Arista Networks, Inc. stock research
FY2025 Q4
Arista Networks (ANET) Gross Margin — Quarter Ended Dec 31, 2025
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue also rose. Gross margin weakened slightly from the prior quarter but remained higher than the year-ago level.
Gross margin takeaway
Quarter ended Dec 31, 2025 · FY2025 Q4
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue also rose. Gross margin weakened slightly from the prior quarter but remained higher than the year-ago level.
- The strongest observable margin driver is the relationship between revenue growth and cost of revenue growth; revenue increased at a faster pace than cost of revenue compared to the year-ago quarter, supporting a higher gross margin. Compared to the prior quarter, cost of revenue grew more rapidly relative to revenue, contributing to the slight margin decline.
- Gross margin improved compared to the same quarter one year earlier but weakened relative to the immediately preceding quarter. Revenue and gross profit were higher in both comparisons, while cost of revenue also increased.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
62.9%
Gross profit
$1.6B
Revenue
$2.5B
Cost of revenue
$924.0M
Quarter-over-quarter change
-1.7 pts
Year-over-year change
-0.9 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, 2025 | $2.0B | $1.3B | $728.7M | 63.7% |
| Jun 30, 2025 | $2.2B | $1.4B | $766.2M | 65.2% |
| Sep 30, 2025 | $2.3B | $1.5B | $818.1M | 64.6% |
| Dec 31, 2025 | $2.5B | $1.6B | $924.0M | 62.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2025
-1.7 pts
Year-over-year change
Dec 31, 2024
-0.9 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the relationship between revenue growth and cost of revenue growth; revenue increased at a faster pace than cost of revenue compared to the year-ago quarter, supporting a higher gross margin. Compared to the prior quarter, cost of revenue grew more rapidly relative to revenue, contributing to the slight margin decline.
Gross margin improved compared to the same quarter one year earlier but weakened relative to the immediately preceding quarter. Revenue and gross profit were higher in both comparisons, while cost of revenue also increased.
Monitor the trend in cost of revenue relative to revenue, as its faster growth in the current quarter versus the prior quarter contributed to the margin decline.