Cisco Reports Four Quarter and Fiscal Year 06 Earnings

SAN JOSE, CA - Aug 17, 2016 - Cisco (NASDAQ: CSCO)

Q4 Revenue: $12.6 billion

Growth of 2% year over year -- Q4 guidance was 0% to 3% growth year over year (normalized to exclude the SP Video CPE Business for Q4 FY 2015)

Q4 Earnings per Share: $0.56 GAAP; $0.63 non-GAAP

FY 2016 Revenue (normalized to exclude the SP Video CPE Business):

$48.7 billion, growth of 3% year over year

FY 2016 Earnings per Share: $2.11 GAAP; $2.36 non-GAAP

Q1 FY 2017 Outlook:

Revenue: -1% to 1% growth year over year (normalized to exclude the SP Video CPE Business for Q1 FY 2016)

Earnings per Share: GAAP $0.42 - $0.47; Non-GAAP: $0.58 to $0.60

Cisco (NASDAQ: CSCO) today reported fourth quarter and fiscal year results for the period ended July 30, 2016. Cisco reported fourth quarter revenue of $12.6 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.8 billion or $0.56 per share, and non-GAAP net income of $3.2 billion or $0.63 per share.

We had another strong quarter, wrapping up a great year. I am particularly pleased with our performance in priority areas including security, data center switching, collaboration, services as well as our overall performance, with revenues up 2% in Q4 excluding the SP Video CPE business, said Chuck Robbins, CEO of Cisco. We continue to execute well in a challenging macro environment. Despite slowing in our Service Provider business and Emerging Markets after three consecutive quarters of growth, the balance of the business was healthy with 5% order growth. This growth and balance demonstrates the strength of our diverse portfolio. Our product deferred revenue from software and subscriptions grew 33% showing the continued momentum of our business model transformation.

Q4 GAAP Results

Q4 FY 2016 Q4 FY 2015 Vs. Q4 FY 2015

Revenue (including SP Video CPE Business for all periods) $ 12.6 billion $ 12.8 billion (2)%

Revenue (excluding SP Video CPE Business for all periods) $ 12.6 billion $ 12.4 billion 2%

Net Income $ 2.8 billion $ 2.3 billion 21%

Diluted Earnings per Share (EPS) $ 0.56 $ 0.45 24%

Q4 Non-GAAP Results

Q4 FY 2016 Q4 FY 2015 Vs. Q4 FY 2015

Net Income (excluding SP Video CPE Business for all periods) $ 3.2 billion $ 3.0 billion 7%

EPS (excluding SP Video CPE Business for all periods) $ 0.63 $ 0.58 9%

Fiscal Year GAAP Results

FY 2016 FY 2015 Vs. FY 2015

Revenue (including SP Video CPE Business for all periods) $ 49.2 billion $ 49.2 billion --%

Revenue (excluding SP Video CPE Business for all periods) $ 48.7 billion $ 47.3 billion 3%

Net Income $ 10.7 billion $ 9.0 billion 20%

EPS $ 2.11 $ 1.75 21%

Fiscal Year Non-GAAP Results

FY 2016 FY 2015 Vs. FY 2015

Net Income (excluding SP Video CPE Business for all periods) $ 12.0 billion $ 11.2 billion 7%

EPS (excluding SP Video CPE Business for all periods) $ 2.36 $ 2.18 8%

Reconciliations between net income, EPS and other measures on a GAAP and non-GAAP basis are provided in the tables located in the section entitled Reconciliations of GAAP to non-GAAP Measures.

We delivered another solid quarter and a good fiscal year, expanding both our gross margins and operating margins, said Kelly Kramer, Cisco executive vice president and chief financial officer. Our strong operational discipline has enabled us to drive growth and margin improvement as we continue to invest in key priority areas such as security, IoT, collaboration, next generation data center and cloud, while also delivering shareholder value.

Restructuring Plan

Todays market requires Cisco and our customers to be decisive, move with greater speed and drive more innovation than weve seen in our history. Today, we announced a restructuring enabling us to optimize our cost base in lower growth areas of our portfolio and further invest in key priority areas such as security, IoT, collaboration, next generation data center and cloud. We expect to reinvest substantially all of the cost savings from these actions back into these businesses and will continue to aggressively invest to focus on our areas of future growth. The restructuring will eliminate up to 5,500 positions, representing approximately 7 percent of our global workforce, and we will take action under this plan beginning in the first quarter of fiscal 2017.

Financial Summary

All comparative percentages are on a year-over-year basis unless otherwise noted.

All revenue, non-GAAP, and geographic financial information in the Q4 FY 2016 Highlights and FY 2016 Highlights sections are presented excluding the SP Video CPE Business for prior periods as it was divested during the second quarter of fiscal 2016 on November 20, 2015.

Q4 FY 2016 Highlights

Revenue -- Total revenue was $12.6 billion, up 2%, with product revenue up 1% and service revenue up 5%. Revenue by geographic segment was: Americas up 3%, EMEA up 3%, and APJC down 2%. Product revenue growth was led by Security at 16%. Collaboration, Wireless and Switching product revenue increased by 6%, 5%, and 2%, respectively. Service Provider Video, NGN Routing and Data Center product revenue decreased by 12%, 6%, and 1%, respectively.

Gross Margin -- On a GAAP basis, total gross margin and product gross margin were 63.1% and 62.2%, respectively. The increase in the product gross margin compared with 59.0% in the fourth quarter of fiscal 2015 was primarily due to continued productivity improvements, the divestiture of the SP Video CPE Business, and to a lesser extent product mix, partially offset by pricing.

Non-GAAP total gross margin and product gross margin were 64.6% and 63.9%, respectively. The increase in non-GAAP product gross margin compared with 63.2% in the fourth quarter of

LINK:	https://newsroom.cisco.com/press-release-content?type=press-release&ar...
	See more stories from cisco

Most recent headlines