Summary
Cisco Systems, Inc. reported its first quarter fiscal year 2018 results, which ended on October 28, 2017. The company experienced a slight decrease in total revenue, down 2% year-over-year to $12.14 billion. This was primarily driven by a 3% decline in product revenue, notably in Infrastructure Platforms, while service revenue saw a modest 1% increase. The company highlighted continued weakness in the service provider market and emerging countries, though it reported solid growth in Security and Applications. Despite the revenue dip, Cisco demonstrated resilience with a 3% increase in net income to $2.39 billion, leading to a diluted EPS of $0.48, up from $0.46 in the prior year. This performance was supported by a lower effective tax rate and a decrease in restructuring charges. The company continued its capital allocation strategy, returning approximately $3.06 billion to shareholders through dividends and share repurchases, while maintaining a strong free cash flow of $2.91 billion. Cisco also announced its intent to acquire BroadSoft for approximately $1.9 billion, signaling continued investment in its cloud collaboration strategy.
Financial Highlights
57 data points| Revenue | $12.14B |
| Cost of Revenue | $4.71B |
| Gross Profit | $7.43B |
| R&D Expenses | $1.57B |
| Operating Expenses | $4.67B |
| Operating Income | $2.76B |
| Interest Expense | $235.00M |
| Net Income | $2.39B |
| EPS (Basic) | $0.48 |
| EPS (Diluted) | $0.48 |
| Shares Outstanding (Basic) | 4.96B |
| Shares Outstanding (Diluted) | 4.99B |
Key Highlights
- 1Total revenue declined 2% to $12.14 billion, impacted by a 3% decrease in product revenue, particularly in Infrastructure Platforms.
- 2Net income increased by 3% to $2.39 billion, with diluted EPS rising to $0.48 from $0.46 in the prior year.
- 3Gross margin percentage decreased by 2.6 percentage points to 61.2%, mainly due to pricing pressures, lower productivity benefits, and a $122 million legal settlement charge.
- 4The company continued its strong capital return to shareholders, repurchasing $1.62 billion in stock and paying $1.44 billion in dividends.
- 5Free cash flow remained robust at $2.91 billion.
- 6Security and Applications product categories showed strong revenue growth (8% and 6% respectively).
- 7Cisco announced its intention to acquire BroadSoft for approximately $1.9 billion.