Cisco Systems (CSCO) Financial History

Our business, results of operations, or financial condition could be materially harmed by evolving regulatory uncertainty or obligations applicable to our products and services.

Union’s (“EU”) General Data Protection Regulation (“GDPR”) and Data Act apply to our activities conducted from an establishment in the EU or related to products and services offered in the EU and imposes a range of co…

The solutions we sell to customers, the third-party products and components that we integrate into our solutions and use in our operations, and the cloud-based services operated or enabled by us, or by third parties u…

We experience cyber attacks and other attempts to gain unauthorized access on a regular basis to (i) our products and services (together, our “solutions”) and (ii) the servers, data centers, networks, systems, and clo…

Many of our commercial offerings include software or other intellectual property licensed from third parties.

the existence of a large number of patents in the information technology field, the secrecy of some pending patents, and the rapid rate of issuance of new patents, it is not economically practical or even possible to…

We generally rely on patents, copyrights, trademarks, trade secrets, and other intellectual property laws to establish and maintain proprietary rights in our technology and products.

We are subject to evolving and sometimes conflicting, laws, regulations, policies, and investor and other stakeholder expectations concerning environmental, social, and governance matters both in the United States and…

As of the end of fiscal 2026, we have senior unsecured notes outstanding in an aggregate principal amount of $23.0 billion that mature at specific dates from calendar year 2026 through 2064.

There can be no assurance that our results of operations or financial condition will not be negatively impacted by our incurrence of debt.

The continued threat of terrorism and heightened security and military action in response thereto, or any other current or future acts of terrorism, war (such as the ongoing Russia-Ukraine war and Middle East conflict…

Terrorism, war, and other events may harm our business, results of operations or financial condition.

Our corporate headquarters, including certain research and development operations, are located in Silicon Valley, a region known for seismic activity.

Our provision for income taxes is subject to volatility and could be negatively impacted by earnings being lower than anticipated in countries that have lower tax rates and higher than anticipated in countries that ha…

Our products are subject to efforts by third parties to manufacture and sell counterfeit versions.

Our results of operations may be negatively impacted and damage to our reputation may occur due to the production and sale of counterfeit versions of our products.

We are a party to a variety of claims, litigation and governmental investigations arising in the normal course of business.

Adverse resolution of claims, litigation or governmental investigations may harm our results of operations or financial condition.

Our success depends in large part on our ability to attract and retain highly skilled technical, managerial, sales, and marketing personnel.

Because a significant portion of our business is conducted outside the United States, we are exposed to adverse movements in foreign currency exchange rates, including in emerging markets where currencies may be extre…

We maintain an investment portfolio with various holdings, investment types, and maturities, including available-for-sale debt and equity investments, the values of which are subject to market volatility.

Most of our sales are on an open credit basis, and, in addition to varying payment terms globally, we provide financing and facilitation of leasing arrangements for our products, services, and related installation costs.

We produce highly complex hardware and software products that incorporate leading-edge technology.

We have strategic alliances with large and complex organizations and other companies to offer complementary products and services.

As we pursue new market opportunities and key priority areas, including AI, cloud, and cybersecurity, we compete with companies of all sizes, some of which may have greater resources than we do.

Mergers and acquisitions of technology companies are inherently risky and subject to factors outside our control, and there can be no assurance that past or future acquisitions will be successful or will not materiall…

•Incur tax expense related to the effect of acquisitions on our legal structure

•Record goodwill and intangible assets subject to impairment testing, potential impairment charges, and amortization expense

•Dependence on unfamiliar supply chains or smaller supply partners

•Challenges entering markets where we have limited experience and competitors have stronger positions

•Difficulties completing projects related to acquired in-process research and development

•Diversion of management’s attention from day-to-day operations and the challenges of managing larger and more complex operations following acquisitions

•Difficulties or delays integrating the operations, including IT security, systems, technologies, products, and personnel of acquired companies, particularly companies with large global operations or complex products

Our growth depends on market growth, our ability to enhance existing products, and our ability to introduce new products on a timely basis.

We have made and expect to continue to make acquisitions that could disrupt our operations and harm our results of operations.

Over the long term we intend to invest in engineering, sales, service and marketing activities, and in key priority areas, and these investments may achieve delayed, or lower than expected, benefits which could harm o…

In response to changes in industry and market conditions, we may be required to strategically realign our resources and to consider restructuring, disposing of, or otherwise exiting businesses.

Furthermore, we may not execute successfully on our strategy because of challenges with regard to product planning and timing, technical hurdles that we fail to overcome in a timely fashion, including keeping pace wit…

Developing new technologies, including more programmable, flexible and virtual networks, and technology related to other market transitions— such as AI, security, observability, and cloud— is complex and uncertain, an…

growth for our software subscription offerings, we need to convince potential customers to purchase new licenses or subscriptions and generate timely renewals and additional purchases from existing customers.

In recent years, we have shifted our business model to deliver more recurring software and subscription offerings.

We incorporate AI technology in certain of our commercial offerings and in our business operations.

We must manage inventory relating to sales of our distributors effectively, as inventory held by them could affect our results of operations.

We also face competition from customers to which we license or supply technology and suppliers from which we transfer technology.

Some competitors compete across many of our product lines, while others focus in a specific product area.

The markets in which we compete are characterized by rapid change, converging technologies, and a migration to networking and communications solutions that offer relative advantages, all of which are factors that pose…

Sales to the service provider and cloud market are often characterized by large and sporadic purchases.

Sales to the service provider and cloud market, including sales of AI infrastructure solutions to large cloud and hyperscaler customers, are especially volatile and may be concentrated among a limited number of custom…

•Lower than expected benefits from value engineering and our ability to reduce production costs

•The timing of revenue recognition and revenue deferrals or increased amortization of purchased intangible assets, especially from acquisitions

•Increases in material, labor or other manufacturing-related costs (i.e., component costs, broker fees, expedited freight and overtime) or higher supply chain logistics costs, any of which could be significant, especi…

•Changes in customer, geographic, or product mix, including the mix of hardware and software sales (and the mix of cloud-based and on-premise software sales)

Our level of product gross margins has declined in certain prior periods and could decline in future periods due to adverse impacts from various factors, including:

Manufacturing capacity and supply constraints, such as the memory shortages experienced in fiscal 2026, remain significant risks, and we expect to continue to be adversely impacted by the rising costs of currently con…

We believe future supply chain challenges may include: rapid growth in new markets in which we participate, which may make it difficult to quickly obtain significant component capacity; dependency on unfamiliar supply…

manufacturing process issues, that have affected our operations, including extended lead times.

A reduction or interruption in supply, including disruptions on our global supply chain, caused in part by geopolitical tensions; public health emergencies; significant natural disasters (including as a result of clim…

Supply chain issues, including financial problems of contract manufacturers or component suppliers, or a shortage of adequate component supply or manufacturing capacity that increase our costs or cause a delay in our…

The timing of large orders can also have a significant impact on our business and results of operations from quarter to quarter.

Our quarterly revenue is difficult to predict, which can be exacerbated during challenging global macroenvironments and resulting market uncertainty.

Our revenue for a particular period is difficult to predict, and a shortfall in revenue may harm our results of operations.

The global macroeconomic environment can be challenging and uncertain.

Our results of operations may be negatively impacted by unfavorable economic and market conditions and the uncertain geopolitical environment.

•Our ability to achieve targeted cost reductions and anticipated benefits from our investments

•The ability of our direct sale customers, channel partners, contract manufacturers and suppliers to obtain financing, to fund capital expenditures, or withstand financial problems

•Variations in sales channels, product costs, or mix of products sold (e.g., hardware and software sales, including mix of cloud-based and on-premise software sales)

•Industry trends such as consolidation among our competitors and our customers, and the introduction and market acceptance of new technologies, products and technology standards, and our success in these new and evolv…

•Our ability to maintain appropriate inventory levels and purchase commitments and manage manufacturing and customer lead times

Our results of operations have been in the past, and will continue to be, subject to quarterly and annual fluctuations as a result of numerous factors, some of which may contribute to more pronounced fluctuations in a…

Our operations can be difficult to predict because our results of operations may fluctuate in future periods.

Global privacy and data protection-related laws and regulations, including cybersecurity laws, are evolving, extensive, and complex.

We experience cyber attacks and other attempts to gain unauthorized access on a regular basis to (i) our products and services (together, our “solutions”) and (ii) the servers, data centers, networks, systems, and clo…

We generally rely on patents, copyrights, trademarks, and trade secret laws to establish and maintain proprietary rights in our technology and products.

Our success has always depended in large part on our ability to attract and retain highly skilled technical, managerial, sales, and marketing personnel.

component suppliers and distribution partners.

We conduct significant sales and customer support operations in countries around the world.

•Become subject to intellectual property or other litigation

•Incur large write-offs and restructuring and other related expenses

•Incur amortization expenses related to certain intangible assets

•Significantly increase our interest expense, leverage and debt service requirements if we incur additional debt to pay for an acquisition

•Use a substantial portion of our cash resources, or incur debt

•Insufficient revenue to offset increased expenses associated with acquisitions

competition in the development and sale of enterprise data center technologies, including competition from entities that are among our long-term strategic alliance partners.

results in any future period.

•The timing of revenue recognition and revenue deferrals

•Our ability to reduce production costs

Our operating results in one or more segments may also be affected by uncertain or changing economic conditions particularly germane to that segment or to particular customer markets within that segment.

result of the on-going Russia and Ukraine war, Middle East conflicts and wars, and China-Taiwan relations), and other disruptions may continue to put pressure on global economic conditions.

The global macroeconomic environment can be challenging and uncertain.

As a consequence, operating results for a particular future period are difficult to predict, and, therefore, prior results are not necessarily indicative of results to be expected in future periods.

•Benefits anticipated from our investments

•Manufacturing and customer lead times

•The timing, size, and mix of orders from customers

•The overall movement toward industry consolidation among both our competitors and our customers

•Changes in sales and implementation cycles for our products and reduced visibility into our customers’ spending plans and associated revenue

•Fluctuations in demand for our products and services, especially with respect to service providers and Internet businesses, in part due to changes in the global economic environment

Global privacy, data, and cybersecurity laws are extensive, complex, and constantly evolving, making compliance both difficult and costly.

breach is attributable to a vulnerability in our solutions, a failure by us to timely mitigate or apply a security fix for products we use that are found vulnerable, or a failure to maintain the digital security infra…

Third parties, including customers, have asserted and may in the future assert claims or initiate litigation relating to patents, copyrights, trademarks, and other intellectual property rights covering technologies or…

further uncertainties or could otherwise negatively impact our business, results of operations, or financial condition.