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CISCO REPORTS FOURTH QUARTER AND FISCAL YEAR 2024 EARNINGS

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

News Summary:

Product order growth of 14% year over year; up 6% excluding SplunkRevenue of $13.6 billion in Q4 FY 2024, above the high end of our guidance rangeStrong margins:Q4 FY 2024 GAAP gross margin of 64.4% and Non-GAAP gross margin of 67.9%FY 2024 GAAP gross margin of 64.7% and Non-GAAP gross margin of 67.5%, the highest in 20 yearsSolid growth in software and recurring metrics in FY 2024, enhanced by SplunkTotal subscription revenue of $27.4 billion including Splunk, representing 51% of total revenueTotal annualized recurring revenue (ARR) at $29.6 billion, including $4.3 billion from Splunk, up 22% year over yearTotal software revenue at $18.4 billion, up 9% year over year, with software subscription revenue of $16.4 billion, up 15% year over year, making up 89% of total software revenueQ4 FY 2024 Results:Revenue: $13.6 billionDecrease of 10% year over yearEarnings per Share: GAAP: $0.54; Non-GAAP: $0.87GAAP EPS decreased 44% year over yearNon-GAAP EPS decreased 24% year over yearFY 2024 Results:Revenue: $53.8 billion Decrease of 6% year over yearEarnings per Share: GAAP: $2.54; Non-GAAP: $3.73GAAP EPS decreased 17% year over yearNon-GAAP EPS decreased 4% year over yearQ1 FY 2025 Guidance: Revenue: $13.65 billion to $13.85 billionEarnings per Share: GAAP: $0.35 to $0.42; Non-GAAP: $0.86 to $0.88FY 2025 Guidance: Revenue: $55.0 billion to $56.2 billionEarnings per Share: GAAP: $1.93 to $2.05; Non-GAAP: $3.52 to $3.58

Cisco today reported fourth quarter and fiscal year results for the period ended July 27, 2024. Cisco reported fourth quarter revenue of $13.6 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.2 billion or $0.54 per share, and non-GAAP net income of $3.5 billion or $0.87 per share.

“We delivered a strong close to fiscal 2024,” said Chuck Robbins, chair and CEO of Cisco. “In our fourth quarter, we saw steady customer demand with order growth across the business as customers rely on Cisco to connect and protect all aspects of their organizations in the era of AI.”

“Revenue, gross margin and EPS in Q4 were at the high end or above our guidance range, demonstrating our operating discipline,” said Scott Herren, CFO of Cisco. “As we look to build on our performance, we remain laser focused on growth and consistent execution as we invest to win in AI, cloud and cybersecurity, while maintaining capital returns.”

Q4 GAAP Results

Q4 FY 2024

Q4 FY 2023

 Vs. Q4 FY 2023

Revenue

$

13.6 billion

$

15.2 billion

(10) %

Net Income

$

2.2 billion

$

4.0 billion

(45) %

Diluted Earnings per Share (EPS)

$

0.54

$

0.97

(44) %

The acquisition of Splunk, including financing costs, had a negative impact of $0.16 to GAAP EPS, for the fourth quarter of fiscal 2024.

Q4 Non-GAAP Results

Q4 FY 2024

Q4 FY 2023

Vs. Q4 FY 2023

Net Income

$

3.5 billion

$

4.7 billion

(25) %

EPS

$

0.87

$

1.14

(24) %

The acquisition of Splunk, including financing costs, had a negative impact of $0.04 to Non-GAAP EPS, for the fourth quarter of fiscal 2024.

Fiscal Year GAAP Results

FY 2024

FY 2023

Vs. FY 2023

Revenue

$

53.8 billion

$

57.0 billion

(6) %

Net Income

$

10.3 billion

$

12.6 billion

(18) %

EPS

$

2.54

$

3.07

(17) %

The acquisition of Splunk, including financing costs, had a negative impact of $0.25 to GAAP EPS, for fiscal 2024.

Fiscal Year Non-GAAP Results

FY 2024

FY 2023

Vs. FY 2023

Net Income

$

15.2 billion

$

16.0 billion

(5) %

EPS

$

3.73

$

3.89

(4) %

The acquisition of Splunk, including financing costs, had a negative impact of $0.04 to Non-GAAP EPS, for fiscal 2024.

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 $0.40 per common share to be paid on October 23, 2024, to all stockholders of record as of the close of business on October 2, 2024. Future dividends will be subject to Board approval.

Financial Summary

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

Q4 FY 2024 Highlights 

Revenue — Total revenue was $13.6 billion, down 10%, with product revenue down 15% and services revenue up 6%. Splunk contributed approximately $960 million of total revenue for the fourth quarter of fiscal 2024.

Revenue by geographic segment was: Americas down 11%, EMEA down 11%, and APJC down 6%. Product revenue performance reflected growth in Security up 81% and Observability up 41%. Networking was down 28%. Product revenue in Collaboration was flat. Security and Observability, excluding Splunk, grew 6% and 12%, respectively, in the fourth quarter of fiscal 2024.

Gross Margin — On a GAAP basis, total gross margin, product gross margin, and services gross margin were 64.4%, 63.0%, and 67.8%, respectively, as compared with 64.1%, 63.6%, and 65.7%, respectively, in the fourth quarter of fiscal 2023.

On a non-GAAP basis, total gross margin, product gross margin, and services gross margin were 67.9%, 67.0%, and 70.3%, respectively, as compared with 65.9%, 65.5%, and 67.5%, respectively, in the fourth quarter of fiscal 2023.

Total gross margins by geographic segment were: 67.7% for the Americas, 69.2% for EMEA and 66.4% for APJC.

Operating Expenses — On a GAAP basis, operating expenses were $6.2 billion, up 12%, and were 45.2% of revenue. Non-GAAP operating expenses were $4.8 billion, up 4%, and were 35.4% of revenue.

Operating Income — GAAP operating income was $2.6 billion, down 38%, with GAAP operating margin of 19.2%. Non-GAAP operating income was $4.4 billion, down 17%, with non-GAAP operating margin at 32.5%.

Provision for Income Taxes — The GAAP tax provision rate was 9.8%. The non-GAAP tax provision rate was 16.6%.

Net Income and EPS — On a GAAP basis, net income was $2.2 billion, a decrease of 45%, and EPS was $0.54, a decrease of 44%. On a non-GAAP basis, net income was $3.5 billion, a decrease of 25%, and EPS was $0.87, a decrease of 24%. 

Cash Flow from Operating Activities — $3.7 billion for the fourth quarter of fiscal 2024, a decrease of 37% compared with $6.0 billion for the fourth quarter of fiscal 2023.

FY 2024 Highlights

Revenue — Total revenue was $53.8 billion, a decrease of 6%. Splunk contributed approximately $1.4 billion of total revenue for fiscal 2024.

Net Income and EPS — On a GAAP basis, net income was $10.3 billion, a decrease of 18%, and EPS was $2.54, a decrease of 17%. On a non-GAAP basis, net income was $15.2 billion, a decrease of 5% compared to fiscal 2023, and EPS was $3.73, a decrease of 4%.

Cash Flow from Operating Activities — $10.9 billion for fiscal 2024, a decrease of 45% compared with $19.9 billion for fiscal 2023.

Balance Sheet and Other Financial Highlights

Cash and Cash Equivalents and Investments — $17.9 billion at the end of the fourth quarter of fiscal 2024, compared with $18.8 billion at the end of the third quarter of fiscal 2024, and compared with $26.1 billion at the end of fiscal 2023.

Remaining Performance Obligations (RPO) — $41.0 billion, up 18% in total, with 51% of this amount to be recognized as revenue over the next 12 months. Product RPO were up 27% and services RPO were up 10%.

Deferred Revenue — $28.5 billion, up 11% in total, with deferred product revenue up 15%. Deferred service revenue was up 9%. 

Capital Allocation — In the fourth quarter of fiscal 2024, we returned $3.6 billion to stockholders through share buybacks and dividends. We declared and paid a cash dividend of $0.40 per common share, or $1.6 billion, and repurchased approximately 43 million shares of common stock under our stock repurchase program at an average price of $46.80 per share for an aggregate purchase price of $2.0 billion. The remaining authorized amount for stock repurchases under the program is $5.2 billion with no termination date.

Guidance

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

Q1 FY 2025

Revenue

$13.65 billion – $13.85 billion

Non-GAAP gross margin

67% – 68%

Non-GAAP operating margin

32% – 33%

Non-GAAP EPS

$0.86 – $0.88

Cisco estimates that GAAP EPS will be $0.35 to $0.42 for the first quarter of fiscal 2025.

Cisco estimates the following results for fiscal 2025:

FY 2025

Revenue

$55.0 billion – $56.2 billion

Non-GAAP EPS

$3.52 – $3.58

Cisco estimates that GAAP EPS will be $1.93 to $2.05 for fiscal 2025.

Our Q1 FY 2025 and FY 2025 guidance assumes an effective tax provision rate of approximately 17% for GAAP and approximately 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:

Q4 fiscal year 2024 conference call to discuss Cisco’s results along with its guidance will be held on Wednesday, August 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, August 14, 2024 to 4:00 p.m. Pacific Time, August 20, 2024 at 1-866-510-4837 (United States) or 1-203-369-1943 (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 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

Fiscal Year Ended

July 27,
2024

July 29,
2023

July 27,
2024

July 29,
2023

REVENUE:

Product

$        9,858

$      11,650

$      39,253

$      43,142

Services

3,784

3,553

14,550

13,856

Total revenue

13,642

15,203

53,803

56,998

COST OF SALES:

Product

3,644

4,237

14,339

16,590

Services

1,217

1,218

4,636

4,655

Total cost of sales

4,861

5,455

18,975

21,245

GROSS MARGIN

8,781

9,748

34,828

35,753

OPERATING EXPENSES:

Research and development

2,179

1,953

7,983

7,551

Sales and marketing

2,841

2,579

10,364

9,880

General and administrative

763

690

2,813

2,478

Amortization of purchased intangible assets

268

70

698

282

Restructuring and other charges

112

203

789

531

Total operating expenses

6,163

5,495

22,647

20,722

OPERATING INCOME

2,618

4,253

12,181

15,031

Interest income

270

312

1,365

962

Interest expense

(418)

(111)

(1,006)

(427)

Other income (loss), net

(74)

17

(306)

(248)

Interest and other income (loss), net

(222)

218

53

287

INCOME BEFORE PROVISION FOR INCOME TAXES

2,396

4,471

12,234

15,318

Provision for income taxes

234

513

1,914

2,705

NET INCOME

$        2,162

$        3,958

$      10,320

$      12,613

Net income per share:

Basic

$          0.54

$          0.97

$          2.55

$          3.08

Diluted

$          0.54

$          0.97

$          2.54

$          3.07

Shares used in per-share calculation:

Basic

4,018

4,071

4,043

4,093

Diluted

4,035

4,093

4,062

4,105

 

CISCO SYSTEMS, INC.

REVENUE BY SEGMENT

(In millions, except percentages)

July 27, 2024

Three Months Ended

Fiscal Year Ended

Amount

Y/Y%

Amount

Y/Y%

Revenue:

Americas

$        8,068

(11) %

$      31,971

(4) %

EMEA

3,511

(11) %

14,117

(7) %

APJC

2,064

(6) %

7,716

(8) %

Total

$      13,642

(10) %

$      53,803

(6) %

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

 

CISCO SYSTEMS, INC.

GROSS MARGIN PERCENTAGE BY SEGMENT

(In percentages)

July 27, 2024

Three Months Ended 

Fiscal Year Ended 

Gross Margin Percentage:

Americas

67.7 %

66.8 %

EMEA

69.2 %

69.1 %

APJC

66.4 %

67.2 %

 

CISCO SYSTEMS, INC.

REVENUE FOR GROUPS OF SIMILAR PRODUCTS AND SERVICES

(In millions, except percentages)

July 27, 2024

Three Months Ended

Fiscal Year Ended

Amount

Y/Y %

Amount

Y/Y %

Revenue:

Networking

$        6,804

(28) %

$      29,229

(15) %

Security

1,787

81 %

5,075

32 %

Collaboration

1,019

— %

4,113

2 %

Observability

248

41 %

837

27 %

Total Product

9,858

(15) %

39,253

(9) %

Services

3,784

6 %

14,550

5 %

Total

$      13,642

(10) %

$      53,803

(6) %

Security and Observability, excluding Splunk, grew 6% and 12%, respectively, in the fourth quarter of fiscal 2024, and 4% and 15%, respectively, for fiscal 2024.

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

 

CISCO SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

July 27,
2024

July 29,
2023

ASSETS

Current assets:

Cash and cash equivalents

$          7,508

$        10,123

Investments

10,346

16,023

Accounts receivable, net of allowance

of $87 at July 27, 2024 and $85 at July 29, 2023

6,685

5,854

Inventories

3,373

3,644

Financing receivables, net

3,338

3,352

Other current assets

5,612

4,352

Total current assets

36,862

43,348

Property and equipment, net

2,090

2,085

Financing receivables, net

3,376

3,483

Goodwill

58,660

38,535

Purchased intangible assets, net

11,219

1,818

Deferred tax assets

6,262

6,576

Other assets

5,944

6,007

TOTAL ASSETS

$      124,413

$      101,852

LIABILITIES AND EQUITY

Current liabilities:

Short-term debt

$        11,341

$          1,733

Accounts payable

2,304

2,313

Income taxes payable

1,439

4,235

Accrued compensation

3,608

3,984

Deferred revenue

16,249

13,908

Other current liabilities

5,643

5,136

Total current liabilities

40,584

31,309

Long-term debt

19,621

6,658

Income taxes payable

3,985

5,756

Deferred revenue

12,226

11,642

Other long-term liabilities

2,540

2,134

Total liabilities

78,956

57,499

Total equity

45,457

44,353

TOTAL LIABILITIES AND EQUITY

$      124,413

$      101,852

 

CISCO SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

Fiscal Year Ended

July 27,
2024

July 29,
2023

Cash flows from operating activities:

Net income

$      10,320

$      12,613

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

Depreciation, amortization, and other

2,507

1,726

Share-based compensation expense

3,074

2,353

Provision for receivables

34

31

Deferred income taxes

(972)

(2,085)

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

215

206

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

Accounts receivable

(289)

734

Inventories

275

(1,069)

Financing receivables

76

1,102

Other assets

(671)

5

Accounts payable

(90)

27

Income taxes, net

(4,539)

1,218

Accrued compensation

(696)

651

Deferred revenue

1,220

2,326

Other liabilities

416

48

Net cash provided by operating activities

10,880

19,886

Cash flows from investing activities:

Purchases of investments

(4,230)

(10,871)

Proceeds from sales of investments

4,136

1,054

Proceeds from maturities of investments

6,367

5,978

Acquisitions, net of cash and cash equivalents acquired

(25,994)

(301)

Purchases of investments in privately held companies

(284)

(185)

Return of investments in privately held companies

202

90

Acquisition of property and equipment

(670)

(849)

Other

(5)

(23)

Net cash used in investing activities

(20,478)

(5,107)

Cash flows from financing activities:

Issuances of common stock

714

700

Repurchases of common stock – repurchase program

(5,787)

(4,293)

Shares repurchased for tax withholdings on vesting of restricted stock units

(992)

(597)

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

478

(602)

Issuances of debt

31,818

Repayments of debt

(9,826)

(500)

Repayments of Splunk convertible debt, net

(3,140)

Dividends paid

(6,384)

(6,302)

Other

(37)

(32)

Net cash provided by (used in) financing activities

6,844

(11,626)

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

(31)

(105)

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

(2,785)

3,048

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

11,627

8,579

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

$        8,842

$      11,627

Supplemental cash flow information:

Cash paid for interest

$           583

$           376

Cash paid for income taxes, net

$        7,426

$        3,571

 

CISCO SYSTEMS, INC.

REMAINING PERFORMANCE OBLIGATIONS

(In millions, except percentages)

July 27, 2024

April 27, 2024

July 29, 2023

Amount

Y/Y %

Amount

Y/Y %

Amount

Y/Y %

Product

$    20,055

27 %

$    18,876

29 %

$    15,802

12 %

Services

20,993

10 %

19,898

14 %

19,066

9 %

Total

$    41,048

18 %

$    38,774

21 %

$    34,868

11 %

We expect 51% of total RPO at July 27, 2024 will be recognized as revenue over the next 12 months.

 

CISCO SYSTEMS, INC.

DEFERRED REVENUE

(In millions)

July 27,
2024

April 27,
2024

July 29,
2023

Deferred revenue:

Product

$      13,219

$      12,856

$      11,505

Services

15,256

14,619

14,045

Total

$      28,475

$      27,475

$      25,550

Reported as:

Current

$      16,249

$      15,751

$      13,908

Noncurrent

12,226

11,724

11,642

Total

$      28,475

$      27,475

$      25,550

 

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

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

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

Fiscal Year Ended

July 27,
2024

July 29,
2023

July 27,
2024

July 29,
2023

GAAP net income

$        2,162

$        3,958

$      10,320

$      12,613

Adjustments to cost of sales:

Share-based compensation expense

133

103

514

396

Amortization of acquisition-related intangible assets

331

168

936

630

Acquisition-related/divestiture costs

21

14

34

18

Supplier component remediation charge (adjustment), net

(9)

(9)

Total adjustments to GAAP cost of sales

485

276

1,484

1,035

Adjustments to operating expenses:

Share-based compensation expense

660

520

2,537

1,951

Amortization of acquisition-related intangible assets

268

70

698

282

Acquisition-related/divestiture costs

297

63

700

241

Russia-Ukraine war costs

(7)

(12)

Significant asset impairments and restructurings

112

203

789

531

Total adjustments to GAAP operating expenses

1,337

849

4,712

3,005

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

Russia-Ukraine war costs

49

49

(Gains) and losses on investments

(32)

(55)

100

133

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

17

(55)

149

133

Total adjustments to GAAP income before provision for income
taxes

1,839

1,070

6,345

4,173

Income tax effect of non-GAAP adjustments

(315)

(215)

(1,360)

(838)

Significant tax matters

(155)

(133)

(155)

31

Total adjustments to GAAP provision for income taxes

(470)

(348)

(1,515)

(807)

Non-GAAP net income

$        3,531

$        4,680

$      15,150

$      15,979

 

CISCO SYSTEMS, INC.

RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

 

GAAP TO NON-GAAP EPS

Three Months Ended

Fiscal Year Ended

July 27,
2024

July 29,
2023

July 27,
2024

July 29,
2023

GAAP EPS

$          0.54

$          0.97

$          2.54

$          3.07

Adjustments to GAAP:

Share-based compensation expense

0.20

0.15

0.75

0.57

Amortization of acquisition-related intangible assets

0.15

0.06

0.40

0.22

Acquisition-related/divestiture costs

0.08

0.02

0.18

0.06

Russia-Ukraine war costs

0.01

0.01

Significant asset impairments and restructurings

0.03

0.05

0.19

0.13

(Gains) and losses on investments

(0.01)

(0.01)

0.02

0.03

Income tax effect of non-GAAP adjustments

(0.08)

(0.05)

(0.33)

(0.20)

Significant tax matters

(0.04)

(0.03)

(0.04)

0.01

Non-GAAP EPS

$          0.87

$          1.14

$          3.73

$          3.89

Amounts may not sum or recalculate due to rounding.

 

CISCO SYSTEMS, INC.

GAAP TO NON-GAAP EPS

IMPACT OF SPLUNK ACQUISITION, INCLUDING FINANCING COSTS

July 27, 2024

Three Months Ended

Fiscal Year Ended

GAAP EPS Impact

$             (0.16)

$             (0.25)

Amortization of acquisition-related intangible assets

0.09

0.14

Acquisition-related costs

0.06

0.11

Income tax effect of non-GAAP adjustments

(0.03)

(0.05)

Non-GAAP EPS Impact

$             (0.04)

$             (0.04)

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 27, 2024

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

$ 6,214

$ 2,567

$ 8,781

$ 6,163

12 %

$ 2,618

(38) %

$ (222)

$ 2,162

(45) %

% of revenue

63.0 %

67.8 %

64.4 %

45.2 %

19.2 %

(1.6) %

15.8 %

Adjustments to GAAP amounts:

Share-based compensation
expense

57

76

133

660

793

793

Amortization of acquisition-
related intangible assets

331

331

268

599

599

Acquisition/divestiture-related
costs

5

16

21

297

318

318

Russia-Ukraine war costs

49

49

Significant asset impairments
and restructurings

112

112

112

(Gains) and losses on
investments

(32)

(32)

Income tax effect/significant tax
matters

(470)

Non-GAAP amount

$ 6,607

$ 2,659

$ 9,266

$ 4,826

4 %

$ 4,440

(17) %

$ (205)

$ 3,531

(25) %

% of revenue

67.0 %

70.3 %

67.9 %

35.4 %

32.5 %

(1.5) %

25.9 %

 

Three Months Ended

July 29, 2023

Product
Gross
Margin

Services
Gross
Margin

Total
Gross
Margin

Operating
Expenses

Operating

Income

Interest
and
other
income
(loss),
net

Net

Income

GAAP amount

$ 7,413

$ 2,335

$ 9,748

$ 5,495

$ 4,253

$ 218

$ 3,958

% of revenue

63.6 %

65.7 %

64.1 %

36.1 %

28.0 %

1.4 %

26.0 %

Adjustments to GAAP amounts:

Share-based compensation expense

40

63

103

520

623

623

Amortization of acquisition-related intangible assets

168

168

70

238

238

Acquisition/divestiture-related costs

14

14

63

77

77

Russia-Ukraine war costs

(7)

(7)

(7)

Supplier component remediation charge (adjustment), net

(9)

(9)

(9)

(9)

Significant asset impairments and restructurings

203

203

203

(Gains) and losses on investments

(55)

(55)

Income tax effect/significant tax matters

(348)

Non-GAAP amount

$ 7,626

$ 2,398

$ 10,024

$ 4,646

$ 5,378

$ 163

$ 4,680

% of revenue

65.5 %

67.5 %

65.9 %

30.6 %

35.4 %

1.1 %

30.8 %

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)

Fiscal Year Ended

July 27, 2024

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

$ 24,914

$ 9,914

$ 34,828

$ 22,647

9 %

$ 12,181

(19) %

$ 53

$ 10,320

(18) %

% of revenue

63.5 %

68.1 %

64.7 %

42.1 %

22.6 %

0.1 %

19.2 %

Adjustments to GAAP amounts:

Share-based compensation
expense

214

300

514

2,537

3,051

3,051

Amortization of acquisition-
related intangible assets

936

936

698

1,634

1,634

Acquisition/divestiture-related
costs

10

24

34

700

734

734

Russia-Ukraine war costs

(12)

(12)

49

37

Significant asset impairments and
restructurings

789

789

789

(Gains) and losses on investments

100

100

Income tax effect/significant tax
matters

(1,515)

Non-GAAP amount

$ 26,074

$ 10,238

$ 36,312

$ 17,935

1 %

$ 18,377

(4) %

$ 202

$ 15,150

(5) %

% of revenue

66.4 %

70.4 %

67.5 %

33.3 %

34.2 %

0.4 %

28.2 %

 

Fiscal Year Ended

July 29, 2023

Product
Gross
Margin

Services
Gross
Margin

Total
Gross
Margin

Operating
Expenses

Operating

Income

Interest
and
other
income
(loss),
net

Net

Income

GAAP amount

$ 26,552

$ 9,201

$ 35,753

$ 20,722

$ 15,031

$ 287

$ 12,613

% of revenue

61.5 %

66.4 %

62.7 %

36.4 %

26.4 %

0.5 %

22.1 %

Adjustments to GAAP amounts:

Share-based compensation expense

151

245

396

1,951

2,347

2,347

Amortization of acquisition-related intangible assets

630

630

282

912

912

Acquisition/divestiture-related costs

18

18

241

259

259

Supplier component remediation charge (adjustment),
net

(9)

(9)

(9)

(9)

Significant asset impairments and restructurings

531

531

531

(Gains) and losses on investments

133

133

Income tax effect/significant tax matters

(807)

Non-GAAP amount

$ 27,342

$ 9,446

$ 36,788

$ 17,717

$ 19,071

$ 420

$ 15,979

% of revenue

63.4 %

68.2 %

64.5 %

31.1 %

33.5 %

0.7 %

28.0 %

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

Fiscal Year Ended

July 27,
2024

July 29,
2023

July 27,
2024

July 29,
2023

GAAP effective tax rate

9.8 %

11.5 %

15.6 %

17.7 %

Total adjustments to GAAP provision for income taxes

6.8 %

4.0 %

2.9 %

0.3 %

Non-GAAP effective tax rate

16.6 %

15.5 %

18.5 %

18.0 %

 

GAAP TO NON-GAAP GUIDANCE

Q1 FY 2025

Gross Margin

Operating Margin

Earnings per
Share (2)

GAAP

63.5% – 64.5%

14% – 15%

$0.35 – $0.42

Estimated adjustments for:

Share-based compensation expense

1.0 %

6.0 %

$0.16 – $0.17

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

2.5 %

6.5 %

$0.17 – $0.18

Significant asset impairments and restructurings(1)

5.5 %

$0.13 – $0.16

Non-GAAP

67% – 68%

32% – 33%

$0.86 – $0.88

 

FY 2025

Earnings per
Share (2)

GAAP

$1.93 – $2.05

Estimated adjustments for:

Share-based compensation expense

$0.74 – $0.76

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

$0.60 – $0.62

Significant asset impairments and restructurings (1)

$0.19 – $0.21

Non-GAAP

$3.52 – $3.58

(1) On August 14, 2024, Cisco announced a restructuring plan to allow it to invest in key growth opportunities and drive more efficiencies in its business. In connection with this restructuring plan, Cisco currently estimates that it will recognize pre-tax charges of up to $1 billion consisting of severance and other one-time termination benefits, and other costs. Cisco expects to recognize approximately $700 million to $800 million of these charges in the first quarter of fiscal 2025 with the remaining amount expected to be recognized during the rest of the fiscal year.

(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, significant asset impairments and restructurings, significant litigation settlements and other contingencies, RussiaUkraine war costs, gains and losses on investments, significant tax matters, or other items, which may or may not be significant.

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 our customers’ reliance on Cisco to connect and protect their organizations in the era of AI and our focus on growth and consistent execution as we invest in AI, cloud and cybersecurity, while maintaining capital returns) and the future financial performance of Cisco (including the guidance for Q1 FY 2025 and full year FY 2025) 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, cloud, enterprise 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 services 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 May 21, 2024 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 months and the year ended July 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 (GAAP) 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, RussiaUkraine 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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/U P D A T E — TrendAI/

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This release has been updated to include new information provided by TrendAI. The complete, corrected release follows, with additional details at the end:

TrendAI™ Adopts Claude Opus 5 to Advance Vulnerability Prioritization and Virtual Patching

As a participant in Anthropic’s Cyber Verification Program, TrendAI applies frontier reasoning to convert vulnerability intelligence into faster protection across hybrid environments

DALLAS, July 24, 2026 /PRNewswire/ — TrendAI™, the enterprise AI security leader from Trend Micro Incorporated (TYO: 4704; TSE: 4704), today announced it is adopting Claude Opus 5, Anthropic’s latest and most capable Opus model, to help security teams convert vulnerability intelligence into immediate protection, from prioritization to virtual patching. The move builds on TrendAI’s collaboration with Anthropic on Claude Opus 4.8, extending the same defensive focus to a model that delivers step-change gains in advanced reasoning, agentic workflows, and long-horizon analysis. As AI makes finding vulnerabilities easier than ever, the harder problem becomes protecting organizations faster than software can be permanently patched, and that is where TrendAI is putting Opus 5 to work.

As a participant in Anthropic’s Cyber Verification Program, which credentials organizations for the defensive use of frontier AI models, TrendAI is positioned to apply Claude Opus 5 to defensive security as access becomes available. The model is Zero Data Retention compatible, supporting TrendAI’s governance and data-protection requirements as it scales AI across security operations.

The work extends to TrendAI Threat Research, where frontier AI models are combined with our proprietary frontier intelligence engine and human expertise to generate pre-disclosure intelligence. Those insights power TrendAI Vision One™, delivering stronger detection, deeper forensic insights, and proactive protection through virtual patching.

Rachel Jin, Chief Platform and Business Officer, Head of TrendAI™:
“With Claude Opus 5, TrendAI can move from vulnerability intelligence to action faster than ever, prioritizing what matters most by exploitability and business impact. Finding the vulnerability was always the hard part. Now the challenge is protecting organizations faster than software can be permanently patched, and frontier reasoning is what changes that equation, extending all the way to virtual patching that protects customers before a vendor fix ships. This is what it means to secure the AI age, fearlessly.”

These capabilities support TrendAI Vision One™ in helping security analysts, AppSec teams, and SOC teams prioritize exposure, map attack paths, and accelerate mitigation, including virtual patching, across hybrid environments, moving vulnerability management from a static scanning process into a faster, context-aware risk mitigation workflow.

About TrendAI™
TrendAI™, the global AI security leader and enterprise business unit of Trend Micro, empowers organizations with full AI visibility and consolidated security that inspires confidence, drives innovation, and eliminates risk. Trusted by the largest enterprises and governments across 185 countries, TrendAI™ secures the entire organization, from identities, to infrastructure, to data. Global Fortune 500 companies rely on TrendAI™ to cut risk and stop threats up to three months earlier, powered by world-leading threat and attack intelligence. Through deep ecosystem partnerships with market leaders like NVIDIA, Anthropic, AWS, Google, and Microsoft, TrendAI™ empowers your organization to securely drive forward at the speed of AI. AI Fearlessly. Learn more: trendaisecurity.com

About Anthropic
Anthropic is an AI safety and research company dedicated to building reliable, interpretable, and steerable AI systems. Its Claude family of models, including Claude Opus 5, enables advanced capabilities across a wide range of applications, including code understanding and security analysis.

Update: The latest version of this release includes additional statements from TrendAI related to the original announcement.

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Ralph Ye on 10 Years of Entrepreneurship at CASEKOO: Less Identity Shift, More Habits That Endure

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NEW YORK, July 24, 2026 /PRNewswire/ — As CASEKOO approaches its 10th anniversary, founder Ralph Ye says the company’s biggest achievement isn’t measured by units sold, but by how its philosophy has evolved.

Ten years ago, Ye found himself frustrated by a simple problem: his phone wouldn’t stand upright on a fast-food table. Instead of accepting the inconvenience, he saw an opportunity to rethink what a phone case could do.

Today, CASEKOO has sold more than 20 million phone cases across 32 countries. Over the past decade, the company has evolved from creating protective accessories into designing products that fit naturally into everyday life.

“Innovation isn’t about changing identities,” Ye said. “It’s about making meaningful habits easier to keep.”

From Q Line to LinKOO

The evolution of CASEKOO’s product portfolio reflects a broader shift in the company’s design philosophy.

The journey began with the Q Line (Quality Line), a collection of crystal-clear phone cases engineered to deliver premium protection without compromising aesthetics. In 2021, CASEKOO introduced the E Line (Innovation Line), the world’s first phone case with an integrated ring stand. The product earned an iF Design Award and became an Amazon bestseller, demonstrating the market’s appetite for accessories that combined protection with everyday functionality. The X Line (Expression Line) followed, expanding the brand’s focus on personalization and expressive design.

Each product generation introduced new capabilities, but each also reinforced an important insight.

“We moved from Q Line to E Line to X Line, and every generation taught us something about what people actually need,” said Ye. “By the time we introduced The KOO series, we weren’t designing features anymore. We were designing around everyday behaviors.”

Today, the portfolio gives each rhythm a clear name: LinKOO — Link Your Way for hands-free carry, StandKOO — Elevate Your Day for hands-free viewing and grip, and X-LINE — Fit Your Vibe for expressive personalization.

It represents CASEKOO’s transition from designing accessories with added functions to creating products that support everyday habits. For the company, the future of consumer technology lies not in how many features a product offers, but in how seamlessly it integrates into the way people live.

A Philosophy Born from Everyday Life

The inspiration behind LinKOO came from one of Ye’s longest-standing habits.

For nearly two decades, he has left home every day holding his wife’s hand. One evening, while carrying his phone, keys, and wallet in his other hand, he realized how often everyday essentials compete with life’s simplest moments.

That observation inspired ClipSafe™, a foldable clasp integrated into the LinKOO series. Hidden when not in use and deployable with a single press, it allows users to carry everyday essentials without sacrificing comfort or aesthetics.

For CASEKOO, LinKOO is more than a product launch. It represents the company’s belief that technology should adapt to people—not the other way around.

“Ten years ago, we asked how to better protect a phone,” Ye said. “Today, we’re asking how to protect a moment.”

That is what designed to fit you means. That is Less Effort, More Living. And after a decade of iteration, failure, and quiet persistence, CASEKOO has finally arrived—not at an answer, but at a better question.

About CASEKOO

CASEKOO is a design-led lifestyle accessories brand built around a simple idea: freeing your hands in everyday life. Through thoughtful hands-free solutions, we help people move seamlessly between different moments of the day—from active, on-the-go moments to times of focus and connection.

What makes CASEKOO different from a regular phone case? We believe technology should support life, not interrupt it. By designing products that adapt naturally to how people live, work, and move, CASEKOO reduces everyday friction and creates a more effortless experience—making room for freedom, connection, and the moments that truly matter.

For more information, visit: casekoo.com.

Contact:
Charlotte Yu
brandteam@casekoo.com 

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Paramount Skydance Corporation Announces Extension of Expiration Dates of Previously Announced Exchange Offers and Tender Offers

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LOS ANGELES and NEW YORK, July 24, 2026 /PRNewswire/ — Paramount Skydance Corporation (NASDAQ: PSKY) (“Paramount”) today announced the extension of the Expiration Dates in connection with the previously announced (i) offers to purchase (the “Tender Offers” and each, a “Tender Offer”) for cash, upon the terms and subject to the conditions set forth in the related offer to purchase (the “Offer to Purchase”), any and all of the identified notes in each series of the Existing Tender Offer Notes (defined by reference to the table set forth below) issued by Discovery Global Holdings, Inc. (formerly WarnerMedia Holdings, Inc.) (the “DGH Issuer”) and Discovery Communications, LLC (the “DCL Issuer” and together with the DGH Issuer, each a “WBD Issuer” and collectively the “WBD Issuers”), as applicable, and (ii) offers to exchange (the “Exchange Offers” and each, an “Exchange Offer” and, together with the Tender Offers, the “Offers” and each, an “Offer”), upon the terms and subject to the conditions set forth in the related exchange offer memorandum (the “Offering Memorandum”), any and all of the identified notes in each series of the Existing Exchange Offer Notes (defined by reference to the table set forth below) (together with the Existing Tender Offer Notes, the “Offer Notes”) issued by the applicable WBD Issuer for notes to be newly issued by Paramount.

The Expiration Dates for the Tender Offers and Exchange Offers (as defined in each of the Offer to Purchase and Offering Memorandum, respectively) have been extended to 5:00 p.m., New York City time, on August 7, 2026, unless further extended. The Settlement Dates for the Tender Offers and Exchange Offers (as defined in each of the Offer to Purchase and Offering Memorandum, respectively) will occur promptly after the Expiration Date and are currently anticipated to occur in the third quarter of 2026. Paramount anticipates extending the Expiration Date for such Tender Offers and Exchange Offers until such time that would result in the Settlement Dates occurring on or promptly following the closing date of the proposed acquisition (the “Acquisition”) by Paramount of Warner Bros. Discovery, Inc. (“WBD”). Tenders of the Offer Notes in the Offers may be withdrawn at any time prior to the Expiration Date. The aforementioned extensions further extend the Expiration Dates previously extended by Paramount on June 12, 2026, June 26, 2026, July 13, 2026, and July 17, 2026.

As of 5:00 p.m., New York City time, on July 23, 2026, approximately 66.17% and 76.38% of the aggregate principal amount of the Existing Tender Offer Notes and Existing Exchange Offer Notes, respectively, have been validly tendered in the applicable Offers. As Paramount previously announced that it anticipates extending the Offers to align with the closing date of the Acquisition, Paramount does not view these figures to be representative of the final results of the applicable Offers.

Information about each series of Offer Notes eligible to participate in the Offers is summarized below.

Type of Offer

Offer Notes to be Tendered
or Exchanged, as
Applicable

Issuer of Offer Notes

CUSIP No. / Common Code 
/ ISIN Eligible to
Participate in the Offers (1)

Aggregate Principal
Amount of Offer Notes
Eligible to Participate in the
Offers (2)

Tender Offer

3.950% Senior Notes due 2028

DCL Issuer

25470D CP2

US25470DCP24

$1,234,458,000

Exchange Offer

4.125% Senior Notes due 2029

DCL Issuer

25470D CQ0

US25470DCQ07

$655,825,000

Exchange Offer

3.625% Senior Notes due 2030

DCL Issuer

25470D CR8

US25470DCR89

$914,183,000

Exchange Offer

5.000% Senior Notes due 2037

DCL Issuer

25470D CS6

US25470DCS62

$453,281,000

Exchange Offer

6.350% Senior Notes due 2040

DCL Issuer

25470D CT4

US25470DCT46

$438,102,000

Exchange Offer

4.950% Senior Notes due 2042

DCL Issuer

25470D CU1

US25470DCU19

$130,366,000

Exchange Offer

4.875% Senior Notes due 2043

DCL Issuer

25470D V91 CV9US25470DC

$141,584,000

Exchange Offer

5.200% Senior Notes due 2047

DCL Issuer

25470D W74 CW7US25470DC

$3,161,000

Exchange Offer

5.300% Senior Notes due 2049

DCL Issuer

25470D X57 CX5US25470DC

$247,860,000

Tender Offer

3.755% Senior Notes due 2027

DGH Issuer

254948 AH5

US254948AH58

254948 AN2

US254948AN27

U25483 AA3

USU25483AA38

$1,189,336,000

Exchange Offer

4.054% Senior Notes due 2029

DGH Issuer

254948 AJ1

US254948AJ15

254948 AP7

US254948AP74

U25483 AB1

USU25483AB11

$1,353,828,000

Exchange Offer

4.279% Senior Notes due 2032

DGH Issuer

254948 AK8

US254948AK87

254948 AQ5

US254948AQ57

$2,691,764,000

Exchange Offer

5.050% Senior Notes due 2042

DGH Issuer

254948 AL6

US254948AL60

254948 AR3

US254948AR31

U25483 AD7

USU25483AD76

$4,104,687,000

Exchange Offer

5.141% Senior Notes due 2052

DGH Issuer

254948 AM4

US254948AM44

254948 AS1

US254948AS14

$949,883,000

Exchange Offer

4.302% Senior Notes due 2030

DGH Issuer

XS3393993285

339399328

€234,382,000

Exchange Offer

4.693% Senior Notes due 2033

DGH Issuer

XS3393994507

339399450

€316,641,000

1

No representation is made as to the correctness or accuracy of the identifiers listed in this press release or printed on the Offer Notes. Such identifiers are provided solely for the convenience of the holders.

2

Represents the aggregate principal amount of Offer Notes outstanding that are eligible to participate in the Offers.

The Exchange Offers are being made pursuant to an exemption from the registration requirements of the U.S. Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations of the Securities and Exchange Commission (the “SEC”) promulgated thereunder, and are also not being registered under any state or foreign securities laws. Any securities offered pursuant to the Exchange Offers may not be offered or sold in the United States or to any U.S. persons (as defined below) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Exchange Offers will only be made, and the securities offered pursuant to the Exchange Offers are only being offered and issued, to holders of applicable Existing Exchange Offer Notes who are (a) reasonably believed to be “qualified institutional buyers” as defined in Rule 144A under the Securities Act or (b) not “U.S. persons,” as defined in Rule 902 of Regulation S under the Securities Act (such holders, “Eligible Holders”), and only Eligible Holders who have completed and returned the eligibility certification are authorized to receive or review the Offering Memorandum or to participate in the Exchange Offers. The eligibility certification is available electronically at: https://gbsc-usa.com/eligibility/paramount.

General

Each Offer is a separate offer, and each may be individually consummated, amended, extended, terminated, or withdrawn, subject to certain conditions and applicable law, at any time in Paramount’s sole discretion, and without also consummating, amending, extending, terminating, or withdrawing any other Offer with respect to any other series of Offer Notes. Paramount may terminate an Offer if any of the conditions of such Offer described in the Offer to Purchase or Offering Memorandum, as applicable, are not satisfied or waived by the applicable Expiration Date, subject to applicable law. In addition, Paramount may waive the conditions to an Offer without extending such Offer in accordance with applicable law.

The Offers are being made solely by Paramount and are not being made by WBD or the WBD Issuers. None of Paramount, WBD, the WBD Issuers, the Dealer Managers, the Exchange Agent (as defined below), the Information Agent (as defined below), the trustees under each of the indentures governing the Offer Notes, the trustee or collateral agent under the indenture that will govern the notes to be issued in the Exchange Offers, or any affiliate of any of them makes any recommendation as to whether any holder of Offer Notes should tender or refrain from tendering all or any portion of the principal amount of such holder’s Offer Notes for cash or notes to be issued in the Exchange Offers. No one has been authorized by any of them to make such a recommendation. Holders must make their own decision whether to tender Offer Notes in any Offer and, if so, the amount of Offer Notes to tender.

Only Eligible Holders may receive a copy of the Offering Memorandum and participate in the Exchange Offers. Paramount has engaged Global Bondholder Services Corporation to act as the exchange agent (in such capacity, the “Exchange Agent”) and information agent (in such capacity, the “Information Agent”) for the Offers. Questions concerning the Offers, or requests for additional copies of the Offer to Purchase or Offering Memorandum or other related documents, may be directed to Corporate Actions by telephone at (855) 654-2014 (U.S. toll-free) or (212) 430-3774 (banks and brokers) or by email at contact@gbsc-usa.com. Holders should also consult their broker, dealer, commercial bank, trust company or other institution for assistance concerning the Offers. The Exchange Offer documents and the Tender Offer documents can be accessed at the following link: https://gbsc-usa.com/paramount.

Paramount has engaged BofA Securities and Citigroup as dealer managers (in such capacity, the “Dealer Managers”) for the Offers. Holders with questions regarding the Offers should contact BofA Securities, Inc. at +1 (888) 292-0070 (toll-free) or +1 (980) 388-3646 (collect) or debt_advisory@bofa.com or Citigroup Global Markets Inc. at +1 (800) 558-3745 (toll-free) or +1 (212) 723-6106 or ny.liabilitymanagement@citi.com. Latham & Watkins LLP is serving as legal counsel to Paramount and Cahill Gordon & Reindel LLP is serving as legal counsel to the Dealer Managers.

This press release is for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, any security, and does not constitute an offer, solicitation, or sale of any security in any jurisdiction in which such offer, solicitation, or sale would be unlawful.

About Paramount, a Skydance Corporation

Paramount, a Skydance Corporation is a next-generation global media and entertainment company, comprised of three business segments: Studios, Direct-to-Consumer, and TV Media. PSKY’s portfolio unites legendary brands, including Paramount Pictures, Paramount Television, CBS, CBS News, CBS Sports, Nickelodeon, MTV, BET, Comedy Central, Showtime, Paramount+, Pluto TV, and Skydance Animation, Film, Television, Interactive/Games, and Paramount Sports Entertainment.

PSKY-IR

Cautionary Note Concerning Forward-Looking Statements

This communication contains “forward-looking statements” regarding the Acquisition and the other transactions referred to herein. The reader is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Paramount. Risks and uncertainties include, but are not limited to: the risk that the closing conditions for the Acquisition will not be satisfied, including the risk that clearances under applicable antitrust or regulatory laws will not be obtained or will be obtained subject to conditions that are not anticipated; the possibility that the transactions described herein will not be completed in the expected timeframe or at all; the occurrence of any event, change or other circumstances that could give rise to the termination of the Acquisition; potential adverse effects to the businesses of Paramount or WBD during the pendency of the Acquisition, such as employee departures or distraction of management from business operations; negative effects of the announcement or the consummation of the Acquisition on the market price of WBD or Paramount stock; the risk of stockholder litigation relating to the Acquisition, including resulting expense or delay; the potential that the expected benefits and opportunities of the Acquisition, if completed, may not be realized or may take longer to realize than expected; risks related to the streaming business of the post-Acquisition combined business (the “Combined Company”); the adverse impact on the Combined Company’s advertising revenues as a result of changes in consumer behavior, advertising market conditions, and deficiencies in audience measurement; risks related to operating in highly competitive and dynamic industries; the unpredictable nature of consumer behavior, as well as evolving technologies and distribution models; risks related to the Combined Company’s decision to invest in new businesses, products, services, and technologies, and the evolution of the Combined Company’s business strategy; the potential for loss of carriage or other reduction in, or the impact of negotiations for, the distribution of the Combined Company’s content; damage to the Combined Company’s reputation or brands; losses due to asset impairment charges for goodwill, content and long-lived assets, including finite-lived intangible assets; liabilities related to discontinued operations and former businesses; increasing scrutiny of, and evolving expectations for, sustainability initiatives; evolving business continuity, cybersecurity, privacy and data protection and similar risks; challenges in protecting and maintaining the Combined Company’s intellectual property rights; domestic and global political, economic and regulatory factors affecting the Combined Company’s business generally or the Acquisition; the inability to hire or retain key employees or secure creative talent; disruptions to the Combined Company’s operations as a result of labor disputes; risks and costs associated with the integration of, and Paramount’s ability to integrate, the businesses of Paramount Global, Skydance Media, LLC, and WBD successfully and to achieve anticipated synergies, including in the amounts or on the timelines anticipated to realize such synergies; litigation related to the Acquisition and other matters or transactions; risks associated with the Combined Company’s holding company structure, including its dependence on distributions from its subsidiaries to meet tax obligations and other cash requirements; risks related to our indebtedness, including our substantial outstanding debt obligations, our ability to incur substantially more debt and our ability to meet the financial and other covenants contained in the agreements governing the indebtedness of Paramount, WBD, or the Combined Company. A further list and description of these risks, uncertainties and other factors and the general risks associated with the respective businesses of Paramount and WBD can be found in Paramount’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 25, 2026, including in the sections captioned “Cautionary Note Concerning Forward-Looking Statements” and “Item 1A. Risk Factors,” Paramount’s most recently filed Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, filed with the SEC on May 4, 2026, including in the sections captioned “Cautionary Note Concerning Forward-Looking Statements” and “Item 1A. Risk Factors,” and Paramount’s subsequent filings with the SEC, and in WBD’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 27, 2026, including in the section captioned “Item 1A. Risk Factors,” WBD’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, filed with the SEC on May 6, 2026, and WBD’s subsequent filings with the SEC. Neither Paramount nor WBD undertakes to update any forward-looking statement as a result of new information or future events or developments, except as required by law.

 

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SOURCE Paramount Skydance Corporation

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