SAN
JOSE, Calif., Aug. 14,
2024 /PRNewswire/ --
News Summary:
- Product order growth of 14% year over year; up 6% excluding
Splunk
- Revenue of $13.6 billion in Q4 FY
2024, above the high end of our guidance range
- Strong margins:
- Q4 FY 2024 GAAP gross margin of 64.4% and Non-GAAP gross margin
of 67.9%
- FY 2024 GAAP gross margin of 64.7% and Non-GAAP gross margin of
67.5%, the highest in 20 years
- Solid growth in software and recurring metrics in FY 2024,
enhanced by Splunk
- Total subscription revenue of $27.4
billion including Splunk, representing 51% of total
revenue
- Total annualized recurring revenue (ARR) at $29.6 billion, including $4.3 billion from Splunk, up 22% year over
year
- Total software revenue at $18.4
billion, up 9% year over year, with software subscription
revenue of $16.4 billion, up 15% year
over year, making up 89% of total software revenue
- Q4 FY 2024 Results:
- Revenue: $13.6 billion
- Decrease of 10% year over year
- Earnings per Share: GAAP: $0.54; Non-GAAP: $0.87
- GAAP EPS decreased 44% year over year
- Non-GAAP EPS decreased 24% year over year
- FY 2024 Results:
- Revenue: $53.8
billion
- Decrease of 6% year over year
- Earnings per Share: GAAP: $2.54; Non-GAAP: $3.73
- GAAP EPS decreased 17% year over year
- Non-GAAP EPS decreased 4% year over year
- Q1 FY 2025 Guidance:
- Revenue: $13.65 billion to
$13.85 billion
- Earnings per Share: GAAP: $0.35 to $0.42;
Non-GAAP: $0.86 to $0.88
- FY 2025 Guidance:
- Revenue: $55.0 billion to
$56.2 billion
- Earnings per Share: GAAP: $1.93 to $2.05;
Non-GAAP: $3.52 to $3.58
Cisco today reported fourth quarter and fiscal year results for
the period ended July 27, 2024. Cisco
reported fourth quarter revenue of $13.6
billion, net income on a generally accepted accounting
principles (GAAP) basis of $2.2
billion or $0.54 per share,
and non-GAAP net income of $3.5
billion or $0.87 per
share.
"We delivered a strong close to fiscal 2024," said Chuck Robbins, chair and CEO of Cisco. "In our
fourth quarter, we saw steady customer demand with order growth
across the business as customers rely on Cisco to connect and
protect all aspects of their organizations in the era of AI."
"Revenue, gross margin and EPS in Q4 were at the high end or
above our guidance range, demonstrating our operating discipline,"
said Scott Herren, CFO of Cisco. "As we look to build on our
performance, we remain laser focused on growth and consistent
execution as we invest to win in AI, cloud and cybersecurity, while
maintaining capital returns."
Q4 GAAP
Results
|
|
|
|
Q4 FY 2024
|
|
Q4 FY 2023
|
|
Vs. Q4 FY 2023
|
Revenue
|
|
$
|
13.6 billion
|
|
$
|
15.2 billion
|
|
|
(10) %
|
Net Income
|
|
$
|
2.2 billion
|
|
$
|
4.0 billion
|
|
|
(45) %
|
Diluted Earnings per
Share (EPS)
|
|
$
|
0.54
|
|
$
|
0.97
|
|
|
(44) %
|
The acquisition of Splunk, including financing costs, had a
negative impact of $0.16 to GAAP EPS,
for the fourth quarter of fiscal 2024.
Q4 Non-GAAP
Results
|
|
|
|
Q4 FY 2024
|
|
Q4 FY 2023
|
|
Vs. Q4 FY 2023
|
Net Income
|
|
$
|
3.5 billion
|
|
$
|
4.7 billion
|
|
(25) %
|
EPS
|
|
$
|
0.87
|
|
$
|
1.14
|
|
(24) %
|
The acquisition of Splunk, including financing costs, had a
negative impact of $0.04 to Non-GAAP
EPS, for the fourth quarter of fiscal 2024.
Fiscal Year GAAP
Results
|
|
|
|
FY 2024
|
|
FY 2023
|
|
Vs. FY 2023
|
Revenue
|
|
$
|
53.8 billion
|
|
$
|
57.0 billion
|
|
(6) %
|
Net Income
|
|
$
|
10.3 billion
|
|
$
|
12.6 billion
|
|
(18) %
|
EPS
|
|
$
|
2.54
|
|
$
|
3.07
|
|
(17) %
|
The acquisition of Splunk, including financing costs, had a
negative impact of $0.25 to GAAP EPS,
for fiscal 2024.
Fiscal Year Non-GAAP
Results
|
|
|
|
FY 2024
|
|
FY 2023
|
|
Vs. FY 2023
|
Net Income
|
|
$
|
15.2 billion
|
|
$
|
16.0 billion
|
|
(5) %
|
EPS
|
|
$
|
3.73
|
|
$
|
3.89
|
|
(4) %
|
The acquisition of Splunk, including financing costs, had a
negative impact of $0.04 to Non-GAAP
EPS, for 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 October 23, 2024, to all stockholders of record
as of the close of business on October 2,
2024. Future dividends will be subject to Board
approval.
Financial Summary
All comparative percentages are on a year-over-year basis
unless otherwise noted.
Q4 FY 2024 Highlights
Revenue -- Total revenue was $13.6 billion, down 10%, with product revenue
down 15% and services revenue up 6%. Splunk contributed
approximately $960 million of total
revenue for the fourth quarter of fiscal 2024.
Revenue by geographic segment was: Americas down 11%, EMEA down
11%, and APJC down 6%. Product revenue performance reflected growth
in Security up 81% and Observability up 41%. Networking was down
28%. Product revenue in Collaboration was flat. Security and
Observability, excluding Splunk, grew 6% and 12%, respectively, in
the fourth quarter of fiscal 2024.
Gross Margin -- On a GAAP basis, total gross
margin, product gross margin, and services gross margin were 64.4%,
63.0%, and 67.8%, respectively, as compared with 64.1%, 63.6%, and
65.7%, respectively, in the fourth quarter of fiscal 2023.
On a non-GAAP basis, total gross margin, product gross margin,
and services gross margin were 67.9%, 67.0%, and 70.3%,
respectively, as compared with 65.9%, 65.5%, and 67.5%,
respectively, in the fourth quarter of fiscal 2023.
Total gross margins by geographic segment were: 67.7% for the
Americas, 69.2% for EMEA and 66.4% for APJC.
Operating Expenses -- On a GAAP basis,
operating expenses were $6.2 billion,
up 12%, and were 45.2% of revenue. Non-GAAP operating expenses were
$4.8 billion, up 4%, and were 35.4%
of revenue.
Operating Income -- GAAP operating income was
$2.6 billion, down 38%, with GAAP
operating margin of 19.2%. Non-GAAP operating income was
$4.4 billion, down 17%, with non-GAAP
operating margin at 32.5%.
Provision for Income Taxes -- The GAAP tax
provision rate was 9.8%. The non-GAAP tax provision rate was
16.6%.
Net Income and EPS -- On a GAAP basis, net income
was $2.2 billion, a decrease of 45%,
and EPS was $0.54, a decrease of 44%.
On a non-GAAP basis, net income was $3.5
billion, a decrease of 25%, and EPS was $0.87, a decrease of 24%.
Cash Flow from Operating Activities --
$3.7 billion for the fourth quarter
of fiscal 2024, a decrease of 37% compared with $6.0 billion for the fourth quarter of fiscal
2023.
FY 2024 Highlights
Revenue -- Total revenue was $53.8 billion, a decrease of 6%. Splunk
contributed approximately $1.4
billion of total revenue for fiscal 2024.
Net Income and EPS -- On a GAAP basis, net income
was $10.3 billion, a decrease of 18%,
and EPS was $2.54, a decrease of 17%.
On a non-GAAP basis, net income was $15.2
billion, a decrease of 5% compared to fiscal 2023, and EPS
was $3.73, a decrease of 4%.
Cash Flow from Operating Activities --
$10.9 billion for fiscal 2024, a
decrease of 45% compared with $19.9
billion for fiscal 2023.
Balance Sheet and Other Financial Highlights
Cash and Cash Equivalents and Investments --
$17.9 billion at the end of the
fourth quarter of fiscal 2024, compared with $18.8 billion at the end of the third quarter of
fiscal 2024, and compared with $26.1
billion at the end of fiscal 2023.
Remaining Performance Obligations (RPO)
-- $41.0 billion, up
18% in total, with 51% of this amount to be recognized as revenue
over the next 12 months. Product RPO were up 27% and services RPO
were up 10%.
Deferred Revenue -- $28.5
billion, up 11% in total, with deferred product revenue up
15%. Deferred service revenue was up 9%.
Capital Allocation -- In the fourth quarter of
fiscal 2024, we returned $3.6 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 43 million shares of common stock under
our stock repurchase program at an average price of $46.80 per share for an aggregate purchase price
of $2.0 billion. The remaining
authorized amount for stock repurchases under the program is
$5.2 billion with no termination
date.
Guidance
Cisco estimates the following results for the
first quarter of fiscal 2025:
Q1 FY 2025
|
|
|
Revenue
|
|
$13.65 billion -
$13.85 billion
|
Non-GAAP gross
margin
|
|
67% - 68%
|
Non-GAAP operating
margin
|
|
32% - 33%
|
Non-GAAP EPS
|
|
$0.86 -
$0.88
|
Cisco estimates that GAAP EPS will be $0.35 to $0.42 for
the first quarter of fiscal 2025.
Cisco estimates the following results for fiscal 2025:
FY 2025
|
|
|
Revenue
|
|
$55.0 billion - $56.2
billion
|
Non-GAAP EPS
|
|
$3.52 -
$3.58
|
Cisco estimates that GAAP EPS will be $1.93 to $2.05 for
fiscal 2025.
Our Q1 FY 2025 and FY 2025 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:
- Q4 fiscal year 2024 conference call to discuss Cisco's results
along with its guidance will be held on Wednesday, August 14,
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, August 14, 2024 to 4:00
p.m. Pacific Time, August 20,
2024 at 1-866-510-4837 (United
States) or 1-203-369-1943 (international). The replay will
also be available via webcast on the Cisco Investor Relations
website at https://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, August 14, 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
https://investor.cisco.com.
CISCO SYSTEMS,
INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
(In millions,
except per-share amounts)
(Unaudited)
|
|
|
Three Months
Ended
|
|
Fiscal Year
Ended
|
|
July 27,
2024
|
|
July 29,
2023
|
|
July 27,
2024
|
|
July 29,
2023
|
REVENUE:
|
|
|
|
|
|
|
|
Product
|
$
9,858
|
|
$ 11,650
|
|
$ 39,253
|
|
$ 43,142
|
Services
|
3,784
|
|
3,553
|
|
14,550
|
|
13,856
|
Total
revenue
|
13,642
|
|
15,203
|
|
53,803
|
|
56,998
|
COST OF SALES:
|
|
|
|
|
|
|
|
Product
|
3,644
|
|
4,237
|
|
14,339
|
|
16,590
|
Services
|
1,217
|
|
1,218
|
|
4,636
|
|
4,655
|
Total cost of
sales
|
4,861
|
|
5,455
|
|
18,975
|
|
21,245
|
GROSS MARGIN
|
8,781
|
|
9,748
|
|
34,828
|
|
35,753
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
Research and
development
|
2,179
|
|
1,953
|
|
7,983
|
|
7,551
|
Sales and
marketing
|
2,841
|
|
2,579
|
|
10,364
|
|
9,880
|
General and
administrative
|
763
|
|
690
|
|
2,813
|
|
2,478
|
Amortization of
purchased intangible assets
|
268
|
|
70
|
|
698
|
|
282
|
Restructuring and
other charges
|
112
|
|
203
|
|
789
|
|
531
|
Total operating
expenses
|
6,163
|
|
5,495
|
|
22,647
|
|
20,722
|
OPERATING INCOME
|
2,618
|
|
4,253
|
|
12,181
|
|
15,031
|
Interest
income
|
270
|
|
312
|
|
1,365
|
|
962
|
Interest
expense
|
(418)
|
|
(111)
|
|
(1,006)
|
|
(427)
|
Other income (loss),
net
|
(74)
|
|
17
|
|
(306)
|
|
(248)
|
Interest and other
income (loss), net
|
(222)
|
|
218
|
|
53
|
|
287
|
INCOME BEFORE PROVISION FOR INCOME
TAXES
|
2,396
|
|
4,471
|
|
12,234
|
|
15,318
|
Provision for income
taxes
|
234
|
|
513
|
|
1,914
|
|
2,705
|
NET INCOME
|
$
2,162
|
|
$
3,958
|
|
$ 10,320
|
|
$ 12,613
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.54
|
|
$
0.97
|
|
$
2.55
|
|
$
3.08
|
Diluted
|
$
0.54
|
|
$
0.97
|
|
$
2.54
|
|
$
3.07
|
Shares used in
per-share calculation:
|
|
|
|
|
|
|
|
Basic
|
4,018
|
|
4,071
|
|
4,043
|
|
4,093
|
Diluted
|
4,035
|
|
4,093
|
|
4,062
|
|
4,105
|
CISCO SYSTEMS,
INC.
REVENUE BY
SEGMENT
(In millions,
except percentages)
|
|
|
|
July 27,
2024
|
|
|
Three Months
Ended
|
|
Fiscal Year
Ended
|
|
|
Amount
|
|
Y/Y%
|
|
Amount
|
|
Y/Y%
|
Revenue:
|
|
|
|
|
|
|
|
|
Americas
|
|
$
8,068
|
|
(11) %
|
|
$ 31,971
|
|
(4) %
|
EMEA
|
|
3,511
|
|
(11) %
|
|
14,117
|
|
(7) %
|
APJC
|
|
2,064
|
|
(6) %
|
|
7,716
|
|
(8) %
|
Total
|
|
$ 13,642
|
|
(10) %
|
|
$ 53,803
|
|
(6) %
|
|
Amounts may not sum and
percentages may not recalculate due to rounding.
|
CISCO SYSTEMS,
INC.
GROSS MARGIN
PERCENTAGE BY SEGMENT
(In
percentages)
|
|
|
|
July 27,
2024
|
|
|
Three Months
Ended
|
|
Fiscal Year
Ended
|
Gross Margin Percentage:
|
|
|
|
|
Americas
|
|
67.7 %
|
|
66.8 %
|
EMEA
|
|
69.2 %
|
|
69.1 %
|
APJC
|
|
66.4 %
|
|
67.2 %
|
CISCO SYSTEMS,
INC.
REVENUE FOR GROUPS
OF SIMILAR PRODUCTS AND SERVICES
(In millions,
except percentages)
|
|
|
|
July 27,
2024
|
|
|
Three Months
Ended
|
|
Fiscal Year
Ended
|
|
|
Amount
|
|
Y/Y %
|
|
Amount
|
|
Y/Y %
|
Revenue:
|
|
|
|
|
|
|
|
|
Networking
|
|
$
6,804
|
|
(28) %
|
|
$ 29,229
|
|
(15) %
|
Security
|
|
1,787
|
|
81 %
|
|
5,075
|
|
32 %
|
Collaboration
|
|
1,019
|
|
— %
|
|
4,113
|
|
2 %
|
Observability
|
|
248
|
|
41 %
|
|
837
|
|
27 %
|
Total
Product
|
|
9,858
|
|
(15) %
|
|
39,253
|
|
(9) %
|
Services
|
|
3,784
|
|
6 %
|
|
14,550
|
|
5 %
|
Total
|
|
$ 13,642
|
|
(10) %
|
|
$ 53,803
|
|
(6) %
|
|
Security and
Observability, excluding Splunk, grew 6% and 12%, respectively, in
the fourth quarter of fiscal 2024, and 4% and 15%, respectively,
for fiscal 2024.
|
|
Amounts may not sum and
percentages may not recalculate due to rounding.
|
CISCO SYSTEMS,
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
millions)
(Unaudited)
|
|
|
July 27,
2024
|
|
July 29,
2023
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
7,508
|
|
$
10,123
|
Investments
|
10,346
|
|
16,023
|
Accounts receivable,
net of allowance
of $87 at
July 27, 2024 and $85 at July 29, 2023
|
6,685
|
|
5,854
|
Inventories
|
3,373
|
|
3,644
|
Financing receivables,
net
|
3,338
|
|
3,352
|
Other current
assets
|
5,612
|
|
4,352
|
Total current
assets
|
36,862
|
|
43,348
|
Property and equipment,
net
|
2,090
|
|
2,085
|
Financing receivables,
net
|
3,376
|
|
3,483
|
Goodwill
|
58,660
|
|
38,535
|
Purchased intangible
assets, net
|
11,219
|
|
1,818
|
Deferred tax
assets
|
6,262
|
|
6,576
|
Other assets
|
5,944
|
|
6,007
|
TOTAL ASSETS
|
$ 124,413
|
|
$ 101,852
|
LIABILITIES AND EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Short-term
debt
|
$
11,341
|
|
$
1,733
|
Accounts
payable
|
2,304
|
|
2,313
|
Income taxes
payable
|
1,439
|
|
4,235
|
Accrued
compensation
|
3,608
|
|
3,984
|
Deferred
revenue
|
16,249
|
|
13,908
|
Other current
liabilities
|
5,643
|
|
5,136
|
Total current
liabilities
|
40,584
|
|
31,309
|
Long-term
debt
|
19,621
|
|
6,658
|
Income taxes
payable
|
3,985
|
|
5,756
|
Deferred
revenue
|
12,226
|
|
11,642
|
Other long-term
liabilities
|
2,540
|
|
2,134
|
Total
liabilities
|
78,956
|
|
57,499
|
Total equity
|
45,457
|
|
44,353
|
TOTAL LIABILITIES AND EQUITY
|
$ 124,413
|
|
$ 101,852
|
CISCO SYSTEMS,
INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In
millions)
(Unaudited)
|
|
|
Fiscal Year
Ended
|
|
July 27,
2024
|
|
July 29,
2023
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$ 10,320
|
|
$ 12,613
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation,
amortization, and other
|
2,507
|
|
1,726
|
Share-based
compensation expense
|
3,074
|
|
2,353
|
Provision for
receivables
|
34
|
|
31
|
Deferred income
taxes
|
(972)
|
|
(2,085)
|
(Gains) losses on
divestitures, investments and other, net
|
215
|
|
206
|
Change in operating
assets and liabilities, net of effects of acquisitions and
divestitures:
|
|
|
|
Accounts
receivable
|
(289)
|
|
734
|
Inventories
|
275
|
|
(1,069)
|
Financing
receivables
|
76
|
|
1,102
|
Other
assets
|
(671)
|
|
5
|
Accounts
payable
|
(90)
|
|
27
|
Income taxes,
net
|
(4,539)
|
|
1,218
|
Accrued
compensation
|
(696)
|
|
651
|
Deferred
revenue
|
1,220
|
|
2,326
|
Other
liabilities
|
416
|
|
48
|
Net cash provided by
operating activities
|
10,880
|
|
19,886
|
Cash flows from
investing activities:
|
|
|
|
Purchases of
investments
|
(4,230)
|
|
(10,871)
|
Proceeds from sales of
investments
|
4,136
|
|
1,054
|
Proceeds from
maturities of investments
|
6,367
|
|
5,978
|
Acquisitions, net of
cash and cash equivalents acquired
|
(25,994)
|
|
(301)
|
Purchases of
investments in privately held companies
|
(284)
|
|
(185)
|
Return of investments
in privately held companies
|
202
|
|
90
|
Acquisition of
property and equipment
|
(670)
|
|
(849)
|
Other
|
(5)
|
|
(23)
|
Net cash used in
investing activities
|
(20,478)
|
|
(5,107)
|
Cash flows from
financing activities:
|
|
|
|
Issuances of common
stock
|
714
|
|
700
|
Repurchases of common
stock - repurchase program
|
(5,787)
|
|
(4,293)
|
Shares repurchased for
tax withholdings on vesting of restricted stock units
|
(992)
|
|
(597)
|
Short-term borrowings,
original maturities of 90 days or less, net
|
478
|
|
(602)
|
Issuances of
debt
|
31,818
|
|
—
|
Repayments of
debt
|
(9,826)
|
|
(500)
|
Repayments of Splunk
convertible debt, net
|
(3,140)
|
|
—
|
Dividends
paid
|
(6,384)
|
|
(6,302)
|
Other
|
(37)
|
|
(32)
|
Net cash provided by
(used in) financing activities
|
6,844
|
|
(11,626)
|
Effect of foreign
currency exchange rate changes on cash, cash equivalents,
restricted cash and restricted
cash equivalents
|
(31)
|
|
(105)
|
Net increase (decrease)
in cash, cash equivalents, restricted cash and restricted cash
equivalents
|
(2,785)
|
|
3,048
|
Cash, cash equivalents,
restricted cash and restricted cash equivalents, beginning of
fiscal year
|
11,627
|
|
8,579
|
Cash, cash equivalents,
restricted cash and restricted cash equivalents, end of fiscal
year
|
$
8,842
|
|
$ 11,627
|
Supplemental cash flow
information:
|
|
|
|
Cash paid for
interest
|
$
583
|
|
$
376
|
Cash paid for income
taxes, net
|
$
7,426
|
|
$
3,571
|
CISCO SYSTEMS,
INC.
REMAINING
PERFORMANCE OBLIGATIONS
(In millions,
except percentages)
|
|
|
July 27,
2024
|
|
April 27,
2024
|
|
July 29,
2023
|
|
Amount
|
|
Y/Y %
|
|
Amount
|
|
Y/Y %
|
|
Amount
|
|
Y/Y %
|
Product
|
$
20,055
|
|
27 %
|
|
$
18,876
|
|
29 %
|
|
$
15,802
|
|
12 %
|
Services
|
20,993
|
|
10 %
|
|
19,898
|
|
14 %
|
|
19,066
|
|
9 %
|
Total
|
$
41,048
|
|
18 %
|
|
$
38,774
|
|
21 %
|
|
$
34,868
|
|
11 %
|
|
We expect 51% of total
RPO at July 27, 2024 will be recognized as revenue over the
next 12 months.
|
CISCO SYSTEMS,
INC.
DEFERRED
REVENUE
(In
millions)
|
|
|
July 27,
2024
|
|
April 27,
2024
|
|
July 29,
2023
|
Deferred
revenue:
|
|
|
|
|
|
Product
|
$ 13,219
|
|
$ 12,856
|
|
$ 11,505
|
Services
|
15,256
|
|
14,619
|
|
14,045
|
Total
|
$ 28,475
|
|
$ 27,475
|
|
$ 25,550
|
Reported as:
|
|
|
|
|
|
Current
|
$ 16,249
|
|
$ 15,751
|
|
$ 13,908
|
Noncurrent
|
12,226
|
|
11,724
|
|
11,642
|
Total
|
$ 28,475
|
|
$ 27,475
|
|
$ 25,550
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
July 27,
2024
|
|
$
0.40
|
|
$
1,606
|
|
43
|
|
$
46.80
|
|
$
2,002
|
|
$
3,608
|
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
|
|
Fiscal Year
Ended
|
|
July 27,
2024
|
|
July 29,
2023
|
|
July 27,
2024
|
|
July 29,
2023
|
GAAP net
income
|
$
2,162
|
|
$
3,958
|
|
$ 10,320
|
|
$ 12,613
|
Adjustments to cost of
sales:
|
|
|
|
|
|
|
|
Share-based
compensation expense
|
133
|
|
103
|
|
514
|
|
396
|
Amortization of
acquisition-related intangible assets
|
331
|
|
168
|
|
936
|
|
630
|
Acquisition-related/divestiture costs
|
21
|
|
14
|
|
34
|
|
18
|
Supplier component
remediation charge (adjustment), net
|
—
|
|
(9)
|
|
—
|
|
(9)
|
Total adjustments to
GAAP cost of sales
|
485
|
|
276
|
|
1,484
|
|
1,035
|
Adjustments to
operating expenses:
|
|
|
|
|
|
|
|
Share-based
compensation expense
|
660
|
|
520
|
|
2,537
|
|
1,951
|
Amortization of
acquisition-related intangible assets
|
268
|
|
70
|
|
698
|
|
282
|
Acquisition-related/divestiture costs
|
297
|
|
63
|
|
700
|
|
241
|
Russia-Ukraine war
costs
|
—
|
|
(7)
|
|
(12)
|
|
—
|
Significant asset
impairments and restructurings
|
112
|
|
203
|
|
789
|
|
531
|
Total adjustments to
GAAP operating expenses
|
1,337
|
|
849
|
|
4,712
|
|
3,005
|
Adjustments to
interest and other income (loss), net:
|
|
|
|
|
|
|
|
Russia-Ukraine war
costs
|
49
|
|
—
|
|
49
|
|
—
|
(Gains) and losses on
investments
|
(32)
|
|
(55)
|
|
100
|
|
133
|
Total adjustments to
GAAP interest and other income (loss), net
|
17
|
|
(55)
|
|
149
|
|
133
|
Total adjustments to
GAAP income before provision for income
taxes
|
1,839
|
|
1,070
|
|
6,345
|
|
4,173
|
Income tax effect of
non-GAAP adjustments
|
(315)
|
|
(215)
|
|
(1,360)
|
|
(838)
|
Significant tax
matters
|
(155)
|
|
(133)
|
|
(155)
|
|
31
|
Total adjustments to
GAAP provision for income taxes
|
(470)
|
|
(348)
|
|
(1,515)
|
|
(807)
|
Non-GAAP net
income
|
$
3,531
|
|
$
4,680
|
|
$ 15,150
|
|
$ 15,979
|
CISCO SYSTEMS,
INC.
RECONCILIATIONS OF
GAAP TO NON-GAAP MEASURES
GAAP TO NON-GAAP
EPS
|
|
|
Three Months
Ended
|
|
Fiscal Year
Ended
|
|
July 27,
2024
|
|
July 29,
2023
|
|
July 27,
2024
|
|
July 29,
2023
|
GAAP EPS
|
$
0.54
|
|
$
0.97
|
|
$
2.54
|
|
$
3.07
|
Adjustments to
GAAP:
|
|
|
|
|
|
|
|
Share-based
compensation expense
|
0.20
|
|
0.15
|
|
0.75
|
|
0.57
|
Amortization of
acquisition-related intangible assets
|
0.15
|
|
0.06
|
|
0.40
|
|
0.22
|
Acquisition-related/divestiture costs
|
0.08
|
|
0.02
|
|
0.18
|
|
0.06
|
Russia-Ukraine war
costs
|
0.01
|
|
—
|
|
0.01
|
|
—
|
Significant asset
impairments and restructurings
|
0.03
|
|
0.05
|
|
0.19
|
|
0.13
|
(Gains) and losses on
investments
|
(0.01)
|
|
(0.01)
|
|
0.02
|
|
0.03
|
Income tax effect of
non-GAAP adjustments
|
(0.08)
|
|
(0.05)
|
|
(0.33)
|
|
(0.20)
|
Significant tax
matters
|
(0.04)
|
|
(0.03)
|
|
(0.04)
|
|
0.01
|
Non-GAAP EPS
|
$
0.87
|
|
$
1.14
|
|
$
3.73
|
|
$
3.89
|
|
Amounts may not sum or
recalculate due to rounding.
|
CISCO SYSTEMS,
INC.
GAAP TO NON-GAAP
EPS
IMPACT OF SPLUNK
ACQUISITION, INCLUDING FINANCING COSTS
|
|
|
July 27,
2024
|
|
Three Months
Ended
|
|
Fiscal Year
Ended
|
GAAP EPS
Impact
|
$
(0.16)
|
|
$
(0.25)
|
Amortization of
acquisition-related intangible assets
|
0.09
|
|
0.14
|
Acquisition-related
costs
|
0.06
|
|
0.11
|
Income tax effect of
non-GAAP adjustments
|
(0.03)
|
|
(0.05)
|
Non-GAAP EPS
Impact
|
$
(0.04)
|
|
$
(0.04)
|
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
|
|
July 27,
2024
|
|
Product
Gross
Margin
|
|
Services
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
|
$ 6,214
|
|
$ 2,567
|
|
$ 8,781
|
|
$ 6,163
|
|
12 %
|
|
$ 2,618
|
|
(38) %
|
|
$ (222)
|
|
$ 2,162
|
|
(45) %
|
% of revenue
|
63.0 %
|
|
67.8 %
|
|
64.4 %
|
|
45.2 %
|
|
|
|
19.2 %
|
|
|
|
(1.6) %
|
|
15.8 %
|
|
|
Adjustments to GAAP
amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
expense
|
57
|
|
76
|
|
133
|
|
660
|
|
|
|
793
|
|
|
|
—
|
|
793
|
|
|
Amortization of
acquisition-
related intangible assets
|
331
|
|
—
|
|
331
|
|
268
|
|
|
|
599
|
|
|
|
—
|
|
599
|
|
|
Acquisition/divestiture-related
costs
|
5
|
|
16
|
|
21
|
|
297
|
|
|
|
318
|
|
|
|
—
|
|
318
|
|
|
Russia-Ukraine war
costs
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
49
|
|
49
|
|
|
Significant asset
impairments
and restructurings
|
—
|
|
—
|
|
—
|
|
112
|
|
|
|
112
|
|
|
|
—
|
|
112
|
|
|
(Gains) and losses
on
investments
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
(32)
|
|
(32)
|
|
|
Income tax
effect/significant tax
matters
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
(470)
|
|
|
Non-GAAP
amount
|
$ 6,607
|
|
$ 2,659
|
|
$ 9,266
|
|
$ 4,826
|
|
4 %
|
|
$ 4,440
|
|
(17) %
|
|
$ (205)
|
|
$ 3,531
|
|
(25) %
|
% of revenue
|
67.0 %
|
|
70.3 %
|
|
67.9 %
|
|
35.4 %
|
|
|
|
32.5 %
|
|
|
|
(1.5) %
|
|
25.9 %
|
|
|
|
Three Months
Ended
|
|
July 29,
2023
|
|
Product
Gross
Margin
|
|
Services
Gross
Margin
|
|
Total
Gross
Margin
|
|
Operating
Expenses
|
|
Operating
Income
|
|
Interest
and
other
income
(loss),
net
|
|
Net
Income
|
GAAP amount
|
$ 7,413
|
|
$ 2,335
|
|
$ 9,748
|
|
$ 5,495
|
|
$ 4,253
|
|
$ 218
|
|
$ 3,958
|
% of revenue
|
63.6 %
|
|
65.7 %
|
|
64.1 %
|
|
36.1 %
|
|
28.0 %
|
|
1.4 %
|
|
26.0 %
|
Adjustments to GAAP
amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation expense
|
40
|
|
63
|
|
103
|
|
520
|
|
623
|
|
—
|
|
623
|
Amortization of
acquisition-related intangible assets
|
168
|
|
—
|
|
168
|
|
70
|
|
238
|
|
—
|
|
238
|
Acquisition/divestiture-related costs
|
14
|
|
—
|
|
14
|
|
63
|
|
77
|
|
—
|
|
77
|
Russia-Ukraine war
costs
|
—
|
|
—
|
|
—
|
|
(7)
|
|
(7)
|
|
—
|
|
(7)
|
Supplier component
remediation charge (adjustment), net
|
(9)
|
|
—
|
|
(9)
|
|
—
|
|
(9)
|
|
—
|
|
(9)
|
Significant asset
impairments and restructurings
|
—
|
|
—
|
|
—
|
|
203
|
|
203
|
|
—
|
|
203
|
(Gains) and losses on
investments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(55)
|
|
(55)
|
Income tax
effect/significant tax matters
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(348)
|
Non-GAAP
amount
|
$ 7,626
|
|
$ 2,398
|
|
$ 10,024
|
|
$ 4,646
|
|
$ 5,378
|
|
$ 163
|
|
$ 4,680
|
% of revenue
|
65.5 %
|
|
67.5 %
|
|
65.9 %
|
|
30.6 %
|
|
35.4 %
|
|
1.1 %
|
|
30.8 %
|
|
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)
|
|
|
Fiscal Year
Ended
|
|
July 27,
2024
|
|
Product
Gross
Margin
|
|
Services
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
|
$ 24,914
|
|
$ 9,914
|
|
$ 34,828
|
|
$ 22,647
|
|
9 %
|
|
$ 12,181
|
|
(19) %
|
|
$ 53
|
|
$ 10,320
|
|
(18) %
|
% of revenue
|
63.5 %
|
|
68.1 %
|
|
64.7 %
|
|
42.1 %
|
|
|
|
22.6 %
|
|
|
|
0.1 %
|
|
19.2 %
|
|
|
Adjustments to GAAP
amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
expense
|
214
|
|
300
|
|
514
|
|
2,537
|
|
|
|
3,051
|
|
|
|
—
|
|
3,051
|
|
|
Amortization of
acquisition-
related intangible assets
|
936
|
|
—
|
|
936
|
|
698
|
|
|
|
1,634
|
|
|
|
—
|
|
1,634
|
|
|
Acquisition/divestiture-related
costs
|
10
|
|
24
|
|
34
|
|
700
|
|
|
|
734
|
|
|
|
—
|
|
734
|
|
|
Russia-Ukraine war
costs
|
—
|
|
—
|
|
—
|
|
(12)
|
|
|
|
(12)
|
|
|
|
49
|
|
37
|
|
|
Significant asset
impairments and
restructurings
|
—
|
|
—
|
|
—
|
|
789
|
|
|
|
789
|
|
|
|
—
|
|
789
|
|
|
(Gains) and losses on
investments
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
100
|
|
100
|
|
|
Income tax
effect/significant tax
matters
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
(1,515)
|
|
|
Non-GAAP
amount
|
$ 26,074
|
|
$ 10,238
|
|
$ 36,312
|
|
$ 17,935
|
|
1 %
|
|
$ 18,377
|
|
(4) %
|
|
$ 202
|
|
$ 15,150
|
|
(5) %
|
% of revenue
|
66.4 %
|
|
70.4 %
|
|
67.5 %
|
|
33.3 %
|
|
|
|
34.2 %
|
|
|
|
0.4 %
|
|
28.2 %
|
|
|
|
Fiscal Year
Ended
|
|
July 29,
2023
|
|
Product
Gross
Margin
|
|
Services
Gross
Margin
|
|
Total
Gross
Margin
|
|
Operating
Expenses
|
|
Operating
Income
|
|
Interest
and
other
income
(loss),
net
|
|
Net
Income
|
GAAP amount
|
$ 26,552
|
|
$ 9,201
|
|
$ 35,753
|
|
$ 20,722
|
|
$ 15,031
|
|
$ 287
|
|
$ 12,613
|
% of revenue
|
61.5 %
|
|
66.4 %
|
|
62.7 %
|
|
36.4 %
|
|
26.4 %
|
|
0.5 %
|
|
22.1 %
|
Adjustments to GAAP
amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation expense
|
151
|
|
245
|
|
396
|
|
1,951
|
|
2,347
|
|
—
|
|
2,347
|
Amortization of
acquisition-related intangible assets
|
630
|
|
—
|
|
630
|
|
282
|
|
912
|
|
—
|
|
912
|
Acquisition/divestiture-related costs
|
18
|
|
—
|
|
18
|
|
241
|
|
259
|
|
—
|
|
259
|
Supplier component
remediation charge (adjustment),
net
|
(9)
|
|
—
|
|
(9)
|
|
—
|
|
(9)
|
|
—
|
|
(9)
|
Significant asset
impairments and restructurings
|
—
|
|
—
|
|
—
|
|
531
|
|
531
|
|
—
|
|
531
|
(Gains) and losses on
investments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
133
|
|
133
|
Income tax
effect/significant tax matters
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(807)
|
Non-GAAP
amount
|
$ 27,342
|
|
$ 9,446
|
|
$ 36,788
|
|
$ 17,717
|
|
$ 19,071
|
|
$ 420
|
|
$ 15,979
|
% of revenue
|
63.4 %
|
|
68.2 %
|
|
64.5 %
|
|
31.1 %
|
|
33.5 %
|
|
0.7 %
|
|
28.0 %
|
|
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
|
|
Fiscal Year
Ended
|
|
July 27,
2024
|
|
July 29,
2023
|
|
July 27,
2024
|
|
July 29,
2023
|
GAAP effective tax
rate
|
9.8 %
|
|
11.5 %
|
|
15.6 %
|
|
17.7 %
|
Total adjustments to
GAAP provision for income taxes
|
6.8 %
|
|
4.0 %
|
|
2.9 %
|
|
0.3 %
|
Non-GAAP effective tax
rate
|
16.6 %
|
|
15.5 %
|
|
18.5 %
|
|
18.0 %
|
GAAP TO NON-GAAP
GUIDANCE
|
|
Q1 FY 2025
|
|
Gross
Margin
|
|
Operating
Margin
|
|
Earnings per
Share (2)
|
GAAP
|
|
63.5% -
64.5%
|
|
14% - 15%
|
|
$0.35 -
$0.42
|
Estimated adjustments
for:
|
|
|
|
|
|
|
Share-based
compensation expense
|
|
1.0 %
|
|
6.0 %
|
|
$0.16 -
$0.17
|
Amortization of
acquisition-related intangible assets and
acquisition/divestiture-related
costs
|
|
2.5 %
|
|
6.5 %
|
|
$0.17 -
$0.18
|
Significant asset
impairments and restructurings(1)
|
|
—
|
|
5.5 %
|
|
$0.13 -
$0.16
|
Non-GAAP
|
|
67% - 68%
|
|
32% - 33%
|
|
$0.86 -
$0.88
|
|
|
|
|
|
|
|
FY 2025
|
|
Earnings per
Share (2)
|
GAAP
|
|
$1.93 -
$2.05
|
Estimated adjustments
for:
|
|
|
Share-based
compensation expense
|
|
$0.74 -
$0.76
|
Amortization of
acquisition-related intangible assets and
acquisition/divestiture-related costs
|
|
$0.60 -
$0.62
|
Significant asset
impairments and restructurings (1)
|
|
$0.19 -
$0.21
|
Non-GAAP
|
|
$3.52 -
$3.58
|
|
|
|
(1) On August 14, 2024,
Cisco announced a restructuring plan to allow it to invest in key
growth opportunities and drive more efficiencies in its business.
In connection with this restructuring plan, Cisco currently
estimates that it will recognize pre-tax charges of up to
$1 billion consisting of severance
and other one-time termination benefits, and other costs. Cisco
expects to recognize approximately $700
million to $800 million of
these charges in the first quarter of fiscal 2025 with the
remaining amount expected to be recognized during the rest of the
fiscal year.
(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, significant asset
impairments and restructurings, significant litigation settlements
and other contingencies, Russia-Ukraine war costs, gains and losses on
investments, significant tax matters, or other items, which may or
may not be significant.
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 customers' reliance on Cisco
to connect and protect their organizations in the era of AI and our
focus on growth and consistent execution as we invest in AI, cloud
and cybersecurity, while maintaining capital returns) and the
future financial performance of Cisco (including the guidance for
Q1 FY 2025 and full year FY 2025) 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,
cloud, enterprise 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 services
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
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achieve the benefits of restructurings and possible changes in the
size and timing of related charges; cyber attacks, data breaches or
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ability to protect personal data; evolving regulatory uncertainty;
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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
May 21, 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 months
and the year ended July 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 (GAAP) 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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