Technology

CISCO REPORTS SECOND QUARTER EARNINGS

Published

1 year ago

February 12, 2025

SAN JOSE, Calif., Feb. 12, 2025 /PRNewswire/ —

News Summary:

Broad-based strength in product orders demonstrating growing demand for Cisco technologiesProduct orders up 29% year over year; up 11% excluding SplunkAI Infrastructure orders of more than $350 million, bringing the total for 1HFY25 to approximately $700 millionRevenue of $14.0 billion, above the high end of our guidance rangeStrong profitability:GAAP gross margin of 65.1% and non-GAAP gross margin of 68.7%GAAP EPS of $0.61 and non-GAAP EPS of $0.94, above the high end of our guidance rangeQuarterly dividend increased to $0.41 per share, up 3%, and additional $15 billion authorized for stock repurchasesQ2 FY 2025 Results:Revenue: $14.0 billionIncrease of 9% year over yearEarnings per Share: GAAP: $0.61; Non-GAAP: $0.94GAAP EPS decreased 6% year over yearNon-GAAP EPS increased 8% year over yearQ3 FY 2025 Guidance: Revenue: $13.9 billion to $14.1 billionEarnings per Share: GAAP: $0.57 to $0.61; Non-GAAP: $0.90 to $0.92FY 2025 Guidance:Revenue: $56.0 billion to $56.5 billionEarnings per Share: GAAP: $2.40 to $2.52; Non-GAAP: $3.68 to $3.74

Cisco today reported second quarter results for the period ended January 25, 2025. Cisco reported second quarter revenue of $14.0 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.4 billion or $0.61 per share, and non-GAAP net income of $3.8 billion or $0.94 per share.

“Cisco’s strong quarterly results were driven by accelerating customer demand for our technology,” said Chuck Robbins, chair and CEO of Cisco. “As AI becomes more pervasive, we are well positioned to help our customers scale their network infrastructure, increase their data capacity requirements, and adopt best-in-class AI security.”

“Q2 was another quarter of solid execution which drove revenue and EPS above our guidance ranges. Splunk continues to perform in line with our expectations on the top line, and was accretive to Q2 non-GAAP EPS, earlier than we had planned,” said Scott Herren, CFO of Cisco. “Our strong cash flows have led us to increase our annual dividend again this year, as well as our overall share repurchase authorization.”

GAAP Results

Q2 FY 2025

Q2 FY 2024

Vs. Q2 FY 2024

Revenue

$ 14.0 billion

$ 12.8 billion

9 %

Net Income

$ 2.4 billion

$ 2.6 billion

(8) %

Diluted Earnings per Share (EPS)

$ 0.61

$ 0.65

(6) %

Non-GAAP Results

Q2 FY 2025

Q2 FY 2024

Vs. Q2 FY 2024

Net Income

$ 3.8 billion

$ 3.5 billion

6 %

EPS

$ 0.94

$ 0.87

8 %

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; Stock Repurchase Program Authorization Increased

Cisco has declared a quarterly dividend of $0.41 per common share, a 1-cent increase or up 3% over the previous quarter’s dividend, to be paid on April 23, 2025, to all stockholders of record as of the close of business on April 3, 2025. Future dividends will be subject to Board approval.

Cisco’s board of directors has also approved a $15 billion increase to the authorization of the stock repurchase program. There is no fixed termination date for the repurchase program. The remaining authorized fixed amount for stock repurchases including the additional authorization is approximately $17 billion.

Financial Summary

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

Q2 FY 2025 Highlights

Revenue — Total revenue was $14.0 billion, up 9%, with product revenue up 11% and services revenue up 6%. Excluding the contribution from Splunk, total revenue was down 1%.

Revenue by geographic segment was: Americas up 9%, EMEA up 11%, and APJC up 8%. Product revenue performance reflected growth in Security up 117%, Observability up 47%, and Collaboration up 1%. Networking was down 3%. Excluding Splunk, Security and Observability grew 4% and 3%, respectively, in the second quarter of fiscal 2025.

Gross Margin — On a GAAP basis, total gross margin, product gross margin, and services gross margin were 65.1%, 63.7%, and 68.9%, respectively, as compared with 64.2%, 62.7%, and 68.2%, respectively, in the second quarter of fiscal 2024.

On a non-GAAP basis, total gross margin, product gross margin, and services gross margin were 68.7%, 67.7%, and 71.6%, respectively, as compared with 66.7%, 65.2%, and 70.5%, respectively, in the second quarter of fiscal 2024.

Total gross margins by geographic segment were: 67.6% for the Americas, 71.3% for EMEA and 68.3% for APJC.

Operating Expenses — On a GAAP basis, operating expenses were $6.0 billion, up 17%, and were 42.9% of revenue. Non-GAAP operating expenses were $4.8 billion, up 10%, and were 34.0% of revenue.

Operating Income — GAAP operating income was $3.1 billion, up 1%, with GAAP operating margin of 22.3%. Non-GAAP operating income was $4.9 billion, up 15%, with non-GAAP operating margin at 34.7%.

Provision for Income Taxes — The GAAP tax provision rate was 15.9%. The non-GAAP tax provision rate was 19.0%.

Net Income and EPS — On a GAAP basis, net income was $2.4 billion, a decrease of 8%, and EPS was $0.61, a decrease of 6%. On a non-GAAP basis, net income was $3.8 billion, an increase of 6%, and EPS was $0.94, an increase of 8%.

Cash Flow from Operating Activities — $2.2 billion for the second quarter of fiscal 2025, an increase of 177%, compared with $0.8 billion for the second quarter of fiscal 2024.

Balance Sheet and Other Financial Highlights

Cash and Cash Equivalents and Investments — $16.9 billion at the end of the second quarter of fiscal 2025, compared with $17.9 billion at the end of fiscal 2024.

Remaining Performance Obligations (RPO) — $41.3 billion, up 16% in total, with 51% of this amount to be recognized as revenue over the next 12 months. Product RPO up 25% and services RPO up 8%.

Deferred Revenue — $27.8 billion, up 8% in total, with deferred product revenue up 12%. Deferred services revenue up 4%.

Capital Allocation — In the second quarter of fiscal 2025, we returned $2.8 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 21 million shares of common stock under our stock repurchase program at an average price of $58.58 per share for an aggregate purchase price of $1.2 billion.

Acquisitions

In the second quarter of fiscal 2025, we closed the acquisition of Deeper Insights AI Ltd., a privately held AI services company.

Guidance

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

Q3 FY 2025

Revenue

$13.9 billion – $14.1 billion

Non-GAAP gross margin

67% – 68%

Non-GAAP operating margin

33% – 34%

Non-GAAP EPS

$0.90 – $0.92

Gross margin guidance includes the estimated impact of proposed tariffs on Mexico, Canada, and China.

Cisco estimates that GAAP EPS will be $0.57 to $0.61 for the third quarter of fiscal 2025.

Cisco estimates the following results for fiscal 2025:

FY 2025

Revenue

$56.0 billion – $56.5 billion

Non-GAAP EPS

$3.68 – $3.74

Gross margin guidance includes the estimated impact of proposed tariffs on Mexico, Canada, and China.

Cisco estimates that GAAP EPS will be $2.40 to $2.52 for fiscal 2025.

Our Q3 FY 2025 guidance assumes an effective tax provision rate of approximately 17% for GAAP and approximately 19% for non-GAAP results. Our FY 2025 guidance assumes an effective tax provision rate of approximately 9% 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:

Q2 fiscal year 2025 conference call to discuss Cisco’s results along with its guidance will be held on Wednesday, February 12, 2025 at 1:30 p.m. Pacific Time. Conference call number is 1-888-848-6507 (United States) or 1-212-519-0847 (international).Conference call replay will be available from 4:00 p.m. Pacific Time, February 12, 2025 to 4:00 p.m. Pacific Time, February 18, 2025 at 1-800-395-6236 (United States) or 1-203-369-3270 (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 12, 2025. Text of the conference call’s prepared remarks will be available within 24 hours of completion of the call. The webcast will include both the prepared remarks and the question-and-answer session. This information, along with the GAAP to non-GAAP reconciliation information, will be available on the Cisco Investor Relations website at https://investor.cisco.com.

CISCO SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per-share amounts)

(Unaudited)

Three Months Ended

Six Months Ended

January 25, 2025

January 27, 2024

January 25, 2025

January 27, 2024

REVENUE:

Product

$ 10,234

$ 9,232

$ 20,348

$ 20,371

Services

3,757

3,559

7,484

7,088

Total revenue

13,991

12,791

27,832

27,459

COST OF SALES:

Product

3,713

3,443

7,239

7,400

Services

1,167

1,131

2,361

2,285

Total cost of sales

4,880

4,574

9,600

9,685

GROSS MARGIN

9,111

8,217

18,232

17,774

OPERATING EXPENSES:

Research and development

2,299

1,943

4,585

3,856

Sales and marketing

2,672

2,458

5,424

4,964

General and administrative

752

642

1,547

1,314

Amortization of purchased intangible assets

265

530

133

Restructuring and other charges

675

135

Total operating expenses

5,998

5,121

12,761

10,402

OPERATING INCOME

3,113

3,096

5,471

7,372

Interest income

238

324

524

684

Interest expense

(404)

(120)

(822)

(231)

Other income (loss), net

(60)

(139)

(19)

(222)

Interest and other income (loss), net

(226)

(317)

231

INCOME BEFORE PROVISION FOR INCOME TAXES

2,887

3,161

5,154

7,603

Provision for income taxes

459

527

1,331

NET INCOME

$ 2,428

$ 2,634

$ 5,139

$ 6,272

Net income per share:

Basic

$ 0.61

$ 0.65

$ 1.29

$ 1.55

Diluted

$ 0.61

$ 0.65

$ 1.28

$ 1.54

Shares used in per-share calculation:

Basic

3,981

4,055

3,986

4,056

Diluted

4,005

4,073

4,008

4,079

CISCO SYSTEMS, INC.

REVENUE BY SEGMENT

(In millions, except percentages)

January 25, 2025

Three Months Ended

Six Months Ended

Amount

Y/Y %

Amount

Y/Y %

Revenue:

Americas

$ 8,202

9 %

$ 16,454

— %

EMEA

3,855

11 %

7,444

4 %

APJC

1,934

8 %

3,934

4 %

Total

$ 13,991

9 %

$ 27,832

1 %

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

CISCO SYSTEMS, INC.

GROSS MARGIN PERCENTAGE BY SEGMENT

(In percentages)

January 25, 2025

Three Months Ended

Six Months Ended

Gross Margin Percentage:

Americas

67.6 %

68.6 %

EMEA

71.3 %

70.8 %

APJC

68.3 %

67.3 %

CISCO SYSTEMS, INC.

REVENUE FOR GROUPS OF SIMILAR PRODUCTS AND SERVICES

(In millions, except percentages)

January 25, 2025

Three Months Ended

Six Months Ended

Amount

Y/Y %

Amount

Y/Y %

Revenue:

Networking

$ 6,850

(3) %

$ 13,603

(14) %

Security

2,111

117 %

4,129

108 %

Collaboration

996

1 %

2,081

(1) %

Observability

277

47 %

535

42 %

Total Product

10,234

11 %

20,348

— %

Services

3,757

6 %

7,484

6 %

Total

$ 13,991

9 %

$ 27,832

1 %

Excluding Splunk, Security and Observability grew 4% and 3% year over year, respectively, in the second quarter of fiscal 2025.

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

CISCO SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

January 25, 2025

July 27, 2024

ASSETS

Current assets:

Cash and cash equivalents

$ 8,556

$ 7,508

Investments

8,297

10,346

Accounts receivable, net of allowance of $80 at January 25, 2025 and $87 at July 27, 2024

5,669

6,685

Inventories

2,927

3,373

Financing receivables, net

3,074

3,338

Other current assets

6,158

5,612

Total current assets

34,681

36,862

Property and equipment, net

1,992

2,090

Financing receivables, net

3,240

3,376

Goodwill

58,719

58,660

Purchased intangible assets, net

10,139

11,219

Deferred tax assets

6,591

6,262

Other assets

6,013

5,944

TOTAL ASSETS

$ 121,375

$ 124,413

LIABILITIES AND EQUITY

Current liabilities:

Short-term debt

$ 11,413

$ 11,341

Accounts payable

1,902

2,304

Income taxes payable

1,884

1,439

Accrued compensation

3,299

3,608

Deferred revenue

15,999

16,249

Other current liabilities

5,522

5,643

Total current liabilities

40,019

40,584

Long-term debt

19,625

19,621

Income taxes payable

1,756

3,985

Deferred revenue

11,796

12,226

Other long-term liabilities

2,649

2,540

Total liabilities

75,845

78,956

Total equity

45,530

45,457

TOTAL LIABILITIES AND EQUITY

$ 121,375

$ 124,413

CISCO SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

Six Months Ended

January 25,
2025

January 27,
2024

Cash flows from operating activities:

Net income

$ 5,139

$ 6,272

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

Depreciation, amortization, and other

1,550

823

Share-based compensation expense

1,748

1,463

Provision for receivables

Deferred income taxes

(382)

(816)

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

(5)

205

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

Accounts receivable

969

941

Inventories

441

442

Financing receivables

330

(33)

Other assets

(427)

(403)

Accounts payable

(359)

(476)

Income taxes, net

(2,285)

(4,656)

Accrued compensation

(293)

(763)

Deferred revenue

(555)

293

Other liabilities

(125)

Net cash provided by operating activities

5,902

3,179

Cash flows from investing activities:

Purchases of investments

(2,261)

(2,253)

Proceeds from sales of investments

1,791

2,484

Proceeds from maturities of investments

2,703

4,044

Acquisitions, net of cash and cash equivalents acquired and divestitures

(257)

(878)

Purchases of investments in privately held companies

(137)

(50)

Return of investments in privately held companies

123

Acquisition of property and equipment

(427)

(304)

Other

(5)

(1)

Net cash provided by investing activities

1,501

3,165

Cash flows from financing activities:

Issuances of common stock

320

349

Repurchases of common stock – repurchase program

(3,243)

(2,504)

Shares repurchased for tax withholdings on vesting of restricted stock units

(655)

(581)

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

1,012

1,398

Issuances of debt

10,406

2,537

Repayments of debt

(11,382)

(750)

Dividends paid

(3,185)

(3,163)

Other

(2)

(7)

Net cash used in financing activities

(6,729)

(2,721)

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

(8)

(32)

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

666

3,591

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

8,842

11,627

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

$ 9,508

$ 15,218

Supplemental cash flow information:

Cash paid for interest

$ 769

$ 203

Cash paid for income taxes, net

$ 2,682

$ 6,804

CISCO SYSTEMS, INC.

REMAINING PERFORMANCE OBLIGATIONS

(In millions, except percentages)

January 25, 2025

October 26, 2024

January 27, 2024

Amount

Y/Y%

Amount

Y/Y%

Amount

Y/Y%

Product

$ 20,321

25 %

$ 19,882

24 %

$ 16,249

12 %

Services

20,947

8 %

20,108

7 %

19,407

12 %

Total

$ 41,268

16 %

$ 39,990

15 %

$ 35,656

12 %

We expect 51% of total RPO at January 25, 2025 will be recognized as revenue over the next 12 months.

CISCO SYSTEMS, INC.

DEFERRED REVENUE

(In millions)

January 25, 2025

October 26, 2024

January 27, 2024

Deferred revenue:

Product

$ 13,033

$ 12,941

$ 11,640

Services

14,762

14,561

14,131

Total

$ 27,795

$ 27,502

$ 25,771

Reported as:

Current

$ 15,999

$ 15,615

$ 14,011

Noncurrent

11,796

11,887

11,760

Total

$ 27,795

$ 27,502

$ 25,771

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

Weighted-Average
Price per Share

Amount

Fiscal 2025

January 25, 2025

$ 0.40

$ 1,593

$ 58.58

$ 1,236

$ 2,829

October 26, 2024

$ 0.40

$ 1,592

$ 49.56

$ 2,003

$ 3,595

Fiscal 2024

July 27, 2024

$ 0.40

$ 1,606

$ 46.80

$ 2,002

$ 3,608

April 27, 2024

$ 0.40

$ 1,615

$ 49.22

$ 1,256

$ 2,871

January 27, 2024

$ 0.39

$ 1,583

$ 49.54

$ 1,254

$ 2,837

October 28, 2023

$ 0.39

$ 1,580

$ 54.53

$ 1,252

$ 2,832

CISCO SYSTEMS, INC.

RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

GAAP TO NON-GAAP NET INCOME

(In millions)

Three Months Ended

Six Months Ended

January 25,
2025

January 27,
2024

January 25,
2025

January 27,
2024

GAAP net income

$ 2,428

$ 2,634

$ 5,139

$ 6,272

Adjustments to cost of sales:

Share-based compensation expense

151

139

282

242

Amortization of acquisition-related intangible assets

335

175

654

356

Acquisition/divestiture-related costs

Total adjustments to GAAP cost of sales

503

315

972

599

Adjustments to operating expenses:

Share-based compensation expense

765

662

1,444

1,212

Amortization of acquisition-related intangible assets

265

530

133

Acquisition/divestiture-related costs

205

490

139

Russia-Ukraine war costs

—

(2)

Significant asset impairments and restructurings

675

135

Total adjustments to GAAP operating expenses

1,245

804

3,139

1,617

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

(Gains) and losses on investments

(91)

139

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

(91)

139

Total adjustments to GAAP income before provision for income taxes

1,755

1,207

4,020

2,355

Income tax effect of non-GAAP adjustments

(423)

(303)

(899)

(561)

Significant tax matters (1)

—

(829)

—

Total adjustments to GAAP provision for income taxes

(423)

(303)

(1,728)

(561)

Non-GAAP net income

$ 3,760

$ 3,538

$ 7,431

$ 8,066

(1) The six months ended January 25, 2025 include a $720 million benefit due to a recent U.S. Tax Court decision regarding the U.S. taxation of deemed foreign dividends in the transition year of the Tax Cuts and Jobs Act.

CISCO SYSTEMS, INC.

RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

GAAP TO NON-GAAP EPS

Three Months Ended

Six Months Ended

January 25,
2025

January 27,
2024

January 25,
2025

January 27,
2024

GAAP EPS

$ 0.61

$ 0.65

$ 1.28

$ 1.54

Adjustments to GAAP:

Share-based compensation expense

0.23

0.20

0.43

0.36

Amortization of acquisition-related intangible assets

0.15

0.06

0.30

0.12

Acquisition/divestiture-related costs

0.06

0.02

0.13

0.03

Significant asset impairments and restructurings

—

0.17

0.03

(Gains) and losses on investments

—

0.02

(0.02)

0.03

Income tax effect of non-GAAP adjustments

(0.11)

(0.07)

(0.22)

(0.14)

Significant tax matters

—

(0.21)

—

Non-GAAP EPS

$ 0.94

$ 0.87

$ 1.85

$ 1.98

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 25, 2025

Product Gross
Margin

Services Gross
Margin

Total Gross
Margin

Operating

Expenses

Y/Y

Operating
Income

Y/Y

Interest and

other income

(loss), net

Net
Income

Y/Y

GAAP amount

$ 6,521

$ 2,590

$ 9,111

$ 5,998

17 %

$ 3,113

1 %

$ (226)

$ 2,428

(8) %

% of revenue

63.7 %

68.9 %

65.1 %

42.9 %

22.3 %

(1.6) %

17.4 %

Adjustments to GAAP amounts:

Share-based compensation expense

151

765

916

—

916

Amortization of acquisition-related intangible assets

335

—

335

265

600

—

600

Acquisition/divestiture-related costs

205

222

—

222

Significant asset impairments and restructurings

—

(Gains) and losses on investments

—

Income tax effect/significant tax matters

—

(423)

Non-GAAP amount

$ 6,924

$ 2,690

$ 9,614

$ 4,753

10 %

$ 4,861

15 %

$ (219)

$ 3,760

6 %

% of revenue

67.7 %

71.6 %

68.7 %

34.0 %

34.7 %

(1.6) %

26.9 %

Three Months Ended

January 27, 2024

Product Gross
Margin

Services Gross

Margin

Total Gross
Margin

Operating

Expenses

Operating

Income

Interest and

other income
(loss), net

Net

Income

GAAP amount

$ 5,789

$ 2,428

$ 8,217

$ 5,121

$ 3,096

$ 65

$ 2,634

% of revenue

62.7 %

68.2 %

64.2 %

40.0 %

24.2 %

0.5 %

20.6 %

Adjustments to GAAP amounts:

Share-based compensation expense

139

662

801

—

801

Amortization of acquisition-related intangible assets

175

—

175

241

—

241

Acquisition/divestiture-related costs

—

Significant asset impairments and restructurings

—

(Gains) and losses on investments

—

Income tax effect/significant tax matters

—

(303)

Non-GAAP amount

$ 6,023

$ 2,509

$ 8,532

$ 4,317

$ 4,215

$ 153

$ 3,538

% of revenue

65.2 %

70.5 %

66.7 %

33.8 %

33.0 %

1.2 %

27.7 %

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 25, 2025

Product Gross

Margin

Services Gross

Margin

Total Gross
Margin

Operating
Expenses

Y/Y

Operating
Income

Y/Y

Interest and

other income
(loss), net

Net

Income

Y/Y

GAAP amount

$ 13,109

$ 5,123

$ 18,232

$ 12,761

23 %

$ 5,471

(26) %

$ (317)

$ 5,139

(18) %

% of revenue

64.4 %

68.5 %

65.5 %

45.9 %

19.7 %

(1.1) %

18.5 %

Adjustments to GAAP amounts:

Share-based compensation expense

122

160

282

1,444

1,726

—

1,726

Amortization of acquisition-related intangible assets

654

—

654

530

1,184

—

1,184

Acquisition/divestiture-related costs

490

526

—

526

Significant asset impairments and restructurings

—

675

—

675

(Gains) and losses on investments

—

(91)

Income tax effect/significant tax matters

—

(1,728)

Non-GAAP amount

$ 13,893

$ 5,311

$ 19,204

$ 9,622

10 %

$ 9,582

— %

$ (408)

$ 7,431

(8) %

% of revenue

68.3 %

71.0 %

69.0 %

34.6 %

34.4 %

(1.5) %

26.7 %

Six Months Ended

January 27, 2024

Product Gross
Margin

Services Gross
Margin

Total Gross
Margin

Operating

Expenses

Operating

Income

Interest and
other income
(loss), net

Net

Income

GAAP amount

$ 12,971

$ 4,803

$ 17,774

$ 10,402

$ 7,372

$ 231

$ 6,272

% 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

—

139

140

—

140

Significant asset impairments and restructurings

—

135

—

135

Russia-Ukraine war costs

—

(2)

—

(2)

(Gains) and losses on investments

—

139

Income tax effect/significant tax matters

—

(561)

Non-GAAP amount

$ 13,428

$ 4,945

$ 18,373

$ 8,785

$ 9,588

$ 370

$ 8,066

% of revenue

65.9 %

69.8 %

66.9 %

32.0 %

34.9 %

1.3 %

29.4 %

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 25,
2025

January 27,
2024

January 25,
2025

January 27,
2024

GAAP effective tax rate

15.9 %

16.7 %

0.3 %

17.5 %

Total adjustments to GAAP provision for income taxes

3.1 %

2.3 %

18.7 %

1.5 %

Non-GAAP effective tax rate

19.0 %

GAAP TO NON-GAAP GUIDANCE

Q3 FY 2025

Gross Margin Rate

Operating Margin Rate

Earnings per Share (1)

GAAP

64% – 65%

21% – 22%

$0.57 – $0.61

Estimated adjustments for:

Share-based compensation expense

1.0 %

7.0 %

$0.17 – $0.18

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

2.0 %

5.0 %

$0.14 – $0.15

Non-GAAP

67% – 68%

33% – 34%

$0.90 – $0.92

FY 2025

Earnings per Share (1)

GAAP

$2.40 – $2.52

Estimated adjustments for:

Share-based compensation expense

$0.69 – $0.71

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

$0.60 – $0.62

Significant asset impairments and restructurings

$0.16 – $0.18

(Gains) and losses on investments

($0.02)

Significant tax matters

($0.21)

Non-GAAP

$3.68 – $3.74

(1) 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, 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 customer demand and our position to help our customers scale their network infrastructure, increase their data capacity requirements, and adopt best-in-class AI security) and the future financial performance of Cisco (including the guidance for Q3 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 key priority 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 November 19, 2024 and September 5, 2024, 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 25, 2025 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/divestiture-related 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.

About Cisco

Cisco (NASDAQ: CSCO) is the worldwide technology leader that is revolutionizing the way organizations connect and protect in the AI era. For more than 40 years, Cisco has securely connected the world. With its industry leading AI-powered solutions and services, Cisco enables its customers, partners and communities to unlock innovation, enhance productivity and strengthen digital resilience. With purpose at its core, Cisco remains committed to creating a more connected and inclusive future for all. Discover more on The Newsroom and follow us on X at @Cisco.

Copyright © 2025 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

View original content to download multimedia:https://www.prnewswire.com/news-releases/cisco-reports-second-quarter-earnings-302375275.html

SOURCE Cisco Systems, Inc.

Technology

10x Genomics Reports First Quarter 2026 Financial Results

Published

6 hours ago

May 7, 2026

PLEASANTON, Calif., May 7, 2026 /PRNewswire/ — 10x Genomics, Inc. (Nasdaq: TXG), a leader in single cell and spatial biology, today reported financial results for the first quarter ended March 31, 2026.

Recent Updates

Revenue was $150.8 million for the first quarter of 2026, representing a 3% decrease over the corresponding period of 2025. Excluding $16.8 million related to one-time license and royalty revenue in the first quarter of 2025, revenue increased 9% over the corresponding period of 2025.Launched Atera, a new platform to redefine how biology is measured and understood. Atera was engineered to deliver spatial whole-transcriptome analysis with single-cell sensitivity at unprecedented scale. The Company expects to start shipping Atera in the second half of 2026.Announced a partnership with Bioptimus, a global AI biotech company, to launch STELA, a multinational spatial data generation initiative to create foundational datasets connecting underlying biology with disease outcomes. The initiative is starting this effort on our Xenium platform and plans to expand to Atera over time.Ended the first quarter of 2026 with cash and cash equivalents and marketable securities of $539.8 million, representing a $112.9 million increase from March 31, 2025.

“We had a solid start to the year, with double-digit growth in Single Cell consumables reaction volumes and double-digit growth in Spatial consumables revenue,” said Serge Saxonov, Co-founder and CEO of 10x Genomics. “The biggest highlight is our recent launch of Atera, which represents the most significant product introduction in our history. We are extremely encouraged by the extraordinary early customer response.”

First Quarter 2026 Financial Results

Revenue was $150.8 million for the first quarter of 2026, a 3% decrease from the corresponding period of 2025. Excluding $16.8 million related to a patent litigation settlement recognized in the first quarter of 2025, revenue increased 9% over the corresponding period of 2025.

Gross margin was 70% for the first quarter of 2026, as compared to 68% for the corresponding prior year period. The increase in gross margin was primarily due to lower warranty costs and lower inventory write-downs, partially offset by a decrease in license and royalty revenue reflecting a non-recurring royalty benefit recognized in the first quarter of 2025.

Operating expenses were $123.2 million for the first quarter of 2026, a 15% decrease from $144.8 million for the corresponding prior year period. The decrease was primarily driven by lower outside legal expenses and personnel expenses, partially offset by a non-recurring gain on settlement of $9.2 million recognized in the first quarter of 2025.

Operating loss was $17.0 million for the first quarter of 2026, as compared to operating loss of $39.3 million for the corresponding prior year period.

Net loss was $13.5 million for the first quarter of 2026, as compared to a net loss of $34.4 million for the corresponding prior year period.

Cash and cash equivalents and marketable securities were $539.8 million as of March 31, 2026.

2026 Financial Guidance

10x Genomics is maintaining its full year 2026 revenue guidance of $600 million to $625 million. Excluding the non-recurring license and royalty revenue related to patent litigation settlements in 2025, this represents 0% to 4% growth over full year 2025.

Webcast and Conference Call Information

10x Genomics will host a conference call to discuss the first quarter 2026 financial results, business developments and outlook after market close on Thursday, May 7, 2026 at 1:30 PM Pacific Time / 4:30 PM Eastern Time. A webcast of the conference call can be accessed at http://investors.10xgenomics.com. The webcast will be archived and available for replay at least 45 days after the event.

About 10x Genomics

10x Genomics is a life science technology company building products to accelerate the mastery of biology and advance human health. Our integrated research solutions include instruments, consumables and software for single cell and spatial biology, which help academic and translational researchers and biopharmaceutical companies understand biological systems at a resolution and scale that matches the complexity of biology. Our products are behind breakthroughs in oncology, immunology, neuroscience and more, fueling powerful discoveries that are transforming the world’s understanding of health and disease. To learn more, visit 10xgenomics.com or connect with us on LinkedIn, X, Facebook, Bluesky or YouTube.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections. All statements included in this press release, other than statements of historical facts, may be forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “might,” “will,” “should,” “expect,” “plan,” “outlook,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “see,” “estimate,” “predict,” “potential,” “would,” “likely,” “seek” or “continue” or the negatives of these terms or variations of them or similar terminology, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements include statements regarding 10x Genomics, Inc.’s products, services, business strategy, collaborations and opportunities and 10x Genomics, Inc.’s financial performance and results of operations, including expectations regarding revenue and guidance. These statements are based on management’s current expectations, forecasts, beliefs, estimates, assumptions and information currently available to management. Actual outcomes and results could differ materially from these statements due to a number of factors and such statements should not be relied upon as representing 10x Genomics, Inc.’s views as of any date subsequent to the date of this press release. 10x Genomics, Inc. disclaims any obligation to update any forward-looking statements provided to reflect any change in 10x Genomics’ expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law. The material risks and uncertainties that could affect 10x Genomics, Inc.’s financial and operating results and cause actual results to differ materially from those indicated by the forward-looking statements made in this press release include those discussed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s most recently-filed 10-K for the fiscal year ended December 31, 2025 filed on February 12, 2026 and the company’s quarterly report on Form 10-Q for the quarter ended March 31, 2026 to be filed with the U.S. Securities and Exchange Commission (“SEC”), and elsewhere in the documents 10x Genomics, Inc. files with the SEC from time to time.

Disclosure Information

10x Genomics uses filings with the Securities and Exchange Commission, its website (www.10xgenomics.com), press releases, public conference calls, public webcasts and its social media accounts as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Contacts

Investors: investors@10xgenomics.com

Media: media@10xgenomics.com

10x Genomics, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except share and per share data)

Three Months Ended
March 31,

2026

2025

Products and services revenue

$ 149,896

$ 137,823

License and royalty revenue

947

17,060

Revenue (1)

150,843

154,883

Cost of products and services revenue (2)

44,665

49,438

Gross profit

106,178

105,445

Operating expenses:

Research and development (2)

56,847

64,245

Selling, general and administrative (2)

66,377

89,728

Gain on settlement

—

(9,200)

Total operating expenses

123,224

144,773

Loss from operations

(17,046)

(39,328)

Other income (expense):

Interest income

5,014

3,686

Other income (expense), net

(815)

2,136

Total other income

4,199

5,822

Loss before provision for income taxes

(12,847)

(33,506)

Provision for income taxes

623

852

Net loss

$ (13,470)

$ (34,358)

Net loss per share, basic and diluted

$ (0.10)

$ (0.28)

Weighted-average shares used to compute net loss per share, basic and diluted

128,291,153

122,606,091

__________________________

(1)

The following table represents total revenue by source for the periods indicated (in thousands). Spatial includes the Company’s Visium and Xenium products:

Three Months Ended
March 31,

2026

2025

Instruments

Single Cell

$ 5,223

$ 5,913

Spatial

6,039

8,902

Total instruments revenue

11,262

14,815

Consumables

Single Cell

88,894

84,109

Spatial

40,907

31,247

Total consumables revenue

129,801

115,356

Services

8,833

7,652

Products and services revenue

149,896

137,823

License and royalty revenue

947

17,060

Total revenue

$ 150,843

$ 154,883

(1)

The following table presents revenue by geography based on the location of the customer for the periods indicated (in thousands):

Three Months Ended
March 31,

2026

2025

Americas

United States*

$ 76,693

$ 86,818

Americas (excluding United States)

3,406

3,752

Total Americas

80,099

90,570

Europe, Middle East and Africa

36,852

31,895

Asia-Pacific

China

15,837

16,883

Asia-Pacific (excluding China)

18,055

15,535

Total Asia-Pacific

33,892

32,418

Total revenue

$ 150,843

$ 154,883

Includes license and royalty revenue.

(2)

Includes stock-based compensation expense as follows:

Three Months Ended
March 31,

(in thousands)

2026

2025

Cost of revenue

$ 1,918

$ 2,481

Research and development

10,695

14,106

Selling, general and administrative

10,029

14,489

Total stock-based compensation expense

$ 22,642

$ 31,076

10x Genomics, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

March 31,
2026

December 31,
2025

Assets

Current assets:

Cash and cash equivalents

$ 490,285

$ 473,966

Marketable securities

49,563

49,443

Accounts receivable, net

39,031

47,013

Other receivables

17,106

35,480

Inventory

53,487

56,341

Prepaid expenses and other current assets

20,261

22,208

Total current assets

669,733

684,451

Property and equipment, net

220,591

226,711

Operating lease right-of-use assets

58,390

60,450

Goodwill

4,511

Intangible assets, net

59,910

62,329

Other noncurrent assets

2,624

2,913

Total assets

$ 1,015,759

$ 1,041,365

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$ 17,425

$ 12,733

Accrued compensation and related benefits

21,506

42,500

Accrued expenses and other current liabilities

33,680

39,971

Deferred revenue

24,342

23,902

Operating lease liabilities

11,330

10,985

Contingent consideration, current

5,315

23,363

Total current liabilities

113,598

153,454

Contingent consideration, noncurrent

1,222

1,237

Operating lease liabilities, noncurrent

70,059

73,376

Deferred revenue, noncurrent

10,138

10,501

Other noncurrent liabilities

6,418

6,471

Total liabilities

201,435

245,039

Commitments and contingencies

Stockholders’ equity:

Preferred stock

—

Common stock

Additional paid-in capital

2,338,269

2,306,690

Accumulated deficit

(1,524,061)

(1,510,591)

Accumulated other comprehensive income

114

225

Total stockholders’ equity

814,324

796,326

Total liabilities and stockholders’ equity

$ 1,015,759

$ 1,041,365

View original content to download multimedia:https://www.prnewswire.com/news-releases/10x-genomics-reports-first-quarter-2026-financial-results-302766095.html

SOURCE 10x Genomics, Inc.

Technology

OUTFRONT Media Announces Quarterly Dividend

Published

6 hours ago

May 7, 2026

NEW YORK, May 7, 2026 /PRNewswire/ — OUTFRONT Media Inc. (NYSE: OUT) announced today that its board of directors has declared a quarterly cash dividend on the Company’s common stock of $0.30 per share payable on June 30, 2026, to shareholders of record at the close of business on June 5, 2026.

About OUTFRONT Media Inc.
OUTFRONT is one of the largest and most trusted out-of-home media companies in the U.S., helping brands connect with audiences in the moments and environments that matter most. As OUTFRONT evolves, it’s defining a new era of in-real-life (IRL) marketing, turning public spaces into platforms for creativity, connection, and cultural relevance. With a nationwide footprint across billboards, digital displays, transit systems, and other out-of-home formats, OUTFRONT turns creative into powerful real-world experiences. Its in-house agency, OUTFRONT STUDIOS, and award-winning innovation team, XLabs, deliver standout storytelling, supported by advanced technology and data tools that can drive measurable impact.

Contacts:

Investors

Media

Stephan Bisson

Courtney Richards

Investor Relations

Events & Communications

(212) 297-6573

(646) 876-9404

stephan.bisson@outfront.com

courtney.richards@outfront.com

View original content to download multimedia:https://www.prnewswire.com/news-releases/outfront-media-announces-quarterly-dividend-302766109.html

SOURCE OUTFRONT Media Inc.

Technology

OUTFRONT Media Reports First Quarter 2026 Results

Published

6 hours ago

May 7, 2026

Revenues of $429.6 million

Operating income of $55.9 million

Net income attributable to OUTFRONT Media Inc. of $19.1 million

Adjusted OIBDA of $100.4 million

AFFO attributable to OUTFRONT Media Inc. of $61.0 million

Quarterly dividend of $0.30 per share, payable June 30, 2026

NEW YORK, May 7, 2026 /PRNewswire/ — OUTFRONT Media Inc. (NYSE: OUT) today reported results for the quarter ended March 31, 2026.

“Our first quarter results demonstrate our continued strong performance, with revenue, OIBDA, and AFFO all exceeding our guidance,” said Nick Brien, Chief Executive Officer of OUTFRONT Media. “Importantly, this exceptional performance was driven by strong results across our entire business, with billboard and transit both contributing to this success.”

Three Months Ended
March 31,

$ in Millions, except per share amounts

2026

2025

Revenues

$429.6

$390.7

Operating income

55.9

13.9

Adjusted OIBDA

100.4

64.2

Net income (loss) before allocation to redeemable and non-redeemable
noncontrolling interests

19.3

(20.7)

Net income (loss)1

19.1

(20.6)

Net income (loss) per share1,2,3

$0.11

($0.14)

Funds From Operations (FFO)1

63.5

26.5

Adjusted FFO (AFFO)1

61.0

27.1

Shares outstanding3

177.1

166.4

Notes: See exhibits for reconciliations of non-GAAP financial measures; 1) References to “Net income (loss)”, “FFO” and “AFFO” mean “Net income (loss) attributable to OUTFRONT Media Inc.”, “FFO attributable to OUTFRONT Media Inc.” and “AFFO attributable to OUTFRONT Media Inc.,” respectively; 2) References to “per share” mean per common share for diluted earnings per weighted average share; 3) Diluted weighted average shares outstanding.

First Quarter 2026 Results

Consolidated Results
Reported revenues of $429.6 million increased $38.9 million, or 10.0%, for the first quarter of 2026 as compared to the same prior-year period.

Total operating expenses of $227.5 million increased $6.2 million, or 2.8%, compared to the same prior-year period, due primarily to higher variable billboard property lease expenses, higher transit franchise costs, including higher guaranteed minimum annual payments to the New York Metropolitan Transportation Authority (the “MTA”) due to inflation, higher production expenses, and higher maintenance and utilities costs, partially offset by the impact of lost billboards in the period.

Selling, General and Administrative expenses (“SG&A”) of $107.3 million decreased $7.4 million, or 6.5%, compared to the same prior-year period, due primarily to lower compensation-related expenses, including severance and salaries, and lower credit card usage by customers, partially offset by higher professional fees, including software and technology expenses, a higher allowance for bad debt and higher client entertainment expenses.

Adjusted OIBDA of $100.4 million increased $36.2 million, or 56.4%, compared to the same prior-year period.

Segment Results

Billboard
Reported billboard segment revenues of $332.9 million increased $22.2 million, or 7.1%, compared to the same prior-year period, due primarily to higher proceeds from condemnations and an increase in average revenue per display (yield), including the impact of programmatic platforms on digital billboard revenues, partially offset by lost billboards in the period.

Operating expenses increased $3.5 million, or 2.4%, due primarily to higher variable billboard property lease costs, higher maintenance and utilities, higher site-related costs, and higher compensation-related expenses, partially offset by the impact of lost billboards in the period.

SG&A expenses increased $1.3 million, or 1.9%, due primarily to higher professional fees, including software and technology expenses, and a higher allowance for bad debt, partially offset by lower credit card usage by customers and lower compensation-related expenses.

Adjusted OIBDA of $116.4 million increased $17.4 million, or 17.6%, compared to the same prior-year period.

Transit
Reported transit segment revenues of $95.0 million increased $17.3 million, or 22.3%, compared to the same prior-year period, due primarily to an increase in average revenue per display (yield), partially offset by the impact of new and lost transit franchise contracts.

Operating expenses increased $3.0 million, or 4.0%, due primarily to higher guaranteed minimum annual payments to the MTA due to inflation, higher display production costs, and higher posting and rotation costs.

SG&A expenses increased $1.5 million, or 8.7%, due primarily to higher compensation-related expenses, including severance and commissions, higher professional fees, including higher software and technology expenses, partially offset by lower credit card usage by customers.

Adjusted OIBDA loss decreased $12.8 million, or 90.1%, compared to the same prior-year period.

Other
Reported revenues decreased $0.6 million, or 26.1%, operating expenses decreased $0.3 million, or 16.7%, and Adjusted OIBDA decreased $0.3 million, or 60.0%, compared to the same prior-year period, due primarily to a decrease in third-party digital equipment sales.

Corporate
Corporate expenses, excluding stock-based compensation, decreased $6.3 million, or 29.9%, compared to the same prior-year period to $14.8 million, due primarily to lower compensation-related expenses, including severance, and lower professional fees, including fees related to a management consulting project.

Interest Expense
Net interest expense in the first quarter of 2026 was $36.0 million, including amortization of deferred financing costs of $1.4 million, as compared to $36.0 million, including amortization of deferred financing costs of $1.5 million, in the same prior-year period. The weighted average cost of debt was 5.3% as of March 31, 2026 and 5.4% as of March 31, 2025.

Income Taxes
The provision for income taxes decreased $0.1 million, or 20.0%, in the first quarter of 2026 compared to the same prior-year period. Cash paid for income taxes in the three months ended March 31, 2026 was $0.4 million.

Net Income Attributable to OUTFRONT Media Inc.
Net income attributable to OUTFRONT Media Inc. was $19.1 million in the first quarter of 2026 compared to a Net loss attributable to OUTFRONT Media Inc. of $20.6 million in the same prior-year period. Diluted weighted average shares outstanding were 177.1 million for the first quarter of 2026 compared to 166.4 million for the same prior-year period. Net income per common share for diluted earnings per weighted average share was $0.11 in the first quarter of 2026 compared to a Net loss per common share for diluted earnings per weighted average share of $0.14 in the same prior-year period.

FFO
FFO attributable to OUTFRONT Media Inc. was $63.5 million in the first quarter of 2026, an increase of $37.0 million, or 139.6%, from the same prior-year period, driven primarily by higher Adjusted OIBDA.

AFFO
Starting at the end of 2025, we modified our calculation of AFFO to include amortization of direct lease acquisition costs instead of cash paid for direct lease acquisition costs, as management believes that this calculation of AFFO is a more appropriate measure of performance period-over-period and consistent with how we calculate FFO. Accordingly, relevant prior periods have been recast to conform to this presentation.

AFFO attributable to OUTFRONT Media Inc. was $61.0 million in the first quarter of 2026, an increase of $33.9 million, or 125.1%, from the same prior-year period, due primarily to higher Adjusted OIBDA and a higher non-cash effect of straight-line rent, partially offset by lower equity earnings.

Cash Flow & Capital Expenditures
Net cash flow provided by operating activities of $75.3 million for the three months ended March 31, 2026, increased $41.7 million, or 124.1%, compared to $33.6 million in the same prior-year period, due primarily to higher net income, as adjusted for non-cash items, the timing of accounts receivables and a decrease in accounts payable and accrued expenses, partially offset by a decrease in deferred revenues. Total capital expenditures increased $6.9 million, or 40.1%, to $24.1 million for the three months ended March 31, 2026, compared to the same prior-year period, due primarily to increased growth in digital displays, increased maintenance spending for billboard display upgrades and increased spending for safety-related projects.

Dividends
In the three months ended March 31, 2026, we paid cash dividends of $53.4 million on our common stock and vested restricted share units granted to employees. We announced on May 7, 2026, that our board of directors has approved a quarterly cash dividend on our common stock of $0.30 per share payable on June 30, 2026, to stockholders of record at the close of business on June 5, 2026.

Balance Sheet and Liquidity
As of March 31, 2026, our liquidity position included unrestricted cash of $67.2 million and $494.9 million of availability under our $500.0 million revolving credit facility, net of $5.1 million of issued letters of credit against the letter of credit facility sublimit under the revolving credit facility, and $150.0 million of additional availability under our accounts receivable securitization facility. During the three months ended March 31, 2026, no shares of our common stock were sold under our at-the-market equity offering program, of which $232.5 million remains available. Total indebtedness as of March 31, 2026 was $2.6 billion, excluding $14.8 million of deferred financing costs, and includes a $500.0 million term loan, $450.0 million of senior secured notes and $1.7 billion of senior unsecured notes.

Conference Call
We will host a conference call to discuss the results on May 7, 2026, at 4:30 p.m. Eastern Time. The conference call numbers are 833-461-5787 (U.S. callers) and 585-542-9983 (International callers) and the passcode for both is 404991578. Live and replay versions of the conference call will be webcast in the Investor Relations section of our website, www.outfront.com.

Supplemental Materials
In addition to this press release, we have provided a supplemental investor presentation which can be viewed on our website, www.outfront.com.

Contacts:

Investors

Media

Stephan Bisson

Courtney Richards

Investor Relations

Events & Communications

(212) 297-6573

(646) 876-9404

stephan.bisson@outfront.com

courtney.richards@outfront.com

Non-GAAP Financial Measures
In addition to the results prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) provided throughout this document, this document and the accompanying tables include non-GAAP financial measures as described below. We calculate and define “Adjusted OIBDA” as operating income (loss) before depreciation, amortization, net (gain) loss on dispositions and stock-based compensation. We calculate Adjusted OIBDA margin by dividing Adjusted OIBDA by total revenues. Adjusted OIBDA and Adjusted OIBDA margin are among the primary measures we use for managing our business, evaluating our operating performance and planning and forecasting future periods, as each is an important indicator of our operational strength and business performance. Our management believes users of our financial data are best served if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in managing, planning and executing our business strategy. Our management also believes that the presentations of Adjusted OIBDA and Adjusted OIBDA margin, as supplemental measures, are useful in evaluating our business because eliminating certain non-comparable items highlight operational trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures. It is management’s opinion that these supplemental measures provide users of our financial data with an important perspective on our operating performance and also make it easier for users of our financial data to compare our results with other companies that have different financing and capital structures or tax rates. When used herein, references to “FFO” and “AFFO” mean “FFO attributable to OUTFRONT Media Inc.” and “AFFO attributable to OUTFRONT Media Inc.,” respectively. We calculate FFO in accordance with the definition established by the National Association of Real Estate Investment Trusts (“NAREIT”). FFO reflects net income (loss) attributable to OUTFRONT Media Inc. adjusted to exclude gains and losses from the sale of real estate assets, depreciation and amortization of real estate assets, amortization of direct lease acquisition costs and the same adjustments for our equity-based investments and redeemable and non-redeemable noncontrolling interests, as well as the related income tax effect of adjustments, as applicable. We calculate AFFO as FFO adjusted to include amortization of direct lease acquisition costs as such costs are generally amortized over a period ranging from four weeks to one year and therefore are incurred on a regular basis. AFFO also includes cash paid for maintenance capital expenditures since these are routine uses of cash that are necessary for our operations. In addition, AFFO excludes certain non-cash items, including non-real estate depreciation and amortization, stock-based compensation expense, accretion expense, the non-cash effect of straight-line rent, amortization of deferred financing costs and the same adjustments for our redeemable and non-redeemable noncontrolling interests, along with the non-cash portion of income taxes, and the related income tax effect of adjustments, as applicable. We use FFO and AFFO measures for managing our business and for planning and forecasting future periods, and each is an important indicator of our operational strength and business performance, especially compared to other real estate investment trusts (“REITs”). Our management believes users of our financial data are best served if the information that is made available to them allows them to align their analysis and evaluation of our operating results along the same lines that our management uses in managing, planning and executing our business strategy. Our management also believes that the presentations of FFO and AFFO, as supplemental measures, are useful in evaluating our business because adjusting results to reflect items that have more bearing on the operating performance of REITs highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures. It is management’s opinion that these supplemental measures provide users of our financial data with an important perspective on our operating performance and also make it easier to compare our results to other companies in our industry, as well as to REITs. Since Adjusted OIBDA, Adjusted OIBDA margin, FFO and AFFO are not measures calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, operating income (loss) and net income (loss) attributable to OUTFRONT Media Inc., the most directly comparable GAAP financial measures, as indicators of operating performance. These measures, as we calculate them, may not be comparable to similarly titled measures employed by other companies. In addition, these measures do not necessarily represent funds available for discretionary use and are not necessarily a measure of our ability to fund our cash needs.

Please see Exhibits 4-5 of this release for a reconciliation of the above non-GAAP financial measures to the most directly comparable GAAP financial measures.

Cautionary Statement Regarding Forward-Looking Statements
We have made statements in this document that are forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “could,” “would,” “may,” “might,” “will,” “should,” “seeks,” “likely,” “intends,” “plans,” “projects,” “predicts,” “estimates,” “forecast” or “anticipates” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions related to our capital resources, portfolio performance and results of operations. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and may not be able to be realized. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: declines in advertising and general economic conditions; competition; government regulation; our ability to operate our digital display platform; losses and costs resulting from recalls and product liability, warranty and intellectual property claims; our ability to obtain and renew key municipal contracts on favorable terms; taxes, fees and registration requirements; decreased government compensation for the removal of lawful billboards; content-based restrictions on outdoor advertising; seasonal variations; acquisitions and other strategic transactions that we may pursue could have a negative effect on our results of operations; dependence on our management team and other key employees; experiencing a cybersecurity incident; changes in regulations and consumer concerns regarding privacy, information security and data, or any failure or perceived failure to comply with these regulations or our internal policies; asset impairment charges for our long-lived assets and goodwill; environmental, health and safety laws and regulations; expectations relating to environmental, social and governance considerations; our substantial indebtedness; restrictions in the agreements governing our indebtedness; incurrence of additional debt; interest rate risk exposure from our variable-rate indebtedness; our ability to generate cash to service our indebtedness; cash available for distributions; hedging transactions; the ability of our board of directors to cause us to issue additional shares of stock without common stockholder approval; certain provisions of Maryland law may limit the ability of a third party to acquire control of us; our rights and the rights of our stockholders to take action against our directors and officers are limited; our failure to remain qualified to be taxed as a REIT; REIT distribution requirements; availability of external sources of capital; we may face other tax liabilities even if we remain qualified to be taxed as a REIT; complying with REIT requirements may cause us to liquidate investments or forgo otherwise attractive investments or business opportunities; our ability to contribute certain contracts to a taxable REIT subsidiary (“TRS”); our planned use of TRSs may cause us to fail to remain qualified to be taxed as a REIT; REIT ownership limits; complying with REIT requirements may limit our ability to hedge effectively; the ability of our board of directors to revoke our REIT election at any time without stockholder approval; the Internal Revenue Service may deem the gains from sales of our outdoor advertising assets to be subject to a 100% prohibited transaction tax; establishing operating partnerships as part of our REIT structure; and other factors described in our filings with the Securities and Exchange Commission (the “SEC”), including but not limited to the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 26, 2026. All forward-looking statements in this document apply as of the date of this document or as of the date they were made and, except as required by applicable law, we disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes.

EXHIBITS

Exhibit 1: CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) See Notes on Page 14

Three Months Ended

March 31,

(in millions, except per share amounts)

2026

2025

Revenues

$ 429.6

$ 390.7

Expenses:

Operating

227.5

221.3

Selling, general and administrative

107.3

114.7

Net loss on dispositions

1.0

0.1

Depreciation

20.7

23.6

Amortization

17.2

17.1

Total expenses

373.7

376.8

Operating income

55.9

13.9

Interest expense, net

(36.0)

Income (loss) before provision for income taxes and equity in earnings of investee
companies

19.9

(22.1)

Provision for income taxes

(0.4)

(0.5)

Equity in earnings of investee companies, net of tax

(0.2)

1.9

Net income (loss) before allocation to redeemable and non-redeemable noncontrolling
interests

19.3

(20.7)

Net income (loss) attributable to redeemable and non-redeemable noncontrolling interests

0.2

(0.1)

Net income (loss) attributable to OUTFRONT Media Inc.

$ 19.1

$ (20.6)

Net income (loss) per common share:

Basic

$ 0.11

$ (0.14)

Diluted

$ 0.11

$ (0.14)

Weighted average shares outstanding:

Basic

175.5

166.4

Diluted

177.1

166.4

Exhibit 2: CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited) See Notes on Page 14

As of

(in millions)

March 31,
2026

December 31,
2025

Assets:

Current assets:

Cash and cash equivalents

$ 67.2

$ 99.9

Receivables, less allowance ($25.0 in 2026 and $23.2 in 2025)

294.3

365.7

Prepaid lease and franchise costs

2.6

5.1

Prepaid MTA equipment deployment costs

0.2

—

Other prepaid expenses

25.6

21.9

Other current assets

11.6

11.1

Total current assets

401.5

503.7

Property and equipment, net

644.3

643.8

Goodwill

2,006.4

Intangible assets

603.6

612.0

Operating lease assets

1,553.8

1,521.5

Other assets

28.5

24.2

Total assets

$ 5,238.1

$ 5,311.6

Liabilities:

Current liabilities:

Accounts payable

$ 33.3

$ 50.2

Accrued compensation

42.4

72.3

Accrued interest

23.4

35.1

Accrued lease and franchise costs

62.7

72.2

Other accrued expenses

63.2

55.5

Deferred revenues

60.1

57.7

Short-term operating lease liabilities

179.5

172.9

Other current liabilities

27.6

29.4

Total current liabilities

492.2

545.3

Long-term debt, net

2,584.5

2,583.4

Asset retirement obligation

34.1

34.0

Operating lease liabilities

1,398.9

1,374.7

Other liabilities

39.2

40.3

Total liabilities

4,548.9

4,577.7

Commitments and contingencies

Redeemable noncontrolling interests

25.8

22.0

Stockholders’ equity:

Common stock (2026 – 450.0 shares authorized, and 176.1 shares issued and
outstanding; 2025 – 450.0 shares authorized, and 175.2 issued and outstanding)

1.8

Additional paid-in capital

2,604.6

2,619.3

Distribution in excess of earnings

(1,944.6)

(1,910.8)

Accumulated other comprehensive loss

0.1

Total stockholders’ equity

661.9

710.4

Noncontrolling interests

1.5

Total liabilities and equity

$ 5,238.1

$ 5,311.6

Exhibit 3: CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) See Notes on Page 14

Three Months Ended

March 31,

(in millions)

2026

2025

Operating activities:

Net income (loss) attributable to OUTFRONT Media Inc.

$ 19.1

$ (20.6)

Adjustments to reconcile net income (loss) to net cash flow provided by operating activities:

Net income (loss) attributable to redeemable and non-redeemable noncontrolling interests

0.2

(0.1)

Depreciation and amortization

37.9

40.7

Stock-based compensation

5.6

9.5

Provision for doubtful accounts

2.2

1.5

Accretion expense

0.7

Net loss on dispositions

1.0

0.1

Equity in earnings of investee companies, net of tax

0.2

(1.9)

Distributions from investee companies

0.3

Amortization of deferred financing costs and debt discount and premium

1.4

1.5

Change in assets and liabilities, net of investing and financing activities:

Decrease in receivables

69.2

45.3

Increase in prepaid MTA equipment deployment costs

(0.2)

—

(Increase) decrease in prepaid expenses and other current assets

(3.5)

0.8

Decrease in accounts payable and accrued expenses

(57.1)

(67.8)

Increase in operating lease assets and liabilities

0.5

2.1

Increase in deferred revenues

2.4

16.7

Increase (decrease) in income taxes

—

0.5

Other, net

(4.6)

4.3

Net cash flow provided by operating activities

75.3

33.6

Investing activities:

Capital expenditures

(24.1)

(17.2)

Acquisitions

(8.1)

(5.7)

MTA franchise rights

(1.8)

(4.0)

Net proceeds from dispositions

—

0.7

Investment in investee companies

(4.0)

—

Return of investments in investee companies

—

1.5

Net cash flow used for investing activities

(38.0)

(24.7)

Financing activities:

Proceeds from borrowings under short-term debt facilities

—

50.0

Repayments of borrowings under short-term debt facilities

—

(10.0)

Taxes withheld for stock-based compensation

(16.6)

(12.3)

Dividends

(53.4)

(53.0)

Net cash flow used for financing activities

(70.0)

(25.3)

Exhibit 3: CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited) See Notes on Page 14

Three Months Ended

March 31,

(in millions)

2026

2025

Net decrease in cash and cash equivalents

(32.7)

(16.4)

Cash and cash equivalents at beginning of period

99.9

46.9

Cash and cash equivalents at end of period

$ 67.2

$ 30.5

Supplemental disclosure of cash flow information:

Cash paid for income taxes

$ 0.4

$ —

Cash paid for interest

47.1

46.2

Non-cash investing and financing activities:

Accrued purchases of property and equipment

3.3

13.4

Accrued MTA franchise rights

1.9

1.6

Taxes withheld for stock-based compensation

2.8

2.6

Exhibit 4: SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(Unaudited) See Notes on Page 14

Three Months Ended March 31, 2026

(in millions, except percentages)

Billboard

Transit

Other

Corporate

Consolidated

Revenues

$ 332.9

$ 95.0

$ 1.7

$ —

$ 429.6

Operating income (loss)

$ 82.5

$ (6.4)

$ 0.2

$ (20.4)

$ 55.9

Net loss on dispositions

0.9

0.1

—

1.0

Depreciation

18.1

2.6

—

20.7

Amortization

14.9

2.3

—

17.2

Stock-based compensation

—

5.6

Adjusted OIBDA

$ 116.4

$ (1.4)

$ 0.2

$ (14.8)

$ 100.4

Adjusted OIBDA margin

35.0 %

(1.5) %

11.8 %

23.4 %

Three Months Ended March 31, 2025

(in millions, except percentages)

Billboard

Transit

Other

Corporate

Consolidated

Revenues

$ 310.7

$ 77.7

$ 2.3

$ —

$ 390.7

Operating income (loss)

$ 61.0

$ (17.0)

$ 0.5

$ (30.6)

$ 13.9

Net (gain) loss on dispositions

0.7

(0.6)

—

0.1

Depreciation

21.6

2.0

—

23.6

Amortization

15.7

1.4

—

17.1

Stock-based compensation

—

9.5

Adjusted OIBDA

$ 99.0

$ (14.2)

$ 0.5

$ (21.1)

$ 64.2

Adjusted OIBDA margin

31.9 %

(18.3) %

21.7 %

16.4 %

Exhibit 5: SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES
(Unaudited) See Notes on Page 14

Three Months Ended

March 31,

(in millions)

2026

2025

Net income (loss) attributable to OUTFRONT Media Inc.

$ 19.1

$ (20.6)

Depreciation of billboard advertising structures

16.2

18.8

Amortization of real estate-related intangible assets

14.3

15.1

Amortization of direct lease acquisition costs

13.0

13.2

Net loss on disposition of real estate assets

1.0

0.1

Adjustment related to redeemable and non-redeemable noncontrolling interests

(0.1)

FFO attributable to OUTFRONT Media Inc.

$ 63.5

$ 26.5

Non-cash portion of income taxes

—

0.5

Cash paid for direct lease acquisition costs

(13.0)

(13.2)

Maintenance capital expenditures

(7.0)

(6.3)

Other depreciation

4.5

4.8

Other amortization

2.9

2.0

Stock-based compensation

5.6

9.5

Non-cash effect of straight-line rent

2.4

1.1

Accretion expense

0.7

Amortization of deferred financing costs

1.4

1.5

AFFO attributable to OUTFRONT Media Inc.(a)

$ 61.0

$ 27.1

Exhibit 6: SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES
(Unaudited) See Notes on Page 14

Three Months Ended

March 31,

(in millions)

2026

2025

Adjusted OIBDA

$ 100.4

$ 64.2

Interest expense, net, less amortization of deferred financing costs

(34.6)

(34.5)

Cash paid for income taxes

(0.4)

—

Maintenance capital expenditures

(7.0)

(6.3)

Equity in earnings of investee companies, net of tax

(0.2)

1.9

Non-cash effect of straight-line rent

2.4

1.1

Accretion expense

0.7

Adjustment related to redeemable and non-redeemable noncontrolling interests

(0.3)

—

AFFO attributable to OUTFRONT Media Inc.(a)

$ 61.0

$ 27.1

Exhibit 7: OPERATING EXPENSES

(Unaudited) See Notes on Page 14

Three Months Ended

March 31,

(in millions, except percentages)

2026

2025

Change

Operating expenses:

Billboard property lease

$ 111.3

$ 109.2

1.9 %

Transit franchise

59.7

58.0

2.9

Posting, maintenance and other

56.5

54.1

4.4

Total operating expenses

$ 227.5

$ 221.3

2.8

Exhibit 8: EXPENSES BY SEGMENT

(Unaudited) See Notes on Page 14

Three Months Ended

March 31,

(in millions, except percentages)

2026

2025

Change

Billboard:

Billboard property lease

$ 111.3

$ 109.2

1.9 %

Billboard posting, maintenance and other

37.1

35.7

3.9

Billboard operating expenses

$ 148.4

$ 144.9

2.4

Billboard SG&A expenses

$ 68.1

$ 66.8

1.9

Transit:

Transit franchise

$ 59.7

$ 58.0

2.9

Transit posting, maintenance and other

17.9

16.6

7.8

Transit operating expenses

$ 77.6

$ 74.6

4.0

Transit SG&A expenses

$ 18.8

$ 17.3

8.7

NOTES TO EXHIBITS

PRIOR PERIOD PRESENTATION CONFORMS TO CURRENT REPORTING CLASSIFICATIONS.

(a)

Starting at the end of 2025, we modified our calculation of AFFO to include amortization of direct lease acquisition costs instead of the cash paid for direct lease acquisition costs, as management believes that this calculation of AFFO is a more appropriate measure of performance period-over-period and consistent with how we calculate FFO. Accordingly, relevant prior periods have been recast to conform to this presentation.

* Calculation not meaningful.

View original content to download multimedia:https://www.prnewswire.com/news-releases/outfront-media-reports-first-quarter-2026-results-302766116.html

SOURCE OUTFRONT Media Inc.