8-KEarnings & ResultsFinancial EventsExhibits & Filings

CISCO SYSTEMS, INC. 8-K Report, Financial Results (Nov 16, 2022)

Filed November 16, 2022For Securities:CSCO

Summary

Cisco Systems, Inc. (CSCO) filed an 8-K on November 16, 2022, reporting its fiscal first quarter 2023 results for the period ending October 29, 2022. The report primarily furnishes a press release detailing the company's financial performance, emphasizing non-GAAP measures alongside GAAP results. Investors should note that Cisco utilizes non-GAAP financial measures to provide insights into underlying business trends, excluding items such as share-based compensation, acquisition-related costs, and restructuring charges. In addition to the quarterly results, the filing also discloses a significant restructuring plan initiated in the second quarter of fiscal 2023, aimed at rebalancing the organization and aligning with a hybrid work strategy. This plan is expected to incur approximately $600 million in pre-tax charges, primarily cash-based, related to severance, real estate optimization, and other exit costs, with recognition spread across fiscal years 2023 and early 2024. Investors should monitor the execution of this restructuring and its financial impact.

Key Highlights

  • 1Cisco reported its fiscal Q1 2023 results on November 16, 2022.
  • 2The company utilizes and provides non-GAAP financial measures (e.g., non-GAAP EPS, gross margin) alongside GAAP measures, excluding items like stock-based compensation and acquisition costs.
  • 3A significant restructuring plan was announced, effective Q2 fiscal 2023.
  • 4The restructuring is expected to result in approximately $600 million in pre-tax charges, primarily cash-based.
  • 5Charges will include severance, one-time termination benefits, and real estate optimization costs.
  • 6Restructuring charges are anticipated to be recognized across Q2 FY23, the second half of FY23, and into Q1 FY24.
  • 7The restructuring aims to rebalance the organization and support a hybrid work strategy.

Frequently Asked Questions

This 8-K filing primarily refers to an attached press release (Exhibit 99.1) which contains Cisco's fiscal Q1 2023 results. While the 8-K itself does not detail the numbers, it indicates that the press release includes GAAP and non-GAAP measures for net income, gross margins, operating expenses, operating income, tax rates, and EPS. Investors should refer to Exhibit 99.1 for the specific figures.

Cisco uses non-GAAP measures to provide investors and management with additional insights into the company's financial and business trends. These measures exclude certain items that are not considered reflective of ongoing operating results, such as share-based compensation expense, amortization of acquisition-related intangible assets, acquisition/divestiture costs, significant asset impairments, restructuring charges, and Russia-Ukraine war costs. Cisco believes these exclusions help in evaluating the company's performance in conjunction with the corresponding GAAP measures.

Cisco announced a restructuring plan expected to incur approximately $600 million in pre-tax charges. These charges are primarily cash-based and will consist of severance and other one-time termination benefits, real estate-related charges, and other costs associated with the organizational rebalancing and optimization for a hybrid work strategy. The charges are expected to be recognized progressively, with approximately $300 million in Q2 fiscal 2023, $200 million in the second half of fiscal 2023, and the remainder through Q1 fiscal 2024.

The restructuring charges will be recognized over several periods. Cisco expects to recognize approximately $300 million in the second quarter of fiscal 2023, approximately $200 million in the second half of fiscal 2023, and the remaining amount primarily through the first quarter of fiscal 2024.