declines in 2023 and 2024 are attributable to the faster growth of FCFF relative to Enterprise Value. The stabilization in 2025 suggests a balancing of these forces.
Overall, while Enterprise Value consistently rose, the EV/FCFF ratio’s movement is heavily influenced by the fluctuations in Free Cash Flow to the Firm. The ratio suggests that the market valuation, relative to the cash flow generated, has become more favorable from 2022 to 2024, before stabilizing in the latest year.