8-KEarnings & Results

CISCO SYSTEMS, INC. 8-K Report, Financial Results (Nov 12, 2015)

Filed November 12, 2015For Securities:CSCO

Summary

Cisco Systems, Inc. (CSCO) filed a Form 8-K on November 12, 2015, to report its financial results for the fiscal first quarter ended October 24, 2015. The filing primarily includes a press release detailing these results, along with extensive explanations of the non-GAAP financial measures used by the company. Investors should note that Cisco presented a range of non-GAAP metrics, including net income, margins, operating expenses, tax rates, and earnings per share, alongside GAAP figures. The company emphasizes that these non-GAAP measures are not prepared in accordance with GAAP and may differ from those of other companies, but are believed to provide useful insights into financial and business trends when viewed with GAAP results. The non-GAAP adjustments are detailed, including exclusions for share-based compensation, amortization of acquisition-related intangibles, purchase accounting adjustments to inventory, acquisition/divestiture costs, significant asset impairments/restructurings, and litigation/contingencies. Cisco also highlights its use of free cash flow, defined as operating cash flow less capital expenditures, as a key liquidity measure and an indicator of its commitment to returning capital to shareholders through dividends and buybacks. Investors should consult the accompanying press release (Exhibit 99.1) for the specific financial figures.

Key Highlights

  • 1Cisco Systems reported its Q1 fiscal year 2016 results on November 12, 2015.
  • 2The filing includes a press release (Exhibit 99.1) with detailed financial results for the quarter ended October 24, 2015.
  • 3The company provided both GAAP and non-GAAP financial results, emphasizing the utility of non-GAAP measures for understanding business trends.
  • 4Key non-GAAP exclusions detailed include share-based compensation, acquisition-related intangibles, and restructuring costs.
  • 5Free cash flow is highlighted as a key liquidity metric, reflecting cash available for shareholder returns.
  • 6Management utilizes non-GAAP measures internally for budgeting and performance review, alongside GAAP figures.
  • 7No specific financial figures are included directly in the 8-K text; investors must refer to Exhibit 99.1 for quantitative data.

Frequently Asked Questions

The main purpose of this 8-K filing is to officially report Cisco Systems, Inc.'s financial results for its fiscal first quarter ended October 24, 2015. It also provides detailed explanations of the non-GAAP financial metrics the company uses.

Non-GAAP financial measures are financial metrics that exclude certain items that are not in accordance with Generally Accepted Accounting Principles (GAAP). Cisco uses them because management believes they provide a more useful view of ongoing operational performance and business trends, excluding one-time or non-cash items like share-based compensation, acquisition-related costs, and restructuring charges. However, these measures should be considered alongside GAAP results.

Cisco typically 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, and significant litigation and other contingencies. They also exclude the related income tax effects.

Cisco defines free cash flow as the net cash provided by operating activities less cash used to acquire property and equipment. They consider it a key liquidity measure that provides useful information about the cash available to invest in the business, make strategic acquisitions, repurchase stock, and pay dividends.