Cisco Systems, Inc. Files 10-Q for Q2 2024

TL;DR

<b>Cisco Systems, Inc. filed its Q2 2024 10-Q report on February 20, 2024, detailing financial performance for the quarter ending January 27, 2024.</b>

AI Summary

CISCO SYSTEMS, INC. (CSCO) filed a Quarterly Report (10-Q) with the SEC on February 20, 2024. Cisco Systems, Inc. filed its Form 10-Q for the period ending January 27, 2024. The filing covers the second quarter of fiscal year 2024. The company's fiscal year ends on July 27th. The filing was made on February 20, 2024. Cisco Systems, Inc. is categorized under SIC code 3576 for Computer Communications Equipment.

Why It Matters

For investors and stakeholders tracking CISCO SYSTEMS, INC., this filing contains several important signals. This 10-Q filing provides investors with an updated view of Cisco's financial health and operational performance for the second quarter of fiscal year 2024. The detailed financial statements and disclosures within the report are crucial for understanding the company's revenue streams, profitability, and any potential risks or changes in its business operations.

Risk Assessment

Risk Level: medium — CISCO SYSTEMS, INC. shows moderate risk based on this filing. The filing is a standard quarterly report, but the complexity of Cisco's global operations and the technology sector it operates in inherently carries medium risk.

Analyst Insight

Investors should review the detailed financial statements and management's discussion and analysis in this 10-Q to assess Cisco's performance and outlook.

Key Numbers

• 20240127 — Conformed Period of Report (End date of the reporting period)
• 20240220 — Filed As Of Date (Date the report was filed)
• 0727 — Fiscal Year End (End month and day of the fiscal year)
• Q2 2024 — Quarter (Fiscal quarter being reported)

Key Players & Entities

• CISCO SYSTEMS, INC. (company) — Filer name
• 0000858877 (company) — Central Index Key
• 3576 (company) — Standard Industrial Classification
• DE (company) — State of Incorporation
• CA (company) — State of Business Address
• 170 WEST TASMAN DR (company) — Business Address Street 1
• SAN JOSE (company) — Business Address City
• 95134-1706 (company) — Business Address ZIP

FAQ

Industry Context

Cisco Systems operates in the computer communications equipment industry, a sector characterized by rapid technological advancements and global supply chains.

Regulatory Implications

As a publicly traded company, Cisco Systems is subject to the reporting requirements of the Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934.

What Investors Should Do

1. Analyze Cisco's revenue and profitability trends for Q2 2024.
2. Review any new risk factors or updates to existing ones disclosed in the filing.
3. Compare Cisco's performance against industry benchmarks and analyst expectations.

Key Dates

• 2024-01-27: End of Fiscal Quarter — The reporting period for the 10-Q filing.
• 2024-02-20: Filing Date — Date Cisco Systems, Inc. submitted the 10-Q to the SEC.

Year-Over-Year Comparison

This is the 10-Q filing for the second quarter of fiscal year 2024, providing an update from the previous filings.

Key Financial Figures

• $0.001 — ich registered Common Stock, par value $0.001 per share CSCO The Nasdaq Stock Market

Filing Documents

• csco-20240127.htm (10-Q) — 2795KB
• exh311-q2fy24.htm (EX-31.1) — 8KB
• exh312-q2fy24.htm (EX-31.2) — 8KB
• exh321-q2fy24.htm (EX-32.1) — 5KB
• exh322-q2fy24.htm (EX-32.2) — 4KB
• csco-20240127_g1.jpg (GRAPHIC) — 32KB
• 0000858877-24-000003.txt (&nbsp;) — 15086KB
• csco-20240127.xsd (EX-101.SCH) — 81KB
• csco-20240127_cal.xml (EX-101.CAL) — 144KB
• csco-20240127_def.xml (EX-101.DEF) — 435KB
• csco-20240127_lab.xml (EX-101.LAB) — 1102KB
• csco-20240127_pre.xml (EX-101.PRE) — 752KB
• csco-20240127_htm.xml (XML) — 2994KB

Financial Information

Part I Financial Information 3

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) 3 Consolidated Balance Sheets at January 27, 2024 and July 29, 2023 3 Consolidated Statements of Operations for the Three and Six Months Ended January 27, 2024 and January 28, 2023 4 Consolidated Statements of Comprehensive Income for the Three and Six Months Ended January 27, 2024 and January 28, 2023 5 Consolidated Statements of Cash Flows for the Six Months Ended January 27, 2024 and January 28, 2023 6 Consolidated Statements of Equity for the Three and Six Months Ended January 27, 2024 and January 28, 2023 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 9

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 39

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 60

Controls and Procedures

Item 4. Controls and Procedures 61

Other Information

Part II. Other Information 61

Legal Proceedings

Item 1. Legal Proceedings 61

Risk Factors

Item 1A. Risk Factors 62

Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities 77

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 77

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 77

Other Information

Item 5. Other Information 77

Exhibits

Item 6. Exhibits 78 Signature 79 2 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) CISCO SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS (in millions, except par value) (Unaudited) January 27, 2024 July 29, 2023 ASSETS Current assets: Cash and cash equivalents $ 13,715 $ 10,123 Investments 11,956 16,023 Accounts receivable, net of allowance of $ 79 at January 27, 2024 and $ 85 at July 29, 2023 4,884 5,854 Inventories 3,209 3,644 Financing receivables, net 3,476 3,352 Other current assets 4,887 4,352 Total current assets 42,127 43,348 Property and equipment, net 2,005 2,085 Financing receivables, net 3,364 3,483 Goodwill 39,087 38,535 Purchased intangible assets, net 1,678 1,818 Deferred tax assets 7,338 6,576 Other assets 5,575 6,007 TOTAL ASSETS $ 101,174 $ 101,852 LIABILITIES AND EQUITY Current liabilities: Short-term debt $ 4,936 $ 1,733 Accounts payable 1,848 2,313 Income taxes payable 1,876 4,235 Accrued compensation 3,216 3,984 Deferred revenue 14,011 13,908 Other current liabilities 4,964 5,136 Total current liabilities 30,851 31,309 Long-term debt 6,669 6,658 Income taxes payable 3,390 5,756 Deferred revenue 11,760 11,642 Other long-term liabilities 2,253 2,134 Total liabilities 54,923 57,499 Commitments and contingencies (Note 14) Equity: Cisco stockholders' equity: Preferred stock, $ 0.001 par value: 5 shares authorized; none issued and outstanding — — Common stock and additional paid-in capital, $ 0.001 par value: 20,000 shares authorized; 4,050 and 4,066 shares issued and outstanding at January 27, 2024 and July 29, 2023, respectively 45,002 44,289 Retained earnings 2,761 1,639 Accumulated other comprehensive loss ( 1,512 ) ( 1,575 ) Total equity 46,251 44,353 TOTAL LIABILITIES AND EQUITY $ 101,174 $ 101,852 See Notes to Consolidated Financial Statements. 3 Table of Contents CISCO SYSTEMS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per-share amounts) (Unaudited) Three Months Ended Six Months Ended January 27, 2024 Janua

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Organization and Basis of Presentation The fiscal year for Cisco Systems, Inc. (the "Company," "Cisco," "we," "us," or "our") is the 52 or 53 weeks ending on the last Saturday in July. Fiscal 2024 and fiscal 2023 are each 52-week fiscal years. The Consolidated Financial Statements include our accounts and those of our subsidiaries. All intercompany accounts and transactions have been eliminated. We conduct business globally and are primarily managed on a geographic basis in the following three geographic segments: the Americas; Europe, Middle East, and Africa (EMEA); and Asia Pacific, Japan, and China (APJC). We have prepared the accompanying financial data as of January 27, 2024 and for the second quarter and first six months of fiscal 2024 and 2023, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP) have been condensed or omitted pursuant to such rules and regulations. The July 29, 2023 Consolidated Balance Sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States. However, we believe that the disclosures are adequate to make the information presented not misleading. These Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended July 29, 2023. In the opinion of management, all normal recurring adjustments necessary to state fairly the consolidated balance sheet as of January 27, 2024, the results of operations, the statements of comprehensive income and the statements of equity for the second quarter and first six months of

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) 3. Revenue We enter into contracts with customers that can include various combinations of products and services which are generally distinct and accounted for as separate performance obligations. As a result, our contracts may contain multiple performance obligations. We determine whether arrangements are distinct based on whether the customer can benefit from the product or service on its own or together with other resources that are readily available and whether our commitment to transfer the product or service to the customer is separately identifiable from other obligations in the contract. We classify our hardware, perpetual software licenses, and software-as-a-service (SaaS) as distinct performance obligations. Term software licenses represent multiple obligations, which include software licenses and software maintenance. In transactions where we deliver hardware or software, we are typically the principal and we record revenue and costs of goods sold on a gross basis. We refer to our term software licenses, security software licenses, SaaS, and associated service arrangements as subscription offers. We recognize revenue upon transfer of control of promised goods or services in a contract with a customer in an amount that reflects the consideration we expect to receive in exchange for those products or services. Transfer of control occurs once the customer has the contractual right to use the product, generally upon shipment, electronic delivery (or when the software is available for download by the customer), or once title and risk of loss has transferred to the customer. Transfer of control can also occur over time for software maintenance and services as the customer receives the benefit over the contract term. Our hardware and perpetual software licenses are distinct performance obligations where revenue is recognized upfront upon transfer of control. Term software licenses include mu

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) (a) Disaggregation of Revenue We disaggregate our revenue into groups of similar products and services that depict the nature, amount, and timing of revenue and cash flows for our various offerings. The sales cycle, contractual obligations, customer requirements, and go-to-market strategies differ for each of our product categories, resulting in different economic risk profiles for each category. Effective in the first quarter of fiscal 2024, we began reporting our product and service revenue in the following categories: Networking, Security, Collaboration, Observability, and Services and conformed our product revenue for prior periods to the current period presentation. The following table presents this disaggregation of revenue (in millions): Three Months Ended Six Months Ended January 27, 2024 January 28, 2023 January 27, 2024 January 28, 2023 Product revenue: Networking $ 7,081 $ 8,092 $ 15,904 $ 16,123 Security 973 943 1,984 1,914 Collaboration 989 958 2,106 2,044 Observability 188 162 378 319 Total Product 9,232 10,155 20,371 20,400 Services 3,559 3,437 7,088 6,824 Total $ 12,791 $ 13,592 27,459 27,224 Amounts may not sum due to rounding. Networking consists of our core networking technologies of switching, routing, wireless, 5G, silicon, optics solutions and compute products. These technologies consist of both hardware and software offerings, including software licenses and SaaS. Our hardware and perpetual software in this category are distinct performance obligations where revenue is recognized upfront upon transfer of control. Term software licenses are multiple performance obligations where the term license is recognized upfront upon transfer of control with the associated software maintenance revenue recognized ratably over the contract term. SaaS arrangements in this category have one distinct performance obligation which is satisfied over time with revenue recognized ra

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) In addition to our product offerings, we provide a broad range of service and support options for our customers, including technical support services and advanced services. Technical support services represent the majority of these offerings which are distinct performance obligations that are satisfied over time with revenue recognized ratably over the contract term. Advanced services are distinct performance obligations that are satisfied over time with revenue recognized as services are delivered. The sales arrangements as discussed above are typically made pursuant to customer purchase orders based on master purchase or

View Full Filing

View this 10-Q filing on SEC EDGAR