Technology

CISCO REPORTS THIRD QUARTER EARNINGS

Published

1 year ago

May 14, 2025

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

News Summary:

Product orders up 20% year over year; up 9% excluding Splunk, with growth across all geographies and customer marketsAI Infrastructure orders taken from webscale customers exceeded $600 million, surpassing our $1 billion target one quarter earlyRevenue of $14.1 billion, up 11% year over year, above the high end of our guidance rangeStrong profitability with GAAP and non-GAAP margins and EPS above the high end of our guidance rangeQ3 FY 2025 Results:Revenue: $14.1 billionIncrease of 11% year over yearEarnings per Share: GAAP: $0.62; Non-GAAP: $0.96GAAP EPS increased 35% year over yearNon-GAAP EPS increased 9% year over yearQ4 FY 2025 Guidance (1): Revenue: $14.5 billion to $14.7 billionEarnings per Share: GAAP: $0.62 to $0.67; Non-GAAP: $0.96 to $0.98FY 2025 Guidance (1):Revenue: $56.5 billion to $56.7 billionEarnings per Share: GAAP: $2.53 to $2.58; Non-GAAP: $3.77 to $3.79

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

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

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

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

GAAP Results

Q3 FY 2025

Q3 FY 2024

Vs. Q3 FY 2024

Revenue

$ 14.1 billion

$ 12.7 billion

11 %

Net Income

$ 2.5 billion

$ 1.9 billion

32 %

Diluted Earnings per Share (EPS)

$ 0.62

$ 0.46

35 %

Non-GAAP Results

Q3 FY 2025

Q3 FY 2024

Vs. Q3 FY 2024

Net Income

$ 3.8 billion

$ 3.6 billion

8 %

EPS

$ 0.96

$ 0.88

9 %

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

Cisco Declares Quarterly Dividend

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

Financial Summary

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

Q3 FY 2025 Highlights

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

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

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

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

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

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

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

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

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

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

Balance Sheet and Other Financial Highlights

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

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

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

Capital Allocation — In the third quarter of fiscal 2025, we returned $3.1 billion to stockholders through share buybacks and dividends. We declared and paid a cash dividend of $0.41 per common share, or $1.6 billion, and repurchased approximately 25 million shares of common stock under our stock repurchase program at an average price of $59.78 per share for an aggregate purchase price of $1.5 billion. The remaining authorized amount for stock repurchases under the program is $15.4 billion with no termination date.

Acquisitions

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

Guidance

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

Q4 FY 2025

Revenue

$14.5 billion – $14.7 billion

Non-GAAP gross margin

67.5% – 68.5%

Non-GAAP operating margin

33.5% – 34.5%

Non-GAAP EPS

$0.96 – $0.98

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

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

Cisco estimates the following results for fiscal 2025:

FY 2025

Revenue

$56.5 billion – $56.7 billion

Non-GAAP EPS

$3.77 – $3.79

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

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

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

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

Editor’s Notes:

Q3 fiscal year 2025 conference call to discuss Cisco’s results along with its guidance will be held on Wednesday, May 14, 2025 at 1:30 p.m. Pacific Time. Conference call number is 1-888-848-6507 (United States) or 1-212-519-0847 (international).Conference call replay will be available from 4:00 p.m. Pacific Time, May 14, 2025 to 4:00 p.m. Pacific Time, May 20, 2025 at 1-800-876-5258 (United States) or 1-203-369-3998 (international). The replay will also be available via webcast on the Cisco Investor Relations website at https://investor.cisco.com.Additional information regarding Cisco’s financials, as well as a webcast of the conference call with visuals designed to guide participants through the call, will be available at 1:30 p.m. Pacific Time, May 14, 2025. Text of the conference call’s prepared remarks will be available within 24 hours of completion of the call. The webcast will include both the prepared remarks and the question-and-answer session. This information, along with the GAAP to non-GAAP reconciliation information, will be available on the Cisco Investor Relations website at https://investor.cisco.com.

CISCO SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per-share amounts)

(Unaudited)

Three Months Ended

Nine Months Ended

April 26, 2025

April 27, 2024

April 26, 2025

April 27, 2024

REVENUE:

Product

$ 10,374

$ 9,024

$ 30,722

$ 29,395

Services

3,775

3,678

11,259

10,766

Total revenue

14,149

12,702

41,981

40,161

COST OF SALES:

Product

3,688

3,295

10,927

10,695

Services

1,183

1,134

3,544

3,419

Total cost of sales

4,871

4,429

14,471

14,114

GROSS MARGIN

9,278

8,273

27,510

26,047

OPERATING EXPENSES:

Research and development

2,335

1,948

6,920

5,804

Sales and marketing

2,724

2,559

8,148

7,523

General and administrative

739

736

2,286

2,050

Amortization of purchased intangible assets

244

297

774

430

Restructuring and other charges

542

709

677

Total operating expenses

6,076

6,082

18,837

16,484

OPERATING INCOME

3,202

2,191

8,673

9,563

Interest income

250

411

774

1,095

Interest expense

(403)

(357)

(1,225)

(588)

Other income (loss), net

(102)

(10)

(121)

(232)

Interest and other income (loss), net

(255)

(572)

275

INCOME BEFORE PROVISION FOR INCOME TAXES

2,947

2,235

8,101

9,838

Provision for income taxes

456

349

471

1,680

NET INCOME

$ 2,491

$ 1,886

$ 7,630

$ 8,158

Net income per share:

Basic

$ 0.63

$ 0.47

$ 1.92

$ 2.01

Diluted

$ 0.62

$ 0.46

$ 1.91

$ 2.00

Shares used in per-share calculation:

Basic

3,972

4,042

3,981

4,051

Diluted

4,002

4,060

4,004

4,071

CISCO SYSTEMS, INC.

REVENUE BY SEGMENT

(In millions, except percentages)

April 26, 2025

Three Months Ended

Nine Months Ended

Amount

Y/Y %

Amount

Y/Y %

Revenue:

Americas

$ 8,380

14 %

$ 24,834

4 %

EMEA

3,736

8 %

11,179

5 %

APJC

2,034

9 %

5,968

6 %

Total

$ 14,149

11 %

$ 41,981

5 %

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

CISCO SYSTEMS, INC.

GROSS MARGIN PERCENTAGE BY SEGMENT

(In percentages)

April 26, 2025

Three Months Ended

Nine Months Ended

Gross Margin Percentage:

Americas

67.7 %

68.3 %

EMEA

71.2 %

70.9 %

APJC

67.2 %

67.3 %

CISCO SYSTEMS, INC.

REVENUE FOR GROUPS OF SIMILAR PRODUCTS AND SERVICES

(In millions, except percentages)

April 26, 2025

Three Months Ended

Nine Months Ended

Amount

Y/Y %

Amount

Y/Y %

Revenue:

Networking

$ 7,068

8 %

$ 20,671

(8) %

Security

2,013

54 %

6,142

87 %

Collaboration

1,031

4 %

3,112

1 %

Observability

261

24 %

796

35 %

Total Product

10,374

15 %

30,722

5 %

Services

3,775

3 %

11,259

5 %

Total

$ 14,149

11 %

$ 41,981

5 %

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

CISCO SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

April 26, 2025

July 27, 2024

ASSETS

Current assets:

Cash and cash equivalents

$ 8,161

$ 7,508

Investments

7,481

10,346

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

5,277

6,685

Inventories

2,832

3,373

Financing receivables, net

2,958

3,338

Other current assets

6,107

5,612

Total current assets

32,816

36,862

Property and equipment, net

2,076

2,090

Financing receivables, net

3,247

3,376

Goodwill

59,024

58,660

Purchased intangible assets, net

9,643

11,219

Deferred tax assets

7,016

6,262

Other assets

5,960

5,944

TOTAL ASSETS

$ 119,782

$ 124,413

LIABILITIES AND EQUITY

Current liabilities:

Short-term debt

$ 6,422

$ 11,341

Accounts payable

2,260

2,304

Income taxes payable

1,821

1,439

Accrued compensation

3,210

3,608

Deferred revenue

16,081

16,249

Other current liabilities

4,701

5,643

Total current liabilities

34,495

40,584

Long-term debt

22,857

19,621

Income taxes payable

1,874

3,985

Deferred revenue

11,910

12,226

Other long-term liabilities

2,711

2,540

Total liabilities

73,847

78,956

Total equity

45,935

45,457

TOTAL LIABILITIES AND EQUITY

$ 119,782

$ 124,413

CISCO SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

Nine Months Ended

April 26,
2025

April 27,
2024

Cash flows from operating activities:

Net income

$ 7,630

$ 8,158

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

Depreciation, amortization, and other

2,176

1,684

Share-based compensation expense

2,693

2,274

Provision for receivables

Deferred income taxes

(792)

(245)

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

224

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

Accounts receivable

1,406

1,286

Inventories

541

530

Financing receivables

505

Other assets

(516)

(382)

Accounts payable

(10)

(300)

Income taxes, net

(2,002)

(5,223)

Accrued compensation

(431)

(1,092)

Deferred revenue

(524)

211

Other liabilities

(786)

(86)

Net cash provided by operating activities

9,959

7,150

Cash flows from investing activities:

Purchases of investments

(3,066)

(3,044)

Proceeds from sales of investments

2,228

3,874

Proceeds from maturities of investments

3,985

5,804

Acquisitions, net of cash and cash equivalents acquired and divestitures

(291)

(25,874)

Purchases of investments in privately held companies

(265)

(82)

Return of investments in privately held companies

108

146

Acquisition of property and equipment

(688)

(472)

Other

(5)

(2)

Net cash provided by (used in) investing activities

2,006

(19,650)

Cash flows from financing activities:

Issuances of common stock

320

347

Repurchases of common stock – repurchase program

(4,748)

(3,772)

Shares repurchased for tax withholdings on vesting of restricted stock units

(910)

(765)

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

(479)

1,547

Issuances of debt

17,388

24,159

Repayments of debt

(18,545)

(2,195)

Repayments of Splunk convertible debt, net

—

(3,140)

Dividends paid

(4,812)

(4,778)

Other

(80)

(52)

Net cash provided by (used in) financing activities

(11,866)

11,351

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

(23)

(39)

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

(1,188)

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

8,842

11,627

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

$ 8,918

$ 10,439

Supplemental cash flow information:

Cash paid for interest

$ 1,370

$ 350

Cash paid for income taxes, net

$ 3,265

$ 7,150

CISCO SYSTEMS, INC.

REMAINING PERFORMANCE OBLIGATIONS

(In millions, except percentages)

April 26, 2025

January 25, 2025

April 27, 2024

Amount

Y/Y%

Amount

Y/Y%

Amount

Y/Y%

Product

$ 20,752

10 %

$ 20,321

25 %

$ 18,876

29 %

Services

20,915

5 %

20,947

8 %

19,898

14 %

Total

$ 41,667

7 %

$ 41,268

16 %

$ 38,774

21 %

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

CISCO SYSTEMS, INC.

DEFERRED REVENUE

(In millions)

April 26, 2025

January 25, 2025

April 27, 2024

Deferred revenue:

Product

$ 13,170

$ 13,033

$ 12,856

Services

14,821

14,762

14,619

Total

$ 27,991

$ 27,795

$ 27,475

Reported as:

Current

$ 16,081

$ 15,999

$ 15,751

Noncurrent

11,910

11,796

11,724

Total

$ 27,991

$ 27,795

$ 27,475

CISCO SYSTEMS, INC.

DIVIDENDS PAID AND REPURCHASES OF COMMON STOCK

(In millions, except per-share amounts)

DIVIDENDS

STOCK REPURCHASE PROGRAM

TOTAL

Quarter Ended

Per Share

Amount

Weighted-
Average Price
per Share

Amount

Fiscal 2025

April 26, 2025

$ 0.41

$ 1,627

$ 59.78

$ 1,504

$ 3,131

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

Nine Months Ended

April 26,
2025

April 27,
2024

April 26,
2025

April 27,
2024

GAAP net income

$ 2,491

$ 1,886

$ 7,630

$ 8,158

Adjustments to cost of sales:

Share-based compensation expense

152

139

434

381

Amortization of acquisition-related intangible assets

263

249

917

605

Acquisition/divestiture-related costs

Supplier component remediation charge (adjustment)

(7)

—

(7)

—

Total adjustments to GAAP cost of sales

425

400

1,397

999

Adjustments to operating expenses:

Share-based compensation expense

778

665

2,222

1,877

Amortization of acquisition-related intangible assets

244

297

774

430

Acquisition/divestiture-related costs

197

264

687

403

Russia-Ukraine war costs

—

(10)

—

(12)

Significant asset impairments and restructurings

542

709

677

Total adjustments to GAAP operating expenses

1,253

1,758

4,392

3,375

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

(Gains) and losses on investments

(7)

(72)

132

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

(7)

(72)

132

Total adjustments to GAAP income before provision for income taxes

1,697

2,151

5,717

4,506

Income tax effect of non-GAAP adjustments

(357)

(484)

(1,256)

(1,045)

Significant tax matters (1)

—

(829)

—

Total adjustments to GAAP provision for income taxes

(357)

(484)

(2,085)

(1,045)

Non-GAAP net income

$ 3,831

$ 3,553

$ 11,262

$ 11,619

(1) The nine months ended April 26, 2025 includes a $720 million benefit due to an August 2024 U.S. Tax Court decision regarding the U.S. taxation of deemed foreign dividends in the transition year of the Tax Cuts and Jobs Act.

CISCO SYSTEMS, INC.

RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

GAAP TO NON-GAAP EPS

Three Months Ended

Nine Months Ended

April 26,
2025

April 27,
2024

April 26,
2025

April 27,
2024

GAAP EPS

$ 0.62

$ 0.46

$ 1.91

$ 2.00

Adjustments to GAAP:

Share-based compensation expense

0.23

0.20

0.66

0.55

Amortization of acquisition-related intangible assets

0.13

0.42

0.25

Acquisition/divestiture-related costs

0.05

0.07

0.18

0.10

Significant asset impairments and restructurings

0.01

0.13

0.18

0.17

(Gains) and losses on investments

—

(0.02)

0.03

Income tax effect of non-GAAP adjustments

(0.09)

(0.12)

(0.31)

(0.26)

Significant tax matters

—

(0.21)

—

Non-GAAP EPS

$ 0.96

$ 0.88

$ 2.81

$ 2.85

Amounts may not sum due to rounding.

CISCO SYSTEMS, INC.

RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

GROSS MARGINS, OPERATING EXPENSES, OPERATING MARGINS, INTEREST AND OTHER INCOME (LOSS), NET, AND NET INCOME

(In millions, except percentages)

Three Months Ended

April 26, 2025

Product
Gross
Margin

Services
Gross
Margin

Total
Gross
Margin

Operating
Expenses

Y/Y

Operating
Income

Y/Y

Interest
and
other
income
(loss),
net

Net
Income

Y/Y

GAAP amount

$ 6,686

$ 2,592

$ 9,278

$ 6,076

— %

$ 3,202

46 %

$ (255)

$ 2,491

32 %

% of revenue

64.4 %

68.7 %

65.6 %

42.9 %

22.6 %

(1.8) %

17.6 %

Adjustments to GAAP amounts:

Share-based compensation expense

152

778

930

—

930

Amortization of acquisition-related intangible assets

263

—

263

244

507

—

507

Acquisition/divestiture-related costs

197

214

—

214

Supplier component remediation charge (adjustment)

(7)

—

(7)

—

(7)

—

(7)

Significant asset impairments and restructurings

—

(Gains) and losses on investments

—

Income tax effect/significant tax matters

—

(357)

Non-GAAP amount

$ 7,013

$ 2,690

$ 9,703

$ 4,823

12 %

$ 4,880

12 %

$ (236)

$ 3,831

8 %

% of revenue

67.6 %

71.3 %

68.6 %

34.1 %

34.5 %

(1.7) %

27.1 %

Three Months Ended

April 27, 2024

Product
Gross
Margin

Services
Gross
Margin

Total
Gross
Margin

Operating
Expenses

Operating

Income

Interest
and
other
income
(loss),
net

Net

Income

GAAP amount

$ 5,729

$ 2,544

$ 8,273

$ 6,082

$ 2,191

$ 44

$ 1,886

% of revenue

63.5 %

69.2 %

65.1 %

47.9 %

17.2 %

0.3 %

14.8 %

Adjustments to GAAP amounts:

Share-based compensation expense

139

665

804

—

804

Amortization of acquisition-related intangible assets

249

—

249

297

546

—

546

Acquisition/divestiture-related costs

264

276

—

276

Significant asset impairments and restructurings

—

542

—

542

Russia-Ukraine war costs

—

(10)

—

(10)

(Gains) and losses on investments

—

(7)

Income tax effect/significant tax matters

—

(484)

Non-GAAP amount

$ 6,039

$ 2,634

$ 8,673

$ 4,324

$ 4,349

$ 37

$ 3,553

% of revenue

66.9 %

71.6 %

68.3 %

34.0 %

34.2 %

0.3 %

28.0 %

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)

Nine Months Ended

April 26, 2025

Product
Gross
Margin

Services
Gross
Margin

Total
Gross
Margin

Operating
Expenses

Y/Y

Operating
Income

Y/Y

Interest
and

other
income
(loss),
net

Net
Income

Y/Y

GAAP amount

$ 19,795

$ 7,715

$ 27,510

$ 18,837

14 %

$ 8,673

(9) %

$ (572)

$ 7,630

(6) %

% of revenue

64.4 %

68.5 %

65.5 %

44.9 %

20.7 %

(1.4) %

18.2 %

Adjustments to GAAP amounts:

Share-based compensation expense

189

245

434

2,222

2,656

—

2,656

Amortization of acquisition-related intangible assets

917

—

917

774

1,691

—

1,691

Acquisition/divestiture-related costs

687

740

—

740

Supplier component remediation charge (adjustment)

(7)

—

(7)

—

(7)

—

(7)

Significant asset impairments and restructurings

—

709

—

709

(Gains) and losses on investments

—

(72)

Income tax effect/significant tax matters

—

(2,085)

Non-GAAP amount

$ 20,906

$ 8,001

$ 28,907

$ 14,445

10 %

$ 14,462

4 %

$ (644)

$ 11,262

(3) %

% of revenue

68.0 %

71.1 %

68.9 %

34.4 %

(1.5) %

26.8 %

Nine Months Ended

April 27, 2024

Product
Gross
Margin

Services
Gross
Margin

Total
Gross
Margin

Operating
Expenses

Operating

Income

Interest
and
other
income
(loss),
net

Net

Income

GAAP amount

$ 18,700

$ 7,347

$ 26,047

$ 16,484

$ 9,563

$ 275

$ 8,158

% of revenue

63.6 %

68.2 %

64.9 %

41.0 %

23.8 %

0.7 %

20.3 %

Adjustments to GAAP amounts:

Share-based compensation expense

157

224

381

1,877

2,258

—

2,258

Amortization of acquisition-related intangible assets

605

—

605

430

1,035

—

1,035

Acquisition/divestiture-related costs

403

416

—

416

Significant asset impairments and restructurings

—

677

—

677

Russia-Ukraine war costs

—

(12)

—

(12)

(Gains) and losses on investments

—

132

Income tax effect/significant tax matters

—

(1,045)

Non-GAAP amount

$ 19,467

$ 7,579

$ 27,046

$ 13,109

$ 13,937

$ 407

$ 11,619

% of revenue

66.2 %

70.4 %

67.3 %

32.6 %

34.7 %

1.0 %

28.9 %

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

Nine Months Ended

April 26,
2025

April 27,
2024

April 26,
2025

April 27,
2024

GAAP effective tax rate

15.5 %

15.6 %

5.8 %

17.1 %

Total adjustments to GAAP provision for income taxes

2.0 %

3.4 %

12.7 %

1.9 %

Non-GAAP effective tax rate

17.5 %

19.0 %

18.5 %

19.0 %

GAAP TO NON-GAAP GUIDANCE

Q4 FY 2025

Gross Margin Rate

Operating Margin Rate

Earnings per Share (1)

GAAP

64.5% –65.5%

22% – 23%

$0.62 – $0.67

Estimated adjustments for:

Share-based compensation expense

1.0 %

6.5 %

$0.18 – $0.19

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

2.0 %

4.5 %

$0.12 – $0.13

Significant asset impairments and restructurings(2)

—

0.5 %

$0.01 – $0.02

Non-GAAP

67.5% – 68.5%

33.5% – 34.5%

$0.96 – $0.98

FY 2025

Earnings per Share (1)

GAAP

$2.53 – $2.58

Estimated adjustments for:

Share-based compensation expense

$0.69 – $0.70

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

$0.60 – $0.61

Significant asset impairments and restructurings(2)

$0.14 – $0.15

(Gains) and losses on investments

($0.01)

Significant tax matters

($0.21)

Non-GAAP

$3.77 – $3.79

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

(2) Reflects charges related to a restructuring plan announced on August 14, 2024. We expect this plan to be substantially completed by the end of the first quarter of fiscal 2026.

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

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 the demand for our technologies, the momentum we are seeing with AI and how it is fueled, and our operational discipline and its impact on generating strong cash flows) and the future financial performance of Cisco (including the guidance for Q4 FY 2025 and full year FY 2025) that involve risks and uncertainties, such as the actual impact of tariffs on our guidance for Q4 FY2025 and full year FY2025. 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 February 18, 2025 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 nine months ended April 26, 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

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SOURCE Cisco Systems, Inc.

Technology

ADT Secures AI Innovation with Oracle

Published

30 minutes ago

October 27, 2026

ADT estimates it can save more than $3 million over four years and improve application performance by 25 percent by migrating business-critical applications to Oracle AI Database@Google Cloud

Oracle Cloud HCM automatically answers 90 percent of ADT’s basic HR inquiries

LAS VEGAS, Oct. 27, 2026 /PRNewswire/ — Oracle AI World — ADT Inc. (NYSE: ADT), the trusted leader in smart home security solutions, is expanding its use of AI with Oracle AI Database@Google Cloud and Oracle Fusion Cloud Applications. To reduce infrastructure costs, improve application performance, strengthen data security, and bring business data closer to its analytics and AI tools, ADT moved critical applications to Oracle AI Database@Google Cloud. In addition, ADT is leveraging the extensive AI capabilities in Oracle Fusion Cloud Human Capital Management (HCM) to answer employees’ routine HR questions and help managers complete performance reviews faster.

“To develop more intelligent, proactive protection, we need to make it easier for our teams to put critical data to work,” said Dave Scott, executive vice president and chief people and administration officer, ADT. “By using Oracle AI Database@Google Cloud, we are bringing that data closer to the tools our teams use to develop and test new ideas. With Oracle Fusion Applications, we are also using AI to help improve HR outcomes. For example, our new hires get the guidance they need while our managers gain more time to support their teams.”

Bringing Critical Data Closer to AI and Analytics
ADT estimates that moving its billing, tax, and order management applications to Oracle AI Database@Google Cloud can save more than $3 million over four years and improve application performance by 25 percent. The move also brings data from those applications closer to ADT’s Google BigQuery data warehouse, making it more accessible for planned AI projects using Gemini Enterprise. Keeping the data next to the Google Cloud services that use it can also simplify data management, accelerate analyses, and reduce the need to move or duplicate sensitive information. ADT also uses Oracle Database Zero Data Loss Autonomous Recovery Service to help secure and protect critical data, and Oracle Maximum Availability Architecture to enhance availability and disaster recovery of its databases deployed across the three Google Cloud regions it currently uses.

Improving the Employee Experience with AI
With more than 5,000 new hires each year, ADT wanted to give employees a more consistent experience, allow managers to spend more time with their teams, and reduce integration work across its systems. To meet these goals, ADT selected Oracle Cloud HCM, part of Oracle Fusion Applications, to bring HR processes and data together on one platform and take advantage of the latest AI capabilities.

With the AI capabilities in Oracle Cloud HCM, ADT has been able to automate responses to 90 percent of basic HR inquiries. In addition, Oracle Cloud HCM has enabled ADT to reduce HR support tickets by 26 percent, giving HR specialists more time for workforce planning and supporting complex employee needs. For managers, the AI-assisted tools in Oracle Cloud HCM save two to three hours per direct report during performance review cycles. ADT has also built a predictive turnover model in Oracle Cloud HCM that helps leaders identify potential attrition risks by job group and location.

“ADT is taking a practical approach to AI that is delivering results today while creating new opportunities for innovation,” said Nathan Thomas, senior vice president, product management, Oracle. “By bringing critical data closer to its AI and analytics tools, ADT is creating new opportunities to move faster and innovate, while its use of AI in HR is already giving employees more time to focus on higher-value work. Together, these efforts will help ADT continue to deliver smarter, more proactive protection for its customers.”

ADT’s migration to Oracle AI Database@Google Cloud was supported by the Google Solution Line at Insight and Oracle Consulting.

Additional Resources

Customer Story: ADT embraces Oracle AI to improve onboarding and enhance workforce insightsProduct Overview: Oracle AI Database@Google CloudProduct Overview: Oracle Fusion Cloud Human Capital Management (HCM)

About ADT
ADT is a leading provider of security, interactive and smart home solutions serving residential and small business customers in the U.S. Through innovative offerings, unrivaled safety and a premium customer experience delivered by the largest network of smart home security professionals in the U.S., ADT empowers people to protect and connect to what matters most, every second, every day. For more information, visit ADT.com.

About Oracle Fusion Cloud Applications
Oracle Fusion Cloud Applications are a complete suite of cloud applications that form the enterprise system of record, spanning finance, HR, supply chain, manufacturing, sales, service, and marketing. The suite includes Oracle Fusion Cloud Enterprise Resource Planning (ERP), Oracle Fusion Cloud Human Capital Management (HCM), Oracle Fusion Cloud Supply Chain & Manufacturing (SCM), and Oracle Fusion Cloud Customer Experience (CX).

Fusion Agentic Applications extend that foundation into a system of outcomes. They can coordinate and execute end-to-end work toward business objectives, and are designed to operate within the policies, controls, and authority each organization defines. With Oracle AI Agent Studio for Fusion Applications, customers and partners can create, extend, and manage these agents and agentic applications combining trusted enterprise data with the security, data governance, and performance needed to operate at scale.

About Oracle
Oracle offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit us at oracle.com.

About Oracle AI World
Oracle AI World is where customers and partners discover the latest product and technology innovations, see how AI is being applied across industries, and connect with experts and peers. Attendees will gain practical tips and insights to drive immediate impact within their organizations and explore how Oracle is helping unlock the full potential of AI. Join the event to see new capabilities in action and hear from thought leaders and industry movers. Register now at oracle.com/ai-world or follow the news and conversation at oracle.com/news and linkedin.com/company/oracle.

Trademarks
Oracle, Java, MySQL and NetSuite are registered trademarks of Oracle Corporation. NetSuite was the first cloud company—ushering in the new era of cloud computing.

Contact:
Ben Wolfson
Oracle
+1.510.480.5230
ben.wolfson@oracle.com

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SOURCE Oracle

Technology

Oracle Unveils New Cloud Networking Innovations for AI

Published

30 minutes ago

October 27, 2026

New Oracle Acceleron capabilities help customers move data efficiently, keep distributed AI workloads running, and securely scale multi-tenant clusters

LAS VEGAS, Oct. 27, 2026 /PRNewswire/ — Oracle AI World — Oracle today announced new capabilities in Oracle Acceleron, Oracle Cloud Infrastructure‘s (OCI) suite of networking and infrastructure technologies that help customers run demanding AI workloads reliably, securely, and at scale.

The latest additions build on OCI’s continued investments in high-performance connectivity, network architecture, host-level acceleration, and security and give customers more flexibility across compute and storage while improving the network’s ability to adapt to changing conditions.

“AI infrastructure can be unforgiving when it comes to network friction,” said Pradeep Vincent, executive vice president, Compute and AI Infrastructure, Oracle Cloud Infrastructure. “When thousands of accelerators are working together, one congested or failed path can have consequences far beyond a single connection. With Oracle Acceleron, we are building a network that can respond by rerouting traffic, recovering from failures, and helping customers scale securely.”

Oracle Acceleron combines dedicated network fabrics, more direct data paths, and a converged NIC to boost performance and lower cost, with host-level zero-trust routing and multi-planar designs to strengthen security and resilience. Its unique software architecture simplifies complex networking operations through a programmable foundation that unifies advanced networking, storage, and security capabilities across a broad range of hardware.

New capabilities span AI data movement, distributed AI communication, and secure multi-tenant AI infrastructure:

AI Data Movement

Oracle Acceleron High-Performance Fabric: Helps customers deploy inference, storage, and HPC workloads with greater performance through RDMA connectivity on OCI front-end compute.Expanded NVMe Block-storage Attachment Options: Helps customers support AI, database, and other data-intensive workloads with NVMe block storage across Oracle Acceleron bare metal and VM shapes improving performance up to 3x.

Distributed AI Communication

Oracle Collective Communications Library: Helps customers keep distributed AI workloads running when network paths fail by spreading collective traffic across OCI’s backend Multiplanar Network. It steers traffic toward healthier paths and helps workloads instantaneously recover when links, ports, or NICs fail, significantly improving the network availability and resilience.Transparent Front-End Multiplanar Networking: Helps customers improve resiliency across compute infrastructure by bringing multiplanar networking to front-end networks, with built-in transparent path selection and failover, as well as transparent congestion control for front-end RDMA traffic.

Additional Resources

Learn more about new Oracle Acceleron capabilities and innovationsLearn more about Oracle Cloud InfrastructureLearn more about Oracle Cloud NetworkingLearn more about Oracle Acceleron

About Oracle
Oracle offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit us at oracle.com.

Future Product Disclaimer
This press release is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, timing, and pricing of any features or functionality described for Oracle’s products may change and remains at the sole discretion of Oracle Corporation.

Forward-Looking Statements Disclaimer
Statements in this article relating to Oracle’s future plans, expectations, beliefs, and intentions are “forward-looking statements” and are subject to material risks and uncertainties. Many factors could affect Oracle’s current expectations and actual results, and could cause actual results to differ materially. A discussion of such factors and other risks that affect Oracle’s business is contained in Oracle’s Securities and Exchange Commission (SEC) filings, including Oracle’s most recent reports on Form 10-K and Form 10-Q under the heading “Risk Factors.” These filings are available on the SEC’s website or on Oracle’s website at oracle.com/investor. All information in this article is current as of October 27, 2026 and Oracle undertakes no duty to update any statement in light of new information or future events.

Trademarks
Oracle, Java, MySQL and NetSuite are registered trademarks of Oracle Corporation. NetSuite was the first cloud company—ushering in the new era of cloud computing.

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SOURCE Oracle

Technology

Oracle Introduces Oracle Media Fabric

Published

30 minutes ago

October 27, 2026

Integrated platform brings together AI-powered production, enterprise media models, and distributed video delivery to help media companies, streaming providers, and brands get more value from their content

LAS VEGAS, Oct. 27, 2026 /PRNewswire/ — Oracle AI World — Oracle today announced Oracle Media Fabric, an integrated platform designed to help media companies, streaming providers, and brands reduce content production time and cost, distribute and stream high-quality video at scale, and create more personalized experiences for viewers. The platform brings sophisticated content creation and streaming capabilities once available only to the largest proprietary streaming platforms to content creators of all sizes. By connecting AI-powered creative tools with next-generation video delivery infrastructure built around open standards, Oracle Media Fabric enables audience-specific advertising, tailored programming, and shared viewing experiences built around what audiences care about.

“Creating content and delivering it to viewers were separate processes,” said Clay Magouyrk, CEO, Oracle. “With Oracle Media Fabric, we’re bringing content creation and streaming together, using AI across the entire production and distribution workflow. That helps creators reduce production time and cost, make better use of their existing content, and tailor viewing experiences for different audiences in real-time.”

Oracle Media Fabric brings together Oracle Creative Studio, Oracle AI Media Models, and Oracle Video Edge to help customers create, adapt, and deliver content. It includes safeguards to help protect customers’ intellectual property (IP) and reduce the risk of generated content infringing the IP rights of others. Powered by the Oracle Creative Studio and Oracle Video Edge, the Oracle Adaptive Media Platform connects creation and delivery to enable audience-specific advertising, personalized programming, and shared viewing experiences.

Oracle Creative Studio: Helps professional media teams and a broad range of creators turn ideas into storyboards, scenes, cinematic video, visual effects, and virtual characters. As an AI-powered production suite, it brings together Oracle AI Media Models and leading third-party models through a flexible, model-agnostic platform that can select models for each creative task based on requirements for security, provenance, cost, and IP protection.Oracle AI Media Models: Help media studios and entertainment companies accelerate content creation while maintaining creative control. The Oracle-developed models focus on video generation, image generation, and image editing, enabling governed, large-scale media processing, intelligent curation and search, and frontier-model customization on Oracle Cloud Infrastructure (OCI).Oracle Video Edge: Helps broadcasters and streaming providers maintain high video quality and low latency during large-scale live events, helping ensure viewer playback starts fast and remains smooth as audience sizes peak. The AI-enabled managed platform uses real-time network and playback information to coordinate capacity and direct viewers to suitable delivery locations across OCI and participating content delivery networks and internet service provider networks.Oracle Adaptive Media Platform: Helps connect creation and delivery, enabling customers to develop audience-specific advertising, personalized programming, and shared viewing experiences. Brands can generate variations of a base advertisement within brand guidelines and approval rules, helping reduce the time and cost of creating multiple versions.

By helping broadcasters and streaming providers understand how audiences respond to programming and advertising, Oracle Media Fabric can inform more engaging experiences, strengthen viewer relationships within customers’ applications, and create new opportunities to monetize content. Oracle Media Fabric is planned to be available within the next 12 months.

About Oracle
Oracle offers integrated suites of applications plus secure, autonomous infrastructure in Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit oracle.com.

Trademarks
Oracle, Java, MySQL, and NetSuite are registered trademarks of Oracle Corporation. NetSuite was the first cloud company—ushering in the new era of cloud computing.

Future Product Disclaimer
The preceding is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, timing, and pricing of any features or functionality described for Oracle’s products may change and remains at the sole discretion of Oracle Corporation.

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SOURCE Oracle