Arista Networks (ANET) Q3 Financial Results Summary

2025-11-05 · Stocks · QuoteReporter

Arista Networks, Inc. (ANET) Q3 2025 Financial Results Summary

Arista Networks, Inc. (NYSE: ANET) released its financial results for the third quarter ended September 30, 2025, on November 4, 2025.

Financial Highlights

Revenue:
$2.308 billion, a 4.7% increase from Q2 2025.
A 27.5% increase compared to Q3 2024.
GAAP Gross Margin:
64.6%, down from 65.2% in Q2 2025, but up from 64.2% in Q3 2024.
Non-GAAP Gross Margin:
65.2%, down from 65.6% in Q2 2025, and up from 64.6% in Q3 2024.
GAAP Net Income:
$853.0 million, or $0.67 per diluted share, an increase from $747.9 million or $0.58 per diluted share in Q3 2024.
Non-GAAP Net Income:
$962.3 million, or $0.75 per diluted share, up from $769.0 million or $0.60 per diluted share in Q3 2024.
Non-GAAP EPS Growth:
25% growth compared to the same quarter last year.

Company Highlights

Leadership Appointments:
Kenneth Duda appointed as President and Chief Technology Officer.
Tyson Lamoreaux appointed as Senior Vice President of Cloud and AI Networking.
Industry Collaboration:
Announced collaboration with industry leaders to deliver Ethernet for Scale-Up Networks (ESUN), focused on open standards-based solutions.
AI Innovations:
Introduced AI agents for streamlined network operations leveraging open standards like MCP and Arista’s EOS and NetDL.
Launched an observability blueprint, Arista CloudVision AI, for enhanced visibility and intelligence across networks.

Financial Outlook for Q4 2025

Expected revenue: $2.3 – $2.4 billion.
Expected non-GAAP gross margin: 62 – 63%.
Expected non-GAAP operating margin: 47 – 48%.

Stock and Dividends

Arista Networks announced a share repurchase of $983.0 million in Q3 2025.
No quarterly dividend was declared during this period.

Operational Metrics

Product Revenue:
$1.911 billion, a 25.5% increase from Q3 2024’s $1.524 billion.
Service Revenue:
$396.6 million, up from $287.1 million in Q3 2024, marking an increase of 38.0%.
Total Cost of Revenue:
$818.1 million, increased from $649.2 million in Q3 2024, an increase of 26.0%.
Gross Profit:
$1.490 billion, increasing from $1.162 billion in Q3 2024 by 28.3%.
Operating Expenses:
Total operating expenses stood at $512.0 million, up from $376.4 million in Q3 2024, reflecting a 36.0% rise.
Income from Operations:
$978.2 million, compared to $785.3 million in Q3 2024, representing a 24.6% gain.

Balance Sheet Overview

Total Current Assets: $15.185 billion as of September 30, 2025, up from $11.911 billion at the end of 2024.
Total Liabilities: $6.142 billion as of September 30, 2025, compared to $4.049 billion previously.
Stockholders’ Equity: Increased to $11.907 billion from $9.995 billion.

Cash Flow Metrics

Net Cash Provided by Operating Activities:
$3.110 billion for the nine months ended September 30, 2025, as compared to $2.677 billion for the same period in 2024.
Net Cash Used in Investing Activities:
$(2.577) billion, up from $(1.147) billion in 2024.
Net Cash Used in Financing Activities:
$(970.4) million, increasing from $(291.8) million in the previous year.

Arista Networks continues to demonstrate strong financial performance, innovation in networking technology, and strategic leadership, positioning itself effectively in the industry for future growth.

Condensed Consolidated Income Statements

(Unaudited, in millions, except per share amounts)

Revenue:	Three Months Ended September 30,		Nine Months Ended September 30,
	2025	2024	2025	2024
Product	$1,911.7	$1,523.8	$5,481.2	$4,275.9
Service	396.6	287.1	1,036.7	796.8
Total revenue	2,308.3	1,810.9	6,517.9	5,072.7
Cost of revenue:
Product	745.5	593.3	2,125.5	1,655.4
Service	72.6	55.9	187.5	157.0
Total cost of revenue	818.1	649.2	2,313.0	1,812.4
Gross profit	1,490.2	1,161.7	4,204.9	3,260.3
Operating expenses:
Research and development	326.0	235.8	888.9	711.7
Sales and marketing	151.2	106.8	394.3	316.3
General and administrative	34.8	33.8	98.5	87.3
Total operating expenses	512.0	376.4	1,381.7	1,115.3
Income from operations	978.2	785.3	2,823.2	2,145.0
Other income (expense), net	98.9	97.6	289.1	231.1
Income before income taxes	1,077.1	882.9	3,112.3	2,376.1
Provision for income taxes	224.1	134.9	556.7	325.0
Net income	$853.0	$748.0	$2,555.6	$2,051.1
Net income per share(1):
Basic	$0.68	$0.59	$2.03	$1.63
Diluted	$0.67	$0.58	$2.00	$1.60
Weighted-average shares used in computing net income per share(1):
Basic	1,258.0	1,257.9	1,258.1	1,255.0
Diluted	1,276.6	1,281.8	1,275.7	1,280.3

(1) Prior period results have been adjusted to reflect the four-for-one stock split effected in December 2024.

Condensed Consolidated Balance Sheets

(Unaudited, in millions)

ASSETS	September 30, 2025	December 31, 2024
CURRENT ASSETS:
Cash and cash equivalents	$2,326.6	$2,762.4
Marketable securities	7,779.6	5,541.1
Accounts receivable	1,489.4	1,140.5
Inventories	2,155.7	1,834.6
Prepaid expenses and other current assets	1,433.5	632.3
Total current assets	15,184.8	11,910.9
Property and equipment, net	172.6	98.8
Goodwill	416.2	268.5
Deferred tax assets	1,665.4	1,440.4
Other assets	609.8	325.3
TOTAL ASSETS	$18,048.8	$14,043.9
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$481.0	$381.1
Accrued liabilities	471.0	435.3
Deferred revenue	3,520.7	1,727.3
Other current liabilities	193.9	188.5
Total current liabilities	4,666.6	2,732.2
Deferred revenue, non-current	1,165.5	1,064.1
Other long-term liabilities	309.6	252.8
TOTAL LIABILITIES	6,141.7	4,049.1
STOCKHOLDERS’ EQUITY:
Common stock	$0.1	$0.1
Additional paid-in capital	2,784.1	2,465.4
Retained earnings	9,115.1	7,542.5
Accumulated other comprehensive income (loss)	7.8	-13.2
TOTAL STOCKHOLDERS’ EQUITY	11,907.1	9,994.8
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$18,048.8	$14,043.9