News Release

Cisco Reports Fourth Quarter And Fiscal Year 2021 Earnings

Cisco Press Release

SAN JOSE, Calif., Aug. 18, 2021 

News Summary :

  • Cisco ended fiscal 2021 strong with Q4 performance of $13.1 billion in revenue (up 8% year over year) and fiscal year revenue of $49.8 billion
  • Double digit order growth across all customer markets and geographies, including product order growth of 31% - strongest year-over-year growth in over a decade
  • Continued momentum in transforming our business delivering more software and subscriptions - achieved $4 billion in software revenue in Q4 (an increase of 6% with subscription revenue up 9% year over year) and $15 billion for the year (an increase of 7% with subscription revenue up 15% year over year)
  • Q4 Results:
    • Revenue: $13.1 billion
      • Increase of 8% year over year
    • Earnings per Share: GAAP: $0.71; Non-GAAP: $0.84
      • GAAP EPS increased 15% year over year
      • Non-GAAP EPS increased 5% year over year
  • FY 2021 Results:
    • Revenue: $49.8 billion 
      • Increase of 1% year over year
    • Earnings per Share: GAAP: $2.50; Non-GAAP: $3.22
      • GAAP EPS decreased 5% year over year
      • Non-GAAP EPS was flat year over year
  • Q1 Guidance:
    • Revenue: 7.5% to 9.5% growth year over year
    • Earnings per Share: GAAP: $0.61 to $0.66; Non-GAAP: $0.79 to $0.81
  • FY 2022 Guidance:
    • Revenue: 5% to 7% growth year over year
    • Earnings per Share: GAAP: $2.72 to $2.84; Non-GAAP: $3.38 to $3.45

Q4FY21 Earnings Infographics

Cisco today reported fourth quarter and fiscal year results for the period ended July 31, 2021. Cisco reported fourth quarter revenue of $13.1 billion, net income on a generally accepted accounting principles (GAAP) basis of $3.0 billion or $0.71 per share, and non-GAAP net income of $3.6 billion or $0.84 per share.

 

"We continue to see great momentum in our business as customers are looking to modernize their organizations for agility and resiliency," said Chuck Robbins, Chair and CEO of Cisco. "The demand for Cisco technology is strong with our Q4 performance marking the highest product order growth in over a decade. With the power of our portfolio, we are well positioned to help our customers accelerate their digital transformation and thrive in a hybrid world."

"We executed exceptionally well delivering strong results across revenue, non-GAAP net income, non-GAAP EPS and record operating cash flow," said Scott Herren, CFO of Cisco. "Our performance reflects the impact of our investments in high growth opportunities resulting in our strong product order growth. As we continue to drive our business model transformation to more recurring revenue, we now have built up over $30 billion in remaining performance obligations."

Q4 GAAP Results

 
   

Q4 FY 2021

 

Q4 FY 2020

 

Vs. Q4 FY 2020

Revenue

 

$

13.1

  billion

 

$

12.2

  billion

 

8%

Net Income

 

$

3.0

  billion

 

$

2.6

  billion

 

14%

Diluted Earnings per Share (EPS)

 

$

0.71

   

$

0.62

   

15%

                     
                     

Q4 Non-GAAP Results

                     
   

Q4 FY 2021

 

Q4 FY 2020

 

Vs. Q4 FY 2020

Net Income

 

$

3.6

  billion

 

$

3.4

  billion

 

5%

EPS

 

$

0.84

   

$

0.80

   

5%

                     
                     

Fiscal Year GAAP Results

                     
   

FY 2021

 

FY 2020

 

Vs. FY 2020

Revenue

 

$

49.8

  billion

 

$

49.3

  billion

 

1%

Net Income

 

$

10.6

  billion

 

$

11.2

  billion

 

(6)%

EPS

 

$

2.50

   

$

2.64

   

(5)%

                     
                     

Fiscal Year Non-GAAP Results

                     
   

FY 2021

 

FY 2020

 

Vs. FY 2020

Net Income

 

$

13.6

  billion

 

$

13.7

  billion

 

—%

EPS

 

$

3.22

   

$

3.21

   

—%

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

Financial Summary

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

Q4 FY 2021 Highlights  

Revenue -- Total revenue was $13.1 billion, up 8%, with product revenue up 10% and service revenue up 3%. Revenue by geographic segment was: Americas up 8%, EMEA up 6%, and APJC up 13%. Product revenue was led by growth in Infrastructure Platforms, up 13% and Security, up 1%. Applications was down 1%.

Gross Margin --  On a GAAP basis, total gross margin, product gross margin, and service gross margin were 63.6%, 62.7%, and 66.2%, respectively, as compared with 63.2%, 61.2%, and 68.7%, respectively, in the fourth quarter of fiscal 2020.

On a non-GAAP basis, total gross margin, product gross margin, and service gross margin were 65.6%, 65.0%, and 67.4%, respectively, as compared with 65.0%, 63.2%, and 69.8%, respectively, in the fourth quarter of fiscal 2020.

Total gross margins by geographic segment were: 66.2% for the Americas, 65.0% for EMEA and 64.4% for APJC.

Operating Expenses --  On a GAAP basis, operating expenses were $4.8 billion, up 8%, and were 36.3% of revenue. Non-GAAP operating expenses were $4.2 billion, up 8%, and were 32.1% of revenue.

Operating Income -- GAAP operating income was $3.6 billion, up 10%, with GAAP operating margin of 27.2%. Non-GAAP operating income was $4.4 billion, up 10%, with non-GAAP operating margin at 33.5%.

Provision for Income Taxes -- The GAAP tax provision rate was 19.4%. The non-GAAP tax provision rate was 19.3%.

Net Income and EPS -- On a GAAP basis, net income was $3.0 billion, an increase of 14%, and EPS was $0.71, an increase of 15%. On a non-GAAP basis, net income was $3.6 billion, an increase of 5%, and EPS was $0.84, an increase of 5%. 

Cash Flow from Operating Activities -- $4.5 billion for the fourth quarter of fiscal 2021, an increase of 18% compared with $3.8 billion for the fourth quarter of fiscal 2020.

FY 2021 Highlights

Revenue -- Total revenue was $49.8 billion, an increase of 1%.

Net Income and EPS -- On a GAAP basis, net income was $10.6 billion, a decrease of 6%, and EPS was $2.50, a decrease of 5%. On a non-GAAP basis, net income was $13.6 billion, flat compared to fiscal 2020, and EPS was flat at $3.22.

Cash Flow from Operating Activities -- $15.5 billion for fiscal 2021, flat compared with fiscal 2020.

Balance Sheet and Other Financial Highlights

Cash and Cash Equivalents and Investments -- $24.5 billion at the end of the fourth quarter of fiscal 2021, compared with $23.6 billion at the end of the third quarter of fiscal 2021, and compared with $29.4 billion at the end of fiscal 2020.

Remaining Performance Obligations -- $30.9 billion, up 9% in total. Product remaining performance obligations were up 18% and service remaining performance obligations were up 3%.

Deferred Revenue -- $22.2 billion, up 8% in total, with deferred product revenue up 19%. Deferred service revenue was up 2%. 

Capital Allocation -- In the fourth quarter of fiscal 2021, we returned $2.4 billion to stockholders through share buybacks and dividends. We declared and paid a cash dividend of $0.37 per common share, or $1.6 billion, and repurchased approximately 15 million shares of common stock under our stock repurchase program at an average price of $53.30 per share for an aggregate purchase price of $791 million. The remaining authorized amount for stock repurchases under the program is $7.9 billion with no termination date.

Acquisitions

In the fourth quarter of fiscal 2021, we closed the following acquisitions:

  • Slido s.r.o., a privately held company that provides an audience interaction platform.
  • Sedonasys Systems Ltd., a privately held company which offers products that enable multi-vendor, multi-domain automation, and software-defined networking.
  • Kenna Security, Inc., a privately held cybersecurity company that provides risk-based vulnerability management technology which enables organizations to work cross-functionally to rapidly identify, prioritize and remediate cyber risks.
  • Involvio LLC, a privately held company that offers a suite of education-focused products that help colleges and universities improve student experience, engagement, and retention.
  • Socio Labs, Inc., a privately held company that offers a modern event technology platform designed to power the hybrid events of the future.

Guidance

Cisco expects to achieve the following results for the first quarter of fiscal 2022:

Q1 FY 2022

   

Revenue

 

7.5% to 9.5% growth Y/Y

Non-GAAP gross margin rate

 

63.5% - 64.5%

Non-GAAP operating margin rate

 

31.5% - 32.5%

Non-GAAP EPS

 

$0.79 - $0.81

Cisco estimates that GAAP EPS will be $0.61 to $0.66 for the first quarter of fiscal 2022.

Cisco expects to achieve the following results for fiscal 2022:

FY 2022

   

Revenue

 

5% to 7% growth Y/Y

Non-GAAP EPS

 

$3.38 - $3.45

Cisco estimates that GAAP EPS will be $2.72 to $2.84 for fiscal 2022.

Our Q1 FY 2022 and FY 2022 guidance assumes an effective tax provision rate of 19% for GAAP and 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 2021 conference call to discuss Cisco's results along with its guidance will be held on Wednesday, August 18, 2021 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 18, 2021 to 4:00 p.m. Pacific Time, August 25, 2021 at 1-800-388-4923 (United States) or 1-203-369-3800 (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 18, 2021. 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 31,

2021

 

July 25,

2020

 

July 31,

2021

 

July 25,

2020

REVENUE:

             

Product

$

9,716

   

$

8,832

   

$

36,014

   

$

35,978

 

Service

3,410

   

3,322

   

13,804

   

13,323

 

Total revenue

13,126

   

12,154

   

49,818

   

49,301

 

COST OF SALES:

             

Product

3,628

   

3,429

   

13,300

   

13,199

 

Service

1,154

   

1,041

   

4,624

   

4,419

 

Total cost of sales

4,782

   

4,470

   

17,924

   

17,618

 

GROSS MARGIN

8,344

   

7,684

   

31,894

   

31,683

 

OPERATING EXPENSES:

             

Research and development

1,713

   

1,565

   

6,549

   

6,347

 

Sales and marketing

2,448

   

2,218

   

9,259

   

9,169

 

General and administrative

521

   

494

   

2,152

   

1,925

 

Amortization of purchased intangible assets

79

   

33

   

215

   

141

 

Restructuring and other charges

8

   

127

   

886

   

481

 

Total operating expenses

4,769

   

4,437

   

19,061

   

18,063

 

OPERATING INCOME

3,575

   

3,247

   

12,833

   

13,620

 

Interest income

130

   

187

   

618

   

920

 

Interest expense

(98)

   

(119)

   

(434)

   

(585)

 

Other income (loss), net

128

   

(9)

   

245

   

15

 

Interest and other income (loss), net

160

   

59

   

429

   

350

 

INCOME BEFORE PROVISION FOR INCOME TAXES

3,735

   

3,306

   

13,262

   

13,970

 

Provision for income taxes

726

   

670

   

2,671

   

2,756

 

NET INCOME

$

3,009

   

$

2,636

   

$

10,591

   

$

11,214

 
               

Net income per share:

             

Basic

$

0.71

   

$

0.62

   

$

2.51

   

$

2.65

 

Diluted

$

0.71

   

$

0.62

   

$

2.50

   

$

2.64

 

Shares used in per-share calculation:

             

Basic

4,216

   

4,227

   

4,222

   

4,236

 

Diluted

4,238

   

4,244

   

4,236

   

4,254

 

 

CISCO SYSTEMS, INC.

REVENUE BY SEGMENT

(In millions, except percentages)

 
   

July 31, 2021

   

Three Months Ended

 

Fiscal Year Ended

   

Amount

 

Y/Y%

 

Amount

 

Y/Y%

Revenue:

               

Americas

 

$

7,731

   

8%

 

$

29,161

   

—%

EMEA

 

3,297

   

6%

 

12,951

   

2%

APJC

 

2,098

   

13%

 

7,706

   

5%

Total

 

$

13,126

   

8%

 

$

49,818

   

1%

 

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

 

CISCO SYSTEMS, INC.

GROSS MARGIN PERCENTAGE BY SEGMENT

(In percentages)

 
   

July 31, 2021

   

Three Months Ended

 

Fiscal Year Ended

Gross Margin Percentage:

       

Americas

 

66.2%

 

66.9%

EMEA

 

65.0%

 

65.4%

APJC

 

64.4%

 

64.2%

 

CISCO SYSTEMS, INC.

REVENUE FOR GROUPS OF SIMILAR PRODUCTS AND SERVICES

(In millions, except percentages)

 
   

July 31, 2021

   

Three Months Ended

 

Fiscal Year Ended

   

Amount

 

Y/Y %

 

Amount

 

Y/Y %

Revenue:

               

Infrastructure Platforms

 

$

7,546

   

13%

 

$

27,109

   

—%

Applications

 

1,344

   

(1)%

 

5,504

   

(1)%

Security

 

823

   

1%

 

3,382

   

7%

Other Products

 

4

   

(42)%

 

19

   

(43)%

Total Product

 

9,716

   

10%

 

36,014

   

—%

Services

 

3,410

   

3%

 

13,804

   

4%

Total

 

$

13,126

   

8%

 

$

49,818

   

1%

 

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

 

CISCO SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

 
 

July 31,

2021

 

July 25,

2020

ASSETS

     

Current assets:

     

Cash and cash equivalents

$

9,175

   

$

11,809

 

Investments

15,343

   

17,610

 

Accounts receivable, net of allowance for doubtful accounts of $109 at July 31, 2021 and $143 at July 25, 2020

5,766

   

5,472

 

Inventories

1,559

   

1,282

 

Financing receivables, net

4,380

   

5,051

 

Other current assets

2,889

   

2,349

 

Total current assets

39,112

   

43,573

 

Property and equipment, net

2,338

   

2,453

 

Financing receivables, net

4,884

   

5,714

 

Goodwill

38,168

   

33,806

 

Purchased intangible assets, net

3,619

   

1,576

 

Deferred tax assets

4,360

   

3,990

 

Other assets

5,016

   

3,741

 

TOTAL ASSETS

$

97,497

   

$

94,853

 

LIABILITIES AND EQUITY

     

Current liabilities:

     

Short-term debt

$

2,508

   

$

3,005

 

Accounts payable

2,362

   

2,218

 

Income taxes payable

801

   

839

 

Accrued compensation

3,818

   

3,122

 

Deferred revenue

12,148

   

11,406

 

Other current liabilities

4,620

   

4,741

 

Total current liabilities

26,257

   

25,331

 

Long-term debt

9,018

   

11,578

 

Income taxes payable

8,538

   

8,837

 

Deferred revenue

10,016

   

9,040

 

Other long-term liabilities

2,393

   

2,147

 

Total liabilities

56,222

   

56,933

 

Total equity

41,275

   

37,920

 

     TOTAL LIABILITIES AND EQUITY

$

97,497

   

$

94,853

 

 

CISCO SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

 
 

Fiscal Year Ended

 

July 31,

2021

 

July 25,

2020

Cash flows from operating activities:

     

Net income

$

10,591

   

$

11,214

 

Adjustments to reconcile net income to net cash provided by operating activities:

     

Depreciation, amortization, and other

1,862

   

1,808

 

Share-based compensation expense

1,761

   

1,569

 

Provision (benefit) for receivables

(6)

   

93

 

Deferred income taxes

(384)

   

(38)

 

(Gains) losses on divestitures, investments and other, net

(354)

   

(138)

 

Change in operating assets and liabilities, net of effects of acquisitions and divestitures:

     

Accounts receivable

(107)

   

(107)

 

Inventories

(244)

   

84

 

Financing receivables

1,577

   

(797)

 

Other assets

(797)

   

96

 

Accounts payable

(53)

   

141

 

Income taxes, net

(549)

   

(322)

 

Accrued compensation

643

   

(78)

 

Deferred revenue

1,560

   

2,011

 

Other liabilities

(46)

   

(110)

 

Net cash provided by operating activities

15,454

   

15,426

 

Cash flows from investing activities:

     

Purchases of investments

(9,328)

   

(9,212)

 

Proceeds from sales of investments

3,373

   

5,631

 

Proceeds from maturities of investments

8,409

   

7,975

 

Acquisitions, net of cash and cash equivalents acquired and divestitures

(7,038)

   

(327)

 

Purchases of investments in privately held companies

(175)

   

(190)

 

Return of investments in privately held companies

194

   

224

 

Acquisition of property and equipment

(692)

   

(770)

 

Proceeds from sales of property and equipment

28

   

179

 

Other

(56)

   

(10)

 

Net cash (used in) provided by investing activities

(5,285)

   

3,500

 

Cash flows from financing activities:

     

Issuances of common stock

643

   

655

 

Repurchases of common stock - repurchase program

(2,877)

   

(2,659)

 

Shares repurchased for tax withholdings on vesting of restricted stock units

(636)

   

(727)

 

Short-term borrowings, original maturities of 90 days or less, net

(5)

   

(3,470)

 

Repayments of debt

(3,000)

   

(6,720)

 

Dividends paid

(6,163)

   

(6,016)

 

Other

(1)

   

51

 

Net cash used in financing activities

(12,039)

   

(18,886)

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

(1,870)

   

40

 

Cash, cash equivalents, and restricted cash, beginning of fiscal year

11,812

   

11,772

 

Cash, cash equivalents, and restricted cash, end of fiscal year

$

9,942

   

$

11,812

 
       

Supplemental cash flow information:

     

Cash paid for interest

$

438

   

$

603

 

Cash paid for income taxes, net

$

3,604

   

$

3,116

 

 

CISCO SYSTEMS, INC.

REMAINING PERFORMANCE OBLIGATIONS

(In millions, except percentages)

 
 

July 31, 2021

 

May 1, 2021

 

July 25, 2020

 

Amount

 

Y/Y %

 

Amount

 

Y/Y %

 

Amount

 

Y/Y %

Product

$

13,270

   

18

%

 

$

11,903

   

15

%

 

$

11,261

   

17

%

Service

17,623

   

3

%

 

16,235

   

7

%

 

17,093

   

9

%

Total

$

30,893

   

9

%

 

$

28,138

   

10

%

 

$

28,354

   

12

%

 

CISCO SYSTEMS, INC.

DEFERRED REVENUE

(In millions)

 
 

July 31,

2021

 

May 1,

2021

 

July 25,

2020

Deferred revenue:

         

Product

$

9,416

   

$

8,698

   

$

7,895

 

Service

12,748

   

12,191

   

12,551

 

Total

$

22,164

   

$

20,889

   

$

20,446

 

Reported as:

         

Current

$

12,148

   

$

11,492

   

$

11,406

 

Noncurrent

10,016

   

9,397

   

9,040

 

Total

$

22,164

   

$

20,889

   

$

20,446

 

 

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 2021

                       

July 31, 2021

 

$

0.37

   

$

1,562

   

15

   

$

53.30

   

$

791

   

$

2,353

 

May 1, 2021

 

$

0.37

   

$

1,560

   

10

   

$

48.71

   

$

510

   

$

2,070

 

January 23, 2021

 

$

0.36

   

$

1,521

   

19

   

$

42.82

   

$

801

   

$

2,322

 

October 24, 2020

 

$

0.36

   

$

1,520

   

20

   

$

40.44

   

$

800

   

$

2,320

 
                         

Fiscal 2020

                       

July 25, 2020

 

$

0.36

   

$

1,525

   

   

$

   

$

   

$

1,525

 

April 25, 2020

 

$

0.36

   

$

1,519

   

25

   

$

39.71

   

$

981

   

$

2,500

 

January 25, 2020

 

$

0.35

   

$

1,486

   

18

   

$

46.71

   

$

870

   

$

2,356

 

October 26, 2019

 

$

0.35

   

$

1,486

   

16

   

$

48.91

   

$

768

   

$

2,254

 

 

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 31,

2021

 

July 25,

2020

 

July 31,

2021

 

July 25,

2020

GAAP net income

$

3,009

   

$

2,636

   

$

10,591

   

$

11,214

 

Adjustments to cost of sales:

             

Share-based compensation expense

67

   

61

   

275

   

237

 

Amortization of acquisition-related intangible assets

199

   

157

   

698

   

611

 

Acquisition-related/divestiture costs

1

   

   

4

   

3

 

Legal and indemnification settlements/charges

   

   

43

   

4

 

Total adjustments to GAAP cost of sales

267

   

218

   

1,020

   

855

 

Adjustments to operating expenses:

             

Share-based compensation expense

357

   

332

   

1,460

   

1,307

 

Amortization of acquisition-related intangible assets

79

   

33

   

215

   

141

 

Acquisition-related/divestiture costs

109

   

55

   

288

   

246

 

Significant asset impairments and restructurings

8

   

127

   

886

   

481

 

Total adjustments to GAAP operating expenses

553

   

547

   

2,849

   

2,175

 

Adjustments to interest and other income (loss), net:

             

Acquisition-related/divestiture costs

   

   

4

   

 

(Gains) and losses on equity investments

(154)

   

2

   

(285)

   

(97)

 

Total adjustments to GAAP interest and other income (loss), net

(154)

   

2

   

(281)

   

(97)

 

Total adjustments to GAAP income before provision for income taxes

666

   

767

   

3,588

   

2,933

 

Income tax effect of non-GAAP adjustments

(199)

   

(175)

   

(702)

   

(722)

 

Significant tax matters

76

   

166

   

159

   

233

 

Total adjustments to GAAP provision for income taxes

(123)

   

(9)

   

(543)

   

(489)

 

Non-GAAP net income

$

3,552

   

$

3,394

   

$

13,636

   

$

13,658

 

 

CISCO SYSTEMS, INC.

RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

 

GAAP TO NON-GAAP EPS

 
 

Three Months Ended

 

Fiscal Year Ended

 

July 31,

2021

 

July 25,

2020

 

July 31,

2021

 

July 25,

2020

GAAP EPS

$

0.71

   

$

0.62

   

$

2.50

   

$

2.64

 

Adjustments to GAAP:

             

Share-based compensation expense

0.10

   

0.09

   

0.41

   

0.36

 

Amortization of acquisition-related intangible assets

0.07

   

0.04

   

0.22

   

0.18

 

Acquisition-related/divestiture costs

0.03

   

0.01

   

0.07

   

0.06

 

Legal and indemnification settlements/charges

   

   

0.01

   

 

Significant asset impairments and restructurings

   

0.03

   

0.21

   

0.11

 

(Gains) and losses on equity investments

(0.04)

   

   

(0.07)

   

(0.02)

 

Income tax effect of non-GAAP adjustments

(0.05)

   

(0.04)

   

(0.17)

   

(0.17)

 

Significant tax matters

0.02

   

0.04

   

0.04

   

0.05

 

Non-GAAP EPS

$

0.84

   

$

0.80

   

$

3.22

   

$

3.21

 
 

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 31, 2021

 

Product

Gross

Margin

 

Service

Gross

Margin

 

Total

Gross

Margin

 

Operating

Expenses

 

Y/Y

 

Operating

Income

 

Y/Y

 

Interest

and

other

income

(loss),

net

 

Net

Income

 

Y/Y

GAAP amount

$

6,088

   

$

2,256

   

$

8,344

   

$

4,769

   

8%

 

$

3,575

   

10%

 

$

160

   

$

3,009

   

14%

% of revenue

62.7

%

 

66.2

%

 

63.6

%

 

36.3

%

     

27.2

%

     

1.2

%

 

22.9

%

   

Adjustments to GAAP amounts:

                                     

Share-based compensation expense

24

   

43

   

67

   

357

       

424

       

   

424

     

Amortization of acquisition-related intangible assets

199

   

   

199

   

79

       

278

       

   

278

     

Acquisition/divestiture-related costs

1

   

   

1

   

109

       

110

       

   

110

     

Significant asset impairments and restructurings

   

   

   

8

       

8

       

   

8

     

(Gains) and losses on equity investments

   

   

   

       

       

(154)

   

(154)

     

Income tax effect/significant tax matters

   

   

   

       

       

   

(123)

     

Non-GAAP amount

$

6,312

   

$

2,299

   

$

8,611

   

$

4,216

   

8%

 

$

4,395

   

10%

 

$

6

   

$

3,552

   

5%

% of revenue

65.0

%

 

67.4

%

 

65.6

%

 

32.1

%

     

33.5

%

     

%

 

27.1

%

   

 

 

Three Months Ended

 

July 25, 2020

 

Product

Gross

Margin

 

Service

Gross

Margin

 

Total

Gross

Margin

 

Operating

Expenses

 

Operating

Income

 

Interest

and

other

income

(loss),

net

 

Net

Income

GAAP amount

$

5,403

   

$

2,281

   

$

7,684

   

$

4,437

   

$

3,247

   

$

59

   

$

2,636

 

% of revenue

61.2

%

 

68.7

%

 

63.2

%

 

36.5

%

 

26.7

%

 

0.5

%

 

21.7

%

Adjustments to GAAP amounts:

                         

Share-based compensation expense

24

   

37

   

61

   

332

   

393

   

   

393

 

Amortization of acquisition-related intangible assets

157

   

   

157

   

33

   

190

   

   

190

 

Acquisition/divestiture-related costs

   

   

   

55

   

55

   

   

55

 

Significant asset impairments and restructurings

   

   

   

127

   

127

   

   

127

 

(Gains) and losses on equity investments

   

   

   

   

   

2

   

2

 

Income tax effect/significant tax matters

   

   

   

   

   

   

(9)

 

Non-GAAP amount

$

5,584

   

$

2,318

   

$

7,902

   

$

3,890

   

$

4,012

   

$

61

   

$

3,394

 

% of revenue

63.2

%

 

69.8

%

 

65.0

%

 

32.0

%

 

33.0

%

 

0.5

%

 

27.9

%

 

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

 

CISCO SYSTE MS, 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 31, 2021

 

Product

Gross

Margin

 

Service

Gross

Margin

 

Total

Gross

Margin

 

Operating

Expenses

 

Y/Y

 

Operating

Income

 

Y/Y

 

Interest

and

other

income

(loss),

net

 

Net

Income

 

Y/Y

GAAP amount

$

22,714

   

$

9,180

   

$

31,894

   

$

19,061

   

6%

 

$

12,833

   

(6)%

 

$

429

   

$

10,591

   

(6)%

% of revenue

63.1

%

 

66.5

%

 

64.0

%

 

38.3

%

     

25.8

%

     

0.9

%

 

21.3

%

   

Adjustments to GAAP amounts:

                                     

Share-based compensation expense

99

   

176

   

275

   

1,460

       

1,735

       

   

1,735

     

Amortization of acquisition-related intangible assets

698

   

   

698

   

215

       

913

       

   

913

     

Acquisition/divestiture-related costs

3

   

1

   

4

   

288

       

292

       

4

   

296

     

Legal and indemnification settlements/charges

43

   

   

43

   

       

43

       

   

43

     

Significant asset impairments and restructurings

   

   

   

886

       

886

       

   

886

     

(Gains) and losses on equity investments

   

   

   

       

       

(285)

   

(285)

     

Income tax effect/significant tax matters

   

   

   

       

       

   

(543)

     

Non-GAAP amount

$

23,557

   

$

9,357

   

$

32,914

   

$

16,212

   

2%

 

$

16,702

   

—%

 

$

148

   

$

13,636

   

—%

% of revenue

65.4

%

 

67.8

%

 

66.1

%

 

32.5

%

     

33.5

%

     

0.3

%

 

27.4

%

   

 

 

Fiscal Year Ended

 

July 25, 2020

 

Product

Gross

Margin

 

Service

Gross

Margin

 

Total

Gross

Margin

 

Operating

Expenses

 

Operating

Income

 

Interest

and

other

income

(loss),

net

 

Net

Income

GAAP amount

$

22,779

   

$

8,904

   

$

31,683

   

$

18,063

   

$

13,620

   

$

350

   

$

11,214

 

% of revenue

63.3

%

 

66.8

%

 

64.3

%

 

36.6

%

 

27.6

%

 

0.7

%

 

22.7

%

Adjustments to GAAP amounts:

                         

Share-based compensation expense

93

   

144

   

237

   

1,307

   

1,544

   

   

1,544

 

Amortization of acquisition-related intangible assets

611

   

   

611

   

141

   

752

   

   

752

 

Acquisition/divestiture-related costs

   

3

   

3

   

246

   

249

   

   

249

 

Legal and indemnification settlements

4

   

   

4

   

   

4

   

   

4

 

Significant asset impairments and restructurings

   

   

   

481

   

481

   

   

481

 

(Gains) and losses on equity investments

   

   

   

   

   

(97)

   

(97)

 

Income tax effect/significant tax matters

   

   

   

   

   

   

(489)

 

Non-GAAP amount

$

23,487

   

$

9,051

   

$

32,538

   

$

15,888

   

$

16,650