Arista Networks, Inc. stock research
FY2024 Q3
Arista Networks (ANET) Gross Margin — Quarter Ended Sep 30, 2024
Revenue and gross profit increased compared with both the prior quarter and the same quarter last year. Gross margin weakened slightly from the prior quarter but improved compared with the year-ago period, reflecting a complex relationship among revenue, cost of revenue, and gross profit.
Gross margin takeaway
Quarter ended Sep 30, 2024 · FY2024 Q3
Revenue and gross profit increased compared with both the prior quarter and the same quarter last year. Gross margin weakened slightly from the prior quarter but improved compared with the year-ago period, reflecting a complex relationship among revenue, cost of revenue, and gross profit.
- The strongest observable margin driver is the year-over-year improvement in gross margin, which is associated with revenue growing at a faster pace than cost of revenue over that period.
- Sequentially, revenue and gross profit rose while cost of revenue also increased, leading to a slightly lower gross margin. Compared with the same quarter one year earlier, all three metrics were higher, with gross margin improving.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
64.2%
Gross profit
$1.2B
Revenue
$1.8B
Cost of revenue
$649.2M
Quarter-over-quarter change
-0.8 pts
Year-over-year change
+1.7 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 |
|---|---|---|---|---|
| Dec 31, 2023 | $1.5B | $999.2M | $541.2M | 64.9% |
| Mar 31, 2024 | $1.6B | $1.0B | $570.0M | 63.7% |
| Jun 30, 2024 | $1.7B | $1.1B | $593.2M | 64.9% |
| Sep 30, 2024 | $1.8B | $1.2B | $649.2M | 64.2% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2024
-0.8 pts
Year-over-year change
Sep 30, 2023
+1.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the year-over-year improvement in gross margin, which is associated with revenue growing at a faster pace than cost of revenue over that period.
Sequentially, revenue and gross profit rose while cost of revenue also increased, leading to a slightly lower gross margin. Compared with the same quarter one year earlier, all three metrics were higher, with gross margin improving.
Monitor the trend in cost of revenue relative to revenue to assess whether the recent sequential margin weakness continues.