Arista Networks

Capital allocation at Arista has been prudent. The company plows cash into R&D (14-16% of revenue on R&D during 2023-24), fueling future products and strengthening the moat. It avoids unnecessary debt and opportunistically repurchases stock.

In 2024 it spent about $424M on buybacks, and continuing into 2025 it authorized an additional $1.2B program. The pace of buybacks has accelerated only as valuation allowed. There were no large questionable acquisitions; earlier buys (e.g. Pluribus, Mojo) were small and integrative.

One consideration is dilution from stock-based comp – it was $355M in 2024), which is substantial but typical in tech. Overall, Arista’s capital is used largely for organic growth and buybacks, not lavish deals.

This earns a very good score – the company wisely reinvests and returns capital, though we would prefer slightly more aggressive buybacks given current cash and high stock price.