ANET · 8-K · 20260804PR000174

Gross Margin Drivers

Arista Networks, Inc. · 2026-08-04 · Importance 34 · Surprise 30 · No source text

GAAP gross profit increased to $1.910 billion in Q2 2026 from $1.439 billion in Q2 2025, while GAAP gross margin declined to 62.9% from 65.2%. Product gross margin was approximately 59.8% and service gross margin was approximately 81.9% based on reported revenue and cost figures. Non-GAAP gross margin decreased to 63.4% from 65.6%, with stock-based compensation and intangible amortization adding $14.4 million to six-month non-GAAP gross profit adjustments.

Key facts

• GAAP gross profit for the three months ended June 30, 2026: $1,910.3 million. source
• GAAP gross margin for the three months ended June 30, 2026: 62.9%. source
• Non-GAAP gross profit for the three months ended June 30, 2026: $1,924.7 million. source
• Non-GAAP gross margin for the three months ended June 30, 2026: 63.4%. source
• Cost of revenue total for the three months ended June 30, 2026: $1,125.4 million. source
• Product cost of revenue for the three months ended June 30, 2026: $1,047.5 million. source
• Service cost of revenue for the three months ended June 30, 2026: $77.9 million. source
• Intangible asset amortization included in GAAP gross profit adjustments for the three months ended June 30, 2026: $7.0 million. source

Impact estimates