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November 9, 2011
FORWARD-LOOKING STATEMENTS
This presentation contains projections and other forward-looking statements regarding future events or the future financial performance of Cisco, including future operating results. These projections and statements are only predictions. Actual events or results may differ materially from those in the projections or other forward-looking statements. Please see Ciscos filings with the SEC, including its most recent filing on Form 10-K, for a discussion of important risk factors that could cause actual events or results to differ materially from those in the projections or other forward-looking statements.
GAAP RECONCILIATION
During this presentation references to financial measures of Cisco will include references to non-GAAP financial measures. Cisco provides a reconciliation between GAAP and non-GAAP financial information on our website at www.cisco.com under About Cisco in the Investor Relations section. http://investor.cisco.com/financialstatements.cfm
Cisco Confidential
EMEA
Europe (includes Eastern Europe) Middle East & Africa Russia
APJC
Cisco Confidential
Collaboration
Unified Communications TelePresence
Other
Optical Emerging Technologies Other
Other
Emerging Technologies Application Networking Services Virtual Home (Linksys) Other (including Pure Digital)
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Business Overview
Financial Overview Guidance Summary
Q&A
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Revenue % of Total
Switching
$3,675
0%
NGN Routing
Collaboration Service Provider Video
2,108
1,093 879
(3%)
12% 13%
2% 2% 3% 3%
Other
Service
Wireless
Security Data Center
362
320 259
8%
10% 107%
Other Product
Service Total Cisco
256
2,304 $11,256
(22%)
12% 5%
Cisco Confidential
Y/Y Growth %
Americas
EMEA APJC Total Cisco
12%
13% 13% 13%
11%
Public Sector
Commercial* Service Provider Total Cisco
10%
12% 16% 13%
Approximately 1
* Includes Consumer
Cisco Confidential
changes and our technology and business architectures built upon integrated products, services and software platforms.
Ability to help them solve their most important business issues
leadership, product leadership, emerging markets leadership, the strength of our customer and partner relationships
Cisco Confidential
Business Overview
Financial Overview Guidance Summary
Q&A
Cisco Confidential
Revenue % of Total
Switching
$3,675
0%
NGN Routing
Collaboration Service Provider Video
2,108
1,093 879
(3%)
12% 13%
2% 2% 3% 3%
Other
Service
Wireless
Security Data Center
362
320 259
8%
10% 107%
Other Product
Service Total Cisco
256
2,304 $11,256
(22%)
12% 5%
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Q2 FY11
$3,341 1,919 952 825
Q3 FY11
$3,480 2,150 1,008 898
Q4 FY11
$3,620 2,018 1,076 982
FY11
$14,130 8,264 4,013 3,483
Wireless
Security Data Center Other Product
334
290 125 330
335
270 177 417
353
316 173 291
405
324 219 277
1,427
1,200 694 1,315
Service
Total
2,050
$10,750
2,171
$10,407
2,197
$10,866
2,274
$11,195
8,692
$43,218
Historical product revenue as previously reported and as reclassified are available on our website at http://investor.cisco.com under Financial Reporting in the Investor Relations section.
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Percentage Q1 FY12 $6,588 2,845 1,823 $11,256 Q1 FY11 64.1% 64.7% 64.3% 64.3% Q4 FY11 62.4% 63.1% 63.1% 62.7% Q1 FY12 63.1% 61.7% 60.8% 62.4%
Historical product revenue as previously reported and as reclassified are available on our website at http://investor.cisco.com under Financial Reporting in the Investor Relations section.
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Q1 FY11 $10,750 19% 8,700 2,050 64.3% 64.0% 65.7% 3,897 36.3% 28.1% $2,411 14% $0.42 17%
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Q4 FY11 $11,195 3% 8,921 2,274 62.7% 61.2% 68.6% 4,201 37.5% 25.2% $2,195 (12%) $0.40 (7%)
Q1 FY12 $11,256 5% 8,952 2,304 62.4% 61.3% 66.8% 4,080 36.2% 26.1% $2,322 (4%) $0.43 2%
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Net Sales Year/Year Growth Product Service Gross Margin Product Gross Margin Service Gross Margin Operating Expenses OPEX (% of Revenue) Operating Income (% of Revenue) Net Income Year/Year Growth EPS (diluted) Year/Year Growth
2010 Cisco and/or its affiliates. All rights reserved.
GAAP Operating Income Share-based compensation expense Amortization of acquisition-related intangible assets Other acquisition-related costs Significant asset impairments and restructurings Total non-GAAP adjustments
$ 2,942
26.1%
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Net Sales Product Service Gross Margin Product Gross Margin Service Gross Margin Operating Expenses OPEX (% of Revenue)
21.9%
$1,930 $0.34
13.0%
$1,232 $0.22
19.6%
$1,777 $0.33
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38
1,523 10.8 4,048
38
1,486 11.4 4,313
35
1,622 10.9 4,178
10,736
72,605 --Amount Purchased ($M)
12,207
71,825 329
Number of Shares (M)
12,396
63,465 322
Avg. Price Per Share
Q1 FY12 Purchases
$1,544
100
$15.37
*Approximately $8.7B remaining authorized funds in repurchase program as of the end of Q1 FY12.
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Business Overview
Financial Overview Guidance Summary
Q&A
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Share-based compensation expense is expected to be recorded to the various line items of the GAAP income statement in similar proportions as Q1 FY12. Amortization of purchased intangible assets, other acquisition-related costs, and restructuring and other charges will be reported as GAAP operating expenses, cost of sales, or other income (loss) as applicable. Guidance assumes no additional acquisitions, asset impairments, restructurings, tax or other events, which may or may not be significant.
2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 18
Business Overview
Financial Overview Guidance Summary
Q&A
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Business Overview
Financial Overview Guidance Summary
Q&A
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Forward-Looking Statements
These presentation slides and the related conference call contain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other things, statements regarding future events (such as statements regarding our strategy of providing intelligent networks, architectures and integrated products, product integration, market leadership and positioning, and marketplace trends involving the intelligent network) and the future financial performance of Cisco that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including: business and economic conditions and growth trends in the networking industry, our customer markets and various geographic regions; global economic conditions and uncertainties in the geopolitical environment; overall information technology spending; the growth and evolution of the Internet and levels of capital spending on Internet-based systems; variations in customer demand for products and services, including sales to the service provider market and other customer markets; the return on our investments in certain priorities, including our foundational priorities, and in certain geographical locations; the timing of orders and manufacturing and customer lead times; changes in customer order patterns or customer mix; insufficient, excess or obsolete inventory; variability of component costs; variations in sales channels, product costs or mix of products sold; our ability to successfully acquire businesses and technologies and to successfully integrate and operate these acquired businesses and technologies; increased competition in our product and service markets, including the data center; dependence on the introduction and market acceptance of new product offerings and standards; rapid technological and market change; manufacturing and sourcing risks; product defects and returns; litigation involving patents, intellectual property, antitrust, shareholder and other matters, and governmental investigations; natural catastrophic events; a pandemic or epidemic; our ability to achieve the benefits anticipated from our investments in sales, engineering, service, marketing, and manufacturing activities; our ability to recruit and retain key personnel; our ability to manage financial risk, and to manage expenses during economic downturns; risks related to the global nature of our operations, including our operations in emerging markets, currency fluctuations and other international factors; changes in provision for income taxes, including changes in tax laws and regulations or adverse outcomes resulting from examinations of our income tax returns; potential volatility in operating results; and other factors listed in Ciscos most recent report on Form 10-K. The financial information contained in these presentation slides and the related conference call should be read in conjunction with the consolidated financial statements and notes thereto included in Ciscos most recent report on Form 10-K filed on September 14, 2011, as may be amended from time to time. Ciscos results of operations for the three months ended October 29, 2011 are not necessarily indicative of Ciscos operating results for any future periods. Any projections in these presentation slides and the related conference call are based on limited information currently available to Cisco, which is subject to change. Although any such projections and the factors influencing them will likely change, Cisco will not necessarily update the information, since Cisco will only provide guidance at certain points during the year. Such information speaks only as of the date of these presentation slides and the related conference call.
2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 21