Silicon Investor - Cisco Systems, Inc. (CSCO)

[Eric] [graphic] Cisco Systems Inc. has added a new event to its website: Cisco Q4FY2...

Eric — 8/5/2026 5:08:57 PM

Cisco Systems Inc. has added a new event to its website:

Cisco Q4FY26 Earnings Results

Click here for a complete listing of Cisco Systems Inc. Investor Relations events.

[Eric] Cisco Systems Inc. has added a new press release to its website: Cisco Schedule...

Eric — 8/5/2026 4:55:22 PM

Cisco Systems Inc. has added a new press release to its website:

Cisco Schedules Conference Call for Q4 Fiscal Year 2026 Financial Results

SAN JOSE, Calif., Aug. 5, 2026 /PRNewswire/ -- Cisco (NASDAQ: CSCO) has scheduled a conference call for Wednesday, Aug 12, 2026, at 1:30 PM (PT); 4:30 PM (ET) to announce its fourth quarter fiscal year 2026 financial results for the period ending Saturday, July 25, 2026.

Financial results will be released over PR Newswire via US National and European Financial distribution, after the close of the market on Wednesday, Aug 12, 2026. Cisco's quarterly earnings press release will be posted at https://newsroom.cisco.com.

Date:
Wednesday, Aug 12, 2026

Time:
1:30 PM (PT); 4:30 PM (ET)

To Listen via Telephone:
888-848-6507
212-519-0847 (for International Callers)

To Listen via the Internet:
We are pleased to offer a live and replay audio broadcast of the conference call with corresponding slides at https://investor.cisco.com.

The conference call will also be livestreamed on YouTube, LinkedIn, & X.

Replay:
A telephone playback of the Q4 FY2026 conference call is scheduled to be available beginning at 4:00 PM (PT) on Aug 12, 2026, through 10:00 PM (PT) Aug 18, 2026. The replay will be accessible by calling 800-839-2232 (International callers: 203-369-3662). The call runs 24 hours/day, including weekends. An archived version of the webcast will be available on Cisco's Investor Relations website at https://investor.cisco.com.

About Cisco

Cisco (NASDAQ: CSCO) is the worldwide technology leader that is revolutionizing the way organizations connect and protect in the AI era. For more than 40 years, Cisco has securely connected the world. With its industry leading AI-powered solutions and services, Cisco enables its customers, partners and communities to unlock innovation, enhance productivity and strengthen digital resilience. With purpose at its core, Cisco remains committed to creating a more connected and inclusive future for all. Discover more on The Newsroom and follow us on X at @Cisco.

Investor Relations Contact:	Press Contact:
Sami Badri	Britt Stagnaro
Cisco	Cisco
sambadri@cisco.com	media_pr@external.cisco.com

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SOURCE Cisco Systems, Inc.

Click here for a complete listing of Cisco Systems Inc. press releases.

[Eric] Cisco Hints At Big AI Ramp — JPMorgan Says 2026 Orders Could Surprise To The Ups...

Eric — 11/17/2025 4:04:13 PM

Cisco Hints At Big AI Ramp — JPMorgan Says 2026 Orders Could Surprise To The Upside

-0.28%

Following Cisco Systems Inc's (NASDAQ:CSCO) earnings release for the fiscal first quarter, JPMorgan hosted an investor meeting with the Head of Investor Relations, Sami Badri.

The Cisco Systems Analyst: Analyst Samik Chatterjee reiterated an Overweight rating on the stock.

Check out other analyst stock ratings.

The Cisco Systems Thesis: Chatterjee mentioned the following takeaways after the meeting:

The company's fiscal 2026 guidance for hyperscaler AI order of more than $4 billion is "a minimum-level target."
Most of the AI opportunity pipeline, which is worth over $2 billion and includes NeoCloud and Enterprise AI, was produced over the last quarter.
The Sovereign AI pipeline is not reflected in the over $2 billion estimates.
The gross margin pressure experienced in the fiscal first quarter was mostly due to mix and year-on-year comps.
The telco vertical strength is more durable than the 4G cycle.
A significant mix shift to new products is required for the company to meet its security target growth rate of 15%-17%.

CSCO Price Action: Cisco Systems shares were up 1.42% at $79.11 at the time of publication on Monday. The stock is trading near its 52-week high of $79.50, according to Benzinga Pro data.

Cisco Systems, with a market cap of $311.75 billion, is positioned in the communications equipment sector, where its P/E ratio of 30.1 indicates a premium valuation relative to historical averages.

The stock has approached its 52-week high of $79.50, reflecting strong investor confidence amid a broader industry trend towards digital transformation and increased demand for networking solutions.

Additionally, a dividend yield of 2.1% highlights its commitment to returning value to shareholders, which is particularly appealing in a competitive market.

Read More:

Cisco Beats Q1 On Strong AI Demand, Execution; Analysts Raise Price Targets

Photo: MacroEcon/Shutterstock

[Eric] Cisco Systems IncNorth AmericaMaking a Pitch for the Bull Case November 13, 202...

Eric — 11/14/2025 4:23:35 PM

Cisco Systems Inc
North America

Making a Pitch for the Bull Case

November 13, 2025 01:17 AM GMT

Meta A Marshall, Mary B Lenox, CPA

Contents

Bottom Line
Analysis
Risk Reward - Cisco Systems Inc (CSCO.O)
Financials

WHAT'S CHANGED?

From:To:Cisco Systems Inc (CSCO.O)

Price Target

$77.00

$82.00

Reaction to earnings
UnchangedImpact to our thesis
Modest upsideFinancial results versus consensus
Modest revision higherDirection of next 12-month consensus EPS
Source: Company data, Morgan Stanley Research

CSCO's FQ1 posted slight upside, but the real surprise was on AI orders, which came in at $1.3bn in FQ1, with the company now expecting $3bn of AI rev in FY26. Remain OW as AI becoming more material, with sovereign opportunity still on the come, a setup which could support further rerating.

Key takeaways

AI orders of $1.3bn, with an expectation of ~$3bn of AI revenue this year, represented meaningful upside to our and buyside expectations.
Despite concerns on campus switching cycle and Fed, both performed well, aligning with our checks.
Gross margins headwinds from commodity pricing manageable, with gross margin guides staying as is.
Security growth was disappointing, but explained in part by differences in how Splunk orders came in vs. expects on premise / cloud split.
Remain OW given AI potential in scale-across and in sovereigns, both forward opportunities not priced into stock today.

COMPANY DATA

- Cisco Systems Inc
  (CSCO.O, CSCO US)
- Telecom & Networking Equipment |United States of America
Stock Rating
Overweight
Industry View In-Line
Price target $82.00
Shr price, close (Nov 12, 2025) $73.96
Mkt cap, curr (mm) $294,545
52-Week Range $74.84-52.11

AI connecting Cisco to more growth opportunities. Our OW on Cisco had been based around a belief that growth opportunities between campus upgrades, Splunk and AI were enough to help Cisco generate double digit earnings growth, which overall should help the company close the ~5x turn gap it has with the S&P. Two of three of those drivers are performing better than expected currently, with AI growth potential far greater than expected. While we had entered the quarter relatively muted, we did note that AI orders greater than $1bn would be a positive catalyst, which Cisco outperformed with $1.3bn of orders. With the company now expecting ~$3bn of revenue in FY26 from AI, Cisco’s AI business has gone from ~2% of the company to almost 5% in a couple of years, becoming a more meaningful contributor to growth. Combined with a healthy campus upgrade cycle, this lays the groundwork for rerating potential, particularly if sovereign opportunity becomes more sizeable over the next year, keeping us OW.

What we liked:

AI demand outperformed, with more to come. Cisco's AI orders were $1.3bn in the quarter, up from $800mm last quarter, with the company believing they will now book $3bn of cloud AI revenue in FY26 (up from ~$1bn in FY25). This strength is on the back of 4 new engagements, one with each of the hyperscalers, and is fairly evenly split between optics and switching. We would note the company also spoke to another $2bn of pipeline for revenue from neo clouds / sovereigns / enterprise AI use cases. Given we think scale across will be a bigger market over the next couple of years, we see continued growth potential for Cisco with their Acacia / Luxtera / Silicon One portfolios.
Early campus refresh traction. Cisco noted that in FQ1 the company saw accelerated order growth across their campus portfolio (switching, routing, wireless, IoT). This had been a trend we picked up in our checks and an opportunity we highlighted in a deep dive earlier this year. However, given uncertainty with macro / tariffs, we were uncertain whether we would see strength here until early next year.
Gross margins remained resilient despite commodity headwinds. Cisco's gross margins came in at 68.1% vs. our expectation of 68% in FQ1. This was despite Splunk revenue underperforming expectations during the quarter (as a result of on-premise / cloud mix). Additionally, this is a level the company believes they can maintain despite meaningful recent increases in DRAM pricing. While not calling out inventory balances, the company did note they have memory commitments to meet outlook, a positive given constraints in the market currently.

What we are watching:

Security portfolio underwhelmed, though some of that due to business model transitions. Cisco's security business was down 2% Y/Y, worse than our expectation of 4.5% Y/Y growth and meaningfully below 15-17% targets the company has laid out. The company noted that while ongoing product transition is a headwind on the core business (new products about 1/3rd of the business, growing double digits), the difference in performance vs. expectations was largely attributable to Splunk revenue coming in differently than expected. The company had expected about 50/50 split between on-premise / cloud, with actual revenue coming in 1/3rd on-premise / 2/3rd cloud, a headwind to performance. To highlight this, Splunk ARR and product RPO grew double digits in the quarter (added ~250 new customers). We continue to monitor the security business given profitability and key to pulling through other networking business, but were encouraged by some of the Splunk detail given vs results.
Outlook implies core growth (ex-AI) below longer term growth targets. Cisco laid out a 4-6% revenue growth CAGR target at their Analyst Day in 2024. While the AI story is running well ahead of expectations, and providing a significant multi-year growth tailwind for the company, backing out expected AI growth from the ~8% revenue guide for FY26 gets you to sub 4%. Part of this headwind is the Splunk revenue transition highlighted above, which gives us more confidence in the core business.
Capital allocation still opting for share repurchases vs. debt repayment. Cisco generated ~$3.2bn FCF in FQ1. While the company is operating at <1x net debt / EBITDA, the company is choosing to use cash for share repurchases ($2.3bn in the quarter) vs. debt repayment in the near term. The company notes they would like to maintain flexibility on the balance sheet, which current levels certainly afford.

Networking strength offset security weakness.

CSCO reported FQ1 non-GAAP revenue / EPS of $14.9B/ $1.00 ahead of our expectations of $14.7B/$0.98. Product orders were up 13% Y/Y, with Service Provider/Cloud orders up 45% Y/Y. Non-GAAP gross margins were 68.1% (vs. MSe of 68.0%), which benefitted from less impact from tariffs. There were $1.3bn AI orders in the quarter from hyperscalers. Upside in the quarter was driven by networking that came in at $7,768mm vs MSe of $7,459mm, benefitting from campus refresh. This was somewhat offset by security underperformance of $1,980mm (vs. MSe of $2,107mm). Top-line drove stronger EPS of $1.00 (vs. MSe of $0.98). We increase FY26 to reflect strong networking demand, particularly the campus refresh. Our revised FQ2'26 / FY25 non-GAAP revenue / EPS estimates are now $15.1bn / $1.01 and $60.6n / $4.09 vs. $14.8bn / $1.00 and $59.5bn / $4.02 previously.

Remain OW, $82 PT from $77. We rollforward our PT to FY27 estimates. Our $82 base case represents 19x a ~$4.32 FY27 EPS (from 19x a ~$4 FY26 EPS). Our multiple of 19x is based on the upper end of the traditional range. Our $56 (from $54) bear case reflects 14x $4 EPS (from 14x $3.8 FY26 EPS). The 14x multiple is closer to trading averages over the last 10 years. Our $100 (from $92 FY26 EPS) bull case assumes bull case FY27 EPS of $4.50 (from $4.2 FY26 EPS). The 22x multiple is closer to the historical 10-year peak multiple. We believe CSCO could trade closer to the bull case with the Cat 9k refresh cycle or if AI cloud business were to become more meaningful to growth of the entire business. Risks to our PT include changes in tariff and macro weakness.

Morgan Stanley

11/13/2025

[Eric] Briefing.com 04:14 PM EST, 11/12/2025 Cisco beats by $0.02, reports revs in-li...

Eric — 11/12/2025 4:24:58 PM

Briefing.com

04:14 PM EST, 11/12/2025

Cisco beats by $0.02, reports revs in-line; guides JanQ EPS above consensus, revs above consensus; guides FY26 EPS above consensus, revs above consensus

+3.14%

Reports Q1 (Oct) earnings of $1.00 per share, excluding non-recurring items, $0.02 better than the FactSet Consensus of $0.98; revenues rose 7.5% year/year to $14.88 bln vs the $14.78 bln FactSet Consensus.Co reports Q1 non-GAAP operating margin of 34.4% vs 33-34% prior guidance.Remaining Performance Obligations (RPO): $42.9 bln, up 7% in total. Product RPO was up 10%, of which long-term RPO was $11.8 billion, up 13%. Services RPO was up 4%.Growth in product orders across all geographies and customer markets, demonstrating strong demand for Cisco's technologies. Product orders up 13% yr/yr, with double-digit growth in Networking product orders for the fifth consecutive quarter.AI Infrastructure orders taken from hyperscaler customers totaled $1.3 bln, reflecting a significant acceleration in growth. Major multi-year, multi-billion-dollar campus networking refresh cycle underway. All technologies within campus networking (switching, routing, wireless and IoT) saw accelerated order growth in Q1. All next-generation solutions including smart switches, secure routers and WiFi 7 products are ramping faster than prior product launches.Co issues upside guidance for Q2 (Jan), sees EPS of $1.01-1.03, excluding non-recurring items, vs. $0.98 FactSet Consensus; sees Q2 revs of $15.00-15.20 bln vs. $14.62 bln FactSet Consensus.Co guides to Q2 non-GAAP operating margin of 33.5-34.5%. Co issues upside guidance for FY26, sees EPS of $4.08-4.14, excluding non-recurring items, vs. $4.04 FactSet Consensus and vs $4.00-4.06 prior guidance; sees FY26 revs of $60.20-61.00 bln vs. $59.64 bln FactSet Consensus and vs $59-60 bln prior guidance.

[Eric] Yep, I held a ton of Cisco shares purchased way back in 1991. Sold the vast ma...

Eric — 6/20/2025 4:04:11 PM

Yep,

I held a ton of Cisco shares purchased way back in 1991.

Sold the vast majority before March of 2000.

1998, 1999.

[Johnny Canuck] Still not back to the peaks of 2000. During the dot.com bust a lot of companies ...

Johnny Canuck — 6/20/2025 3:02:59 PM

Still not back to the peaks of 2000. During the dot.com bust a lot of companies went out of business and a few survived but took 20 years to get even close to the all time highs

Only a few like ORCL, MSFT and QCOM have managed to exceed the 2000 highs.

Even boring IBM has found new life through AI and quantum computing after finally spinning off there slow growth to no growth businesses.

[Eric] DJ Cisco Was the Dot-Com Busts Biggest Loser. Now Its at a 25-Year High. -- Barr...

Eric — 6/20/2025 2:11:01 PM

DJ Cisco Was the Dot-Com Busts Biggest Loser. Now Its at a 25-Year High. -- Barrons.com

1:35 PM ET 6/20/25 | Dow Jones

By Teresa Rivas

It took the Nasdaq Composite 15 years to recover after the dot-com bubble burst, and now one of tech's hardest-hit companies may finally surpass its 2000 high.

Cisco Systems soared some 3,800%, from $2 at the start of 1995 to more than $80 in March 2000, when the Nasdaq Composite peaked. That made it the world's most valuable company, with a market capitalization of more than half a trillion dollars.

It swiftly came back to earth, tumbling nearly 90% to a low of less than $10 in October 2002. The company wasn't an epic failure like pets.com -- it was still selling billions every year -- but investors were no longer willing to assign sky-high premiums to tech stocks anymore.

Now shares have popped 11% this year, boosted by strong earnings and hopes the company can cash in on AI. On Friday, Cisco was trading around $66.21, putting it on track for its highest close since Sept. 7, 2000 -- when it reached $66.25 -- and less than 20% away from its 2000 record.

J.P. Morgan analyst Samik Chatterjee believes the stock can reach $73, and reiterated an Overweight rating Friday.

He argues skeptics aren't giving Cisco enough credit. Most enthusiasm about AI has focused on the cloud and data centers, but physical networking hardware -- Cisco's bread and butter -- will be needed as well. That makes him confident Cisco can meet its fiscal 2026 and 2027 revenue growth targets of 4% to 6%.

Cisco's security business, which offers products covering networking, data center, cloud, and collaboration, is in the midst of a transformation, including its recent acquisition of Splunk, that could make it a leader in the space, Chatterjee argues. He believes "the combination of organic and inorganic investments makes the 15% to 17% growth target for the segment more achievable, even though still ambitious."

That much was evident at the company's recent Cisco Live 2025, where it showcased innovations and "demonstrated how Cisco is moving toward solutions where Security is embedded within the product, from networking equipment to AI management systems," Chatterjee writes.

Not all analysts are as bullish. Just over half the 25 analysts tracked by FactSet have a Buy rating or equivalent on the shares and the average target is $66. Still, the last bearish analyst threw in the towel this spring and targets range as high as $78.

Someone call Prince on a Cisco IP desk phone, because it's almost time to party like it's 1999.

[Eric] DJ Cisco Could be 'the Next IBM,' Analyst Says -- Market Talk 12:50 PM ET 2/13/...

Eric — 2/13/2025 4:05:12 PM

DJ Cisco Could be 'the Next IBM,' Analyst Says -- Market Talk

12:50 PM ET 2/13/25 | Dow Jones

Related Quotes


3:59 PM ET 2/13/25
Symbol	Last	% Chg
CSCO	63.78	2.00%
IBM	259.19	1.32%
Real time quote.

1250 ET -

Similarities are emerging between Cisco Systems and International Business Machines. IBM was unloved by investors until it started hitting numbers, buying software and posting growth, which has prompted a surge in stock price, Melius Research analysts say in a note. Cisco was similarly overlooked by Wall Street, but the networking-equipment company has struck a better tone in recent quarters, with orders trending upwards and solid gross margins. Now, orders are ramping, and the company's artificial-intelligence strategy is making real progress, analysts say. Shares rise 2.2%, one day after Cisco boosted its revenue outlook for the year, prompted by stronger-than-expected sales in its fiscal 2Q. (connor.hart@wsj.com)

[Eric] [graphic] Cisco Systems, Inc. has added a new press release to its website: ...

Eric — 5/15/2024 4:16:31 PM

Cisco Systems, Inc. has added a new press release to its website:

CISCO REPORTS THIRD QUARTER EARNINGS

SAN JOSE, Calif., May 15, 2024 /PRNewswire/ --

News Summary:

$12.7 billion in revenue, down 13% year over year, in line with expectations and reflects our customers' continued implementation of products on-hand
Strong profitability with GAAP gross margin of 65.1% and non-GAAP gross margin of 68.3%
Transformed business model, further enhanced by the Splunk acquisition:

Total subscription revenue of $6.9 billion including Splunk, representing 54% of total revenue
Total annualized recurring revenue (ARR) at $29.2 billion including $4.2 billion from Splunk, up 22% year over year, and product ARR at $15.5 billion, up 44% year over year

Gary Steele, former Splunk CEO, named president of Go-to-Market, effective immediately
Q3 FY 2024 Results:

Revenue: $12.7 billion

Decrease of 13% year over year
Splunk contributed $413 million in revenue

Earnings per Share: GAAP: $0.46; Non-GAAP: $0.88

GAAP EPS decreased 41% year over year, which includes a negative $0.09 impact from the Splunk acquisition
Non-GAAP EPS decreased 12% year over year, which includes a negative $0.01 impact from the Splunk acquisition

Q4 FY 2024 Guidance:

Revenue: $13.4 billion to $13.6 billion
Earnings per Share: GAAP: $0.46 to $0.51; Non-GAAP: $0.84 to $0.86

FY 2024 Guidance:

Revenue: $53.6 billion to $53.8 billion
Earnings per Share: GAAP: $2.46 to $2.51; Non-GAAP: $3.69 to $3.71

Cisco today reported third quarter results for the period ended April 27, 2024. Cisco reported third quarter revenue of $12.7 billion, net income on a generally accepted accounting principles (GAAP) basis of $1.9 billion or $0.46 per share, and non-GAAP net income of $3.6 billion or $0.88 per share.

"We delivered a solid Q3 performance in what remains a dynamic environment" said Chuck Robbins, chair and CEO of Cisco. "Our unique ability to bring together networking, security, observability, and data enables Cisco to offer our customers unrivaled digital resilience for the AI era."

"Revenue, gross margin and non-GAAP EPS in Q3 were at the high end or above our guidance range, both including and excluding Splunk, resulting in continued operating leverage," said Scott Herren, CFO of Cisco. "Customers are consuming the equipment shipped over the last few quarters in line with our expectations and we are seeing stabilization of demand as a result. The addition of Splunk to our product line will be a catalyst for further growth."

Gary Steele Named President of Go-to-Market

Cisco has named Gary Steele as President of Go-to-Market, effective immediately. Steele is well known for his operational excellence, and in this new role, he will work closely with Robbins to set and execute against Cisco's strategic plans and goals. He will continue to lead the Splunk team through the integration process to ensure a seamless integration into Cisco.

Cisco also announced that Jeff Sharritts, Cisco's Chief Customer and Partner Officer, will depart Cisco after a successful 24-year career at the company. Sharritts will remain with Cisco until mid-July to ensure a seamless transition.

GAAP Results

	Q3 FY 2024	Q3 FY 2023	Vs. Q3 FY 2023
Revenue	$ 12.7 billion	$ 14.6 billion	(13) %
Net Income	$ 1.9 billion	$ 3.2 billion	(41) %
Diluted Earnings per Share (EPS)	$ 0.46	$ 0.78	(41) %

The acquisition of Splunk, including financing costs, had a negative impact of $0.09 to GAAP EPS, for the third quarter of fiscal 2024.

Non-GAAP Results

	Q3 FY 2024	Q3 FY 2023	Vs. Q3 FY 2023
Net Income	$ 3.6 billion	$ 4.1 billion	(14) %
EPS	$ 0.88	$ 1.00	(12) %

The acquisition of Splunk, including financing costs, had a negative impact of $0.01 to Non-GAAP EPS, for the third quarter of fiscal 2024.

Reconciliations between net income, EPS, and other measures on a GAAP and non-GAAP basis are provided in the tables located in the section entitled "Reconciliations of GAAP to non-GAAP Measures."

Cisco Declares Quarterly Dividend

Cisco has declared a quarterly dividend of $0.40 per common share to be paid on July 24, 2024, to all stockholders of record as of the close of business on July 5, 2024. Future dividends will be subject to Board approval.

Financial Summary

All comparative percentages are on a year-over-year basis unless otherwise noted.

Q3 FY 2024 Highlights

Revenue -- Total revenue was $12.7 billion, down 13%, with product revenue down 19% and service revenue up 6%. Cisco completed the acquisition of Splunk Inc. ("Splunk") in the third quarter of fiscal 2024. Splunk contributed $413 million of total revenue for the third quarter of fiscal 2024.

Revenue by geographic segment was: Americas down 15%, EMEA down 9%, and APJC down 12%. Product revenue performance reflected growth in Security up 36% and Observability up 27%. Networking was down 27%. Product revenue in Collaboration was flat. Security and Observability, excluding Splunk, grew 3% and 14%, respectively, in the third quarter of fiscal 2024.

Gross Margin -- On a GAAP basis, total gross margin, product gross margin, and service gross margin were 65.1%, 63.5%, and 69.2%, respectively, as compared with 63.4%, 62.7%, and 65.4%, respectively, in the third quarter of fiscal 2023.

On a non-GAAP basis, total gross margin, product gross margin, and service gross margin were 68.3%, 66.9%, and 71.6%, respectively, as compared with 65.2%, 64.5%, and 67.3%, respectively, in the third quarter of fiscal 2023.

Total gross margins by geographic segment were: 67.9% for the Americas, 69.6% for EMEA and 67.4% for APJC.

Operating Expenses -- On a GAAP basis, operating expenses were $6.1 billion, up 15%, and were 47.9% of revenue. Non-GAAP operating expenses were $4.3 billion, down 5%, and were 34.0% of revenue.

Operating Income -- GAAP operating income was $2.2 billion, down 44%, with GAAP operating margin of 17.2%. Non-GAAP operating income was $4.3 billion, down 12%, with non-GAAP operating margin at 34.2%.

Provision for Income Taxes -- The GAAP tax provision rate was 15.6%. The non-GAAP tax provision rate was 19.0%.

Net Income and EPS -- On a GAAP basis, net income was $1.9 billion and EPS was $0.46, each a decrease of 41%. On a non-GAAP basis, net income was $3.6 billion, a decrease of 14%, and EPS was $0.88, a decrease of 12%.

Cash Flow from Operating Activities -- $4.0 billion for the third quarter of fiscal 2024, a decrease of 24%, compared with $5.2 billion for the third quarter of fiscal 2023.

Balance Sheet and Other Financial Highlights

Cash and Cash Equivalents and Investments -- $18.8 billion at the end of the third quarter of fiscal 2024, compared with $26.1 billion at the end of fiscal 2023.

Remaining Performance Obligations (RPO) -- $38.8 billion, up 21% in total, with 52% of this amount to be recognized as revenue over the next 12 months. Product RPO were up 29% and service RPO were up 14%.

Deferred Revenue -- $27.5 billion, up 13% in total, with deferred product revenue up 18%. Deferred service revenue was up 9%.

Capital Allocation -- In the third quarter of fiscal 2024, we returned $2.9 billion to stockholders through share buybacks and dividends. We declared and paid a cash dividend of $0.40 per common share, or $1.6 billion, and repurchased approximately 26 million shares of common stock under our stock repurchase program at an average price of $49.22 per share for an aggregate purchase price of $1.3 billion. The remaining authorized amount for stock repurchases under the program is $7.2 billion with no termination date.

Acquisitions

In the third quarter of fiscal 2024, we closed the following acquisitions:

Splunk Inc., a public cybersecurity and observability company
Isovalent, Inc., a privately held cloud native solutions company

Guidance

Cisco estimates the following results for the fourth quarter of fiscal 2024:

Q4 FY 2024
Revenue		$13.4 billion - $13.6 billion
Non-GAAP gross margin rate		66.5% – 67.5%
Non-GAAP operating margin rate		31.5% – 32.5%
Non-GAAP EPS		$0.84 – $0.86

Our Q4 FY 2024 guidance includes $950 million to $1 billion in revenue from Splunk and a negative impact to non-GAAP EPS of approximately ($0.03) as the interest impact from financing the acquisition more than offsets the operating benefit.

Cisco estimates that GAAP EPS will be $0.46 to $0.51 for the fourth quarter of fiscal 2024.

Cisco estimates the following results for fiscal 2024:

FY 2024
Revenue		$53.6 billion - $53.8 billion
Non-GAAP EPS		$3.69 – $3.71

Cisco estimates that GAAP EPS will be $2.46 to $2.51 for fiscal 2024.

Our Q4 FY 2024 guidance assumes an effective tax provision rate of approximately 18% for GAAP and non-GAAP results. Our FY 2024 guidance assumes an effective tax provision rate of approximately 17% for GAAP and approximately 19% for non-GAAP results.

A reconciliation between the guidance on a GAAP and non-GAAP basis is provided in the tables entitled "GAAP to non-GAAP Guidance" located in the section entitled "Reconciliations of GAAP to non-GAAP Measures."

Editor's Notes:

Q3 fiscal year 2024 conference call to discuss Cisco's results along with its guidance will be held on Wednesday, May 15, 2024 at 1:30 p.m. Pacific Time. Conference call number is 1-888-848-6507 (United States) or 1-212-519-0847 (international).
Conference call replay will be available from 4:00 p.m. Pacific Time, May 15, 2024 to 4:00 p.m. Pacific Time, May 21, 2024 at 1-800-391-9851 (United States) or 1-203-369-3268 (international). The replay will also be available via webcast on the Cisco Investor Relations website at u27227478.ct.sendgrid.net.
Additional information regarding Cisco's financials, as well as a webcast of the conference call with visuals designed to guide participants through the call, will be available at 1:30 p.m. Pacific Time, May 15, 2024. Text of the conference call's prepared remarks will be available within 24 hours of completion of the call. The webcast will include both the prepared remarks and the question-and-answer session. This information, along with the GAAP to non-GAAP reconciliation information, will be available on the Cisco Investor Relations website at u27227478.ct.sendgrid.net.

CISCO SYSTEMS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per-share amounts) (Unaudited)

	Three Months Ended		Nine Months Ended
	April 27, 2024	April 29, 2023	April 27, 2024	April 29, 2023
REVENUE:
Product	$ 9,024	$ 11,092	$ 29,395	$ 31,492
Service	3,678	3,479	10,766	10,303
Total revenue	12,702	14,571	40,161	41,795
COST OF SALES:
Product	3,295	4,136	10,695	12,353
Service	1,134	1,203	3,419	3,437
Total cost of sales	4,429	5,339	14,114	15,790
GROSS MARGIN	8,273	9,232	26,047	26,005
OPERATING EXPENSES:
Research and development	1,948	1,962	5,804	5,598
Sales and marketing	2,559	2,526	7,523	7,301
General and administrative	736	641	2,050	1,788
Amortization of purchased intangible assets	297	70	430	212
Restructuring and other charges	542	87	677	328
Total operating expenses	6,082	5,286	16,484	15,227
OPERATING INCOME	2,191	3,946	9,563	10,778
Interest income	411	262	1,095	650
Interest expense	(357)	(109)	(588)	(316)
Other income (loss), net	(10)	(142)	(232)	(265)
Interest and other income (loss), net	44	11	275	69
INCOME BEFORE PROVISION FOR INCOME TAXES	2,235	3,957	9,838	10,847
Provision for income taxes	349	745	1,680	2,192
NET INCOME	$ 1,886	$ 3,212	$ 8,158	$ 8,655

Net income per share:
Basic	$ 0.47	$ 0.79	$ 2.01	$ 2.11
Diluted	$ 0.46	$ 0.78	$ 2.00	$ 2.11
Shares used in per-share calculation:
Basic	4,042	4,089	4,051	4,100
Diluted	4,060	4,110	4,071	4,111

CISCO SYSTEMS, INC. REVENUE BY SEGMENT (In millions, except percentages)

	April 27, 2024
	Three Months Ended		Nine Months Ended
	Amount	Y/Y %	Amount	Y/Y %
Revenue:
Americas	$ 7,372	(15) %	$ 23,904	(2) %
EMEA	3,458	(9) %	10,606	(5) %
APJC	1,873	(12) %	5,652	(9) %
Total	$ 12,702	(13) %	$ 40,161	(4) %

Amounts may not sum and percentages may not recalculate due to rounding.

CISCO SYSTEMS, INC. GROSS MARGIN PERCENTAGE BY SEGMENT (In percentages)

	April 27, 2024
	Three Months Ended	Nine Months Ended
Gross Margin Percentage:
Americas	67.9 %	66.5 %
EMEA	69.6 %	69.1 %
APJC	67.4 %	67.5 %

CISCO SYSTEMS, INC. REVENUE FOR GROUPS OF SIMILAR PRODUCTS AND SERVICES (In millions, except percentages)

	April 27, 2024
	Three Months Ended		Nine Months Ended
	Amount	Y/Y %	Amount	Y/Y %
Revenue:
Networking	$ 6,522	(27) %	$ 22,425	(11) %
Security	1,304	36 %	3,288	14 %
Collaboration	987	— %	3,093	2 %
Observability	211	27 %	589	21 %
Total Product	9,024	(19) %	29,395	(7) %
Services	3,678	6 %	10,766	5 %
Total	$ 12,702	(13) %	$ 40,161	(4) %

Security and Observability, excluding Splunk, grew 3% and 14%, respectively, in the third quarter of fiscal 2024, and 3% and 17%, respectively, for the first nine months of fiscal 2024.

Amounts may not sum and percentages may not recalculate due to rounding.

CISCO SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) (Unaudited)

	April 27, 2024	July 29, 2023
ASSETS
Current assets:
Cash and cash equivalents	$ 8,913	$ 10,123
Investments	9,857	16,023
Accounts receivable, net of allowance of $81 at April 27, 2024 and $85 at July 29, 2023	5,127	5,854
Inventories	3,118	3,644
Financing receivables, net	3,443	3,352
Other current assets	5,428	4,352
Total current assets	35,886	43,348
Property and equipment, net	2,000	2,085
Financing receivables, net	3,251	3,483
Goodwill	58,633	38,535
Purchased intangible assets, net	11,819	1,818
Deferred tax assets	5,527	6,576
Other assets	5,882	6,007
TOTAL ASSETS	$ 122,998	$ 101,852
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt	$ 11,891	$ 1,733
Accounts payable	2,054	2,313
Income taxes payable	1,867	4,235
Accrued compensation	3,211	3,984
Deferred revenue	15,751	13,908
Other current liabilities	5,334	5,136
Total current liabilities	40,108	31,309
Long-term debt	20,102	6,658
Income taxes payable	2,869	5,756
Deferred revenue	11,724	11,642
Other long-term liabilities	2,427	2,134
Total liabilities	77,230	57,499
Total equity	45,768	44,353
TOTAL LIABILITIES AND EQUITY	$ 122,998	$ 101,852

CISCO SYSTEMS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited)

	Nine Months Ended
	April 27, 2024	April 29, 2023
Cash flows from operating activities:
Net income	$ 8,158	$ 8,655
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, and other	1,684	1,304
Share-based compensation expense	2,274	1,720
Provision for receivables	19	11
Deferred income taxes	(245)	(1,343)
(Gains) losses on divestitures, investments and other, net	224	243
Change in operating assets and liabilities, net of effects of acquisitions and divestitures:
Accounts receivable	1,286	1,494
Inventories	530	(894)
Financing receivables	92	1,126
Other assets	(382)	(428)
Accounts payable	(300)	156
Income taxes, net	(5,223)	1,120
Accrued compensation	(1,092)	25
Deferred revenue	211	1,055
Other liabilities	(86)	(324)
Net cash provided by operating activities	7,150	13,920
Cash flows from investing activities:
Purchases of investments	(3,044)	(7,652)
Proceeds from sales of investments	3,874	802
Proceeds from maturities of investments	5,804	3,789
Acquisitions, net of cash and cash equivalents acquired	(25,874)	(96)
Purchases of investments in privately held companies	(82)	(162)
Return of investments in privately held companies	146	72
Acquisition of property and equipment	(472)	(616)
Other	(2)	(24)
Net cash used in investing activities	(19,650)	(3,887)
Cash flows from financing activities:
Issuances of common stock	347	316
Repurchases of common stock - repurchase program	(3,772)	(3,029)
Shares repurchased for tax withholdings on vesting of restricted stock units	(765)	(444)
Short-term borrowings, original maturities of 90 days or less, net	1,547	(602)
Issuances of debt	24,159	—
Repayments of debt	(2,195)	(500)
Repayments of Splunk convertible debt, net	(3,140)	—
Dividends paid	(4,778)	(4,713)
Other	(52)	(4)
Net cash provided by (used in) financing activities	11,351	(8,976)
Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents	(39)	(90)
Net (decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents	(1,188)	967
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period	11,627	8,579
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period	$ 10,439	$ 9,546
Supplemental cash flow information:
Cash paid for interest	$ 350	$ 306
Cash paid for income taxes, net	$ 7,150	$ 2,414

CISCO SYSTEMS, INC. REMAINING PERFORMANCE OBLIGATIONS (In millions, except percentages)

	April 27, 2024		January 27, 2024		April 29, 2023
	Amount	Y/Y%	Amount	Y/Y%	Amount	Y/Y%
Product	$ 18,876	29 %	$ 16,249	12 %	$ 14,681	9 %
Service	19,898	14 %	19,407	12 %	17,401	4 %
Total	$ 38,774	21 %	$ 35,656	12 %	$ 32,082	6 %

We expect 52% of total RPO at April 27, 2024 will be recognized as revenue over the next 12 months.

CISCO SYSTEMS, INC. DEFERRED REVENUE (In millions)

	April 27, 2024	January 27, 2024	April 29, 2023
Deferred revenue:
Product	$ 12,856	$ 11,640	$ 10,895
Service	14,619	14,131	13,365
Total	$ 27,475	$ 25,771	$ 24,260
Reported as:
Current	$ 15,751	$ 14,011	$ 13,249
Noncurrent	11,724	11,760	11,011
Total	$ 27,475	$ 25,771	$ 24,260

CISCO SYSTEMS, INC. DIVIDENDS PAID AND REPURCHASES OF COMMON STOCK (In millions, except per-share amounts)

	DIVIDENDS		STOCK REPURCHASE PROGRAM			TOTAL
Quarter Ended	Per Share	Amount	Shares	Weighted-Average Price per Share	Amount	Amount
Fiscal 2024
April 27, 2024	$ 0.40	$ 1,615	26	$ 49.22	$ 1,256	$ 2,871
January 27, 2024	$ 0.39	$ 1,583	25	$ 49.54	$ 1,254	$ 2,837
October 28, 2023	$ 0.39	$ 1,580	23	$ 54.53	$ 1,252	$ 2,832
Fiscal 2023
July 29, 2023	$ 0.39	$ 1,589	25	$ 50.49	$ 1,254	$ 2,843
April 29, 2023	$ 0.39	$ 1,593	25	$ 49.45	$ 1,259	$ 2,852
January 28, 2023	$ 0.38	$ 1,560	26	$ 47.72	$ 1,256	$ 2,816
October 29, 2022	$ 0.38	$ 1,560	12	$ 43.76	$ 502	$ 2,062

CISCO SYSTEMS, INC. RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES GAAP TO NON-GAAP NET INCOME (In millions)

	Three Months Ended		Nine Months Ended
	April 27, 2024	April 29, 2023	April 27, 2024	April 29, 2023
GAAP net income	$ 1,886	$ 3,212	$ 8,158	$ 8,655
Adjustments to cost of sales:
Share-based compensation expense	139	106	381	293
Amortization of acquisition-related intangible assets	249	156	605	462
Acquisition-related/divestiture costs	12	1	13	4
Total adjustments to GAAP cost of sales	400	263	999	759
Adjustments to operating expenses:
Share-based compensation expense	665	518	1,877	1,431
Amortization of acquisition-related intangible assets	297	70	430	212
Acquisition-related/divestiture costs	264	55	403	178
Russia-Ukraine war costs	(10)	2	(12)	7
Significant asset impairments and restructurings	542	87	677	328
Total adjustments to GAAP operating expenses	1,758	732	3,375	2,156
Adjustments to interest and other income (loss), net:
(Gains) and losses on investments	(7)	123	132	188
Total adjustments to GAAP interest and other income (loss), net	(7)	123	132	188
Total adjustments to GAAP income before provision for income taxes	2,151	1,118	4,506	3,103
Income tax effect of non-GAAP adjustments	(484)	(219)	(1,045)	(623)
Significant tax matters	—	—	—	164
Total adjustments to GAAP provision for income taxes	(484)	(219)	(1,045)	(459)
Non-GAAP net income	$ 3,553	$ 4,111	$ 11,619	$ 11,299

CISCO SYSTEMS, INC. RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES GAAP TO NON-GAAP EPS

	Three Months Ended		Nine Months Ended
	April 27, 2024	April 29, 2023	April 27, 2024	April 29, 2023
GAAP EPS	$ 0.46	$ 0.78	$ 2.00	$ 2.11
Adjustments to GAAP:
Share-based compensation expense	0.20	0.15	0.55	0.42
Amortization of acquisition-related intangible assets	0.13	0.06	0.25	0.16
Acquisition-related/divestiture costs	0.07	0.01	0.10	0.04
Significant asset impairments and restructurings	0.13	0.02	0.17	0.08
(Gains) and losses on investments	—	0.03	0.03	0.05
Income tax effect of non-GAAP adjustments	(0.12)	(0.05)	(0.26)	(0.15)
Significant tax matters	—	—	—	0.04
Non-GAAP EPS	$ 0.88	$ 1.00	$ 2.85	$ 2.75

Amounts may not sum due to rounding.

CISCO SYSTEMS, INC. GAAP TO NON-GAAP EPS IMPACT OF SPLUNK ACQUISITION, INCLUDING FINANCING COSTS

	Three Months Ended
	April 27, 2024
GAAP EPS Impact	$ (0.09)
Amortization of intangible assets	0.05
Acquisition-related costs	0.05
Income tax effect of non-GAAP adjustments	(0.02)
Non-GAAP EPS Impact	$ (0.01)

Amounts may not sum due to rounding.

CISCO SYSTEMS, INC. RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES GROSS MARGINS, OPERATING EXPENSES, OPERATING MARGINS, INTEREST AND OTHER INCOME (LOSS), NET, AND NET INCOME (In millions, except percentages)

	Three Months Ended
	April 27, 2024
	Product Gross Margin	Service Gross Margin	Total Gross Margin	Operating Expenses	Y/Y	Operating Income	Y/Y	Interest and other income (loss), net	Net Income	Y/Y
GAAP amount	$ 5,729	$ 2,544	$ 8,273	$ 6,082	15 %	$ 2,191	(44) %	$ 44	$ 1,886	(41) %
% of revenue	63.5 %	69.2 %	65.1 %	47.9 %		17.2 %		0.3 %	14.8 %
Adjustments to GAAP amounts:
Share-based compensation expense	57	82	139	665		804		—	804
Amortization of acquisition-related intangible assets	249	—	249	297		546		—	546
Acquisition/divestiture-related costs	4	8	12	264		276		—	276
Significant asset impairments and restructurings	—	—	—	542		542		—	542
Russia-Ukraine war costs	—	—	—	(10)		(10)		—	(10)
(Gains) and losses on investments	—	—	—	—		—		(7)	(7)
Income tax effect/significant tax matters	—	—	—	—		—		—	(484)
Non-GAAP amount	$ 6,039	$ 2,634	$ 8,673	$ 4,324	(5) %	$ 4,349	(12) %	$ 37	$ 3,553	(14) %
% of revenue	66.9 %	71.6 %	68.3 %	34.0 %		34.2 %		0.3 %	28.0 %

	Three Months Ended
	April 29, 2023
	Product Gross Margin	Service Gross Margin	Total Gross Margin	Operating Expenses	Operating Income	Interest and other income (loss), net	Net Income
GAAP amount	$ 6,956	$ 2,276	$ 9,232	$ 5,286	$ 3,946	$ 11	$ 3,212
% of revenue	62.7 %	65.4 %	63.4 %	36.3 %	27.1 %	0.1 %	22.0 %
Adjustments to GAAP amounts:
Share-based compensation expense	40	66	106	518	624	—	624
Amortization of acquisition-related intangible assets	156	—	156	70	226	—	226
Acquisition/divestiture-related costs	1	—	1	55	56	—	56
Significant asset impairments and restructurings	—	—	—	87	87	—	87
Russia-Ukraine war costs	—	—	—	2	2	—	2
(Gains) and losses on investments	—	—	—	—	—	123	123
Income tax effect/significant tax matters	—	—	—	—	—	—	(219)
Non-GAAP amount	$ 7,153	$ 2,342	$ 9,495	$ 4,554	$ 4,941	$ 134	$ 4,111
% of revenue	64.5 %	67.3 %	65.2 %	31.3 %	33.9 %	0.9 %	28.2 %

Amounts may not sum and percentages may not recalculate due to rounding.

CISCO SYSTEMS, INC. RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES GROSS MARGINS, OPERATING EXPENSES, OPERATING MARGINS, INTEREST AND OTHER INCOME (LOSS), NET, AND NET INCOME (In millions, except percentages)

	Nine Months Ended
	April 27, 2024
	Product Gross Margin	Service Gross Margin	Total Gross Margin	Operating Expenses	Y/Y	Operating Income	Y/Y	Interest and other income (loss), net	Net Income	Y/Y
GAAP amount	$ 18,700	$ 7,347	$ 26,047	$ 16,484	8 %	$ 9,563	(11) %	$ 275	$ 8,158	(6) %
% of revenue	63.6 %	68.2 %	64.9 %	41.0 %		23.8 %		0.7 %	20.3 %
Adjustments to GAAP amounts:
Share-based compensation expense	157	224	381	1,877		2,258		—	2,258
Amortization of acquisition-related intangible assets	605	—	605	430		1,035		—	1,035
Acquisition/divestiture-related costs	5	8	13	403		416		—	416
Significant asset impairments and restructurings	—	—	—	677		677		—	677
Russia-Ukraine war costs	—	—	—	(12)		(12)		—	(12)
(Gains) and losses on investments	—	—	—	—		—		132	132
Income tax effect/significant tax matters	—	—	—	—		—		—	(1,045)
Non-GAAP amount	$ 19,467	$ 7,579	$ 27,046	$ 13,109	— %	$ 13,937	2 %	$ 407	$ 11,619	3 %
% of revenue	66.2 %	70.4 %	67.3 %	32.6 %		34.7 %		1.0 %	28.9 %

	Nine Months Ended
	April 29, 2023
	Product Gross Margin	Service Gross Margin	Total Gross Margin	Operating Expenses	Operating Income	Interest and other income (loss), net	Net Income
GAAP amount	$ 19,139	$ 6,866	$ 26,005	$ 15,227	$ 10,778	$ 69	$ 8,655
% of revenue	60.8 %	66.6 %	62.2 %	36.4 %	25.8 %	0.2 %	20.7 %
Adjustments to GAAP amounts:
Share-based compensation expense	111	182	293	1,431	1,724	—	1,724
Amortization of acquisition-related intangible assets	462	—	462	212	674	—	674
Acquisition/divestiture-related costs	4	—	4	178	182	—	182
Significant asset impairments and restructurings	—	—	—	328	328	—	328
Russia-Ukraine war costs	—	—	—	7	7	—	7
(Gains) and losses on investments	—	—	—	—	—	188	188
Income tax effect/significant tax matters	—	—	—	—	—	—	(459)
Non-GAAP amount	$ 19,716	$ 7,048	$ 26,764	$ 13,071	$ 13,693	$ 257	$ 11,299
% of revenue	62.6 %	68.4 %	64.0 %	31.3 %	32.8 %	0.6 %	27.0 %

Amounts may not sum and percentages may not recalculate due to rounding.

CISCO SYSTEMS, INC. RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES EFFECTIVE TAX RATE (In percentages)

	Three Months Ended		Nine Months Ended
	April 27, 2024	April 29, 2023	April 27, 2024	April 29, 2023
GAAP effective tax rate	15.6 %	18.8 %	17.1 %	20.2 %
Total adjustments to GAAP provision for income taxes	3.4 %	0.2 %	1.9 %	(1.2) %
Non-GAAP effective tax rate	19.0 %	19.0 %	19.0 %	19.0 %

GAAP TO NON-GAAP GUIDANCE

Q4 FY 2024	Gross Margin Rate	Operating Margin Rate	Earnings per Share (1)
GAAP	63% – 64%	18.5% – 19.5%	$0.46 – $0.51
Estimated adjustments for:
Share-based compensation expense	1.0 %	6.0 %	$0.15 – $0.16
Amortization of acquisition-related intangible assets and acquisition/divestiture-related costs	2.5 %	6.5 %	$0.19 – $0.20
Significant asset impairments and restructurings	—	0.5 %	$0.01 – $0.02
Non-GAAP	66.5% – 67.5%	31.5% – 32.5%	$0.84 – $0.86

FY 2024		Earnings per Share (1)
GAAP		$2.46 – $2.51
Estimated adjustments for:
Share-based compensation expense		$0.58 – $0.59
Amortization of acquisition-related intangible assets and acquisition/divestiture-related costs		$0.46 – $0.47
Significant asset impairments and restructurings		$0.13 – $0.14
(Gains) and losses on investments		$0.03
Non-GAAP		$3.69 – $3.71

(1) Estimated adjustments to GAAP earnings per share are shown after income tax effects.

Except as noted above, this guidance does not include the effects of any future acquisitions/divestitures, asset impairments, Russia-Ukraine war costs, restructurings, (gains) and losses on investments and significant tax matters or other events, which may or may not be significant unless specifically stated.

Forward Looking Statements, Non-GAAP Information and Additional Information

This release may be deemed to contain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other things, statements regarding future events (such as our ability to bring together networking, security, observability, and data to enable us to offer digital resilience to our customers, the stabilization of demand for our products, and the addition of Splunk to our product line as a catalyst for future growth) and the future financial performance of Cisco (including the guidance for Q4 FY 2024 and full year FY 2024) that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including: business and economic conditions and growth trends in the networking industry, our customer markets and various geographic regions; global economic conditions and uncertainties in the geopolitical environment; our development and use of artificial intelligence; overall information technology spending; the growth and evolution of the Internet and levels of capital spending on Internet-based systems; variations in customer demand for products and services, including sales to the service provider market and other customer markets; the return on our investments in certain priorities, key growth areas, and in certain geographical locations, as well as maintaining leadership in Networking and services; the timing of orders and manufacturing and customer lead times; supply constraints; changes in customer order patterns or customer mix; insufficient, excess or obsolete inventory; variability of component costs; variations in sales channels, product costs or mix of products sold; our ability to successfully acquire businesses and technologies and to successfully integrate and operate these acquired businesses and technologies; our ability to achieve expected benefits of our partnerships; increased competition in our product and service markets, including the data center market; dependence on the introduction and market acceptance of new product offerings and standards; rapid technological and market change; manufacturing and sourcing risks; product defects and returns; litigation involving patents, other intellectual property, antitrust, stockholder and other matters, and governmental investigations; our ability to achieve the benefits of restructurings and possible changes in the size and timing of related charges; cyber attacks, data breaches or other incidents; vulnerabilities and critical security defects; our ability to protect personal data; evolving regulatory uncertainty; terrorism; natural catastrophic events (including as a result of global climate change); any pandemic or epidemic; our ability to achieve the benefits anticipated from our investments in sales, engineering, service, marketing and manufacturing activities; our ability to recruit and retain key personnel; our ability to manage financial risk, and to manage expenses during economic downturns; risks related to the global nature of our operations, including our operations in emerging markets; currency fluctuations and other international factors; changes in provision for income taxes, including changes in tax laws and regulations or adverse outcomes resulting from examinations of our income tax returns; potential volatility in operating results; and other factors listed in Cisco's most recent reports on Forms 10-Q and 10-K filed on February 20, 2024 and September 7, 2023, respectively. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in Cisco's most recent reports on Forms 10-Q and 10-K as each may be amended from time to time. Cisco's results of operations for the three and nine months ended April 27, 2024 are not necessarily indicative of Cisco's operating results for any future periods. Any projections in this release are based on limited information currently available to Cisco, which is subject to change. Although any such projections and the factors influencing them will likely change, Cisco will not necessarily update the information, since Cisco will only provide guidance at certain points during the year. Such information speaks only as of the date of this release.

This release includes non-GAAP net income, non-GAAP gross margins, non-GAAP operating expenses, non-GAAP operating income and margin, non-GAAP effective tax rates, non-GAAP interest and other income (loss), net, and non-GAAP net income per share data for the periods presented. It also includes future estimated ranges for gross margin, operating margin, tax provision rate and EPS on a non-GAAP basis.

These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Cisco believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Cisco's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Cisco's results of operations in conjunction with the corresponding GAAP measures.

Cisco believes that the presentation of non-GAAP measures when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and its historical and projected results of operations.

For its internal budgeting process, Cisco's management uses financial statements that do not include, when applicable, share-based compensation expense, amortization of acquisition-related intangible assets, acquisition-related/divestiture costs, significant asset impairments and restructurings, significant litigation settlements and other contingencies, Russia-Ukraine war costs, gains and losses on investments, the income tax effects of the foregoing and significant tax matters. Cisco's management also uses the foregoing non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Cisco. In prior periods, Cisco has excluded other items that it no longer excludes for purposes of its non-GAAP financial measures. From time to time in the future there may be other items that Cisco may exclude for purposes of its internal budgeting process and in reviewing its financial results. For additional information on the items excluded by Cisco from one or more of its non-GAAP financial measures, refer to the Form 8-K regarding this release furnished today to the Securities and Exchange Commission.

Annualized recurring revenue represents the annualized revenue run-rate of active subscriptions, term licenses, operating leases and maintenance contracts at the end of a reporting period, net of rebates to customers and partners as well as certain other revenue adjustments. Includes both revenue recognized ratably as well as upfront on an annualized basis.

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[Tom Clarke] Insider Trading Ahead of Cisco’s $28 Billion Splunk Acquisition? One "lucky" tr...

Tom Clarke — 9/22/2023 11:38:10 AM

Insider Trading Ahead of Cisco’s $28 Billion Splunk Acquisition?

One "lucky" trader appears to have turned $22,000 into $10 million betting on SPLK, a 46,000% return.

decrypt.co

[Eric] MW By buying Splunk, Cisco is closer to becoming a software company 8:23 AM ET ...

Eric — 9/22/2023 9:06:48 AM

MW By buying Splunk, Cisco is closer to becoming a software company

8:23 AM ET 9/22/23 | MarketWatch

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4:00 PM ET 9/21/23
Symbol	Last	% Chg
CSCO	53.34	0.00%
SPLK	144.43	0.00%
Real time quote.

By Therese Poletti

Cisco's plan for 50% of its revenue to come from software by fiscal 2025 is still on track

With Cisco Systems Inc.'s pending acquisition of Splunk Inc., the networking giant is making another major step toward becoming a software company.

On Thursday, Cisco (CSCO) said it was buying Splunk (SPLK) in a deal valued at about $28 billion, or $157 a share in cash, for the cloud-security company. The match had been speculated about for years, and Cisco has been on a buying binge this year, as it seeks to grow with more security and software offerings.

"Together, we will become one of the largest software companies globally," Cisco Chief Executive Chuck Robbins said on a conference call with analysts early Thursday. "The combination of Cisco and Splunk further enhances and accelerates our strategy to securely connect to make everything possible."

Cisco's shares fell nearly 4% on Thursday, while Splunk soared nearly 25%.

Upon closing sometime next year, Cisco said it expects the deal will add an additional $4 billion in annual recurring revenue and will drive more software sales. In fiscal 2023, ended Jan. 31, Splunk reported $3.674 billion in revenue, up 18% from the year-earlier period. That growth rate will also help boost Cisco's overall revenue growth, which the company forecast at an anemic 2% for fiscal 2024.

Also read: Here's why Cisco may want to close the Splunk deal sooner rather than later

Citi analyst Atif Malik pointed out that the company's prior target of 50% of revenue coming from software by fiscal 2025 is still intact. For fiscal 2023, Cisco said it had $17 billion in software revenue, out of total revenue of $57 billion. In past years, Cisco has increased its software revenue through networking subscriptions combined with new routers, and has continued with other subscription-based products to enable recurring revenue, as opposed to sales of networking hardware that have no recurring revenue.

Another factor playing a role in the deal is artificial intelligence, which Cisco told analysts it plans to layer on top of data. Malik noted that the combination with Splunk will enable Cisco to have "a security operations-center intelligence, AI products, as well as a policy AI product, which when combined will be timely given the emergence of Gen AI."

While Cisco potentially acquiring Splunk has been bandied about for years, it's likely that the big push in the enterprise market toward more artificial intelligence was one big factor in finally moving the companies together. Whatever the actual driver, investors for the most part were pleased that Cisco is getting more software in its portfolio, especially security-focused software.

-Therese Poletti

[Glenn Petersen] Cisco makes largest ever acquisition, buying cybersecurity company Splunk for $2...

Glenn Petersen — 9/22/2023 4:44:18 AM

Cisco makes largest ever acquisition, buying cybersecurity company Splunk for $28 billion in cash

PUBLISHED THU, SEP 21 20237:53 AM EDT
UPDATED THU, SEP 21 20234:52 PM EDT
Rohan Goswami @IN/ROHANGOSWAMICNBC @ROGOSWAMI

KEY POINTS

Cisco is acquiring cybersecurity firm Splunk for $157 per share in an all-cash deal.
Cisco will finance the deal using a combination of cash and debt.
The acquisition is by far Cisco’s largest ever and deepens the company’s bet on security software.

Ciscois acquiring cybersecuritysoftware company Splunkfor $157 per share in a cash deal worth about $28 billion, the company said Thursday, in its largest acquisition ever.

Splunk shares ended Thursday up 21%, while Cisco shares closed down 4%.

Splunk’s technology helps businesses monitor and analyze their data to minimize the risk of hacks and resolve technical issues faster. Cisco has long been the world’s largest maker of computer networking equipment and has been bolstering its cybersecurity business to meet customer demands and fuel growth.

Cisco CEO Chuck Robbins emphasized the importance of artificial intelligence and using the power of AI that comes with Splunk’s technology to protect networks.

“Our combined capabilities will drive the next generation of AI-enabled security and observability,” Robbins said, in a statement. “From threat detection and response to threat prediction and prevention, we will help make organizations of all sizes more secure and resilient.”

The deal is expected to close in the third quarter of 2024, and Cisco says it should improve gross margins in the first year and non-GAAP earnings in year two.

The purchase price is equivalent to about 13% of Cisco’s market cap, a big number for a company that has historically avoided blockbuster deals. Prior to Splunk, Cisco’s biggest deal ever was the $6.9 billion purchaseof cable set-top box maker Scientific Atlanta in 2006. At the time, Cisco’s market cap was just over $100 billion.

But as the public cloud has gobbled more of Cisco’s traditional back-end business, the company has needed to find new and big revenue streams. Cybersecurity has been the biggest bet.

In fiscal 2022, Cisco changed the name of its core switching and routing business from Infrastructure Platforms to Secure, Agile Networks, focusing on the need to have security built into networking gear. The company has a separate reporting unit called End-to-End Security, consisting specifically of security products.

Revenue in the core business climbed 22% in the fiscal yearended July 29, to $29.1 billion, and the security unit saw sales rise 4% to $3.9 billion.

Cisco shares have underperformed the Nasdaq this year, rising 12% while the tech-heavy index has jumped 27%. Over the past five years, it’s been an even worse investment relative to the broader sector. The stock is up about 10% over that stretch, trailing the Nasdaq’s 66% gain.

Splunk logo displayed on a phone screen and a laptop keyboard are seen in this illustration photo taken in Krakow, Poland on October 30, 2021. (Photo by Jakub Porzycki/NurPhoto via Getty Images) / Jakub Porzycki | Nurphoto | Getty Images
---------------------------------
Robbins told CNBC’s “Squawk on the Street” on Thursday that he expects organizational synergies between Cisco and Splunk to become clear within 12 to 18 months. The company will finance the deal with a combination of cash and debt, he said.

“Together, we will become one of the largest software companies globally,” Robbins said in a conference call with analysts.

Following the announcement, some analysts raised concerns about potential product overlap, regulatory scrutiny and the price Cisco paid. Oppenheimer’s Ittai Kidron noted on the call that Splunk’s pivot to the cloud has been “underwhelming.”

In recent years, Splunk turned away from an on-premises “customer-managed” approach to focus on a cloud-oriented offering.

Splunk CEO Gary Steele, who will join Cisco’s executive team after the deal closes, said on the call with analysts that, “We still have many large customers who are very dependent upon the capabilities that we allow for in a customer managed environment.”

Steele joined Splunk a little over a year ago. Prior to that, he was CEO of Proofpoint, a cybersecurity firm that was acquired by private equity firm Thoma Bravo in 2021 for $12.3 billion.

If Cisco backs out of the deal or if it’s blocked by regulators, Cisco will pay Splunk a termination fee of $1.48 billion, according to a regulatory filing. Should Splunk walk away, it will pay a $1 billion breakup fee to Cisco.

In 2023, Cisco has acquired four companies focused on security: Armorblox, a threat detection platform; Oort, which does identity management; and Valtix and Lightspin, both in cloud security.

Tidal Partners, Simpson Thacher, and Cravath, Swaine & Moore advised Cisco. Qatalyst Partners, Morgan Stanley, and Skadden, Arps, Slate, Meagher & Flom advised Splunk

Cisco acquires Splunk in cash deal worth $28 billion (cnbc.com)

[Eric] [graphic] Cisco Systems, Inc. has added a new press release to its website: ...

Eric — 5/17/2023 4:13:08 PM

Cisco Systems, Inc. has added a new press release to its website:

CISCO REPORTS THIRD QUARTER EARNINGS

SAN JOSE, Calif., May 17, 2023 /PRNewswire/ --

News Summary:

$14.6 billion in revenue, up 14% year over year; GAAP EPS $0.78, up 7% year over year, and Non-GAAP EPS $1.00, up 15% year over yearQ3 FY 2023 operating cash flow of $5.2 billion, up 43%Continued progress on business model transformation:Total software revenue up 18% year over year and software subscription revenue up 17% year over yearTotal annualized recurring revenue (ARR) at $23.8 billion, up 6% year over year and product ARR up 10% year over yearRemaining performance obligations (RPO) at $32.1 billion, up 6% year over year and product RPO up 9% year over yearQ3 FY 2023 Results: Revenue: $14.6 billionIncrease of 14% year over yearEarnings per Share: GAAP: $0.78; Non-GAAP: $1.00GAAP EPS increased 7% year over yearNon-GAAP EPS increased 15% year over yearQ4 FY 2023 Guidance: Revenue: 14% to 16% growth year over yearEarnings per Share: GAAP: $0.82 to $0.87; Non-GAAP: $1.05 to $1.07FY 2023 Guidance: Revenue: 10% to 10.5% growth year over yearEarnings per Share: GAAP: $2.93 to $2.98; Non-GAAP: $3.80 to $3.82 Cisco today reported third quarter results for the period ended April 29, 2023. Cisco reported third quarter revenue of $14.6 billion, net income on a generally accepted accounting principles (GAAP) basis of $3.2 billion or $0.78 per share, and non-GAAP net income of $4.1 billion or $1.00 per share.

"We once again delivered a strong quarter in a dynamic environment," said Chuck Robbins, chair and CEO of Cisco. "In Q3, we delivered record revenue and double-digit growth in both software and subscription revenue. As key technologies like cloud, AI and security continue to scale, Cisco's long-established leadership in networking, and the breadth of our portfolio position us well for the future."

"Our operational discipline and focused execution resulted in strong top and bottom-line growth, margin expansion and record operating cash flow," said Scott Herren, CFO of Cisco. "Our healthy backlog, recurring revenue streams and RPO, as well as the improving availability of supply, underpin our confidence to increase full year guidance."

GAAP Results

	Q3 FY 2023		Q3 FY 2022		Vs. Q3 FY 2022
Revenue	$	14.6 billion	$	12.8 billion	14 %
Net Income	$	3.2 billion	$	3.0 billion	6 %
Diluted Earnings per Share (EPS)	$	0.78	$	0.73	7 %

Non-GAAP Results

	Q3 FY 2023		Q3 FY 2022		Vs. Q3 FY 2022
Net Income	$	4.1 billion	$	3.6 billion	13 %
EPS	$	1.00	$	0.87	15 %

Reconciliations between net income, EPS, and other measures on a GAAP and non-GAAP basis are provided in the tables located in the section entitled "Reconciliations of GAAP to non-GAAP Measures."

Cisco Declares Quarterly Dividend

Cisco has declared a quarterly dividend of $0.39 per common share to be paid on July 26, 2023, to all stockholders of record as of the close of business on July 6, 2023. Future dividends will be subject to Board approval.

Financial Summary

All comparative percentages are on a year-over-year basis unless otherwise noted.

Q3 FY 2023 Highlights

Revenue -- Total revenue was up 14% at $14.6 billion, with product revenue up 17% and service revenue was up 3%. Revenue by geographic segment was: Americas up 13%, EMEA up 16%, and APJC was up 11%. Product revenue performance was led by growth in Secure, Agile Networks up 29%, Internet for the Future up 5%, End-to-End Security up 2%, and Optimized Application Experiences up 12%. Collaboration was down 13%.

Gross Margin -- On a GAAP basis, total gross margin, product gross margin, and service gross margin were 63.4%, 62.7%, and 65.4%, respectively, as compared with 63.3%, 61.8%, and 67.3%, respectively, in the third quarter of fiscal 2022.

On a non-GAAP basis, total gross margin, product gross margin, and service gross margin were 65.2%, 64.5%, and 67.3%, respectively, as compared with 65.3%, 64.1%, and 68.9%, respectively, in the third quarter of fiscal 2022.

Total gross margins by geographic segment were: 64.2% for the Americas, 66.6% for EMEA and 66.4% for APJC.

Operating Expenses -- On a GAAP basis, operating expenses were $5.3 billion, up 17%, and were 36.3% of revenue. Non-GAAP operating expenses were $4.6 billion, up 16%, and were 31.3% of revenue.

Operating Income -- GAAP operating income was $3.9 billion, up 9%, with GAAP operating margin of 27.1%. Non-GAAP operating income was $4.9 billion, up 11%, with non-GAAP operating margin at 33.9%.

Provision for Income Taxes -- The GAAP tax provision rate was 18.8%. The non-GAAP tax provision rate was 19.0%.

Net Income and EPS -- On a GAAP basis, net income was $3.2 billion, an increase of 6%, and EPS was $0.78, an increase of 7%. On a non-GAAP basis, net income was $4.1 billion, an increase of 13%, and EPS was $1.00, an increase of 15%.

Cash Flow from Operating Activities -- $5.2 billion for the third quarter of fiscal 2023, an increase of 43% compared with $3.7 billion for the third quarter of fiscal 2022.

Balance Sheet and Other Financial Highlights

Cash and Cash Equivalents and Investments -- $23.3 billion at the end of the third quarter of fiscal 2023, compared with $19.3 billion at the end of fiscal 2022.

Remaining Performance Obligations (RPO) -- $32.1 billion, up 6% in total, with 53% of this amount to be recognized as revenue over the next 12 months. Product RPO were up 9% and service RPO were up 4%.

Deferred Revenue -- $24.3 billion, up 9% in total, with deferred product revenue up 11%. Deferred service revenue was up 7%.

Capital Allocation -- In the third quarter of fiscal 2023, we returned $2.9 billion to stockholders through share buybacks and dividends. We declared and paid a cash dividend of $0.39 per common share, or $1.6 billion, and repurchased approximately 25 million shares of common stock under our stock repurchase program at an average price of $49.45 per share for an aggregate purchase price of $1.3 billion. The remaining authorized amount for stock repurchases under the program is $12.2 billion with no termination date.

Acquisitions

In the third quarter of fiscal 2023, we closed the acquisition of Valtix, a privately held cloud network security company.

Guidance

Cisco expects to achieve the following results for the fourth quarter of fiscal 2023:

Q4 FY 2023
Revenue		14% – 16% growth Y/Y
Non-GAAP gross margin rate		64.5% – 65.5%
Non-GAAP operating margin rate		34% – 35%
Non-GAAP EPS		$1.05 – $1.07

Cisco estimates that GAAP EPS will be $0.82 to $0.87 for the fourth quarter of fiscal 2023.

Cisco expects to achieve the following results for fiscal 2023:

FY 2023
Revenue		10% – 10.5% growth Y/Y
Non-GAAP EPS		$3.80 – $3.82

Cisco estimates that GAAP EPS will be $2.93 to $2.98 for fiscal 2023.

Our Q4 FY 2023 guidance assumes an effective tax provision rate of 18% for GAAP and 19% for non-GAAP results. Our FY 2023 guidance assumes an effective tax provision rate of 20% for GAAP and 19% for non-GAAP results.

A reconciliation between the Guidance on a GAAP and non-GAAP basis is provided in the tables entitled "GAAP to non-GAAP Guidance" located in the section entitled "Reconciliations of GAAP to non-GAAP Measures."

Editor's Notes:

Q3 fiscal year 2023 conference call to discuss Cisco's results along with its guidance will be held on Wednesday, May 17, 2023 at 1:30 p.m. Pacific Time. Conference call number is 1-888-848-6507 (United States) or 1-212-519-0847 (international). Conference call replay will be available from 4:00 p.m. Pacific Time, May 17, 2023 to 4:00 p.m. Pacific Time, May 24, 2023 at 1-800-395-6236 (United States) or 1-203-369-3270 (international). The replay will also be available via webcast on the Cisco Investor Relations website at u27227478.ct.sendgrid.net. Additional information regarding Cisco's financials, as well as a webcast of the conference call with visuals designed to guide participants through the call, will be available at 1:30 p.m. Pacific Time, May 17, 2023. Text of the conference call's prepared remarks will be available within 24 hours of completion of the call. The webcast will include both the prepared remarks and the question-and-answer session. This information, along with the GAAP to non-GAAP reconciliation information, will be available on the Cisco Investor Relations website at u27227478.ct.sendgrid.net.

CISCO SYSTEMS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per-share amounts) (Unaudited)

	Three Months Ended		Nine Months Ended
	April 29, 2023	April 30, 2022	April 29, 2023	April 30, 2022
REVENUE:
Product	$ 11,092	$ 9,448	$ 31,492	$ 28,330
Service	3,479	3,387	10,303	10,125
Total revenue	14,571	12,835	41,795	38,455
COST OF SALES:
Product	4,136	3,606	12,353	10,848
Service	1,203	1,108	3,437	3,384
Total cost of sales	5,339	4,714	15,790	14,232
GROSS MARGIN	9,232	8,121	26,005	24,223
OPERATING EXPENSES:
Research and development	1,962	1,708	5,598	5,092
Sales and marketing	2,526	2,209	7,301	6,736
General and administrative	641	517	1,788	1,612
Amortization of purchased intangible assets	70	77	212	240
Restructuring and other charges	87	—	328	8
Total operating expenses	5,286	4,511	15,227	13,688
OPERATING INCOME	3,946	3,610	10,778	10,535
Interest income	262	115	650	347
Interest expense	(109)	(90)	(316)	(267)
Other income (loss), net	(142)	166	(265)	446
Interest and other income (loss), net	11	191	69	526
INCOME BEFORE PROVISION FOR INCOME TAXES	3,957	3,801	10,847	11,061
Provision for income taxes	745	757	2,192	2,064
NET INCOME	$ 3,212	$ 3,044	$ 8,655	$ 8,997

Net income per share:
Basic	$ 0.79	$ 0.73	$ 2.11	$ 2.15
Diluted	$ 0.78	$ 0.73	$ 2.11	$ 2.14
Shares used in per-share calculation:
Basic	4,089	4,152	4,100	4,184
Diluted	4,110	4,170	4,111	4,204

CISCO SYSTEMS, INC. REVENUE BY SEGMENT (In millions, except percentages)

	April 29, 2023
	Three Months Ended		Nine Months Ended
	Amount	Y/Y %	Amount	Y/Y %
Revenue :
Americas	$ 8,634	13 %	$ 24,372	9 %
EMEA	3,806	16 %	11,209	11 %
APJC	2,131	11 %	6,214	4 %
Total	$ 14,571	14 %	$ 41,795	9 %

Amounts may not sum and percentages may not recalculate due to rounding.

CISCO SYSTEMS, INC. GROSS MARGIN PERCENTAGE BY SEGMENT (In percentages)

	April 29, 2023
	Three Months Ended	Nine Months Ended
Gross Margin Percentage :
Americas	64.2 %	63.4 %
EMEA	66.6 %	65.4 %
APJC	66.4 %	64.2 %

CISCO SYSTEMS, INC. REVENUE FOR GROUPS OF SIMILAR PRODUCTS AND SERVICES (In millions, except percentages)

	April 29, 2023
	Three Months Ended		Nine Months Ended
	Amount	Y/Y %	Amount	Y/Y %
Revenue :
Secure, Agile Networks	$ 7,550	29 %	$ 20,980	18 %
Internet for the Future	1,392	5 %	4,007	— %
Collaboration	985	(13) %	3,029	(8) %
End-to-End Security	958	2 %	2,872	6 %
Optimized Application Experiences	204	12 %	597	10 %
Other Products	3	19 %	7	(7) %
Total Product	11,092	17 %	31,492	11 %
Services	3,479	3 %	10,303	2 %
Total	$ 14,571	14 %	$ 41,795	9 %

Amounts may not sum and percentages may not recalculate due to rounding.

CISCO SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) (Unaudited)

	April 29, 2023	July 30, 2022
ASSETS
Current assets:
Cash and cash equivalents	$ 8,044	$ 7,079
Investments	15,244	12,188
Accounts receivable, net of allowance of $83 as of each of April 29, 2023 and July 30, 2022	5,104	6,622
Inventories	3,474	2,568
Financing receivables, net	3,402	3,905
Other current assets	4,682	4,355
Total current assets	39,950	36,717
Property and equipment, net	2,047	1,997
Financing receivables, net	3,393	4,009
Goodwill	38,369	38,304
Purchased intangible assets, net	1,966	2,569
Deferred tax assets	5,817	4,449
Other assets	5,987	5,957
TOTAL ASSETS	$ 97,529	$ 94,002
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt	$ 1,731	$ 1,099
Accounts payable	2,442	2,281
Income taxes payable	3,132	961
Accrued compensation	3,352	3,316
Deferred revenue	13,249	12,784
Other current liabilities	4,813	5,199
Total current liabilities	28,719	25,640
Long-term debt	6,663	8,416
Income taxes payable	6,725	7,725
Deferred revenue	11,011	10,480
Other long-term liabilities	2,116	1,968
Total liabilities	55,234	54,229
Total equity	42,295	39,773
TOTAL LIABILITIES AND EQUITY	$ 97,529	$ 94,002

CISCO SYSTEMS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited)

	Nine Months Ended
	April 29, 2023	April 30, 2022
Cash flows from operating activities:
Net income	$ 8,655	$ 8,997
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, and other	1,304	1,527
Share-based compensation expense	1,720	1,407
Provision (benefit) for receivables	11	49
Deferred income taxes	(1,343)	(167)
(Gains) losses on divestitures, investments and other, net	243	(470)
Change in operating assets and liabilities, net of effects of acquisitions and divestitures:
Accounts receivable	1,494	(134)
Inventories	(894)	(683)
Financing receivables	1,126	1,431
Other assets	(428)	(1,295)
Accounts payable	156	(54)
Income taxes, net	1,120	(730)
Accrued compensation	25	(730)
Deferred revenue	1,055	292
Other liabilities	(324)	109
Net cash provided by operating activities	13,920	9,549
Cash flows from investing activities:
Purchases of investments	(7,652)	(5,383)
Proceeds from sales of investments	802	2,488
Proceeds from maturities of investments	3,789	4,308
Acquisitions, net of cash and cash equivalents acquired and divestitures	(96)	(373)
Purchases of investments in privately held companies	(162)	(158)
Return of investments in privately held companies	72	149
Acquisition of property and equipment	(616)	(338)
Proceeds from sales of property and equipment	2	6
Other	(26)	(15)
Net cash (used in) provided by investing activities	(3,887)	684
Cash flows from financing activities:
Issuances of common stock	316	306
Repurchases of common stock - repurchase program	(3,029)	(5,347)
Shares repurchased for tax withholdings on vesting of restricted stock units	(444)	(546)
Short-term borrowings, original maturities of 90 days or less, net	(602)	9
Issuances of debt	—	1,049
Repayments of debt	(500)	(3,050)
Dividends paid	(4,713)	(4,657)
Other	(4)	(108)
Net cash used in financing activities	(8,976)	(12,344)
Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents	(90)	(122)
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents	967	(2,233)
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period	8,579	9,942
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period	$ 9,546	$ 7,709
Supplemental cash flow information:
Cash paid for interest	$ 306	$ 292
Cash paid for income taxes, net	$ 2,414	$ 2,960

CISCO SYSTEMS, INC. REMAINING PERFORMANCE OBLIGATIONS (In millions, except percentages)

	April 29, 2023		January 28, 2023		April 30, 2022
	Amount	Y/Y%	Amount	Y/Y%	Amount	Y/Y%
Product	$ 14,681	9 %	$ 14,517	7 %	$ 13,416	13 %
Service	17,401	4 %	17,255	2 %	16,789	3 %
Total	$ 32,082	6 %	$ 31,772	4 %	$ 30,205	7 %

We expect 53% of total RPO at April 29, 2023 will be recognized as revenue over the next 12 months.

CISCO SYSTEMS, INC. DEFERRED REVENUE (In millions)

	April 29, 2023	January 28, 2023	April 30, 2022
Deferred revenue:
Product	$ 10,895	$ 10,679	$ 9,835
Service	13,365	13,248	12,458
Total	$ 24,260	$ 23,927	$ 22,293
Reported as:
Current	$ 13,249	$ 13,109	$ 12,249
Noncurrent	11,011	10,818	10,044
Total	$ 24,260	$ 23,927	$ 22,293

CISCO SYSTEMS, INC. DIVIDENDS PAID AND REPURCHASES OF COMMON STOCK (In millions, except per-share amounts)

	DIVIDENDS		STOCK REPURCHASE PROGRAM			TOTAL
Quarter Ended	Per Share	Amount	Shares	Weighted- Average Price per Share	Amount	Amount
Fiscal 2023
April 29, 2023	$ 0.39	$ 1,593	25	$ 49.45	$ 1,259	$ 2,852
January 28, 2023	$ 0.38	$ 1,560	26	$ 47.72	$ 1,256	$ 2,816
October 29, 2022	$ 0.38	$ 1,560	12	$ 43.76	$ 502	$ 2,062
Fiscal 2022
July 30, 2022	$ 0.38	$ 1,567	54	$ 44.02	$ 2,402	$ 3,969
April 30, 2022	$ 0.38	$ 1,555	5	$ 54.20	$ 252	$ 1,807
January 29, 2022	$ 0.37	$ 1,541	82	$ 58.36	$ 4,824	$ 6,365
October 30, 2021	$ 0.37	$ 1,561	5	$ 56.49	$ 256	$ 1,817

CISCO SYSTEMS, INC. RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

GAAP TO NON-GAAP NET INCOME (In millions)

	Three Months Ended		Nine Months Ended
	April 29, 2023	April 30, 2022	April 29, 2023	April 30, 2022
GAAP net income	$ 3,212	$ 3,044	$ 8,655	$ 8,997
Adjustments to cost of sales:
Share-based compensation expense	106	83	293	233
Amortization of acquisition-related intangible assets	156	176	462	571
Acquisition-related/divestiture costs	1	1	4	3
Russia-Ukraine war costs	—	5	—	5
Total adjustments to GAAP cost of sales	263	265	759	812
Adjustments to operating expenses:
Share-based compensation expense	518	394	1,431	1,173
Amortization of acquisition-related intangible assets	70	92	212	255
Acquisition-related/divestiture costs	55	29	178	261
Russia-Ukraine war costs	2	62	7	62
Significant asset impairments and restructurings	87	—	328	8
Total adjustments to GAAP operating expenses	732	577	2,156	1,759
Adjustments to interest and other income (loss), net:
(Gains) and losses on investments	123	(159)	188	(478)
Total adjustments to GAAP interest and other income (loss), net	123	(159)	188	(478)
Total adjustments to GAAP income before provision for income taxes	1,118	683	3,103	2,093
Income tax effect of non-GAAP adjustments	(219)	(95)	(623)	(435)
Significant tax matters	—	—	164	—
Total adjustments to GAAP provision for income taxes	(219)	(95)	(459)	(435)
Non-GAAP net income	$ 4,111	$ 3,632	$ 11,299	$ 10,655

CISCO SYSTEMS, INC. RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

GAAP TO NON-GAAP EPS

	Three Months Ended		Nine Months Ended
	April 29, 2023	April 30, 2022	April 29, 2023	April 30, 2022
GAAP EPS	$ 0.78	$ 0.73	$ 2.11	$ 2.14
Adjustments to GAAP:
Share-based compensation expense	0.15	0.11	0.42	0.33
Amortization of acquisition-related intangible assets	0.06	0.06	0.16	0.20
Acquisition-related/divestiture costs	0.01	0.01	0.04	0.06
Russia-Ukraine war costs	—	0.02	—	0.02
Significant asset impairments and restructurings	0.02	—	0.08	—
(Gains) and losses on investments	0.03	(0.04)	0.05	(0.11)
Income tax effect of non-GAAP adjustments	(0.05)	(0.02)	(0.15)	(0.10)
Significant tax matters	—	—	0.04	—
Non-GAAP EPS	$ 1.00	$ 0.87	$ 2.75	$ 2.53
Amounts may not sum due to rounding.

CISCO SYSTEMS, INC. RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

GROSS MARGINS, OPERATING EXPENSES, OPERATING MARGINS, INTEREST AND OTHER INCOME (LOSS), NET, AND NET INCOME (In millions, except percentages)

	Three Months Ended
	April 29, 2023
	Product Gross Margin	Service Gross Margin	Total Gross Margin	Operating Expenses	Y/Y	Operating Income	Y/Y	Interest and other income (loss), net	Net Income	Y/Y
GAAP amount	$ 6,956	$ 2,276	$ 9,232	$ 5,286	17 %	$ 3,946	9 %	$ 11	$ 3,212	6 %
% of revenue	62.7 %	65.4 %	63.4 %	36.3 %		27.1 %		0.1 %	22.0 %
Adjustments to GAAP amounts:
Share-based compensation expense	40	66	106	518		624		—	624
Amortization of acquisition-related intangible assets	156	—	156	70		226		—	226
Acquisition/divestiture-related costs	1	—	1	55		56		—	56
Significant asset impairments and restructurings	—	—	—	87		87		—	87
Russia-Ukraine war costs	—	—	—	2		2		—	2
(Gains) and losses on investments	—	—	—	—		—		123	123
Income tax effect/significant tax matters	—	—	—	—		—		—	(219)
Non-GAAP amount	$ 7,153	$ 2,342	$ 9,495	$ 4,554	16 %	$ 4,941	11 %	$ 134	$ 4,111	13 %
% of revenue	64.5 %	67.3 %	65.2 %	31.3 %		33.9 %		0.9 %	28.2 %

	Three Months Ended
	April 30, 2022
	Product Gross Margin	Service Gross Margin	Total Gross Margin	Operating Expenses	Operating Income	Interest and other income (loss), net	Net Income
GAAP amount	$ 5,842	$ 2,279	$ 8,121	$ 4,511	$ 3,610	$ 191	$ 3,044
% of revenue	61.8 %	67.3 %	63.3 %	35.1 %	28.1 %	1.5 %	23.7 %
Adjustments to GAAP amounts:
Share-based compensation expense	30	53	83	394	477	—	477
Amortization of acquisition-related intangible assets	176	—	176	92	268	—	268
Acquisition/divestiture-related costs	1	—	1	29	30	—	30
Russia-Ukraine war costs	4	1	5	62	67	—	67
(Gains) and losses on investments	—	—	—	—	—	(159)	(159)
Income tax effect/significant tax matters	—	—	—	—	—	—	(95)
Non-GAAP amount	$ 6,053	$ 2,333	$ 8,386	$ 3,934	$ 4,452	$ 32	$ 3,632
% of revenue	64.1 %	68.9 %	65.3 %	30.7 %	34.7 %	0.2 %	28.3 %

Amounts may not sum and percentages may not recalculate due to rounding.

CISCO SYSTEMS, INC. RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

GROSS MARGINS, OPERATING EXPENSES, OPERATING MARGINS, INTEREST AND OTHER INCOME (LOSS), NET, AND NET INCOME (In millions, except percentages)

	Nine Months Ended
	April 29, 2023
	Product Gross Margin	Service Gross Margin	Total Gross Margin	Operating Expenses	Y/Y	Operating Income	Y/Y	Interest and other income (loss), net	Net Income	Y/Y
GAAP amount	$ 19,139	$ 6,866	$ 26,005	$ 15,227	11 %	$ 10,778	2 %	$ 69	$ 8,655	(4) %
% of revenue	60.8 %	66.6 %	62.2 %	36.4 %		25.8 %		0.2 %	20.7 %
Adjustments to GAAP amounts:
Share-based compensation expense	111	182	293	1,431		1,724		—	1,724
Amortization of acquisition-related intangible assets	462	—	462	212		674		—	674
Acquisition/divestiture-related costs	4	—	4	178		182		—	182
Significant asset impairments and restructurings	—	—	—	328		328		—	328
Russia-Ukraine war costs	—	—	—	7		7		—	7
(Gains) and losses on investments	—	—	—	—		—		188	188
Income tax effect/significant tax matters	—	—	—	—		—		—	(459)
Non-GAAP amount	$ 19,716	$ 7,048	$ 26,764	$ 13,071	10 %	$ 13,693	4 %	$ 257	$ 11,299	6 %
% of revenue	62.6 %	68.4 %	64.0 %	31.3 %		32.8 %		0.6 %	27.0 %

	Nine Months Ended
	April 30, 2022
	Product Gross Margin	Service Gross Margin	Total Gross Margin	Operating Expenses	Operating Income	Interest and other income (loss), net	Net Income
GAAP amount	$ 17,482	$ 6,741	$ 24,223	$ 13,688	$ 10,535	$ 526	$ 8,997
% of revenue	61.7 %	66.6 %	63.0 %	35.6 %	27.4 %	1.4 %	23.4 %
Adjustments to GAAP amounts:
Share-based compensation expense	84	149	233	1,173	1,406	—	1,406
Amortization of acquisition-related intangible assets	571	—	571	255	826	—	826
Acquisition/divestiture-related costs	3	—	3	261	264	—	264
Russia-Ukraine war costs	4	1	5	62	67	—	67
Significant asset impairments and restructurings	—	—	—	8	8	—	8
(Gains) and losses on investments	—	—	—	—	—	(478)	(478)
Income tax effect/significant tax matters	—	—	—	—	—	—	(435)
Non-GAAP amount	$ 18,144	$ 6,891	$ 25,035	$ 11,929	$ 13,106	$ 48	$ 10,655
% of revenue	64.0 %	68.1 %	65.1 %	31.0 %	34.1 %	0.1 %	27.7 %

Amounts may not sum and percentages may not recalculate due to rounding.

CISCO SYSTEMS, INC. RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

EFFECTIVE TAX RATE (In percentages)

	Three Months Ended		Nine Months Ended
	April 29, 2023	April 30, 2022	April 29, 2023	April 30, 2022
GAAP effective tax rate	18.8 %	19.9 %	20.2 %	18.7 %
Total adjustments to GAAP provision for income taxes	0.2 %	(0.9) %	(1.2) %	0.3 %
Non-GAAP effective tax rate	19.0 %	19.0 %	19.0 %	19.0 %

GAAP TO NON-GAAP GUIDANCE

Q4 FY 2023	Gross Margin Rate	Operating Margin Rate	Earnings per Share (2)
GAAP	62.5% – 63.5%	26.5% – 27.5%	$0.82 – $0.87
Estimated adjustments for:
Share-based compensation expense	1.0 %	4.0 %	$0.11 – $0.12
Amortization of acquisition-related intangible assets and acquisition/divestiture-related costs	1.0 %	2.0 %	$0.05 – $0.06
Significant asset impairments and restructurings (1)	—	1.5 %	$0.04 – $0.05
Non-GAAP	64.5% – 65.5%	34% – 35%	$1.05 – $1.07

FY 2023		Earnings per Share (2)
GAAP		$2.93 – $2.98
Estimated adjustments for:
Share-based compensation expense		$0.45 – $0.46
Amortization of acquisition-related intangible assets and acquisition/divestiture-related costs		$0.22 – $0.23
Significant asset impairments and restructurings (1)		$0.10 – $0.11
(Gains) and losses on investments		$0.03
Significant tax matters		$0.04
Non-GAAP		$3.80 – $3.82

(1)	On November 16, 2022, Cisco announced a restructuring plan in order to rebalance the organization and enable further investment in key priority areas. We expect to recognize approximately $200 million of restructuring charges in the fourth quarter of fiscal 2023.
(2)	Estimated adjustments to GAAP earnings per share are shown after income tax effects.

Except as noted above, this guidance does not include the effects of any future acquisitions/divestitures, asset impairments, Russia-Ukraine war costs, restructurings, (gains) and losses on investments and significant tax matters or other events, which may or may not be significant unless specifically stated.

Forward Looking Statements, Non-GAAP Information and Additional Information

This release may be deemed to contain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other things, statements regarding future events (such as key technologies like cloud, AI and security continuing to scale, our continued leadership in networking, the breadth of our portfolio to position us well for the future, our healthy backlog, recurring revenue streams, RPO and the continued improving availability of supply) and the future financial performance of Cisco (including the guidance for Q4 FY 2023 and full year FY 2023) that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including: the impact of the COVID-19 pandemic and related public health measures; business and economic conditions and growth trends in the networking industry, our customer markets and various geographic regions; global economic conditions and uncertainties in the geopolitical environment; overall information technology spending; the growth and evolution of the Internet and levels of capital spending on Internet-based systems; variations in customer demand for products and services, including sales to the service provider market and other customer markets; the return on our investments in certain priorities, key growth areas, and in certain geographical locations, as well as maintaining leadership in Secure, Agile Networks and services; the timing of orders and manufacturing and customer lead times; significant supply constraints; changes in customer order patterns or customer mix; insufficient, excess or obsolete inventory; variability of component costs; variations in sales channels, product costs or mix of products sold; our ability to successfully acquire businesses and technologies and to successfully integrate and operate these acquired businesses and technologies; our ability to achieve expected benefits of our partnerships; increased competition in our product and service markets, including the data center market; dependence on the introduction and market acceptance of new product offerings and standards; rapid technological and market change; manufacturing and sourcing risks; product defects and returns; litigation involving patents, other intellectual property, antitrust, stockholder and other matters, and governmental investigations; our ability to achieve the benefits of restructurings and possible changes in the size and timing of related charges; cyber-attacks, data breaches or malware; vulnerabilities and critical security defects; terrorism; natural catastrophic events (including as a result of global climate change); any other pandemic or epidemic; our ability to achieve the benefits anticipated from our investments in sales, engineering, service, marketing and manufacturing activities; our ability to recruit and retain key personnel; our ability to manage financial risk, and to manage expenses during economic downturns; risks related to the global nature of our operations, including our operations in emerging markets; currency fluctuations and other international factors; changes in provision for income taxes, including changes in tax laws and regulations or adverse outcomes resulting from examinations of our income tax returns; potential volatility in operating results; and other factors listed in Cisco's most recent reports on Forms 10-Q and 10-K filed on February 21, 2023 and September 8, 2022, respectively. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in Cisco's most recent reports on Forms 10-Q and 10-K as each may be amended from time to time. Cisco's results of operations for the three and nine months ended April 29, 2023 are not necessarily indicative of Cisco's operating results for any future periods. Any projections in this release are based on limited information currently available to Cisco, which is subject to change. Although any such projections and the factors influencing them will likely change, Cisco will not necessarily update the information, since Cisco will only provide guidance at certain points during the year. Such information speaks only as of the date of this release.

This release includes non-GAAP net income, non-GAAP gross margins, non-GAAP operating expenses, non-GAAP operating income and margin, non-GAAP effective tax rates, non-GAAP interest and other income (loss), net, and non-GAAP net income per share data for the periods presented. It also includes future estimated ranges for gross margin, operating margin, tax provision rate and EPS on a non-GAAP basis.

These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Cisco believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Cisco's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Cisco's results of operations in conjunction with the corresponding GAAP measures.

Cisco believes that the presentation of non-GAAP measures when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and its historical and projected results of operations.

For its internal budgeting process, Cisco's management uses financial statements that do not include, when applicable, share-based compensation expense, amortization of acquisition-related intangible assets, acquisition-related/divestiture costs, significant asset impairments and restructurings, significant litigation settlements and other contingencies, Russia-Ukraine war costs, gains and losses on investments, the income tax effects of the foregoing and significant tax matters. Cisco's management also uses the foregoing non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Cisco. In prior periods, Cisco has excluded other items that it no longer excludes for purposes of its non-GAAP financial measures. From time to time in the future there may be other items that Cisco may exclude for purposes of its internal budgeting process and in reviewing its financial results. For additional information on the items excluded by Cisco from one or more of its non-GAAP financial measures, refer to the Form 8-K regarding this release furnished today to the Securities and Exchange Commission.

Annualized recurring revenue represents the annualized revenue run-rate of active subscriptions, term licenses, operating leases and maintenance contracts at the end of a reporting period, net of rebates to customers and partners as well as certain other revenue adjustments. Includes both revenue recognized ratably as well as upfront on an annualized basis.

About Cisco

Cisco (Nasdaq: CSCO) is the worldwide leader in technology that powers the Internet. Cisco inspires new possibilities by reimagining your applications, securing your data, transforming your infrastructure, and empowering your teams for a global and inclusive future. Discover more at newsroom.cisco.com and follow us on Twitter at @Cisco.

Copyright © 2023 Cisco and/or its affiliates. All rights reserved. Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S. and other countries. To view a list of Cisco trademarks, go to: www.cisco.com/go/trademarks. Third-party trademarks mentioned in this document are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company. This document is Cisco Public Information.

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[Eric] [graphic] Cisco Systems, Inc. has added a new press release to its website: ...

Eric — 11/16/2022 4:12:15 PM

Cisco Systems, Inc. has added a new press release to its website:

CISCO REPORTS FIRST QUARTER EARNINGS

SAN JOSE, Calif., Nov. 16, 2022 /PRNewswire/ --

News Summary:

$13.6 billion in revenue, up 6% year over year; GAAP EPS $0.65, down 7% year over year, and Non-GAAP EPS $0.86, up 5% year over yearContinued progress on business model transformation: Total annualized recurring revenue (ARR) at $23.2 billion, up 7% year over year and product ARR up 12% year over yearTotal software revenue up 5% year over year and software subscription revenue up 11% year over yearRemaining performance obligations (RPO) at $30.9 billion, up 3% year over year and product RPO up 5% year over year Q1 FY 2023 Results: Revenue: $13.6 billionIncrease of 6% year over yearEarnings per Share: GAAP: $0.65; Non-GAAP: $0.86GAAP EPS decreased (7)% year over yearNon-GAAP EPS increased 5% year over yearQ2 FY 2023 Guidance: Revenue: 4.5% to 6.5% growth year over yearEarnings per Share: GAAP: $0.59 to $0.64; Non-GAAP: $0.84 to $0.86 FY 2023 Guidance: Revenue: 4.5% to 6.5% growth year over yearEarnings per Share: GAAP: $2.63 to $2.76; Non-GAAP: $3.51 to $3.58 Cisco today reported first quarter results for the period ended October 29, 2022. Cisco reported first quarter revenue of $13.6 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.7 billion or $0.65 per share, and non-GAAP net income of $3.5 billion or $0.86 per share.

"Our fiscal 2023 is off to a good start as we delivered the largest quarterly revenue and second highest quarterly non-GAAP earnings per share in our history," said Chuck Robbins, chair and CEO of Cisco. "These results demonstrate the relevance of our strategy, our differentiated innovation, and our unique position to help our customers become more resilient."

"We delivered strong results in Q1 and continued to make progress on our business transformation," said Scott Herren, CFO of Cisco. "Our annualized recurring revenue increased to more than $23 billion, with product ARR growing 12%. This, together with our significant backlog, strong RPO, and easing supply situation, provides us with great visibility and predictability, and supports our increased full year guidance."

GAAP Results

	Q1 FY 2023		Q1 FY 2022		Vs. Q1 FY 2022
Revenue	$ 13.6	billion	$ 12.9	billion	6 %
Net Income	$ 2.7	billion	$ 3.0	billion	(10) %
Diluted Earnings per Share (EPS)	$ 0.65		$ 0.70		(7) %


Non-GAAP Results

	Q1 FY 2023		Q1 FY 2022		Vs. Q1 FY 2022
Net Income	$ 3.5	billion	$ 3.5	billion	2 %
EPS	$ 0.86		$ 0.82		5 %

Reconciliations between net income, EPS, and other measures on a GAAP and non-GAAP basis are provided in the tables located in the section entitled "Reconciliations of GAAP to non-GAAP Measures."

Financial Summary

All comparative percentages are on a year-over-year basis unless otherwise noted.

Q1 FY 2023 Highlights

Revenue -- Total revenue was up 6% at $13.6 billion, with product revenue up 8% and service revenue was flat. Revenue by geographic segment was: Americas up 5%, EMEA up 11%, and APJC was flat. Product revenue performance was led by growth in Secure, Agile Networks up 12%, End-to-End Security up 9%, and Optimized Application Experiences up 7%. Internet for the Future was down 5% and Collaboration was down 2%.

Gross Margin -- On a GAAP basis, total gross margin, product gross margin, and service gross margin were 61.2%, 59.2%, and 67.3%, respectively, as compared with 62.4%, 61.5%, and 65.2%, respectively, in the first quarter of fiscal 2022.

On a non-GAAP basis, total gross margin, product gross margin, and service gross margin were 63.0%, 61.0%, and 68.8%, respectively, as compared with 64.5%, 63.8%, and 66.5%, respectively, in the first quarter of fiscal 2022.

Total gross margins by geographic segment were: 63.0% for the Americas, 63.3% for EMEA and 62.3% for APJC.

Operating Expenses -- On a GAAP basis, operating expenses were $4.8 billion, up 4%, and were 35.3% of revenue. Non-GAAP operating expenses were $4.2 billion, up 5%, and were 31.1% of revenue.

Operating Income -- GAAP operating income was $3.5 billion, up 3%, with GAAP operating margin of 26.0%. Non-GAAP operating income was $4.3 billion, up 1%, with non-GAAP operating margin at 31.8%.

Provision for Income Taxes -- The GAAP tax provision rate was 23.2%. The non-GAAP tax provision rate was 19.0%.

Net Income and EPS -- On a GAAP basis, net income was $2.7 billion, a decrease of 10%, and EPS was $0.65, a decrease of 7%. On a non-GAAP basis, net income was $3.5 billion, an increase of 2%, and EPS was $0.86, an increase of 5%.

Cash Flow from Operating Activities -- $4.0 billion for the first quarter of fiscal 2023, an increase of 16% compared with $3.4 billion for the first quarter of fiscal 2022.

Balance Sheet and Other Financial Highlights

Cash and Cash Equivalents and Investments -- $19.8 billion at the end of the first quarter of fiscal 2023, compared with $19.3 billion at the end of fiscal 2022.

Remaining Performance Obligations (RPO) -- $30.9 billion, up 3% in total, with 53% of this amount to be recognized as revenue over the next 12 months. Product RPO were up 5% and service RPO were up 1%.

Deferred Revenue -- $23.0 billion, up 4% in total, with deferred product revenue up 7%. Deferred service revenue was up 2%.

Capital Allocation -- In the first quarter of fiscal 2023, we returned $2.1 billion to stockholders through share buybacks and dividends. We declared and paid a cash dividend of $0.38 per common share, or $1.6 billion, and repurchased approximately 12 million shares of common stock under our stock repurchase program at an average price of $43.76 per share for an aggregate purchase price of $0.5 billion. The remaining authorized amount for stock repurchases under the program is $14.7 billion with no termination date.

Guidance

Cisco expects to achieve the following results for the second quarter of fiscal 2023:

Q2 FY 2023
Revenue		4.5% – 6.5% growth Y/Y
Non-GAAP gross margin rate		63% – 64%
Non-GAAP operating margin rate		31.5% – 32.5%
Non-GAAP EPS		$0.84 – $0.86

Cisco estimates that GAAP EPS will be $0.59 to $0.64 for the second quarter of fiscal 2023.

Cisco expects to achieve the following results for fiscal 2023:

FY 2023
Revenue		4.5% – 6.5% growth Y/Y
Non-GAAP EPS		$3.51 – $3.58

Cisco estimates that GAAP EPS will be $2.63 to $2.76 for fiscal 2023.

Our Q2 FY 2023 guidance assumes an effective tax provision rate of 19% for GAAP and non-GAAP results. Our FY 2023 guidance assumes an effective tax provision rate of 20% for GAAP and 19% for non-GAAP results.

A reconciliation between the Guidance on a GAAP and non-GAAP basis is provided in the tables entitled "GAAP to non-GAAP Guidance" located in the section entitled "Reconciliations of GAAP to non-GAAP Measures."

Editor's Notes:

Q1 fiscal year 2023 conference call to discuss Cisco's results along with its guidance will be held on Wednesday, November 16, 2022 at 1:30 p.m. Pacific Time. Conference call number is 1-888-848-6507 (United States) or 1-212-519-0847 (international). Conference call replay will be available from 4:00 p.m. Pacific Time, November 16, 2022 to 4:00 p.m. Pacific Time, November 23, 2022 at 1-800-835-5808 (United States) or 1-203-369-3353 (international). The replay will also be available via webcast on the Cisco Investor Relations website at u27227478.ct.sendgrid.net. Additional information regarding Cisco's financials, as well as a webcast of the conference call with visuals designed to guide participants through the call, will be available at 1:30 p.m. Pacific Time, November 16, 2022. Text of the conference call's prepared remarks will be available within 24 hours of completion of the call. The webcast will include both the prepared remarks and the question-and-answer session. This information, along with the GAAP to non-GAAP reconciliation information, will be available on the Cisco Investor Relations website at u27227478.ct.sendgrid.net.

CISCO SYSTEMS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per-share amounts) (Unaudited)

	Three Months Ended
	October 29, 2022	October 30, 2021
REVENUE:
Product	$ 10,245	$ 9,529
Service	3,387	3,371
Total revenue	13,632	12,900
COST OF SALES:
Product	4,179	3,673
Service	1,107	1,174
Total cost of sales	5,286	4,847
GROSS MARGIN	8,346	8,053
OPERATING EXPENSES:
Research and development	1,781	1,714
Sales and marketing	2,391	2,261
General and administrative	565	551
Amortization of purchased intangible assets	71	84
Restructuring and other charges	(2)	5
Total operating expenses	4,806	4,615
OPERATING INCOME	3,540	3,438
Interest income	169	121
Interest expense	(100)	(89)
Other income (loss), net	(134)	187
Interest and other income (loss), net	(65)	219
INCOME BEFORE PROVISION FOR INCOME TAXES	3,475	3,657
Provision for income taxes	805	677
NET INCOME	$ 2,670	$ 2,980

Net income per share:
Basic	$ 0.65	$ 0.71
Diluted	$ 0.65	$ 0.70
Shares used in per-share calculation:
Basic	4,108	4,218
Diluted	4,116	4,243

CISCO SYSTEMS, INC. REVENUE BY SEGMENT (In millions, except percentages)

	Three Months Ended
	October 29, 2022
	Amount	Y/Y %
Revenue :
Americas	$ 7,914	5 %
EMEA	3,675	11 %
APJC	2,043	— %
Total	$ 13,632	6 %

Amounts may not sum and percentages may not recalculate due to rounding.

CISCO SYSTEMS, INC. GROSS MARGIN PERCENTAGE BY SEGMENT (In percentages)

		Three Months Ended
		October 29, 2022
Gross Margin Percentage :
Americas		63.0 %
EMEA		63.3 %
APJC		62.3 %

CISCO SYSTEMS, INC. REVENUE FOR GROUPS OF SIMILAR PRODUCTS AND SERVICES (In millions, except percentages)

	Three Months Ended
	October 29, 2022
	Amount	Y/Y %
Revenue :
Secure, Agile Networks	$ 6,684	12 %
Internet for the Future	1,310	(5) %
Collaboration	1,086	(2) %
End-to-End Security	971	9 %
Optimized Application Experiences	193	7 %
Other Products	2	(47) %
Total Product	10,245	8 %
Services	3,387	— %
Total	$ 13,632	6 %

Amounts may not sum and percentages may not recalculate due to rounding.

CISCO SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) (Unaudited)

	October 29, 2022	July 30, 2022
ASSETS
Current assets:
Cash and cash equivalents	$ 7,292	$ 7,079
Investments	12,492	12,188
Accounts receivable, net of allowance of $88 at October 29, 2022 and $83 at July 30, 2022	5,439	6,622
Inventories	2,664	2,568
Financing receivables, net	3,683	3,905
Other current assets	4,571	4,355
Total current assets	36,141	36,717
Property and equipment, net	1,972	1,997
Financing receivables, net	3,618	4,009
Goodwill	38,160	38,304
Purchased intangible assets, net	2,360	2,569
Deferred tax assets	4,891	4,449
Other assets	5,912	5,957
TOTAL ASSETS	$ 93,054	$ 94,002
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt	$ 1,249	$ 1,099
Accounts payable	2,316	2,281
Income taxes payable	890	961
Accrued compensation	2,907	3,316
Deferred revenue	12,578	12,784
Other current liabilities	4,956	5,199
Total current liabilities	24,896	25,640
Long-term debt	7,629	8,416
Income taxes payable	7,835	7,725
Deferred revenue	10,441	10,480
Other long-term liabilities	1,981	1,968
Total liabilities	52,782	54,229
Total equity	40,272	39,773
TOTAL LIABILITIES AND EQUITY	$ 93,054	$ 94,002

CISCO SYSTEMS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited)

	Three Months Ended
	October 29, 2022	October 30, 2021
Cash flows from operating activities:
Net income	$ 2,670	$ 2,980
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, and other	415	533
Share-based compensation expense	496	453
Provision (benefit) for receivables	7	1
Deferred income taxes	(366)	(98)
(Gains) losses on divestitures, investments and other, net	131	(211)
Change in operating assets and liabilities, net of effects of acquisitions and divestitures:
Accounts receivable	1,119	427
Inventories	(108)	(275)
Financing receivables	556	672
Other assets	(316)	(170)
Accounts payable	42	(93)
Income taxes, net	20	17
Accrued compensation	(384)	(585)
Deferred revenue	(78)	(95)
Other liabilities	(242)	(129)
Net cash provided by operating activities	3,962	3,427
Cash flows from investing activities:
Purchases of investments	(1,943)	(2,951)
Proceeds from sales of investments	407	580
Proceeds from maturities of investments	971	1,856
Acquisitions, net of cash and cash equivalents acquired and divestitures	—	(336)
Purchases of investments in privately held companies	(48)	(101)
Return of investments in privately held companies	10	53
Acquisition of property and equipment	(176)	(122)
Proceeds from sales of property and equipment	—	1
Other	(20)	—
Net cash used in investing activities	(799)	(1,020)
Cash flows from financing activities:
Repurchases of common stock - repurchase program	(556)	(273)
Shares repurchased for tax withholdings on vesting of restricted stock units	(108)	(133)
Short-term borrowings, original maturities of 90 days or less, net	(602)	—
Repayments of debt	—	(2,000)
Dividends paid	(1,560)	(1,561)
Other	(29)	(3)
Net cash used in financing activities	(2,855)	(3,970)
Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents	(95)	—
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents	213	(1,563)
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period	8,579	9,942
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period	$ 8,792	$ 8,379
Supplemental cash flow information:
Cash paid for interest	$ 114	$ 124
Cash paid for income taxes, net	$ 1,150	$ 758

CISCO SYSTEMS, INC. REMAINING PERFORMANCE OBLIGATIONS (In millions, except percentages)

	October 29, 2022		July 30, 2022		October 30, 2021
	Amount	Y/Y%	Amount	Y/Y%	Amount	Y/Y%
Product	$ 14,013	5 %	$ 14,090	6 %	$ 13,384	18 %
Service	16,897	1 %	17,449	(1) %	16,751	4 %
Total	$ 30,910	3 %	$ 31,539	2 %	$ 30,135	10 %

We expect 53% of total RPO at October 29, 2022 will be recognized as revenue over the next 12 months.

CISCO SYSTEMS, INC. DEFERRED REVENUE (In millions)

	October 29, 2022	July 30, 2022	October 30, 2021
Deferred revenue:
Product	$ 10,404	$ 10,427	$ 9,681
Service	12,615	12,837	12,391
Total	$ 23,019	$ 23,264	$ 22,072
Reported as:
Current	$ 12,578	$ 12,784	$ 12,017
Noncurrent	10,441	10,480	10,055
Total	$ 23,019	$ 23,264	$ 22,072

CISCO SYSTEMS, INC. DIVIDENDS PAID AND REPURCHASES OF COMMON STOCK (In millions, except per-share amounts)

	DIVIDENDS		STOCK REPURCHASE PROGRAM			TOTAL
Quarter Ended	Per Share	Amount	Shares	Weighted- Average Price per Share	Amount	Amount
Fiscal 2023
October 29, 2022	$ 0.38	$ 1,560	12	$ 43.76	$ 502	$ 2,062
Fiscal 2022
July 30, 2022	$ 0.38	$ 1,567	54	$ 44.02	$ 2,402	$ 3,969
April 30, 2022	$ 0.38	$ 1,555	5	$ 54.20	$ 252	$ 1,807
January 29, 2022	$ 0.37	$ 1,541	82	$ 58.36	$ 4,824	$ 6,365
October 30, 2021	$ 0.37	$ 1,561	5	$ 56.49	$ 256	$ 1,817

CISCO SYSTEMS, INC. RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

GAAP TO NON-GAAP NET INCOME (In millions)

	Three Months Ended
	October 29, 2022	October 30, 2021
GAAP net income	$ 2,670	$ 2,980
Adjustments to cost of sales:
Share-based compensation expense	81	69
Amortization of acquisition-related intangible assets	153	198
Acquisition-related/divestiture costs	2	1
Total adjustments to GAAP cost of sales	236	268
Adjustments to operating expenses:
Share-based compensation expense	415	383
Amortization of acquisition-related intangible assets	71	84
Acquisition-related/divestiture costs	75	112
Russia-Ukraine war costs	3	—
Significant asset impairments and restructurings	(2)	5
Total adjustments to GAAP operating expenses	562	584
Adjustments to interest and other income (loss), net:
(Gains) and losses on equity investments	109	(219)
Total adjustments to GAAP interest and other income (loss), net	109	(219)
Total adjustments to GAAP income before provision for income taxes	907	633
Income tax effect of non-GAAP adjustments	(192)	(138)
Significant tax matters	164	—
Total adjustments to GAAP provision for income taxes	(28)	(138)
Non-GAAP net income	$ 3,549	$ 3,475

CISCO SYSTEMS, INC. RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

GAAP TO NON-GAAP EPS

	Three Months Ended
	October 29, 2022	October 30, 2021
GAAP EPS	$ 0.65	$ 0.70
Adjustments to GAAP:
Share-based compensation expense	0.12	0.11
Amortization of acquisition-related intangible assets	0.05	0.07
Acquisition-related/divestiture costs	0.02	0.03
(Gains) and losses on equity investments	0.03	(0.05)
Income tax effect of non-GAAP adjustments	(0.05)	(0.03)
Significant tax matters	0.04	—
Non-GAAP EPS	$ 0.86	$ 0.82

Amounts may not sum due to rounding.

CISCO SYSTEMS, INC. RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

GROSS MARGINS, OPERATING EXPENSES, OPERATING MARGINS, INTEREST AND OTHER INCOME (LOSS), NET, AND NET INCOME (In millions, except percentages)

	Three Months Ended
	October 29, 2022
	Product Gross Margin	Service Gross Margin	Total Gross Margin	Operating Expenses	Y/Y	Operating Income	Y/Y	Interest and other income (loss), net	Net Income	Y/Y
GAAP amount	$ 6,066	$ 2,280	$ 8,346	$ 4,806	4 %	$ 3,540	3 %	$ (65)	$ 2,670	(10) %
% of revenue	59.2 %	67.3 %	61.2 %	35.3 %		26.0 %		(0.5) %	19.6 %
Adjustments to GAAP amounts:
Share-based compensation expense	31	50	81	415		496		—	496
Amortization of acquisition-related intangible assets	153	—	153	71		224		—	224
Acquisition/divestiture-related costs	2	—	2	75		77		—	77
Significant asset impairments and restructurings	—	—	—	(2)		(2)		—	(2)
Russia-Ukraine war costs	—	—	—	3		3		—	3
(Gains) and losses on equity investments	—	—	—	—		—		109	109
Income tax effect/significant tax matters	—	—	—	—		—		—	(28)
Non-GAAP amount	$ 6,252	$ 2,330	$ 8,582	$ 4,244	5 %	$ 4,338	1 %	$ 44	$ 3,549	2 %
% of revenue	61.0 %	68.8 %	63.0 %	31.1 %		31.8 %		0.3 %	26.0 %

	Three Months Ended
	October 30, 2021
	Product Gross Margin	Service Gross Margin	Total Gross Margin	Operating Expenses	Operating Income	Interest and other income (loss), net	Net Income
GAAP amount	$ 5,856	$ 2,197	$ 8,053	$ 4,615	$ 3,438	$ 219	$ 2,980
% of revenue	61.5 %	65.2 %	62.4 %	35.8 %	26.7 %	1.7 %	23.1 %
Adjustments to GAAP amounts:
Share-based compensation expense	25	44	69	383	452	—	452
Amortization of acquisition-related intangible assets	198	—	198	84	282	—	282
Acquisition/divestiture-related costs	1	—	1	112	113	—	113
Significant asset impairments and restructurings	—	—	—	5	5	—	5
(Gains) and losses on equity investments	—	—	—	—	—	(219)	(219)
Income tax effect/significant tax matters	—	—	—	—	—	—	(138)
Non-GAAP amount	$ 6,080	$ 2,241	$ 8,321	$ 4,031	$ 4,290	$ —	$ 3,475
% of revenue	63.8 %	66.5 %	64.5 %	31.2 %	33.3 %	— %	26.9 %

Amounts may not sum and percentages may not recalculate due to rounding.

CISCO SYSTEMS, INC. RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

EFFECTIVE TAX RATE (In percentages)

	Three Months Ended
	October 29, 2022	October 30, 2021
GAAP effective tax rate	23.2 %	18.5 %
Total adjustments to GAAP provision for income taxes	(4.2) %	0.5 %
Non-GAAP effective tax rate	19.0 %	19.0 %

GAAP TO NON-GAAP GUIDANCE

Q2 FY 2023	Gross Margin Rate	Operating Margin Rate	Earnings per Share (2)
GAAP	61% – 62%	22.5% – 23.5%	$0.59 – $0.64
Estimated adjustments for:
Share-based compensation expense	1.0 %	4.5 %	$0.12 – $0.13
Amortization of acquisition-related intangible assets and acquisition/divestiture-related costs	1.0 %	2.0 %	$0.05 – $0.06
Significant asset impairments and restructurings (1)	—	2.5 %	$0.05 – $0.06
Non-GAAP	63% – 64%	31.5% – 32.5%	$0.84 – $0.86

FY 2023		Earnings per Share (2)
GAAP		$2.63 – $2.76
Estimated adjustments for:
Share-based compensation expense		$0.46 – $0.48
Amortization of acquisition-related intangible assets and acquisition/divestiture-related costs		$0.21 – $0.23
Significant asset impairments and restructurings (1)		$0.09 – $0.11
(Gains) and losses on equity investments		$0.02
Significant tax matters		$0.04
Non-GAAP		$3.51 – $3.58

(1) On November 16, 2022, Cisco announced a restructuring plan in order to rebalance the organization and enable further investment in key priority areas. This rebalancing will include talent movement options and restructuring. Additionally, Cisco will optimize its real estate portfolio, aligned to the broader hybrid work strategy. Cisco will take action under this plan beginning in the second quarter of fiscal 2023. Cisco currently estimates that it will recognize pre-tax charges to its GAAP financial results of approximately $600 million consisting of severance and other one-time termination benefits, real estate-related charges, and other costs. These charges are primarily cash-based. Cisco expects to recognize approximately $300 million of these charges in the second quarter of fiscal 2023, approximately $200 million of these charges during the second half of fiscal 2023, and the remaining amount of these charges primarily through the first quarter of fiscal 2024.

(2) Estimated adjustments to GAAP earnings per share are shown after income tax effects.

Except as noted above, this guidance does not include the effects of any future acquisitions/divestitures, asset impairments, Russia-Ukraine war costs, restructurings, (gains) and losses on equity investments and significant tax matters or other events, which may or may not be significant unless specifically stated.

Forward Looking Statements, Non-GAAP Information and Additional Information

This release may be deemed to contain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other things, statements regarding future events (such as the relevance of our strategy, our differentiated innovation, our ability to help our customers become more resilient, our continued progress on our business model transformation, and the visibility and predictability provided by backlog, RPO, easing of the supply situation and the growth of annualized recurring revenue) and the future financial performance of Cisco (including the guidance for Q2 FY 2023 and full year FY 2023) that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including: the impact of the COVID-19 pandemic and related public health measures; business and economic conditions and growth trends in the networking industry, our customer markets and various geographic regions; global economic conditions and uncertainties in the geopolitical environment; overall information technology spending; the growth and evolution of the Internet and levels of capital spending on Internet-based systems; variations in customer demand for products and services, including sales to the service provider market and other customer markets; the return on our investments in certain priorities, key growth areas, and in certain geographical locations, as well as maintaining leadership in Secure, Agile Networks and services; the timing of orders and manufacturing and customer lead times; significant supply constraints; changes in customer order patterns or customer mix; insufficient, excess or obsolete inventory; variability of component costs; variations in sales channels, product costs or mix of products sold; our ability to successfully acquire businesses and technologies and to successfully integrate and operate these acquired businesses and technologies; our ability to achieve expected benefits of our partnerships; increased competition in our product and service markets, including the data center market; dependence on the introduction and market acceptance of new product offerings and standards; rapid technological and market change; manufacturing and sourcing risks; product defects and returns; litigation involving patents, other intellectual property, antitrust, stockholder and other matters, and governmental investigations; our ability to achieve the benefits of restructurings and possible changes in the size and timing of related charges; cyber-attacks, data breaches or malware; vulnerabilities and critical security defects; terrorism; natural catastrophic events (including as a result of global climate change); any other pandemic or epidemic; our ability to achieve the benefits anticipated from our investments in sales, engineering, service, marketing and manufacturing activities; our ability to recruit and retain key personnel; our ability to manage financial risk, and to manage expenses during economic downturns; risks related to the global nature of our operations, including our operations in emerging markets; currency fluctuations and other international factors; changes in provision for income taxes, including changes in tax laws and regulations or adverse outcomes resulting from examinations of our income tax returns; potential volatility in operating results; and other factors listed in Cisco's most recent report on Form 10-K filed on September 8, 2022. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in Cisco's most recent report on Form 10-K as it may be amended from time to time. Cisco's results of operations for the three months ended October 29, 2022 are not necessarily indicative of Cisco's operating results for any future periods. Any projections in this release are based on limited information currently available to Cisco, which is subject to change. Although any such projections and the factors influencing them will likely change, Cisco will not necessarily update the information, since Cisco will only provide guidance at certain points during the year. Such information speaks only as of the date of this release.

This release includes non-GAAP net income, non-GAAP gross margins, non-GAAP operating expenses, non-GAAP operating income and margin, non-GAAP effective tax rates, non-GAAP interest and other income (loss), net, and non-GAAP net income per share data for the periods presented. It also includes future estimated ranges for gross margin, operating margin, tax provision rate and EPS on a non-GAAP basis.

These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Cisco believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Cisco's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Cisco's results of operations in conjunction with the corresponding GAAP measures.

Cisco believes that the presentation of non-GAAP measures when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and its historical and projected results of operations.

For its internal budgeting process, Cisco's management uses financial statements that do not include, when applicable, share-based compensation expense, amortization of acquisition-related intangible assets, acquisition-related/divestiture costs, significant asset impairments and restructurings, significant litigation settlements and other contingencies, Russia-Ukraine war costs, gains and losses on equity investments, the income tax effects of the foregoing and significant tax matters. Cisco's management also uses the foregoing non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Cisco. In prior periods, Cisco has excluded other items that it no longer excludes for purposes of its non-GAAP financial measures. From time to time in the future there may be other items that Cisco may exclude for purposes of its internal budgeting process and in reviewing its financial results. For additional information on the items excluded by Cisco from one or more of its non-GAAP financial measures, refer to the Form 8-K regarding this release furnished today to the Securities and Exchange Commission.

Annualized recurring revenue represents the annualized revenue run-rate of active subscriptions, term licenses, and maintenance contracts at the end of a reporting period, net of rebates to customers and partners as well as certain other revenue adjustments. Includes both revenue recognized ratably as well as upfront on an annualized basis.

About Cisco

Cisco (Nasdaq: CSCO) is the worldwide leader in technology that powers the Internet. Cisco inspires new possibilities by reimagining your applications, securing your data, transforming your infrastructure, and empowering your teams for a global and inclusive future. Discover more at newsroom.cisco.com and follow us on Twitter at @Cisco.

Copyright © 2022 Cisco and/or its affiliates. All rights reserved. Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S. and other countries. To view a list of Cisco trademarks, go to: www.cisco.com/go/trademarks. Third-party trademarks mentioned in this document are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company. This document is Cisco Public Information.

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[Eric] DJ Top Companies for Customer Satisfaction -- Journal Report 3:04 PM ET 2/28/22...

Eric — 2/28/2022 4:10:39 PM

DJ Top Companies for Customer Satisfaction -- Journal Report

3:04 PM ET 2/28/22 | Dow Jones

Cisco Systems Inc. is No. 1 for customer satisfaction in the latest Management Top 250 ranking, followed by Agilent Technologies Inc. and International Business Machines Corp.

The Management Top 250 ranking, developed by the Drucker Institute, measures corporate effectiveness by examining performance in five categories: customer satisfaction, employee engagement and development, innovation, social responsibility and financial strength.

Among the companies in the Top 250 with the highest scores for customer satisfaction, IBM ranks highest overall, at No. 4. Two others in this group also made the top 10 overall, Nvidia Corp. at No. 6 and Cisco at No. 8. Nvidia and Cisco also are among this year's eight All-Stars -- companies that excel in all five components of the overall ranking.

Nvidia also made the top 10 for financial strength and is No. 1 for employee engagement and development. Other top-10 performances for the leaders in customer satisfaction are Cisco for social responsibility and IBM for innovation.

You can explore the full, detailed rankings here. In the coming weeks we'll take a look at the leaders in each of the remaining ranking categories and the companies whose scores improved the most from the previous year in each category.

-- Gerard Yates

[Sr K] Cisco Made $20 Billion-Plus Takeover Offer for Splunk Bid was made recently tho...

Sr K — 2/11/2022 7:00:33 PM

Cisco Made $20 Billion-Plus Takeover Offer for Splunk

Bid was made recently though companies aren’t currently in active talks, according to people familiar with the matter

San Jose, Calif.-based Cisco sells routers, switches and security services as well as software products.PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS

By
Dana Cimilluca Follow

and
Cara Lombardo Follow

Updated Feb. 11, 2022 6:43 pm ET

Cisco Systems Inc. CSCO -1.77% has made a takeover offer worth more than $20 billion for software maker Splunk Inc., SPLK -2.76% according to people familiar with the matter.

The offer was made recently and the companies aren’t currently in active talks, some of the people said.

Should there be a deal, it would be Cisco’s biggest ever, eclipsing the roughly $7 billion acquisition of Scientific Atlanta in 2005. Its most recent deal of size was its nearly $5 billion purchase of Acacia Communications Inc. in 2021.

Splunk is currently searching for a chief executive after Doug Merritt stepped down from the role in November after roughly six years following a series of disappointing earnings reports. The company named Chairman Graham Smith as interim CEO, a position he still holds.

Splunk shares rose sharply early in the pandemic as did those of a number of other technology companies with strong growth potential, but have almost fallen in half since then.

It isn’t clear whether other potential suitors are circling Splunk.

Splunk, founded in 2003, makes software used by companies’ information-technology and security operations to monitor and analyze data.

San Jose, Calif.-based Cisco sells routers, switches and security services as well as software products such as its Webex meeting application.

Cisco’s interest shows that the networking giant—a serial acquirer, but usually of smaller companies—has an appetite for big deals.

And it has the wherewithal, with a market value of around $235 billion and more than $20 billion in cash and short-term investments.

Software has been a hot corner of the M&A market lately, with a number of companies in the sector being snapped up by private-equity firms or other industry players. In one of the latest examples, Citrix Systems Inc. agreed to be taken private by a pair of private-equity firms in an acquisition valued at $16.5 billion, including debt.

Splunk said in June that technology-focused private-equity firm Silver Lake was making a $1 billion investment in the company to help support the transformation of the business. Splunk has been shifting from a traditional software-licensing arrangement to a cloud-based subscription model. An increase in the shares on news of that investment had evaporated by the close of trading Friday.

Cisco is set to report its fiscal second-quarter earnings Feb. 16, while Splunk reports March 2.

Exc.

[Eric] Cisco Schedules Conference Call for Q2 Fiscal Year 2022 Financial Results 4:30 ...

Eric — 2/2/2022 5:12:31 PM

Cisco Schedules Conference Call for Q2 Fiscal Year 2022 Financial Results

4:30 PM ET 2/2/22 | Dow Jones

SAN JOSE, Calif., Feb. 2, 2022 /PRNewswire/ -- Cisco has scheduled a conference call for Wednesday, February 16, 2022, at 1:30 PM (PT); 4:30 PM (ET) to announce its second quarter fiscal year 2022 financial results for the period ending Saturday, January 29, 2022.

Financial results will be released over PR Newswire via US National and European Financial distribution, after the close of the market on Wednesday, February 16, 2022.

Cisco's quarterly earnings press release will be posted at newsroom.cisco.com.

Date:

Wednesday, February 16, 2022

Time:

1:30 PM (PT); 4:30 PM (ET)

To Listen via Telephone:

888-848-6507

212-519-0847 (for International Callers)

RSVP:

No RSVP is necessary

To Listen via the Internet:

We are pleased to offer a live and replay audio broadcast of the conference call with corresponding slides at investor.cisco.com.

Replay: A telephone playback of the Q2 FY2022 conference call is scheduled to be available beginning at 4:00 PM (PT) on February 16, 2022, through 4:00 PM (PT) February 23, 2022. The replay will be accessible by calling 888-568-0332 (International callers: 203-369-3905). The call runs 24 hours/day, including weekends.

[rudolphdaniel] That's a good news to hear out. Cisco is working and helping out little companie...

rudolphdaniel — 1/7/2021 7:24:50 AM

That's a good news to hear out. Cisco is working and helping out little companies.

Besides if you are looking out for web design services check out Bakersfield Web Design

[macnai] Cisco appears to be working with a little company called Poet Technologies. Agor...

macnai — 1/4/2021 1:04:04 PM

Cisco appears to be working with a little company called Poet Technologies.
Agoracom: Small Cap Investment - POET Technologies Inc. - Re: 400G FR4 - Remote Light Source (Cisco)

[Eric] Cisco Stock Is Rebounding After Earnings. Why There's Still Work To Do. -- Barro...

Eric — 11/13/2020 4:17:26 PM

Cisco Stock Is Rebounding After Earnings. Why There's Still Work To Do. -- Barrons.com

3:40 PM ET 11/13/20

Related Quotes


4:00 PM ET 11/13/20
Symbol	Last	% Chg
CSCO	41.40	7.06%
IBM	116.85	2.05%
Real time quote.

By Eric J. Savitz

At least for now, Cisco Systems is out of the investment doghouse.

On Thursday, the networking giant posted better-than-expected results for the fiscal first quarter ended Oct. 24 and the company's guidance for the January quarter was a little better than the Street had been anticipating. As Cisco (ticker: CSCO) CEO Chuck Robbins said in an interview with Barron's , the numbers may not have looked great mathematically, but they were "better than we thought."

Cisco posted revenue for the quarter of $11.9 billion, down 9% year over year, which was at the high end of the company's guidance range. Non-GAAP profits of 76 cents a share exceeded the company's target range of 69 to 71 cents. Cisco projects January quarter revenues will be flat to down 2%, with non-GAAP earnings per share of 74 to 76 cents. That's above the old Wall Street analyst consensus, which had called for a 3% decline in revenue, and non-GAAP profits of 73 cents a share.

To be sure, this was no return to the Cisco of old. Revenue from the core infrastructure platforms business was down 16%. Enterprise orders were down 15%, and orders from Asia were off 14%. But there were some positive signs beyond the top and bottom lines. The severe recent order declines from commercial customers -- basically small- and medium-size businesses -- moderated. Demand from cloud customers was strong. Security revenue was up 6% and public sector revenue was robust.

Add it up, and you get a quarter that pleased analysts, though some remain cautious about the sustainability of the rebound.

New Street Research analyst Pierre Ferragu on Friday upped his rating on Cisco shares to Buy from Neutral, setting a Street-high $60 price target. In a research note, Ferragu notes that the company is exposed to legacy and on-premise IT spending, "which has made 2020 a difficult year." But he says the revenue decline has troughed, with January quarter revenues likely flat sequentially and down just 1% at the midpoint of the guidance range year over year.

"This to us is the beginning of a recovery in IT spending," Ferragu writes. "In our conversations with Fortune 500 companies and industry executives, we see reasons to expect a quick recovery in 2021. In 2020, spending was front-loaded and directed toward emergency responses to Covid and work from home, which led to a very weak second half, but 2021 IT budgets are unlikely to get cut, as in-depth transformation projects have only been postponed."

Evercore ISI analyst Amit Daryananai writes that "this one goes out to all the haters ... reduced uncertainty, improving revenue trajectory, and easy compares make Cisco an attractive large-cap asset to own especially for value investors." He keeps his Outperform rating and $54 target.

Barclays analyst Tim Long likewise writes that "both tone and visibility has improved since last quarter, and we believe CSCO has room to run in the post-pandemic recovery." He keeps his Overweight rating and $50 target.

And RBC Capital's Robert Muller writes that "with long-duration secular tailwinds intact, steady market leading positions, and favorable valuation ... we continue to view the long-term CSCO story favorably." He keeps his Outperform rating, and inches up his target to $49, from $48.

Other analysts saw the quarter as a step in the right direction, but want to see more evidence before jumping aboard.

William Blair analyst Jason Ader keeps his Market Perform rating. "We contend that pandemic or no pandemic, Cisco's business is not yet out of the woods, with the long-term structural pressures ... remaining in place," he writes in a research note. "While Cisco has been attempting to pivot its business toward a greater mix of software and recurring revenue, we believe the pandemic has spotlighted the firm's product deficiencies (especially in the cloud), nonstrategic assets (e.g., Cisco's compute portfolio), and competitive challenges (best-of-breed competition chipping away in multiple product areas)."

Ader adds that "without a bolder approach to addressing its strategic shortcomings in a rapidly changing technology landscape, we think that like IBM (pre-Red Hat), Cisco's growth rate will continue to languish and its relevance with CIOs could continue to erode."

Needham's Alex Henderson remains a skeptic, and keeps his Hold rating. "Cisco sounded much more upbeat on the call and all we can do is assume it is in the pipeline activity," he writes. "The numbers reported don't show much cause for optimism. Cisco reported a year-over-year decline in revenues of 9% on a steep decline of 13.1% in product revenues against a decline in the year-ago period....We consider Cisco fairly valued."

Citi's Jim Suva keeps his Neutral rating, though he inches up his target to $45, from $43. "We were impressed with the company's outlook as well as a clear change in tone that went from last quarter's cautious comments of not much improvement to current quarter comments of a more stable and improving demand environment," he writes in a research note Friday. But he adds that he still has some concerns, in particular the 5% drop in overall orders, and the sharp 15% decline in enterprise orders, which deteriorated from down 7% in the July quarter.

[Eric] UPDATE: Cisco stock rallies 8% as results, outlook top Street view 5:49 PM ET 1...

Eric — 11/12/2020 6:03:48 PM

UPDATE: Cisco stock rallies 8% as results, outlook top Street view

5:49 PM ET 11/12/20

Related Quotes


4:00 PM ET 11/12/20
Symbol	Last	% Chg
CSCO	38.67	-1.68%
Real time quote.

By Wallace Witkowski

Autodesk's Herren named new CFO

Cisco Systems Inc. shares surged in the extended session Thursday after the maker of network services, videoconferencing tools and security software's quarterly results and outlook topped Wall Street estimates, and it announced a new chief financial officer.

Cisco (CSCO) reported fiscal first-quarter net income of $2.17 billion, or 51 cents a share, compared with $2.93 billion, or 68 cents a share, in the year-ago period. Adjusted earnings were 76 cents a share, compared with 84 cents a share in the year-ago period.

Revenue declined to $11.93 billion from $13.16 billion in the year-ago quarter, marking the fourth quarter in a row Cisco has reported a year-over-year decline in revenue. Security sales helped make up for deficiencies in infrastructure sales.

Analysts surveyed by FactSet had forecast earnings of 70 cents a share on revenue of $11.85 billion, following Cisco's forecast of 69 cents to 71 cents a share on revenue of $11.71 billion to $11.97 billion.

Shares rallied as much as 8% after hours, and will add about $13 billion in market cap if the stock performs at those levels when it opens Friday. Shares declined 1.7% in the regular session to close at $38.67, for a market cap of $163.23 billion.

For the first quarter, infrastructure sales declined 16% to $6.34 billion and applications sales fell 8% to $1.38 billion, but security sales rose 6% to $861 million from the year-ago period. Analysts had forecast infrastructure sales of $6.45 billion, applications sales of $1.4 billion and security sales of $855.8 million.

On the analyst call, Chuck Robbins, Cisco chairman and chief executive, sounded a lot more optimistic going forward than he did in the earnings call three months ago marketwatch.com.

"When we did the last earnings call, we had seen actually good demand in the first couple weeks of the quarter, but clearly it was a couple weeks and so it was not anything that would have given us a trend, but the quarter started and it stayed, it was very linear," Robbins told analysts.

Cisco expects earnings of 74 cents to 76 cents a share on revenue of $11.36 billion to $12.01 billion for the fiscal second quarter. Analysts had forecast 73 cents a share on revenue of $11.6 billion for the quarter.

Cisco also appointed R. Scott Herren as its new CFO marketwatch.com effective Dec. 18.

"Most recently Scott served as the CFO for Autodesk (ADSK) and brings an incredible background in software and helped lead Autodesk's successful business model transformation from perpetual licenses to SaaS and subscription software," Robbins said on the call.

In its last earnings report, Cisco announced that CFO Kelly Kramer will retire from the company once a replacement is found and that it would undergo a $1 billion cost reduction "over the next few quarters."

Cisco reported $602 million in "restructuring and other charges" in the fiscal first quarter, and said it expects another $298 million to be reported in the second quarter. Cisco did not comment on the call as to how many of its last-reported 77,500 employees were affected by layoffs.

For the year, Cisco shares are down about 20%, compared with a 1.9% advance in the Dow Jones Industrial Average , of which Cisco is a component, a 9% rise by the S&P 500 index and a 30% gain by the tech-heavy Nasdaq Composite Index .

[Eric] Cisco Reports First Quarter Earnings 4:05 PM ET 11/12/20 | PR Newswire Relat...

Eric — 11/12/2020 4:12:30 PM

Cisco Reports First Quarter Earnings

4:05 PM ET 11/12/20 | PR Newswire

Related Quotes


4:00 PM ET 11/12/20
Symbol	Last	% Chg
CSCO	38.67	-1.68%
Real time quote.

-- Q1 Results:

-- Revenue: $11.9 billion

-- Decrease of (9)% year over year

-- Earnings per Share: GAAP: $0.51; Non-GAAP: $0.76

-- GAAP EPS decreased (25)% year over year

-- Non-GAAP EPS decreased (10)% year over year

-- Q2 Guidance:

-- Revenue: 0% to (2)% decline year over year

-- Earnings per Share: GAAP: $0.55 to $0.60; Non-GAAP: $0.74 to $0.76

SAN JOSE, Calif., Nov. 12, 2020 /PRNewswire/ -- Cisco today reported first quarter results for the period ended October 24, 2020. Cisco reported first quarter revenue of $11.9 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.2 billion or $0.51 per share, and non-GAAP net income of $3.2 billion or $0.76 per share.

"Cisco is off to a solid start in fiscal 2021 and we are encouraged by the signs of improvement in our business as we continue to navigate the pandemic and other macro uncertainties," said Chuck Robbins, chairman and CEO of Cisco. "Our focus is on winning with a differentiated innovative portfolio, long-term growth and being a trusted technology partner offering choice and flexibility to our customers. We see many great opportunities ahead as every company in every industry is accelerating its digital-first strategy."

GAAP Results

Q1 FY 2021 Q1 FY 2020 Vs. Q1 FY 2020

Revenue $11.9 billion $13.2 billion (9)%

Net Income $2.2 billion $2.9 billion (26)%

Diluted Earnings

per Share

(EPS) $0.51 $0.68 (25)%

Non-GAAP Results

Q1 FY 2021 Q1 FY 2020 Vs. Q1 FY 2020

Net Income $3.2 billion $3.6 billion (11)%

EPS $0.76 $0.84 (10)%

Reconciliations between net income, EPS, and other measures on a GAAP and non-GAAP basis are provided in the tables located in the section entitled "Reconciliations of GAAP to non-GAAP Measures."

"Our Q1 results reflect good execution with strong margins in a challenging environment," said Kelly Kramer, CFO of Cisco. "We continued to transform our business through more software offerings and subscriptions, driving 10% year over year growth in remaining performance obligations. We delivered strong growth in operating cash flow and returned $2.3 billion to shareholders."

Financial Summary

All comparative percentages are on a year-over-year basis unless otherwise noted.

Q1 FY 2021 Highlights

Revenue -- Total revenue was $11.9 billion, down 9%, with product revenue down 13% and service revenue up 2%. Revenue by geographic segment was: Americas down 10%, EMEA down 10%, and APJC down 7%. Product revenue was led by growth in Security, up 6%. Infrastructure Platforms was down 16% and Applications was down 8%.

Gross Margin -- On a GAAP basis, total gross margin, product gross margin, and service gross margin were 63.6%, 62.7%, and 65.8%, respectively, as compared with 64.3% for each in the first quarter of fiscal 2020.

On a non-GAAP basis, total gross margin, product gross margin, and service gross margin were 65.8%, 65.3%, and 67.1%, respectively, as compared with 65.9%, 66.1%, and 65.4%, respectively, in the first quarter of fiscal 2020.

Total gross margins by geographic segment were: 67.3% for the Americas, 63.9% for EMEA and 63.0% for APJC.

Operating Expenses -- On a GAAP basis, operating expenses were $5.0 billion, up 3%, and were 42.0% of revenue. Non-GAAP operating expenses were $4.0 billion, down 7%, and were 33.1% of revenue.

Operating Income -- GAAP operating income was $2.6 billion, down 28%, with GAAP operating margin of 21.5%. Non-GAAP operating income was $3.9 billion, down 12%, with non-GAAP operating margin at 32.7%.

Provision for Income Taxes -- The GAAP tax provision rate was 18.9%. The non-GAAP tax provision rate was 19.0%.

Net Income and EPS -- On a GAAP basis, net income was $2.2 billion, a decrease of 26%, and EPS was $0.51, a decrease of 25%. On a non-GAAP basis, net income was $3.2 billion, a decrease of 11%, and EPS was $0.76, a decrease of 10%.

Cash Flow from Operating Activities -- $4.1 billion for the first quarter of fiscal 2021, an increase of 14% compared with $3.6 billion for the first quarter of fiscal 2020.

Balance Sheet and Other Financial Highlights

Cash and Cash Equivalents and Investments -- $30.0 billion at the end of the first quarter of fiscal 2021, compared with $29.4 billion at the end of fiscal 2020.

Deferred Revenue -- $20.5 billion, up 10% in total, with deferred product revenue up 15%. Deferred service revenue was up 7%.

Remaining Performance Obligations -- $27.5 billion at the end of the first quarter of fiscal 2021, up 10%.

Capital Allocation -- In the first quarter of fiscal 2021, we returned $2.3 billion to shareholders through share buybacks and dividends. We declared and paid a cash dividend of $0.36 per common share, or $1.5 billion, and repurchased approximately 20 million shares of common stock under our stock repurchase program at an average price of $40.44 per share for an aggregate purchase price of $800 million. The remaining authorized amount for stock repurchases under the program is $10.0 billion with no termination date.

Guidance for Q2 FY 2021

Cisco expects to achieve the following results for the second quarter of fiscal 2021:

Q2 FY 2021

-------------------------------

Revenue 0% - (2)% decline Y/Y

Non-GAAP gross margin rate 64% - 65%

Non-GAAP operating margin rate 32% - 33%

Non-GAAP tax provision rate 19%

Non-GAAP EPS $0.74 - $0.76

Cisco estimates that GAAP EPS will be $0.55 to $0.60 in the second quarter of fiscal 2021.

A reconciliation between the Guidance for Q2 FY 2021 on a GAAP and non-GAAP basis is provided in the table entitled "GAAP to non-GAAP Guidance for Q2 FY 2021" located in the section entitled "Reconciliations of GAAP to non-GAAP Measures."

[Eric] Cisco's Stock Rises After Morgan Stanley Turns Bullish, Citing Durable Earnings ...

Eric — 7/9/2020 1:30:49 PM

Cisco's Stock Rises After Morgan Stanley Turns Bullish, Citing Durable Earnings Growth And Valuation -- MarketWatch

11:48 AM ET 7/9/20

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1:27 PM ET 7/9/20
Symbol	Last	% Chg
CSCO	47.05	2.70%
Real time quote.

Shares of Cisco Systems Inc. (CSCO) rallied 1.1% in midday trading Thursday, to buck the broad-market selloff, after Morgan Stanley analyst Meta Marshall turned bullish on the networking giant, citing attractive valuation, durable earnings growth and potential tailwinds. The stock was the best performer of the two of 30 Dow Jones Industrial Average components that were gaining ground, as the Dow tumbled 494 points, or 1.9%. Marshall raised the rating to overweight, after being at equal weight since February 2019, and boosted his price target on the stock to $54 from $46. Marshall said Cisco's valuation multiple is at the greatest discount to the S&P 500 in the past 10 years. He believes the "valuation gap" will normalize as Cisco's earnings prove more resilient than investor expectations, driven by strength in public sector and service provider revenue, and as business spending improves as networking and security needs grow. "We are mindful of secular headwinds and broad macro exposure, but think growing networking/security needs, cash flow flexibility and [operating expenditure] discipline provide tailwinds, helping multiple gap close over [the next 12 months]," Marshall wrote in a note to clients. The stock has lost 3.5% year to date, while the Dow has dropped 10.4% and the S&P 500 has eased 3.4%.

-Tomi Kilgore

For more from MarketWatch: marketwatch.com

[Eric] UPDATE: Cisco stock heads higher as profit continues to flow amid pandemic despi...

Eric — 5/13/2020 4:34:04 PM

UPDATE: Cisco stock heads higher as profit continues to flow amid pandemic despite revenue slowdown

4:31 PM ET 5/13/20 | MarketWatch

Related Quotes


4:00 PM ET 5/13/20
Symbol	Last	% Chg
CSCO	41.95	-2.94%
Real time quote.

By Jeremy C. Owens, MarketWatch , Jon Swartz

Earnings increase from last year despite sales decline; forecast for fiscal fourth quarter shows higher profit expectation than analysts

Cisco Systems Inc. showed stronger-than-expected resilience in its earnings Wednesday and shares went higher in after-hours trading, but the tech giant's sales are declining amid the COVID-19 pandemic.

The maker of network services, videoconferencing tools and security software reported third-quarter net income of $2.8 billion, or 65 cents a share, as revenue declined 8% to $12 billion from $12.96 billion in the year-ago period. After adjusting for stock compensation and other effects, Cisco reported earnings of 79 cents a share, up slightly from 78 cents a share a year ago.

Analysts surveyed by FactSet had projected adjusted earnings of 71 cents a share on revenue of $11.9 billion on average, though those expectations have come down significantly since COVID-19 began to spread across the globe. Analysts expected adjusted earnings of 80 cents a share on sales of $12.7 billion at the end of 2019.

The third-quarter results, announced after the market's close Wednesday, initially sent Cisco (CSCO) shares up 3% in after-hours trading. Cisco stock has dipped 20% the past 12 months, while the S&P 500 index has inched down 1%. Since March 12, however, Cisco shares have jumped 30%.

"The pandemic has driven organizations across the globe to digitize their operations and support remote workforces at a faster speed and greater scale than ever before. We remain focused on providing the technology and solutions our customers need to accelerate their digital organizations," Cisco Chief Executive Chuck Robbins said in a statement investor.cisco.com announcing the results.

See also: Cisco is seeing a spike in videoconferencing, but how will IT spending fare in the age of COVID-19? marketwatch.com

As a major provider of networking equipment, Cisco is a crucial barometer of demand for information technology by major corporations. The results underscore softness in overall IT spending in the age of COVID-19 despite insatiable demand for certain aspects -- namely videoconferencing and network infrastructure.

For the fiscal fourth quarter, Cisco expects revenue decreases to accelerate, guiding for a year-over-year sales decline of 8.5% to 11.5% after hitting more than $13 billion in revenue in the year-ago quarter, suggesting that sales will come in lower than $12 billion. Analysts on average expected fourth-quarter revenue of $12.07 billion, after shaving off more than $750 million in response to COVID-19.

LIke its big profit beat on Wednesday, however, Cisco continues to exceed expectations with its earnings forecast. For the fourth quarter, the company expects adjusted earnings of 72 to 74 cents a share, topping the average analyst expectation of 71 cents a share, according to FactSet.

[Eric] Cisco Reports Third Quarter Earnings 4:05 PM ET 5/13/20 | PR Newswire Related...

Eric — 5/13/2020 4:08:32 PM

Cisco Reports Third Quarter Earnings

4:05 PM ET 5/13/20 | PR Newswire

Related Quotes


4:00 PM ET 5/13/20
Symbol	Last	% Chg
CSCO	41.95	-2.94%
Real time quote.

-- Q3 Results:

-- Revenue: $12.0 billion

-- Decrease of (8)% year over year

-- Earnings per Share: GAAP: $0.65; Non-GAAP: $0.79

-- GAAP EPS decreased (6)% year over year

-- Non-GAAP EPS increased 1% year over year

-- Q4 Guidance:

-- Revenue: (8.5)% to (11.5)% decline year over year

-- Earnings per Share: GAAP: $0.57 to $0.62; Non-GAAP: $0.72 to $0.74

SAN JOSE, Calif., May 13, 2020 /PRNewswire/ -- Cisco today reported third quarter results for the period ended April 25, 2020. Cisco reported third quarter revenue of $12.0 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.8 billion or $0.65 per share, and non-GAAP net income of $3.4 billion or $0.79 per share.

"During this extraordinary time, our priority has been supporting our employees, customers, partners and communities, while positioning Cisco for the future," said Chuck Robbins, chairman and CEO of Cisco. "The pandemic has driven organizations across the globe to digitize their operations and support remote workforces at a faster speed and greater scale than ever before. We remain focused on providing the technology and solutions our customers need to accelerate their digital organizations."

GAAP Results

Q3 FY 2020 Q3 FY 2019 Vs. Q3 FY 2019

Revenue $ 12.0 billion $ 13.0 billion (8)%

Net Income $ 2.8 billion $ 3.0 billion (9)%

Diluted Earnings

per Share

(EPS) $ 0.65 $ 0.69 (6)%

Non-GAAP Results

Q3 FY 2020 Q3 FY 2019 Vs. Q3 FY 2019

Net Income $ 3.4 billion $ 3.5 billion (2)%

EPS $ 0.79 $ 0.78 1%

Reconciliations between net income, EPS, and other measures on a GAAP and non-GAAP basis are provided in the tables located in the section entitled "Reconciliations of GAAP to non-GAAP Measures."

"We executed well in Q3 in a very challenging environment, delivering strong margins and non-GAAP EPS growth," said Kelly Kramer, CFO of Cisco. "The resiliency that we have been building into our business model is paying off, with software subscriptions now at 74% of our software revenue, up 9 points year over year. We are focused on driving long-term profitable growth while delivering shareholder value."

COVID-19 Pandemic Response

We have been focused on helping our employees, customers, partners and communities.

Employees

-- 95% of our global workforce working from home.

-- Seamless transition to work from home with a long-standing flexible work

policy, and we build the technologies that allow organizations to stay

connected, secure and productive.

-- For the 5% who must be in the office to perform their roles, we are

focused on their health and safety, and are taking all of the necessary

precautions.

Customer and Partners

-- Introduced a variety of free offers and trials for our Webex and security

technologies as they dramatically shifted entire workforces to be remote.

-- Announced $2.5 billion in financing with a new Business Resiliency

Program through Cisco Capital to offer financial flexibility and support

their business continuity. This will help customers and partners access

the technology they need now, invest for recovery, and defer most of the

payments until early 2021.

Communities

-- Committed nearly $300 million to date to support both global and local

pandemic response efforts.

-- Providing technology and financial support for non-profits, first

responders, and governments.

-- Donating personal protective equipment to hospital workers including N95

masks and face shields 3D-printed by Cisco volunteers around the world.

Financial Summary

All comparative percentages are on a year-over-year basis unless otherwise noted.

Q3 FY 2020 Highlights

Revenue -- Total revenue was $12.0 billion, down 8%, with product revenue down 12% and service revenue up 5%. Revenue by geographic segment was: Americas down 8%, EMEA down 7%, and APJC down 9%. Product revenue was led by growth in Security, up 6%. Infrastructure Platforms was down 15% and Applications was down 5%.

Gross Margin -- On a GAAP basis, total gross margin, product gross margin, and service gross margin were 64.9%, 63.7%, and 67.7%, respectively, as compared with 63.1%, 62.0%, and 66.3%, respectively, in the third quarter of fiscal 2019.

On a non-GAAP basis, total gross margin, product gross margin, and service gross margin were 66.6%, 65.8%, and 68.9%, respectively, as compared with 64.6%, 63.7%, and 67.3%, respectively, in the third quarter of fiscal 2019.

Total gross margins by geographic segment were: 67.8% for the Americas, 65.7% for EMEA and 63.5% for APJC.

Operating Expenses -- On a GAAP basis, operating expenses were $4.4 billion, down 6%, and were 36.4% of revenue. Non-GAAP operating expenses were $3.8 billion, down 9%, and were 31.8% of revenue.

Operating Income -- GAAP operating income was $3.4 billion, down 3%, with GAAP operating margin of 28.5%. Non-GAAP operating income was flat at $4.2 billion, with non-GAAP operating margin at 34.9%.

Provision for Income Taxes -- The GAAP tax provision rate was 19.4%. The non-GAAP tax provision rate was 20.0%.

Net Income and EPS -- On a GAAP basis, net income was $2.8 billion, a decrease of 9%, and EPS was $0.65, a decrease of 6%. On a non-GAAP basis, net income was $3.4 billion, a decrease of 2%, and EPS was $0.79, an increase of 1%.

Cash Flow from Operating Activities -- $4.2 billion for the third quarter of fiscal 2020, a decrease of 2% compared with $4.3 billion for the third quarter of fiscal 2019.

Balance Sheet and Other Financial Highlights

Cash and Cash Equivalents and Investments -- $28.6 billion at the end of the third quarter of fiscal 2020, compared with $33.4 billion at the end of fiscal 2019.

Deferred Revenue -- $18.6 billion, up 7% in total, with deferred product revenue up 17%. Deferred service revenue was up 1%.

Remaining Performance Obligations -- $25.5 billion at the end of the third quarter of fiscal 2020, up 11%.

Capital Allocation -- In the third quarter of fiscal 2020, we returned $2.5 billion to shareholders through share buybacks and dividends. We declared and paid a cash dividend of $0.36 per common share, or $1.5 billion, and repurchased approximately 25 million shares of common stock under our stock repurchase program at an average price of $39.71 per share for an aggregate purchase price of $981 million. The remaining authorized amount for stock repurchases under the program is $10.8 billion with no termination date.

Acquisitions

In the third quarter of fiscal 2020, we closed the acquisition of Exablaze, a privately held designer and manufacturer of advanced network devices aimed at reducing latency and improving network performance.

Guidance for Q4 FY 2020

Cisco expects to achieve the following results for the fourth quarter of fiscal 2020:

Q4 FY 2020

Revenue (8.5)% - (11.5)% decline Y/Y

Non-GAAP gross margin rate 64% - 65%

Non-GAAP operating margin rate 31.5% - 32.5%

Non-GAAP tax provision rate 20%

Non-GAAP EPS $0.72 - $0.74

Cisco estimates that GAAP EPS will be $0.57 to $0.62 in the fourth quarter of fiscal 2020.

A reconciliation between the Guidance for Q4 FY 2020 on a GAAP and non-GAAP basis is provided in the table entitled "GAAP to non-GAAP Guidance for Q4 FY 2020" located in the section entitled "Reconciliations of GAAP to non-GAAP Measures."

Editor's Notes:

-- Q3 fiscal year 2020 conference call to discuss Cisco's results along with

its guidance will be held on Wednesday, May 13, 2020 at 1:30 p.m. Pacific

Time. Conference call number is 1-888-848-6507 (United States) or

1-212-519-0847 (international).

-- Conference call replay will be available from 4:00 p.m. Pacific Time, May

13, 2020 to 4:00 p.m. Pacific Time, May 20, 2020 at 1-800-391-9847

(United States) or 1-402-220-3093 (international). The replay will also

be available via webcast on the Cisco Investor Relations website at

investor.cisco.com.

-- Additional information regarding Cisco's financials, as well as a webcast

of the conference call with visuals designed to guide participants

through the call, will be available at 1:30 p.m. Pacific Time, May 13,

2020. Text of the conference call's prepared remarks will be available

within 24 hours of completion of the call. The webcast will include both

the prepared remarks and the question-and-answer session. This

information, along with the GAAP to non-GAAP reconciliation information,

will be available on the Cisco Investor Relations website at

investor.cisco.com.

CISCO SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per-share amounts)

(Unaudited)

Three Months Ended Nine Months Ended

April 25, April 27, April 25, April 27,

2020 2019 2020 2019

REVENUE:

Product $ 8,597 $ 9,722 $ 27,146 $ 28,885

Service 3,386 3,236 10,001 9,591

Total revenue 11,983 12,958 37,147 38,476

COST OF SALES:

Product 3,120 3,693 9,770 11,106

Service 1,092 1,092 3,378 3,278

Total cost of

sales 4,212 4,785 13,148 14,384

GROSS MARGIN 7,771 8,173 23,999 24,092

OPERATING

EXPENSES:

Research and

development 1,546 1,659 4,782 4,824

Sales and

marketing 2,192 2,403 6,951 7,084

General and

administrative 457 541 1,431 1,261

Amortization of

purchased

intangible

assets 34 39 108 112

[Eric] UPDATE: Cisco unleashes 'Thanos' in hopes for a 'radical simplification' of secu...

Eric — 2/25/2020 1:19:22 PM

UPDATE: Cisco unleashes 'Thanos' in hopes for a 'radical simplification' of security software

8:35 AM ET 2/25/20 | MarketWatch

Related Quotes


1:15 PM ET 2/25/20
Symbol	Last	% Chg
CSCO	42.60	-3.18%
Real time quote.

UPDATE: Cisco unleashes 'Thanos' in hopes for a 'radical simplification' of security software

By Wallace Witkowski, MarketWatch

SecureX platform, code-named after Marvel villain, combines disparate security products from Cisco and competitors into a single interface

Cisco Systems Inc. is hoping to restore order into a universe of frazzled security professionals through a "radical simplification" that could reduce the number of hungry mouths in a crowded marketplace.

Sound familiar? Well, Cisco (CSCO) did internally code-name the product "Thanos," after the Marvel supervillain who believes he will bring order to a resource-taxed universe by randomly killing half its inhabitants. By launch on Monday, the first day of the 2020 RSA Conference for the cybersecurity industry in San Francisco, Cisco had renamed the product SecureX.

In a statement, Cisco said the product "was code-named to demonstrate similar abilities/powers -- strength and speed that SecureX can offer to customers."

Evil connotations aside, the culling spirit of Thanos plays well into what chief information security officers have long been demanding from their products: Ways of simplifying their information-security needs with scarce resources. Cisco said the SecureX platform is a single, cloud-native interface that brings together threat visibility from all Cisco products as well as third-party products in less than 15 minutes.

"The industry has been flooded with thousands of point products that were meant to help customers but instead created unmanageable environments with products that don't work together, which has created gaps in businesses' security posture," Gee Rittenhouse, the head of Cisco's security business, said in a statement.

See also: Security software seen as a fractured industry in need of consolidation marketwatch.com

Cisco's pitch is that SecureX is the scalable platform that can simplify the security environment in which companies currently patch together products from up to dozens of vendors. Of course, Cisco -- believed to be the largest single security vendor in terms of revenue after years of costly acquisitions -- would like to replace many of those products with its own. Cisco said SecureX will be available in June.

"Nearly one-third (31%) of organizations base cybersecurity monitoring and protection on more than 50 different security products," said Jon Oltsik, senior principal analyst at the Enterprise Strategy Group, in a statement. "This not only adds cost and complexity but also makes it harder to detect and respond to cybersecurity incidents in a timely fashion."

Cisco and its competitors will gather in San Francisco this week for RSA, which runs through Friday. Verizon Communications Inc. (VZ) , AT&T Inc. (T) and International Business Machines Corp. (IBM) have canceled their plans for RSA due to COVID-19 fears, but conference organizers said in an update Friday (https://www.rsaconference.com/novel-coronavirus-update)that they still expect more than 40,000 attendees.

For more: Will the shows go on? Coronavirus hangs over tech conferences marketwatch.com

Over the past 12 months, Cisco shares have declined nearly 8%, while the ETFMG Prime Cyber Security ETF (HACK) has advanced more than 11%. In comparison, the Dow Jones Industrial Average , of which Cisco is a component, has risen 12%, the S&P 500 Index has grown 20% and the tech-heavy Nasdaq Composite Index has advanced 28%.

[Eric] Second Qtr results: newsroom.cisco.com Dividend Increased 3 Percent Q2 Result...

Eric — 2/12/2020 4:12:13 PM

Second Qtr results:

newsroom.cisco.com

Dividend Increased 3 Percent

Q2 Results: Revenue: $12.0 billion Decrease of (4)% year over year

Earnings per Share: GAAP: $0.68; Non-GAAP: $0.77 Non-GAAP EPS increased 5% year over year

Q3 Guidance: Revenue: (1.5)% to (3.5)% decline year over year

Earnings per Share: GAAP: $0.62 to $0.67; Non-GAAP: $0.79 to $0.81 SAN JOSE, Calif., Feb. 12, 2020 --

Cisco today reported second quarter results for the period ended January 25, 2020. Cisco reported second quarter revenue of $12.0 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.9 billion or $0.68 per share, and non-GAAP net income of $3.3 billion or $0.77 per share.

[Eric] Buy Cisco Stock to Play New Product Cycles, Analyst Says -- Barrons.com 12:04 P...

Eric — 12/19/2019 6:22:22 PM

Buy Cisco Stock to Play New Product Cycles, Analyst Says -- Barrons.com

12:04 PM ET 12/19/19

Related Quotes


4:15 PM ET 12/19/19
Symbol	Last	% Chg
CSCO	47.88	2.66%
Real time quote.

By Eric J. Savitz

Cisco Systems stock is trading higher Thursday after Barclays upped its rating on the network equipment provider.

Analyst Tim Long now rates the stock Overweight from Equal Weight previously, with a new target price of $53, up from $47.

Cisco shares (ticker: CSCO) have sharply underperformed the market in 2019, with a year-to-date gain of just 13%, versus 33% for the Nasdaq Composite. Since peaking above $58 a share in July, Cisco shares have slumped 18%. The decline reflects recent investor concerns with the outlook for both enterprise and carrier spending amid a tougher macro environment. In reporting earnings last month, Cisco projected January quarter revenue would be down 3% to 5% on a year-over-year basis, a range of $11.8 billion to $12.1 billion, or as much as $1 billion below the previous Street consensus at $12.8 billion.

In an interview with Barron's following earnings last month, Cisco Chief Financial Officer Kelly Kramer said that order weakness the company saw in the previous quarter "got a little worse for us" in the October quarter. She said there was continued softness both from service providers and in emerging markets, but that the issue has spread and become more broad-based.

In a research note this morning, Long says his more bullish stance reflects both a valuation call and the promise of a recent round of product announcements.

"Cisco has a diversified revenue stream, but a few key product areas should improve for Cisco and the industry over the next year," he writes.

Long calls out Cisco's new 8000 router series which is based on the company's new Cisco Silicon One chip. "Cisco is four years removed from its last routing cycle, so we expect upgrades and share gains, particularly as 5G traffic grows," he writes.

Long also sees further gains for the campus switching market, where he estimates 40% share for Cisco's 9000 series switches. And Long says a technology shift to Wi-Fi 6 should help both the wireless local area networking, or WLAN, and campus switching segments.

As for the stock, Long says Cisco shares have historically outperformed following guidance revisions like the one issued last quarter. "We expect this time to be no different, particularly as product cycles emerge," he writes. Long today lifted his earnings-per-share estimates to $3.25 from $3.20 for the July 2020 fiscal year, and to $3.50 from $3.38 for fiscal year 2021. And he sees potential for multiple expansion, with new product cycles improving sentiment on the shares.

Cisco stock on Thursday was up recently 2%, to $47.55.

[John Koligman] Cisco drops on poor guidance, says China business dropped 25% PUBLISHED 3 HOURS ...

John Koligman — 8/14/2019 6:53:57 PM

Cisco drops on poor guidance, says China business dropped 25%
PUBLISHED 3 HOURS AGOUPDATED AN HOUR AGO

Jordan Novet @JORDANNOVET

KEY POINTS

Cisco beat on top and bottom lines.Guidance came in below estimates.The company said it would buy Acacia Communications in the quarter.

Cisco CEO Chuck Robbins being interviewed in Davos, Switzerland, January 21, 2016.
David A. Grogan | CNBC

Cisco shares fell by as much as 7% after hours on Wednesday after the company reported weaker-than-expected guidance. It had already dropped 4% during the day on a disastrous day for stocks.

Here’s what the company reported:

Earnings: 83 cents per share, excluding certain items, vs. 82 cents per share as expected by analysts, according to Refinitiv.Revenue: $13.43 billion, vs. $13.38 billion as expected by analysts, according to Refinitiv.

Revenue grew 6% on an annualized basis in the quarter, according to a statement.

“We did see in July some slight early indications of some macro shifts that we didn’t see in the prior quarter,” Cisco CEO Chuck Robbins told analysts on a Wednesday conference call. He said in the quarter Cisco company saw “significant impact” on business in China because of the U.S.-China trade war.

In China, Cisco’s revenue was down 25% on an annualized basis in the quarter, Kelly Kramer, the company’s chief financial officer, said on the call.

“What we’ve seen is in the state on enterprises ... we’re just being -- we’re being uninvited to bid,” Robbins said. “We’re not being allowed to even participate anymore.” Sales to carriers declined more forcefully as well, he said.

The majority of Cisco’s revenue comes from sales of data center networking products, including switches and routers. That business is represented by Cisco’s Infrastructure Platforms segment, which came up with quarterly revenue of $7.88 billion, above the $7.84 billion consensus among analyst polled by FactSet.

The Applications segment had $1.49 billion in revenue, in line with the $1.49 billion FactSet analyst consensus. Cisco’s Security business contributed $714 million in revenue, less than $739.9 million FactSet consensus estimate.

Heading into the report, some analysts expressed concerns about Cisco given storage hardware company NetApp’s decision to lower its fiscal-year guidanceat the beginning of August.

“We expect a large portion of NetApp’s headwinds to have limited implications for Cisco, except for cautious spending from large accounts which we believe Cisco is well positioned to offset through a strong product cycle and broader customer exposure,” JP Morgan analysts led by Samik Chatterjee wrote in a Monday note.

Cisco’s broad customer base could help the company weather softer macroeconomic conditions, wrote the JP Morgan analysts, who have an overweight rating on Cisco stock.

In the quarter Cisco announced new Wi-Fi products and a plan to acquire Acacia Communications for $2.6 billion.

As for guidance, Cisco said it expects to report 80 to 82 cents in earnings per share, excluding certain items, and flat to 2% revenue growth in the first quarter of its 2020 fiscal year. Analysts polled by Refinitiv were looking for 83 cents in earnings per share, excluding certain items, and $13.40 billion in revenue, or 2.5% growth, for that period.

Shares of the company are up 17% since the beginning of the year.

[Eric] 3 Reasons to Be Bullish on Cisco Stock Ahead Of Earnings -- Barrons.com 10:43 A...

Eric — 8/12/2019 4:39:02 PM

3 Reasons to Be Bullish on Cisco Stock Ahead Of Earnings -- Barrons.com

10:43 AM ET 8/12/19

Related Quotes


4:00 PM ET 8/12/19
Symbol	Last	% Chg
CSCO	51.54	-1.70%
NTAP	46.11	-1.01%
Real time quote.

By Eric J. Savitz

Tech stock earnings season continues this week, as Cisco Systems (ticker: CSCO) reports earnings Wednesday for its July quarter. And there are reasons for optimism about the networking equipment giant's shares.

J.P. Morgan analyst Samik Chatterjee pointed out in a research note Monday that the stock is trading about 10% below its 52-week high, pressured by investor concerns about the U.S.-China trade spat, and a nasty earnings disappointment from NetApp (NTAP) that hinted at softening Enterprise IT spending.

But Chatterjee repeated his Overweight rating and $62 price target on the stock, and offered three reasons he thinks the bearish tone on the stock is overdone:

-- Both of the company's most direct competitors in networking hardware,

Arista (ANET) and Juniper (JNPR), recently reported strong enterprise

sector growth.

-- While the macro economy uncertainty appears to be "elongating sales

cycles for large award wins with larger enterprises," Cisco's deep

customer footprint across a range of small- and medium-size business and

enterprise customers will limit the impact on its results, he adds.

-- And Chatterjee says Cisco's "accelerating top-line momentum" -- driven by

product cycles in campus switching and security -- as well as a coming

product tailwind in Wi-Fi equipment, "will allow the firm to offset macro

headwinds."

For those reasons, Cisco can show top-line acceleration, with mid-single-digit revenue growth going forward, Chatterjee writes. "We believe the recent weakness in CSCO shares offer an attractive entry point," he writes. The stock trades at 15.4 times earnings on a next 12 months basis, below the market multiple at 16.7 times, despite a "superior medium-term top-line and earnings growth outlook."

For Cisco's fiscal fourth quarter ended July 31, Street consensus calls for revenue of $13.39 billion, up 6%, with earnings of 82 cents a share. Cisco's guidance for the quarter called for revenue growth of 4.5% to 6.5%, with non-GAAP profits of 80 to 82 cents a share.

On Monday morning, Cisco stock fell 21 cents, or 0.4%, to $52.22.

[Eric] Cisco Announces Intent to Acquire Voicea 8:00 AM ET 8/6/19 | PR Newswire Rela...

Eric — 8/7/2019 4:03:19 PM

Cisco Announces Intent to Acquire Voicea

8:00 AM ET 8/6/19 | PR Newswire

Related Quotes


4:00 PM ET 8/7/19
Symbol	Last	% Chg
CSCO	52.34	-0.49%
Real time quote.

Unlocking the Power of Data Within Business Conversations to Turn Talk into Action

SAN JOSE, Calif., Aug. 6, 2019 /PRNewswire/ --

News Summary:

-- Cisco intent to acquire Voicea* represents another proof point in Cisco's

continuous commitment to making Webex the collaboration

platform-of-choice for the best employee experience.

-- As part of the Webex portfolio, our first focus is to use Voicea to turn

a simple meeting into a treasure trove of digital meeting notes and

insights, with robust data privacy.

-- Acquisition builds upon Cisco's vision of Cognitive Collaboration, which

slipstreams AI across all interactions to make teams more productive.

Cisco (NASDAQ: CSCO) today announced its intent to acquire privately-held Voicea, headquartered in Mountain View, CA. Voicea is the creator of a market-leading real-time solution that provides meeting transcription, voice search, and meeting highlights/action items, with robust data privacy. It helps teams have more productive and actionable meetings by turning talk into action.

With Voicea technology, Cisco will enhance its Webex portfolio of products with a powerful transcription service that blends AI and Automated Speech Recognition (ASR) to unlock the power of any collaboration, like meetings and calls. Our first focus with Voicea is to turn meetings into a treasure trove of digital meeting notes and insights. Attendees and non-attendees can quickly gather the most relevant information from these digital notes and insights, turning a block of text into actionable information.

Key Facts:

-- This acquisition reflects Cisco's vison of Cognitive Collaboration,

interoperability, and workplace transformation through combining the

power of AI, ML, software, hardware, and the network to remove friction

and get work done faster and smarter.

-- The acquisition is expected to close in the first quarter of Cisco's

fiscal year 2020, subject to customary closing conditions and required

regulatory approvals.

-- Upon completion of the transaction, the Voicea team will join the Webex

portfolio team, led by Sri Srinivasan, Senior Vice President and General

Manager. Read the blog for more details.

-- Cisco collaboration customers include 95 percent of the Fortune 500.

-- More than 130 million people use Webex every month.

-- More than 360 million meetings happen on Webex each year.

"Voicea's true market leading technology will be a game changer for our Webex customers to experience more productive and actionable meetings," said Amy Chang, senior vice president and general manager, Cisco Collaboration. "The acquisition of Voicea allows us to leap past basic transcription services and instead, continue delivering on our vision of AI-driven, Cognitive Collaboration across our entire portfolio."

About Cisco

Cisco (NASDAQ: CSCO) is the worldwide technology leader that has been making the Internet work since 1984. Our people, products, and partners help society securely connect and seize tomorrow's digital opportunity today. Discover more at newsroom.cisco.com and follow us on Twitter at @Cisco.

* Rizio Inc., is doing business as Voicea

Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S. and other countries. A listing of Cisco's trademarks can be found at www.cisco.com/go/trademarks.

Press Contact: Industry Analyst Contact: Investor Relations Contact:

Christine Johansen Ben Culp Carol Villazon

+1 (617) 595-8434 +1 (949) 823 3787 +1 (408) 527-6538

cjohanse@cisco.com beculp@cisco.com carolv@cisco.com

View original content to download multimedia:http://www.prnewswire.com/news-releases/cisco-announces-intent-to-acquire-voicea-300896768.html

SOURCE Cisco

Web site: cisco.com

[JakeStraw] Cisco Securely Connects Harsh Environments and Remote Locations at the IoT Edge ...

JakeStraw — 6/12/2019 8:14:01 AM

Cisco Securely Connects Harsh Environments and Remote Locations at the IoT Edge
investor.cisco.com
News Summary:

Cisco is extending intent-based networking to some of the most challenging work environments on Earth; from chemical plants and oil refineries, to mines.

Unveiling ruggedized industrial switches, access points and routers designed to withstand extended exposure to water, dust, and other extreme environmental conditions.

Cultivating a global ecosystem of partners and developers, such as Emerson, to innovate on Cisco networking platforms.

[JakeStraw] The Network Gets Smarter, Simpler and More Secure with Artificial Intelligence a...

JakeStraw — 6/12/2019 8:12:35 AM

The Network Gets Smarter, Simpler and More Secure with Artificial Intelligence and Machine Learning
investor.cisco.com
News Summary:

Cisco helps IT teams better understand network behavior and predict issues with new artificial intelligence and machine learning capabilities.

Since its introduction two years ago, Cisco's intent-based networking has reinvented how networks are built and managed. Cisco is furthering this effort through multidomain integrations designed to provide end-to-end security, segmentation and application experience.

Cisco is delivering these new software advancements via software subscriptions, granting customers access to ongoing innovation.

[Eric] Cisco Stock Is a Top Pick During the Trade War, Analyst Says -- Barrons.com 11...

Eric — 5/31/2019 6:10:04 PM

Cisco Stock Is a Top Pick During the Trade War, Analyst Says -- Barrons.com

11:23 AM ET 5/30/19

Related Quotes


4:15 PM ET 5/31/19
Symbol	Last	% Chg
CSCO	52.03	-2.87%
Real time quote.

By Tae Kim

Cisco Systems stock is attractive because it is relatively insulated from the escalating trade conflict between the U.S. and China, according to JPMorgan.

The networking company is a leading maker of routers, switches, and security products.

The back story. Cisco shares (ticker: CSCO) have rallied about 24% so far in 2019. Earlier this month, the company reported strong fiscal third-quarter results above Wall Street expectations.

What's new. JPMorgan analyst Samik Chatterjee on Thursday reaffirmed his Overweight rating for Cisco stock, citing the company's low exposure to China.

"Cisco remains our top pick for investors looking at safe havens in the current environment to navigate through the trade war noise," he wrote. The company has "relatively modest exposure to China and [is] largely immune to any trade-related impacts."

Cisco shares were up 0.5% to $53.45 on Thursday.

The analyst cited the fact that China represents less than 5% of Cisco's sales. He is optimistic about the networking giant's latest product line and its shift to selling more software and subscription offerings.

The company said on its last earning call it expects just a "modest impact" from the worsening trade conflict between the U.S. and China. Cisco also has proactively adjusted its supply chain to lower the impact of any potential tariff increases.

Looking ahead. The analyst reaffirmed his $60 price target for Cisco stock, representing 12% upside to the current stock price.

[Eric] UPDATE: Chuck Robbins decided to 'change everything' at Cisco, and it's working ...

Eric — 5/29/2019 9:38:35 AM

UPDATE: Chuck Robbins decided to 'change everything' at Cisco, and it's working

3:02 PM ET 5/28/19 | MarketWatch

Related Quotes


9:33 AM ET 5/29/19
Symbol	Last	% Chg
CSCO	53.27	-1.22%
Real time quote.

UPDATE: Chuck Robbins decided to 'change everything' at Cisco, and it's working

Four years after taking over for Silicon Valley legend John Chambers, Cisco CEO Robbins has transformed the company

SAN JOSE, Calif. -- Chuck Robbins minces no words in describing how he took the baton from Silicon Valley legend John Chambers and began to radically remake Cisco Systems Inc.

"The last quarter before I took over was a record for revenue, but I said we were going to change everything," Robbins told MarketWatch in a one-hour, one-on-one interview at the company's San Jose, Calif., headquarters this month. "The fear was if you change seven things at once and something breaks, the question is, What did we break?"

The unassuming Robbins essentially reshaped a multibillion-dollar legacy company, top to bottom, from one built almost entirely on selling hardware for networking to one focused on hybrid cloud and recurring software subscriptions. The tricky transformation is the stuff that Harvard Business School case studies are made of -- in this case, an August 2016 paper that deemed the corporate handoff "a smooth transition."

Cisco's(CSCO)metamorphosis was not entirely smooth, though: It required a change in operations, products and personnel that took more than a year and led to layoffs, wholesale executive changes and some rough quarters. During the transition, Robbins had to dip into a well of salesmanship to convince longtime customers to change along with Cisco.

Q&A:Five questions with Chuck Robbins -- exclusive MarketWatch interview with the Cisco CEO (http://www.marketwatch.com/story/five-questions-with-chuck-robbins-on-ciscos-transformation-2019-05-25)

Omid Mohoeb, global director of network and telecom at Anheuser-Busch InBev(ABI.BT) , the largest brewer in the world, used to consider Cisco "a hardware company selling boxes." But as Cisco has morphed, so has Anheuser-Busch's use of its technology.

"Now, we view them as more of a service provider that connects hardware and services," says Mohoeb, who plans to shift to a Cisco subscription model in a few years.

That was the aim Robbins had when he took the mantle nearly four years ago, and some analysts are now comparing Cisco's renaissance with Satya Nadella's reboot of Microsoft Corp.(MSFT)as a major cloud vendor as much as a software powerhouse. Robbins, 53, has been able to pull it off despite industry skepticism over the pivot of a 34-year-old company so closely identified with networking hardware.

"Kudos to Chuck Robbins for doing a commendable job shepherding Cisco through geopolitical issues, such as competing with Huawei, and reaching for a greater share of the public cloud wallet from Google(GOOGL) (GOOGL) , Amazon(AMZN)and Microsoft," IDC analyst Rohit Mehra told MarketWatch in a phone interview. "Many thought the cloud was Cisco's kryptonite and would eventually lead to its demise. How Cisco transformed itself from a hardware box seller into a trusted technology partner helping customers navigate the complex cloud world is one great story."

What the company is accomplishing isn't unprecedented -- venerable tech giants like Adobe Inc.(ADBE)along with Microsoft have moved to the cloud as part of their turnaround narratives. But neither software-focused company faced the same challenges as Cisco, a hardware company overly dependent on network switches and other devices that often weren't replaced for years.

"No question Adobe and Microsoft are tremendous companies that have done great transitions to the cloud, but they have a number of pure software assets," Robbins said. "We are predominantly a hardware company. This is more complicated."

A rough transition

Cisco's second act under Robbins, which started in mid-2015, has picked up steam in the past 18 months, with revenue growth, and the promise of more to come, pushing shares up almost 25% in the past year. But it hasn't been easy: It took seven quarters of declining growth before the plan took hold.

From last year: Cisco turns corner in move to a new era (http://www.marketwatch.com/story/cisco-earnings-show-turnaround-success-stock-zooms-toward-post-2000-highs-2018-02-14)

While some aspects of Cisco remain intact from Chambers's reign, it's significantly different in terms of its business model, culture and leadership, insiders and analysts say.

"There was considerable turnover in executive ranks and the overall talent pool," JMP Securities analyst Erik Suppiger told MarketWatch in a phone interview. "Lately, Cisco has been able to achieve modest growth, but they need to identify and capitalize on growth opportunities" beyond networking hardware, he added.

Cisco, which established its name on networking equipment, continues to invest heavily in cloud, security, the "internet of things" and data centers. In the past four years, the acquisition-happy company has snapped up 31 companies across analytics/data center (10), networking (seven), security (six), cloud (four) and collaboration (four).

From 2015: The four big opportunities for new Cisco CEO Chuck Robbins (http://www.marketwatch.com/story/the-four-big-opportunities-for-new-cisco-ceo-chuck-robbins-2015-10-02)

As Cisco has changed, so, too, has its revenue stream. Though a majority of Cisco's revenue still comes from the sale of hardware, $9.7 billion in its April quarter, its software sales are steadily increasing. Importantly, a growing percentage of those sales came from subscriptions, with 65% of software sales in its April quarter coming through subscriptions, compared with 57% in the year-earlier quarter. Chief Financial Officer Kelly Kramer has said that the software transition will lead to 30% of Cisco's revenue coming from software sales by 2020, up from 22% in 2017, and she said in an earnings conference call this month that Cisco is ahead of schedule on that goal.

A key driver is demand for its subscription-based Catalyst 9000 family of network switches, the fastest-growing product in Cisco's history. The software-rich Catalyst 9000 was introduced in 2017 (http://www.marketwatch.com/story/cisco-hopes-artificial-intelligence-and-subscription-pricing-can-make-it-cool-again-2017-06-20) to offer organizations integrated advanced security, automation and better performance as they need it via a paid subscription plan.

Corporations in the midst of digital transformations are ordering technology as if off a menu, based on needs and level of expertise, IDC analyst Mehra said. Cisco is "in Year 3 or 4 in a 10-year transformation," he said, and its progress is "slow and steady."

Cisco customers are on a similar arc. Increasingly, Penn Mutual Life Insurance Co. is buying hardware updates via a subscription plan from Meraki, the cloud-infrastructure company that Cisco acquired for $1.2 billion in 2012.

"There is a simplicity to adding features as we need them," said Paul Steinberger, a network engineer at Horsham, Pa.--based Penn Mutual, which also uses Cisco network switches to connect several hundred employees to company computer servers and the internet. "It makes administration easier."

Succeeding a Silicon Valley legend

Under Chambers, Cisco's annual sales rocketed from $1.2 billion in 1995 to nearly $50 billion in 2015, cementing his status on Silicon Valley's Mount Rushmore. In 2000, Cisco was briefly the most valuable company in the world, with a market capitalization of $557 billion, more than twice today's valuation of roughly $250 billion. However, Cisco's double-digit growth stalled toward the end of his tenure amid wrenching industry changes that helped smaller, nimbler rivals find ways to design and manage computer networks.

Chambers, who now runs a venture-capital firm in Silicon Valley, declined to comment on Cisco in an email. Robbins and Chambers -- who stepped down as executive chairman in late 2017 -- maintain a close relationship and occasionally golf together, Robbins said.

From 2017: Cisco is Chuck Robbins's company now, for better or worse (http://www.marketwatch.com/story/cisco-is-chuck-robbinss-company-now-for-better-or-worse-2017-09-18)

The transition from Chambers, an alpha male who could command a room even while hanging out with world leaders, to Robbins, a former JV basketball player at the University of North Carolina who favors a team-oriented approach, wasn't entirely vexing. Both men were brought up in small Southern towns, share backgrounds in sales with an emphasis on customer service, and agreed that Cisco had to jump to the digital age.

The story is far from over. Cisco is still in the beginning of its transformation, Mehra and others point out, and Robbins has faced several potential hurdles along the way. The latest: murmurs of an economic slowdown, intensified competition with rival Huawei Technologies, and a trade war with China.

For more: How Cisco is working around the China tariffs (http://www.marketwatch.com/story/how-cisco-is-working-around-the-china-tariffs-2019-05-15)

Cisco's efforts in cybersecurity have been a big draw for investors, but slackening enterprise spending in early 2019 recently dinged the results of rivals like Symantec(SYMC)and Check Point Software Technologies(CHKP) . This makes analyst Suppiger cautious about Cisco's long-term prospects.

"Companies are recalibrating their digital transformation projects -- particularly cybersecurity in the cloud," Suppiger said. He has a rating of market perform on Cisco shares but no share-price target. "[Corporate customers] are struggling to strategize and reassess that part of the business."

Robbins never assumed any of this would be easy, though, and knows he has a long road ahead.

"We must constantly transform," he said, with a nod to the past and an eye to the future. "We need to constantly make changes in order for Cisco to stay relevant over the next three, five, 10 years -- especially in today's rapidly changing environment."

Chambers put it more bluntly in an interview at his tony Silicon Valley home last year: "Traditional companies can't move with the speed they once did. Anyone who misses will be Amazon'd or Uber'd."

[Eric] Cisco sees little impact from tariffs, delivers another upside report 11:31 AM ...

Eric — 5/16/2019 4:47:47 PM

Cisco sees little impact from tariffs, delivers another upside report

11:31 AM ET 5/16/19 | Briefing.com

Related Quotes


4:00 PM ET 5/16/19
Symbol	Last	% Chg
CSCO	55.93	6.66%
Real time quote.

The stock market is receiving a lift this morning following solid quarterly reports from two Dow components: namely, Walmart (WMT) and Cisco (CSCO). These reports are helping to take the focus off of trade concerns with China, which have been dominating headlines.

As for CSCO, the networking and IT security company delivered solid 3Q19 results last night, edging out analysts' top and bottom line estimates. EPS came in at $0.78 vs. the $0.77 expectation on revenue growth of 4.0% to $12.96 bln, also above the $12.89 bln forecast.

It guided for Q4 revenue growth of 4.5-6.5%, which equates to $13.34 bln at the mid-point, slightly ahead of the $13.29 bln consensus.

Click here to access the earnings press release.

Heading into the print, concerns were rising that the new hike in tariffs on Chinese goods could impact the company's growth and outlook. In particular, some of CSCO's switches and routers are made in China. This angst helps explain why the stock sank by nearly 8% from the beginning of May through this past Monday.

However, during the earnings call last night, management did a good job easing investors' concerns, stating that only about 3% of its overall revenues now come from China. Over the past several months, the company has reduced its exposure to China, re-working its supply chain and changing its suppliers.

Furthermore, its CEO stated that it already anticipated that tariffs would be increased to 25% from 10% and that this change was already baked into its outlook.

The minimal impact of the tariffs is reflected in the solid results from its core Infrastructure Platform segment (58% of revenue), which was up 5% to $7.55 bln, better than the $7.47 bln expectation.

Within this segment, management credited switching devices as a significant catalyst driven by the continued ramp of its Catalyst 9000 products. Also, healthy demand for SD-WAN boosted its routing product line.

Its security segment was another key contributor to the upside results; revenue in the category jumped by 21%. From a broader sense, CSCO and many other cyber security companies are benefiting from several trends, including the acceleration of emerging technologies like AI, multi-cloud, and IoT.

CSCO's growth was also aided from the integration of Duo Security, which was acquired last October for $2.35 bln. Duo is best known for its two-factor authentication tools, which help employees to securely access applications and platforms through mobile devices.

To put the impact of Duo into perspective, CSCO said that Duo contributed about 40 basis points to its growth this quarter.

Another issue facing CSCO is that some analysts have questioned the quality of its recent upside reports and its growth overall. That's because its yr/yr growth rates have been inflated by the change to 606 accounting methods.

Companies with a lot of deferred revenue, such as those in the software and communications equipment industries like CSCO, have been impacted the most because the new rule states that revenue must usually be booked right away, rather than stretched out over time.

Consequently, CSCO's software-based revenue has seen an artificial bump from the new standards. But as the implementation of the new rules moves further into the rear-view mirror, the effect is becoming smaller. For this quarter, CSCO said that the 606 impact was a positive 1.2%, relatively light compared to other quarters.

As Cisco is a mature $50 bln business, it's very difficult for it to move the needle in terms of growth, but the upcoming transition to 5G is expected to be a meaningful catalyst as communications and service providers upgrade their networking equipment.

This figures to be a more meaningful factor next year. In the meantime, the launch of new subscription-based Wi-Fi 6 access points, the ongoing Catalyst 9000 refresh, and certain price hikes should accommodate growth throughout the remainder of 2019.

Key Takeaways: CSCO's guidance and commentary helped ease concerns regarding the new escalated tariffs on China-made products. The company has done a good job diversifying its supply chain and manufacturing processes away from China, limiting its exposure there.

Due to its sheer size, its growth rates don't spectacular to begin with, but its modest growth rates have been somewhat inflated by new accounting rules and acquisitions. So, to say business is booming probably wouldn't be an accurate description.

However, several emerging technologies such as AI, IoT, multi-cloud, and Wi-Fi 6 position it well to keep growth rates churning higher. Longer term, the transition to 5G should be a meaningful catalyst.

My comments:

Cisco is a mature company very different than when I first went long with a very large position way back in 1992.

5G and other necessary tech buildouts required for it over the next ten years will give Cisco greatly accelerated growth compared to the last 15.

But it won't be explosive like it was in the 1990's when the Internet was in it's infancy.

Those days are over....

JMHO

Eric

[Eric] Cisco CC is starting right now as of 1:30 PM PDST: wsw.com

Eric — 5/15/2019 4:30:31 PM

[Eric] UPDATE: Cisco stock rises as earnings, revenue forecast top Wall Street estimate...

Eric — 5/15/2019 4:26:39 PM

UPDATE: Cisco stock rises as earnings, revenue forecast top Wall Street estimates

4:23 PM ET 5/15/19 | MarketWatch

Related Quotes


4:15 PM ET 5/15/19
Symbol	Last	% Chg
CSCO	52.44	0.81%
Real time quote.

UPDATE: Cisco stock rises as earnings, revenue forecast top Wall Street estimates

By Wallace Witkowski, MarketWatch

Earnings outlook for networking company's fiscal fourth quarter in-line with estimates

Cisco Systems Inc.'s stock rose in the extended session Wednesday after the networking company reported quarterly results that topped Wall Street estimates and a revenue forecast for the end of its fiscal year that exceeded the analyst consensus.

Cisco (CSCO) shares rose 3% after hours. The company reported fiscal third-quarter net income of $3.04 billion, or 69 cents a share, compared with a $2.69 billion, or 56 cents a share, in the year-ago period. Adjusted earnings were 78 cents a share. Analysts surveyed by FactSet had forecast earnings of 77 cents a share, while Cisco had forecast earnings of 76 cents to 78 cents a share.

Revenue rose to $12.96 billion from $12.46 billion in the year-ago quarter. Product revenue rose to $9.72 billion from $9.3 billion a year ago, and service revenue rose to $3.24 billion from $3.16 billion last year. Analysts had expected revenue of $12.89 billion, while Cisco had forecast revenue of $12.96 billion to $13.21 billion. Wall Street had forecast product revenue of $9.65 billion and service revenue of $3.22 billion.

For the fourth quarter, Cisco expects adjusted earnings of 80 cents to 82 cents a share on 4.5% to 6.5% year-over-year revenue growth, or $13.21 billion to $13.46 billion. Cisco said the forecast excludes the company's now divested Service Provider Video Software Solutions business, which brought in $206 million in the fourth quarter in 2018.

Analysts had estimated earnings of 81 cents a share on revenue of $13.29 billion.

Cisco said it returned $7.5 billion to shareholders through share buybacks and dividends in the third quarter: $1.5 billion though dividends and $6 billion in the buyback of about 116 million shares at an average price of $52.14 a share. Cisco said it still has $18 billion in buyback authority remaining.

Cisco shares closed Wednesday up 0.8% at $52.44, while the Dow Jones Industrial Average gained 0.5%, the S&P 500 index rose 0.6%, and the tech-heavy Nasdaq Composite Index advanced 1.1%.

-Wallace Witkowski; 415-439-6400; AskNewswires@dowjones.com

> Dow Jones Newswires

[Eric] Cisco Reports Third Quarter Earnings 4:05 PM ET 5/15/19 | PR Newswire Related...

Eric — 5/15/2019 4:10:36 PM

Cisco Reports Third Quarter Earnings

4:05 PM ET 5/15/19 | PR Newswire

Related Quotes


4:00 PM ET 5/15/19
Symbol	Last	% Chg
CSCO	52.44	0.81%
Real time quote.

Cisco Reports Third Quarter Earnings

-- Q3 Results:

-- Revenue: $13.0 billion

-- Growth of 6% year over year (normalized to exclude the divested SPVSS

business for Q3 FY 2018)

-- Earnings per Share: GAAP: $0.69; Non-GAAP: $0.78

-- Non-GAAP EPS increased 18% year over year

-- Q4 Guidance (normalized to exclude the divested SPVSS business for Q4 FY

2018):

-- Revenue: 4.5% to 6.5% growth year over year

-- Earnings per Share: GAAP: $0.66 to $0.71; Non-GAAP: $0.80 to $0.82

SAN JOSE, Calif., May 15, 2019 /PRNewswire/ -- Cisco today reported third quarter results for the period ended April 27, 2019. Cisco reported third quarter revenue of $13.0 billion, net income on a generally accepted accounting principles (GAAP) basis of $3.0 billion or $0.69 per share, and non-GAAP net income of $3.5 billion or $0.78 per share.

As previously disclosed, Cisco completed the divestiture of the Service Provider Video Software Solutions (SPVSS) business in the second quarter of fiscal 2019 on October 28, 2018. Revenue, non-GAAP financial information, and Q4 FY 2019 guidance have been normalized to exclude the SPVSS business from prior periods for comparative purposes.

"Our strong performance in the quarter was across the business, reflecting our customers' confidence in our strategy, business model and market-leading portfolio," said Chuck Robbins, chairman and CEO of Cisco. "Technology is at the heart of our customers' strategies and we are building the technology to help them achieve their business objectives."

GAAP Results

Vs. Q3 FY

Q3 FY 2019 Q3 FY 2018 2018

Revenue (including

SPVSS business

for all periods) $ 13.0 billion $ 12.5 billion 4%

Revenue (excluding

SPVSS business

for all periods) $ 13.0 billion $ 12.2 billion 6%

Net Income $ 3.0 billion $ 2.7 billion 13%

Diluted Earnings

per Share (EPS) $ 0.69 $ 0.56 23%

Non-GAAP Results

Q3 FY 2019 Q3 FY 2018 Vs. Q3 FY 2018

Net Income

(excluding SPVSS

business for all

periods) $ 3.5 billion $ 3.2 billion 8%

EPS (excluding

SPVSS business

for all periods) $ 0.78 $ 0.66 18%

Reconciliations between net income, EPS, and other measures on a GAAP and non-GAAP basis are provided in the tables located in the section entitled "Reconciliations of GAAP to non-GAAP Measures."

"We executed well in Q3, delivering revenue growth of 6%, non-GAAP EPS growth of 18%, as well as strong margins and cash flow," said Kelly Kramer, CFO of Cisco. "We continue to invest in our innovation pipeline to drive long-term profitable growth, while successfully evolving our business model through software offerings and subscriptions and delivering value for shareholders."

Financial Summary

All comparative percentages are on a year-over-year basis unless otherwise noted.

All revenue, non-GAAP, and geographic financial information in the "Q3 FY 2019 Highlights" section are presented excluding the SPVSS business for all periods as it was divested during the second quarter, on October 28, 2018.

Q3 FY 2019 Highlights

Revenue -- Total revenue was $13.0 billion, up 6%, with product revenue up 7% and service revenue up 3%. Revenue by geographic segment was: Americas up 9%, EMEA up 5%, and APJC down 4%. Product revenue performance was broad based with growth in Security, up 21%, Applications, up 9%, and Infrastructure Platforms, up 5%.

Gross Margin -- On a GAAP basis, total gross margin, product gross margin, and service gross margin were 63.1%, 62.0%, and 66.3%, respectively, as compared with 62.3%, 61.0%, and 65.8%, respectively, in the third quarter of fiscal 2018.

On a non-GAAP basis, total gross margin, product gross margin, and service gross margin were 64.6%, 63.7%, and 67.3%, respectively, as compared with 64.5%, 63.7%, and 67.1%, respectively, in the third quarter of fiscal 2018.

Total gross margins by geographic segment were: 65.6% for the Americas, 64.5% for EMEA and 60.7% for APJC.

Operating Expenses -- On a GAAP basis, operating expenses were $4.7 billion, up 1%. Non-GAAP operating expenses were $4.2 billion, up 6%, and were 32.4% of revenue.

Operating Income -- GAAP operating income was $3.5 billion, up 12%, with GAAP operating margin of 27.1%. Non-GAAP operating income was $4.2 billion, up 6%, with non-GAAP operating margin at 32.2%.

Provision for Income Taxes -- The GAAP tax provision rate was 15.8%. The non-GAAP tax provision rate was 19.0%.

Net Income and EPS -- On a GAAP basis, net income was $3.0 billion and EPS was $0.69. On a non-GAAP basis, net income was $3.5 billion, an increase of 8%, and EPS was $0.78, an increase of 18%.

Cash Flow from Operating Activities -- $4.3 billion for the third quarter of fiscal 2019, an increase of 79% compared with $2.4 billion for the third quarter of fiscal 2018. Operating cash flow for the third quarter of fiscal 2018 included the payment of $1.3 billion of one-time foreign taxes as related to the Tax Cuts and Jobs Act. Operating cash flow increased 16%, normalized for these tax payments.

Balance Sheet and Other Financial Highlights

Cash and Cash Equivalents and Investments -- $34.6 billion at the end of the third quarter of fiscal 2019, compared with $40.4 billion at the end of the second quarter of fiscal 2019, and compared with $46.5 billion at the end of fiscal 2018.

Deferred Revenue -- $17.5 billion, down 8% in total, with deferred product revenue down 23%. Deferred service revenue was up 3%.

Capital Allocation -- In the third quarter of fiscal 2019, we returned $7.5 billion to shareholders through share buybacks and dividends. We declared and paid a cash dividend of $0.35 per common share, or $1.5 billion, and repurchased approximately 116 million shares of common stock under our stock repurchase program at an average price of $52.14 per share for an aggregate purchase price of $6.0 billion. The remaining authorized amount for stock repurchases under the program is $18.0 billion with no termination date.

Acquisitions

In the third quarter of fiscal 2019, we closed the acquisitions of Luxtera, Inc., a privately held semiconductor company, and Singularity Networks, a privately held network infrastructure analytics company.

Guidance for Q4 FY 2019

Cisco expects to achieve the following results for the fourth quarter of fiscal 2019 (normalized to exclude the divested SPVSS business):

Q4 FY 2019

Revenue 4.5% - 6.5% growth Y/Y

Non-GAAP gross margin rate 64% - 65%

Non-GAAP operating margin rate 31% - 32%

Non-GAAP tax provision rate 19%

Non-GAAP EPS $0.80 - $0.82

Revenue for the divested SPVSS business for the fourth quarter of fiscal 2018 was $206 million.

Cisco estimates that GAAP EPS will be $0.66 to $0.71 in the fourth quarter of fiscal 2019.

A reconciliation between the Guidance for Q4 FY 2019 on a GAAP and non-GAAP basis is provided in the table entitled "GAAP to non-GAAP Guidance for Q4 FY 2019" located in the section entitled "Reconciliations of GAAP to non-GAAP Measures."

Editor's Notes:

-- Q3 fiscal year 2019 conference call to discuss Cisco's results along with

its guidance will be held on Wednesday, May 15, 2019 at 1:30 p.m. Pacific

Time. Conference call number is 1-888-848-6507 (United States) or

1-212-519-0847 (international).

-- Conference call replay will be available from 4:00 p.m. Pacific Time, May

15, 2019 to 4:00 p.m. Pacific Time, May 22, 2019 at 1-888-446-2545

(United States) or 1-402-998-1344 (international). The replay will also

be available via webcast on the Cisco Investor Relations website at

investor.cisco.com.

-- Additional information regarding Cisco's financials, as well as a webcast

of the conference call with visuals designed to guide participants

through the call, will be available at 1:30 p.m. Pacific Time, May 15,

2019. Text of the conference call's prepared remarks will be available

within 24 hours of completion of the call. The webcast will include both

the prepared remarks and the question-and-answer session. This

information, along with the GAAP to non-GAAP reconciliation information,

will be available on the Cisco Investor Relations website at

investor.cisco.com.

-- Cisco is hosting Cisco Live, its premier annual customer and partner

conference June 9-13 in San Diego, Calif. Register now for keynotes,

hands-on learnings experiences, expert demos and networking.

CISCO SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per-share amounts)

(Unaudited)

Three Months Ended Nine Months Ended

April 27, April 28, April 27, April 28,

2019 2018 2019 2018

REVENUE:

Product $ 9,722 $ 9,304 $ 28,885 $ 27,067

Service 3,236 3,159 9,591 9,419

Total revenue 12,958 12,463 38,476 36,486

COST OF SALES:

Product 3,693 3,625 11,106 10,594

Service 1,092 1,079 3,278 3,208

Total cost of

sales 4,785 4,704 14,384 13,802

GROSS MARGIN 8,173 7,759 24,092 22,684

OPERATING

EXPENSES:

Research and

development 1,659 1,590 4,824 4,706

Sales and

marketing 2,403 2,325 7,084 6,894

General and

administrative 541 561 1,261 1,601

Amortization of

purchased

intangible

assets 39 67 112 188

Restructuring

and other

charges 18 82 282 332

Total operating

expenses 4,660 4,625 13,563 13,721

OPERATING

INCOME 3,513 3,134 10,529 8,963

(MORE TO FOLLOW) Dow Jones Newswires

[Julius Wong] A Cisco Router Bug Has Massive Global Implications wired.com

Julius Wong — 5/13/2019 8:57:15 PM

[engineer] do you have the link to that article? I want to read the full text. Thanks for ...

engineer — 5/13/2019 8:51:00 PM

do you have the link to that article? I want to read the full text.

Thanks for posting.

[Julius Wong] Researchers report key weaknesses in ubiquitous Cisco router Researchers are di...

Julius Wong — 5/13/2019 8:46:42 PM

Researchers report key weaknesses in ubiquitous Cisco router

Researchers are disclosing a vulnerability that could let attackers take over Cisco Systems' (CSCO -3.5%) 1001-X router, a move that Wired says has massive global implications.

That router is for institutional use (such as stock exchanges) rather than home use.

Researchers at Red Balloon exploited two vulnerabilities: one in Cisco's IOS (not Apple's iOS) allowing remote root access -- and more important, a way to bypass the Trust Anchor in hardware, the router's most fundamental security protection.

Problems with operating systems like IOS can be patched with software -- and Cisco is announcing a patch today -- while the Trust Anchor is thornier, and Cisco disputes that the secure boot vulnerability directly impacts the Trust Anchor.

[JakeStraw] How Wi-Fi 6 will transform connectivity in your home, at the office, and beyond ...

JakeStraw — 4/30/2019 12:27:03 PM

How Wi-Fi 6 will transform connectivity in your home, at the office, and beyond
digitaltrends.com
In fact, companies like Cisco aim to make connecting to Wi-Fi hotspots simple, more secure, and increasingly seamless.

[JakeStraw] Cisco Ushers in a New Wireless Era with Wi-Fi 6 investor.cisco.com

JakeStraw — 4/29/2019 8:08:50 AM

[JakeStraw] Cisco's Stock May Reach Prices Not Seen In 20 Years Cisco is seeing bullish opt...

JakeStraw — 4/18/2019 9:03:04 AM

Cisco's Stock May Reach Prices Not Seen In 20 Years

Cisco is seeing bullish options bets.

The technical chart suggests the stock rises to $62.

Cisco could benefit from the race to build out 5G.
seekingalpha.com

[JakeStraw] Cisco has a new strategy to invest in the hottest start-ups, even as other inves...

JakeStraw — 3/26/2019 10:13:32 AM

Cisco has a new strategy to invest in the hottest start-ups, even as other investors flood the zone
cnbc.com

[Eric] Cisco (AppDynamics) Positioned as a Leader in Gartner's Magic Quadrant for the S...

Eric — 3/18/2019 4:58:35 PM

Cisco (AppDynamics) Positioned as a Leader in Gartner's Magic Quadrant for the Seventh Year in a Row

11:05 AM ET 3/18/19 | BusinessWire

RELATED QUOTES


4:15 PM ET 3/18/19
Symbol	Last	% Chg
CSCO	53.51	0.58%
Real time quote.

SAN FRANCISCO--(BUSINESS WIRE)--March 18, 2019--

AppDynamics, a Cisco company and the leader in application intelligence, today announced it has been named a Leader in Gartner's 2019 Magic Quadrant for Application Performance Monitoring *. This is the seventh time in a row it has been recognized in this report.

Thousands of customers, including hundreds of the Global 2000, trust AppDynamics' unified application and business monitoring platform for their critical application and business transactions. Together with Cisco, AppDynamics is at the forefront of businesses' digital transformation journeys, providing visibility and insight into complex environments and automating IT tasks to free up resources to drive new innovation.

A complimentary copy of the full report can be found here.

"Every employee at AppDynamics is dedicated to making sure our customers thrive in a digital-first world by giving them deep visibility into the broadest array of technologies -- from bleeding edge cloud platform capabilities to legacy mainframe systems. AppDynamics helps manage multi-cloud environments efficiently and gives you unique insight into how technology decisions impact your key business outcomes," said David Wadhwani, CEO, AppDynamics. "As the largest and fastest growing company in the APM market, we're helping thousands of customers automate previously costly and repetitive tasks and providing the tools needed to start their journey to a true AIOps mindset."

To address the rising complexity in IT environments and the rapid changes in the technologies modern businesses are using, AppDynamics has delivered innovations built to empower Agents of Transformation, the IT leaders driving the technological and cultural change needed to drive digital-first organizations.

-- Significant increase in end-to-end monitoring coverage and scalability --

AppDynamics has the broadest application visibility in the industry --

capable of monitoring everything from the latest application frameworks

running in highly dynamic microservice environments to legacy services

running in mainframes. The company furthered its leadership in this area

with the announcements of a Serverless Agent for AWS Lambda, AppDynamics

for Kubernetes and AppDynamics for SAP, as well as support for OpenShift,

the Pivotal Cloud Foundry, .NET Core, SPA and more. This level of

visibility allows IT leaders to have unparalleled end-to-end, full-stack

visibility into modern, cloud-native and traditional technologies in

order to improve customer experience and accelerate business growth. Over

the course of 2018 AppDynamics took APM scalability to the next level by

enhancing its platform to support hundreds of thousands of agents in a

single monitoring environment.

-- Improvement in insights and automation through AIOps -- AppDynamics AIOps

vision, the Central Nervous System for IT, was unveiled to help IT teams

move confidently and quickly by giving them full visibility of complex

multi-cloud environments, deep insights and an integrated automation

framework. In support of this vision, AppDynamics announced Cognition

Engine, which uses machine learning to automate root-cause analysis and

anomaly detection, cutting remediation times down to seconds. The need

for automation and a full, end-to-end understanding of every application

will only become more critical as enterprises continue to their shift

toward more dynamic multi-cloud environments.

-- Faster identification and resolution of business performance issues --

AppDynamics Business iQ is quickly becoming a must-have for any digital

business with its ability to monitor business metrics in real time and

pinpoint how change in application and user experience impacts business

outcomes. AppDynamics Business iQ automatically baselines business

metrics, detects business anomalies against SLAs and provides real-time

diagnostic tools to help pinpoint application characteristics that affect

customer experience and overall business outcomes. AppDynamics sped up

time to value with the introduction of Business Journeys, out-of-the-box

dashboards and zero configuration metrics. IT leaders and CIOs can now

continuously monitor their key business metrics, like revenue, conversion

rates, number of accounts being opened, or any other metric that

correlates to their business' success.

New Integrations and Increased Investment from Cisco

AppDynamics has been thriving inside of Cisco with expanded investment, including increased R&D spend by more than 80 percent. Recently, AppDynamics and Cisco delivered the first ever integration between an Application Performance Monitoring platform and a Software Defined Network platform with AppDynamics for Cisco Application Centric Infrastructure. This creates a bridge between DevOps teams and infrastructure teams to help ensure fewer problems and faster resolution.

"The atomic unit of digital transformation is increasingly the application, which is why AppDynamics is integral to Cisco," said Anuj Kapur, chief strategy officer, Cisco. "Over the years, we've witnessed a broad cross-section of companies put the application front and center on their journey toward hybrid-IT and multi-cloud. Important to our strategy, AppDynamics provides strong coordination of the application and infrastructure layers, and enables IT teams to manage the growing levels of complexity and minimize risk as they transform their environments."

Additional Information

-- Download your complimentary copy of the full Gartner Magic Quadrant

report

-- Learn more about the Cisco and AppDynamics vision for the Central Nervous

System

-- Read more about AppDynamics' Gartner Magic Quadrant placement on the

AppDynamics blog

Connect with AppDynamics

-- Follow @AppDynamics on Twitter

-- Like AppDynamics on Facebook

-- Connect with AppDynamics on LinkedIn

*Gartner Magic Quadrant for Application Performance Monitoring, Charley Rich, Federico De Silva, Sanjit Ganguli, 14 March 2019.

Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

About Cisco

Cisco (NASDAQ: CSCO) is the worldwide technology leader that has been making the Internet work since 1984. Our people, products, and partners help society securely connect and seize tomorrow's digital opportunity today. Discover more at newsroom.cisco.com and follow us on Twitter at @Cisco.

Cisco and the Cisco logo are trademarks or registered trademarks of Ciscoand/or its affiliates in the U.S. and other countries. A listing of Cisco's trademarks can be found at www.cisco.com/go/trademarks. Third-party trademarks mentioned are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company.

About AppDynamics

AppDynamics is the Application Intelligence company. With AppDynamics, enterprises have real-time insights into application performance, user performance and business performance so they can move faster in an increasingly sophisticated, software-driven world. AppDynamics' integrated suite of applications is built on its innovative, enterprise-grade App iQ Platform that enables its customers to make faster decisions that enhance customer engagement and improve operational and business performance. AppDynamics is uniquely positioned to enable enterprises to accelerate their digital transformations by actively monitoring, analyzing and optimizing complex application environments at scale.

View source version on businesswire.com: businesswire.com

CONTACT: AppDynamics

Justin Dorff

justin.dorff@appdynamics.com

SOURCE: AppDynamics

[JakeStraw] Now it's "connected devices".We are rapidly beginning a new era in RF communicat...

JakeStraw — 2/20/2019 11:04:39 AM

Now it's "connected devices".We are rapidly beginning a new era in RF communications.

I like SWKS in this space....

[Eric] Business Nation & World Technology The race to 5G wireless tech is on. A repo...

Eric — 2/20/2019 9:34:00 AM

Business

Nation & World

Technology

The race to 5G wireless tech is on. A report finds Americans have an early lead

Originally published February 19, 2019 at 12:06 pm Updated February 19, 2019 at 4:58 pm

Huawei 5G modem Balong 5000 chipset is displayed in Beijing on Jan. 24. (Andy Wong / AP)

Nearly 1 in 10 mobile connections in North America will be served by 5G by 2022, according to Cisco.

By
Brian Fung
The Washington Post

U.S. policymakers keep wringing their hands over a competition with China to build the world’s first mass-market 5G wireless network. But a new report from Cisco may offer reasons to breathe easier.

By 2022, fifth-generation cellular networks will power as many as 9 percent of mobile data connections across North America, Cisco said, compared with 4 percent in Asia. The new projections were unveiled Tuesday as part of Cisco’s annual mobile Virtual Networking Index report, which studies industry trends.

The results underscore the substantial work countries like China face as they seek to outdevelop Western nations. And they reflect early U.S. policies that put it in a strong position to lead, said Cisco, which makes networking technology.

Proponents say 5G will offer download speeds faster than what many households receive on their home internet connections. And, they say, 5G’s reliability will unlock new capabilities such as self-driving cars, remote medicine and a thriving ecosystem of smart appliances that require a constant connection.

Although the Asia-Pacific region will be home to more than twice the number of 5G devices compared with North America by 2022, it will account for a tiny share of the 422 million devices on 5G worldwide, according to Cisco. North America will account for the largest slice; most of the rest, about 6.5 percent, will come from Western Europe.

Tuesday marks the first time Cisco has dedicated an entire section in its mobile report to 5G technology.

“The U.S. has made a good start in changing policies to support the deployment of 5G, and as we look around the rest of the world, policy changes of the type we’ve seen here in the U.S. have not yet happened,” said Mary Brown, senior director of government affairs at Cisco. “We do expect that’s going to be changing over the next 12 to 18 months, and so the race to 5G is very real.”

A head start in 5G penetration could be critical for determining which countries get to shape — and benefit from — innovations in apps, services and other economic fruits of the technology, according to policy analysts. When the United States took the lead on 4G mobile technology, it gave rise to the app economy, which remains dominated by U.S.-based firms today, Brown said.

“The stakes with 5G are even higher,” she said.

For now, a true 5G experience remains out of reach for the average consumer. The first 5G smartphones aren’t expected until later this year; in the meantime, carriers such as AT&T and Verizon have been locked in a marketing war to convince customers that they’re making rapid progress (though AT&T was recently sued for some of its promotional activities).

Telecom executives, and many federal officials, have cited intense competition against global rivals as a reason to accelerate the spread of 5G in the United States with deregulation and policies favorable to the industry.

“U.S. leadership in 5G technology is a national imperative for economic growth and competitiveness,” said Ajit Pai, chairman of the Federal Communications Commission, at a White House summit on the issue last year. He added: “We cannot let today’s red tape strangle the 5G future.”

Last year, in a bid to grease processes at the local level, the FCC moved to limit how much cities could charge telecom companies for using publicly owned utility poles, and it required swifter decisions on infrastructure permits.

The plan was welcomed by industry groups as a crucial step toward building 5G, but it was assailed by other critics who said it amounted to a massive corporate handout.

“This effectively transfers $2 billion from cities to carriers,” wrote Blair Levin, a former FCC chief of staff, in a blog post this week. “In return, the FCC asks carriers for nothing.”

Complicating the picture are continuing concerns about the security of networking equipment from companies such as China’s Huawei, which the Trump administration is expected to target with an executive order. The FCC, in a separate move, has proposed limiting federal funding to U.S. telecom companies that use Huawei’s hardware. Policymakers worry that foreign manufacturers could secretly install spyware in their products that could allow other governments to eavesdrop on sensitive U.S. communications. Huawei’s founder on Tuesday rejected those claims as speculation in an interview with CBS.

The uncertainty surrounding U.S. infrastructure policy, Washington, D.C.’s stance on foreign firms and the details of 5G technology that are still being hammered out could result in delays.

“We anticipate that some large scale commercial 5G deployments may not be executed until after the current forecast period” after 2022, Cisco said in its report.

But even after considering those factors, North America will still wind up ahead of the competition in 5G penetration by 2022, Cisco found.

seattletimes.com

This story was originally published at washingtonpost.com. Read it here.

My comments:

Back in the late 1990's some folks thought that the Internet traffic growth rate would slow down.

Many of us who work in electronic communications thought otherwise including myself.

Video would become the new driver back then.

Now it's "connected devices".

We are rapidly beginning a new era in RF communications.

Microcells.

Eric

Stock Rating	Overweight
Industry View	In-Line
Price target	$82.00
Shr price, close (Nov 12, 2025)	$73.96
Mkt cap, curr (mm)	$294,545
52-Week Range	$74.84-52.11