What changed in this filing

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Item 1. Financial Statements

2025-08-06 compared with 2025-05-07 · 113 added, 89 removed, 400 unchanged (34% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

(In millions, except par value)

March 31, 2025 December 31, 2024

(Unaudited, in millions, except par value)

June 30, 2025 December 31, 2024

CURRENT ASSETS:

6 unchanged sentences

Property and equipment, net 152.3 98.8

Acquisition-related intangible assets, net 56.4 62.0

Goodwill 416.5 268.5

7 unchanged sentences

Deferred revenue 2,787.6 1,727.3

Income taxes payable 249.1 50.1

Other current liabilities 339.2 188.5

5 unchanged sentences

STOCKHOLDERS’ EQUITY:

Preferred stock, $ 0.0001 par value— 100 shares authorized and no shares issued and outstanding as of March 31, 2025 and December 31, 2024

Common stock, $ 0.0001 par value— 4,000 shares authorized as of March 31, 2025 and December 31, 2024;

1,256.6 and 1,261.3 shares issued and outstanding as of March 31, 2025 and December 31, 2024

Preferred stock, $ 0.0001 par value— 100 shares authorized and no shares issued and outstanding as of June 30, 2025 and December 31, 2024

Common stock, $ 0.0001 par value— 4,000 shares authorized as of June 30, 2025 and December 31, 2024;

1,256.8 and 1,261.3 shares issued and outstanding as of June 30, 2025 and December 31, 2024

Additional paid-in capital 2,635.6 2,465.4

7 unchanged sentences

(Unaudited, in millions, except per share amounts)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

2025 2024 2025 2024

Product $ 1,877.0 $ 1,423.3 $ 3,569.5 $ 2,752.1

28 unchanged sentences

(Unaudited, in millions)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net income $ 888.8 $ 665.4 $ 1,702.6 $ 1,303.1

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments 0.7 ( 1.4 )

Change in foreign currency translation 2.4 ( 1.0 ) 3.1 ( 2.4 )

Available-for-sale investments:

6 unchanged sentences

(Unaudited, in millions)

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025 Six Months Ended June 30, 2025

Common Stock Additional

3 unchanged sentences

Income (Loss) Total

Stockholders’ Equity

Shares Amount

Stockholders’ Equity Common Stock Additional

Paid-In Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Total

Stockholders’

Shares Amount Shares Amount

Balance at beginning of period 1,256.6 $ 0.1 $ 2,551.7 $ 7,569.2 $ ( 1.9 ) $ 10,119.1 1,261.3 $ 0.1 $ 2,465.4 $ 7,542.5 $ ( 13.2 ) $ 9,994.8

6 unchanged sentences

Balance at end of period 1,256.8 $ 0.1 $ 2,635.6 $ 8,262.1 $ 3.8 $ 10,901.6 1,256.8 $ 0.1 $ 2,635.6 $ 8,262.1 $ 3.8 $ 10,901.6

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024 Six Months Ended June 30, 2024

Common Stock Additional

2 unchanged sentences

Comprehensive

Stockholders’ Equity

Stockholders’ Equity Common Stock Additional

Paid-In Capital (1)

Earnings Accumulated

Comprehensive

Stockholders’

Balance at beginning of period 1,254.4 $ 0.1 $ 2,185.1 $ 5,689.0 $ ( 11.9 ) $ 7,862.3 1,249.0 $ 0.1 $ 2,108.3 $ 5,114.0 $ ( 3.3 ) $ 7,219.1

12 unchanged sentences

(Unaudited, in millions)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

19 unchanged sentences

Purchases of property and equipment ( 52.4 ) ( 12.6 )

Cash paid for business combinations, net of cash acquired ( 300.0 ) —

Other — ( 1.0 )

25 unchanged sentences

In management’s opinion, the unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of our financial information.

The results for the three months ended March 31, 2025, are not necessarily indicative of the results expected for the full fiscal year.

The results for the three and six months ended June 30, 2025, are not necessarily indicative of the results expected for the full fiscal year.

The condensed consolidated balance sheet as of December 31, 2024 has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statements.

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Early adoption is permitted for annual financial statements that have not yet been issued.

The amendments should be applied on a prospective basis although retrospective

application is permitted.

We will adopt the standard in our 2025 annual period and are currently evaluating the impact that the updated standard will have on our financial statement disclosures.

The amendments should be applied on a prospective basis although retrospective application is permitted.

We will adopt the standard in our 2025 annual period using a prospective transition method .

In November 2024, the FASB issued ASU No.

2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40).

The ASU requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions.

The ASU requires the disaggregated disclosure of specific expense categories, including purchases of inventory,

employee compensation, depreciation, and amortization, within relevant income statement captions.

This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses.

12 unchanged sentences

The following tables summarize the fair value of these financial assets by significant investment category and their levels within the fair value hierarchy (in millions):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Level I Level II Level III Total Level I Level II Level III Total

10 unchanged sentences

Corporate bonds — 3,219.5 — 3,219.5 — 2,593.6 — 2,593.6

Municipal bonds — 1.5 — 1.5 — — — —

Agency securities — 1,129.9 — 1,129.9 — 977.2 — 977.2

3 unchanged sentences

Total Financial Assets $ 3,186.2 $ 4,472.7 $ — $ 7,658.9 $ 3,661.8 $ 3,622.6 $ — $ 7,284.4

During the three months ended March 31, 2025, the Company did not make any transfers between the levels of the fair value hierarchy.

During the three and six months ended June 30, 2025, the Company did not make any transfers between the levels of the fair value hierarchy.

Debt securities

The following table summarizes the amortized cost, unrealized gains and losses, and fair value of our debt securities measured at fair value on a recurring basis (in millions):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Amortized Cost Unrealized Gains Unrealized Losses Fair Value Amortized Cost Unrealized Gains Unrealized Losses Fair Value

2 unchanged sentences

Corporate bonds 3,210.9 10.1 ( 1.5 ) 3,219.5 2,595.7 4.4 ( 6.5 ) 2,593.6

Municipal bonds 1.5 — — 1.5 — — — —

Agency securities 1,173.8 1.6 ( 0.7 ) 1,174.7 981.0 1.6 ( 2.4 ) 980.2

4 unchanged sentences

Given the short-term and conservative nature of our portfolio, our debt securities are generally not subject to credit risk;

therefore, we did not recognize any credit losses or non-credit-related impairments related to such securities for the three months ended March 31, 2025.

therefore, we did not recognize any credit losses or non-credit-related impairments related to such securities for the three and six months ended June 30, 2025.

All unrealized losses were recognized in other comprehensive income (loss).

Realized gains or losses were immaterial for the three months ended March 31, 2025.

Realized gains or losses were immaterial for the three and six months ended June 30, 2025.

The following table is an analysis of our debt securities in unrealized loss positions (in millions):

March 31, 2025

June 30, 2025

Unrealized Losses within 12 months Unrealized Losses 12 months or greater Total

2 unchanged sentences

Corporate bonds 732.6 ( 1.5 ) — — 732.6 ( 1.5 )

Municipal bonds 1.5 — — — 1.5 —

Agency securities 614.5 ( 0.7 ) — — 614.5 ( 0.7 )

Total $ 2,274.4 $ ( 3.6 ) $ — $ — $ 2,274.4 $ ( 3.6 )

As of March 31, 2025, we had no marketable debt securities with contractual maturities that exceeded three years .

As of June 30, 2025, we had no marketable debt securities with contractual maturities that exceeded three years .

The fair values of marketable debt securities, by remaining contractual maturities, are as follows (in millions):

March 31, 2025

June 30, 2025

Due in 1 year or less $ 2,617.0

1 unchanged sentence

Total debt securities $ 6,618.9

The weighted-average remaining duration of our marketable debt securities is approximately 1.3 years as of March 31, 2025.

The weighted-average remaining duration of our marketable debt securities is approximately 1.3 years as of June 30, 2025.

As we view these marketable debt securities as available to support current operations, we classify marketable debt securities with maturities beyond 12 months as current assets under the caption "Marketable securities" on the condensed consolidated balance sheets.

1 unchanged sentence

Inventories consist of the following (in millions):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Raw materials $ 601.2 $ 565.4

2 unchanged sentences

Total inventories $ 2,059.1 $ 1,834.6

(1) The balance includes evaluation inventory held at customers or partners totaling $ 435.8 million and $ 422.1 million as of March 31, 2025 and December 31, 2024, respectively.

(1) The balance includes evaluation inventory totaling $ 335.0 million and $ 422.1 million as of June 30, 2025 and December 31, 2024, respectively.

Property and Equipment, net

Property and equipment, net consists of the following (in millions):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Land $ 47.3 $ 47.2

7 unchanged sentences

Property and equipment, net $ 152.3 $ 98.8

Depreciation expense was $ 8.0 million and $ 8.6 million for the three months ended March 31, 2025 and 2024, respectively.

Depreciation expense was $ 7.7 million and $ 8.5 million for the three months ended June 30, 2025 and 2024, respectively, and $ 15.7 million and $ 17.1 million for the six months ended June 30, 2025 and 2024, respectively.

Contract Liabilities, Deferred Revenue and Other Performance Obligations

2 unchanged sentences

The following table summarizes the activity related to our contract liabilities (in millions):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Contract liabilities, beginning balance $ 160.5 $ 139.6 $ 160.8 $ 133.2

Revenue recognized from beginning balance ( 14.1 ) ( 12.4 ) ( 31.1 ) ( 29.2 )

Beginning balance reclassified to deferred revenue ( 6.4 ) ( 6.5 )

Contract liabilities recognized 19.0 24.9

Contract liabilities recognized, net 41.7 16.9 58.4 40.1

Contract liabilities, ending balance $ 188.1 $ 144.1 $ 188.1 $ 144.1

As of March 31, 2025 and December 31, 2024, $ 66.3 million and $ 65.7 million of our contract liabilities, respectively, were included in "Other current liabilities" with the remaining balances included in "Other long-term liabilities" on the condensed consolidated balance sheets.

As of June 30, 2025 and December 31, 2024, $ 83.6 million and $ 65.7 million of our contract liabilities, respectively, were included in "Other current liabilities" with the remaining balances included in "Other long-term liabilities" on the condensed consolidated balance sheets.

Deferred Revenue

1 unchanged sentence

The following table summarizes the activity related to our deferred revenue (in millions):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Deferred revenue, beginning balance

4 unchanged sentences

Other Performance Obligations

Other performance obligations totaling $ 419.9 million as of March 31, 2025 include unbilled multi-year PCS and service contract amounts of $ 357.2 million and $ 62.7 million of binding contractual agreements with certain customers that are primarily related to future product shipments.

Other performance obligations totaling $ 442.3 million as of June 30, 2025 include unbilled multi-year PCS and service contract amounts of $ 385.9 million, and $ 56.4 million of binding contractual agreements with certain customers that are primarily related to future product shipments.

Revenue from Total Remaining Performance Obligations

T otal revenue from our contract liabilities, deferred revenue and other performance obligations that is expected to be recognized in future periods amounts to $ 3.7 billion as of March 31, 2025 .

T otal revenue from our contract liabilities, deferred revenue and other performance obligations that is expected to be recognized in future periods amounts to $ 4.7 billion as of June 30, 2025 .

A pproximately 88 % of this future revenue is expected to be recognized over the next two years and the remaining 12 % is expected to be recognized during the third to the fifth year.

1 unchanged sentence

Other income (expense), net consists of the following (in millions):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Interest income $ 90.4 $ 71.4 $ 180.6 $ 135.3

1 unchanged sentence

Total $ 94.0 $ 70.8 $ 190.2 $ 133.5

Acquisition, Goodwill and Acquisition-Related Intangible Assets

We had no business acquisitions during the three months ended March 31, 2025 and 2024.

No changes were made to the carrying values of goodwill for the three months ended March 31, 2025 and 2024.

On June 30, 2025, we completed the acqu isition of the VeloCloud business ("VeloCloud") from Broadcom fo r total cash consideration of $ 300.0 million.

VeloCloud's secure, AI-optimized cloud WAN portfolio provides seamless connectivity to customer sites of any type, complementing Arista's leading data center and campus wired/wireless portfolio.

The preliminary purchase price allocation based on the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date, included $ 268.4 million of intangible assets, $ 148.0 million of goodwill and $ 116.4 million of net tangible liabilities assumed.

The change in the carrying value of goodwill for the three months ended June 30, 2025 was solely related to the acquisition, and a portion of the goodwill is deductible for tax purposes.

Acquisition-Related Intangible Assets

Acquisition-related intangible assets, included in other assets, are subject to amortization on a straight-line basis over their estimated useful lives, as we believe this method most closely reflects the pattern in which the economic benefits of the assets will be consumed.

Acquisition-related intangible assets, excluding those that are fully amortized, were as follows (in millions, except years):

Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Useful Life (in years)

December 31, 2024

Additions March 31, 2025 December 31, 2024

Amortization March 31, 2025 December 31, 2024

March 31, 2025

June 30, 2025 December 31, 2024

Weighted-Average Remaining Useful Lives (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount

Developed technology 4.5 $ 241.1 $ ( 125.0 ) $ 116.1 $ 154.9 $ ( 119.2 ) $ 35.7

2 unchanged sentences

Total 5.8 $ 490.3 $ ( 170.5 ) $ 319.8 $ 221.9 $ ( 159.9 ) $ 62.0

Amortization expense related to acquisition-related intangible assets was $ 5.6 million and $ 6.7 million for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, future estimated amortization expense related to the acquisition-related intangible assets is as follows (in millions):

Future estimated amortization expense related to acquisition-related intangible assets is as follows (in millions):

Future Amortization Expense

Remainder of 2025 $ 31.1

2029 and thereafter 116.1

Total $ 319.8

Commitments and Contingencies

3 unchanged sentences

In addition, we purchase strategic component inventory from certain suppliers under non-cancellable purchase commitments, including integrated circuits, which are consigned to our contract manufacturers .

As of March 31, 2025, we had non-cancellable purchase commitments not recorded on our balance sheet of $ 3.5 billion, of which $ 3.0 billion have expected receipt dates within 12 months, and $ 0.5 billion have expected receipt dates greater than 12 months.

As of June 30, 2025, we had non-cancellable purchase commitments not recorded on our balance sheet of $ 3.6 billion, of which $ 3.1 billion have expected receipt dates within 12 months, and $ 0.5 billion have expected receipt dates greater than 12 months.

These open purchase orders are considered enforceable and legally binding, and while we may have some limited ability to reschedule, and adjust our requirements based on our business needs prior to the delivery of goods or performance of services, this can only occur with the agreement of the related supplier.

We also had deposits to our contract manufacturers to secure our purchase commitments in the amount of $ 80.1 million and $ 95.8 million as of March 31, 2025 and December 31, 2024, respectively, which were recorded within prepaid expenses and other current assets, as well as other assets in the condensed consolidated balance sheets.

We also had deposits to our contract manufacturers to secure our purchase commitments in the amount of $ 66.8 million and $ 95.8 million as of June 30, 2025 and December 31, 2024, respectively, which were recorded within prepaid expenses and other current assets, as well as other assets in the condensed consolidated balance sheets.

Property Project

During the year ended December 31, 2021, we purchased land and the improvements thereon in Santa Clara, California to construct a building for office, lab and data center space.

The estimated remaining capital expenditures related to this project are expected to be approximately $ 215.0 million to $ 240.0 million for the next two years , with construction expected to be completed by the end of fiscal 2026.

The estimated remaining capital expenditures related to this project are expected to be approximately $ 190.0 million to $ 215.0 million through the end of fiscal 2026 when we expect construction to be completed.

We have entered into agreements with some of our direct customers and channel partners that contain indemnification provisions relating to potential situations where claims could be alleged that our products infringe the intellectual property rights of a third party.

13 unchanged sentences

On March 10, 2025, the Federal Circuit affirmed the PTAB’s decision.

The parties subsequently agreed to stay the litigation for an additional 90 days to allow WSOU to change counsel.

The parties subsequently agreed to stay the litigation to allow WSOU to change counsel and that stay was extended pending the result of proceedings in a WSOU case against another company.

We intend to vigorously defend against the claims brought against us by WSOU;

8 unchanged sentences

We record a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

As of March 31, 2025, provisions recorded for contingent losses related to other claims and matters have not been significant.

As of June 30, 2025, provisions recorded for contingent losses related to other claims and matters have not been significant.

Based on currently-available information, management does not believe that any additional liabilities relating to other unresolved matters are probable or that the amount of any resulting loss is estimable, and believes these other matters are not likely, individually and in the aggregate, to have a material adverse effect on our financial position, results of operations or cash flows;

3 unchanged sentences

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").

In May 2025 we completed repurchases under our previous $ 1.2 billion stock repurchase program (the "Prior Repurchase Program") and our board of directors authorized a new $ 1.5 billion stock repurchase program (the “New Repurchase Program”, and together with the Prior 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 repurchase d 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

The New Repurchase Program does 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 June 30, 2025, we repurchased a total of $ 133.9 million of our common stock under our Prior Repurchase Program and $ 62.0 million of our common stock under our New Repurchase Program.

During the six months ended June 30, 2025, we repurchased a total of $ 921.0 million of our common stock under our Prior Repurchase Program and $ 62.0 million of our common stock under our New Repurchase Program.

As of June 30, 2025, the remaining authorized amount for repurchases under the New Repurchase Program was $ 1.4 billion.

A summary of the stock repurchase activity under the Repurchase Programs for the three and six months ended June 30, 2025 is as follows (in millions, except per share amounts):

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2025

Aggregate purchase price $ 195.9 $ 983.0

4 unchanged sentences

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 wa s 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

1 unchanged sentence

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.

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 June 30, 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.

1 unchanged sentence

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.

During the six months ended June 30, 2025, we issued 0.4 million shares at a weighted-average purchase price of $ 62.31 per share under the ESPP.

2014 Equity Incentive Plan

On April 16, 2024, our board of directors adopted an amended and restated Arista Networks, Inc.

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.

As of June 30, 2025, there remained approximately 47.7 million shares available for grant under the Restated Plan.

Stock Option Activities

7 unchanged sentences

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

Balance—June 30, 2025 1.2 $ 10.56 2.5 $ 109.4

Vested and exercisable—June 30, 2025 1.1 $ 10.37 2.5 $ 105.2

Restricted Stock Unit (RSU) Activities

7 unchanged sentences

RSUs and PRSUs forfeited/canceled ( 1.5 ) 46.87

Unvested balance—March 31, 2025 26.4 $ 49.36

Unvested balance—June 30, 2025 29.1 $ 58.20

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,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Cost of revenue $ 5.8 $ 4.0 $ 11.3 $ 7.4

1 unchanged sentence

Sales and marketing

18.8 16.8 38.7 35.7

General and administrative 7.4 7.8 18.0 18.9

Total stock-based compensation $ 85.2 $ 79.3 $ 178.2 $ 156.5

As of March 31, 2025, there were $ 1.1 billion of unamortized compensation costs related to all unvested awards.

As of June 30, 2025, there were $ 1.4 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 4.6 years.

4 unchanged sentences

The following table sets forth the computation of our basic and diluted net income per share (in millions, except per share amounts):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net income $ 888.8 $ 665.4 $ 1,702.6 $ 1,303.1

7 unchanged sentences

The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of diluted net income per share for the periods presented because their effect would have been anti-dilutive for the periods presented (in millions):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Employee equity awards 3.2 0.1 2.0 0.4

Income Taxes (in millions, except percentages)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Income before income taxes $ 1,080.2 $ 770.4 $ 2,035.2 $ 1,493.2

1 unchanged sentence

Effective tax rate 17.7 % 13.6 % 16.3 % 12.7 %

The increase in the effective tax rates in the three months ended March 31, 2025, as compared to the same period in 2024, was primarily due to a decrease in the proportion of tax benefits attributable to equity-based compensation versus total pre-tax income.

The increase in the effective tax rates in the three and six months ended June 30, 2025, as compared to the same periods in 2024, was primarily due to a decrease in tax benefits attributable to equity-based compensation.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBB Act") was signed into law in the U.S..

This legislation contains a broad range of tax reform provisions affecting businesses.

We are evaluating the full effects of the legislation on our estimated annual effective tax rate and cash tax position.

As the legislation was signed into law after the close of our second quarter, such impacts are not included in our operating results for the six months ended June 30, 2025.

Segment and Geographical Information

14 unchanged sentences

The following table represents revenue based on customers’ shipping addresses (in millions):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

$ 1,724.1 $ 1,374.2 $ 3,322.6 $ 2,629.6

Europe, Middle East and Africa 281.6 178.8 456.2 320.4

2 unchanged sentences

(1) Includes $ 1,712.1 million and $ 1,362.7 million revenue generated from the U.S.

for the three months ended March 31, 2025 and March 31, 2024, respectively.

for the three months ended June 30, 2025 and June 30, 2024, respectively, and $ 3,293.6 million and $ 2,595.5 million for the six months ended June 30, 2025 and June 30, 2024, respectively.

Long-lived assets, net, excluding intercompany receivables, investments in subsidiaries, privately-held equity investments and deferred tax assets, by location are summarized as follows (in millions):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

United States $ 135.2 $ 83.5

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements