What changed in this filing

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Item 1. Financial Statements

2026-05-06 compared with 2025-11-05 · 94 added, 166 removed, 338 unchanged (43% of the section changed)

3 unchanged sentences

(In millions, except par value)

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

CURRENT ASSETS:

22 unchanged sentences

STOCKHOLDERS’ EQUITY:

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

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

1,259.2 and 1,261.3 shares issued and outstanding as of September 30, 2025 and December 31, 2024

Preferred stock, $ 0.0001 par value— 100 shares authorized and no shares issued and outstanding as of March 31, 2026 and December 31, 2025

Common stock, $ 0.0001 par value— 4,000 shares authorized as of March 31, 2026 and December 31, 2025;

1,259.2 and 1,256.5 shares issued and outstanding as of March 31, 2026 and December 31, 2025

Additional paid-in capital 3,036.4 2,911.8

7 unchanged sentences

(Unaudited, in millions, except per share amounts)

Three Months Ended September 30,

Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Product $ 2,311.3 $ 1,692.5

22 unchanged sentences

Diluted 1,273.8 1,279.2

(1) Prior period results have been adjusted to reflect the four -for-one stock split effected in December 2024.

See Note 1, Organization and Summary of Accounting Policies, for details.

The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited).

2 unchanged sentences

(Unaudited, in millions)

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Net income $ 1,022.9 $ 813.8

3 unchanged sentences

Change in net unrealized gains (losses) on available-for-sale securities ( 28.5 ) 10.6

Reclassification adjustment included in net income ( 0.2 ) —

Other comprehensive income (loss) ( 31.3 ) 11.3

4 unchanged sentences

(Unaudited, in millions)

Three Months Ended September 30, 2025 Nine Months Ended September 30, 2025

Three Months Ended March 31, 2026

Common Stock Additional

2 unchanged sentences

Comprehensive

Stockholders’ Equity Common Stock Additional

Paid-In Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Total

Stockholders’

Shares Amount Shares Amount

Stockholders’ Equity

Shares Amount

Balance at beginning of period 1,256.5 $ 0.1 $ 2,911.8 $ 9,446.6 $ 12.0 $ 12,370.5

Net income — — — 1,022.9 — 1,022.9

Other comprehensive income, net of tax — — — — 4.0 4.0 — — — — 21.0 21.0

Other comprehensive loss, net of tax — — — — ( 31.3 ) ( 31.3 )

Stock-based compensation — — 120.9 — — 120.9

Issuance of common stock in connection with employee equity incentive plans 2.9 — 29.9 — — 29.9

Repurchase of common stock — — — — — — ( 11.1 ) — — ( 983.0 ) — ( 983.0 )

Tax withholding paid for net share settlement of equity awards ( 0.2 ) — ( 26.2 ) — — ( 26.2 )

Other — — — 0.4 — 0.4

Balance at end of period 1,259.2 $ 0.1 $ 3,036.4 $ 10,469.9 $ ( 19.3 ) $ 13,487.1

Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Common Stock Additional

Paid-In Capital (1)

Earnings Accumulated

Comprehensive

Income (Loss) Total

Stockholders’ Equity Common Stock Additional

Paid-In Capital (1)

Paid-In Capital Retained

Earnings Accumulated

1 unchanged sentence

Income (Loss) Total

Stockholders’

Stockholders’ Equity

Shares Amount

Balance at beginning of period 1,261.3 $ 0.1 $ 2,465.4 $ 7,542.5 $ ( 13.2 ) $ 9,994.8

6 unchanged sentences

Balance at end of period 1,256.6 $ 0.1 $ 2,551.7 $ 7,569.2 $ ( 1.9 ) $ 10,119.1

(1) Prior period results have been adjusted to reflect the four -for-one stock split effected in December 2024.

See Note 1, Organization and Summary of Accounting Policies, for details.

The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited).

2 unchanged sentences

(Unaudited, in millions)

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

19 unchanged sentences

Purchases of property and equipment ( 54.5 ) ( 28.4 )

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

Other ( 10.0 ) ( 6.6 )

Net cash used in investing activities ( 865.3 ) ( 765.9 )

3 unchanged sentences

Repurchases of common stock — ( 787.1 )

Other ( 3.7 ) —

Net cash used in financing activities — ( 793.8 )

19 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 and nine months ended September 30, 2025, are not necessarily indicative of the results expected for the full fiscal year.

The results for the three months ended March 31, 2026, are not necessarily indicative of the results expected for the full fiscal year.

The condensed consolidated balance sheet as of December 31, 2025 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.

1 unchanged sentence

Certain reclassifications of prior period amounts were made in the current year to conform to the current period presentation.

On November 7, 2024, the Company announced a four -for-one forward stock split ("Stock Split") of the Company’s common stock that was effected through the filing of an amendment to the Company's Amended and Restated Certificate of Incorporation ("Amendment") on December 3, 2024.

The Stock Split proportionately increased the authorized shares of common stock, and all share and per share amounts presented herein have been retroactively adjusted to reflect the impact of the Stock Split.

Our condensed consolidated financial statements and related financial information in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and related footnotes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 18, 2025.

Use of Estimates

The preparation of the accompanying consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes.

Those estimates and assumptions include, but are not limited to, valuation of inventory and contract manufacturer/supplier liabilities, accounting for income taxes, including the recognition of deferred tax assets and liabilities, valuation allowance on deferred tax assets and reserves for uncertain tax positions, revenue recognition and deferred revenue, valuation of goodwill and acquisition-related intangible assets, estimate of useful lives of long-lived assets including intangible assets, and the recognition and measurement of contingent liabilities.

We evaluate our estimates and assumptions based on historical experience and other factors and adjust these estimates and assumptions when facts and circumstances dictate.

1 unchanged sentence

Recent Accounting Pronouncements Not Yet Effective

In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-09, Income Taxes (Topic 740)-Improvements to Income Tax Disclosures.

The ASU requires that an entity disclose specific categories in the effective tax rate reconciliation as well as provide additional information for reconciling items that meet a quantitative threshold.

Further, the ASU requires certain disclosures of state versus federal income tax expense and taxes paid.

The amendments in this ASU are required to be adopted for fiscal years beginning after December 15, 2024.

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 using a prospective transition method .

In November 2024, the FASB issued ASU 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.

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

The ASU requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions, and also requires disclosure of the total amount of selling expenses along with the definition of selling expenses.

The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

1 unchanged sentence

Early adoption is also permitted.

This ASU will likely result in the required additional disclosures being included in our consolidated financial statements, once adopted.

We are currently evaluating the impact of future adoption on our financial statement disclosures.

In July 2025, the FASB issued ASU 2025-05 Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses for Accounts Receivable and Contract Assets, or ASU 2025-05.

The ASU provides a practical expedient that allows entities to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset when estimating expected credit losses for current accounts receivable and current contract assets.

The amendments of ASU 2025-05 should be applied prospectively and are effective for annual and interim periods beginning after December 15, 2025, with early adoption permitted.

We do not expect the adoption of ASU 2025-05 to have a material impact on our consolidated financial statements and related disclosures.

This ASU will result in the required additional disclosures being included in our consolidated financial statements, once adopted.

We are currently evaluating the provisions of this ASU.

On December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) which is intended to streamline the guidance in ASC 270, Interim Reporting, and clarify when it applies.

Under the amendments, an entity is subject to ASC 270 if it provides interim financial statements and notes in accordance with GAAP.

ASU 2025-11 also addresses the form and content of such financial statements, interim disclosures requirements, and establishes a principle under which an entity must disclose events since the end of the last annual reporting period that have a material impact on the entity.

ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, and early adoption is permitted.

We are currently evaluating the provisions of this ASU.

Fair Value Measurements

1 unchanged sentence

We measure and report our cash equivalents, restricted cash, and available-for-sale marketable securities at fair value on a recurring basis.

We use a fair value hierarchy to measure fair value, maximizing the use of observable inputs and minimizing the use of unobservable inputs.

The two-tiers of the fair value hierarchy are as follows:

Level I —Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date and Level II —Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

We use a fair value hierarchy to measure fair value, maximizing the use of observable inputs.

The three-tiers of the fair value hierarchy are as follows:

Level I —Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date, Level II —Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities, and Level III —Inputs that are generally unobservable and typically reflect management's estimate of assumptions that market participants would use in pricing the asset or liability.

We don't have any level III financial assets measured at fair value on a recurring basis.

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):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

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

3 unchanged sentences

Commercial paper — 63.7 — 63.7 — 29.8 — 29.8

Corporate bonds — — — — — 6.6 — 6.6

government notes 48.4 — — 48.4 124.9 — — 124.9

9 unchanged sentences

Other Assets:

Money market funds - restricted 1.4 — — 1.4 1.4 — — 1.4

Money market funds - restricted cash 1.4 — — 1.4 1.4 — — 1.4

Total Financial Assets $ 3,751.1 $ 6,919.3 $ — $ 10,670.4 $ 4,155.4 $ 5,961.2 $ — $ 10,116.6

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

Debt securities

During the three months ended March 31, 2026, the Company did not make any transfers between the levels of the fair value hierarchy.

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):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

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

6 unchanged sentences

For debt securities in unrealized loss positions, it is not likely that we will be required to sell such securities before recovery of their amortized cost basis nor do we have the intent to sell such securities before maturity.

We invest in debt securities that have maximum maturities of three years and are generally deemed to be low risk based on their credit ratings from the major rating agencies.

We invest in debt securities that have maximum maturities of three years that are generally deemed to be low risk based on their credit ratings from the major rating agencies.

The longer the duration of these debt securities, the more susceptible they are to changes in market interest rates and bond yields.

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 and nine months ended September 30, 2025.

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

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

Given the relatively 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, 2026.

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

Realized gains or losses were immaterial for the three months ended March 31, 2026.

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

September 30, 2025

March 31, 2026

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

3 unchanged sentences

Corporate bonds 2,925.3 ( 11.3 ) 6.0 — 2,931.3 ( 11.3 )

Municipal bonds 11.4 — — — 11.4 —

Agency securities 1,053.0 ( 4.4 ) — — 1,053.0 ( 4.4 )

Total $ 5,560.3 $ ( 19.5 ) $ 16.0 $ — $ 5,576.3 $ ( 19.5 )

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

As of March 31, 2026, 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):

September 30, 2025

March 31, 2026

Due in 1 year or less $ 3,501.6

1 unchanged sentence

Total debt securities $ 9,563.7

The weighted-average remaining duration of our marketable debt securities is approximately 1.4 years as of September 30, 2025.

The weighted-average remaining duration of our marketable debt securities is approximately 1.4 years as of March 31, 2026.

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):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Raw materials $ 811.1 $ 611.2

2 unchanged sentences

Total inventories $ 2,380.0 $ 2,247.1

(1) The balance includes evaluation inventory totaling $ 427.3 million and $ 422.1 million as of September 30, 2025 and December 31, 2024, respectively.

(1) The balance includes evaluation inventory totaling $ 525.7 million and $ 403.7 million as of March 31, 2026 and December 31, 2025, respectively.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in millions):

March 31, 2026 December 31, 2025

Deferred cost of goods sold (1)

$ 1,546.5 $ 1,197.0

Other prepaid expenses and deposits 353.2 313.0

Total prepaid expenses and other current assets $ 1,899.7 $ 1,510.0

(1) The increase in the quarter ended March 31, 2026 was driven by a corresponding increase in deferred product revenue.

Property and Equipment, net

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

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Land $ 47.3 $ 47.3

7 unchanged sentences

Property and equipment, net $ 250.3 $ 203.1

Depreciation expense was $ 7.4 million and $ 8.5 million for the three months ended September 30, 2025 and 2024, respectively, and $ 23.2 million and $ 25.6 million for the nine months ended September 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 September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Contract liabilities, beginning balance $ 250.1 $ 160.8

2 unchanged sentences

Contract liabilities, ending balance $ 273.7 $ 160.5

As of September 30, 2025 and December 31, 2024, $ 78.5 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 March 31, 2026 and December 31, 2025, $ 131.0 million and $ 114.0 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 September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Deferred revenue, beginning balance

4 unchanged sentences

Other Performance Obligations

Other performance obligations totaling $ 465.9 million as of September 30, 2025 include unbilled multi-year PCS and service contract amounts of $ 377.2 million, and $ 88.7 million of binding contractual agreements with certain customers that are primarily related to future product shipments.

Other performance obligations totaling $ 1.2 billion as of March 31, 2026 include unbilled multi-year PCS and service contract amounts of $ 264.6 million, and $ 968.4 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 $ 5.3 billion as of September 30, 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 $ 7.7 billion as of March 31, 2026 .

A pproximately 91 % of this future revenue is expected to be recognized over the next two years and the remaining 9 % 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 September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Interest income $ 109.2 $ 90.2

5 unchanged sentences

A portion of the goodwill is deductible for tax purposes.

The change in the carrying value of goodwill for the three months ended September 30, 2025 was not material.

There was no change in the carrying value of goodwill for the three months ended March 31, 2026.

Acquisition-Related Intangible Assets

1 unchanged sentence

Acquisition-related intangible assets, excluding those that are fully amortized and no longer have economic benefit, were as follows (in millions, except years):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

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

10 unchanged sentences

Purchase Commitments

We outsource most o f our manufacturing and supply chain management operations to third-party contract manufacturers, who procure components and assemble products on our behalf.

A significant portion of purchase orders to our contract manufacturers for finished products consist of non-cancellable purchase commitments.

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 September 30, 2025, we had non-cancellable purchase commitments not recorded on our balance sheet of $ 4.8 billion, of which $ 4.3 billion have expected receipt dates within 12 months, and $ 0.5 billion have expected receipt dates greater than 12 months.

We outsource most of our manufacturing and supply chain management operations to third-party contract manufacturers, who procure components and assemble products on our behalf.

A significant portion of our purchase orders for finished goods and strategic components, including integrated circuits consigned to contract manufacturers, consists of non-cancellable commitments.

Our purchase obligations also encompass software and technology licenses, property and equipment, and other corporate goods and services.

As of March 31, 2026, we had non-cancellable purchase commitments not recorded on our balance sheet of $ 8.9 billion, of which $ 7.6 billion have expected receipt dates within 12 months, and $ 1.3 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 $ 50.1 million and $ 95.8 million as of September 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.

We also had deposits to our contract manufacturers to secure our purchase commitments in the amount of $ 95.5 million and $ 53.0 million as of March 31, 2026 and December 31, 2025, 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.

As of September 30, 2025, the estimated remaining capital expenditures related to this project are expected to be approximately $ 170.0 million to $ 200.0 million through the end of fiscal 2026 when we expect construction to be completed.

As of March 31, 2026, the estimated remaining capital expenditures related to this project are expected to be approximately $ 130.0 million to $ 150.0 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.

5 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 September 30, 2025, provisions recorded for contingent losses related to other claims and matters have not been significant.

As of March 31, 2026, 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

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").

In May 2025 our board of directors authorized a $ 1.5 billion stock repurchase program (the “Repurchase Program”).

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 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.

We did not repurchase any shares during the three months ended September 30, 2025.

During the nine months ended September 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 September 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 nine months ended September 30, 2025 is as follows (in millions, except per share amounts):

Nine Months Ended

September 30, 2025

Aggregate purchase price $ 983.0

Shares repurchased 11.1

Average price paid per share $ 88.7

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.

The 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.

We did not repurchase any shares during the three months ended March 31, 2026.

As of March 31, 2026, the remaining authorized amount for repurchases under the Repurchase Program was $ 817.9 million.

Equity Award Plan Activities

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 September 30, 2025, there remained approximately 104.1 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 nine months ended September 30, 2025, we issued 0.7 million shares at a weighted-average purchase price of $ 67.27 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.

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 September 30, 2025, there remained approximately 45.7 million shares available for grant under the Restated Plan.

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):

Outstanding Options Weighted-

Price per Share Weighted-

Term (in years) Aggregate

Balance—December 31, 2024 3.1 $ 6.71 1.5 $ 320.9

Options granted — —

Options exercised ( 2.1 ) 3.99

Options canceled ( 0.1 ) 14.70

Balance—September 30, 2025 0.9 $ 11.74 2.6 $ 126.4

Vested and exercisable—September 30, 2025 0.9 $ 11.74 2.6 $ 126.4

Restricted Stock Unit (RSU) Activities

4 unchanged sentences

Unvested balance—December 31, 2025 28.1 $ 69.81

RSUs and PRSUs granted 9.6 98.29

RSUs and PRSUs vested ( 6.7 ) 35.82

RSUs and PRSUs forfeited/canceled ( 2.2 ) 48.65

Unvested balance—September 30, 2025 29.3 $ 65.18

RSUs granted 1.0 133.67

RSUs vested ( 2.4 ) 56.14

RSUs forfeited/canceled ( 0.4 ) 62.41

Unvested balance—March 31, 2026 26.3 $ 73.50

Stock-Based Compensation Expense

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Cost of revenue $ 7.0 $ 5.5

1 unchanged sentence

Sales and marketing

32.9 21.0 71.6 56.6

General and administrative 11.9 10.6

Total stock-based compensation $ 120.9 $ 93.0

As of September 30, 2025, there were $ 1.6 billion of unamortized compensation costs related to all unvested awards.

As of March 31, 2026, there were $ 1.5 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 4.2 years.

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Diluted net income per share is computed using the weighted-average number of shares of common stock outstanding during the period, including potential common shares assuming the dilutive effect of outstanding stock options, restricted stock units, and the employee stock purchase plan using the treasury stock method.

Potential common shares whose

effect would have been antidilutive are excluded from the computation of diluted net income per share.

Potential common shares whose effect would have been antidilutive are excluded from the computation of diluted net income per share.

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 September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Net income $ 1,022.9 $ 813.8

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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 September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Employee equity awards 0.7 0.9

Income Taxes (in millions, except percentages)

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Income before income taxes $ 1,271.4 $ 955.0

1 unchanged sentence

Effective tax rate 19.5 % 14.8 %

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

This legislation provides for significant tax law changes and modifications, including changes to the U.S.

effective tax rates on certain foreign earnings, and permanently repeals the domestic research and development capitalization requirement.

The increase in the effective tax rates in the three and nine months ended September 30, 2025, as compared to the same periods in 2024, was primarily associated with a one-time deferred tax provision arising from the remeasurement of our basis difference associated with the U.S.

tax effect of foreign deferred tax assets resulting from the enactment of the OBBB Act, and a decrease in tax benefits attributable to equity-based compensation.

While some specific provisions of the OBBB Act are not effective until our fiscal 2026 period, our deferred method of accounting policy with respect to U.S.

tax on foreign earnings, known as global intangible low tax income, requires us to account for these changes in the period of enactment.

In addition, we do not anticipate a material impact to our effective tax rate in future periods as a result of the OBBB Act.

The increase in the effective tax rate in the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to a decrease in tax benefits attributable to equity-based compensation.

Segment and Geographical Information

1 unchanged sentence

The accounting policies of the reportable segment are the same as those described in the summary of significant accounting policies.

Our chief operating decision maker ("CODM") is our President, Chief Executive Officer and Chairperson of the Board, who reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance.

Our chief operating decision maker ("CODM") is our Chief Executive Officer and Chairperson of the Board, who reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance.

The financial information reviewed by the CODM reflects quarterly and year-to-date operating results, with a primary focus on revenue, gross margin, operating margin and net income as reported on the consolidated statements of income.

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There was no change for each of the periods presented in the measurement methods used to determine reported segment profit and loss.

The CODM reviews the following significant segment expenses, which are presented separately on the Company’s consolidated statements of income:

cost of product, cost of services, selling and marketing expenses, general and administrative expenses, and research and development expenses.

The CODM reviews cost of revenue and operating expenses, which are presented as separate line items on the Company’s consolidated statements of income.

Other segment items that are included in the calculation of the Company’s net income include other income (expense), net, which is further described in Note 3.

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

$ 2,290.1 $ 1,598.5

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(1) Includes $ 2,272.1 million and $ 1,581.5 million revenue generated from the U.S.

for the three months ended September 30, 2025 and September 30, 2024, respectively, and $ 5,119.3 million and $ 4,060.8 million for the nine months ended September 30, 2025 and September 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):

September 30, 2025 December 31, 2024

for the three months ended March 31, 2026 and March 31, 2025, respectively.

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

March 31, 2026 December 31, 2025

United States $ 228.8 $ 184.8

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