01—Abstract
Summary
Summary of the 8-K filed February 18, 2025. Cited figures are marked; the original filing is the authoritative source.
Arista Networks reported strong fourth-quarter and full-year 2024 results on February 18, 2025, with full-year revenue of $7.003 billiona, up 19.5% year over year, and fourth-quarter revenue of $1.930 billion, up 25.3% from the prior-year quarter and 6.6% sequentially.
Profitability improved meaningfully: full-year GAAP gross margin expanded to 64.1% from 61.9%, GAAP operating margin rose to 42.0% from 38.5%, and GAAP diluted EPS reached $2.23b versus $1.65 (all per-share figures adjusted for the December 2024 four-for-one stock split). Operating cash flow was $3.71 billion for the year, up from $2.03 billion, driven largely by a $1.29 billion increase in deferred revenue, which is a notable signal of forward demand but also a item to monitor for revenue recognition timing. The balance sheet remains very strong, with cash, equivalents and marketable securities totaling roughly $8.3 billion at year-end, against total liabilities of about $4.0 billion.
Management used some of this capacity for buybacks, repurchasing $424 millionc of common stock in 2024 versus $112 million in 2023. Inventory declined slightly, which supports the view that supply management has improved. The first-quarter 2025 outlook calls for revenue of $1.93 billion to $1.97 billion, non-GAAP gross margin of about 63% and non-GAAP operating margin of about 44%.
Guidance implies roughly flat sequential revenue and a modest step-down in gross margin from the 64.2%d non-GAAP level in Q4 2024, so investors will focus on whether AI and campus demand can sustain growth and margins as the company scales. Note that this 8-K is furnished, not filed, and the financial figures are unaudited.
02—Key points
Key Highlights
- Full-year 2024 revenue reached $7.003 billion, up 19.5%; Q4 revenue of $1.930 billion rose 25.3% year over year.
- GAAP gross margin expanded to 64.1% for the year (from 61.9%), and GAAP operating margin improved to 42.0% (from 38.5%).
- GAAP diluted EPS was $2.23 for 2024 versus $1.65 in 2023; non-GAAP diluted EPS was $2.27 versus $1.73.
- Operating cash flow nearly doubled to $3.71 billion, supported by a $1.29 billion increase in deferred revenue, including $1.73 billion current deferred revenue at year-end.
- Liquidity is strong, with about $8.3 billion in cash and marketable securities against $4.0 billion in total liabilities; the company repurchased $424 million of stock in 2024.
- Q1 2025 guidance of $1.93–$1.97 billion revenue, roughly 63% non-GAAP gross margin and about 44% non-GAAP operating margin indicates flat sequential revenue and a margin step-down.
- Four-for-one stock split was completed in December 2024, with trading on a split-adjusted basis beginning December 4, 2024.
03—Questions
Frequently Asked Questions
How did Arista perform in 2024 compared with 2023?
Revenue grew 19.5% to $7.003 billion, GAAP net income rose to $2.852 billion from $2.087 billion, and GAAP operating income increased to $2.945 billion from $2.257 billion. Margins expanded across the board, with GAAP gross margin up to 64.1% and GAAP operating margin up to 42.0%.
What is Arista's outlook for the first quarter of 2025?
Management expects Q1 2025 revenue of $1.93 billion to $1.97 billion, non-GAAP gross margin of about 63%, and non-GAAP operating margin of about 44%. The midpoint of revenue guidance is roughly flat with Q4 2024, and the gross margin outlook is below Q4's 64.2% non-GAAP level.
Why did operating cash flow increase so sharply?
Operating cash flow rose to $3.71 billion from $2.03 billion, primarily because deferred revenue increased by $1.29 billion, reflecting customer prepayments and billings ahead of revenue recognition. Higher net income also contributed. Investors should note that deferred revenue growth can reverse if billings slow or timing shifts.
How strong is Arista's balance sheet and how is it returning capital?
At December 31, 2024, the company held $2.76 billion in cash and equivalents and $5.54 billion in marketable securities, against total liabilities of $4.05 billion and stockholders' equity of $9.99 billion. It repurchased $424 million of common stock during 2024, up from $112 million in 2023.
Are the reported financial figures audited, and how should non-GAAP metrics be viewed?
The financial statement tables in this release are unaudited. Non-GAAP measures exclude stock-based compensation, intangible amortization, legal settlements, strategic investment gains and certain tax effects. Stock-based compensation was $355 million in 2024, so the GAAP and non-GAAP figures differ meaningfully and both should be considered.
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