8-KEarnings & Results

CISCO SYSTEMS, INC. 8-K Report, Financial Results (Feb 11, 2015)

Filed February 11, 2015For Securities:CSCO

Summary

Cisco Systems, Inc. (CSCO) filed an 8-K on February 11, 2015, to report its financial results for the second fiscal quarter of 2015, which ended on January 24, 2015. The report primarily serves to furnish the press release detailing these results, which are presented using both Generally Accepted Accounting Principles (GAAP) and non-GAAP measures. Investors should note that Cisco provides non-GAAP figures to offer a clearer view of ongoing operational performance, excluding items such as share-based compensation, acquisition-related intangibles, and other non-recurring or irregular items. The company emphasizes that these non-GAAP metrics are not a substitute for GAAP but are intended to provide useful insights into financial and business trends. A key focus for investors is Cisco's definition and use of free cash flow, which is presented as net cash from operating activities less capital expenditures. Cisco highlights its intent to return a stated percentage of free cash flow to shareholders through dividends and stock repurchases, making this a significant liquidity and shareholder return metric.

Key Highlights

  • 1Cisco Systems reported its second fiscal quarter 2015 results on February 11, 2015.
  • 2The filing includes a press release (Exhibit 99.1) detailing the financial performance for the quarter ended January 24, 2015.
  • 3The company presented both GAAP and non-GAAP financial measures, providing explanations for the adjustments made.
  • 4Key exclusions for non-GAAP reporting include share-based compensation, amortization of acquisition-related intangibles, and acquisition/divestiture costs.
  • 5Cisco defines and utilizes free cash flow (operating cash flow less capital expenditures) as a key liquidity measure.
  • 6The company intends to return a portion of free cash flow to shareholders via dividends and share repurchases.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report Cisco Systems' financial results for its second fiscal quarter of 2015, which concluded on January 24, 2015, and to furnish the associated press release.

Cisco uses non-GAAP financial measures to provide a view of its ongoing operational performance, excluding certain items that are not considered reflective of core business trends. These exclusions typically include share-based compensation expense, amortization of acquisition-related intangible assets, and acquisition-related costs, among others. Cisco believes these measures offer useful information to investors and management when analyzed alongside GAAP results.

Cisco defines free cash flow as net cash provided by operating activities less cash used to acquire property and equipment. It is considered an important liquidity measure because Cisco intends to return a stated percentage of its free cash flow to shareholders through dividends and stock repurchases, and it represents cash available for reinvestment, strategic acquisitions, or shareholder returns after capital investments.

Based on the filing, Cisco excludes items such as share-based compensation expense, amortization of acquisition-related intangible assets, impact to cost of sales from purchase accounting adjustments to inventory, acquisition-related/divestiture costs, significant asset impairments and restructurings, significant litigation and other contingencies, the income tax effects of these items, and significant tax matters.