Summary
Cisco Systems, Inc. (CSCO) reported fiscal year 2025 results characterized by overall revenue growth and solid margins, despite a decrease in operating income as a percentage of revenue. The company saw a 5% increase in total revenue year-over-year, driven by a 6% rise in product revenue and a 3% increase in services revenue. Notably, the acquisition of Splunk significantly boosted the Security and Observability segments, with Security revenue surging by 59% and Observability by 26%. Networking revenue experienced a 3% decline, attributed to normalized product shipments after a period of elevated levels. Geographically, all segments demonstrated revenue growth, with the Americas leading the increase. While Cisco continues to invest heavily in AI and key growth areas, the company faced headwinds including increased amortization of purchased intangible assets and share-based compensation expenses, contributing to a 1.8 percentage point decrease in operating income as a percentage of revenue. A legal dispute settlement also impacted the product cost of sales. Despite these factors, Cisco returned significant capital to shareholders through dividends and stock repurchases, maintaining a strong liquidity position with substantial cash and investments. The company remains focused on its strategy to securely connect everything, integrating AI across its portfolio to drive future growth.
Financial Highlights
56 data points| Revenue | $56.65B |
| Cost of Revenue | $19.86B |
| Gross Profit | $36.79B |
| R&D Expenses | $9.30B |
| Operating Expenses | $25.03B |
| Operating Income | $11.76B |
| Net Income | $10.18B |
| EPS (Basic) | $2.56 |
| EPS (Diluted) | $2.55 |
| Shares Outstanding (Basic) | 3.98B |
| Shares Outstanding (Diluted) | 4.00B |
Key Highlights
- 1Total revenue increased by 5% year-over-year to $56.65 billion, driven by product revenue growth of 6% and services revenue growth of 3%.
- 2The acquisition of Splunk significantly boosted the Security segment, with revenue increasing by 59%, and the Observability segment, with revenue up by 26%.
- 3Networking revenue saw a 3% decline, primarily due to a normalization of product shipments after elevated levels in the prior year, with servers and campus switching experiencing a decrease.
- 4Operating income as a percentage of revenue decreased by 1.8 percentage points to 20.8%, attributed to increased amortization of purchased intangible assets, higher share-based compensation, and a legal dispute settlement.
- 5The company returned approximately $12.4 billion to stockholders through dividends ($6.4 billion) and stock repurchases ($6.0 billion) in fiscal year 2025.
- 6Cisco generated $14.2 billion in cash from operating activities and ended the fiscal year with $16.1 billion in cash, cash equivalents, and investments.