Arista Networks (ANET)

Operating return on assets (Operating ROA)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Operating income (ttm)	US$ in thousands	2,944,616	2,784,878	2,602,323	2,432,812	2,257,249	2,086,254	1,900,906	1,733,697	1,527,106	1,323,975	1,139,922	996,434	924,739	853,589	808,690	756,314	699,684	681,035	721,246	761,094
Total assets	US$ in thousands	14,043,900	12,846,700	11,623,200	10,550,200	9,956,640	9,069,040	8,186,040	7,543,070	6,775,410	6,162,010	5,824,540	6,108,190	5,734,430	5,437,350	5,208,280	4,893,730	4,738,920	4,399,370	4,335,850	4,111,840
Operating ROA		20.97%	21.68%	22.39%	23.06%	22.67%	23.00%	23.22%	22.98%	22.54%	21.49%	19.57%	16.31%	16.13%	15.70%	15.53%	15.45%	14.76%	15.48%	16.63%	18.51%

December 31, 2024 calculation

Operating ROA = Operating income (ttm) ÷ Total assets
= $2,944,616K ÷ $14,043,900K
= 20.97%

Operating Return on Assets (Operating ROA) is a key financial ratio that indicates a company's ability to generate profit from its operational assets. For Arista Networks, the trend of Operating ROA over the period from March 31, 2020, to December 31, 2024, reveals fluctuations in the company's profitability relative to its asset base.

The Operating ROA of Arista Networks started at 18.51% in March 2020 and gradually decreased to 14.76% by December 2020. However, from March 2021 onwards, there was a slight increase in the ratio, reaching 15.45% by March 2021 and fluctuating around the 15-16% range until June 2022.

Significant improvement in performance was observed from June 2022 onwards, as the Operating ROA increased sharply to 19.57% by June 2022, further climbing to 23.22% by June 2023. This indicates that Arista Networks became more efficient in utilizing its operational assets to generate profits during this period.

However, there was a slight decline in the Operating ROA in the latter half of 2023 and throughout 2024, with the ratio dropping to 20.97% by December 2024. Despite this decline, the ratio remained relatively high compared to the earlier periods, suggesting that Arista Networks continued to generate decent profits from its operational assets.

Overall, the analysis of Arista Networks' Operating ROA indicates a mix of fluctuations and improvements in profitability over the period under consideration, reflecting the company's ability to manage its assets effectively to generate returns for its stakeholders.