Stockholders’ Equity and Stock-Based Compensation

3 Months Ended

Mar. 31, 2025

Share-Based Payment Arrangement [Abstract]

Stockholders’ Equity and Stock-Based Compensation

Stock Repurchase Programs

Our current repurchase program (the "Existing Repurchase Program") allows for stock repurchases of up to $1.2 billion through May 2027. In May 2025, our board of directors authorized and announced a new $1.5 billion stock repurchase program (the “New Repurchase Program” and together with the Existing Repurchase Program, the "Repurchase Programs"). This authorization allows us to repurchase shares of our common stock that will be funded from working capital. Repurchases may be made at management's discretion from time to time on the open market, through privately negotiated transactions, transactions structured through investment banking institutions, block purchases, trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or a combination of the foregoing. The Repurchase Programs do not obligate us to acquire any of our common stock and may be suspended or discontinued by the Company at any time without prior notice. During the three months ended March 31, 2025, we repurchased a total of $787.1 million of our common stock under our Existing Repurchase Program. As of March 31, 2025, the remaining authorized amount for repurchases under the Existing Repurchase Program was $133.9 million. In April 2025, we repurchased an additional $100.0 million of our common stock authorized under the Existing Repurchase Program.

A summary of the stock repurchase activity under the Existing Repurchase Program for the three months ended March 31, 2025 is as follows (in millions, except per share amounts):


	Three Months Ended
	March 31, 2025
Aggregate purchase price	$	787.1
Shares repurchased	8.7
Average price paid per share	$	90.5

The aggregate purchase price of repurchased shares of our common stock is recorded as a reduction to retained earnings in our unaudited condensed consolidated statements of stockholders' equity. All shares repurchased have been retired.

Equity Award Plan Activities

2014 Equity Incentive Plan

On April 16, 2024, our board of directors adopted an amended and restated Arista Networks, Inc. 2014 Equity Plan ("Restated Plan"), effective April 17, 2024 ("Effective Date") subject to the approval of our stockholders, which was approved at the 2024 Annual Meeting of Stockholders on June 7, 2024.

The Restated Plan provides for the grant of equity-based awards, including stock options, restricted stock units, restricted stock, stock appreciation rights, and performance awards. The share pool available under the prior version of the Company's 2014 Equity Incentive Plan ("Prior Plan") was extinguished, and the Restated Plan provides for a new share pool not to exceed (i) 52.8 million shares of our Common Stock (“Shares”), plus (ii) any Shares subject to awards under the Prior Plan that, on or after the Effective Date, expired or otherwise terminated without having been exercised in full, or that were forfeited to or repurchased by us, including net settlement of Shares subject to restricted stock units, with the maximum number of Shares to be added to the Restated Plan as a result of clause (ii) equal to 40.2 million Shares. The Restated Plan’s terms are substantially similar to the Prior Plan’s terms, including with respect to treatment of equity awards in the event of a “change in control” as defined under the Restated Plan, but with certain modifications, including the elimination of the automatic “evergreen” share reserve increase provided for under the Prior Plan. As of March 31, 2025, there remained approximately 52.3 million shares available for grant under the Restated Plan.

2014 Employee Stock Purchase Plan

In April 2014, our board of directors and stockholders approved the 2014 Employee Stock Purchase Plan (“ESPP”). The ESPP became effective on the first day that our common stock was publicly traded. The number of shares reserved for

issuance under the ESPP increases automatically on January 1 of each year by the number of shares equal to 1% of our shares outstanding on the immediately preceding December 31, but not to exceed 40 million shares, unless our board of directors, in its discretion, determines to make a smaller increase. As of March 31, 2025, there remained approximately 104.5 million shares available for issuance under the ESPP.

Under our ESPP, eligible employees are permitted to acquire shares of our common stock at 85% of the lower of the fair market value of our common stock on the first trading day of each offering period or on the exercise date. Each offering period lasts approximately two years starting on the first trading date after February 15 and August 15 of each year, and includes purchase dates every six months on or after February 15 and August 15 of each year. Participants may purchase shares of common stock through payroll deductions up to 15% of their eligible compensation, subject to Internal Revenue Service mandated purchase limits.

During the three months ended March 31, 2025, we issued 0.4 million shares at a weighted-average purchase price of $62.31 per share under the ESPP.

Stock Option Activities

The following table summarizes the option activity under our stock plans and related information (in millions, except years and per share amounts):


	Number of Shares Underlying Outstanding Options	Weighted- Average Exercise Price per Share		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Balance—December 31, 2024	3.1	$	6.71	1.5	$	320.9
Options granted	—	—
Options exercised	(1.0)	4.03
Options canceled	(0.1)	14.49
Balance—March 31, 2025	2.0	$	7.92	1.8	$	137.8
Vested and exercisable—March 31, 2025	1.9	$	7.74	1.8	$	134.8

Restricted Stock Unit (RSU) Activities

A summary of the RSU activity is presented below (in millions, except years and per share amounts):


	Number of Shares	Weighted- Average Grant Date Fair Value Per Share
Unvested balance—December 31, 2024	28.6	$	45.46
RSUs and PRSUs granted	1.5	96.18
RSUs and PRSUs vested	(2.8)	38.11
RSUs and PRSUs forfeited/canceled	(0.9)	43.37
Unvested balance—March 31, 2025	26.4	$	49.36

Stock-Based Compensation Expense

The following table summarizes the stock-based compensation expense related to our equity awards (in millions):


	Three Months Ended March 31,
	2025		2024
Cost of revenue	$	5.5	$	3.4
Research and development	57.0		43.8
Sales and marketing	19.9		18.9
General and administrative	10.6		11.1
Total stock-based compensation	$	93.0	$	77.2

As of March 31, 2025, there were $1.1 billion of unamortized compensation costs related to all unvested awards. The unamortized compensation costs are expected to be recognized over a weighted-average period of approximately 4.4 years.