2. 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 Cisco’s filings with the SEC, including its most recent filings on Forms 10-K and 10-Q, 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 “Financial Info” in the “Investor Relations” section.
http://investor.cisco.com/investor-relations/financial-information/Financial-Results/default.aspx
3. Business Momentum & Key Trends
Financial Overview
Guidance
Summary and Q&A
4. • Made strong moves around four focus areas:
• Accelerating what’s working and changing what’s not
• Simplifying our business
• Driving operational rigor
• Investing in our talent and culture
• Delivered record revenues and record non-GAAP EPS for both Q4 and
FY15.
• Growing our business and earnings, while driving the evolution of our
portfolio…
• Continued commitment to shareholder return…FY15 returned
$8.3B…through share buybacks and dividends…73% of our free cash flow
Q4 & FY’15 Highlights
5. Business Momentum & Key Trends
Financial Overview
Guidance
Summary and Q&A
7. $M
Y/Y %
Change
Switching $3,719 2%
NGN Routing 1,992 3%
Collaboration 1,088 14%
Service Provider Video 994 (7%)
Data Center 880 14%
Wireless 715 7%
Security 464 4%
Other Products 59 (3%)
Service 2,932 4%
Total Cisco $12,843 4%
Q4 FY’15 – Revenue Highlights
Certain reclassifications have been made to the amounts for prior years in order to conform to the current year’s presentation. Historical revenue by product category and
service is available on our website at http://investor.cisco.com under “Financial Info” in the “Investor Relations” section.
29%
16%
8%8%
7%
6%
4%
23% Switching
NGN Routing
Collaboration
SP Video
Data Center
Wireless
Security
Other
Service
Revenue % of Total
Percentages may not add up to 100% due to rounding
8. Q4 FY’15 Product Orders: Geographic Regions &
Customer Segments
Geographic Region Y/Y % Change
Americas 7%
EMEA (1%)
APJC (1%)
Total Cisco 4%
Product Book to Bill Comfortably above 1
Customer Segment Y/Y % Change
Enterprise (1%)
Public Sector 4%
Commercial 11%
Service Provider 2%
Total Cisco 4%
16. 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 (such as our digitization
strategy and execution, financial strength and financial guidance, our strategy to transition our business to a more software-based business model and recurring
revenue streams, and our ability to deliver profitable growth, manage our portfolio and strategic investments, and return shareholder value) 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; our
ability to achieve expected benefits of our partnerships; 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 Cisco’s most recent reports on Forms 10-Q and 10-K filed on May 20, 2015 and September 9, 2014,
respectively. 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 Cisco’s most recent reports on Forms 10-Q and 10-K as each may be amended from time to time. Cisco’s
results of operations for the three and twelve months ended July 25, 2015 are not necessarily indicative of Cisco’s 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.
18. FY’15 non-GAAP Income Statement Highlights
$M (except per-share amounts and percentages) FY’14 FY’15
Revenue $47,142 $49,161
Year/Year Change
Product
Service
(3%)
36,172
10,970
4%
37,750
11,411
Gross Margin 62.2% 62.4%
Product Gross Margin
Service Gross Margin
60.7%
67.3%
61.5%
65.4%
Operating Expenses 15,988 16,482
OPEX (% of Revenue) 33.9% 33.5%
Operating Income (% of Revenue) 28.3% 28.9%
Net Income $10,863 $11,354
Year/Year Change 0% 5%
EPS (diluted) $2.06 $2.21
Year/Year Change 2% 7%
19. FY’15 GAAP Income Statement Highlights
$M (except per-share amounts and percentages) FY’14 FY’15
Revenue $47,142 $49,161
Product
Service
36,172
10,970
37,750
11,411
Gross Margin 58.9% 60.4%
Product Gross Margin
Service Gross Margin
56.8%
66.0%
59.3%
64.0%
Operating Expenses 18,424 18,911
OPEX (% of Revenue) 39.1% 38.5%
Operating Income (% of Revenue) 19.8% 21.9%
Net Income $7,853* $8,981
Year/Year Change (21%) 14%
EPS (diluted) $1.49* $1.75
Year/Year Change (20%) 17%
*Includes a pre-tax charge of $655 million related to the expected cost of remediation of issues with memory components in certain products sold in prior fiscal years.
20. Q4 FY’15 GAAP to non-GAAP Reconciliation
(Operating Income)
$M (except percentage) Q4 FY’15
GAAP Operating Income $2,881
Share-based compensation expense
Amortization of acquisition-related intangible assets
Acquisition-related costs
Restructuring and other charges
396
325
79
78
Total adjustments to GAAP operating income $878
Non-GAAP Operating Income
% of Revenue
$3,759
29.3%