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CISCO REPORTS THIRD QUARTER EARNINGS

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SAN JOSE, Calif., May 14, 2025 /PRNewswire/ --

News Summary:

  • Product orders up 20% year over year; up 9% excluding Splunk, with growth across all geographies and customer markets
  • AI Infrastructure orders taken from webscale customers exceeded $600 million, surpassing our $1 billion target one quarter early
  • Revenue of $14.1 billion, up 11% year over year, above the high end of our guidance range
  • Strong profitability with GAAP and non-GAAP margins and EPS above the high end of our guidance range
  • Q3 FY 2025 Results:
    • Revenue: $14.1 billion
      • Increase of 11% year over year
    • Earnings per Share: GAAP: $0.62; Non-GAAP: $0.96
      • GAAP EPS increased 35% year over year
      • Non-GAAP EPS increased 9% year over year
  • Q4 FY 2025 Guidance (1):   
    • Revenue: $14.5 billion to $14.7 billion
    • Earnings per Share: GAAP: $0.62 to $0.67; Non-GAAP: $0.96 to $0.98
  • FY 2025 Guidance (1):
    • Revenue: $56.5 billion to $56.7 billion
    • Earnings per Share: GAAP: $2.53 to $2.58; Non-GAAP: $3.77 to $3.79

(1) Margin and EPS guidance includes the estimated impact of tariffs based on current trade policy.

Cisco today reported third quarter results for the period ended April 26, 2025. Cisco reported third quarter revenue of $14.1 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.5 billion or $0.62 per share, and non-GAAP net income of $3.8 billion or $0.96 per share.

"Cisco once again had strong quarterly results with clear demand for our technologies," said Chuck Robbins, chair and CEO of Cisco. "The momentum we are seeing with AI is fueled by the power of our secure networking portfolio, our trusted global partnerships, and the value we bring to our customers."

"Another quarter of solid execution in Q3 drove revenue, margins and EPS above our guidance ranges," said Scott Herren, CFO of Cisco. "Our innovation positions us well for future growth and our operational discipline is generating strong cash flows, enabling us to deliver significant shareholder returns."

GAAP Results




Q3 FY 2025


Q3 FY 2024


Vs. Q3 FY 2024

Revenue


$               14.1 billion


$               12.7 billion


11 %

Net Income


$                 2.5 billion


$                 1.9 billion


32 %

Diluted Earnings per Share (EPS)


$                      0.62


$                      0.46


35 %








Non-GAAP Results










Q3 FY 2025


Q3 FY 2024


Vs. Q3 FY 2024

Net Income


$               3.8 billion


$                 3.6 billion


8 %

EPS


$                       0.96


$                      0.88


9 %

 

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

Cisco Declares Quarterly Dividend

Cisco has declared a quarterly dividend of $0.41 per common share to be paid on July 23, 2025, to all stockholders of record as of the close of business on July 3, 2025. Future dividends will be subject to Board approval.

Financial Summary

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

Q3 FY 2025 Highlights

Revenue -- Total revenue was $14.1 billion, up 11%, with product revenue up 15% and services revenue up 3%.

Revenue by geographic segment was: Americas up 14%, EMEA up 8%, and APJC up 9%. Product revenue performance reflected growth in Security up 54%, Observability up 24%, Networking up 8%, and Collaboration up 4%.

Gross Margin -- On a GAAP basis, total gross margin, product gross margin, and services gross margin were 65.6%, 64.4%, and 68.7%, respectively, as compared with 65.1%, 63.5%, and 69.2%, respectively, in the third quarter of fiscal 2024.

On a non-GAAP basis, total gross margin, product gross margin, and services gross margin were 68.6%, 67.6%, and 71.3%, respectively, as compared with 68.3%, 66.9%, and 71.6%, respectively, in the third quarter of fiscal 2024.

Total gross margins by geographic segment were: 67.7% for the Americas, 71.2% for EMEA and 67.2% for APJC.

Operating Expenses -- On a GAAP basis, operating expenses were $6.1 billion, flat year over year, and were 42.9% of revenue. Non-GAAP operating expenses were $4.8 billion, up 12%, and were 34.1% of revenue.

Operating Income -- GAAP operating income was $3.2 billion, up 46%, with GAAP operating margin of 22.6%. Non-GAAP operating income was $4.9 billion, up 12%, with non-GAAP operating margin at 34.5%.

Provision for Income Taxes -- The GAAP tax provision rate was 15.5%. The non-GAAP tax provision rate was 17.5%.

Net Income and EPS -- On a GAAP basis, net income was $2.5 billion, an increase of 32%, and EPS was $0.62, an increase of 35%. On a non-GAAP basis, net income was $3.8 billion, an increase of 8%, and EPS was $0.96, an increase of 9%.

Cash Flow from Operating Activities -- $4.1 billion for the third quarter of fiscal 2025, an increase of 2%, compared with $4.0 billion for the third quarter of fiscal 2024.

Balance Sheet and Other Financial Highlights

Cash and Cash Equivalents and Investments -- $15.6 billion at the end of the third quarter of fiscal 2025, compared with $17.9 billion at the end of fiscal 2024.

Remaining Performance Obligations (RPO) -- $41.7 billion, up 7% in total, with 51% of this amount expected to be recognized as revenue over the next 12 months. Product RPO was up 10% and services RPO was up 5%.

Deferred Revenue -- $28.0 billion, up 2% in total, with deferred product revenue up 2% and deferred services revenue up 1%.

Capital Allocation -- In the third quarter of fiscal 2025, we returned $3.1 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 25 million shares of common stock under our stock repurchase program at an average price of $59.78 per share for an aggregate purchase price of $1.5 billion. The remaining authorized amount for stock repurchases under the program is $15.4 billion with no termination date.

Acquisitions

In the third quarter of fiscal 2025, we closed the acquisition of SnapAttack, a privately held company that offers a threat detection and engineering platform.

Guidance

Cisco estimates the following results for the fourth quarter of fiscal 2025:

Q4 FY 2025



Revenue


$14.5 billion - $14.7 billion

Non-GAAP gross margin


67.5% – 68.5%

Non-GAAP operating margin


33.5% – 34.5%

Non-GAAP EPS


$0.96 – $0.98

Margin and EPS guidance includes the estimated impact of tariffs based on current trade policy.

Cisco estimates that GAAP EPS will be $0.62 to $0.67 for the fourth quarter of fiscal 2025.

Cisco estimates the following results for fiscal 2025:

FY 2025



Revenue


$56.5 billion - $56.7 billion

Non-GAAP EPS


$3.77 – $3.79

Margin and EPS guidance includes the estimated impact of tariffs based on current trade policy.

Cisco estimates that GAAP EPS will be $2.53 to $2.58 for fiscal 2025.

Our Q4 FY 2025 guidance assumes an effective tax provision rate of approximately 17% for GAAP and approximately 18% for non-GAAP results. Our FY 2025 guidance assumes an effective tax provision rate of approximately 9% for GAAP and approximately 18.5% for non-GAAP results.

A reconciliation between the guidance on a GAAP and non-GAAP basis is provided in the tables entitled "GAAP to non-GAAP Guidance" located in the section entitled "Reconciliations of GAAP to non-GAAP Measures."

Editor's Notes:

  • Q3 fiscal year 2025 conference call to discuss Cisco's results along with its guidance will be held on Wednesday, May 14, 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, May 14, 2025 to 4:00 p.m. Pacific Time, May 20, 2025 at 1-800-876-5258 (United States) or 1-203-369-3998 (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, May 14, 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-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


Nine Months Ended


April 26, 2025


April 27, 2024


April 26, 2025


April 27, 2024

REVENUE:








Product

$       10,374


$         9,024


$       30,722


$       29,395

Services

3,775


3,678


11,259


10,766

Total revenue

14,149


12,702


41,981


40,161

COST OF SALES:








Product

3,688


3,295


10,927


10,695

Services

1,183


1,134


3,544


3,419

Total cost of sales

4,871


4,429


14,471


14,114

GROSS MARGIN

9,278


8,273


27,510


26,047

OPERATING EXPENSES:








Research and development

2,335


1,948


6,920


5,804

Sales and marketing

2,724


2,559


8,148


7,523

General and administrative

739


736


2,286


2,050

Amortization of purchased intangible assets

244


297


774


430

Restructuring and other charges

34


542


709


677

Total operating expenses

6,076


6,082


18,837


16,484

OPERATING INCOME

3,202


2,191


8,673


9,563

Interest income

250


411


774


1,095

Interest expense

(403)


(357)


(1,225)


(588)

Other income (loss), net

(102)


(10)


(121)


(232)

Interest and other income (loss), net

(255)


44


(572)


275

INCOME BEFORE PROVISION FOR INCOME TAXES

2,947


2,235


8,101


9,838

Provision for income taxes

456


349


471


1,680

NET INCOME

$         2,491


$         1,886


$         7,630


$         8,158









Net income per share:








Basic

$           0.63


$           0.47


$           1.92


$           2.01

Diluted

$           0.62


$           0.46


$           1.91


$           2.00

Shares used in per-share calculation:








Basic

3,972


4,042


3,981


4,051

Diluted

4,002


4,060


4,004


4,071

 

CISCO SYSTEMS, INC.

REVENUE BY SEGMENT

(In millions, except percentages)




April 26, 2025



Three Months Ended


Nine Months Ended



Amount


Y/Y %


Amount


Y/Y %

Revenue:









Americas


$         8,380


14 %


$       24,834


4 %

EMEA


3,736


8 %


11,179


5 %

APJC


2,034


9 %


5,968


6 %

Total


$       14,149


11 %


$       41,981


5 %

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

 

CISCO SYSTEMS, INC.

GROSS MARGIN PERCENTAGE BY SEGMENT

(In percentages)




April 26, 2025



Three Months Ended


Nine Months Ended

Gross Margin Percentage:





Americas


67.7 %


68.3 %

EMEA


71.2 %


70.9 %

APJC


67.2 %


67.3 %

 

CISCO SYSTEMS, INC.

REVENUE FOR GROUPS OF SIMILAR PRODUCTS AND SERVICES

(In millions, except percentages)




April 26, 2025



Three Months Ended


Nine Months Ended



Amount


Y/Y %


Amount


Y/Y %

Revenue:









Networking


$         7,068


8 %


$       20,671


(8) %

Security


2,013


54 %


6,142


87 %

Collaboration


1,031


4 %


3,112


1 %

Observability


261


24 %


796


35 %

Total Product


10,374


15 %


30,722


5 %

Services


3,775


3 %


11,259


5 %

Total


$       14,149


11 %


$       41,981


5 %

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

 

CISCO SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)



April 26, 2025


July 27, 2024

ASSETS




Current assets:




Cash and cash equivalents

$                8,161


$                7,508

Investments

7,481


10,346

Accounts receivable, net of allowance of $82 at April 26, 2025 and $87 at July 27, 2024

5,277


6,685

Inventories

2,832


3,373

Financing receivables, net

2,958


3,338

Other current assets

6,107


5,612

Total current assets

32,816


36,862

Property and equipment, net

2,076


2,090

Financing receivables, net

3,247


3,376

Goodwill

59,024


58,660

Purchased intangible assets, net

9,643


11,219

Deferred tax assets

7,016


6,262

Other assets

5,960


5,944

TOTAL ASSETS

$            119,782


$            124,413

LIABILITIES AND EQUITY




Current liabilities:




Short-term debt

$                6,422


$              11,341

Accounts payable

2,260


2,304

Income taxes payable

1,821


1,439

Accrued compensation

3,210


3,608

Deferred revenue

16,081


16,249

Other current liabilities

4,701


5,643

Total current liabilities

34,495


40,584

Long-term debt

22,857


19,621

Income taxes payable

1,874


3,985

Deferred revenue

11,910


12,226

Other long-term liabilities

2,711


2,540

Total liabilities

73,847


78,956

Total equity

45,935


45,457

TOTAL LIABILITIES AND EQUITY

$            119,782


$            124,413

 

CISCO SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)



Nine Months Ended


April 26,
2025


April 27,
2024

Cash flows from operating activities:




Net income

$              7,630


$              8,158

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




Depreciation, amortization, and other

2,176


1,684

Share-based compensation expense

2,693


2,274

Provision for receivables

17


19

Deferred income taxes

(792)


(245)

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

52


224

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




Accounts receivable

1,406


1,286

Inventories

541


530

Financing receivables

505


92

Other assets

(516)


(382)

Accounts payable

(10)


(300)

Income taxes, net

(2,002)


(5,223)

Accrued compensation

(431)


(1,092)

Deferred revenue

(524)


211

Other liabilities

(786)


(86)

Net cash provided by operating activities

9,959


7,150

Cash flows from investing activities:




Purchases of investments

(3,066)


(3,044)

Proceeds from sales of investments

2,228


3,874

Proceeds from maturities of investments

3,985


5,804

Acquisitions, net of cash and cash equivalents acquired and divestitures

(291)


(25,874)

Purchases of investments in privately held companies

(265)


(82)

Return of investments in privately held companies

108


146

Acquisition of property and equipment

(688)


(472)

Other

(5)


(2)

Net cash provided by (used in) investing activities

2,006


(19,650)

Cash flows from financing activities:




Issuances of common stock

320


347

Repurchases of common stock - repurchase program

(4,748)


(3,772)

Shares repurchased for tax withholdings on vesting of restricted stock units

(910)


(765)

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

(479)


1,547

Issuances of debt

17,388


24,159

Repayments of debt

(18,545)


(2,195)

Repayments of Splunk convertible debt, net


(3,140)

Dividends paid

(4,812)


(4,778)

Other

(80)


(52)

Net cash provided by (used in) financing activities

(11,866)


11,351

Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and
restricted cash equivalents

(23)


(39)

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

76


(1,188)

Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period

8,842


11,627

Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period

$              8,918


$           10,439

Supplemental cash flow information:




Cash paid for interest

$              1,370


$                 350

Cash paid for income taxes, net

$              3,265


$              7,150

 

CISCO SYSTEMS, INC.

REMAINING PERFORMANCE OBLIGATIONS

(In millions, except percentages)



April 26, 2025


January 25, 2025


April 27, 2024


Amount


Y/Y%


Amount


Y/Y%


Amount


Y/Y%

Product

$    20,752


10 %


$    20,321


25 %


$    18,876


29 %

Services

20,915


5 %


20,947


8 %


19,898


14 %

Total

$    41,667


7 %


$    41,268


16 %


$    38,774


21 %

We expect 51% of total RPO at April 26, 2025 to be recognized as revenue over the next 12 months.

 

CISCO SYSTEMS, INC.

DEFERRED REVENUE

(In millions)



April 26, 2025


January 25, 2025


April 27, 2024

Deferred revenue:






Product

$       13,170


$       13,033


$       12,856

Services

14,821


14,762


14,619

Total

$       27,991


$       27,795


$       27,475

Reported as:






Current

$       16,081


$       15,999


$       15,751

Noncurrent

11,910


11,796


11,724

Total

$       27,991


$       27,795


$       27,475

 

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













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

 

CISCO SYSTEMS, INC.

RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

 

GAAP TO NON-GAAP NET INCOME

(In millions)



Three Months Ended


Nine Months Ended


April 26,
2025


April 27,
2024


April 26,
2025


April 27,
2024

GAAP net income

$         2,491


$         1,886


$         7,630


$         8,158

Adjustments to cost of sales:








Share-based compensation expense

152


139


434


381

Amortization of acquisition-related intangible assets

263


249


917


605

Acquisition/divestiture-related costs

17


12


53


13

Supplier component remediation charge (adjustment)

(7)



(7)


Total adjustments to GAAP cost of sales

425


400


1,397


999

Adjustments to operating expenses:








Share-based compensation expense

778


665


2,222


1,877

Amortization of acquisition-related intangible assets

244


297


774


430

Acquisition/divestiture-related costs

197


264


687


403

Russia-Ukraine war costs


(10)



(12)

Significant asset impairments and restructurings

34


542


709


677

Total adjustments to GAAP operating expenses

1,253


1,758


4,392


3,375

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








(Gains) and losses on investments

19


(7)


(72)


132

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

19


(7)


(72)


132

Total adjustments to GAAP income before provision for income taxes

1,697


2,151


5,717


4,506

Income tax effect of non-GAAP adjustments

(357)


(484)


(1,256)


(1,045)

Significant tax matters (1)



(829)


Total adjustments to GAAP provision for income taxes

(357)


(484)


(2,085)


(1,045)

Non-GAAP net income

$         3,831


$         3,553


$       11,262


$       11,619

(1) The nine months ended April 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.

 

CISCO SYSTEMS, INC.

RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

 

GAAP TO NON-GAAP EPS



Three Months Ended


Nine Months Ended


April 26,
2025


April 27,
2024


April 26,
2025


April 27,
2024

GAAP EPS

$           0.62


$           0.46


$           1.91


$           2.00

Adjustments to GAAP:








Share-based compensation expense

0.23


0.20


0.66


0.55

Amortization of acquisition-related intangible assets

0.13


0.13


0.42


0.25

Acquisition/divestiture-related costs

0.05


0.07


0.18


0.10

Significant asset impairments and restructurings

0.01


0.13


0.18


0.17

(Gains) and losses on investments



(0.02)


0.03

Income tax effect of non-GAAP adjustments

(0.09)


(0.12)


(0.31)


(0.26)

Significant tax matters



(0.21)


Non-GAAP EPS

$           0.96


$           0.88


$           2.81


$           2.85

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


April 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

$ 6,686


$ 2,592


$ 9,278


$ 6,076


— %


$ 3,202


46 %


$ (255)


$ 2,491


32 %

% of revenue

64.4 %


68.7 %


65.6 %


42.9 %




22.6 %




(1.8) %


17.6 %



Adjustments to GAAP amounts:

















Share-based compensation expense

67


85


152


778




930





930



Amortization of acquisition-related intangible assets

263



263


244




507





507



Acquisition/divestiture-related costs

4


13


17


197




214





214



Supplier component remediation charge (adjustment)

(7)



(7)





(7)





(7)



Significant asset impairments and restructurings




34




34





34



(Gains) and losses on investments










19


19



Income tax effect/significant tax matters











(357)



Non-GAAP amount

$ 7,013


$ 2,690


$ 9,703


$ 4,823


12 %


$ 4,880


12 %


$ (236)


$ 3,831


8 %

% of revenue

67.6 %


71.3 %


68.6 %


34.1 %




34.5 %




(1.7) %


27.1 %



               


Three Months Ended


April 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

$   5,729


$   2,544


$   8,273


$   6,082


$   2,191


$        44


$   1,886

% of revenue

63.5 %


69.2 %


65.1 %


47.9 %


17.2 %


0.3 %


14.8 %

Adjustments to GAAP amounts:














Share-based compensation expense

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