8-KEarnings & Results

CISCO SYSTEMS, INC. 8-K Report, Financial Results (May 9, 2006)

Filed May 9, 2006For Securities:CSCO

Summary

Cisco Systems, Inc. (CSCO) filed a Form 8-K on May 9, 2006, reporting its financial results for the fiscal third quarter ended April 29, 2006. The primary purpose of this filing is to furnish a press release detailing these results, including both GAAP and non-GAAP financial measures. Investors should note that Cisco is providing significant non-GAAP data, which excludes items such as stock-based compensation, purchase accounting adjustments, payroll taxes on stock option exercises, acquisition-related expenses, in-process R&D, and gains/losses on equity securities. The company believes these non-GAAP measures offer valuable insights into operational trends and are used internally for management's review and budgeting.

Key Highlights

  • 1The report announces Cisco's financial results for the fiscal third quarter ended April 29, 2006.
  • 2Cisco is providing both Generally Accepted Accounting Principles (GAAP) and non-GAAP financial results.
  • 3Key non-GAAP adjustments include exclusion of stock-based compensation, purchase accounting adjustments, payroll tax on stock option exercises, acquisition-related expenses, in-process R&D, and gains/losses on publicly traded equity securities.
  • 4The company asserts that its non-GAAP measures provide useful information to investors and management for evaluating financial and business trends.
  • 5Non-GAAP measures are used internally by management for budgeting and reviewing financial results.
  • 6The filing includes a press release as Exhibit 99.1 containing detailed financial information.
  • 7Cisco emphasizes that non-GAAP measures are not a substitute for GAAP and may differ from measures used by other companies.

Frequently Asked Questions

The main purpose of this Form 8-K filing is to report Cisco Systems, Inc.'s financial results for its fiscal third quarter ended April 29, 2006. It includes a press release that provides detailed financial information, along with explanations of the non-GAAP measures used.

Non-GAAP financial measures are financial metrics that exclude certain items from GAAP results. Cisco provides these measures because it believes they offer useful insights into the company's operational performance and trends, excluding items that management considers less reflective of ongoing business operations (e.g., stock-based compensation, acquisition-related costs). These measures are also used internally for management's review and budgeting.

Cisco excludes several items from its non-GAAP calculations. These commonly include stock-based compensation expenses, the impact of purchase accounting adjustments to inventory, payroll taxes on stock option exercises, compensation expenses related to acquisitions and investments, in-process research and development, and gains or losses on publicly traded equity securities. The tax effects of these adjustments are also considered.

No, Cisco explicitly states that its non-GAAP measures are not in accordance with, or an alternative for, Generally Accepted Accounting Principles (GAAP). They may also differ from non-GAAP measures used by other companies. Investors are advised to consider these non-GAAP measures in conjunction with the corresponding GAAP measures for a comprehensive view of the company's financial performance.