8-KEarnings & Results

CISCO SYSTEMS, INC. 8-K Report, Financial Results (May 18, 2016)

Filed May 18, 2016For Securities:CSCO

Summary

Cisco Systems, Inc. (CSCO) filed an 8-K on May 18, 2016, to report its financial results for the third quarter of fiscal year 2016, which ended on April 30, 2016. The report includes both GAAP and non-GAAP financial measures, providing investors with a comprehensive view of the company's performance. Cisco emphasizes the utility of non-GAAP measures, such as non-GAAP net income, gross margins, operating expenses, and earnings per share, in offering insights into underlying business trends by excluding items like share-based compensation, acquisition-related costs, and amortization of intangibles. The filing also highlights Cisco's commitment to returning value to shareholders through dividends and stock repurchases, underscoring the importance of free cash flow, defined as operating cash flow less capital expenditures, as a key liquidity measure. Investors should note that the company has also provided financial measures that exclude the impact of its divested Service Provider Video CPE Business, which was sold in the second quarter of fiscal year 2016.

Key Highlights

  • 1Cisco Systems reported its third quarter fiscal year 2016 financial results on May 18, 2016.
  • 2The report includes both GAAP and non-GAAP financial results, offering a detailed view of performance.
  • 3Non-GAAP measures exclude items such as share-based compensation, acquisition-related costs, and amortization of intangibles.
  • 4Free cash flow is highlighted as a key liquidity measure, reflecting cash available for shareholder returns.
  • 5Financial measures excluding the divested Service Provider Video CPE Business are provided for a clearer go-forward view.
  • 6The company emphasizes its use of non-GAAP measures to provide useful information on financial and business trends.

Frequently Asked Questions

These financial results are for Cisco Systems' fiscal third quarter ended April 30, 2016.

Cisco presents non-GAAP financial measures to provide investors with a more insightful view of the company's underlying business trends by excluding items such as share-based compensation expense, amortization of acquisition-related intangible assets, and acquisition-related costs, which may not be reflective of ongoing operating 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 it represents cash available to invest in the business, make strategic acquisitions, repurchase stock, and pay dividends.

Yes, Cisco divested the Customer Premises Equipment portion of its Service Provider Video Connected Devices business during the second quarter of fiscal year 2016. The filing includes financial measures that exclude this divested business to provide a clearer view of ongoing operations.