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Arista Networks, Inc.

ANET Technology Computer Hardware

Arista Networks, Inc.’s revenue for fiscal 2025 (year ended December 2025) was $9.0 billion, up 28.6% from fiscal 2024. In the quarter to June 2026, revenue grew 37.7%, EPS grew 35.2% and free cash flow fell 10.4%, each against the same quarter a year earlier. Member of the S&P 500; revenue growth for five consecutive years, operating cash flow growth for three.

210.88 5.86 −2.70%
Market cap
$273.4B
P/E
65.7×
Fwd P/E
46.1×
Dividend yield
—
F-score
4/9
Altman Z
16.45
Beneish M
−2.24
Dividend safety
n/a
Overview Business Profile Financial Analysis Income Statement Balance Sheet Cash Flow Metrics & Ratios Filings 10-Q 10-K

Arista Networks, Inc. (ANET) Financial Analysis

Updated · Covers results through Q2 FY2026 · Sources · How this is made

Snapshot

Arista Networks generated revenue of $9.0 billion, gross profit of $5.8 billion, operating income of $3.9 billion and net income of $3.5 billion in FY2025. Diluted EPS was $2.75 and free cash flow was $4.3 billion in FY2025.

In Q2 FY2026, revenue was $3.0 billion, gross profit was $1.9 billion, operating income was $1.4 billion and net income was $1.2 billion. Diluted EPS was $0.95 and free cash flow was $1.1 billion in Q2 FY2026. Revenue over the TTM to Q2 FY2026 was $10.5 billion, while net income over the TTM to Q2 FY2026 was $4.0 billion.

Growth

Revenue increased 28.6% in FY2025 against FY2024, reaching $9.0 billion in FY2025. Revenue compound annual growth was 27.1% in FY2022–FY2025 and 31.2% in FY2020–FY2025. Diluted EPS increased 23.3% in FY2025 against FY2024 to $2.75 in FY2025, with compound annual growth of 37.1% in FY2022–FY2025 and 40.7% in FY2020–FY2025.

Free cash flow increased 15.7% in FY2025 against FY2024 to $4.3 billion in FY2025. In Q2 FY2026, revenue increased 12.1% against Q1 FY2026 and 37.7% against Q2 FY2025, while diluted EPS increased 18.7% against Q1 FY2026 and 35.7% against Q2 FY2025. Free cash flow declined 35.7% against Q1 FY2026 and 10.4% against Q2 FY2025 in Q2 FY2026.

Profitability

Gross margin was 64.1% in FY2025, with a change of −0.1 percentage points in FY2024–FY2025 and 0.1 percentage points in FY2020–FY2025. Operating margin was 42.8% in FY2025, rising by 0.8 percentage points in FY2024–FY2025 and 12.6 percentage points in FY2020–FY2025. Pre-tax margin was 47.2% in FY2025, up 0.6 percentage points in FY2024–FY2025 and 15.3 percentage points in FY2020–FY2025.

Net margin was 39.0% in FY2025, declining by −1.7 percentage points in FY2024–FY2025 but rising by 11.6 percentage points in FY2020–FY2025. Return on equity was 31.4%, return on assets was 21.0%, and return on invested capital was 148.1% in FY2025. In Q2 FY2026, gross margin was 62.9% and operating margin was 45.4%.

Balance sheet

Cash and short-term investments were $10.7 billion, working capital was $11.0 billion and shareholders’ equity was $12.4 billion in FY2025. Net debt was −$10.7 billion in FY2025, following −$8.3 billion in FY2024. Total debt was $44.0 million in FY2022, the latest fiscal-year total debt figure reported.

Net debt was −$13.3 billion in Q2 FY2026, compared with −$12.4 billion in Q1 FY2026. The current ratio was 3.0× and debt to equity was 0.0× in Q2 FY2026. Management states that existing cash, cash equivalents and marketable securities, together with cash from operations, are expected to meet working-capital requirements and growth strategies for the foreseeable future.

Cash flow & capital return

Operating cash flow was $4.4 billion in FY2025, increasing 17.9% in FY2025 against FY2024. Capital expenditure was $119.5 million and free cash flow was $4.3 billion in FY2025. Free cash flow represented 121.1% of net income in FY2025.

Operating cash flow over the TTM to Q2 FY2026 was $5.3 billion, up 31.1% against the TTM to Q2 FY2025. Free cash flow over the TTM to Q2 FY2026 was $5.2 billion, up 29.7% against the TTM to Q2 FY2025. Net share repurchases were $1.5 billion in FY2025. Weighted average shares were 1.3 billion shares in FY2025 and 1.3 billion shares in Q2 FY2026. Management states that it does not expect to pay cash dividends in the foreseeable future.

Valuation

Market capitalisation was $258.2 billion as of September 28, 2026. P/E was 63.8× as of September 28, 2026, higher than the 46.8× five-year median and 38.0× ten-year median measured as of September 28, 2026. It was also higher than the 20.2× industry median as of September 28, 2026.

P/S was 24.5×, P/B was 17.5×, EV/Sales was 23.2× and EV/Cash flow was 47.6× as of September 28, 2026. Each was higher than its own five-year and ten-year median as of September 28, 2026. P/S, P/B and EV/Sales were also higher than their respective industry medians as of September 28, 2026. Relative to the company’s five-year medians as of September 28, 2026, P/S was 1.6×, P/B was 1.6×, EV/Sales was 1.7× and EV/Cash flow was 1.3×.

What changed since last quarter

In Q2 FY2026, revenue was $3.0 billion, increasing 12.1% against Q1 FY2026 and 37.7% against Q2 FY2025. Management attributes the year-over-year revenue increase to customer demand and higher shipments of switching and routing platforms, alongside growth in support contracts as the installed base expanded. Diluted EPS was $0.95 in Q2 FY2026, up 18.7% against Q1 FY2026 and 35.7% against Q2 FY2025.

Gross margin was 62.9% in Q2 FY2026, up 1.0 percentage point against Q1 FY2026 but down −2.3 percentage points against Q2 FY2025. Management attributes the year-over-year gross-margin decline to a greater proportion of sales to large end customers that generally receive higher discounts. Operating margin was 45.4% in Q2 FY2026, up 2.7 percentage points sequentially and 0.7 percentage points year over year. Free cash flow was $1.1 billion in Q2 FY2026, down against both comparison periods.

Open questions

  • How will the timing and size of orders from large customers affect quarterly revenue patterns?
  • How will customer trials and contracts with acceptance periods affect revenue recognition and inventory?
  • How will supply conditions, trade measures and component availability affect product costs and fulfillment?
  • How will the mix of large-customer sales affect gross margin?

Sources

This page is for information only. It is not investment advice, a recommendation or an offer to buy or sell any security. Figures come from the sources listed above and may contain errors; verify against the company's filings.