10-KPeriod: FY2025

CISCO SYSTEMS, INC. Annual Report, Year Ended Jul 26, 2025

Filed September 3, 2025For Securities:CSCO

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
Beta

Revenue

$56.65B

64.9% Gross Margin

Net Income

$10.18B

18.0% Net Margin

EPS (Diluted)

$2.55

Total Assets

$122.29B

Cash & Equivalents

$8.35B

Free Cash Flow

$13.29B

Financial Statements
Beta
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.

Frequently Asked Questions

In fiscal year 2025, Cisco reported a 5% increase in total revenue to $56.65 billion. Product revenue grew by 6%, and services revenue grew by 3%. While gross margins remained strong, operating income as a percentage of revenue decreased by 1.8 percentage points due to factors including higher amortization of intangible assets and share-based compensation, as well as a charge from a legal dispute settlement. Net income was $10.18 billion, a slight decrease from the prior year.

The acquisition of Splunk significantly boosted Cisco's Security and Observability segments. Security segment revenue increased by 59%, largely driven by Splunk's offerings. The Observability segment also saw substantial growth, with revenue up 26%, primarily from Splunk's Observability Suite and ThousandEyes offerings. This acquisition is a key part of Cisco's strategy to integrate AI and enhance its security and data insights capabilities.

Cisco faces several risks, including fluctuations in demand for its products and services due to global economic and geopolitical conditions, intense competition, reliance on contract manufacturers and suppliers, challenges in managing its supply chain and inventory, and the need to continuously innovate and respond to emerging technological trends, including AI. Cybersecurity threats and data privacy regulations also pose significant risks. The company also notes potential impacts from changes in distribution models and the success of its acquisition strategy.

Cisco remains committed to returning capital to shareholders. In fiscal year 2025, the company paid $6.4 billion in dividends and repurchased $6.0 billion of its common stock. Cisco targets returning a minimum of 50% of its free cash flow annually to stockholders through these means. The company has an ongoing stock repurchase program with approximately $14.2 billion remaining authorization.