Arista Networks, Inc. stock research
FY2023 Q3
Arista Networks (ANET) Gross Margin — Quarter Ended Sep 30, 2023
Revenue was stable compared to the prior quarter and higher than the same quarter a year ago. Gross profit and gross margin improved both sequentially and year-over-year, as cost of revenue decreased relative to revenue.
Gross margin takeaway
Quarter ended Sep 30, 2023 · FY2023 Q3
Revenue was stable compared to the prior quarter and higher than the same quarter a year ago. Gross profit and gross margin improved both sequentially and year-over-year, as cost of revenue decreased relative to revenue.
- The strongest observable driver of the gross margin improvement was the reduction in cost of revenue as a proportion of revenue.
- Compared to the prior quarter, gross margin increased as revenue was flat and cost of revenue declined. Year-over-year, revenue, gross profit, and gross margin all increased.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
62.4%
Gross profit
$942.4M
Revenue
$1.5B
Cost of revenue
$567.0M
Quarter-over-quarter change
+1.8 pts
Year-over-year change
+2.1 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2023 | $1.4B | $804.5M | $546.8M | 59.5% |
| Jun 30, 2023 | $1.5B | $884.1M | $574.8M | 60.6% |
| Sep 30, 2023 | $1.5B | $942.4M | $567.0M | 62.4% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2023
+1.8 pts
Year-over-year change
Sep 30, 2022
+2.1 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver of the gross margin improvement was the reduction in cost of revenue as a proportion of revenue.
Compared to the prior quarter, gross margin increased as revenue was flat and cost of revenue declined. Year-over-year, revenue, gross profit, and gross margin all increased.
Monitor the trajectory of cost of revenue, as its relative reduction was the key factor in the margin improvement.