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CISCO REPORTS SECOND QUARTER EARNINGS

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SAN JOSE, Calif., Feb. 14, 2024 /PRNewswire/ — 

News Summary:

$12.8 billion in revenue, down 6% year over year; GAAP EPS $0.65, down 3% year over year, and Non-GAAP EPS $0.87, down 1% year over year

Revenue growth in security, collaboration and observabilityProgress on business model transformation in Q2 FY 2024:Total software revenue was flat year over year and software subscription revenue up 5% year over yearTotal annualized recurring revenue (ARR) at $24.7 billion, up 6% year over year and product ARR up 9% year over yearRemaining performance obligations (RPO) at $35.7 billion, up 12% year over year and product RPO up 12% year over yearDividend increased by 3% to $0.40 per shareQ2 FY 2024 Results:Revenue: $12.8 billionDecrease of 6% year over yearEarnings per Share: GAAP: $0.65; Non-GAAP: $0.87GAAP EPS decreased 3% year over yearNon-GAAP EPS decreased 1% year over yearQ3 FY 2024 Guidance:   Revenue: $12.1 billion to $12.3 billionEarnings per Share: GAAP: $0.51 to $0.56; Non-GAAP: $0.84 to $0.86FY 2024 Guidance:Revenue: $51.5 billion to $52.5 billionEarnings per Share: GAAP: $2.61 to $2.73; Non-GAAP: $3.68 to $3.74

Cisco today reported second quarter results for the period ended January 27, 2024. Cisco reported second quarter revenue of $12.8 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.6 billion or $0.65 per share, and non-GAAP net income of $3.5 billion or $0.87 per share.

“We delivered a solid second quarter with strong operating leverage and capital returns,” said Chuck Robbins, chair and CEO of Cisco. “We continue to align our investments to future growth opportunities. Our innovation sits at the center of an increasingly connected ecosystem and will play a critical role as our customers adopt AI and secure their organizations.”

“Focused execution and operating discipline drove our solid top and bottom-line results and strong margins in Q2,” said Scott Herren, CFO of Cisco. “We are making good progress in our business model shift to more recurring revenue while remaining focused on financial discipline, operating leverage and shareholder returns, as evidenced by our increased dividend.”

GAAP Results

Q2 FY 2024

Q2 FY 2023

Vs. Q2 FY 2023

Revenue

$    12.8 billion

$      13.6 billion

(6) %

Net Income

$     2.6  billion

$       2.8  billion

(5) %

Diluted Earnings per Share (EPS)

$           0.65

$             0.67

(3) %

 

Non-GAAP Results

Q2 FY 2024

Q2 FY 2023

Vs. Q2 FY 2023

Net Income

$      3.5 billion

$      3.6 billion

(3) %

EPS

$           0.87

$            0.88

(1) %

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 Increases Quarterly Dividend

Cisco has declared a quarterly dividend of $0.40 per common share, a 1-cent increase or up 3%, over the previous quarter’s dividend, to be paid on April 24, 2024, to all stockholders of record as of the close of business on April 4, 2024. Future dividends will be subject to Board approval.

Financial Summary

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

Q2 FY 2024 Highlights

Revenue — Total revenue was $12.8 billion, down 6%, with product revenue down 9% and service revenue up 4%. Revenue by geographic segment was: Americas down 4%, EMEA down 7%, and APJC was down 12%. Product revenue performance reflected growth in Security up 3%, Collaboration up 3% and Observability up 16%. Networking was down 12%.

Gross Margin — On a GAAP basis, total gross margin, product gross margin, and service gross margin were 64.2%, 62.7%, and 68.2%, respectively, as compared with 62.0%, 60.2%, and 67.2%, respectively, in the second quarter of fiscal 2023.

On a non-GAAP basis, total gross margin, product gross margin, and service gross margin were 66.7%, 65.2%, and 70.5%, respectively, as compared with 63.9%, 62.1%, and 69.1%, respectively, in the second quarter of fiscal 2023.

Total gross margins by geographic segment were: 65.7% for the Americas, 68.1% for EMEA and 68.2% for APJC.

Operating Expenses — On a GAAP basis, operating expenses was flat at $5.1 billion, and were 40.0% of revenue. Non-GAAP operating expenses were $4.3 billion, up 1%, and were 33.8% of revenue.

Operating Income — GAAP operating income was $3.1 billion, down 6%, with GAAP operating margin of 24.2%. Non-GAAP operating income was $4.2 billion, down 4%, with non-GAAP operating margin at 33.0%.

Provision for Income Taxes — The GAAP tax provision rate was 16.7%. The non-GAAP tax provision rate was 19.0%.

Net Income and EPS — On a GAAP basis, net income was $2.6 billion, a decrease of 5%, and EPS was $0.65, a decrease of 3%. On a non-GAAP basis, net income was $3.5 billion, a decrease of 3%, and EPS was $0.87, a decrease of 1%.

Cash Flow from Operating Activities — $0.8 billion for the second quarter of fiscal 2024, a decrease of 83% compared with $4.7 billion for the second quarter of fiscal 2023.

Balance Sheet and Other Financial Highlights

Cash and Cash Equivalents and Investments — $25.7 billion at the end of the second quarter of fiscal 2024, compared with $26.1 billion at the end of fiscal 2023.

Remaining Performance Obligations (RPO) — $35.7 billion, up 12% in total, with 50% of this amount to be recognized as revenue over the next 12 months. Product RPO and service RPO were each up 12%.

Deferred Revenue — $25.8 billion, up 8% in total, with deferred product revenue up 9%. Deferred service revenue was up 7%.

Capital Allocation — In the second quarter of fiscal 2024, we returned $2.8 billion to stockholders through share buybacks and dividends. We declared and paid a cash dividend of $0.39 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 $49.54 per share for an aggregate purchase price of $1.3 billion. The remaining authorized amount for stock repurchases under the program is $8.4 billion with no termination date.

Guidance

Cisco expects to achieve the following results for the third quarter of fiscal 2024:

Q3 FY 2024

Revenue

$12.1 billion – $12.3 billion

Non-GAAP gross margin rate

66% – 67%

Non-GAAP operating margin rate

33.5% – 34.5%

Non-GAAP EPS

$0.84 – $0.86

Cisco estimates that GAAP EPS will be $0.51 to $0.56 for the third quarter of fiscal 2024.

Cisco expects to achieve the following results for fiscal 2024:

FY 2024

Revenue

$51.5 billion – $52.5 billion

Non-GAAP EPS

$3.68 – $3.74

Cisco estimates that GAAP EPS will be $2.61 to $2.73 for fiscal 2024.

Our Q3 FY 2024 and FY 2024 guidance assumes an effective tax provision rate of 18% for GAAP and 19% 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:

Q2 fiscal year 2024 conference call to discuss Cisco’s results along with its guidance will be held on Wednesday, February 14, 2024 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, February 14, 2024 to 12:00 a.m. Pacific Time, February 21, 2024 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, February 14, 2024. 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

Six Months Ended

January 27, 2024

January 28, 2023

January 27, 2024

January 28, 2023

REVENUE:

Product

$         9,232

$       10,155

$       20,371

$       20,400

Service

3,559

3,437

7,088

6,824

Total revenue

12,791

13,592

27,459

27,224

COST OF SALES:

Product

3,443

4,038

7,400

8,217

Service

1,131

1,127

2,285

2,234

Total cost of sales

4,574

5,165

9,685

10,451

GROSS MARGIN

8,217

8,427

17,774

16,773

OPERATING EXPENSES:

Research and development

1,943

1,855

3,856

3,636

Sales and marketing

2,458

2,384

4,964

4,775

General and administrative

642

582

1,314

1,147

Amortization of purchased intangible assets

66

71

133

142

Restructuring and other charges

12

243

135

241

Total operating expenses

5,121

5,135

10,402

9,941

OPERATING INCOME

3,096

3,292

7,372

6,832

Interest income

324

219

684

388

Interest expense

(120)

(107)

(231)

(207)

Other income (loss), net

(139)

11

(222)

(123)

Interest and other income (loss), net

65

123

231

58

INCOME BEFORE PROVISION FOR INCOME TAXES

3,161

3,415

7,603

6,890

Provision for income taxes

527

642

1,331

1,447

NET INCOME

$         2,634

$         2,773

$         6,272

$         5,443

Net income per share:

Basic

$           0.65

$           0.68

$           1.55

$           1.33

Diluted

$           0.65

$           0.67

$           1.54

$           1.32

Shares used in per-share calculation:

Basic

4,055

4,103

4,056

4,105

Diluted

4,073

4,116

4,079

4,115

 

CISCO SYSTEMS, INC.

REVENUE BY SEGMENT

(In millions, except percentages)

January 27, 2024

Three Months Ended

Six Months Ended

Amount

Y/Y %

Amount

Y/Y %

Revenue:

Americas

$         7,510

(4) %

$       16,532

5 %

EMEA

3,484

(7) %

7,148

(3) %

APJC

1,798

(12) %

3,779

(7) %

Total

$       12,791

(6) %

$       27,459

1 %

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

 

CISCO SYSTEMS, INC.

GROSS MARGIN PERCENTAGE BY SEGMENT

(In percentages)

January 27, 2024

Three Months Ended

Six Months Ended

Gross Margin Percentage:

Americas

65.7 %

65.9 %

EMEA

68.1 %

68.8 %

APJC

68.2 %

67.6 %

 

CISCO SYSTEMS, INC.

REVENUE FOR GROUPS OF SIMILAR PRODUCTS AND SERVICES

(In millions, except percentages)

January 27, 2024

Three Months Ended

Six Months Ended

Amount

Y/Y %

Amount

Y/Y %

Revenue:

Networking

$         7,081

(12) %

$       15,904

(1) %

Security

973

3 %

1,984

4 %

Collaboration

989

3 %

2,106

3 %

Observability

188

16 %

378

18 %

Total Product

9,232

(9) %

20,371

— %

Services

3,559

4 %

7,088

4 %

Total

$       12,791

(6) %

$       27,459

1 %

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

 

CISCO SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

January 27, 2024

July 29, 2023

ASSETS

Current assets:

Cash and cash equivalents

$              13,715

$              10,123

Investments

11,956

16,023

Accounts receivable, net of allowance of $79 at January 27, 2024 and $85 at July 29, 2023

4,884

5,854

Inventories

3,209

3,644

Financing receivables, net

3,476

3,352

Other current assets

4,887

4,352

Total current assets

42,127

43,348

Property and equipment, net

2,005

2,085

Financing receivables, net

3,364

3,483

Goodwill

39,087

38,535

Purchased intangible assets, net

1,678

1,818

Deferred tax assets

7,338

6,576

Other assets

5,575

6,007

TOTAL ASSETS

$            101,174

$            101,852

LIABILITIES AND EQUITY

Current liabilities:

Short-term debt

$                4,936

$                1,733

Accounts payable

1,848

2,313

Income taxes payable

1,876

4,235

Accrued compensation

3,216

3,984

Deferred revenue

14,011

13,908

Other current liabilities

4,964

5,136

Total current liabilities

30,851

31,309

Long-term debt

6,669

6,658

Income taxes payable

3,390

5,756

Deferred revenue

11,760

11,642

Other long-term liabilities

2,253

2,134

Total liabilities

54,923

57,499

Total equity

46,251

44,353

TOTAL LIABILITIES AND EQUITY

$            101,174

$            101,852

 

CISCO SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

Six Months Ended

January 27,
2024

January 28,
2023

Cash flows from operating activities:

Net income

$              6,272

$              5,443

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

Depreciation, amortization, and other

823

853

Share-based compensation expense

1,463

1,097

Provision (benefit) for receivables

12

6

Deferred income taxes

(816)

(845)

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

205

109

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

Accounts receivable

941

1,393

Inventories

442

(569)

Financing receivables

(33)

834

Other assets

(403)

(210)

Accounts payable

(476)

42

Income taxes, net

(4,656)

118

Accrued compensation

(763)

(146)

Deferred revenue

293

633

Other liabilities

(125)

(57)

Net cash provided by operating activities

3,179

8,701

Cash flows from investing activities:

Purchases of investments

(2,253)

(3,797)

Proceeds from sales of investments

2,484

587

Proceeds from maturities of investments

4,044

2,316

Acquisitions, net of cash and cash equivalents acquired

(878)

(3)

Purchases of investments in privately held companies

(50)

(70)

Return of investments in privately held companies

123

39

Acquisition of property and equipment

(304)

(346)

Other

(1)

(19)

Net cash provided by (used in) provided by investing activities

3,165

(1,293)

Cash flows from financing activities:

Issuances of common stock

349

316

Repurchases of common stock – repurchase program

(2,504)

(1,760)

Shares repurchased for tax withholdings on vesting of restricted stock units

(581)

(310)

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

1,398

(602)

Issuances of debt

2,537

—

Repayments of debt

(750)

—

Dividends paid

(3,163)

(3,120)

Other

(7)

(5)

Net cash used in financing activities

(2,721)

(5,481)

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

(32)

3

Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents

3,591

1,930

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

11,627

8,579

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

$           15,218

$           10,509

Supplemental cash flow information:

Cash paid for interest

$                 203

$                 178

Cash paid for income taxes, net

$              6,804

$              2,172

 

CISCO SYSTEMS, INC.

REMAINING PERFORMANCE OBLIGATIONS

(In millions, except percentages)

January 27, 2024

October 28, 2023

January 28, 2023

Amount

Y/Y%

Amount

Y/Y%

Amount

Y/Y%

Product

$    16,249

12 %

$    16,011

14 %

$    14,517

7 %

Service

19,407

12 %

18,742

11 %

17,255

2 %

Total

$    35,656

12 %

$    34,753

12 %

$    31,772

4 %

We expect 50% of total RPO at January 27, 2024 will be recognized as revenue over the next 12 months.

 

CISCO SYSTEMS, INC.

DEFERRED REVENUE

(In millions)

January 27, 2024

October 28, 2023

January 28, 2023

Deferred revenue:

Product

$       11,640

$       11,689

$       10,679

Service

14,131

13,970

13,248

Total

$       25,771

$       25,659

$       23,927

Reported as:

Current

$       14,011

$       13,812

$       13,109

Noncurrent

11,760

11,847

10,818

Total

$       25,771

$       25,659

$       23,927

 

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 2024

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

Fiscal 2023

July 29, 2023

$             0.39

$          1,589

25

$          50.49

$          1,254

$          2,843

April 29, 2023

$             0.39

$          1,593

25

$          49.45

$          1,259

$          2,852

January 28, 2023

$             0.38

$          1,560

26

$          47.72

$          1,256

$          2,816

October 29, 2022

$             0.38

$          1,560

12

$          43.76

$             502

$          2,062

 

CISCO SYSTEMS, INC.

RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

GAAP TO NON-GAAP NET INCOME

(In millions)

Three Months Ended

Six Months Ended

January 27,
2024

January 28,
2023

January 27,
2024

January 28,
2023

GAAP net income

$         2,634

$         2,773

$         6,272

$         5,443

Adjustments to cost of sales:

Share-based compensation expense

139

106

242

187

Amortization of acquisition-related intangible assets

175

153

356

306

Acquisition-related/divestiture costs

1

1

1

3

Total adjustments to GAAP cost of sales

315

260

599

496

Adjustments to operating expenses:

Share-based compensation expense

662

498

1,212

913

Amortization of acquisition-related intangible assets

66

71

133

142

Acquisition-related/divestiture costs

64

48

139

123

Russia-Ukraine war costs

—

2

(2)

5

Significant asset impairments and restructurings

12

243

135

241

Total adjustments to GAAP operating expenses

804

862

1,617

1,424

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

(Gains) and losses on investments

88

(44)

139

65

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

88

(44)

139

65

Total adjustments to GAAP income before provision for income taxes

1,207

1,078

2,355

1,985

Income tax effect of non-GAAP adjustments

(303)

(212)

(561)

(404)

Significant tax matters

—

—

—

164

Total adjustments to GAAP provision for income taxes

(303)

(212)

(561)

(240)

Non-GAAP net income

$         3,538

$         3,639

$         8,066

$         7,188

  

CISCO SYSTEMS, INC.

RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

GAAP TO NON-GAAP EPS

Three Months Ended

Six Months Ended

January 27,
2024

January 28,
2023

January 27,
2024

January 28,
2023

GAAP EPS

$           0.65

$           0.67

$           1.54

$           1.32

Adjustments to GAAP:

Share-based compensation expense

0.20

0.15

0.36

0.27

Amortization of acquisition-related intangible assets

0.06

0.05

0.12

0.11

Acquisition-related/divestiture costs

0.02

0.01

0.03

0.03

Significant asset impairments and restructurings

—

0.06

0.03

0.06

(Gains) and losses on investments

0.02

(0.01)

0.03

0.02

Income tax effect of non-GAAP adjustments

(0.07)

(0.05)

(0.14)

(0.10)

Significant tax matters

—

—

—

0.04

Non-GAAP EPS

$           0.87

$           0.88

$           1.98

$           1.75

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

January 27, 2024

Product
Gross
Margin

Service
Gross
Margin

Total
Gross
Margin

Operating
Expenses

Y/Y

Operating
Income

Y/Y

Interest
andother
income
(loss), net

Net
Income

Y/Y

GAAP amount

$ 5,789

$ 2,428

$ 8,217

$ 5,121

— %

$ 3,096

(6) %

$    65

$ 2,634

(5) %

% of revenue

62.7 %

68.2 %

64.2 %

40.0 %

24.2 %

0.5 %

20.6 %

Adjustments to GAAP amounts:

Share-based compensation expense

58

81

139

662

801

—

801

Amortization of acquisition-related intangible assets

175

—

175

66

241

—

241

Acquisition/divestiture-related costs

1

—

1

64

65

—

65

Significant asset impairments and restructurings

—

—

—

12

12

—

12

(Gains) and losses on investments

—

—

—

—

—

88

88

Income tax effect/significant tax matters

—

—

—

—

—

—

(303)

Non-GAAP amount

$ 6,023

$ 2,509

$ 8,532

$ 4,317

1 %

$ 4,215

(4) %

$  153

$ 3,538

(3) %

% of revenue

65.2 %

70.5 %

66.7 %

33.8 %

33.0 %

1.2 %

27.7 %

               

Three Months Ended

January 28, 2023

Product
Gross
Margin

Service
Gross
Margin

Total
Gross
Margin

Operating
Expenses

Operating

Income

Interest
and other
income
(loss), net

Net

Income

GAAP amount

$   6,117

$   2,310

$   8,427

$   5,135

$   3,292

$      123

$   2,773

% of revenue

60.2 %

67.2 %

62.0 %

37.8 %

24.2 %

0.9 %

20.4 %

Adjustments to GAAP amounts:

Share-based compensation expense

40

66

106

498

604

—

604

Amortization of acquisition-related intangible assets

153

—

153

71

224

—

224

Acquisition/divestiture-related costs

1

—

1

48

49

—

49

Significant asset impairments and restructurings

—

—

—

243

243

—

243

Russia-Ukraine war costs

—

—

—

2

2

—

2

(Gains) and losses on investments

—

—

—

—

—

(44)

(44)

Income tax effect/significant tax matters

—

—

—

—

—

—

(212)

Non-GAAP amount

$   6,311

$   2,376

$   8,687

$   4,273

$   4,414

$        79

$   3,639

% of revenue

62.1 %

69.1 %

63.9 %

31.4 %

32.5 %

0.6 %

26.8 %

Amounts may not sum and percentages may not recalculate 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)

Six Months Ended

January 27, 2024

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

$ 12,971

$ 4,803

$ 17,774

$ 10,402

5 %

$ 7,372

8 %

$  231

$ 6,272

15 %

% of revenue

63.7 %

67.8 %

64.7 %

37.9 %

26.8 %

0.8 %

22.8 %

Adjustments to GAAP amounts:

Share-based compensation expense

100

142

242

1,212

1,454

—

1,454

Amortization of acquisition-related intangible assets

356

—

356

133

489

—

489

Acquisition/divestiture-related costs

1

—

1

139

140

—

140

Significant asset impairments and restructurings

—

—

—

135

135

—

135

Russia-Ukraine war costs

—

—

—

(2)

(2)

—

(2)

(Gains) and losses on investments

—

—

—

—

—

139

139

Income tax effect/significant tax matters

—

—

—

—

—

—

(561)

Non-GAAP amount

$ 13,428

$ 4,945

$ 18,373

$ 8,785

3 %

$ 9,588

10 %

$  370

$ 8,066

12 %

% of revenue

65.9 %

69.8 %

66.9 %

32.0 %

34.9 %

1.3 %

29.4 %

 

Six Months Ended

January 28, 2023

Product
Gross
Margin

Service
Gross
Margin

Total
Gross
Margin

Operating
Expenses

Operating

Income

Interest
and other
income
(loss), net

Net

Income

GAAP amount

$ 12,183

$   4,590

$ 16,773

$   9,941

$   6,832

$        58

$   5,443

% of revenue

59.7 %

67.3 %

61.6 %

36.5 %

25.1 %

0.2 %

20.0 %

Adjustments to GAAP amounts:

Share-based compensation expense

71

116

187

913

1,100

—

1,100

Amortization of acquisition-related intangible assets

306

—

306

142

448

—

448

Acquisition/divestiture-related costs

3

—

3

123

126

—

126

Significant asset impairments and restructurings

—

—

—

241

241

—

241

Russia-Ukraine war costs

—

—

—

5

5

—

5

(Gains) and losses on investments

—

—

—

—

—

65

65

Income tax effect/significant tax matters

—

—

—

—

—

—

(240)

Non-GAAP amount

$ 12,563

$   4,706

$ 17,269

$   8,517

$   8,752

$      123

$   7,188

% of revenue

61.6 %

69.0 %

63.4 %

31.3 %

32.1 %

0.5 %

26.4 %

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

 

CISCO SYSTEMS, INC.

RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

EFFECTIVE TAX RATE

(In percentages)

Three Months Ended

Six Months Ended

January 27,
2024

January 28,
2023

January 27,
2024

January 28,
2023

GAAP effective tax rate

16.7 %

18.8 %

17.5 %

21.0 %

Total adjustments to GAAP provision for income taxes

2.3 %

0.2 %

1.5 %

(2.0) %

Non-GAAP effective tax rate

19.0 %

19.0 %

19.0 %

19.0 %

 

GAAP TO NON-GAAP GUIDANCE

Q3 FY 2024

Gross Margin
Rate

Operating Margin
Rate

Earnings per
Share (2)

GAAP

63.5% – 64.5%

20.5% – 21.5%

$0.51 – $0.56

Estimated adjustments for:

Share-based compensation expense

1.0 %

6.5 %

$0.15 – $0.16

Amortization of acquisition-related intangible assets and acquisition/divestiture-related costs

1.5 %

2.0 %

$0.05 – $0.06

Significant asset impairments and restructurings (1)

—

4.5 %

$0.10 – $0.11

Non-GAAP

66% – 67%

33.5% – 34.5%

$0.84 – $0.86

 

FY 2024

Earnings per
Share (2)

GAAP

$2.61 – $2.73

Estimated adjustments for:

Share-based compensation expense

$0.59 – $0.61

Amortization of acquisition-related intangible assets and acquisition/divestiture-related costs

$0.23 – $0.25

Significant asset impairments and restructurings (1)

$0.16 – $0.18

(Gains) and losses on investments

$0.03

Non-GAAP

$3.68 – $3.74

(1) On February 14, 2024, Cisco announced a restructuring plan in order to realign the organization and enable further investment in key priority areas. This restructuring plan will impact approximately 5 percent of Cisco’s global workforce. Cisco currently estimates that it will recognize pre-tax charges to its GAAP financial results of approximately $800 million consisting of severance and other one-time termination benefits and other costs. These charges are primarily cash-based. Cisco expects to take the majority of these actions in the third quarter of fiscal 2024 and recognize approximately $500 million of these charges. Cisco expects approximately $150 million of these charges to be recognized in the fourth quarter of fiscal 2024, and the remaining amount of these charges primarily through the first half of fiscal 2025.

(2) Estimated adjustments to GAAP earnings per share are shown after income tax effects.

Except as noted above, this guidance does not include the effects of any future acquisitions/divestitures, asset impairments, Russia–Ukraine war costs, restructurings, (gains) and losses on investments and significant tax matters or other events, which may or may not be significant unless specifically stated.

Forward Looking Statements, Non-GAAP Information and Additional Information
This release may be deemed to contain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other things, statements regarding future events (such as the alignment of our investments to future growth opportunities, the role that our innovation plays as our customers adopt AI and secure their organizations, the progress in our business model shift to more recurring revenue while remaining focused on financial discipline, operating leverage and shareholder returns) and the future financial performance of Cisco (including the guidance for Q3 FY 2024 and full year FY 2024) that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including: business and economic conditions and growth trends in the networking industry, our customer markets and various geographic regions; global economic conditions and uncertainties in the geopolitical environment; our development and use of artificial intelligence; overall information technology spending; the growth and evolution of the Internet and levels of capital spending on Internet-based systems; variations in customer demand for products and services, including sales to the service provider market and other customer markets; the return on our investments in certain priorities, key growth areas, and in certain geographical locations, as well as maintaining leadership in Networking and services; the timing of orders and manufacturing and customer lead times; supply constraints; changes in customer order patterns or customer mix; insufficient, excess or obsolete inventory; variability of component costs; variations in sales channels, product costs or mix of products sold; our ability to successfully acquire businesses and technologies and to successfully integrate and operate these acquired businesses and technologies; our ability to achieve expected benefits of our partnerships; increased competition in our product and service markets, including the data center market; dependence on the introduction and market acceptance of new product offerings and standards; rapid technological and market change; manufacturing and sourcing risks; product defects and returns; litigation involving patents, other intellectual property, antitrust, stockholder and other matters, and governmental investigations; our ability to achieve the benefits of restructurings and possible changes in the size and timing of related charges; cyber attacks, data breaches or other incidents; vulnerabilities and critical security defects; our ability to protect personal data; evolving regulatory uncertainty; terrorism; natural catastrophic events (including as a result of global climate change); any pandemic or epidemic; our ability to achieve the benefits anticipated from our investments in sales, engineering, service, marketing and manufacturing activities; our ability to recruit and retain key personnel; our ability to manage financial risk, and to manage expenses during economic downturns; risks related to the global nature of our operations, including our operations in emerging markets; currency fluctuations and other international factors; changes in provision for income taxes, including changes in tax laws and regulations or adverse outcomes resulting from examinations of our income tax returns; potential volatility in operating results; and other factors listed in Cisco’s most recent reports on Forms 10-Q and 10-K filed on November 21, 2023 and September 7, 2023, respectively. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in Cisco’s most recent reports on Forms 10-Q and 10-K as each may be amended from time to time. Cisco’s results of operations for the three and six months ended January 27, 2024 are not necessarily indicative of Cisco’s operating results for any future periods. Any projections in this release are based on limited information currently available to Cisco, which is subject to change. Although any such projections and the factors influencing them will likely change, Cisco will not necessarily update the information, since Cisco will only provide guidance at certain points during the year. Such information speaks only as of the date of this release.

This release includes non-GAAP net income, non-GAAP gross margins, non-GAAP operating expenses, non-GAAP operating income and margin, non-GAAP effective tax rates, non-GAAP interest and other income (loss), net, and non-GAAP net income per share data for the periods presented. It also includes future estimated ranges for gross margin, operating margin, tax provision rate and EPS on a non-GAAP basis.

These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Cisco believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Cisco’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Cisco’s results of operations in conjunction with the corresponding GAAP measures.

Cisco believes that the presentation of non-GAAP measures when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and its historical and projected results of operations.

For its internal budgeting process, Cisco’s management uses financial statements that do not include, when applicable, share-based compensation expense, amortization of acquisition-related intangible assets, acquisition-related/divestiture costs, significant asset impairments and restructurings, significant litigation settlements and other contingencies, Russia–Ukraine war costs, gains and losses on investments, the income tax effects of the foregoing and significant tax matters. Cisco’s management also uses the foregoing non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Cisco. In prior periods, Cisco has excluded other items that it no longer excludes for purposes of its non-GAAP financial measures. From time to time in the future there may be other items that Cisco may exclude for purposes of its internal budgeting process and in reviewing its financial results. For additional information on the items excluded by Cisco from one or more of its non-GAAP financial measures, refer to the Form 8-K regarding this release furnished today to the Securities and Exchange Commission.

Annualized recurring revenue represents the annualized revenue run-rate of active subscriptions, term licenses, operating leases and maintenance contracts at the end of a reporting period, net of rebates to customers and partners as well as certain other revenue adjustments. Includes both revenue recognized ratably as well as upfront on an annualized basis.

About Cisco

Cisco (Nasdaq: CSCO) is the worldwide technology leader that securely connects everything to make anything possible. Our purpose is to power an inclusive future for all by helping our customers reimagine their applications, power hybrid work, secure their enterprise, transform their infrastructure, and meet their sustainability goals. Discover more at newsroom.cisco.com and follow us on X at @Cisco.

Copyright © 2024 Cisco and/or its affiliates. All rights reserved. Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S. and other countries. To view a list of Cisco trademarks, go to: www.cisco.com/go/trademarks. Third-party trademarks mentioned in this document are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company. This document is Cisco Public Information.

RSS Feed for Cisco: https://newsroom.cisco.com/rss-feeds

 

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SOURCE Cisco Systems, Inc.

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Visier Debuts Talent Agents, Closing the Gap Between HR Programs and Business Impact

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New AI agents turn Visier insights and plans into guided action for every manager, fixing the #1 reason HR programs fail: manager follow-through

VANCOUVER, BC, Oct. 21, 2026 /PRNewswire/ — Visier today announced Talent Agents at HR Tech 2026. Built on the Visier Workforce Intelligence Platform, these new AI agents guides every manager to the next right action in their organization’s HR programs in real time, and give talent leaders evidence of what each program actually changed for the business.

Talent management devotes a great deal of money and effort into HR programs every year, and many still can’t show the ROI or outcomes. New Visier research* found:

62% of HR leaders name manager follow-through as the single biggest reason programs fail77% of enterprises run HR programs on spreadsheets or a patchwork of tools, and are three times less likely to measure results while a program is underway.

Visier Talent Agents are built to close these gaps, helping talent management tackle its most critical challenges as organizations plan, grow and retain their talent. They leverage the latest in AI developments to pair best-in-class program frameworks with personalized, in-workflow guidance delivered to whoever needs to act next, and a closed-loop system for continuous learning and improvement based on every program’s goals.

“Good program design has never been enough. What HR has lacked is a GPS for every manager, so the moment someone drifts off track, they’re guided back before the program goes sideways,” said Dave Weisbeck, Chief Strategy Officer at Visier. “That’s what Talent Agents deliver, along with proof of what the program actually changed for the business.” 

“The space between HR program design and the actual business result is exactly where most HR investment gets lost,” said Madeline Laurano, founder of Aptitude Research. “Guidance that activates the manager at the moment they need to act, with proof of what changed afterward, is the piece of talent management that’s been missing and what Visier is solving for.”

Unlike HCM suites that teams would spend a year customizing, or point solutions that only see one piece of the picture, or even an internal-built tool that puts employee data at risk, Visier’s Talent Agents are built to run programs end-to-end and prove impact, not just track activity.

The agents reach every stakeholder in a program at the moment they need to act, not just when someone remembers to ask. They’re built to match how an organization actually operates, and the outcome of every action it recommends feeds back into the AI learning engine, so guidance gets sharper with each cycle. Because guidance runs on Visier’s proprietary Workforce AI rather than routing every follow-up through a person, organizations can scale their programs without being constrained by HRBP headcount.

The agents are built on Visier’s Workforce Intelligence Platform, so every program comes with the context, governance, and security an enterprise expects, backed by over 16 years of experience solving HR’s toughest problems.

Talent Agents are Visier’s answer to what the company calls the “activate” layer of Workforce AI, building on the platform’s existing strength in helping organizations understand their workforce data and plan around it. The offering pairs Visier’s technology with a dedicated implementation team that customizes each program to a customer’s specific processes and goals.

Attending HRTech 2026 in Las Vegas this week? Head over to Visier Booth #5209 to explore Talent Agents, or visit visier.com to learn more. The Visier team will also be at UNLEASH World in Paris (booth #106) and Total Talent Asia (booth #3).

About Visier
Visier Workforce AI is the context foundation for talent management. The Visier Workforce Intelligence Platform turns scattered, sensitive people data into one governed understanding of the entire workforce, so organizations can understand, plan, and activate all of their talent priorities in one place. More than 85,000 of the world’s most complex organizations, including Ford Motor Company, eBay, Experian, and Domino’s Pizza, rely on Visier’s over 16 years of workforce domain expertise, ranked #1 in vendor satisfaction and user experience for three consecutive years by the Sapient Insights HR Systems Survey. Learn more at Visier.com.

*Research from fall 2026, conducted by the Visier, Inc. Research Team surveyed verified senior HR and Talent leaders from 80 organizations with more than 10,000 employees across North America.  

visierpr@walkersands.com

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SOURCE Visier

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HSG Laser Unveils New Flagship Machine at EuroBLECH 2026, Powering Productivity for European Manufacturers

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HANNOVER, Germany, Oct. 21, 2026 /PRNewswire/ — HSG Laser is showcasing its latest laser cutting and intelligent manufacturing solutions at EuroBLECH 2026, held from October 20–23 at the Hannover Exhibition Centre. Under the theme “Powering Productivity with HSG,” HSG is presenting its latest innovations at Booth 15-F42, including the European debut of its new flagship GV, alongside the launch of GFA PRO and AI CutPilot, as well as the European debut of its high-speed laser solutions G3015T and R2 PRO.

Expanding High-Performance Laser Solutions

The new GFA PRO is engineered for large-format metal processing, addressing challenges such as large footprints, low speed, unstable thick-plate performance, and high operating costs. Making their European debut, the G3015T and R2 PRO expand HSG’s high-speed laser lineup for sheet and tube processing, helping manufacturers improve throughput, flexibility, and production efficiency.

“HSG Laser’s European footprint has grown steadily, with more than 2,000 units delivered and a new showroom opening soon this year,” said Shawn Wang, Vice President of HSG Laser. “Our latest launches at EuroBLECH mark another step forward, combining high-performance equipment with intelligent technologies and localized support to deliver greater productivity for European customers.”

Recognized by MM MaschinenMarkt Germany

Built for the European market, HSG Laser earned the “International Spotlight” award from MM MaschinenMarkt Germany’s Chief Editor for its GV and AI CutPilot. The GV combines cutting, beveling, countersinking, and chamfering in one machine to streamline pre-welding workflows and boost efficiency. AI CutPilot is HSG’s industry-first, self-developed AI system that turns laser-cutting expertise into a reusable, scalable machine capability, helping reduce trial work and improve first-pass yield. The award further highlights HSG Laser’s technological strength and growing presence in the European market.

Strengthening Local Operations in Europe

As part of its continued commitment to supporting manufacturers worldwide, HSG Laser is further strengthening its localized operations in Europe. On 10th November, HSG will open its new showroom in Düsseldorf, Germany under the theme “Go Global, Link Local.” The new showroom will bring HSG’s latest machines, technologies, and expertise closer to European customers, creating more opportunities for direct engagement and local support. This expansion further strengthens HSG’s presence in Europe and its ability to provide responsive, customer-focused solutions tailored to local manufacturing needs.

About HSG Laser

Founded in 2006, HSG Laser is a leading global manufacturer of intelligent metal processing equipment, specializing in laser cutting, tube processing, bending, and welding automation systems. With a presence in over 100 countries and regional centers across Europe, North America, Japan, India, and Asia-Pacific, HSG Laser is committed to driving the transformation of manufacturing through innovation, reliability, and artificial intelligence.

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Mérieux NutriSciences Completes Acquisition of Certified Group, Becoming North America’s Leading Food Testing Provider

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CHICAGO, Oct. 21, 2026 /PRNewswire/ — Mérieux NutriSciences, a global leader in food safety, quality, and sustainability, today announced the successful completion of its acquisition of Certified Group.

First announced in August 2026, this strategic transaction unites two complementary leaders in the Testing, Inspection, and Certification (TIC) sector. With approximately $300 million in revenue, Certified Group brings 31 laboratories and over 1,600 talented employees into Mérieux NutriSciences’ global network. The integration also adds a robust roster of more than 170 independent regulatory consultants across the United States and Canada.

With this expanded coast-to-coast footprint, Mérieux NutriSciences is positioned to provide customers with broader service offerings and enhanced regulatory support. The integration deepens the company’s capabilities in key Food & Beverage segments, most notably in animal protein through its Food Safety Net Services (FSNS) network, where Certified Group has built a strong reputation as a bellwether for safety and quality, alongside leading positions in dairy, packaged foods, nuts, and spices.

Customers will also benefit from high-value expertise in cosmetics, OTC products, and dietary supplements through the Certified Laboratories vertical, and reduced-harm nicotine product testing via Labstat International. These core verticals are further bolstered by specialized expert services, including contract research (Lab Plus), regulatory consulting (EAS Consulting Group), and comprehensive certification and audit programs (FSNS Certification and Audit).

“We are thrilled to officially welcome the talented teams from Certified Group to the Mérieux NutriSciences global network,” said Nicolas Cartier, CEO of Mérieux NutriSciences. “By combining our respective strengths, we are vastly expanding the depth and breadth of our capabilities. This milestone allows us to be closer to our customers, meeting their localized, time-sensitive needs with unmatched speed and reliability, while furthering our shared purpose: Better Food. Better Health. Better World.”

“Our priority is to ensure a seamless transition for all customers while delivering immediate, enhanced value,” added Sébastien Moulard, President North America at Mérieux NutriSciences. “Through this nationwide analytical network, customers now have access to a truly comprehensive portfolio of routine testing, specialized analysis, expert regulatory support, and more. We are excited to leverage the best of both worlds to drive innovation and provide practical solutions right where production happens.”

“Certified Group has built a differentiated platform with a strong reputation for quality, scientific excellence and exceptional customer service,” said Deborah Kerr, Managing Director, Warburg Pincus & Executive Chair, Certified Group. “We are proud to have supported Certified Group’s evolution and look forward to seeing the company continue to thrive as part of Mérieux NutriSciences.”

The financing of the acquisition brings new minority shareholders Peugeot Invest and Continental Grain Company (Conti) alongside Mérieux NutriSciences’ long standing shareholders: Institut Mérieux, Sofina, and Dassault Group. This collective support underscores strong market confidence in the company’s strategic vision. Ultimately, the successful integration of Certified Group solidifies Mérieux NutriSciences as the leading provider in North America and a top player in the global food TIC market, further cementing its role as the trusted partner for customers navigating a rapidly evolving landscape.

About Mérieux NutriSciences:

At Mérieux NutriSciences, we leverage 60 years of scientific and entrepreneurial expertise to answer food industry needs. Today’s global challenges transform the way food is produced, marketed and consumed, which is why we know our clients need more than reliable analytical results; they need practical and innovative solutions that will contribute to make food systems safer, healthier and more sustainable. Present worldwide, we are more than 160 accredited laboratories and a team of over 11,600 committed employees. We strongly believe that together, we can create solutions to offer our planet: BETTER FOOD. BETTER HEALTH. BETTER WORLD. na.mxns.com

MERIEUX NUTRISCIENCES
Stephen Nichols (North America)
stephen.nichols@mxns.com 

Marion Bertrand (Global)
media@mxns.com 

Ashton van den Bergh (Global)
media@mxns.com

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SOURCE Mérieux NutriSciences

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