Cisco Systems Financial Performance
This is an article about the financial performance of the American corporation Cisco.
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2022: Cisco missed $200 million in revenue for the quarter due to business shutdown in Russia
Cisco estimated at $200 million the effect in its quarterly revenue from the decision to stop business activities in Russia against the backdrop of a special operation in Ukraine. This was announced on May 18 during a conference call with top company managers and analysts by Cisco CFO Scott Herren[1]
In March, Cisco became one of the last among the largest American technology companies to make statements about stopping operations in Russia or completely leaving the market.
During the call, Scott Herren noted that historically, Russia, Belarus and Ukraine together account for only about 1% of the company's total turnover, but the effect of the conflict in the region on turnover dynamics turned out to be higher than the traditional contribution of the region. This is partly due to the inability to receive receivables and other payments due to the company.
By stopping operations in Russia, Cisco partially explains its rather weak result on the dynamics of its total turnover in the 3rd quarter of fiscal year 2022, which ended for the company on April 30. Revenue increased by only 0.3% year on year to $12.835 billion. Previously, Cisco expected growth of 3-5%.
Another important factor that influenced the dynamics, the company called lockdowns in China due to the growth of coronavirus infections. Because of this, Cisco cannot receive the necessary components from China in a timely manner. The effect of this factor in its quarterly revenue in Cisco was estimated at $300 million.
The forecast for the 4th quarter of 2022 also did not please investors: Scott Herren announced an expected reduction in revenue from 1% to 5.5% year-on-year, which means a fall from $131 million to $720 million.
Chuck Robbins, a member of the board of directors and CEO of Cisco, explained during a conference call on May 18 that a broader spectrum of revenue forecasts was made taking into account the impact on the turnover of the conflict in Ukraine and the ongoing uncertainty in connection with lockdowns in China.
2021
Fifth place in the world among ICT developers by revenue
According to Synergy Research Group, the total revenue of the 13 largest manufacturers of software and ICT services for business, including telecom operators, in this market reached $613 billion in 2021, which is 10% more than a year earlier. Cisco ranked fifth on this list.
Revenue - $49.82 billion, profit - $10.59 billion
In fiscal 2021, Cisco revenue amounted to $49.82 billion, an increase of 1% compared to the previous year. Sales of equipment and software during this time increased from $35.98 billion to $36.01 billion, and revenues from services increased from $13.32 billion to $13.8 billion.
The infrastructure platform segment, which includes switches, routers and data center solutions, brought Cisco about $27.1 billion in revenue, which is almost exactly the result of fiscal 2020. In a division called Applications (teleconference software and products, including AppDynamics and WebEx solutions), Cisco revenue reached $5.5 billion, down 1% year-on-year.
Information security solutions, such as firewalls and data loss prevention systems, provided Cisco with an annual revenue of 3.38 billion (+ 7%). The remaining products combined added about $19 million to the company's turnover, which is 43% less than a year earlier.
The largest Cisco turnover continues to be in the Americas. There, the company's revenue in the 2021 reporting year amounted to $29.16 billion, practically unchanged from the previous year. Sales in EMEA (Europe, Middle East, Africa) increased by 2% to $12.95 billion. Revenues in the Asia-Pacific region grew by 5%, to $7.71 billion.
Cisco's net profit at the end of the 2021 financial year amounted to $10.59 billion, which is less than the profit a year ago of $11.21 billion.
On the day the 2021 reports were published (August 18, 2021st calendar), Cisco shares fell by almost 2%. Since the beginning of 2021, the company's market capitalization has increased by 23.2%, to $236.1 billion.[2]
2020: Revenue decline by 5% to $49.3 billion
Cisco ended fiscal year 2020 with revenue of $49.3 billion, which is 5% less than a year earlier. Previously, revenue has grown since 2017. Services and software accounted for more than half (51%) of the turnover, and in the software business about 78% of revenues were occupied by subscription sales.
In the direction of infrastructure platforms, which include switches, routers and solutions for data centers, an annual revenue of $27.12 billion was registered, which is 10% less than a year ago.
In a division called Applications (teleconference software and products, including AppDynamics and WebEx solutions), sales fell not so much - by 4% to $5.67 billion.
On information security solutions, such as firewalls and data leakage prevention systems, the American company earned $3.15 billion in the 2020 reporting year, which is 12% more compared to 2019. Thus, the IB business remained the only growing business in Cisco.
Cisco's largest revenues are still generated in the Americas - in 2020, revenue there amounted to $29.29 billion, which is 5% less than a year earlier. In EMEA countries (Europe, the Middle East, Africa), sales decreased by 3%, to $12.66 billion, and in the Asia-Pacific region, turnover fell by 6% to $7.35 billion.
Cisco's net profit in fiscal 2020 decreased to $11.21 billion from $11.62 billion.
Along with the publication of the financial statements, Cisco announced a restructuring that includes a program of voluntary early retirement with compensation and reduction of jobs. About $900 million was allocated for these measures.
At a conference with analysts, Cisco CEO Chuck Robbins said the company aims to reduce annual costs by $1 billion.Cisco Reporting for Fiscal Year 2020
2019: Revenue growth by 5% to $51.9 billion
In fiscal 2019, which ended on July 27, 2019, Cisco's revenue reached $51.9 billion, an increase of 7% compared to 2018. Sales of the company grow for two years in a row, which is largely facilitated by solutions in the field of information security (IS).
The department responsible for such technologies (Security) completed 2019 Fingod with a turnover of $2.73 billion, which is 16% higher than a year ago. These growth rates were the highest among all Cisco business destinations.
Applications, which is responsible for teleconference software and products, recorded a 15 percent increase in annual turnover to $5.8 billion.
Most of the revenues continue to fall on the segment of the so-called infrastructure platforms (its basis are switches and routers), which in 2019 brought the corporation $30.19 billion in revenue. This is 7% more than the previous year.
The service business is also growing: over the 12-month period closed at the end of July 2019, revenue here increased by 2% and turned out to be $12.9 billion.
As for the regions, most of Cisco's revenue continues to be generated by the Americas. In the 2019 reporting year, revenue in these markets reached $30.93 billion, 6% higher than a year ago.
Sales of the company in the EMEA region increased by 5%, they amounted to $13.1 billion there. In the Asia-Pacific region, the vendor's revenue was measured at $7.88 billion, showing an increase of 1% from year to year.
In fiscal 2019, Cisco had a strong jump in profits - up to $11.62 billion from $110 million. The small profit in 2018 is due to a write-off of $10.4 billion in connection with tax reform in the United States, explained in the financial report.[3]
2018: Revenue growth by 7% to $49.3 billion
In fiscal 2018, Cisco's revenue reached $49.3 billion, an increase of 7% compared to 2017. The reporting period ended on July 28, 2018.
Cisco sales in the infrastructure platform category, which includes switches, routers, and data center solutions, reached $28.3 billion, which is 2% more than a year ago.
In a division called Applications (software and teleconference products), the revenue of the American corporation turned out to be $5 billion, an increase of 10% year-on-year.
Information security (IS) solutions, such as firewalls and data loss prevention systems, brought Cisco annual revenue of $2.4 billion, a 9% increase from a year earlier.
The sale of products brought Cisco revenue in the amount of $36.7 billion (+ 3% compared to the previous year), and the service business - $12.6 billion (+ 3%).
A significant portion of Cisco's revenue continues to come from the Americas. There, the company's revenue for fiscal year 2018 increased by 3% to $29 billion. In EMEA (Europe, Middle East, Africa), sales increased by 4% to $12.4 billion, and in the Asia-Pacific region, growth amounted to 2% with revenue of $7.8 billion.
Cisco's net profit collapsed 87 times - from $9.6 billion to $110 million. The decline occurred due to the update of tax laws in the United States: the company had to pay once for $10.4 billion to return profits to its homeland and implement other measures.
On the day Cisco reported for fiscal year 2018, Cisco shares rose 6.1% to $46.53. This was due to an improvement in revenue from sales of software subscriptions, which accounted for about 56% of the vendor's software revenues.[4]
2017: Falling revenues due to weak network equipment sales
On August 16, 2017, Cisco published a report for fiscal year 2017. It follows from the materials that the company's revenues decreased largely due to falling sales of network equipment, which still brings the American vendor most of the revenue.
For the 12-month reporting period ended July 29, 2017, Cisco sales amounted to $48 billion, which is 3% less than a year earlier. Net profit during this time decreased by 11% to $9.6 billion.
The annual implementation of Cisco switches amounted to $13.9 billion, a decrease of 5% compared to the previous fiscal year. Router sales fell 4% to $7.8 billion.
The decline occurred in the segments of solutions for collaboration and data centers - by 2% (up to $4.3 billion) and 4% (up to $3.2 billion), respectively.
Information security has become the fastest growing business. Revenue here in fiscal year 2017 jumped 9%, reaching $2.2 billion. In the wireless market, the company's revenues increased by 5% to $2.8 billion.
As for the regions, the largest revenue of Cisco is still brought by the countries of the Americas, where the company's sales for the year amounted to $28.4 billion - 4% less than a year earlier. In EMEA (Europe, Middle East, Africa), revenue fell 2% to $12 billion. In the Asia-Pacific region, a 1 percent rise to $7.7 billion was recorded.
 | We have completed another strong quarter and turning year, "comments Cisco CEO Chuck Robbins. - We have made great strides in shifting our business to regular revenue, which is largely tied to software, and also continued to accelerate the development of innovations both in key areas and in the entire product portfolio. |  |
2016: Profit growth by 20% to $10.7 billion; revenue - $49.2 billion
On August 17, 2016, Cisco announced the results of work in fiscal year 2016 and announced mass layoffs. The company will reduce 7% of the state, but the media write about a larger personnel purge.
For the 12-month reporting period, closed July 30, 2016, Cisco revenue amounted to $49.2 billion, which is approximately the same as a year ago. The company's net profit increased by almost 20% to $10.7 billion.
In the structure of Cisco's annual revenue, equipment sales took $37.2 billion, and services - $12 billion. In the Americas, the company's turnover decreased by 1% to $29.4 billion. Revenues in Europe, the Middle East and Africa remained unchanged - at $12.3 billion. In the Asia-Pacific region, revenue rose 5% to $7.6 billion.
In fiscal year 2016, Cisco's fastest growing business was information security solutions, whose sales jumped 13%, reaching almost $2 billion. In the segment of video products for telecom operators, revenues increased by 12% to $1.9 billion.
Cisco earned $14.7 billion in switch sales, which corresponds to the 2015 financial year. In the router market, the company's turnover decreased by 4% to 7.4 billion. The implementation of solutions for collaboration data centers and increased by 9% and 5%, respectively - up to 4.4 and 3.4 billion. dollars
Along with the publication of financial statements, Cisco announced a reduction of 5,500 jobs. The day before this report, CRN, citing sources close to Cisco, wrote about the company's plans to lay off 9 to 14 thousand employees.
As of April 20, 2016, the total number of Cisco personnel totaled 73,104 people. If 14 thousand jobs are liquidated, the company's staff will decrease by 20%, which has never been the case in the history of the American IT giant.[5]
2015
Results of the year: revenue $49.2 billion (+ 4%), profit $9 billion (+ 14 %)
On August 12, 2015, Cisco published its financial year 2015 report. Revenues of the American corporation jumped due to the strengthening of the server business and sales growth in the Americas.
According to Cisco data, during the reporting 12-month period, which ended July 25, 2015, the company earned $49.2 billion, which is 4.3% more year-on-year. Net profit during this time increased even more - by 14.4% to $9 billion.
Commenting on the financial statements, Chuck Robbins, who headed Cisco at the end of July 2015, noted that the company ended the year with record revenue and adjusted earnings per share (amounted to $2.21).
especially pleased with the strong rise in deferred revenue, which shows the high efficiency of our work in the direction of a more predictable software business model, as well as growing sales and profits," Robbins said.
In the structure of annual revenue, Cisco revenues from the provision of various kinds of services and services reached $11.4 billion against $11 billion in fiscal year 2014. The company earned almost $37.6 billion on the sale of products, while a year earlier there was revenue of $36.2 billion.
In fiscal 2015, sales of Cisco switching equipment were measured at $14.7 billion, an increase of 5% compared to a year ago. Most of all, revenue from servers for data centers increased - by 22% to $3.2 billion. In the market of routers and collaborative solutions, turnover growth was measured at 1% and 5%, respectively, and its volume was $7.7 billion and $4 billion. Cisco earned $1.7 billion on information security products, up 12% year-on-year.
The largest region for the company remains North and South America. There in 2015, the manufacturer received $29.7 billion in revenue - 7% more compared to the previous year. In EMEA countries (Europe, Middle East, Africa), sales increased by 3% to $12.3 billion. In the Asia-Pacific region, there was a 2 percent decline (up to $7.2 billion).[6]
Q3: Revenue $12.1 billion (+ 5 %)
During a conference call on the results of the 3rd quarter of 2015 fiscal year, which ended on April 25, Cisco CEO John Chambers reported that in the reporting period, the company's revenue amounted to $12.1 billion, an increase of 5%.
2014: Revenue $47.1 billion (-3%), profit $10.9 billion
In August 2014, Cisco reported financial results for the 4th quarter and the entire fiscal year, which ended for the company in July. Cisco revenue for the year amounted to $47.1 billion, a decrease of 3% compared to 2013. The company's net profit for this period, calculated without taking into account GAAP principles, amounted to $10.9 billion, practically unchanged from the previous reporting period.
Earnings per share in 2014 rose slightly to $2.06 against $2.02 in 2013, and Cisco's cash, equivalents and investments for the year increased by $1.5 billion, to a total of $52.1 billion.
The company's revenue for the 4th quarter of fiscal year 2014 amounted to $12.4 billion, reducing by 0.5%, and profit excluding GAAP principles - $2.8 billion, which is 0.4% lower than the same indicator for 2013 year.
During a conference call on the results of the 4th quarter of 2014, Cisco President John Chambers said that total sales for EMEA during this period increased by 2%. In Russia, they decreased by 30%, said Chambers.
The President of Cisco outlined the overall downward trend in sales in almost all emerging markets where the company operates: the total decline in sales for them in the 4th quarter was 9%. In addition to Russia, the number of regions that showed the worst dynamics turned out to be China minus 23%. Business Brazil in decreased by 13%. Positive dynamics from developing countries was observed in, India where revenue increased by 18%.
"We have seen the impact of economic and geopolitical difficulties in China, Brazil, Russia, Argentina, Turkey, Thailand and a number of emerging markets, as well as many other companies. Despite the fact that in the 2nd and 3rd quarters, trends in emerging markets looked better, in the 4th quarter these countries lost growth rates, and losses continued, expressed by double-digit indicators, "said John Chambers during a conference call.
He added that, unfortunately, looking into the future, Cisco does not anticipate a return of sales growth in emerging markets in the next few quarters and expects that the situation may even worsen.
2013: Revenue $48.6 billion (+ 5 %)
According to the results of fiscal year 2013, Cisco revenue amounted to $48.6 billion.
2012: Revenue $46.1 billion (+ 7%), profit $8 billion (+ 24 %)
For fiscal year 2012, revenue Cisco grew by 7 percent to dollars $46.1 billion, and net profit increased by 24 percent to $8 billion (based on GAAP principles) or $10 billion. USA. when calculating without using principles. GAAP At the same time, Cisco's net income per share in fiscal year 2012 was $1 49 cents when calculated according to GAAP principles or $1 85 cents when calculated without applying these principles.
As of the end of the fourth quarter of FY 2012, Cisco's cash, cash equivalents and investments reached $48.7 billion. For comparison: at the end of the previous quarter, this figure amounted to $48.4 billion, and a year ago - $44.6 billion.
During fiscal year 2012, Cisco bought back 262 million ordinary shares totaling $4.4 billion. Thus, since the beginning of this program, the company has bought and withdrawn 3.7 billion ordinary shares for a total amount of about $76.1 billion. Under this program, Cisco has about $5.9 billion in stock to buy back. The end date of the program has not been determined. During fiscal year 2012, Cisco paid dividends totaling $1.5 billion to shareholders.
Cisco's sales in the latest fiscal quarter grew by just 4.4%, as the company's customers in Southern Europe are still under severe influence from the economic downturn, and lower public sector spending on both sides of the Atlantic has also played a role. In particular, Cisco EMEA orders decreased by 6%.
In total, for the quarter ended July 12, 2012, Cisco revenue amounted to $11.7 billion. Net income at the same time increased by 56% in quarterly terms to $1.9 billion or $0.36 per share.
The revenue from Cisco's core business, the sale of switching and routing solutions, turned out to be quite flat. The business in the area of collaborative solutions has decreased by 8%, including the Telepresence videoconference line.
Positive results were achieved by vendors in the areas of sale of the Unified Computing System server platform, where orders grew by 58%, as well as wireless solutions, where revenue increased by 22%.
Chief Executive John Chambers said that Cisco remains committed to partnering with VMware and EMC despite the fact that VMware recently acquired SDN (software-defined networking) startup Nicira. According to him, Cisco's position also remains quite strong in the markets for virtualization solutions, as well as in the network equipment market.
At the same time, Cisco continues to implement the reorganization of the product line, announced back in 2011, which has already reduced $1 billion in annual costs and 12 thousand jobs. In May 2012, the company "killed" its Cius tablets, and in the fourth quarter reported a reduction of another 1.3 thousand employees.
In the first quarter of the new fiscal year, Cisco forecasts revenue growth of 2-4%, and earnings per share from 45 to 47%.
2011
Results of the year: revenue - $43.2 billion (+ 8%), profit $6.5 billion (-16.4 %)
Net profit of Cisco Systems, the largest network equipment manufacturer, in fiscal year 2010-11, which ended July 30, 2011, decreased by 16.4% in GAAP to $6.5 billion compared to the previous year[7].
Earnings per share decreased 12% to $1.17. At the same time, the company's revenue increased by 8% to $43.2 billion compared to fiscal year 2010. The company itself predicted revenue growth of 7%.
The decrease in Cisco's annual profit partly explains the $923 million cost of restructuring the company's business. Most of this spending - $772 million - came in the fourth quarter of the reporting finale.
In the fourth quarter, Cisco's net income fell 36% to $1.23 billion from the same period a year earlier, and earnings per share fell by a third to $0.22.
At the same time, quarterly revenue showed a slight growth of 3.3% to $11.2 billion, and was slightly higher than analysts' forecasts that expected a turnover of $10.97 billion, Bloomberg writes.
"Thecompany's profit turned out to be quite stable, and the decline is due to operating expenses," Robert W. Baird & Co analyst told Bloomberg. Jason Noland.
However, strong competitors - Juniper Networks and Hewlett-Packard - are gradually regaining Cisco's market share in telecommunications equipment with cheaper products, while Cisco's own sales continue to decline. So, the revenue from the sale of switches decreased by 4% to $3.44 billion at the end of the year, and the volume of sales of routers - by 2% to 1.73 billion.
Restructuring should help Cisco regain its competitiveness and strengthen its financial position. To this end, the company almost completely discontinued the production of consumer products, including the Flip series of compact video cameras, and also announced plans to reduce approximately 6.5 thousand employees or 9% of the staff. The company intends to achieve a reduction in expenses in the 2011-12 fiscal year by $1 billion and an increase in profit by 8%.
Cisco shares rose 6.6% in OTC trading after the publication of the financial report. Since the beginning of 2011, the company's securities have lost more than 32% on the Nasdaq.
Second quarter of the financial year: sales growth by 10%
Cisco Systems revenue in the second quarter of fiscal 2012 increased compared to the same period in 2011, the company said on January 8, 2012. Sales grew by 10.8% and reached $11.5 billion, the report said, which also notes that everything is happening in accordance with the cost reduction plan adopted a quarter earlier.
According to the GAAP report, Cisco earned $0.40 per share, which exceeds the figure of 48% compared to the second quarter of 2011. Profit excluding GAAP was $0.47 per share and exceeded the preliminary estimate of analysts surveyed by Thomson Financial: they called the figure $0.43. Analysts predicted sales of $11.23 billion in the second quarter.
CEO John Chambers said in a press release that the company operates according to a three-year plan to accelerate profit growth, not gross revenue. "We cut our own spending by a billion dollars in the previous quarter," he added.
Cisco began implementing this plan after a decline in performance that caused the reorganization of the company in 2011, which lasted five months. Among other changes, the company's structure, based on many deliberative bodies, was replaced by a more traditional organization.
The head of the company also noted that during the recession, Cisco reduced aggressive takeover activities, but now returns to the game. According to him, the ideal goal for purchase remains the same: this is a business with a staff of engineers of about 100 people and a product that is going to be put on the market. Preferred are companies that recommend purchasing Cisco customers directly.
According to the company's report, its revenue from sales of the UCS (Unified Computing System) server line in the second quarter increased by 91% compared to the previous year. At the same time, Cisco was able to attract almost 11 thousand customers (10763) within this direction. "Together with the implementation of these servers and the Nexus line of switches, Cisco expects to advance to the data center market through the promotion of virtualization technologies and the cloud," Chambers emphasized.
According to the company's CEO, the direction will combine the servers, networks and storage that Cisco offers together with partners - EMC and VMware. Gross income from this direction increased by 88%.
Revenues from sales of routing and switching products also increased, although in each direction by only 8%. Deliveries of video infrastructure services, another key business area of Cisco, grew in revenue by 23%.
In the Americas, there is a 5% increase in Cisco product orders, in the EMEA market - by 7%, and in the Asia-Pacific region, including Japan - by 14%. Chambers noted that while corporate orders and demand for commercial products grew by 7% in each sector, and orders for video infrastructure services increased by 12%, public sector business decreased by 1% as a result of lower budget spending, especially in the United States.
2009: Revenue $36.12 billion (-9%), profit $6.13 billion (-24%)
- Revenue - $36.12 billion (-9%)
- Net profit - $6.13 billion (-24%)
Capitalization - $98 billion (December 2008). The Cisco brand is estimated at $19.1 billion.
2008: Net income $8 billion
According to the results of the financial year, which ended on July 25, 2008, the company's revenue amounted to $39.54 billion. Net profit - $8.05 billion
See also
Links
Notes
- ↑ Cisco Systems , Inc. (CSCO) CEO Chuck Robbins on Q3 2022 Results - Earnings Call Transcript.
- ↑ CISCO REPORTS FOURTH QUARTER AND FISCAL YEAR 2021 EARNINGS
- ↑ Fiscal 2019 financial results
- ↑ Cisco Reports Fourth Quarter and Fiscal Year 2018 Earnings
- ↑ Cisco Reports Fourth Quarter and Fiscal Year 2016 Earnings
- ↑ Cisco Reports Fourth Quarter and Fiscal Year 2015 Earnings
- ↑ Cisco's net profit in fiscal year 2010-11 decreased by 16% to $6.5 billion
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