10-KPeriod: FY2015

CISCO SYSTEMS, INC. Annual Report, Year Ended Jul 25, 2015

Filed September 8, 2015For Securities:CSCO

Summary

Cisco Systems, Inc.'s 2015 10-K report highlights a year of solid revenue growth (4.3%) reaching $49.2 billion, driven by increases in product and service revenues, and a notable improvement in operating income as a percentage of revenue (21.9%). The company's strategy continues to focus on digital transitions and providing secure, automated, and intelligent solutions, with key growth areas including Data Center and Security products, which saw significant year-over-year revenue increases of 22% and 12% respectively. Financially, Cisco demonstrated strong operating cash flow and continued its commitment to shareholder returns through significant stock repurchases ($4.2 billion) and dividends ($4.1 billion). The company also maintained a robust cash position, exceeding $60 billion in cash and investments. Despite challenges in the service provider market and certain emerging countries, Cisco's strategic investments in R&D and its product portfolio, particularly in security and cloud, position it for future growth.

Financial Highlights

60 data points
Beta

Revenue

$49.16B

60.4% Gross Margin

Net Income

$8.98B

18.3% Net Margin

EPS (Diluted)

$1.75

Total Assets

$113.37B

Cash & Equivalents

$6.88B

Free Cash Flow

$11.32B

Financial Statements
Beta
Revenue$49.16B
Cost of Revenue$19.48B
Gross Profit$29.68B
R&D Expenses$6.21B
Operating Expenses$18.91B
Operating Income$10.77B
Interest Expense$566.00M
Net Income$8.98B
EPS (Basic)$1.76
EPS (Diluted)$1.75
Shares Outstanding (Basic)5.10B
Shares Outstanding (Diluted)5.15B

Key Highlights

  • 1Total revenue increased by 4.3% to $49.16 billion in fiscal year 2015.
  • 2Data Center and Security product categories showed strong growth, up 22% and 12% respectively.
  • 3Operating income as a percentage of revenue improved to 21.9% from 19.8% in the prior year.
  • 4The company generated $12.55 billion in cash from operating activities.
  • 5Cisco returned approximately $8.3 billion to shareholders through stock repurchases ($4.2 billion) and dividends ($4.1 billion).
  • 6Cash and cash equivalents and investments totaled $60.4 billion.
  • 7Despite overall growth, the Service Provider Video segment revenue declined by 10.4%, and product revenue in certain emerging countries saw declines.

Frequently Asked Questions

Cisco's revenue grew by 4.3% in fiscal year 2015, reaching $49.2 billion. This growth was primarily driven by increases in both product revenue (up 4.4%) and service revenue (up 4.0%). Specifically, strong performance in the Data Center (up 22%) and Security (up 12%) product categories were key contributors, alongside steady growth in Switching and Collaboration products. The Americas segment also showed robust growth.

Cisco improved its operating income as a percentage of revenue to 21.9% in fiscal year 2015, up from 19.8% in the prior year. This improvement was largely due to a gross margin increase of 1.5 percentage points, benefiting from the absence of a significant component remediation charge recorded in fiscal 2014 and ongoing productivity improvements. Additionally, operating expenses as a percentage of revenue decreased, primarily due to efficiency gains from restructuring actions and higher acquisition-related compensation costs in the prior year.

Cisco's strategy focuses on leading customers through their digital transition by providing secure, automated, and intelligent solutions. Key areas of investment and focus include Data Center, Software, Security, and Cloud. The company is also committed to maintaining leadership in its core routing and switching businesses. The increasing adoption of its Application Centric Infrastructure (ACI) and the continued expansion of its Unified Computing System (UCS) portfolio in the data center are strategic priorities.

Cisco demonstrated a strong commitment to shareholder returns by repurchasing approximately $4.2 billion of its common stock and paying $4.1 billion in dividends during fiscal year 2015, returning a total of over $8.3 billion. The company maintained a robust financial position, with cash and cash equivalents and investments totaling $60.4 billion, providing ample liquidity for operations, investments, and further shareholder returns.