Core Insights - Cisco Systems (CSCO) reported fourth-quarter fiscal 2025 non-GAAP earnings of 99 cents per share, exceeding the Zacks Consensus Estimate by 2.06% and reflecting a year-over-year increase of 13.8% [1] - Revenues reached $14.67 billion, surpassing the Zacks Consensus Estimate by 0.47% and showing a year-over-year growth of 7.6% [1] - Total Annual Recurring Revenues (ARR) were $31.1 billion, up 5%, with product ARR growth of 8% [1] Financial Performance - Fourth-quarter revenues from Networking were $7.63 billion, up 12% year over year; Security revenues were $1.95 billion, up 9%; Collaboration revenues were $1.04 billion, up 2%; and Observability revenues were $259 million, up 4% [4] - Total Product revenues in Q4 were $10.89 billion, accounting for 74.2% of total revenues, with a year-over-year increase of 10%; Service Revenues were $3.79 billion, flat year over year [5] - Operating expenses totaled $5 billion, up 3.6% year over year, but as a percentage of revenues, they declined by 130 basis points; non-GAAP operating income was $5.03 billion, up 13.3% year over year, with an operating margin of 34.3% [10] Regional Performance - Americas' revenues increased 9% year over year to $8.82 billion; EMEA revenues climbed 4% to $3.65 billion; APJC revenues rose 7% to $2.21 billion [6] AI Infrastructure and Partnerships - AI Infrastructure orders from webscale customers exceeded $800 million, contributing to total revenues of $2 billion in fiscal 2025, which is double the original expectation [6][9] - Cisco's partnership with NVIDIA is enhancing its offerings, particularly in AI infrastructure, with the integration of Cisco Nexus switches and NVIDIA's Spectrum-X architecture [7] Balance Sheet and Shareholder Returns - As of July 26, 2025, cash and cash equivalents and investments totaled $16.1 billion, up from $15.6 billion; total debt decreased to $28.1 billion from $29.2 billion [11] - Remaining performance obligations (RPO) were $43.5 billion, up 6%, with 50% expected to be recognized as revenues in the next 12 months; Cisco returned $2.9 billion to stockholders through share buybacks and dividends [12] Guidance - For Q1 fiscal 2026, Cisco expects non-GAAP earnings between 97 cents and 99 cents per share, with revenues projected between $14.65 billion and $14.85 billion [13] - For fiscal 2026, non-GAAP earnings are expected to be between $4 and $4.06 per share, with revenues anticipated between $59 billion and $60 billion [14]

Core Insights - Cisco Systems reported strong fourth-quarter fiscal 2025 results, exceeding both earnings and revenue estimates, but shares fell approximately 2% in after-market trading due to weak future forecasts [1][3]. Financial Performance - Earnings per share were 99 cents, surpassing the Zacks Consensus Estimate of 97 cents, and reflecting a 14% increase year-over-year [3]. - Revenues increased by 8% year-over-year to $14.67 billion, exceeding the consensus estimate of $14.60 billion [3]. - Product revenues rose by 10% to $10.9 billion, while services revenues remained flat at $3.78 billion [4]. Future Outlook - For fiscal 2026, Cisco anticipates revenues between $59 billion and $60 billion and earnings per share between $4.00 and $4.06, with the Zacks Consensus Estimate at $59.18 billion for revenues and $3.79 for earnings per share [5]. - In the ongoing fiscal first quarter, Cisco projects revenues between $14.65 billion and $14.85 billion and earnings in the range of 97 to 99 cents per share, with the Zacks Consensus Estimate at $14.56 billion for revenues and 97 cents for earnings per share [5]. Industry ETFs - iShares U.S. Telecommunications ETF (IYZ) has a 19.4% allocation to Cisco, with total assets under management (AUM) of $511.9 million [6]. - First Trust Nasdaq Cybersecurity ETF (CIBR) holds 9% of Cisco, with an AUM of $9.7 billion [7]. - iShares Edge MSCI USA Value Factor ETF (VLUE) features Cisco at 7.1%, with an AUM of $6.7 billion [8]. - Pacer Data and Digital Revolution ETF (TRFK) includes Cisco at 8% of its assets, with an AUM of $104.8 million [10]. - Amplify Cybersecurity ETF (HACK) allocates 6.6% to Cisco, with an AUM of $2.2 billion [11].

Shares of Cisco Systems Inc CSCO came under some pressure in early trading on Thursday, after the company Wednesday reported upbeat fiscal fourth-quarter results. Here are some key analyst takeaways. Check out other analyst stock ratings. JPMorgan: Cisco Systems reported revenues of $14.7 billion. It topped the consensus of $14.6 billion, driven by stronger-than-expected Networking revenues. The company's gross and operating margins of 68.4% and 34.3% surpassed consensus estimates of 68.2% and 34.1%, respec ...

Core Insights - Cisco Systems (CSCO) reported $14.67 billion in revenue for the quarter ended July 2025, marking a year-over-year increase of 7.6% and an EPS of $0.99 compared to $0.87 a year ago, exceeding Zacks Consensus Estimates for both revenue and EPS [1] Revenue Breakdown - Revenue from Networking products was $7.63 billion, surpassing the average estimate of $7.19 billion, with a year-over-year change of +12.2% [4] - Revenue from Observability products was $259 million, below the estimated $288.55 million, reflecting a +4.4% change year-over-year [4] - Revenue from Services was $3.79 billion, slightly below the average estimate of $3.88 billion, with a year-over-year change of +0.1% [4] - Revenue from Security products was $1.95 billion, below the estimated $2.2 billion, showing a +9.2% change year-over-year [4] - Total Product revenue was $10.89 billion, exceeding the average estimate of $10.72 billion, with a year-over-year change of +10.4% [4] - Revenue from Collaboration products was $1.04 billion, matching the average estimate, with a +2.3% change year-over-year [4] Gross Margin Insights - Non-GAAP Gross Margin for Services was $2.68 billion, slightly below the average estimate of $2.75 billion [4] - Non-GAAP Gross Margin for Products was $7.35 billion, exceeding the average estimate of $7.18 billion [4] Stock Performance - Cisco shares have returned +6.3% over the past month, outperforming the Zacks S&P 500 composite's +3.1% change, with a Zacks Rank 2 (Buy) indicating potential for further outperformance [3]

Financial Data and Key Metrics Changes - The company reported total revenue of $14.7 billion for Q4, an increase of 8% year over year [22] - Non-GAAP net income was $4 billion, up 12%, with non-GAAP earnings per share at $0.99, reflecting a 14% increase [22][23] - For the full fiscal year, total revenue reached $56.7 billion, up 5%, with non-GAAP earnings per share at $3.81, a 2% increase [29][31] Business Line Data and Key Metrics Changes - Total product revenue was $10.9 billion, up 10%, while services revenue remained flat at $3.8 billion [23][24] - Networking revenue grew by 12%, driven by double-digit growth in internet infrastructure and enterprise routing [24] - Security revenue increased by 9%, primarily due to growth from Splunk and SASE offerings [24] - Collaboration revenue rose by 2%, supported by solid growth in devices [24] Market Data and Key Metrics Changes - Product orders in Q4 grew by 7% year over year, with the Americas up 5%, EMEA up 10%, and APJC up 7% [26] - Service provider and cloud orders surged by 49%, while enterprise orders increased by 5% and public sector orders declined by 6% [26][9] - AI infrastructure orders from web scale customers exceeded $800 million in Q4, totaling over $2 billion for the fiscal year [8][12] Company Strategy and Development Direction - The company is focusing on AI infrastructure, with a strong emphasis on networking and security solutions to support the AI era [7][12] - Cisco aims to leverage its refreshed product portfolio, including Silicon One and AI-native security solutions, to meet increasing network demands [7][12] - The company is positioned to capitalize on the growing demand for AI solutions, particularly in the enterprise and web scale markets [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for AI infrastructure and the company's ability to deliver critical solutions [7][12] - The company anticipates a strong fiscal year 2026, driven by continued growth in AI-related orders and a robust pipeline [7][34] - Management acknowledged the complexities of the current operating environment but remains optimistic about future growth opportunities [32][34] Other Important Information - The company returned $2.9 billion to shareholders in Q4, totaling $12.4 billion for the fiscal year, representing 94% of free cash flow [7][30] - The non-GAAP gross margin for Q4 was 68.4%, up 50 basis points year over year, indicating strong profitability [26][27] Q&A Session Summary Question: Regarding guidance and AI opportunity - Management clarified that the anticipated deceleration in growth is related to year-over-year comparisons and not a change in demand [38][39] Question: Outlook for security business growth - Management expressed optimism about security growth, citing strong order growth for new products and double-digit growth outside the U.S. federal sector [44][46] Question: Concerns about order pull forwards - Management stated that there is no significant evidence of order pull forwards affecting the business, based on customer feedback and order metrics [57][60] Question: Sustainability of networking growth - Management indicated confidence in maintaining growth rates, driven by AI demand and upcoming campus upgrades [68][70] Question: AI orders translating into revenue - Management confirmed that approximately $1 billion in revenue was recognized from AI infrastructure orders during FY 2025 [76]

Financial Data and Key Metrics Changes - In Q4 FY 2025, total revenue was $14.7 billion, up 8% year over year, with non-GAAP net income at $4 billion, up 12% [21][22] - Non-GAAP earnings per share (EPS) was $0.99, reflecting a 14% increase, indicating strong operating leverage [22] - For the full fiscal year, revenue reached $56.7 billion, a 5% increase, with non-GAAP EPS at $3.81, up 2% [28][29] Business Line Data and Key Metrics Changes - Total product revenue was $10.9 billion, up 10%, with networking revenue increasing by 12% and security revenue up by 9% [22][23] - Services revenue remained flat at $3.8 billion year over year [23] - Collaboration revenue grew by 2%, driven by solid growth in devices, while observability revenue increased by 4% [23] Market Data and Key Metrics Changes - Product orders in Q4 grew by 7% year over year, with service provider and cloud orders up 49% [7][25] - Enterprise product orders increased by 5%, while public sector orders decreased by 6% [8][25] - The Americas saw a 5% increase in product orders, EMEA grew by 10%, and APJC was up by 7% [25] Company Strategy and Development Direction - Cisco is focusing on AI infrastructure, with over $2 billion in AI infrastructure orders for FY 2025, more than double the original target [7][11] - The company aims to leverage its refreshed product portfolio to meet the growing demand for AI and network modernization [6][10] - Cisco is positioned to support the transition to AI by providing critical infrastructure and security solutions [12][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for Cisco's technology, particularly in AI and networking, despite a complex operating environment [6][19] - The company anticipates continued growth in AI-related orders and infrastructure as enterprises modernize their networks [11][62] - Management highlighted the importance of security in the AI era, emphasizing the need for integrated security solutions [15][79] Other Important Information - Cisco returned $2.9 billion to shareholders in Q4 FY 2025, totaling $12.4 billion for the fiscal year, representing 94% of free cash flow [6][29] - The company has a strong cash position with $16.1 billion in cash, cash equivalents, and investments [27] - Cisco's partnership with NVIDIA is expected to enhance its capabilities in AI infrastructure [11][80] Q&A Session Summary Question: Guidance and AI Opportunity - Analyst inquired about the deceleration of growth in guidance and whether it reflects conservatism or changes in demand [34] - Management clarified that the deceleration is related to year-over-year comparisons and not indicative of a demand change [36] Question: Security Growth Outlook - Analyst asked about the growth outlook for security products post-Splunk acquisition [39] - Management expressed optimism, noting double-digit growth in security orders excluding U.S. Federal [42] Question: Pull Forward Concerns - Analyst raised concerns about potential pull forwards in orders due to federal budget cuts and tariffs [50] - Management stated they have not observed significant pull forwards and provided metrics to support this [52][54] Question: Networking Cycle Sustainability - Analyst questioned the sustainability of networking growth rates amid potential spending slowdowns [84] - Management indicated strong demand signals from customers and confidence in continued growth [87] Question: AI Orders and Revenue Translation - Analyst asked about the translation of AI orders into revenue for FY 2026 [66] - Management confirmed that approximately $1 billion in revenue was recognized from AI orders in FY 2025 [71] Question: Identity and Security Partnerships - Analyst inquired about partnerships outside of NVIDIA in the AI space [91] - Management confirmed ongoing collaboration with AMD and emphasized the importance of identity in Zero Trust architectures [93][94]

Financial Performance - Q4 FY25 - Cisco's Q4 FY25 revenue reached $14673 million, an increase of 8% year-over-year[5,30,36,37] - Non-GAAP EPS was $099, up 14% year-over-year[5,37] - Total RPO increased by 6% year-over-year to $435 billion, with product RPO up 8% year-over-year[5,31] - Total ARR grew by 5% year-over-year to $311 billion, with product ARR up 8% year-over-year[5,31] Financial Performance - FY25 - FY25 revenue was $56654 million, a 5% increase year-over-year[40,41] - FY25 Non-GAAP EPS was $381, a 2% increase year-over-year[41] - The company returned $124 billion to shareholders in FY25[5,39] AI and Infrastructure - AI infrastructure orders from webscale customers exceeded $800 million in Q4, bringing the FY25 total to over $2 billion, more than double the original target[5,12] - Product orders increased by 7% year-over-year, with growth across all geographies[5,34,35] - Data Center Switching orders grew in the mid-teens year-over-year[12] Guidance - Cisco projects Q1 FY26 revenue between $1465 billion and $1485 billion[44] - Cisco anticipates FY26 revenue between $59 billion and $60 billion[45]

[News Summary](index=1&type=section&id=News%20Summary) This section provides an overview of Cisco's financial performance for Q4 and full fiscal year 2025, along with guidance for Q1 and full fiscal year 2026 [Q4 FY 2025 Results Highlights](index=1&type=section&id=Q4%20FY%202025%20Results) Cisco achieved strong Q4 FY2025 results, meeting or exceeding revenue and profitability expectations, with outstanding AI infrastructure orders Key Financial Data for Q4 FY2025 | Metric | Amount/Ratio (Q4 FY2025) | Year-over-Year Growth (YoY) | | :--- | :--- | :--- | | **Revenue** | $14.7 billion | 8% | | **Product Orders** | - | 7% | | **AI Infrastructure Orders (webscale customers)** | >$800 million (Q4) | - | | **GAAP Gross Margin** | 65.7% | - | | **Non-GAAP Gross Margin** | 68.4% | - | | **GAAP EPS** | $0.71 | 31% | | **Non-GAAP EPS** | $0.99 | 14% | - AI infrastructure orders from webscale customers exceeded **$800 million** in Q4, bringing the total for FY2025 to over **$2 billion**, more than double the original **$1 billion** target[4](index=4&type=chunk) [FY 2025 Full Year Results Highlights](index=1&type=section&id=FY%202025%20Results) For the full fiscal year 2025, Cisco delivered solid revenue growth and profitability, with particularly strong AI infrastructure order performance Key Financial Data for Full Year FY2025 | Metric | Amount (FY2025) | Year-over-Year Growth (YoY) | | :--- | :--- | :--- | | **Revenue** | $56.7 billion | 5% | | **AI Infrastructure Orders (webscale customers)** | >$2 billion | >100% (vs. $1B target) | | **GAAP EPS** | $2.61 | 3% | | **Non-GAAP EPS** | $3.81 | 2% | - Total AI infrastructure orders from webscale customers for full year FY2025 exceeded **$2 billion**, more than double the original **$1 billion** target[4](index=4&type=chunk) [Q1 FY 2026 Guidance](index=1&type=section&id=Q1%20FY%202026%20Guidance) Cisco anticipates stable revenue for Q1 FY2026, with Non-GAAP EPS projected to be between $0.97 and $0.99 Q1 FY2026 Performance Guidance | Metric | Range | | :--- | :--- | | **Revenue** | $14.65 billion - $14.85 billion | | **GAAP EPS** | $0.63 - $0.68 | | **Non-GAAP EPS** | $0.97 - $0.99 | - Gross margin and EPS guidance include the estimated impact of tariffs under current trade policies[4](index=4&type=chunk) [FY 2026 Full Year Guidance](index=1&type=section&id=FY%202026%20Guidance) Cisco projects full year FY2026 revenue growth, with Non-GAAP EPS expected to range from $4.00 to $4.06 Full Year FY2026 Performance Guidance | Metric | Range | | :--- | :--- | | **Revenue** | $59.0 billion - $60.0 billion | | **GAAP EPS** | $2.79 - $2.91 | | **Non-GAAP EPS** | $4.00 - $4.06 | - Gross margin and EPS guidance include the estimated impact of tariffs under current trade policies[4](index=4&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) This section presents statements from Cisco's CEO and CFO regarding the company's recent performance and future outlook [CEO Statement](index=2&type=section&id=CEO%20Statement) CEO Chuck Robbins highlights strong FY2025 performance driven by innovation and execution, noting exceptional AI infrastructure orders and market opportunities - Cisco concluded FY2025 with a strong performance, driven by accelerated innovation and solid execution[6](index=6&type=chunk) - AI infrastructure orders from webscale customers in FY2025 were more than double the original target, indicating significant opportunities in the AI era where Cisco will lead architectural transformation and build critical infrastructure[6](index=6&type=chunk) [CFO Statement](index=2&type=section&id=CFO%20Statement) CFO Mark Patterson notes Q4 revenue, gross margin, and operating income at the high end of guidance, with EPS exceeding expectations and robust operating cash flow - Q4 revenue, gross margin, and operating income were at the high end of guidance, with EPS exceeding expectations and robust operating cash flow[6](index=6&type=chunk) - Entering FY2026, the company remains focused on strategic investments in innovation, driving sustainable profitable growth, and creating shareholder value[6](index=6&type=chunk) [Detailed Financial Results](index=2&type=section&id=Detailed%20Financial%20Results) This section provides an in-depth analysis of Cisco's financial performance for Q4 and full fiscal year 2025, including balance sheet and capital allocation details [Q4 FY 2025 Financial Performance](index=2&type=section&id=Q4%20FY%202025%20Financial%20Performance) Cisco achieved significant revenue and earnings growth in Q4 FY2025, driven by strong product revenue across all geographic regions and product categories, alongside increased operating cash flow Q4 FY2025 GAAP and Non-GAAP Performance | Metric | Q4 FY2025 (GAAP) | Q4 FY2024 (GAAP) | Year-over-Year Growth (GAAP) | Q4 FY2025 (Non-GAAP) | Q4 FY2024 (Non-GAAP) | Year-over-Year Growth (Non-GAAP) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $14.7 billion | $13.6 billion | 8% | - | - | - | | **Net Income** | $2.8 billion | $2.2 billion | 31% | $4.0 billion | $3.5 billion | 12% | | **Diluted EPS** | $0.71 | $0.54 | 31% | $0.99 | $0.87 | 14% | - Product revenue increased by **10%**, while service revenue remained flat; Americas revenue grew **9%**, EMEA **4%**, and APJC **7%**[16](index=16&type=chunk) - Product revenue growth was primarily driven by **12%** growth in Networking, **9%** in Security, **4%** in Observability, and **2%** in Collaboration products[16](index=16&type=chunk) Q4 FY2025 Gross Margins | Metric | Q4 FY2025 (GAAP) | Q4 FY2024 (GAAP) | Q4 FY2025 (Non-GAAP) | Q4 FY2024 (Non-GAAP) | | :--- | :--- | :--- | :--- | :--- | | **Total Gross Margin** | 65.7% | 64.4% | 68.4% | 67.9% | | **Product Gross Margin** | 64.7% | 63.0% | 67.5% | 67.0% | | **Service Gross Margin** | 68.3% | 67.8% | 70.8% | 70.3% | - Operating expenses were flat on a GAAP basis and increased by **4%** on a Non-GAAP basis; GAAP operating income grew **32%**, and Non-GAAP operating income grew **13%**[18](index=18&type=chunk) - Operating cash flow for Q4 FY2025 was **$4.2 billion**, a **14%** year-over-year increase[20](index=20&type=chunk) [FY 2025 Full Year Financial Performance](index=2&type=section&id=FY%2025%20Financial%20Performance) For full year FY2025, Cisco's total revenue grew by 5%, with GAAP net income and EPS increasing, while Non-GAAP net income remained flat and EPS saw a slight rise, alongside a significant increase in operating cash flow Full Year FY2025 GAAP and Non-GAAP Performance | Metric | FY2025 (GAAP) | FY2024 (GAAP) | Year-over-Year Growth (GAAP) | FY2025 (Non-GAAP) | FY2024 (Non-GAAP) | Year-over-Year Growth (Non-GAAP) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $56.7 billion | $53.8 billion | 5% | - | - | - | | **Net Income** | $10.5 billion | $10.3 billion | 1% | $15.2 billion | $15.2 billion | —% | | **Diluted EPS** | $2.61 | $2.54 | 3% | $3.81 | $3.73 | 2% | - Operating cash flow for full year FY2025 was **$14.2 billion**, a **30%** year-over-year increase[22](index=22&type=chunk) [Balance Sheet and Capital Allocation](index=3&type=section&id=Balance%20Sheet%20and%20Capital%20Allocation) As of Q4 FY2025, Cisco's cash and investments slightly increased, with growth in remaining performance obligations and deferred revenue, while consistently returning capital to shareholders through dividends and stock repurchases Cash, Cash Equivalents, and Investments | Period | Amount | | :--- | :--- | | **End of Q4 FY2025** | $16.1 billion | | **End of Q3 FY2025** | $15.6 billion | | **End of FY2024** | $17.9 billion | - Remaining Performance Obligations (RPO) reached **$43.5 billion**, a **6%** year-over-year increase, with **50%** expected to be recognized as revenue within the next 12 months; Product RPO grew **8%**, and Service RPO grew **5%**[23](index=23&type=chunk)[46](index=46&type=chunk) - Total deferred revenue was **$28.8 billion**, a **1%** year-over-year increase, with deferred product revenue up **2%** and deferred service revenue flat[24](index=24&type=chunk)[48](index=48&type=chunk) - In Q4 FY2025, the company returned **$2.9 billion** to shareholders through stock repurchases and dividends, including **$1.6 billion** in cash dividends of **$0.41** per share and **$1.3 billion** for repurchasing approximately **19 million** shares of common stock[25](index=25&type=chunk)[50](index=50&type=chunk) [Financial Guidance](index=4&type=section&id=Financial%20Guidance) This section outlines Cisco's financial projections for Q1 and full fiscal year 2026, including expected revenue, profitability, and EPS ranges [Q1 FY 2026 Outlook](index=4&type=section&id=Q1%20FY%202026%20Outlook) Cisco provides detailed financial guidance for Q1 FY2026, including expected ranges for revenue, gross margin, operating margin, and EPS, noting the inclusion of tariff impacts Q1 FY2026 Performance Guidance | Metric | Range | | :--- | :--- | | **Revenue** | $14.65 billion - $14.85 billion | | **Non-GAAP Gross Margin** | 67.5% - 68.5% | | **Non-GAAP Operating Margin** | 33% - 34% | | **Non-GAAP EPS** | $0.97 - $0.99 | | **GAAP EPS** | $0.63 - $0.68 | - Gross margin and EPS guidance include the estimated impact of tariffs under current trade policies[27](index=27&type=chunk) - Q1 FY2026 and FY2026 guidance assume a GAAP effective tax rate of approximately **18%** and a Non-GAAP effective tax rate of approximately **19%**[30](index=30&type=chunk) [Full Year FY 2026 Outlook](index=4&type=section&id=Full%20Year%20FY%202026%20Outlook) Cisco issues full year FY2026 revenue and EPS guidance, projecting revenue between $59.0 billion and $60.0 billion, with Non-GAAP EPS from $4.00 to $4.06 Full Year FY2026 Performance Guidance | Metric | Range | | :--- | :--- | | **Revenue** | $59.0 billion - $60.0 billion | | **Non-GAAP EPS** | $4.00 - $4.06 | | **GAAP EPS** | $2.79 - $2.91 | - Gross margin and EPS guidance include the estimated impact of tariffs under current trade policies[29](index=29&type=chunk) - Q1 FY2026 and FY2026 guidance assume a GAAP effective tax rate of approximately **18%** and a Non-GAAP effective tax rate of approximately **19%**[30](index=30&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section provides comprehensive consolidated financial statements, including statements of operations, balance sheets, cash flows, and details on revenue, RPO, and deferred revenue [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations detail Cisco's key financial data for Q4 and full fiscal year 2025, including revenue, costs, gross profit, operating expenses, operating income, and net income Consolidated Statements of Operations Summary (Millions of USD) | Metric | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :--- | :--- | :--- | :--- | :--- | | **Product Revenue** | $10,886 | $9,858 | $41,608 | $39,253 | | **Service Revenue** | $3,787 | $3,784 | $15,046 | $14,550 | | **Total Revenue** | $14,673 | $13,642 | $56,654 | $53,803 | | **Gross Profit** | $9,635 | $8,781 | $37,145 | $34,828 | | **Operating Expenses** | $6,193 | $6,163 | $25,030 | $22,647 | | **Operating Income** | $3,442 | $2,618 | $12,115 | $12,181 | | **Net Income** | $2,823 | $2,162 | $10,453 | $10,320 | | **Diluted EPS** | $0.71 | $0.54 | $2.61 | $2.54 | [Revenue by Geographic Segment and Product Group](index=6&type=section&id=Revenue%20by%20Segment%20and%20Product%20Group) Cisco's revenue is detailed by geographic region (Americas, EMEA, APJC) and product category (Networking, Security, Collaboration, Observability), illustrating growth across segments and product lines Revenue by Geographic Segment (Millions of USD) | Region | Q4 FY2025 Amount | Q4 FY2025 Year-over-Year Growth | FY2025 Amount | FY2025 Year-over-Year Growth | | :--- | :--- | :--- | :--- | :--- | | **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% | Revenue by Product Group (Millions of USD) | Product Group | Q4 FY2025 Amount | Q4 FY2025 Year-over-Year Growth | FY2025 Amount | FY2025 Year-over-Year Growth | | :--- | :--- | :--- | :--- | :--- | | **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% | Gross Margin Percentage by Geographic Segment | Region | Q4 FY2025 | FY2025 | | :--- | :--- | :--- | | **Americas** | 68.0% | 68.2% | | **EMEA** | 71.7% | 71.1% | | **APJC** | 64.2% | 66.4% | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets provide a snapshot of Cisco's assets, liabilities, and stockholders' equity at the end of fiscal years 2025 and 2024, reflecting changes in the company's financial position Condensed Consolidated Balance Sheets Summary (Millions of USD) | Metric | July 26, 2025 | July 27, 2024 | | :--- | :--- | :--- | | **Total Assets** | $122,564 | $124,413 | | **Cash and Cash Equivalents** | $8,346 | $7,508 | | **Investments** | $7,764 | $10,346 | | **Total Liabilities** | $75,448 | $78,956 | | **Short-Term Debt** | $5,232 | $11,341 | | **Long-Term Debt** | $22,861 | $19,621 | | **Deferred Revenue (Total)** | $28,779 | $28,475 | | **Total Equity** | $47,116 | $45,457 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows illustrate Cisco's cash generation and usage from operating, investing, and financing activities for Q4 and full fiscal year 2025 Consolidated Statements of Cash Flows Summary (Millions of USD) | Activity Type | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $4,234 | $3,730 | $14,193 | $10,880 | | **Net Cash Provided by/(Used in) Investing Activities** | $(273) | $(828) | $1,733 | $(20,478) | | **Net Cash Used in Financing Activities** | $(3,949) | $(4,507) | $(15,815) | $6,844 | | **Cash and Cash Equivalents at End of Period** | $8,910 | $8,842 | $8,910 | $8,842 | [Remaining Performance Obligations and Deferred Revenue](index=9&type=section&id=Remaining%20Performance%20Obligations%20and%20Deferred%20Revenue) Cisco's remaining performance obligations (RPO) and deferred revenue both show growth, indicating future revenue visibility and sustained customer contracts Remaining Performance Obligations (RPO) (Millions of USD) | Metric | July 26, 2025 Amount | Year-over-Year Growth (Y/Y%) | | :--- | :--- | :--- | | **Product RPO** | $21,572 | 8% | | **Service RPO** | $21,961 | 5% | | **Total RPO** | $43,533 | 6% | | **Expected to be Recognized as Revenue within Next 12 Months** | 50% | - | Deferred Revenue (Millions of USD) | Metric | July 26, 2025 | April 26, 2025 | July 27, 2024 | | :--- | :--- | :--- | :--- | | **Product Deferred Revenue** | $13,490 | $13,170 | $13,219 | | **Service Deferred Revenue** | $15,289 | $14,821 | $15,256 | | **Total Deferred Revenue** | $28,779 | $27,991 | $28,475 | [Dividends Paid and Repurchases of Common Stock](index=9&type=section&id=Dividends%20Paid%20and%20Repurchases%20of%20Common%20Stock) Cisco consistently returns capital to shareholders through dividend payments and common stock repurchase programs, demonstrating its commitment to shareholder value FY2025 Dividends Paid and Stock Repurchases (Millions of USD, except per share amounts) | Quarter Ended | Dividend Per Share | Dividend Amount | Shares Repurchased (Millions) | Weighted Average Repurchase Price Per Share | Repurchase Amount | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **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 | - Remaining authorized stock repurchase amount is **$14.2 billion**, with no termination date[25](index=25&type=chunk) [Reconciliations of GAAP to Non-GAAP Measures](index=10&type=section&id=Reconciliations%20of%20GAAP%20to%20non-GAAP%20Measures) This section provides detailed reconciliations between GAAP and Non-GAAP financial measures, including net income, EPS, gross margins, operating expenses, operating margins, net income, effective tax rates, and guidance [GAAP to Non-GAAP Net Income Reconciliation](index=10&type=section&id=GAAP%20to%20Non-GAAP%20Net%20Income%20Reconciliation) This section reconciles GAAP net income to Non-GAAP net income, detailing adjustments for stock-based compensation, acquisition-related intangible asset amortization, and acquisition/divestiture costs, to clarify core business performance GAAP to Non-GAAP Net Income Reconciliation (Millions of USD) | Metric | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :--- | :--- | :--- | :--- | :--- | | **GAAP Net Income** | $2,823 | $2,162 | $10,453 | $10,320 | | **Total Cost Adjustments** | $396 | $485 | $1,793 | $1,484 | | **Total Operating Expense Adjustments** | $1,191 | $1,337 | $5,583 | $4,712 | | **Total Interest and Other Income (Loss) Net Adjustments** | $(115) | $17 | $(187) | $149 | | **Income Tax Impact** | $(344) | $(470) | $(2,429) | $(1,515) | | **Non-GAAP Net Income** | $3,951 | $3,531 | $15,213 | $15,150 | - FY2025 includes a **$720 million** benefit from the August 2024 U.S. Tax Court ruling regarding U.S. taxation of deemed foreign dividends in a transition year under the Tax Cuts and Jobs Act[52](index=52&type=chunk) [GAAP to Non-GAAP EPS Reconciliation](index=11&type=section&id=GAAP%20to%20Non-GAAP%20EPS%20Reconciliation) This section reconciles GAAP EPS to Non-GAAP EPS, outlining the impact of adjustments such as stock-based compensation, intangible asset amortization, and tax effects on per-share earnings GAAP to Non-GAAP EPS Reconciliation | Metric | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :--- | :--- | :--- | :--- | :--- | | **GAAP EPS** | $0.71 | $0.54 | $2.61 | $2.54 | | **Stock-Based Compensation Expense** | $0.24 | $0.20 | $0.90 | $0.75 | | **Acquisition-Related Intangible Asset Amortization** | $0.12 | $0.15 | $0.55 | $0.40 | | **Income Tax Impact** | $(0.09) | $(0.08) | $(0.40) | $(0.33) | | **Non-GAAP EPS** | $0.99 | $0.87 | $3.81 | $3.73 | [Gross Margins, Operating Expenses, Operating Margins, and Net Income Reconciliation](index=12&type=section&id=Gross%20Margins,%20Operating%20Expenses,%20Operating%20Margins,%20and%20Net%20Income%20Reconciliation) This section details the reconciliation of GAAP to Non-GAAP gross margins, operating expenses, operating margins, and net income, presenting the quarterly and full-year impact of adjustments on these key financial metrics Q4 FY2025 GAAP to Non-GAAP Gross Margins, Operating Expenses, Operating Margins, and Net Income Reconciliation (Millions of USD) | Metric | GAAP Amount | GAAP % of Revenue | Adjustments | Non-GAAP Amount | Non-GAAP % of Revenue | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Gross Profit** | $9,635 | 65.7% | $396 | $10,031 | 68.4% | | **Operating Expenses** | $6,193 | 42.2% | $(1,191) | $5,002 | 34.1% | | **Operating Income** | $3,442 | 23.5% | $1,587 | $5,029 | 34.3% | | **Net Income** | $2,823 | 19.2% | $1,128 | $3,951 | 26.9% | FY2025 GAAP to Non-GAAP Gross Margins, Operating Expenses, Operating Margins, and Net Income Reconciliation (Millions of USD) | Metric | GAAP Amount | GAAP % of Revenue | Adjustments | Non-GAAP Amount | Non-GAAP % of Revenue | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Gross Profit** | $37,145 | 65.6% | $1,793 | $38,938 | 68.7% | | **Operating Expenses** | $25,030 | 44.2% | $(5,583) | $19,447 | 34.3% | | **Operating Income** | $12,115 | 21.4% | $7,376 | $19,491 | 34.4% | | **Net Income** | $10,453 | 18.5% | $4,760 | $15,213 | 26.9% | [Effective Tax Rate Reconciliation](index=14&type=section&id=Effective%20Tax%20Rate%20Reconciliation) This section provides a reconciliation between GAAP and Non-GAAP effective tax rates, illustrating the impact of various adjustments on the company's tax rate Effective Tax Rate Reconciliation (Percentage) | Metric | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :--- | :--- | :--- | :--- | :--- | | **GAAP Effective Tax Rate** | 15.8% | 9.8% | 8.7% | 15.6% | | **Total GAAP Income Tax Provision Adjustments** | 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 Reconciliation](index=14&type=section&id=GAAP%20to%20Non-GAAP%20Guidance%20Reconciliation) This section reconciles GAAP to Non-GAAP guidance for Q1 and full fiscal year 2026, detailing estimated adjustments impacting gross margin, operating margin, and EPS Q1 FY2026 GAAP to Non-GAAP Guidance Reconciliation | Metric | GAAP | Estimated Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | **Gross Margin** | 65% - 66% | Stock-based compensation expense: 1.0%; Intangible asset amortization and acquisition/divestiture costs: 1.5%; Restructuring charges: — | 67.5% - 68.5% | | **Operating Margin** | 21.5% - 22.5% | Stock-based compensation expense: 6.5%; Intangible asset amortization and acquisition/divestiture costs: 4.0%; Restructuring charges: 1.0% | 33% - 34% | | **EPS** | $0.63 - $0.68 | Stock-based compensation expense: $0.18 - $0.19; Intangible asset amortization and acquisition/divestiture costs: $0.11 - $0.12; Restructuring charges: $0.02 - $0.03 | $0.97 - $0.99 | FY2026 GAAP to Non-GAAP Guidance Reconciliation | Metric | GAAP | Estimated Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | **EPS** | $2.79 - $2.91 | Stock-based compensation expense: $0.69 - $0.71; Intangible asset amortization and acquisition/divestiture costs: $0.43 - $0.45; Restructuring charges: $0.03 - $0.05 | $4.00 - $4.06 | - Estimated adjustments to EPS are net of income tax effects[68](index=68&type=chunk) - Restructuring charges reflect expenses related to the restructuring plan announced on August 14, 2024, which is expected to be substantially completed by the end of Q2 FY2026[69](index=69&type=chunk) [Additional Information](index=15&type=section&id=Additional%20Information) This section includes cautionary statements regarding forward-looking information, explanations of Non-GAAP financial measures, and an overview of Cisco's mission [Forward-Looking Statements, Non-GAAP Information, and Other Disclosures](index=15&type=section&id=Forward%20Looking%20Statements,%20Non-GAAP%20Information%20and%20Additional%20Information) This section contains warnings about forward-looking statements, highlighting inherent risks and uncertainties, and explains the rationale, limitations, and complementary use of Non-GAAP financial measures with GAAP - This press release may contain forward-looking statements subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, involving risks and uncertainties regarding future events and financial performance[71](index=71&type=chunk) - Non-GAAP measures are not in accordance with or an alternative for GAAP measures, may differ from Non-GAAP measures used by other companies, and are not based on any comprehensive set of accounting rules or principles[73](index=73&type=chunk) - Cisco believes that Non-GAAP measures, when used in conjunction with corresponding GAAP measures, provide useful information to investors and management regarding financial condition and operating results[74](index=74&type=chunk) [About Cisco](index=16&type=section&id=About%20Cisco) Cisco (NASDAQ: CSCO) is a global technology leader dedicated to transforming how organizations connect and secure through AI-driven solutions and services, empowering innovation, productivity, and digital resilience - Cisco is a global technology leader transforming how organizations connect and secure in the AI era[77](index=77&type=chunk) - Cisco empowers customers, partners, and communities to unlock innovation, increase productivity, and enhance digital resilience through its industry-leading AI-driven solutions and services[77](index=77&type=chunk)

Core Insights - Cisco reported quarterly results that narrowly exceeded analysts' expectations, with revenue increasing by 7.6% year over year and net income rising to $2.82 billion, or 71 cents per share, compared to $2.16 billion, or 54 cents per share, in the same quarter last year [1] Financial Performance - For the fiscal first quarter, Cisco management projected adjusted earnings per share between 97 cents to 99 cents on revenue of $14.65 billion to $14.85 billion, slightly above the LSEG consensus of 97 cents per share on $14.62 billion in revenue [2] - For the full fiscal year 2026, Cisco forecasts adjusted earnings per share of $4 to $4.06 and revenue between $59 billion to $60 billion, compared to the LSEG consensus of $4.03 per share and $59.53 billion in revenue [2] Segment Performance - In the fiscal fourth quarter, Cisco generated $7.63 billion in networking revenue, a 12% increase, surpassing the StreetAccount estimate of $7.34 billion [3] - Cisco's security revenue for the quarter was $1.95 billion, up 9%, but below the StreetAccount estimate of $2.11 billion [3] Strategic Initiatives - Cisco announced collaborations to invest in artificial intelligence infrastructure with partners including BlackRock and Microsoft, and joined a Stargate data center initiative involving OpenAI and SoftBank [4] - The company introduced new switches and routers designed to handle AI workloads [4] Market Performance - Cisco's AI infrastructure orders from webscale customers in fiscal 2025 exceeded the original target of $1 billion, with orders more than double that amount [5] - Cisco shares have increased by 19% in 2025, outperforming the S&P 500, which has gained about 10% [5]

Financial Results - Cisco Systems, Inc. is set to release its fourth-quarter financial results on August 13, with analysts expecting earnings of 98 cents per share, an increase from 87 cents per share in the same period last year [1] - Projected quarterly revenue is $14.62 billion, compared to $13.64 billion a year earlier [1] Stock Performance - Cisco shares increased by 1% to close at $71.38 on Tuesday [2] Analyst Ratings - UBS analyst David Vogt maintained a Neutral rating and raised the price target from $70 to $74 [4] - Evercore ISI Group analyst Amit Daryanani downgraded the stock from Outperform to In-Line with a price target of $72 [4] - Morgan Stanley analyst Meta Marshall maintained an Overweight rating and increased the price target from $67 to $70 [4] - JP Morgan analyst Samik Chatterjee maintained an Overweight rating and raised the price target from $73 to $78 [4] - Wolfe Research analyst George Notter initiated coverage with a Peer Perform rating [4]