0001596532False00015965322024-07-302024-07-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM 8-K
____________________________

 
CURRENT REPORT
 
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): July 30, 2024
___________________________________________________
ARISTA NETWORKS, INC.
(Exact name of registrant as specified in its charter)
___________________________________________________
Delaware 001-36468 20-1751121
(State or other jurisdiction of
incorporation)		 (Commission File Number) (IRS Employer Identification
No.)

5453 Great America Parkway
Santa Clara, CA 95054
(Address of principal executive offices) (Zip Code)
 
(408) 547-5500
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 par valueANETNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
☐



ITEM 2.02    Results of Operations and Financial Condition
    On July 30, 2024, Arista Networks, Inc. issued a press release announcing its financial results for the quarter ended June 30, 2024. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
    This information and Exhibit 99.1 are intended to be furnished under Item 2.02, “Results of Operations and Financial Condition,” and Item 9.01, “Financial Statements and Exhibits,” of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
ITEM 9.01    Financial Statements and Exhibits
(d)    Exhibits

Exhibit No.Description
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


ARISTA NETWORKS, INC.
July 30, 2024
/s/ CHANTELLE BREITHAUPT
Chantelle Breithaupt
Chief Financial Officer
(Senior Vice President)



Exhibit 99.1
Arista Networks, Inc. Reports Second Quarter 2024 Financial Results
SANTA CLARA, Calif.- July 30, 2024 -- Arista Networks, Inc. (NYSE: ANET), an industry leader in data-driven, client-to-cloud networking for large AI, data center, campus and routing environments, today announced financial results for its second quarter ended June 30, 2024.
Second Quarter Financial Highlights
“On the heels of our June celebration of 10 years as a public company, I would again like to thank our customers, employees and partners for contributing to our success as we arrived at this important milestone,” said Jayshree Ullal, Chairperson and CEO of Arista Networks. “Our Q2 2024 financial results demonstrate Arista's powerful combination of growth, profitability and best of breed platforms.”
•Revenue of $1.690 billion, an increase of 7.6% compared to the first quarter of 2024, and an increase of 15.9% from the second quarter of 2023.
•GAAP gross margin of 64.9%, compared to GAAP gross margin of 63.7% in the first quarter of 2024 and 60.6% in the second quarter of 2023.
•Non-GAAP gross margin of 65.4%, compared to non-GAAP gross margin of 64.2% in the first quarter of 2024 and 61.3% in the second quarter of 2023.
•GAAP net income of $665.4 million, or $2.08 per diluted share, compared to GAAP net income of $491.9 million, or $1.55 per diluted share in the second quarter of 2023.
•Non-GAAP net income of $672.6 million, or $2.10 per diluted share, compared to non-GAAP net income of $501.2 million, or $1.58 per diluted share in the second quarter of 2023.
Commenting on the company's financial results, Chantelle Breithaupt, Arista’s CFO said, "We achieved an EPS increase of 33% in Q2 2024 compared to the same period last year, driven by our strong revenue and gross margin performance."
Company Highlights
•Arista Launches Next Generation Multi-Domain Segmentation for Zero Trust Networking - Arista announced a significant update to its Arista MSSⓇ (Multi-Domain Segmentation Service) offerings that address the challenge of creating a truly enterprise-wide zero trust network. Without the need for endpoint software agents and proprietary network protocols, Arista MSS enables effective microperimeters that restrict lateral movement in campus and data center networks and thus reduces the blast radius of security breaches such as ransomware.
•Arista Delivers Holistic AI Solutions in Collaboration with NVIDIA - Arista announced a technology demonstration of AI Data Centers in order to align compute and network domains as a single managed AI entity, in collaboration with NVIDIA. In order to build optimal generative AI networks with lower job completion times, customers can configure, manage, and monitor AI clusters uniformly across key building blocks including networks, NICs, and servers.
•Arista Unveils Etherlink AI Networking Platforms - Arista announced the Arista Etherlink™ AI platforms, designed to deliver optimal network performance for the most demanding AI workloads, including training and inferencing. Powered by new AI-optimized Arista EOS features, the Arista Etherlink AI portfolio supports AI cluster sizes ranging from thousands to 100,000s of XPUs with highly efficient one and 2-tier network topologies that deliver superior application performance compared to more complex multi-tier networks while offering advanced monitoring capabilities including flow-level visibility.
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Financial Outlook
For the third quarter of 2024, we expect:
•Revenue between $1.72 billion to $1.75 billion
•Non-GAAP gross margin of approximately 63% - 64%; and
•Non-GAAP operating margin of approximately 44%.
Guidance for non-GAAP financial measures excludes certain items, including stock-based compensation expense, amortization of acquisition-related intangible assets, and potential non-recurring charges or benefits. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort because these exclusions can be uncertain or difficult to predict, including stock-based compensation expense which is impacted by the timing of employee stock transactions, the company’s future hiring and retention needs and the future fair market value of the company’s common stock. The actual amount of these exclusions will have a significant impact on the company’s GAAP gross margin and GAAP operating margin.
Prepared Materials and Conference Call Information
Arista's executives will discuss the second quarter 2024 financial results on a conference call at 1:30 p.m. Pacific time today. To listen to the call via telephone, dial (888) 330-2502 in the United States or +1 (240) 789-2713 from international locations. The Conference ID is 5655862.
The financial results conference call will also be available via live webcast on Arista's investor relations website at https://investors.arista.com/. Shortly after the conclusion of the conference call, a replay of the audio webcast will be available on Arista’s investor relations website.
Forward-Looking Statements
This press release contains “forward-looking statements” regarding our future performance, including quotations from management, statements in the section entitled “Financial Outlook,” such as estimates regarding revenue, non-GAAP gross margin and non-GAAP operating margin for the third quarter of 2024 and statements regarding the benefits of Arista's products. Forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause actual results, performance or achievements to differ materially from those anticipated in or implied by the forward-looking statements including risks associated with: large purchases by a limited number of customers who represent a substantial portion of our revenue; adverse economic and geopolitical conditions and conflicts, including inflationary pressures which result in increased component costs and reduced information technology and network infrastructure spending, the Russia/Ukraine, Israel/Hamas conflicts, the Houthi attacks on marine vessels in the Red Sea and the outcome of the upcoming U.S. presidential election; changes in our customers technology roadmaps and priorities including the need for the deployment of artificial intelligence (“AI”) and related technologies; the impact of sole or limited sources of supply, supply shortages and extended lead times or supply changes; volatility in our revenue growth rate; variations in our results of operations; the rapid evolution of the networking market; failure to successfully carry out new products and service offerings and expand into adjacent markets; variability in our gross margins; intense competition and industry consolidation; expansion of our international sales and operations; investments in or acquisitions of other businesses; seasonality and industry cyclicality; fluctuations in currency exchange rates; failure to raise additional capital on favorable terms; our inability to attract new large customers or sell additional products and services to our existing customers; sales of our switches generating most of our product revenue; large customers requiring more favorable terms; inability to increase market awareness or acceptance of our new products and services; the inclusion of any acceptance provisions in our customer contracts and any delays in acceptance, or rejection, of those products; decreases in the sales prices of our products and services; long and unpredictable sales cycles; declines in maintenance renewals by customers; product quality problems; failure to anticipate technological shifts;
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managing the supply of our products and product components; our dependence on third-party manufacturers to build our products; assertions by third parties of intellectual property rights infringement; failure or inability to protect or assert our intellectual property rights; defects, errors or vulnerabilities in our products, the failure of our products to detect security breaches or incidents, the misuse of our products or the risks or product liability; enhanced U.S. tax, tariff, import/export restrictions, Chinese regulations or other trade barriers; failure to comply with government law and regulations; issues in the development and use of artificial intelligence, combined with an uncertain regulatory environment; and other future events. Additional risks and uncertainties that could affect us can be found in our most recent filings with the Securities and Exchange Commission including, but not limited to, our annual report on Form 10-K and quarterly reports on Form 10-Q. You can locate these reports through our website at https://investors.arista.com/ and on the SEC’s website at https://www.sec.gov/. All forward-looking statements in this press release are based on information available to the company as of the date hereof and we disclaim any obligation to publicly update or revise any forward-looking statement to reflect events that occur or circumstances that exist after the date on which they were made.
Non-GAAP Financial Measures
This press release and accompanying table contain certain non-GAAP financial measures including non-GAAP gross profit, non-GAAP gross margin, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income and non-GAAP diluted net income per share. These non-GAAP financial measures exclude stock-based compensation expense, amortization of acquisition-related intangibles, gains/losses on strategic investments, and the income tax effect of these non-GAAP exclusions. In addition, non-GAAP financial measures exclude net tax benefits associated with stock-based awards, which include excess tax benefits, and other discrete indirect effects of such awards. The company uses these non-GAAP financial measures internally in analyzing its financial results and believes that these non-GAAP financial measures are useful to investors as an additional tool to evaluate ongoing operating results and trends. In addition, these measures are the primary indicators management uses as a basis for its planning and forecasting for future periods.
Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for the comparable GAAP financial measures. Non-GAAP financial measures are subject to limitations, and should be read only in conjunction with the company's consolidated financial statements prepared in accordance with GAAP. Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similarly titled measures presented by other companies. A description of these non-GAAP financial measures and a reconciliation of the company’s non-GAAP financial measures to their most directly comparable GAAP measures have been provided in the financial statement tables included in this press release, and investors are encouraged to review the reconciliation.
About Arista Networks
Arista Networks is an industry leader in data-driven, client-to-cloud networking for large AI, data center, campus and routing environments. Its award-winning platforms deliver availability, agility, automation, analytics, and security through an advanced network operating stack. For more information, visit www.arista.com.
ARISTA, MSS, EOS and Etherlink are among the registered and unregistered trademarks of Arista Networks, Inc. in jurisdictions around the world. Other company names or product names may be trademarks of their respective owners.


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ARISTA NETWORKS, INC.
Condensed Consolidated Income Statements
(Unaudited, in thousands, except per share amounts)
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Revenue:
Product$1,423,271 $1,261,537 $2,752,116 $2,433,631 
Service 267,129 197,387 509,658 376,644 
Total revenue1,690,400 1,458,924 3,261,774 2,810,275 
Cost of revenue:
Product540,393 533,613 1,062,072 1,042,475 
Service 52,794 41,182 101,110 79,164 
Total cost of revenue593,187 574,795 1,163,182 1,121,639 
Gross profit 1,097,213 884,129 2,098,592 1,688,636 
Operating expenses:
Research and development 267,482 229,676 475,877 431,084 
Sales and marketing 104,403 97,971 209,483 191,463 
General and administrative 25,755 26,420 53,518 51,449 
Total operating expenses 397,640 354,067 738,878 673,996 
Income from operations699,573 530,062 1,359,714 1,014,640 
Other income (expense), net 70,863 56,339 133,483 68,485 
Income before income taxes770,436 586,401 1,493,197 1,083,125 
Provision for income taxes105,008 94,516 190,077 154,767 
Net income$665,428 $491,885 $1,303,120 $928,358 
Net income per share:
Basic $2.12 $1.59 $4.16 $3.02 
Diluted $2.08 $1.55 $4.07 $2.94 
Weighted-average shares used in computing net income per share:
Basic 313,711 308,636 313,372 307,810 
Diluted 319,921 316,485 319,893 316,031 

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ARISTA NETWORKS, INC.
Reconciliation of Selected GAAP to Non-GAAP Financial Measures
(Unaudited, in thousands, except percentages and per share amounts)
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
GAAP gross profit$1,097,213 $884,129 $2,098,592 $1,688,636 
GAAP gross margin64.9 %60.6 %64.3 %60.1 %
Stock-based compensation expense3,983 2,824 7,433 5,799 
Intangible asset amortization4,195 6,820 8,390 13,640 
Non-GAAP gross profit$1,105,391 $893,773 $2,114,415 $1,708,075 
Non-GAAP gross margin65.4 %61.3 %64.8 %60.8 %
GAAP income from operations$699,573 $530,062 $1,359,714 $1,014,640 
Stock-based compensation expense79,292 67,127 156,507 130,008 
Intangible asset amortization6,690 9,315 13,380 18,630 
Non-GAAP income from operations$785,555 $606,504 $1,529,601 $1,163,278 
Non-GAAP operating margin46.5 %41.6 %46.9 %41.4 %
GAAP net income $665,428 $491,885 $1,303,120 $928,358 
Stock-based compensation expense79,292 67,127 156,507 130,008 
Intangible asset amortization6,690 9,315 13,380 18,630 
Gain on strategic investments— (24,743)— (19,172)
Tax benefits on stock-based awards (64,548)(37,832)(135,381)(87,894)
Income tax effect on non-GAAP exclusions(14,218)(4,519)(27,266)(16,235)
Non-GAAP net income$672,644 $501,233 $1,310,360 $953,695 
GAAP diluted net income per share $2.08 $1.55 $4.07 $2.94 
Non-GAAP adjustments to net income 0.02 0.03 0.03 0.08 
Non-GAAP diluted net income per share$2.10 $1.58 $4.10 $3.02 
Weighted-average shares used in computing diluted net income per share 319,921 316,485 319,893 316,031 
Summary of Stock-Based Compensation Expense:
Cost of revenue$3,983 $2,824 $7,433 $5,799 
Research and development50,769 41,137 94,557 77,706 
Sales and marketing16,769 15,833 35,670 30,971 
General and administrative7,771 7,333 18,847 15,532 
Total$79,292 $67,127 $156,507 $130,008 

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ARISTA NETWORKS, INC.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
June 30, 2024December 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $2,429,031 $1,938,606 
Marketable securities3,844,923 3,069,362 
Accounts receivable, net1,226,795 1,024,569 
Inventories 1,853,776 1,945,180 
Prepaid expenses and other current assets 487,793 412,518 
Total current assets 9,842,318 8,390,235 
Property and equipment, net96,282 101,580 
Acquisition-related intangible assets, net75,388 88,768 
Goodwill268,531 268,531 
Deferred tax assets 1,177,172 945,792 
Other assets163,544 151,900 
TOTAL ASSETS $11,623,235 $9,946,806 
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable $297,832 $435,059 
Accrued liabilities 320,071 407,302 
Deferred revenue 1,329,450 915,204 
Other current liabilities 214,526 152,041 
Total current liabilities 2,161,879 1,909,606 
Income taxes payable 107,833 95,751 
Deferred revenue, non-current789,336 591,000 
Other long-term liabilities 133,379 131,390 
TOTAL LIABILITIES 3,192,427 2,727,747 
STOCKHOLDERS’ EQUITY:
Common stock31 31 
Additional paid-in capital 2,263,356 2,108,331 
Retained earnings 6,182,479 5,114,025 
Accumulated other comprehensive income (loss)(15,058)(3,328)
TOTAL STOCKHOLDERS’ EQUITY 8,430,808 7,219,059 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $11,623,235 $9,946,806 

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ARISTA NETWORKS, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Six Months Ended June 30,
20242023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,303,120 $928,358 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and other31,112 39,227 
Stock-based compensation 156,507 130,008 
Noncash lease expense9,292 9,154 
Deferred income taxes (228,460)(130,287)
Gain on strategic investments— (19,172)
Amortization (accretion) of investment premiums (discounts)(27,843)(11,998)
Changes in operating assets and liabilities:
Accounts receivable, net (202,226)143,370 
Inventories 91,404 (574,628)
Other assets(92,577)(120,864)
Accounts payable (136,236)114,905 
Accrued liabilities (87,063)70,418 
Deferred revenue 612,582 43,658 
Income taxes, net74,067 198,100 
Other liabilities (863)(11,676)
Net cash provided by operating activities1,502,816 808,573 
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of marketable securities952,572 1,265,305 
Proceeds from sale of marketable securities36,750 21,725 
Purchases of marketable securities(1,749,308)(1,392,020)
Purchases of property and equipment (12,555)(17,212)
Cash paid for business combinations, net of cash acquired — 1,799 
Investments in notes and privately-held companies(1,000)(4,250)
Net cash used in investing activities (773,541)(124,653)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock under equity plans34,517 30,410 
Tax withholding paid on behalf of employees for net share settlement(35,999)(15,766)
Repurchases of common stock(234,666)(112,279)
Net cash used in financing activities(236,148)(97,635)
Effect of exchange rate changes (2,692)429 
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH490,435 586,714 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH —Beginning of period1,939,464 675,978 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH —End of period$2,429,899 $1,262,692 

Investor Contacts: 

Arista Networks, Inc.
Liz Stine, 408-547-5885
Investor Relations
liz@arista.com
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v3.24.2
Cover Cover
Jul. 30, 2024
Document Information [Line Items]  
Document Type 8-K
Document Period End Date Jul. 30, 2024
Entity Registrant Name ARISTA NETWORKS, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-36468
Entity Tax Identification Number 20-1751121
Entity Address, Address Line One 5453 Great America Parkway
Entity Address, City or Town Santa Clara
Entity Address, State or Province CA
Entity Address, Postal Zip Code 95054
City Area Code 408
Local Phone Number 547-5500
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.0001 par value
Trading Symbol ANET
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0001596532
Amendment Flag false
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