CISCO SYSTEMS, INC. Quarterly Report for Q1 Ended Oct 30, 2021

Summary

Cisco Systems, Inc. reported strong financial results for the first quarter of fiscal year 2022, with total revenue reaching $12.9 billion, an increase of 8% year-over-year. This growth was primarily driven by an 11% increase in product revenue, while service revenue saw a modest 1% increase. The company's gross margin percentage was 62.4%, a slight decrease from the prior year, impacted by increased costs related to supply chain constraints. However, operating income saw a significant improvement, increasing by 34% to $3.4 billion, with operating income as a percentage of revenue rising to 26.7%. Diluted earnings per share grew by 37% to $0.70. The company is navigating industry-wide supply constraints, particularly in component shortages, which are expected to persist into the second half of fiscal year 2022. Despite these challenges, Cisco continues to invest in innovation and its strategic priorities, focusing on connecting, securing, and automating for digital agility in a cloud-first world. The company also returned significant capital to shareholders through $1.6 billion in dividends and $256 million in share repurchases during the quarter.

Key Highlights

• 1Total revenue increased by 8% to $12.9 billion, driven by robust product revenue growth.
• 2Net income surged by 37% to $3.0 billion, translating to a diluted EPS of $0.70.
• 3Operating income grew 34% to $3.4 billion, with operating margin expanding to 26.7%.
• 4Despite supply chain challenges, the company declared $1.6 billion in dividends and repurchased $256 million in stock.
• 5Product revenue saw an 11% increase, with notable growth in Secure, Agile Networks and Internet for the Future categories.
• 6Service revenue experienced a 1% increase, reflecting continued demand for support and maintenance.
• 7The company is actively managing industry-wide supply constraints, expecting them to continue through the second half of fiscal year 2022.

Frequently Asked Questions