San Jose, Calif., Nov. 10, 1994 -- Cisco Systems, Inc., (NASDAQ: CSCO),the leading manufacturer of internetworking systems and software, todayreported its first quarter results for the period ending October 30, 1994.

Net sales for the first quarter were $392,925,000 and net income was$98,770,000 or $.37 per share. This compares with net sales of$248,457,000 and net income of $63,485,000, or $.24 per share in thesame period last year, and are increases of 58 percent, 56 percent, and 54percent, respectively.

The net income per share and number of shares used in per-sharecalculations for the period ended October 24, 1993 reflect thetwo-for-one stock split which was effective March 4, 1994.

Cisco Systems' fiscal year is a 52 or 53 week year ending on the lastSunday of July. The 53rd week in fiscal 1994 was included in the secondquarter ended January 30, 1994.

"We are pleased to report the nineteenth consecutive quarter of growthin revenue and profitability since Cisco went public in February 1990,"said John Morgridge, president and CEO of Cisco. "In addition to strongrevenue and profitability, Cisco also had a quarter with a number ofhighlights in terms of acquisitions, alliances and product introductions.

"Our acquisition of Newport Systems, which provides software-basedrouters for connecting computer networks, is now complete. We also signedan agreement toacquire Kalpana, a global supplier of Ethernetswitches, which heralds our entry into the low-end switch market segment.

"We announced intent to form strategic alliances with Hewlett-PackardCo., and UBNetworks and strengthened our alliance with Chipcom Corp. andCabletron. We also completed contractswith thirteen Japanese companies toform a joint venture designed to develop and expand the emerginginternetworking market in Japan. "Cisco continued to release a number of new products during the quarter.Our IBM sector introduced a high-performanceinterface processor thatenables IBM mainframe computers to connect directly to routed internetworksat Asynchronous Transfer Mode (ATM) speeds. We also began shipping an ATMswitch, the HyperSwitch A100.

"We've expanded our ISDN solutions: The Cisco 7000 core router seriesis now capable of receiving hundreds of incoming ISDN connections; theCisco 4000 series now supports multiple ISDN Basic Rate Interfaces; and anew model of the Cisco 2500 is priced and configured for entry-level ISDNapplications."

Cisco Systems,Inc., headquartered in San Jose, Calif., is a leadingglobal supplier of networkingproducts, including routers, bridges,workgroup systems, ATM switches, dial-up access servers, software routersand router management software. In the U.S., Cisco is traded over thecounter under the NASDAQ symbol CSCO.

                       Cisco Systems, Inc.
              CONDENSED CONSOLIDATED BALANCE SHEETS                         (In thousands)
                                   October 30,      July 31,                                      1994           1994                                   -----------    ----------                                   (unaudited)AssetsCurrent assets:  Cash and equivalent              $  140,740     $   53,567  Short-term investments              138,638        129,219  Accounts receivable, net            270,227        237,570  Inventories                          31,787         27,896  Deferred income taxes                53,105         46,739  Other current assets                 11,054         12,686                                   ----------      ---------       Total current assets           645,551        507,677
Investments                           407,828        371,494Restricted investments                 95,900         85,900Property and equipment, net            91,336         77,449Other assets                           17,409         11,174                                   ----------     ----------       Total assets                $1,258,024     $1,053,694                                   ==========     ==========
Liabilities and Shareholders' EquityCurrent liabilities:   Accounts payable and other      accrued expenses             $  179,376     $  162,554   Income taxes payable                94,584         42,958                                   ----------     ----------       Total current liabilities      273,960        205,512
Minority Interest                      40,582
Shareholders' equity                  943,482        848,182                                   ----------     ----------       Total liabilities and         shareholders' equity      $1,258,024     $1,053,694                                   ==========     ==========
                       Cisco Systems, Inc.
         CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS             (In thousands except per-share amounts)
                                          Quarters Ended                                    October 30,  October 24,                                       1994          1993                                    -----------   ----------                                           (Unaudited)
Net sales                              $392,925     $248,457Cost of sales                           127,969       83,757                                       --------     --------   Gross margin                         264,956      164,700
Operating expenses:  Research and development               30,048       18,555  Sales and marketing                    68,322       38,283  General and administrative             14,915        9,975                                        -------     --------
    Total operating expenses            113,285       66,813                                        -------     --------
Operating income                        151,671       97,887
Interest and other income, net            7,636        4,839                                        -------     --------Income before provision for  income taxes                          159,307      102,726
Provision for income taxes               60,537       39,241                                        -------     --------Net income                             $ 98,770     $ 63,485                                       ========     ========
Net income per share                   $    .37     $    .24                                       --------     --------
Number of shares used in per-share  calculation                           269,661      263,879                                       ========     ========