Form 4: Arista Networks CTO Duda Sells Shares Under 10b5-1 Plan

Arista Networks President and CTO Kenneth Duda reported the exercise of stock options and subsequent sale of common stock, including shares held in trusts and a foundation, all executed under pre-arranged Rule 10b5-1 trading plans.

Summary

• Kenneth Duda, President and CTO of Arista Networks, Inc. (ANET), reported transactions involving the company's common stock.
• On January 20, 2026, Duda exercised a Non-Qualified Stock Option to acquire 30,000 shares of Common Stock at an exercise price of $3.515 per share.
• Concurrently, Duda sold a total of 30,000 shares of Common Stock directly, with weighted average prices ranging from $127.2796 to $129.8985.
• Additionally, shares held indirectly through a Childrens' Trust (for which Duda serves as co-trustee) and a 501(c) Foundation (for which Duda and his spouse serve as co-trustee) were sold.
• The Childrens' Trust sold a total of 16,000 shares at weighted average prices ranging from $127.2796 to $129.8985.
• The Foundation sold a total of 10,000 shares at weighted average prices ranging from $127.2796 to $129.8985.
• All reported transactions were executed pursuant to Rule 10b5-1 trading plans entered into on March 13, 2025.
• Following these transactions, Duda's direct beneficial ownership is 12,976 shares, with indirect ownership including 1,127,168 shares by Childrens' Trust, 522,400 shares by Foundation, 757,961 shares by GRAT JD, 757,961 shares by GRAT KD, and 35,083 shares by a family Trust.

Sentiment

Score: 5

Explanation: The filing is a routine disclosure of insider transactions under a pre-arranged plan, which is neutral in sentiment. While there are sales, they are systematic and not indicative of a sudden change in outlook.

Positives

• The transactions were executed under pre-arranged Rule 10b5-1 trading plans, indicating a planned and systematic approach to managing equity rather than opportunistic selling.
• The exercise of stock options at a low price ($3.515) and subsequent sale at significantly higher market prices (ranging from $127.2796 to $129.8985) demonstrates a substantial gain for the insider.

Negatives

• Significant insider selling, totaling 56,000 shares (30,000 direct, 16,000 by Childrens' Trust, 10,000 by Foundation), could be perceived negatively by some investors, even if executed under a 10b5-1 plan.

Risks

• The disclosure of insider selling, even under a 10b5-1 plan, could potentially lead to negative market sentiment if interpreted as a lack of confidence, although this is mitigated by the pre-planned nature.

Future Outlook

This Form 4 filing does not contain any forward-looking statements or guidance regarding the company's future performance or strategic direction. It solely reports insider trading activities.

Management Comments

• The reporting person undertakes to provide Arista Networks, Inc., any security holder of Arista Networks, Inc. or the staff of the Securities and Exchange Commission, upon request, full information regarding the number of shares sold at each separate price within the reported ranges.

Industry Context

This filing is a routine disclosure of insider transactions and does not provide specific insights into broader industry trends or competitive landscape. It reflects an individual executive's personal financial planning rather than a corporate strategic move.

Comparison to Industry Standards

• This Form 4 filing details insider transactions, which are standard disclosures for executives of publicly traded companies.
• The use of Rule 10b5-1 trading plans is a common practice among executives to manage their equity holdings in compliance with insider trading regulations, similar to practices observed at companies like Cisco Systems (CSCO) or Juniper Networks (JNPR) where executives also utilize such plans for systematic stock sales.

Related Party Transactions

• Sales of shares held in a Childrens' Trust for which Kenneth Duda serves as co-trustee.
• Sales of shares held by a 501(c) Foundation for which Kenneth Duda and his spouse serve as co-trustee.
• Indirect beneficial ownership through Jennifer Duda Annuity Trusts (spouse as trustee) and Kenneth Duda Annuity Trusts (reporting person as trustee).
• Indirect beneficial ownership through a family trust for which Kenneth Duda is co-trustee.

Stakeholder Impact

• Shareholders: May observe insider selling, but the pre-arranged 10b5-1 plan mitigates concerns about opportunistic selling. The total shares sold represent a small fraction of the company's outstanding shares.
• Employees: No direct impact on employees is indicated by this filing.
• Customers/Suppliers/Creditors: No direct impact on these stakeholders is indicated by this filing.

Next Steps

• No specific future actions or milestones for the company are mentioned in this insider trading report. The reporting person has an ongoing obligation to report changes in beneficial ownership.

Key Dates

Keywords

Arista Networks, ANET, Kenneth Duda, Insider Trading, Form 4, Stock Option Exercise, Rule 10b5-1 Plan, Executive Compensation, Common Stock Sale, CTO