EX-99.12d901470dex991.htmEX-99.1 EX-99.1
Exhibit 99.1
Press Contact:
Investor Relations Contact:
Robyn Blum
Sami Badri
Cisco
Cisco
1 (408) 930-8548
1 (469) 420-4834
rojenkin@cisco.com
sambadri@cisco.com
CISCO REPORTS FOURTH QUARTER AND FISCAL YEAR 2025 EARNINGS
News Summary:
•
Strong topline performance at the high end of our guidance ranges:
•
Q4 revenue of $14.7 billion, up 8% year over year
•
FY 2025 revenue of $56.7 billion, up 5% year over year
•
T1Q4 product orders up 7% year over year with growth across all geographies, demonstrating robust demand for
Cisco’s technologies
•
T2AI Infrastructure orders taken from webscale customers exceeded $800 million, bringing the FY 2025 total to
over $2 billion, more than double the original $1 billion target
•
Strong profitability in Q4:
•
GAAP gross margin of 65.7% and T3non-GAAP gross margin of 68.4%, at the
high end of our guidance range
•
GAAP EPS of $0.71 and non-GAAP EPS of $0.99, above the high end of our
guidance range
•
Q4 FY 2025 Results:
•
Revenue: $14.7 billion
•
Increase of 8% year over year
•
Earnings per Share: GAAP: $0.71; Non-GAAP: $0.99
•
GAAP EPS increased 31% year over year
•
Non-GAAP EPS increased 14% year over year
•
FY 2025 Results:
•
Revenue: $56.7 billion
•
Increase of 5% year over year
•
Earnings per Share: GAAP: $2.61; Non-GAAP: $3.81
•
GAAP EPS increased 3% year over year
•
Non-GAAP EPS increased 2% year over year
•
Q1 FY 2026 Guidance (1):
•
Revenue: $14.65 billion to $14.85 billion
•
Earnings per Share: GAAP: $0.63 to $0.68; Non-GAAP: $0.97 to $0.99
•
FY 2026 Guidance (1):
•
Revenue: $59.0 billion to $60.0 billion
•
Earnings per Share: GAAP: $2.79 to $2.91; Non-GAAP: $4.00 to $4.06
(1) Margin and EPS guidance includes the estimated impact of tariffs based on
current trade policy.
1
SAN JOSE, Calif. — August 13, 2025 — Cisco today reported fourth quarter and fiscal year
results for the period ended July 26, 2025. Cisco reported fourth quarter revenue of $14.7 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.8 billion or $0.71 per share, and non-GAAP net income of $4.0 billion or $0.99 per share.
“We delivered a strong close to fiscal 2025, driven
by our accelerated innovation and solid execution,” said Chuck Robbins, chair and CEO of Cisco. “The AI infrastructure orders we received from webscale customers in fiscal 2025 were more than double our original target, indicating a
massive opportunity ahead as we lead the required architectural shift and build the critical infrastructure needed for the AI era.”
“In Q4,
T4revenue, gross margin and operating margin were at the high end of our guidance ranges, earnings per share was above the guidance range and we delivered solid operating cash flow,” said Mark Patterson, CFO of Cisco. “As we enter fiscal
2026, we remain focused on making strategic investments in innovation, driving durable, profitable growth and delivering shareholder value.”
Q4 GAAP Results
Q4 FY 2025
Q4 FY 2024
Vs. Q4 FY 2024
Revenue
$14.7 billion
$13.6 billion
8%
Net Income
$2.8 billion
$2.2 billion
31%
Diluted Earnings per Share (EPS)
$0.71
$0.54
31%
Q4 Non-GAAP Results
Q4 FY 2025
Q4 FY 2024
Vs. Q4 FY 2024
Net Income
$4.0 billion
$3.5 billion
12%
EPS
$0.99
$0.87
14%
Fiscal Year GAAP Results
FY 2025
FY 2024
Vs. FY 2024
Revenue
$56.7 billion
$53.8 billion
5%
Net Income
$10.5 billion
$10.3 billion
1%
EPS
$2.61
$2.54
3%
Fiscal Year Non-GAAP Results
FY 2025
FY 2024
Vs. FY 2024
Net Income
$15.2 billion
$15.2 billion
—%
EPS
$3.81
$3.73
2%
Reconciliations between net income, EPS, and other measures on a GAAP and non-GAAPbasis 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 $0.41 per common share to be paid on October 22, 2025, to all stockholders of record as of the close of business on October 3, 2025. Future dividends will be subject to Board approval.
2
Financial Summary
All comparative percentages are on a year-over-year basis unless otherwise noted.
Q4 FY 2025 Highlights
Revenue —Total revenue was $14.7 billion, up 8%, with product revenue up 10% and services revenue flat.
Revenue by geographic segment was: Americas
up 9%, EMEA up 4%, and APJC up 7%. T5Product revenue performance reflected growth in Networking up 12%, Security up 9%, Observability up 4%, and Collaboration up 2%.
Gross Margin — On a GAAP basis, total gross margin, product gross margin, and services gross margin were 65.7%, 64.7%, and 68.3%,
respectively, as compared with 64.4%, 63.0%, and 67.8%, respectively, in the fourth quarter of fiscal 2024.
On anon-GAAP basis, total gross margin, product gross margin, and services gross margin were 68.4%, 67.5%, and 70.8%, respectively, as compared with 67.9%, 67.0%, and 70.3%, respectively, in the fourth quarter of
fiscal 2024.
Total gross margins by geographic segment were: 68.0% for the Americas, 71.7% for EMEA and 64.2% for APJC.
Operating Expenses — On a GAAP basis, operating expenses were $6.2 billion, flat year over year, and were 42.2% of revenue. Non-GAAP operating expenses were $5.0 billion, up 4%, and were 34.1% of revenue.
Operating Income
— GAAP operating income was $3.4 billion, up 32%, with GAAP operating margin of 23.5%. Non-GAAP operating income was $5.0 billion, up 13%, withnon-GAAP operating margin at 34.3%.
Provision for Income Taxes — The GAAP tax provision rate
was 15.8%. The non-GAAP tax provision rate was 18.1%.
Net Income and EPS — On a GAAP basis,
net income was $2.8 billion, an increase of 31%, and EPS was $0.71, an increase of 31%. On a non-GAAP basis, net income was $4.0 billion, an increase of 12%, and EPS was $0.99, an increase of 14%.
Cash Flow from Operating Activities — $4.2 billion for the fourth quarter of fiscal 2025, an increase of 14% compared with
$3.7 billion for the fourth quarter of fiscal 2024.
FY 2025 Highlights
Revenue — Total revenue was $56.7 billion, an increase of 5%.
Net Income and EPS — On a GAAP basis, net income was $10.5 billion, an increase of 1%, and EPS was $2.61, an increase of 3%. On a non-GAAP basis, net income was $15.2 billion, flat compared to fiscal 2024, and EPS was $3.81, an increase of 2%.
T6Cash Flow from Operating Activities — $14.2 billion for fiscal 2025, an increase of 30% compared with $10.9 billion for fiscal
2024.
Balance Sheet and Other Financial Highlights
Cash and Cash Equivalents and Investments — $16.1 billion at the end of the fourth quarter of fiscal 2025, compared with
$15.6 billion at the end of the third quarter of fiscal 2025, and compared with $17.9 billion at the end of fiscal 2024.
Remaining
Performance Obligations (RPO) — $43.5 billion, up 6% in total, with 50% of this amount expected to be recognized as revenue over the next 12 months. Product RPO was up 8% and services RPO was up 5%.
Deferred Revenue — $28.8 billion, up 1% in total, with deferred product revenue up 2%. Deferred services revenue was flat.
Capital Allocation — In the fourth quarter of fiscal 2025, we returned $2.9 billion to stockholders through share buybacks and
dividends. We declared and paid a cash dividend of $0.41 per common share, or $1.6 billion, and repurchased approximately 19 million shares of common stock under our stock repurchase program at an average price of $64.65 per share for an
aggregate purchase price of $1.3 billion. The remaining authorized amount for stock repurchases under the program is $14.2 billion with no termination date.
3
Guidance
Cisco estimates the following results for the first quarter of fiscal 2026:
Q1 FY 2026
G1Revenue
$14.65 billion - $14.85 billion
G2Non-GAAP gross margin
67.5% - 68.5%
G3Non-GAAP operating margin
33% - 34%
G4Non-GAAP EPS
$0.97 - $0.99
T7Margin and EPS guidance includes the estimated impact of tariffs based on current trade policy.
G5Cisco estimates that GAAP EPS will be $0.63 to $0.68 for the first quarter of fiscal 2026.
Cisco estimates the following results for fiscal 2026:
FY 2026
G6Revenue
$59.0 billion - $60.0 billion
G7Non-GAAP EPS
$4.00 - $4.06
Margin and EPS guidance includes the estimated impact of tariffs based on current trade policy.
G8Cisco estimates that GAAP EPS will be $2.79 to $2.91 for fiscal 2026.
Our Q1 FY 2026 and FY 2026 guidance assumes an effective tax provision rate of approximately 18% for GAAP and approximately 19% for non-GAAP results.
A reconciliation between the guidance on a GAAP and non-GAAPbasis 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 2025 conference call to discuss Cisco’s results along with its guidance will be held on
Wednesday, August 13, 2025 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 13, 2025 to 10:00 p.m. Pacific
Time, August 19, 2025 at 1-800-391-9853 (United States) or1-203-369-3269 (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 13, 2025. 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-GAAPreconciliation information, will be available on the Cisco Investor Relations website at https://investor.cisco.com.
4
CISCO SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per-share amounts)
(Unaudited)
Three Months Ended
Fiscal Year Ended
July 26,
2025
July 27,
2024
July 26,
2025
July 27,
2024
REVENUE:
Product
$
10,886
$
9,858
$
41,608
$
39,253
Services
3,787
3,784
15,046
14,550
Total revenue
14,673
13,642
56,654
53,803
COST OF SALES:
Product
3,839
3,644
14,766
14,339
Services
1,199
1,217
4,743
4,636
Total cost of sales
5,038
4,861
19,509
18,975
GROSS MARGIN
9,635
8,781
37,145
34,828
OPERATING EXPENSES:
Research and development
2,380
2,179
9,300
7,983
Sales and marketing
2,818
2,841
10,966
10,364
General and administrative
706
763
2,992
2,813
Amortization of purchased intangible assets
254
268
1,028
698
Restructuring and other charges
35
112
744
789
Total operating expenses
6,193
6,163
25,030
22,647
OPERATING INCOME
3,442
2,618
12,115
12,181
Interest income
227
270
1,001
1,365
Interest expense
(368
)
(418
)
(1,593
)
(1,006
)
Other income (loss), net
53
(74
)
(68
)
(306
)
Interest and other income (loss), net
(88
)
(222
)
(660
)
53
INCOME BEFORE PROVISION FOR INCOME TAXES
3,354
2,396
11,455
12,234
Provision for income taxes
531
234
1,002
1,914
NET INCOME
$
2,823
$
2,162
$
10,453
$
10,320
Net income per share:
Basic
$
0.71
$
0.54
$
2.63
$
2.55
Diluted
$
0.71
$
0.54
$
2.61
$
2.54
Shares used in per-share calculation:
Basic
3,960
4,018
3,976
4,043
Diluted
3,992
4,035
3,998
4,062
5
CISCO SYSTEMS, INC.
REVENUE BY SEGMENT
(In
millions, except percentages)
July 26, 2025
Three Months Ended
Fiscal Year Ended
Amount
Y/Y%
Amount
Y/Y%
Revenue:
Americas
$
8,822
9%
$
33,656
5%
EMEA
3,645
4%
14,824
5%
APJC
2,206
7%
8,174
6%
Total
$
14,673
8%
$
56,654
5%
Amounts may not sum and percentages may not recalculate due to rounding.
CISCO SYSTEMS, INC.
GROSS MARGIN PERCENTAGE BY SEGMENT
(In percentages)
July 26, 2025
Three Months Ended
Fiscal Year Ended
Gross Margin Percentage:
Americas
68.0%
68.2%
EMEA
71.7%
71.1%
APJC
64.2%
66.4%
CISCO SYSTEMS, INC.
REVENUE FOR GROUPS OF SIMILAR PRODUCTS AND SERVICES
(In millions, except percentages)
July 26, 2025
Three Months Ended
Fiscal Year Ended
Amount
Y/Y%
Amount
Y/Y%
Revenue:
Networking
$
7,633
12%
$
28,304
(3)%
Security
1,952
9%
8,094
59%
Collaboration
1,042
2%
4,154
1%
Observability
259
4%
1,055
26%
Total Product
10,886
10%
41,608
6%
Services
3,787
— %
15,046
3%
Total
$
14,673
8%
$
56,654
5%
Amounts may not sum and percentages may not recalculate due to rounding.
6
CISCO SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
July 26,
2025
July 27,
2024
ASSETS
Current assets:
Cash and cash equivalents
$
8,346
$
7,508
Investments
7,764
10,346
Accounts receivable, net of allowance of $69 at July 26, 2025 and $87 at July 27,
2024
6,701
6,685
Inventories
3,095
3,373
Financing receivables, net
3,061
3,338
Other current assets
6,374
5,612
Total current assets
35,341
36,862
Property and equipment, net
2,113
2,090
Financing receivables, net
3,466
3,376
Goodwill
59,136
58,660
Purchased intangible assets, net
9,175
11,219
Deferred tax assets
7,274
6,262
Other assets
6,059
5,944
TOTAL ASSETS
$
122,564
$
124,413
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt
$
5,232
$
11,341
Accounts payable
2,528
2,304
Income taxes payable
1,857
1,439
Accrued compensation
3,611
3,608
Deferred revenue
16,416
16,249
Other current liabilities
5,420
5,643
Total current liabilities
35,064
40,584
Long-term debt
22,861
19,621
Income taxes payable
2,165
3,985
Deferred revenue
12,363
12,226
Other long-term liabilities
2,995
2,540
Total liabilities
75,448
78,956
Total equity
47,116
45,457
TOTAL LIABILITIES AND EQUITY
$
122,564
$
124,413
7
CISCO SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Three Months Ended
Fiscal Year Ended
July 26,
2025
July 27,
2024
July 26,
2025
July 27,
2024
Cash flows from operating activities:
Net income
$
2,823
$
2,162
$
10,453
$
10,320
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, and other
635
823
2,811
2,507
Share-based compensation expense
948
800
3,641
3,074
Provision for receivables
7
15
24
34
Deferred income taxes
(259
)
(727
)
(1,051
)
(972
)
(Gains) losses on divestitures, investments and other, net
(90
)
(9
)
(38
)
215
Change in operating assets and liabilities, net of effects of acquisitions and
divestitures:
Accounts receivable
(1,428
)
(1,575
)
(22
)
(289
)
Inventories
(263
)
(255
)
278
275
Financing receivables
(291
)
(16
)
214
76
Other assets
(407
)
(289
)
(923
)
(671
)
Accounts payable
267
210
257
(90
)
Income taxes, net
163
684
(1,839
)
(4,539
)
Accrued compensation
378
396
(53
)
(696
)
Deferred revenue
772
1,009
248
1,220
Other liabilities
979
502
193
416
Net cash provided by operating activities
4,234
3,730
14,193
10,880
Cash flows from investing activities:
Purchases of investments
(1,523
)
(1,186
)
(4,589
)
(4,230
)
Proceeds from sales of investments
415
262
2,643
4,136
Proceeds from maturities of investments
958
563
4,943
6,367
Acquisitions, net of cash and cash equivalents acquired and divestitures
—
(120
)
(291
)
(25,994
)
Purchases of investments in privately held companies
(118
)
(202
)
(383
)
(284
)
Return of investments in privately held companies
198
56
306
202
Acquisition of property and equipment
(217
)
(198
)
(905
)
(670
)
Other
14
(3
)
9
(5
)
Net cash provided by (used in) investing activities
(273
)
(828
)
1,733
(20,478
)
Cash flows from financing activities:
Issuances of common stock
416
367
736
714
Repurchases of common stock - repurchase program
(1,252
)
(2,015
)
(6,000
)
(5,787
)
Shares repurchased for tax withholdings on vesting of restricted stock units
(312
)
(227
)
(1,222
)
(992
)
Short-term borrowings, original maturities of 90 days or less, net
448
(1,069
)
(31
)
478
Issuances of debt
1,904
7,659
19,292
31,818
Repayments of debt
(3,528
)
(7,631
)
(22,073
)
(9,826
)
Repayments of Splunk convertible debt, net
—
—
—
(3,140
)
Dividends paid
(1,625
)
(1,606
)
(6,437
)
(6,384
)
Other
—
15
(80
)
(37
)
Net cash provided by (used in) financing activities
(3,949
)
(4,507
)
(15,815
)
6,844
Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and
restricted cash equivalents
(20
)
8
(43
)
(31
)
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash
equivalents
(8
)
(1,597
)
68
(2,785
)
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of
period
8,918
10,439
8,842
11,627
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period
$
8,910
$
8,842
$
8,910
$
8,842
Supplemental cash flow information:
Cash paid for interest
$
130
$
233
$
1,500
$
583
Cash paid for income taxes, net
$
627
$
276
$
3,892
$
7,426
8
CISCO SYSTEMS, INC.
REMAINING PERFORMANCE OBLIGATIONS
(In millions, except percentages)
July 26, 2025
April 26, 2025
July 27, 2024
Amount
Y/Y%
Amount
Y/Y%
Amount
Y/Y%
Product
$
21,572
8
%
$
20,752
10
%
$
20,055
27
%
Services
21,961
5
%
20,915
5
%
20,993
10
%
Total
$
43,533
6
%
$
41,667
7
%
$
41,048
18
%
We expect 50% of total RPO at July 26, 2025 to be recognized as revenue over the next 12 months.
CISCO SYSTEMS, INC.
DEFERRED REVENUE
(In
millions)
July 26,
2025
April 26,
2025
July 27,
2024
Deferred revenue:
Product
$
13,490
$
13,170
$
13,219
Services
15,289
14,821
15,256
Total
$
28,779
$
27,991
$
28,475
Reported as:
Current
$
16,416
$
16,081
$
16,249
Noncurrent
12,363
11,910
12,226
Total
$
28,779
$
27,991
$
28,475
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 2025
July 26, 2025
$
0.41
$
1,625
19
$
64.65
$
1,252
$
2,877
April 26, 2025
$
0.41
$
1,627
25
$
59.78
$
1,504
$
3,131
January 25, 2025
$
0.40
$
1,593
21
$
58.58
$
1,236
$
2,829
October 26, 2024
$
0.40
$
1,592
40
$
49.56
$
2,003
$
3,595
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
9
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 26,
2025
July 27,
2024
July 26,
2025
July 27,
2024
GAAP net income
$
2,823
$
2,162
$
10,453
$
10,320
Adjustments to cost of sales:
Share-based compensation expense
150
133
584
514
Amortization of acquisition-related intangible assets
233
331
1,150
936
Acquisition/divestiture-related costs
13
21
66
34
Supplier component remediation charge (adjustment)
—
—
(7
)
—
Total adjustments to GAAP cost of sales
396
485
1,793
1,484
Adjustments to operating expenses:
Share-based compensation expense
797
660
3,019
2,537
Amortization of acquisition-related intangible assets
255
268
1,029
698
Acquisition/divestiture-related costs
104
297
791
700
Russia-Ukraine war costs
—
—
—
(12
)
Significant asset impairments and restructurings
35
112
744
789
Total adjustments to GAAP operating expenses
1,191
1,337
5,583
4,712
Adjustments to interest and other income (loss), net:
Russia-Ukraine war costs
—
49
—
49
(Gains) and losses on investments
(115
)
(32
)
(187
)
100
Total adjustments to GAAP interest and other income (loss), net
(115
)
17
(187
)
149
Total adjustments to GAAP income before provision for income taxes
1,472
1,839
7,189
6,345
Income tax effect of non-GAAP adjustments
(344
)
(315
)
(1,600
)
(1,360
)
Significant tax matters (1)
—
(155
)
(829
)
(155
)
Total adjustments to GAAP provision for income taxes
(344
)
(470
)
(2,429
)
(1,515
)
Non-GAAP net income
$
3,951
$
3,531
$
15,213
$
15,150
(1)
The fiscal year ended July 26, 2025 includes a $720 million benefit due to an August 2024 U.S. Tax
Court decision regarding the U.S. taxation of deemed foreign dividends in the transition year of the Tax Cuts and Jobs Act.
10
CISCO SYSTEMS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES
GAAP TO NON-GAAP EPS
Three Months Ended
Fiscal Year Ended
July 26,
2025
July 27,
2024
July 26,
2025
July 27,
2024
GAAP EPS
$
0.71
$
0.54
$
2.61
$
2.54
Adjustments to GAAP:
Share-based compensation expense
0.24
0.20
0.90
0.75
Amortization of acquisition-related intangible assets
0.12
0.15
0.55
0.40
Acquisition/divestiture-related costs
0.03
0.08
0.21
0.18
Russia-Ukraine war costs
—
0.01
—
0.01
Significant asset impairments and restructurings
0.01
0.03
0.19
0.19
(Gains) and losses on investments
(0.03
)
(0.01
)
(0.05
)
0.02
Income tax effect of non-GAAP adjustments
(0.09
)
(0.08
)
(0.40
)
(0.33
)
Significant tax matters
—
(0.04
)
(0.21
)
(0.04
)
Non-GAAP EPS
$
0.99
$
0.87
$
3.81
$
3.73
Amounts may not sum due to rounding.
11
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 26, 2025
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
$
7,047
$
2,588
$
9,635
$
6,193
—
%
$
3,442
32
%
$
(88
)
$
2,823
31
%
% of revenue
64.7
%
68.3
%
65.7
%
42.2
%
23.5
%
(0.6
)%
19.2
%
Adjustments to GAAP amounts:
Share-based compensation expense
66
84
150
797
947
—
947
Amortization of acquisition-related intangible assets
233
—
233
255
488
—
488
Acquisition/divestiture-related costs
2
11
13
104
117
—
117
Significant asset impairments and restructurings
—
—
—
35
35
—
35
(Gains) and losses on investments
—
—
—
—
—
(115
)
(115
)
Income tax effect/significant tax matters
—
—
—
—
—
—
(344
)
Non-GAAP amount
$
7,348
$
2,683
$
10,031
$
5,002
4
%
$
5,029
13
%
$
(203
)
$
3,951
12
%
% of revenue
67.5
%
70.8
%
68.4
%
34.1
%
34.3
%
(1.4
)%
26.9
%
Three Months Ended
July 27, 2024
Product
Gross
Margin
Services
Gross
Margin
Total
Gross
Margin
Operating
Expenses
Operating
Income
Interest
and
other
income
(loss),
net
Net
Income
GAAP amount
$
6,214
$
2,567
$
8,781
$
6,163
$
2,618
$
(222
)
$
2,162
% 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
$
4,440
$
(205
)
$
3,531
% of revenue
67.0
%
70.3
%
67.9
%
35.4
%
32.5
%
(1.5
)%
25.9
%
Amounts may not sum and percentages may not recalculate due to rounding.
12
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 26, 2025
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
$
26,842
$
10,303
$
37,145
$
25,030
11
%
$
12,115
(1
)%
$
(660
)
$
10,453
1
%
% of revenue
64.5
%
68.5
%
65.6
%
44.2
%
21.4
%
(1.2
)%
18.5
%
Adjustments to GAAP amounts:
Share-based compensation expense
255
329
584
3,019
3,603
—
3,603
Amortization of acquisition-related intangible assets
1,150
—
1,150
1,029
2,179
—
2,179
Acquisition/divestiture-related costs
14
52
66
791
857
—
857
Supplier component remediation charge (adjustment)
(7
)
—
(7
)
—
(7
)
—
(7
)
Significant asset impairments and restructurings
—
—
—
744
744
—
744
(Gains) and losses on investments
—
—
—
—
—
(187
)
(187
)
Income tax effect/significant tax matters
—
—
—
—
—
—
(2,429
)
Non-GAAP amount
$
28,254
$
10,684
$
38,938
$
19,447
8
%
$
19,491
6
%
$
(847
)
$
15,213
—
%
% of revenue
67.9
%
71.0
%
68.7
%
34.3
%
34.4
%
(1.5
)%
26.9
%
Fiscal Year Ended
July 27, 2024
Product
Gross
Margin
Services
Gross
Margin
Total
Gross
Margin
Operating
Expenses
Operating
Income
Interest
and
other
income
(loss),
net
Net
Income
GAAP amount
$
24,914
$
9,914
$
34,828
$
22,647
$
12,181
$
53
$
10,320
% 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
$
18,377
$
202
$
15,150
% of revenue
66.4
%
70.4
%
67.5
%
33.3
%
34.2
%
0.4
%
28.2
%
Amounts may not sum and percentages may not recalculate due to rounding.
13
CISCO SYSTEMS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES
EFFECTIVE TAX RATE
(In
percentages)
Three Months Ended
Fiscal Year Ended
July 26,
2025
July 27,
2024
July 26,
2025
July 27,
2024
GAAP effective tax rate
15.8
%
9.8
%
8.7
%
15.6
%
Total adjustments to GAAP provision for income taxes
2.3
%
6.8
%
9.7
%
2.9
%
Non-GAAP effective tax rate
18.1
%
16.6
%
18.4
%
18.5
%
GAAP TO NON-GAAP GUIDANCE
Q1 FY 2026
Gross Margin
Operating Margin
Earnings per
Share (1)
GAAP
65% - 66%
21.5% - 22.5%
$0.63 - $0.68
Estimated adjustments for:
Share-based compensation expense
1.0%
6.5%
$0.18 - $0.19
Amortization of acquisition-related intangible assets and acquisition/divestiture-related
costs
1.5%
4.0%
$0.11 - $0.12
Significant asset impairments and restructurings(2)
—
1.0%
$0.02 - $0.03
Non-GAAP
67.5% - 68.5%
33% - 34%
$0.97 - $0.99
FY 2026
Earnings per
Share (1)
GAAP
$2.79 - $2.91
Estimated adjustments for:
Share-based compensation expense
$0.69 -$0.71
Amortization of acquisition-related intangible assets and acquisition/divestiture-related
costs
$0.43 - $0.45
Significant asset impairments and restructurings(2)
$0.03 - $0.05
Non-GAAP
$4.00 - $4.06
(1)
Estimated adjustments to GAAP earnings per share are shown after income tax effects.
(2)
T8Reflects charges related to a restructuring plan announced on August 14, 2024. We expect this plan to be
substantially completed by the end of the second quarter of fiscal 2026.
Margin and EPS guidance includes the estimated
impact of tariffs based on current trade policy.
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, gains and losses on investments, significant tax matters, or other items, which may or may not be significant.
14
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 massive opportunity ahead as we lead the required architectural shift and building the critical
infrastructure needed for the AI era, and our focus on making strategic investments in innovation, driving durable, profitable growth and delivering shareholder value) and the future financial performance of Cisco (including the guidance for
Q1 FY 2026 and full year FY 2026) that involve risks and uncertainties, such as the actual impact of tariffs on our guidance for Q1 FY 2026 and full year FY 2026. 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 key priority 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 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 and10-K filed on May 20, 2025 and September 5, 2024, 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 26, 2025 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/divestiture-related 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
15
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.
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 leadingAI-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.
Copyright © 2025 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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16
Mentions · how they’re counted
| Category | Underlined | Word counter | Model’s count |
|---|---|---|---|
| AI AI, artificial intelligence, generative AI, machine learning, large language model, LLM | 6 | 6 | 12 |
| Layoffs layoffs, RIF, headcount reduction, workforce optimization, restructuring | 13 | — | 3 |
| Recession recession, downturn, contraction, slowdown | 0 | 0 | 0 |
| Tariffs tariff, trade war, trade barriers, trade restrictions, trade policy | 9 | 9 | 3 |
| Buybacks share repurchase, buyback program | 0 | — | 4 |
Underlines use the same word lists the scores use. AI, recession and tariffs follow Palanor’s word counter, so those counts match it exactly on the same text. Layoffs and buybacks use the terms the model was given. The model’s count is an estimate by meaning, not by string, so it can differ from the underlines.
Source: SEC EDGAR · public domain · Highlights by Palanor