CISCO SYSTEMS, INC. Quarterly Report for Q1 Ended Oct 24, 2015

Summary

Cisco Systems, Inc. reported its first quarter results for fiscal year 2016, showcasing a 3.6% increase in total revenue to $12.68 billion, driven by a 4.3% rise in product revenue, particularly in Switching, Collaboration, and Data Center segments. Service revenue saw a more modest 1% increase. The company demonstrated improved profitability, with operating income increasing by 31% to $3.08 billion and net income soaring by 32.9% to $2.43 billion. This profitability improvement was supported by a higher gross margin percentage (61.8% vs. 59.9%) largely due to favorable year-over-year comparisons and productivity gains, alongside reduced operating expenses as a percentage of revenue. Diluted earnings per share also saw a significant increase, rising 37.1% to $0.48. The company continued its commitment to returning capital to shareholders, repurchasing $1.21 billion in stock and paying $1.07 billion in dividends during the quarter. Financially, Cisco maintained a strong liquidity position with $5.76 billion in cash and cash equivalents and $53.35 billion in investments as of October 24, 2015. The company also showed improved operational efficiency, with Days Sales Outstanding (DSO) decreasing to 34 days and inventory turns increasing to 12.5.

Key Highlights

• 1Total revenue increased by 3.6% to $12.68 billion.
• 2Product revenue grew by 4.3%, with strong performance in Data Center (24.1%) and Collaboration (17.4%).
• 3Net income increased by a substantial 32.9% to $2.43 billion.
• 4Diluted earnings per share rose by 37.1% to $0.48.
• 5Gross margin percentage improved significantly to 61.8% from 59.9% in the prior year period.
• 6Operating income increased by 31% to $3.08 billion.
• 7The company returned $2.28 billion to shareholders through dividends and stock repurchases in the quarter.

Frequently Asked Questions