Summary
Cisco Systems, Inc. (CSCO) filed its 10-K for the fiscal year ended July 28, 2018, reporting a 3% increase in total revenue to $49.3 billion, driven by growth across its Infrastructure Platforms, Applications, and Security segments. Despite revenue growth, net income saw a significant decline of 99% primarily due to a substantial provisional tax expense of $10.4 billion related to the Tax Cuts and Jobs Act. The company continues its strategic shift towards software and subscription-based offerings, aiming to enhance network automation, security, and intelligence. Cisco demonstrated strong cash flow from operations, returning significant capital to shareholders through share repurchases and dividends. The company's strategic priorities include accelerating innovation with its "intent-based networking" technology, exemplified by the Catalyst 9000 series switches, increasing the value of its network through data insights and security, and transforming its business model towards recurring revenue. While the service provider market showed weakness, growth in commercial and enterprise sectors provided a counterbalance. Management highlighted investments in key growth areas like security and applications as crucial for future success, while acknowledging the competitive landscape and the ongoing transformation of the IT industry.
Financial Highlights
59 data points| Revenue | $49.33B |
| Cost of Revenue | $18.72B |
| Gross Profit | $30.61B |
| R&D Expenses | $6.33B |
| Operating Expenses | $18.30B |
| Operating Income | $12.31B |
| Interest Expense | $943.00M |
| Net Income | $110.00M |
| EPS (Basic) | $0.02 |
| EPS (Diluted) | $0.02 |
| Shares Outstanding (Basic) | 4.84B |
| Shares Outstanding (Diluted) | 4.88B |
Key Highlights
- 1Total revenue increased by 3% to $49.3 billion in fiscal year 2018.
- 2Net income decreased by 99% to $110 million due to a $10.4 billion provisional tax expense related to the Tax Cuts and Jobs Act.
- 3Infrastructure Platforms revenue grew 2%, Applications revenue increased 10%, and Security revenue rose 9%.
- 4Gross margin for products decreased slightly to 60.7%, impacted by pricing and component costs, but offset by productivity gains.
- 5The company returned significant capital to shareholders, repurchasing $17.66 billion of stock and paying $6.0 billion in dividends.
- 6Cisco is transforming its business model towards software and subscription-based offerings to increase recurring revenue.
- 7The company continues to invest in key priority areas such as security, applications, and its intent-based networking technologies.