01—Abstract
Summary
Summary of the 10-K filed September 8, 2015. Cited figures are marked; the original filing is the authoritative source.
Cisco Systems, Inc.'s 2015 10-K report highlights a year of solid revenue growth (4.3%) reaching $49.2 billiona, 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 billionb) and dividends ($4.1 billion).
The company also maintained a robust cash position, exceeding $60 billionc 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.
02—Key points
Key Highlights
- Total revenue increased by 4.3% to $49.16 billion in fiscal year 2015.
- Data Center and Security product categories showed strong growth, up 22% and 12% respectively.
- Operating income as a percentage of revenue improved to 21.9% from 19.8% in the prior year.
- The company generated $12.55 billion in cash from operating activities.
- Cisco returned approximately $8.3 billion to shareholders through stock repurchases ($4.2 billion) and dividends ($4.1 billion).
- Cash and cash equivalents and investments totaled $60.4 billion.
- Despite overall growth, the Service Provider Video segment revenue declined by 10.4%, and product revenue in certain emerging countries saw declines.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, Cisco Systems, Inc. kept $0.18.
- Revenue$49.16B100.0%
- Cost of revenue−$19.48B39.6%
- Gross profit$29.68B60.4%
- Operating costs−$18.91B38.5%
- Operating income$10.77B21.9%
- Interest, other & tax−$1.79B3.6%
- Net income$8.98B18.3%
Where FY2015 revenue went
$49.16B- Cost of revenue: $19.48B, 40% of revenue
- Other operating costs: $12.70B, 26% of revenue
- Net income: $8.98B, 18% of revenue
- R&D: $6.21B, 13% of revenue
- Interest, other & tax: $1.79B, 3.6% of revenue
Kept 18% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed September 8, 2015Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $49.16B$47.14B | +4.3% |
| Cost of Revenue | $19.48B$19.37B | +0.6% |
| Gross Profit | $29.68B$27.77B | +6.9% |
| R&D Expenses | $6.21B$6.29B | −1.4% |
| Operating Expenses | $18.91B$18.42B | +2.6% |
| Operating Income | $10.77B$9.35B | +15.2% |
| Interest Expense | $566.00M$564.00M | +0.4% |
| Net Income | $8.98B$7.85B | +14.4% |
| EPS (Basic) | $1.76$1.50 | +17.3% |
| EPS (Diluted) | $1.75$1.49 | +17.4% |
| Shares Outstanding (Basic) | 5.10B5.23B | −2.5% |
| Shares Outstanding (Diluted) | 5.15B5.28B | −2.6% |
05—Questions
Frequently Asked Questions
What were the main drivers of Cisco's revenue growth in fiscal year 2015?
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.
How did Cisco manage its expenses and profitability in fiscal year 2015?
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.
What is Cisco's strategy for future growth, and which areas are emphasized?
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.
How did Cisco address shareholder returns and its financial liquidity?
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.
06—Continue