Analysis of the Form 10-K (2025 Annual Report) | Fiscal year ended July 26, 2025
FY2025, ended July 26, 2025. Reporting currency: US dollar. Amounts in millions of US dollars (US$ mn) unless otherwise stated.
Cisco sells network infrastructure (switches, routers, wireless, servers), security and observability software, collaboration tools and technical support services. Its customers are businesses of all sizes, public institutions and service providers, including large webscale operators. A substantial portion of sales goes through the indirect channel: the document states that "A substantial portion of our products and services is sold indirectly through channel partners". Revenue is collected in three forms: hardware and perpetual licenses recognized on delivery, term licenses and SaaS recognized wholly or partly over the contract, and support services recognized ratably.
In FY2025 subscription revenue reached 31,526 mn, i.e. 31,526 / 56,654 = 55.6% of revenue. In FY2024 the share was 27,380 / 53,803 = 50.9%. In FY2023 it was 24,640 / 56,998 = 43.2%.
There are three operating segments, and they are geographic: Americas, EMEA and APJC. The product categories (Networking, Security, Collaboration, Observability) are a revenue disaggregation, not segments. No customer exceeds 10% of revenue in any of the three years (Note 19).
| Revenue by category (US$ mn) | FY2025 | % FY2025 | FY2024 | FY2023 | Chg. FY25/FY24 | Chg. FY24/FY23 |
|---|---|---|---|---|---|---|
| Networking | 28,304 | 49.96% | 29,229 | 34,570 | −3.2% | −15.4% |
| Security | 8,094 | 14.29% | 5,075 | 3,859 | +59.5% | +31.5% |
| Collaboration | 4,154 | 7.33% | 4,113 | 4,052 | +1.0% | +1.5% |
| Observability | 1,055 | 1.86% | 837 | 661 | +26.0% | +26.6% |
| Services | 15,046 | 26.56% | 14,550 | 13,856 | +3.4% | +5.0% |
| Total | 56,654 | 100.0% | 53,803 | 56,998 | +5.3% | −5.6% |
The categories sum to 56,653 mn against 56,654 reported: the 1 mn gap is a rounding difference disclosed by the document.
| Revenue by geography (US$ mn) | FY2025 | % FY2025 | FY2024 | FY2023 | Chg. FY25/FY24 | Chg. FY24/FY23 |
|---|---|---|---|---|---|---|
| Americas | 33,656 | 59.4% | 31,971 | 33,447 | +5.3% | −4.4% |
| EMEA | 14,824 | 26.2% | 14,117 | 15,135 | +5.0% | −6.7% |
| APJC | 8,174 | 14.4% | 7,716 | 8,417 | +5.9% | −8.3% |
| Total | 56,654 | 100.0% | 53,803 | 56,998 | +5.3% | −5.6% |
| of which United States (US$ bn) | 30.4 | 53.7% | 28.7 | 29.9 | +5.9% | −4.0% |
Employees at July 26, 2025 numbered approximately 86,200, of whom 47.3% were in the United States. The prior-year figure is not reported in the document.
Among the signatories of the 10-K, the relevant change concerns the Chief Financial Officer: Mark Patterson has held the role since July 2025, after serving as Chief Strategy Officer, and the document does not name his predecessor. Among the other executive officers, Jeetendra Patel has been President and Chief Product Officer since May 2025. Oliver Tuszik has led global sales since April 2025.
There are five new items this year relative to the comparative columns. The first is the adoption of the new segment disclosure standard, also applied to the comparatives (Note 2(y)). The second is the settlement with a supplier dated August 26, 2025, recorded in the fourth quarter with a charge of approximately 355 mn to cost of sales (Note 21). The third is a 720 mn tax benefit related to the U.S. Tax Court ruling in the Varian case (Note 18). The fourth is the withdrawal of the indefinite reinvestment assertion on 6.5 bn of foreign earnings, with a deferred tax effect stated to be immaterial. The fifth is the FY2025 restructuring plan, with up to 1 bn of charges and approximately 7% of the workforce. The document does not allow a comparison of the risk factor text with the prior year's, because the previous 10-K is not attached.
The advantage that can be measured from the document's numbers is the recurring nature of contracts. Services revenue amounts to 15,046 mn, 26.6% of the total. Deferred revenue stands at 28,779 mn and remaining performance obligations (RPO) at 43,533 mn, up 6.1%. Segment gross margin, before unallocated items, rose from 64.5% in FY2023 to 68.7% in FY2025.
The document itself, however, tempers the strength of the moat. In the competition section it states that "Barriers to entry are relatively low". On intellectual property it adds that future success depends "primarily on the innovative skills, technological expertise, and management abilities of our employees rather than on the protection afforded by patent, copyright, trademark, and trade secret laws". The list of competitors includes, among others, Arista Networks, Huawei, Palo Alto Networks, Fortinet and Nvidia.
The document shows no pricing power on products; it shows the opposite. In the product gross margin bridge, the "Product pricing" line is −1.6 points. In all three segments the MD&A attributes part of the margin change to "pricing erosion". The competition risk factor adds: "we have experienced price-focused competition from competitors in Asia, especially from China, and we anticipate this will continue".
Product gross margin nonetheless rose from 63.5% to 63.7%. The improvement comes from productivity (+2.0 points) and mix (+1.1 points), i.e. from costs and sales composition, not from list price increases. The document does not provide average selling prices, price revisions or renewal rates.
| Product gross margin bridge (percentage points) | Value |
|---|---|
| FY2024 | 63.5% |
| Productivity | +2.0 |
| Product pricing | −1.6 |
| Product mix | +1.1 |
| Legal dispute with supplier | −0.8 |
| Amortization of purchased intangibles | −0.4 |
| Other | −0.1 |
| FY2025 (check: 63.5 + 2.0 − 1.6 + 1.1 − 0.8 − 0.4 − 0.1) | 63.7% |
Most of the 5.3% revenue growth is not organic. FY2025 includes a full year of Splunk, FY2024 about four months (acquisition closed March 18, 2024 for consideration of 27,090 mn). Note 4 reports that Splunk contributed approximately 1.4 bn of revenue to FY2024 from the acquisition date.
The cleanest comparison available is with FY2024 pro forma revenue, calculated by the company as if Splunk had been acquired at the start of FY2023: (56,654 − 56,761) / 56,761 = −0.19%. On a pro forma basis FY2025 revenue is therefore flat. The document does not provide Splunk's FY2025 revenue, so exact organic growth cannot be calculated.
The mix confirms this reading. Security (+59.5%) and Observability (+26.0%) grow "in large part" thanks to Splunk, according to the MD&A. Networking, half of revenue, declines 3.2%. Acquisitions completed in FY2025 are marginal: 293 mn of total consideration.
In FY2025 operating expenses grew twice as fast as revenue. Operating income fell while revenue rose.
| Item | FY2025 | FY2024 | Chg. % |
|---|---|---|---|
| Revenue | 56,654 | 53,803 | +5.3% |
| Cost of sales | 19,864 | 18,975 | +4.7% |
| R&D | 9,300 | 7,983 | +16.5% |
| Sales and marketing | 10,966 | 10,364 | +5.8% |
| General and administrative | 2,992 | 2,813 | +6.4% |
| Amortization of intangibles (opex) | 1,028 | 698 | +47.3% |
| Restructuring | 744 | 789 | −5.7% |
| Total operating expenses | 25,030 | 22,647 | +10.5% |
| Operating income | 11,760 | 12,181 | −3.5% |
Operating expenses went from 42.1% to 44.2% of revenue (22,647 / 53,803 and 25,030 / 56,654). The MD&A attributes the R&D increase to "higher headcount-related expenses reflecting our investments in AI", to SBC and to acquisition-related cash compensation. Operating margin fell from 26.4% in FY2023 to 20.8% in FY2025. Part of the decline stems from the consolidation of Splunk, which the document does not allow to be isolated.
| US$ mn | FY2025 | FY2024 | FY2023 | Chg. FY25/FY24 | Chg. FY24/FY23 |
|---|---|---|---|---|---|
| Revenue | 56,654 | 53,803 | 56,998 | +5.3% | −5.6% |
| Cost of sales | 19,864 | 18,975 | 21,245 | +4.7% | −10.7% |
| Gross profit | 36,790 | 34,828 | 35,753 | +5.6% | −2.6% |
| Gross margin | 64.9% | 64.7% | 62.7% | +0.2 pt | +2.0 pt |
| R&D | 9,300 | 7,983 | 7,551 | +16.5% | +5.7% |
| Sales and marketing | 10,966 | 10,364 | 9,880 | +5.8% | +4.9% |
| General and administrative | 2,992 | 2,813 | 2,478 | +6.4% | +13.5% |
| Amortization of intangibles (opex) | 1,028 | 698 | 282 | +47.3% | +147.5% |
| Restructuring and other charges | 744 | 789 | 531 | −5.7% | +48.6% |
| Operating income | 11,760 | 12,181 | 15,031 | −3.5% | −19.0% |
| Operating margin | 20.8% | 22.6% | 26.4% | −1.9 pt | −3.7 pt |
| Interest income | 1,001 | 1,365 | 962 | −26.7% | +41.9% |
| Interest expense | (1,593) | (1,006) | (427) | +58.3% | +135.6% |
| Other income (loss) | (68) | (306) | (248) | n.m. | n.m. |
| Income before taxes | 11,100 | 12,234 | 15,318 | −9.3% | −20.1% |
| Income taxes | 920 | 1,914 | 2,705 | −51.9% | −29.2% |
| Effective tax rate | 8.3% | 15.6% | 17.7% | −7.4 pt | −2.0 pt |
| Net income | 10,180 | 10,320 | 12,613 | −1.4% | −18.2% |
| Net margin | 18.0% | 19.2% | 22.1% | −1.2 pt | −2.9 pt |
| Diluted EPS (US$) | 2.55 | 2.54 | 3.07 | +0.4% | −17.3% |
| Weighted average diluted shares (mn) | 3,998 | 4,062 | 4,105 | −1.6% | −1.0% |
Point changes are calculated on unrounded values. For operating margin the result is 20.76% − 22.64% = −1.9 points, while the MD&A reports −1.8 points starting from rounded values. For the effective tax rate the result is 8.29% − 15.64% = −7.4 points, while the MD&A reports −7.3. Excluding the 720 mn tax benefit, FY2025 net income would be 10,180 − 720 = 9,460 mn. Also removing from FY2024 the 55 mn net tax benefit from the IRS audit resolution, normalized FY2024 net income is 10,320 − 55 = 10,265 mn. The normalized decline is 9,460 / 10,265 − 1 = −7.8%. The supplier settlement charge weighs 355 mn before taxes and 355 − 82 = 273 mn after.
| Liquidity (US$ mn) | July 26, 2025 | July 27, 2024 |
|---|---|---|
| Cash and cash equivalents | 8,346 | 7,508 |
| Available-for-sale debt investments | 7,381 | 9,865 |
| Marketable equity securities | 383 | 481 |
| Total | 16,110 | 17,854 |
| Debt (US$ mn) | July 26, 2025 | July 27, 2024 |
|---|---|---|
| Commercial paper | 3,482 | 10,853 |
| Current portion of senior notes | 1,749 | 488 |
| Current portion of other debt | 1 | — |
| Long-term debt (senior notes and other) | 22,861 | 19,621 |
| Financial debt | 28,093 | 30,962 |
| Operating lease liabilities | 1,550 | 1,270 |
| Gross debt | 29,643 | 32,232 |
| Net debt (gross debt − liquidity) | 13,533 | 14,378 |
| Total equity | 46,843 | 45,457 |
The senior notes have a principal amount of 24,750 mn. Maturities run from 2026 to 2064, with coupons between 2.50% and 5.90%. In February 2025 the company issued 5.0 bn of new notes. Between the two year-ends commercial paper fell by 10,853 − 3,482 = 7,371 mn. In FY2026, 1,751 mn of principal matures (Note 12). The 5.0 bn revolving credit facility is undrawn.
Goodwill amounts to 59,136 mn, 48.4% of total assets (59,136 / 122,291). Tangible equity is negative: 46,843 − 59,136 − 9,175 = −21,468 mn. Retained earnings fell to 50 mn, from 1,087 mn, because dividends and buybacks exceeded net income.
| US$ mn | FY2025 | FY2024 | FY2023 |
|---|---|---|---|
| Operating cash flow | 14,193 | 10,880 | 19,886 |
| Capex | (905) | (670) | (849) |
| Free cash flow | 13,288 | 10,210 | 19,037 |
| SBC | 3,641 | 3,074 | 2,353 |
| FCF net of SBC | 9,647 | 7,136 | 16,684 |
| Cash taxes paid | 3,892 | 7,426 | 3,571 |
| Buybacks (program) | 6,000 | 5,787 | 4,293 |
| Shares withheld for taxes on RSUs | 1,222 | 992 | 597 |
| Dividends paid | 6,437 | 6,384 | 6,302 |
| SBC / revenue | 6.4% | 5.7% | 4.1% |
| SBC / FCF | 27.4% | 30.1% | 12.4% |
FY2024 operating cash flow was depressed by taxes paid of 7,426 mn; for FY2025 the MD&A states that operating cash flow "benefited from lower tax payments". FY2025 FCF remains 30.2% below FY2023 (13,288 vs 19,037).
SBC grew 18.4% (3,641 / 3,074 − 1) against revenue growth of 5.3%. Unrecognized compensation cost on unvested awards amounts to 4.5 bn, to be recognized over approximately 1.9 years (Note 16).
Buybacks largely serve to offset dilution. In FY2025 the company repurchased 105 mn shares and issued 80 mn shares, with a further 22 mn withheld for taxes. Shares outstanding fell by 4,007 − 3,960 = 47 mn, i.e. 1.2%. The net spend to achieve this reduction is 6,000 + 1,222 − 736 = 6,486 mn, equal to 6,486 / 47 = US$138 per net share retired. Shares are reported in rounded millions, so the net reduction lies between 46 and 48 mn and the cost between US$135 and US$141. The central value is 138 / 68.69 = 2.0 times the closing price provided.
Owner earnings, without double counting SBC (GAAP net income is already net of SBC):
The cash flow line "depreciation, amortization and other" includes 2,202 mn of amortization of purchased intangibles. Adding it back to earnings assumes that acquired intangibles do not need replacing. Acquisitions over the three years cost on average (301 + 25,994 + 291) / 3 = 8,862 mn a year, a figure dominated by Splunk.
| Metric | FY2025 | FY2024 | FY2023 |
|---|---|---|---|
| Gross margin | 64.9% | 64.7% | 62.7% |
| Operating margin | 20.8% | 22.6% | 26.4% |
| Net margin | 18.0% | 19.2% | 22.1% |
| R&D / revenue | 16.4% | 14.8% | 13.2% |
| Capex / revenue | 1.6% | 1.2% | 1.5% |
| EBITDA (operating income + depreciation, amortization and other) | 14,571 | 14,688 | 16,757 |
| FCF / net income | 1.31x | 0.99x | 1.51x |
| Interest coverage (operating income / interest expense) | 7.4x | 12.1x | 35.2x |
| ROIC (period-end balances, normalized tax rate) | 16.6% | 17.1% | not available |
| Gross debt / EBITDA | 2.03x | 2.19x | not available |
| Net debt / EBITDA | 0.93x | 0.98x | not available |
Formulas (FY2025, then FY2024 where calculable):
Multiples. The closing price is US$68.69 as of July 26, 2025. The share count is 3,953,196,953 as of August 28, 2025, the 10-K cover-page date. The two dates do not coincide, so the market capitalization combines a year-end price with a share count from one month later. July 26, 2025 is a Saturday (Note 1 sets the year-end on the last Saturday in July): the price should be read as the last close available at that date.
Purchase commitments and supply chain (partly materialized). On August 26, 2025 the company settled a dispute with a supplier over long-term purchase obligations. It forfeited approximately 450 mn of prepayments and recorded a charge of approximately 355 mn to cost of sales (Note 21). Purchase commitments rose to 7,599 mn (+47.3%), of which 7,202 mn due within one year, tied to Silicon One and webscale demand. The document warns that these exposures "may result in further negative impacts in future periods". Inventory and commitment provisions were 493 mn in FY2025 and 819 mn in FY2024.
Price erosion (materialized). Pricing took 1.6 points off product gross margin, and the MD&A cites "pricing erosion" in all three segments. In APJC the segment gross margin fell from 67.2% to 66.4%. The company expects price competition from Asia to continue.
Dependence on Networking and on webscale customers (potential, with a precedent). Networking accounts for 50.0% of revenue and declined 15.4% in FY2024 and 3.2% in FY2025. Growth in the service provider and cloud market depends on AI revenue from webscale customers. The risk factor refers to "a high degree of customer concentration, with bespoke product designs and features that would be difficult to sell to alternate customers". The document also recalls that orders from this market declined in FY2024.
Acquisitions, goodwill and recurring charges (potential). Goodwill of 59,136 mn accounts for 48.4% of assets and tangible equity is negative by 21,468 mn. In the annual test, the excess of fair value over carrying value is 56.5 bn for Americas, 80.1 bn for EMEA and 32.9 bn for APJC. A hypothetical 10% decline in fair value would not trigger impairments. Restructuring charges appear in all three years, totaling 531 + 789 + 744 = 2,064 mn. Up to 618 mn of future acquisition-related cash compensation remains.
Debt and interest cost (materialized in the income statement). Interest expense rose to 1,593 mn (+58.3%). Net interest went from +359 mn to −592 mn. Coverage fell from 35.2x to 7.4x in two years. In FY2026, 1,751 mn of notes mature, in addition to commercial paper of 3,482 mn.
Taxation (potential, with a non-recurring benefit already recorded). The 8.3% tax rate includes −6.5 points from the Varian ruling. Unrecognized tax benefits amount to 2,337 mn and accrued interest and penalties to 497 mn. The transition tax payable of 1,595 mn is entirely current. The document notes that certain reduced tax rates depend on employment and investment commitments: "Our failure to meet these commitments could adversely impact our provision for income taxes".
Tariffs and trade policy (potential, not quantified). The MD&A states: "while we are exposed to new and proposed tariffs and other trade policies, the extent of such exposure is uncertain but could be significant if the exposure remains and we are unable to mitigate it". The document provides no estimate of the impact.
Litigation (potential). In Brazil the tax authorities claim 141 mn of taxes, 816 mn of interest and 289 mn of penalties. The total is 141 + 816 + 289 = 1,246 mn. The company considers them "without merit" and cannot estimate a range of loss. For Ramot the document indicates a trial in Delaware set for November 3, 2025, a date after the signing of the 10-K. For Centripetal the company believes that any damages "would not have a material effect".
Cybersecurity (events already occurred, impact stated as immaterial). The document acknowledges that "nation-state actors or their agents have in the past successfully attacked our IT environment". Item 1C concludes that cyber risks have not materially affected the business, results or financial condition.
The document records a single class of common stock (par value US$0.001), listed on Nasdaq; no preferred stock has been issued. It does not describe differentiated voting rights or controlling shareholders. As of August 28, 2025 there were 30,790 registered stockholders. In FY2025 the company reached out to investors representing approximately 61% of shares outstanding. With investors representing approximately 28% it held meetings, calls or correspondence.
Charles Robbins is both Chair and Chief Executive Officer: he has been CEO since July 2015 and Chair since December 2017. The counterweight is a Lead Independent Director, Michael Capellas, on the board since 2006. The Annual Report lists ten directors and states that independent members have consistently comprised "over 75%" of the board. Kevin Weil joined the board in 2025; on the 10-K signature page his name appears without a signature.
On compensation the document refers to the Proxy Statement, which is not attached. The Annual Report only provides the composition of the CEO's FY2025 target package:
| Component | Share |
|---|---|
| Performance-based equity | 51% |
| Time-based equity | 34% |
| Variable cash incentive | 11% |
| Base salary | 4% |
In FY2025 the company introduced a three-year operating goal, a cap on the TSR modifier if absolute return is negative, and a share holding requirement.
Related-party transactions are referred to the Proxy Statement (Item 13): the information is not available in the document. On June 20, 2025 Oliver Tuszik adopted a 10b5-1 sales plan for approximately 49,067 shares, expiring December 31, 2025 (Item 9B).
The auditor is PricewaterhouseCoopers LLP, which states: "We have served as the Company's auditor since 1988". The engagement has therefore lasted approximately 2025 − 1988 = 37 years. The opinion on the financial statements and internal control is unqualified, signed on September 3, 2025.
In FY2025 Cisco adopted the new FASB standard on segment disclosure, with the comparatives recast (Note 2(y)). Note 1 also reports "certain reclassifications" of prior periods, without quantifying them. There are no restatements for errors: the cover-page box on error corrections is not checked.
There is a single Critical Audit Matter, concerning revenue recognition for "certain products and services". The reason given by PwC is "a high degree of auditor effort", not a particularly subjective accounting judgment.
Four accounting choices move earnings:
The 10-K presents neither non-GAAP earnings nor a GAAP/non-GAAP reconciliation. The only non-GAAP measure disclosed is free cash flow. The measure closest to an adjusted profit is segment gross margin, which by definition excludes: amortization and impairment of purchased intangibles, SBC, significant litigation settlements (including the supplier settlement), impairment and restructuring charges, and "certain other charges". In FY2025 these items amount to 2,148 mn at the gross margin level, 5.5% of segment gross margin.
The 8.3% effective tax rate differs from the 21% federal rate because of five main items (Note 18):
| Reconciling item | FY2025 | FY2024 | FY2023 |
|---|---|---|---|
| Federal statutory rate | 21.0% | 21.0% | 21.0% |
| State taxes | +1.3 | +2.8 | +2.4 |
| Foreign income at other than U.S. rates | +0.7 | −0.3 | −0.1 |
| Tax credits | −2.7 | −2.4 | −0.3 |
| FDII deduction | −6.0 | −5.5 | −5.8 |
| SBC | +0.7 | +0.7 | +1.1 |
| Impact of the Tax Act (Varian ruling) | −6.5 | — | — |
| Other | −0.2 | −0.7 | −0.6 |
| Effective tax rate | 8.3% | 15.6% | 17.7% |
Cash taxes paid in FY2025, 3,892 mn, are 4.2 times the tax expense recorded. Relative to pre-tax income they amount to 3,892 / 11,100 = 35.1%. The document does not reconcile taxes paid with taxes recorded. Among the visible elements, the transition tax payable fell from 4,092 to 1,595 mn, a reduction that also includes the effect of the Varian ruling. Deferred income taxes in the cash flow statement amount to −1,133 mn, and deferred tax assets for capitalized research expenditures rose to 4,182 mn.
Contract backlog. RPO stands at 43,533 mn (+6.1%). The company expects to recognize approximately 50% as revenue over the next 12 months. Product RPO grows 7.6% (21,572 / 20,055 − 1), faster than product revenue (+6.0%).
AI demand from webscale customers. The letter to stockholders states "more than $2 billion of AI infrastructure orders from webscale customers in fiscal 2025, more than double our initial target". The Silicon One purchase commitments are the industrial counterpart: the MD&A states "We expect our inventory balances may increase in future quarters as we work to fulfill this demand".
Product refresh cycle. The letter to stockholders calls the launch of the new Smart Switches, routers and access points "the beginning of a major, multi-year product refresh opportunity for Cisco". The document does not quantify the opportunity.
Mechanical decline in amortization. Expected FY2026 amortization of existing intangibles is 1,828 mn. FY2025 recorded 2,202 mn, of which 40 mn of impairments, so pure amortization was 2,202 − 40 = 2,162 mn. On an unchanged perimeter, GAAP operating income benefits by 2,162 − 1,828 = 334 mn; new acquisitions would reduce this benefit.
End of the FY2025 restructuring plan. The plan provides for charges of up to 1 bn, of which 744 mn already recorded, and is expected to be "substantially completed in the second quarter of fiscal 2026". The document does not quantify the expected savings.
Last transition tax installment. The remaining liability of 1,595 mn is entirely current, with a noncurrent portion of zero. After FY2026 this cash outflow does not recur.
The document does not include the FY2024 10-K, to which it refers for the FY2024 versus FY2023 comparison. The comparison is therefore possible only for the commitments that this document itself reports.
| Item | Stated | Achieved | Variance |
|---|---|---|---|
| Cash returned to stockholders | Target: "a minimum of 50% of our free cash flow annually" (MD&A) | (6,437 + 5,995) / 13,288 = 93.6% of FCF | +43.6 points above the minimum |
| AI orders from webscale customers FY2025 | "initial target" not quantified in the document | over 2 bn, "more than double our initial target" (letter) | at least +100% according to the company; not verifiable in the accounts |
| FY2025 restructuring plan | up to 1 bn of charges, approx. 7% of workforce, completion in Q2 FY2026 | 744 mn recorded in FY2025 | 74.4% of budget spent; plan in progress |
| FY2024 restructuring plan | initial budget not reported in this document | 654 mn cumulative, plan completed | not calculable |
| Splunk: pro forma comparison base (not a stated target) | FY2024 pro forma revenue with Splunk for the full year: 56,761 mn | FY2025 revenue: 56,654 mn | −0.19% |
| Margin or business plan targets | not present in the document | — | comparison not possible |
At a price of US$68.69 the P/E is 26.7x. Excluding the 720 mn tax benefit it rises to 28.7x. The FCF yield net of SBC is 3.6%. That yield is below the 5.11% effective rate Cisco itself pays on the notes due 2035 issued in February 2025 (Note 12). The price therefore embeds a recovery in growth and margins that FY2025 figures do not yet show: flat pro forma revenue, declining operating income, Networking contracting for two years.
The thesis holds under three conditions that can be verified in future filings. Networking must return to growth on the back of the product refresh and AI demand. Operating expenses must grow more slowly than revenue once restructuring ends. Purchase commitments must turn into revenue without new charges like the 355 mn one in the fourth quarter. If any of these conditions fails, the multiple paid rests on a mature business that buys growth through acquisitions and returns cash through buybacks largely absorbed by SBC.
Metrics to monitor in the coming quarters:
Report based on the Form 10-K of Cisco Systems, Inc. included in the 2025 Annual Report; FY2025 ended July 26, 2025; document signed September 3, 2025 (the SEC filing date is not stated in the document). The multiples use the closing price of US$68.69 at the fiscal year end, the last session before Saturday July 26, 2025, and the 3,953,196,953 shares outstanding at August 28, 2025 from the 10-K cover page: market capitalization = 68.69 × 3,953,196,953 = US$271.55 bn. The price is an input supplied to the analysis, not a figure from the filing. This report is for analytical purposes only and does not constitute investment advice.
The full data table behind this report — every line item with its source in the filing and the arithmetic checks — is published separately: Cisco FY2025 data table.