Arista Networks, Inc. stock research
FY2023 Q4
Arista Networks (ANET) Gross Margin — Quarter Ended Dec 31, 2023
Revenue was stable compared to the prior quarter, while gross profit increased and cost of revenue decreased, resulting in an improved gross margin. Compared to the same quarter one year earlier, revenue, gross profit, and gross margin were all higher, with cost of revenue also higher.
Gross margin takeaway
Quarter ended Dec 31, 2023 · FY2023 Q4
Revenue was stable compared to the prior quarter, while gross profit increased and cost of revenue decreased, resulting in an improved gross margin. Compared to the same quarter one year earlier, revenue, gross profit, and gross margin were all higher, with cost of revenue also higher.
- The gross margin improved sequentially and year-over-year, driven by a combination of higher gross profit and a lower cost of revenue relative to revenue in the current quarter.
- Compared to the immediately preceding quarter, gross margin strengthened as gross profit rose while cost of revenue fell. Versus the same quarter one year earlier, gross margin was higher, supported by a larger increase in gross profit relative to the increase in cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
64.9%
Gross profit
$999.2M
Revenue
$1.5B
Cost of revenue
$541.2M
Quarter-over-quarter change
+2.4 pts
Year-over-year change
+4.6 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% |
| Dec 31, 2023 | $1.5B | $999.2M | $541.2M | 64.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2023
+2.4 pts
Year-over-year change
Dec 31, 2022
+4.6 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin improved sequentially and year-over-year, driven by a combination of higher gross profit and a lower cost of revenue relative to revenue in the current quarter.
Compared to the immediately preceding quarter, gross margin strengthened as gross profit rose while cost of revenue fell. Versus the same quarter one year earlier, gross margin was higher, supported by a larger increase in gross profit relative to the increase in cost of revenue.
Monitor the trajectory of cost of revenue, which declined sequentially but increased year-over-year, as its movement directly affects gross margin.