ServiceWide moat

Arista Networks (ANET) — moat facet

Support revenue that has grown every year for a decade at about an 82% margin.

Service revenue is the smaller line and the more valuable per dollar. It was $1,428.8 million in 2025, up 27.7%, with a cost of $258.3 million, a gross margin of about 81.9%.12

Service revenue ($m)$138m2016$213m2017$310m2018$390m2019$487m2020$570m2021$665m2022$831m2023$1,119m2024$1,429m2025Arista Forms 10-K FY2018, FY2020, FY2022, FY2025
Up every year for a decade, including 2020, when product revenue fell.

It is almost entirely support. The filing says service revenue is primarily derived from post-contract support contracts, typically purchased with the products and then renewed, and puts the 2025 increase down to continued growth in initial and renewal support contracts as the installed base expanded.3

It has grown every year since at least 2016. Service revenue was $137.8 million that year and rose about 29.7% a year to 2025, including 2020, when product revenue fell; service grew 24.9% in that year.4567 The margin rose from about 73.7% in 2016 to about 81.5% in 2018 and has stayed between 79.7% and 82.4% since.89101112

The line's share of revenue follows the product cycle rather than its own growth. Service was about 12.2% of revenue in 2016, 21.0% in 2020 when product fell, and 15.9% in 2025.13141516 In a year when the largest customers build heavily, product swamps it; in a quiet year it carries more of the company.

The latest quarter continued the trend. Service revenue was $430.5 million in the three months to 30 June 2026, up 31.3%, and $828.2 million in the first half against $640.1 million; its cost was $77.9 million in the quarter.1718 Deferred revenue, which includes support paid in advance as well as product awaiting acceptance, reached $6,865.9 million at 30 June 2026.1920

The verdict is that this line is the evidence behind the software argument: customers keep paying for EOS support year after year, at a margin no hardware line earns. The figure to watch is the service growth rate against product's: service growing more slowly than the installed base for long would mean renewals are being negotiated down.

Moat trajectory: Widening

Service revenue up 31.3% in Q2 2026 at a margin above 80%.

The number that tests this moat
Moat Explorer calc
Service gross margin
About 81.9% in 2025, from 81.0%

Support priced down at renewal would show here before it shows in revenue.

How it's calculated: (1,428.8 - 258.3) / 1,428.8 against (1,119.1 - 212.8) / 1,119.1.
Source: Arista Form 10-K FY2025 (Moat Explorer calc) ↗
References
  1. ReportedIt was $1,428.8 million in 2025, up 27.7%, with a cost of $258.3 million, a gross margin of about 81.9%.
    Arista Networks Form 10-K FY2025 - statements of income 2023-2025: product revenue $5,029.5M/$5,884.0M/$7,576.9M and cost $2,061.2M/$2,299.0M/$2,978.7M; service revenue $830.7M/$1,119.1M/$1,428.8M and cost $168.7M/$212.8M/$258.3M; total revenue $9,005.7M; product revenue +28.8% on higher shipments of switching and routing platforms; service revenue +27.7% on initial and renewal support contracts; revenue definitions; dependence on merchant silicon — FY2023-FY2025 · publ. February 2026 · source ↗
  2. Moat Explorer calcIt was $1,428.8 million in 2025, up 27.7%, with a cost of $258.3 million, a gross margin of about 81.9%.
    Moat Explorer calculation from Arista's Forms 10-K FY2018-FY2025 and the Q2 2026 release: gross margins by line, shares of revenue and gross profit, growth rates and compound growth — FY2016 to Q2 2026 · publ. 2026-09-23 · source ↗
  3. ReportedThe filing says service revenue is primarily derived from post-contract support contracts, typically purchased with the products and then renewed, and puts the 2025 increase down to continued growth in initial and renewal support contracts as the installed base expanded.
    Arista Networks Form 10-K FY2025 - statements of income 2023-2025: product revenue $5,029.5M/$5,884.0M/$7,576.9M and cost $2,061.2M/$2,299.0M/$2,978.7M; service revenue $830.7M/$1,119.1M/$1,428.8M and cost $168.7M/$212.8M/$258.3M; total revenue $9,005.7M; product revenue +28.8% on higher shipments of switching and routing platforms; service revenue +27.7% on initial and renewal support contracts; revenue definitions; dependence on merchant silicon — FY2023-FY2025 · publ. February 2026 · source ↗
  4. ReportedService revenue was $137.8 million that year and rose about 29.7% a year to 2025, including 2020, when product revenue fell; service grew 24.9% in that year.
    Arista Networks Form 10-K FY2018 - statements of operations 2016-2018: product revenue $991.3M/$1,432.8M/$1,841.1M, cost $369.8M/$538.0M/$720.6M; service $137.8M/$213.4M/$310.3M, cost $36.3M/$46.4M/$57.4M — FY2016-FY2018 · publ. February 2019 · source ↗
  5. ReportedService revenue was $137.8 million that year and rose about 29.7% a year to 2025, including 2020, when product revenue fell; service grew 24.9% in that year.
    Arista Networks Form 10-K FY2020 - statements of operations 2018-2020; product revenue down $190.3M (9.4%) in 2020, 2019 having included $125.1M of deferred product revenue recognised on acceptance, with reduced sales to larger customers and COVID-19 supply constraints; service revenue +24.9% — FY2018-FY2020 · publ. February 2021 · source ↗
  6. ReportedService revenue was $137.8 million that year and rose about 29.7% a year to 2025, including 2020, when product revenue fell; service grew 24.9% in that year.
    Arista Networks Form 10-K FY2025 - statements of income 2023-2025: product revenue $5,029.5M/$5,884.0M/$7,576.9M and cost $2,061.2M/$2,299.0M/$2,978.7M; service revenue $830.7M/$1,119.1M/$1,428.8M and cost $168.7M/$212.8M/$258.3M; total revenue $9,005.7M; product revenue +28.8% on higher shipments of switching and routing platforms; service revenue +27.7% on initial and renewal support contracts; revenue definitions; dependence on merchant silicon — FY2023-FY2025 · publ. February 2026 · source ↗
  7. Moat Explorer calcService revenue was $137.8 million that year and rose about 29.7% a year to 2025, including 2020, when product revenue fell; service grew 24.9% in that year.
    Moat Explorer calculation from Arista's Forms 10-K FY2018-FY2025 and the Q2 2026 release: gross margins by line, shares of revenue and gross profit, growth rates and compound growth — FY2016 to Q2 2026 · publ. 2026-09-23 · source ↗
  8. ReportedThe margin rose from about 73.7% in 2016 to about 81.5% in 2018 and has stayed between 79.7% and 82.4% since.
    Arista Networks Form 10-K FY2018 - statements of operations 2016-2018: product revenue $991.3M/$1,432.8M/$1,841.1M, cost $369.8M/$538.0M/$720.6M; service $137.8M/$213.4M/$310.3M, cost $36.3M/$46.4M/$57.4M — FY2016-FY2018 · publ. February 2019 · source ↗
  9. ReportedThe margin rose from about 73.7% in 2016 to about 81.5% in 2018 and has stayed between 79.7% and 82.4% since.
    Arista Networks Form 10-K FY2020 - statements of operations 2018-2020; product revenue down $190.3M (9.4%) in 2020, 2019 having included $125.1M of deferred product revenue recognised on acceptance, with reduced sales to larger customers and COVID-19 supply constraints; service revenue +24.9% — FY2018-FY2020 · publ. February 2021 · source ↗
  10. ReportedThe margin rose from about 73.7% in 2016 to about 81.5% in 2018 and has stayed between 79.7% and 82.4% since.
    Arista Networks Form 10-K FY2023 - statements of income 2021-2023 (product and service revenue and cost) — FY2021-FY2023 · publ. February 2024 · source ↗
  11. ReportedThe margin rose from about 73.7% in 2016 to about 81.5% in 2018 and has stayed between 79.7% and 82.4% since.
    Arista Networks Form 10-K FY2025 - statements of income 2023-2025: product revenue $5,029.5M/$5,884.0M/$7,576.9M and cost $2,061.2M/$2,299.0M/$2,978.7M; service revenue $830.7M/$1,119.1M/$1,428.8M and cost $168.7M/$212.8M/$258.3M; total revenue $9,005.7M; product revenue +28.8% on higher shipments of switching and routing platforms; service revenue +27.7% on initial and renewal support contracts; revenue definitions; dependence on merchant silicon — FY2023-FY2025 · publ. February 2026 · source ↗
  12. Moat Explorer calcThe margin rose from about 73.7% in 2016 to about 81.5% in 2018 and has stayed between 79.7% and 82.4% since.
    Moat Explorer calculation from Arista's Forms 10-K FY2018-FY2025 and the Q2 2026 release: gross margins by line, shares of revenue and gross profit, growth rates and compound growth — FY2016 to Q2 2026 · publ. 2026-09-23 · source ↗
  13. ReportedService was about 12.2% of revenue in 2016, 21.0% in 2020 when product fell, and 15.9% in 2025.
    Arista Networks Form 10-K FY2018 - statements of operations 2016-2018: product revenue $991.3M/$1,432.8M/$1,841.1M, cost $369.8M/$538.0M/$720.6M; service $137.8M/$213.4M/$310.3M, cost $36.3M/$46.4M/$57.4M — FY2016-FY2018 · publ. February 2019 · source ↗
  14. ReportedService was about 12.2% of revenue in 2016, 21.0% in 2020 when product fell, and 15.9% in 2025.
    Arista Networks Form 10-K FY2020 - statements of operations 2018-2020; product revenue down $190.3M (9.4%) in 2020, 2019 having included $125.1M of deferred product revenue recognised on acceptance, with reduced sales to larger customers and COVID-19 supply constraints; service revenue +24.9% — FY2018-FY2020 · publ. February 2021 · source ↗
  15. ReportedService was about 12.2% of revenue in 2016, 21.0% in 2020 when product fell, and 15.9% in 2025.
    Arista Networks Form 10-K FY2025 - statements of income 2023-2025: product revenue $5,029.5M/$5,884.0M/$7,576.9M and cost $2,061.2M/$2,299.0M/$2,978.7M; service revenue $830.7M/$1,119.1M/$1,428.8M and cost $168.7M/$212.8M/$258.3M; total revenue $9,005.7M; product revenue +28.8% on higher shipments of switching and routing platforms; service revenue +27.7% on initial and renewal support contracts; revenue definitions; dependence on merchant silicon — FY2023-FY2025 · publ. February 2026 · source ↗
  16. Moat Explorer calcService was about 12.2% of revenue in 2016, 21.0% in 2020 when product fell, and 15.9% in 2025.
    Moat Explorer calculation from Arista's Forms 10-K FY2018-FY2025 and the Q2 2026 release: gross margins by line, shares of revenue and gross profit, growth rates and compound growth — FY2016 to Q2 2026 · publ. 2026-09-23 · source ↗
  17. ReportedService revenue was $430.5 million in the three months to 30 June 2026, up 31.3%, and $828.2 million in the first half against $640.1 million; its cost was $77.9 million in the quarter.
    Arista Networks Q2 2026 results release (Exhibit 99.1, 4 August 2026) - product revenue $2,605.2M against $1,877.0M, service $430.5M against $327.8M; six months product $4,916.5M against $3,569.5M, service $828.2M against $640.1M; cost of product $1,047.5M against $707.3M, cost of service $77.9M; deferred revenue $5,100.7M current and $1,765.2M non-current; Q3 2026 revenue guidance ~$3.3B — Q2 2026 · publ. 4 August 2026 · source ↗
  18. Moat Explorer calcService revenue was $430.5 million in the three months to 30 June 2026, up 31.3%, and $828.2 million in the first half against $640.1 million; its cost was $77.9 million in the quarter.
    Moat Explorer calculation from Arista's Forms 10-K FY2018-FY2025 and the Q2 2026 release: gross margins by line, shares of revenue and gross profit, growth rates and compound growth — FY2016 to Q2 2026 · publ. 2026-09-23 · source ↗
  19. ReportedDeferred revenue, which includes support paid in advance as well as product awaiting acceptance, reached $6,865.9 million at 30 June 2026.
    Arista Networks Q2 2026 results release (Exhibit 99.1, 4 August 2026) - product revenue $2,605.2M against $1,877.0M, service $430.5M against $327.8M; six months product $4,916.5M against $3,569.5M, service $828.2M against $640.1M; cost of product $1,047.5M against $707.3M, cost of service $77.9M; deferred revenue $5,100.7M current and $1,765.2M non-current; Q3 2026 revenue guidance ~$3.3B — Q2 2026 · publ. 4 August 2026 · source ↗
  20. Moat Explorer calcDeferred revenue, which includes support paid in advance as well as product awaiting acceptance, reached $6,865.9 million at 30 June 2026.
    Moat Explorer calculation from Arista's Forms 10-K FY2018-FY2025 and the Q2 2026 release: gross margins by line, shares of revenue and gross profit, growth rates and compound growth — FY2016 to Q2 2026 · publ. 2026-09-23 · source ↗
Sources
Generated September 23, 2026