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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________________________

FORM 10-K

(Mark One)


☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended July 2726, ~~2024~~2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ____

Commission file number 001-39940

_____________________________________

CISCO SYSTEMS, INC.

(Exact name of registrant as specified in its charter)


Delaware		77-0059951
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)
170 West Tasman Drive		95134-1706
San Jose,	California
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (408) 526-4000

Securities registered pursuant to Section 12(b) of the Act:


Title of each class:	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	CSCO	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

_____________________________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒ Yes ☐ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

Aggregate market value of registrant’s common stock held by non-affiliates of the registrant, based upon the closing price of a share of the registrant’s common stock on January 2624, ~~2024~~2025 as reported by the Nasdaq Global Select Market on that date: $~~211~~247.15 billion

Number of shares of the registrant’s common stock outstanding as of August 3028, ~~2024~~2025: 3,~~990~~953,~~734~~196,~~794~~953

____________________________________

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement relating to the ~~2024~~2025 Annual Meeting of Stockholders, to be held on December 916, ~~2024~~2025, are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated.

Table of Contents

PART I

Item 1.

Business

Item 1A.

Risk Factors

1211

Item 1B.

Unresolved Staff Comments

2625

Item 1C.

Cybersecurity

2726

Item 2.

Properties

2827

Item 3.

Legal Proceedings

2827

Item 4.

Mine Safety Disclosures

2827

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

2928

Item 6.

[Reserved]

3029

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

3130

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

5150

Item 8.

Financial Statements and Supplementary Data

5352

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

~~104~~102

Item 9A.

Controls and Procedures

~~104~~102

Item 9B.

Other Information

~~104~~102

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

~~104~~102

PART III

Item 10.

Directors, Executive Officers and Corporate Governance

~~105~~103

Item 11.

Executive Compensation

~~105~~103

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

~~105~~103

Item 13.

Certain Relationships and Related Transactions, and Director Independence

~~105~~103

Item 14.

Principal Accountant Fees and Services

~~105~~103

PART IV

Item 15.

Exhibits and Financial Statement Schedules

~~105~~103

Item 16.

Form 10-K Summary

~~107~~106

Signatures

~~108~~107

Table of Contents

This Annual Report on Form 10-K, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts are statements that could be deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “momentum,” “seeks,” “estimates,” “continues,” “endeavors,” “strives,” “may,” variations of such words, and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those identified below, under “Item 1A. Risk Factors,” and elsewhere herein. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update any forward-looking statements for any reason.

PART I


Item 1.			Business

General

Cisco designs and sells a broad range of technologies that help to power, secure, and draw insights from the Internet. We are ~~integrating~~incorporating artificial intelligence (AI) into our product portfolios across networking, security, collaboration and observability toas ~~simplify~~well as integrating our products more tightly together. We are simplifying how our technology is delivered, managed and optimized and tohelping ~~help~~ customers maximize the business value of their technology investments ~~and accelerate their digital transformation~~.

We conduct our business globally and manage our business by geography. Our business is organized into the following three geographic segments: Americas; Europe, Middle East, and Africa (EMEA); and Asia Pacific, Japan, and China (APJC).

Our products and technologies are grouped into the following categories: Networking, Security, Collaboration and Observability. In addition to our product offerings, we provide a broad range of services ~~offerings~~over the lifecycle of our products, including technical support services and advanced services~~, also known as lifecycle services~~. Our customers include businesses of all sizes, public institutions, governments, and service providers, including large webscale providers. These customers often look to us as a strategic partner to help them use information technology (IT) to differentiate themselves and drive positive business outcomes.

We were incorporated in California in 1984 and reincorporated in Delaware in 2021. Our headquarters are in San Jose, California. The mailing address of our headquarters is 170 West Tasman Drive, San Jose, California 95134-1706, and our telephone number at that location is (408) 526-4000. Our website is www.cisco.com. Through a link on the Investor Relations section of our website, we make available the following filings as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission (SEC) at sec.gov: our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. All such filings are available free of charge. The information published on our website, or any other website referenced herein, is not incorporated into this report.

Strategy and Priorities

~~Across~~In ~~the~~today's ~~globe~~digital-first world, businesses and organizations ofglobally ~~every size~~ are ~~leveraging~~deploying ~~Cisco~~ technology to ~~transform~~pursue ~~and~~their ~~drive~~strategic ~~better~~objectives, ~~outcomes~~from ~~and~~accelerating ~~experiences.~~growth Weto ~~also~~enhancing ~~help~~operational ~~customers~~efficiency ~~navigate~~and ~~emerging~~fostering ~~technological shifts~~innovation. Our strategy is to securely connect everything to make those desired outcomes ~~and experiences~~ possible ~~for our customers~~.

InOur ~~today’s dynamic environment, our~~ customers have three key priorities in this dynamic environment: i) to build modern ~~and resilient~~ infrastructure; ii) to protect against the cyber threats of today and tomorrow; and iii) to harness the power of AI and data. Cisco is at the forefront of this evolution, developing innovative solutions that leverage advanced AI to deliver more valuable outcomes for our customers.

~~These~~Modern customer priorities are central to how we innovate and develop our technology. First, we provide the underlying network connectivity for our customers, whether they are connecting traditional branch offices, data centers, smart grids, video devices, electric vehicles, or other devices. Second, we help protect those network connections and the underlying technology architecture against cyber threats. Third, through the visibility we have into data across the network, connected devices and applications, we provide context and insights to our customers about what is happening in their technology architecture, not only in their on-premise infrastructure and private data centers, but also their cloud infrastructure. Our ongoing innovation is delivered, managed and optimized through a combination of hardware, software and subscriptions, in line with the flexible consumption models our customers request.Infrastructure

In an increasingly digital and connected world, where each new connection to the Internet puts more demand on the network, our customers are investing in resilient, adaptable infrastructure to quickly respond to market changes and the demands of their own customers. Now more than ever it is crucial for businesses to remain competitive while managing resource constraints. Our customers continue to focus on modernizing their infrastructure with a focus on speed, agility, productivity, innovation and energy efficiency.

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Cisco can help customers connect, protect and draw actionable insights from their technology. We do this in service of delivering the digital resilience our customers need for today’s complex and unpredictable world.Cybersecurity

~~Customer~~With ~~Priorities~~the rapid growth in AI, modern applications, hyper-distributed architecture and increasingly sophisticated cyberattacks, customers see cybersecurity as a top priority. Our differentiated security strategy is based on three pillars: moving from point solutions to a platform comprehensively integrated with the infrastructure; infusing security into the fabric of the network; and harnessing the depth and breadth of telemetry data from Cisco and with our acquisition of Splunk Inc. (“Splunk”) to prevent, detect, and respond to sophisticated attacks.

~~Modernize~~AI ~~Infrastructure~~and Data

InAI anrepresents ~~increasingly~~a ~~digital~~generational shift in technology and ~~connected~~the ~~world,~~advent ~~where~~of ~~each~~AI ~~new~~agents ~~connection~~is todriving ~~the~~an ~~Internet~~order ~~puts~~of ~~more~~magnitude ~~demand~~higher onrequirement ~~the~~for network, ~~our~~connectivity. ~~customers~~We ~~are~~provide ~~looking~~network infrastructure to ~~modernize~~power AI training and ~~transform~~inference ~~their~~workloads for both webscale providers and enterprises. We help to scale our customers’ network infrastructure with high-density routers and switches, ~~including~~improved ~~through~~network ~~automation~~management, toand ~~manage~~high-performance optics. We are reinventing data center operations for our customers by simplifying the configuration, monitoring, and ~~monitor~~maintenance ~~each~~of ~~connection~~fabrics, incompute, ~~real~~networking ~~time~~and storage.

We continue to transform our enterprise networking portfolio by bringing together several technologies to form an integrated architecture. Our vision is to build a unified management platform experience for on-premise and cloud operating models, that simplifies and helps secure networking for customers at scale.

Our Observability offerings collect and process daily measurements from customers’ owned and unowned networks, providing automated insights, proactive recommendations, and closed-loop operations tailored to customers to enable them to reduce mean time to resolution of issues and improve IT productivity and user experience.

For the data center, our strategy is to deliver multicloud architectures that bring policy and operational consistency, regardless of where applications or data reside. We continue to make significant investments in the development of software, silicon and optics, which we believe are the building blocks for the internet for the future.

As part of modernizing their infrastructure, customers of every size are also looking for solutions to help them communicate more effectively with their customers and to connect their employees more efficiently for productivity. Our collaboration portfolio, which includes interoperable devices and our cloud contact center, provides those solutions, and serves as a key component of smart buildings, powered over ethernet, that we believe will define the workplaces of the future.

Improve Cybersecurity

With the rapid growth in modern applications, hyper-distributed architecture and increasingly sophisticated cyberattacks, customers see cybersecurity as a top priority. Our differentiated security strategy is based on three pillars: moving from point solutions to a platform comprehensively integrated with the infrastructure; infusing security into the fabric of the network; and harnessing the depth and breadth of telemetry data from Cisco and with our acquisition of Splunk Inc. (“Splunk”) to prevent, detect, and respond to sophisticated attacks.

Harness the Power of AI and Data

AI represents a generational shift in technology and is driving an order of magnitude higher requirement for network connectivity. We provide network infrastructure to power AI training and inference workloads for both webscalers and enterprises. We help to scale our customers’ network infrastructure with high-density routers and switches, improved network management, and high-performance optics. We are reinventing data center operations for our customers by simplifying the configuration, monitoring, and maintenance of fabrics, compute, networking and storage.

We can help give customers visibility across the network, security solutions, applications and their own business data. With this breadth and scale of data, we can help deliver differentiated insights and context to customers, leading them to more informed proactive decisions and better business results.

These three customer priorities drive our innovation and technology, making them our priorities as well. To help deliver on them, we are bringing together the power of our portfolio, which we refer to as One Cisco, which provides three key outcomes to our customers: i) AI-ready data centers, ii) future-proofed workplaces, and iii) digital resilience.

AI-Ready Data Centers

We are transforming data centers to power AI workloads anywhere. Whether customers need to modernize parts of their existing infrastructure or power new, massive AI workloads, Cisco brings together a wide array of infrastructure (across networking, compute, storage, and silicon) with unified management across traditional and AI workloads, and security from on-premise to cloud to power AI-ready data centers.

Future-Proofed Workplaces

Cisco helps deliver "future-proofed" workplaces, modernizing how people and technology work and serve their customers. This includes environments ranging from factory floors with plant workers and robots to hospitals with healthcare workers, as well as to social workers and salespeople on the move. For secure campus and branch networking, we offer a flexible range of solutions that help ensure secure, reliable connections for users and devices. Our smart building technology turns network devices into sensors for enhanced intelligence and control of physical spaces. To support productivity, we provide collaboration devices and software to enable collaboration no matter where people work.

Digital Resilience

We help to keep the data center, workplace, and entire IT environment securely up and running in the face of any disruption. Our network assurance capabilities, powered by ThousandEyes, are integrated throughout our portfolio. This technology helps ensure seamless connectivity and optimal digital experiences across cloud, Internet, and enterprise networks, for the delivery of applications and services. Our observability solution monitors the entire enterprise to help prevent downtime and improve experiences across networks, infrastructures, and applications. Additionally, Cisco provides robust security measures for threat prevention, detection, investigation, and response for organizations of any size and security maturity.

Cisco enables enterprises and service providers to deliver highly secure connectivity from workplaces to data centers worldwide. Our strength lies in our ability to deliver unified architecture with integrated, end-to-end solutions to help simplify complex challenges. These capabilities are accelerated with Cisco AI, enhancing outcomes for customers globally.

For a discussion of the risks associated with our Strategy and Priorities, see “Item 1A. Risk Factors,” including the risk factor entitled “We depend upon the development of new products and services, and enhancements to existing products and services, and if we fail to predict and respond to emerging technological trends and customers’ changing needs, our operating results and market share may suffer.” For information regarding sales of our major products and services, see Note 19 to the Consolidated Financial Statements.

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Products and Services

Our products and services are grouped into the following categories:

Networking

~~Networking~~Our ~~consists~~networking ofbusiness ~~our~~is ~~core~~built ~~networking~~on ~~technologies~~a foundation of industry-leading technologies, including switching, routing, wireless, and servers., ~~These~~offered ~~technologies~~through ~~consist~~a comprehensive suite of both hardware and software ~~offerings~~solutions. This portfolio, ~~including~~which features software licenses and software-as-a-service (SaaS) offerings, ~~that~~empowers ~~help our~~ customers ~~build~~to ~~networks~~build, automate, modernize, and transform their network infrastructure. Weto ~~believe~~meet itthe isdemands ~~critical~~of ~~for~~a usrapidly toevolving ~~deliver~~digital ~~continuous~~landscape. ~~value~~A tocentral ~~our~~pillar ~~customers.~~of ~~Our~~our ~~objective~~networking strategy is tothe ~~converge~~seamless convergence of our on-premise solutions with our cloud -managed ~~solutions~~offerings. By integrating these capabilities across our networking portfolio, we aim to deliver continuous value to our customers through enhanced flexibility, scalability, and operational efficiency. This unified approach positions us to address the diverse needs of businesses as they transition to hybrid and cloud-first environments.

Our ~~Switching~~switching portfolio encompasses campus switching as well as data center switching offerings. Our campus switching offerings provide the foundation for converged data, voice, video, and Internet of Things (IoT) services. These switches offer enhanced security and reliability and are designed to scale efficiently as our customers grow. Within campus switching, ~~are~~ our Catalyst 9000 ~~series~~family of switches ~~that~~includes ~~include~~ hardware with embedded software, along with a software subscription referred to as Cisco DNA. Cisco DNA provides automation, analytics and security features ~~and~~which can be centrally monitored, managed, and configured. Also, within campus switching we have a range of Meraki cloud-managed switches for customers who prefer ease of management in lean-IT environments. Our ~~data center~~ switching ~~offerings,~~portfolio ~~led~~now byalso includes the ~~Nexus~~newly ~~9000~~launched ~~series,~~Cisco ~~provide~~Smart Switches — Cisco 9350 and Cisco 9610— which represent the ~~foundation~~next ~~for~~generation ~~mission~~of ~~critical~~enterprise ~~data~~networking. These ~~centers~~switches are AI-ready with ~~high~~advanced ~~availability~~telemetry and assurance capabilities. They are built on Cisco Silicon One (which is our single, ~~scalability~~unified, and ~~security~~scalable ~~across~~networking ~~traditional~~silicon ~~data~~architecture) ~~centers~~ and ~~private~~are ~~and~~equipped ~~public~~with ~~cloud~~quantum-resistant ~~data~~security ~~centers.~~and Wepost-quantum ~~continue~~cryptography to ~~add~~protect ~~greater~~against ~~visibility~~future ~~and~~threats. ~~analytics~~They ~~across~~also ~~our~~offer ~~networks~~flexibility ~~and~~for ~~applications,~~one ~~enabling~~hardware us to ~~deliver~~be ~~better~~managed ~~experiences~~via ~~for~~either ~~our~~the ~~customers~~Cisco Catalyst Center or Meraki Dashboard user interface.

~~Internet~~Our ~~Infrastructure~~data ~~primarily~~center ~~consists~~switching ofofferings, ~~our~~led ~~routed~~by ~~optical~~the ~~networking~~Nexus ~~solutions.~~9000 Weseries, ~~are~~provide ~~focusing~~the onfoundation ~~transforming~~for ~~connectivity~~mission tocritical ~~the~~data ~~Internet~~centers ~~and~~with ~~the~~high ~~cloud~~availability, ~~environment~~scalability, byand ~~efficiently~~security ~~meeting~~across ~~the~~traditional ~~growing~~data ~~demand~~centers ~~for~~and ~~low-latency~~private and ~~higher~~public ~~speeds~~cloud data centers. ~~Our~~We ~~routed~~continue ~~optical~~to ~~networking~~add ~~systems~~greater visibility and analytics across our ~~pluggable~~networks ~~optic~~and ~~solutions~~applications, ~~allow~~enabling us to ~~transform~~deliver ~~the~~better ~~economics~~experiences offor ~~building~~our ~~and~~customers. ~~operating~~During ~~networks~~fiscal ~~for~~2025, ~~our~~we ~~service~~introduced ~~provider~~the ~~customers,~~Cisco ~~including~~N9300 ~~our~~Series ~~webscale~~Smart ~~customers.~~Switches ~~Cisco~~with ~~Silicon~~a ~~One~~new isclass ~~our~~of ~~single,~~intelligent ~~unified~~networking silicon alongside embedded Data Processing Units (DPUs), ~~and~~representing ~~scalable~~our ~~networking~~new ~~silicon~~vision ~~architecture~~for ~~which~~AI wedata ~~have~~center ~~expanded~~designs. ~~from~~Complex adata ~~routing-focused~~processing ~~solution~~tasks can be offloaded to ~~one~~the ~~which~~DPUs ~~addresses~~on the ~~webscale~~switch ~~switching~~to ~~market~~improve ~~through~~both network architecture and the ~~combination~~security ofposture. ~~its~~Cisco ~~high-performance~~Hypershield, ~~feature~~our cloud-~~rich,~~native and ~~low~~AI-~~power~~powered ~~characteristics.~~approach ~~Our~~to ~~Cisco~~highly ~~8000~~distributed ~~series~~security ~~routers,~~for ~~which~~AI-scale ~~are~~data ~~based~~centers onthat ~~our~~is ~~Silicon~~built ~~One~~into the fabric of the network, ~~provide~~is ~~broad~~the ~~capacity~~first inservice ~~high-density~~offering ~~designs,~~available ~~allowing~~embedded ~~our~~on ~~customers~~these tonew ~~reduce~~switches. ~~operational~~This ~~footprints,~~helps ~~lower~~to ~~carbon~~narrow ~~emissions,~~the gap between security and ~~transition~~networking tolayers ~~more~~by ~~efficient~~converging ~~network~~them ~~architectures~~into a single solution.

~~Our~~The ~~Enterprise~~Internet ~~Routing~~Infrastructure portion of this portfolio ~~interconnects~~includes ~~public~~AI ~~and~~Infrastructure ~~private~~solutions ~~wireline~~for ~~and~~service ~~mobile~~provider ~~networks~~customers, ~~delivering~~including ~~highly~~our ~~secure~~webscale ~~and~~customers. ~~reliable~~We are focused on transforming connectivity to ~~campus,~~the ~~data~~Internet ~~center~~and the cloud environment by efficiently meeting the growing demand for low-latency and ~~branch~~higher ~~networks~~speeds. Our ~~routing~~routed optical networking systems and our pluggable optic solutions ~~are~~allow ~~designed~~us to ~~meet~~transform the ~~scale~~economics of building and operating networks for our service provider customers. Our Cisco 8000 series routers, ~~reliability~~which are based on Cisco Silicon One, ~~and~~provide ~~security~~broad ~~needs~~capacity ofin high-density designs, allowing our ~~large~~customers to ~~small~~reduce ~~customers~~operational footprints, lower carbon emissions, and transition to more efficient network architectures.

~~Our~~We ~~Wireless~~also ~~portfolio~~have ~~provides~~enterprise ~~indoor~~routing ~~and~~solutions ~~outdoor~~which ~~wireless~~interconnect ~~coverage~~public ~~designed~~and ~~for~~private ~~seamless~~wireline ~~roaming~~and ~~use~~mobile ~~of voice~~networks, ~~video,~~delivering ~~and~~highly ~~data~~secure ~~applications.~~and ~~These~~reliable ~~products~~connectivity ~~include~~to ~~wireless~~campus, ~~access~~data ~~points~~center and ~~controllers~~branch ~~that~~networks. ~~are~~These ~~on-premise~~offerings ~~and~~are ~~cloud~~designed ~~managed,~~to ~~and~~meet ~~which~~the scale, ~~combined with our Switching portfolio~~reliability, ~~delivers~~and asecurity ~~converged~~needs ~~access~~of ~~solution~~customers ~~that~~of isany ~~powerful, yet simple~~size.

Our wireless solutions deliver robust indoor and outdoor coverage, supporting seamless roaming for voice, video, and data applications. With a product portfolio that includes both on-premises and cloud-managed wireless access points and controllers, we provide customers with a powerful and intuitive converged access solution when paired with our switching portfolio.

Security

Security ~~consists~~is at the core of our business strategy, reflecting our commitment to addressing the evolving needs of organizations of every size across industries. Our security portfolio spans Network Security, Identity and Access Management, Secure Access Service Edge (SASE), and Threat Intelligence, Detection, and Response ~~offerings~~(TIDR) solutions. ~~Security~~We isare adedicated ~~leading~~to ~~priority~~continuous ~~for our customers~~innovation, ~~regardless~~with ofsignificant ~~size~~investments ~~or industry. We continue to invest~~ in ~~resources across our security portfolio focused on~~ cloud-based ~~offerings~~security, AI-~~enhanced~~driven threat detection, and end-to-end security architectures. ~~Our~~designed ~~Threat Intelligence, Detection, and Response offerings incorporate the technologies of Splunk~~ to ~~prevent,~~help ~~detect~~customers ~~and~~proactively ~~respond~~safeguard totheir ~~sophisticated~~most ~~cyber~~critical ~~attacks~~assets. ~~This~~In ~~product category includes~~ the ~~Splunk~~third ~~Platform~~quarter ~~and~~of ~~Splunk~~fiscal ~~Security~~2024, ~~offerings~~we ~~after~~acquired ~~the acquisition of~~ Splunk, ~~although~~a ~~the~~recognized ~~Splunk~~leader ~~Platform~~in ~~has~~security ~~use~~analytics ~~cases~~and ~~that~~observability. ~~can~~The ~~also~~Splunk beplatform ~~applicable~~and ~~for~~security ~~Observability~~ offerings. ~~With~~significantly strengthen our ~~acquisition~~TIDR ofcapabilities. ~~Splunk~~We ~~in the third quarter of fiscal 2024, we~~ have ~~begun~~been tointegrating ~~integrate our solutions, starting with~~ Cisco Extended Detection and Response (XDR) ~~and~~with ~~Splunk Enterprise Security. Additionally, we continue to invest in expanding our SASE architecture by delivering combined network and security functionality in a single cloud-native service.~~

Collaboration

Collaboration consists of our Webex Suite, Collaboration Devices, Contact Center and Communication Platform as a Service (CPaaS) offerings. Our offerings within the Collaboration portfolio consist of software offerings, including perpetual licenses and subscription arrangements, as well as hardware. Our Collaboration strategy is to reimagine employee and customer experiences to be more inclusive and engaging by providing technology that enables distributed teams to collaborate effortlessly. We offer end-to-end collaboration solutions that can be delivered from the cloud, on-premise or within hybrid cloud environments allowing customers to transition their collaboration solutions from on-premise to the cloud. AI and machine learning capabilities are embedded across the Webex portfolio to help improve productivity. Our CPaaS is a cloud

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~~communications~~Splunk ~~platform~~Enterprise ~~that~~Security, ~~integrates~~to ~~communication~~create ~~channels~~a unified and ~~existing~~highly ~~back-end~~effective ~~business~~solution ~~systems~~to ~~together~~help prevent, detect, and respond to ~~help~~sophisticated ~~enable~~cyber threats. We are also accelerating the ~~orchestration~~expansion of our SASE architecture, delivering a seamless combination of network and ~~automation~~security functionality through a single, cloud-native platform. Our security offerings also include Cisco Hypershield, our cloud-native, AI-powered approach to highly distributed security for AI-scale data centers that is built into the fabric of ~~all~~the ~~customer~~network. Our security strategy positions us well to capture growing market demand for comprehensive, scalable, and ~~employee~~integrated ~~interactions~~security solutions.

Collaboration

Our Collaboration portfolio consists of our Webex suite, collaboration devices, Contact Center and Communication Platform as a Service (CPaaS) offerings. These offerings consist of software, including perpetual licenses and subscription arrangements, as well as hardware. Our objective is to create more inclusive and engaging employee and customer experiences by providing technology that enables distributed teams to collaborate effortlessly. We offer end-to-end collaboration solutions that can be delivered on-premises, from the cloud, or within hybrid cloud environments. AI and machine learning capabilities are embedded across the Webex portfolio to help improve productivity. Our CPaaS is a cloud communications platform that integrates communication channels and existing back-end business systems to help enable the orchestration and automation of all customer and employee interactions.

Observability

Observability consists of our network assurance, monitoring and analytics and observability suite offerings. ~~Our~~These ~~Observability~~ offerings are designed to bring together and provide end-to-end visibility of our ~~customer’s~~customers' ~~environments~~owned ~~across~~and unowned environments—including applications, networks, multi-cloud infrastructures and the Internet,. toWith ~~help~~AI-driven ~~deliver~~insights ~~full~~at ~~stack~~their ~~observability~~core, ~~for~~our ~~modern~~observability ~~environments~~solutions ~~and~~help ~~drive relevant real-time insights. These offerings enable~~ organizations to see, understand, and improve every digital experience, and ~~assure~~help to ensure seamless connectivity ~~for~~and ~~their~~proactive ~~modern~~issue ~~digital~~resolution across complex, modern environments. ~~Our~~ThousandEyes, our network assurance offering, ~~ThousandEyes,~~deliver isdeep avisibility ~~network~~and intelligence ~~platform~~across ~~that~~network ~~provides~~organizations, ~~in-depth~~spanning ~~visibility~~both ~~into~~their ~~network~~internal infrastructure and ~~internet~~external ~~performance~~dependencies. Our Observability Suite ~~offering,~~ —including Splunk Observability and AppDynamics, —provides ~~complete visibility across the~~ full -stack insights from infrastructure to ~~applications~~application asperformance ~~well~~to asdigital ~~the~~experience, ~~digital~~helping ~~customer~~teams ~~experience~~take decisive action to maintain service health and performance.

Services

In addition to our product offerings, we provide a broad range of ~~service~~technical support and ~~support~~professional ~~options~~services for our customers. ~~Our~~We ~~support~~are ~~and~~incorporating ~~maintenance~~AI ~~services~~into ~~help~~ our ~~customers~~services ~~ensure their products operate efficiently~~offerings, ~~remain~~to ~~available,~~enable ~~and~~customers ~~benefit from the most up-~~to~~-date~~ ~~system~~derive ~~and~~greater ~~application~~business ~~software.~~value ~~These~~from ~~services help customers protect~~ their ~~network~~technology investments~~, manage risk, and minimize downtime for systems running mission-critical applications~~.

WeCisco ~~also~~Technical ~~provide~~Support ~~comprehensive~~provides ~~advisory~~customers ~~services~~with ~~that~~comprehensive ~~are~~assistance, ~~focused~~including onissue ~~responsive~~resolution, ~~preventive,~~software ~~and consultative~~ support ~~of our technologies for specific networking needs. We are investing in~~ and ~~expanding~~hardware ~~advisory services in the areas of software~~replacement, ~~cloud, security, and analytics, which reflects our strategy of selling customer outcomes. We are focused on three priorities: utilizing technology advisory services~~ to ~~drive~~help ~~higher~~ensure ~~product~~Cisco ~~and~~products ~~services; assessment~~ and ~~migration~~networks ~~services~~operate ~~providing~~efficiently ~~the tools, expertise~~ and ~~methodologies~~remain tohighly ~~enable~~available. ~~our~~These ~~customers to migrate to new technology platforms; and providing optimization~~ services ~~aligned~~help ~~with~~ customers’ ~~business~~protect ~~expectations.~~their Wenetwork ~~are~~investments, ~~also~~manage ~~embedding~~risk, ~~AI assistants~~ and ~~automated~~minimize ~~functions~~downtime ~~into~~for ~~our~~systems ~~services~~running tomission-critical ~~drive productivity~~applications.

We also offer a portfolio of professional services which includes planning, design, and implementation services, as well as high-value consulting services focused on aligning technology investments with business outcomes. We continually invest in our support and professional services by integrating AI and automation, and expanding beyond core networking to cover the areas of security and analytics in line with our strategy.

Customers and Markets

Many factors influence the IT, collaboration, and networking requirements of our customers. These include the size of the organization, number and types of technology systems, geographic location, and business applications deployed throughout the customer’s network. Our customer base is not limited to any specific industry, geography, or market segment. Our customers primarily operate in the following markets: enterprise, public sector and service provider and cloud.

Enterprise

Enterprise includes businesses that are large regional, national, or global organizations with multiple locations or branch offices, or mid-market and small businesses. Many enterprise businesses have unique IT, collaboration, and networking needs within a multi-vendor environment. Our mid-market and small business customers typically require the latest advanced technologies, but with less complexity. We offer service and support packages, financing, and managed network services, primarily through our service provider partners. We sell these products through a network of third-party application and technology vendors and channel partners, as well as selling directly to these customers.

Public Sector

Public Sector includes federal, state and local governments, as well as educational institution customers. Many public sector customers have unique IT, collaboration, and networking needs within a multi-vendor environment. We sell to public sector ~~customers through a network of third-party application and technology vendors and channel partners, as well as through direct sales.~~

Service Provider and Cloud

Service Provider and Cloud includes regional, national, and international wireline carriers and webscale operators, as well as internet, cable, and wireless providers. We also include media, broadcast, and content providers within this customer market, as the lines in the telecommunications industry continue to blur between traditional network-based, content-based and application-based services. This customer market offers data, voice, video, and mobile/wireless services to businesses, governments, utilities, and consumers worldwide. Service provider and cloud businesses use a variety of our products and services for their own networks. In addition, many service providers use Cisco data center, virtualization, and collaboration technologies to offer managed or internet-based services to their business customers. Compared with other customers, service providers are more likely to require network design, deployment, and support services because of the greater scale and higher complexity of their networks, whose requirements are addressed, we believe, by our architectural approach.

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customers through a network of third-party application and technology vendors and channel partners, as well as through direct sales.

Service Provider and Cloud

Service Provider and Cloud includes regional, national, and international wireline carriers and webscale providers, as well as Internet, cable, and wireless providers. We also include media, broadcast, and content providers within this customer market, as the lines in the telecommunications industry continue to blur between traditional network-based, content-based and application-based services. This customer market offers data, voice, video, and mobile/wireless services to businesses, governments, utilities, and consumers worldwide. Service provider and cloud businesses use a variety of our products and services for their own networks. In addition, many service providers use Cisco data center, virtualization, and collaboration technologies to offer managed or Internet-based services to their business customers. Compared with other customers, service providers are more likely to require network design, deployment, and support services because of the greater scale and higher complexity of their networks, whose requirements are addressed, we believe, by our architectural approach.

Sales Overview

As of the end of fiscal ~~2024~~2025, our worldwide sales and marketing functions consisted of approximately 2825,~~000~~600 employees, including managers, sales representatives, and technical support personnel. We sell our products and services both directly and indirectly through a variety of channels with support from our sales workforce. A substantial portion of our products and services is sold indirectly through channel partners, and the remainder is sold through direct sales. Channel partners include systems integrators, service providers, other third-party resellers, and distributors.

Systems integrators and service providers typically sell directly to end users and often provide system installation, technical support, professional services, and other support services in addition to network equipment sales. Systems integrators also typically integrate our products into an overall solution. Some service providers are also systems integrators.

Distributors may hold inventory and sell to systems integrators, service providers, and other third-party resellers. We refer to sales through distributors as our two-tier system of sales to the end customer. Revenue from two-tier distributors is recognized based on a sell-in method. These distributors may be given business terms that allow them to return a limited portion of inventory, receive credits for changes in selling prices, receive certain rebates, and participate in various cooperative marketing programs.

Our service offerings complement our products through a range of consulting, technical, project, quality, and software maintenance services, including 24-hour online and telephone support through technical assistance centers.

For information regarding risks related to our sales channels, see “Item 1A. Risk Factors,” including the risk factors entitled “Disruption of or changes in our distribution model could harm our sales and margins” and “Inventory management relating to our sales to our two-tier distribution channel is complex, and excess inventory may harm our gross margins.”

For information regarding risks relating to our international operations, see “Item 1A. Risk Factors,” including the risk factors entitled “Our operating results may be negatively impacted by unfavorable economic and market conditions and the uncertain geopolitical environment;” “Entrance into new or developing markets exposes us to additional competition and will likely increase demands on our service and support operations;” “Due to the global nature of our operations, political or economic changes or other factors in a specific country or region could harm our operating results and financial condition;” “We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows;” and “Cyber attacks, data breaches or other incidents impacting our solutions and IT environment may disrupt our operations, harm our operating results and financial condition, and damage our reputation or otherwise materially harm our business; and cyber attacks, data breaches or other incidents on our customers’ or third-party providers’ networks, or in third-party products we use, could result in claims of liability against us, give rise to legal and/or regulatory action, damage our reputation or otherwise materially harm our business,” among others.

Financing Arrangements

We provide financing arrangements for certain qualified customers to build, maintain, and upgrade their networks. We believe customer financing is a competitive advantage in obtaining business, particularly for those customers involved in significant infrastructure projects. Our financing arrangements include loans, leases (sales-type, direct financing and operating) and channel financing arrangements.

Acquisitions, Investments, and Alliances

The markets in which we compete require a wide variety of technologies, products, and capabilities. We continue to evaluate opportunities to acquire and invest in businesses and technologies that complement and enable further investment in our key priority areas.

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Acquisitions

We acquire companies in order to gain access to talent, technology, products and features, operational capabilities or new markets. The risks associated with acquisitions are more fully discussed in “Item 1A. Risk Factors,” including the risk factor entitled “We have made and expect to continue to make acquisitions that could disrupt our operations and harm our operating results.”

Investments in Privately Held Companies

We make investments in privately held companies that develop technology or provide services that are complementary to our products or that provide insights into emerging technologies that may become relevant to our businesses. The risks associated with these investments are more fully discussed in “Item 1A. Risk Factors,” including the risk factor entitled “We are exposed to fluctuations in the market values of our portfolio investments and in interest rates; impairment of our investments could harm our earnings.”

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Strategic Alliances

We pursue strategic alliances with other companies in areas where collaboration can produce industry advancement and accelerate new markets. The objectives and goals of a strategic alliance can include one or more of the following: technology exchange, product development, joint sales and marketing, or new market creation.

The risks associated with our strategic alliances are more fully discussed in “Item 1A. Risk Factors,” including the risk factor entitled “If we do not successfully manage our strategic alliances, we may not realize the expected benefits from such alliances and we may experience increased competition or delays in product development.”

Competition

We compete in the networking and communications equipment markets, providing products and services designed to transport, and help secure data, voice, and video traffic across cloud, private and public networks and the Internet. We compete with numerous vendors in each product category. The overall number of our competitors providing niche product solutions may increase. Also, the identity and composition of competitors may change as we increase our activity in newer product areas, and in key priority areas. As we continue to expand globally, we may see new competition in different geographic regions. In particular, we have experienced price-focused competition from competitors in Asia, especially from China, and we anticipate this will continue.

Our competitors (in each case relative to only some of our products or services) include: Amazon Web Services LLC; Arista Networks, Inc.; Broadcom Inc.; Ciena Corporation; CrowdStrike Holdings, Inc.; Datadog Inc.; Dell Technologies Inc.; Dynatrace Inc.; Fortinet, Inc.; Hewlett-Packard Enterprise Company; Huawei Technologies Co., Ltd.; ~~Juniper Networks, Inc.;~~ Microsoft Corporation; New Relic, Inc.; Nokia Corporation; Nvidia Corporation; Palo Alto Networks, Inc.; RingCentral, Inc.; Zoom Video Communications, Inc.; and Zscaler, Inc.; among others.

Some of our competitors compete across many of our product lines, while others are primarily focused in a specific product area. Barriers to entry are relatively low, and new ventures to create products that do or could compete with our products are regularly formed. In addition, some of our competitors may have greater resources, including technical and engineering resources, than we do. As we expand into new markets, we will face competition not only from our existing competitors but also from other competitors, including existing companies with strong technological, marketing, and sales positions in those markets. We also sometimes face competition from resellers and distributors of our products. Companies with which we have strategic alliances in some areas may be competitors in other areas, and this trend may increase. For example, the enterprise data center is undergoing a fundamental transformation arising from the convergence of technologies, including computing, networking, storage, and software, that previously were segregated. Additionally, companies that are strategic alliance partners in some areas of our business may acquire or form alliances with our competitors, thereby reducing their business with us.

The principal competitive factors in the markets in which we presently compete and may compete in the future include the ability to sell successful business outcomes; the ability to provide a broad range of networking and communications products and services; product performance; price; the ability to introduce new products, including providing continuous new customer value and products with price-performance advantages; the ability to reduce production costs; the ability to provide value-added features such as security, reliability, and investment protection; conformance to standards; market presence; the ability to provide financing; and disruptive technology shifts and new business models.

We also face competition from customers to which we license or supply technology and suppliers from which we transfer technology. The inherent nature of networking requires interoperability. As such, we must cooperate and, at the same time, compete with many companies. Any inability to effectively manage these complicated relationships with customers, suppliers, and strategic alliance partners could materially harm our business, operating results, and financial condition and accordingly affect our chances of success.

Research and Development

We regularly introduce new products and features to address the requirements of our markets. We allocate our research and development budget among our product categories, which consist of Networking, Security, Collaboration, and Observability technologies. Our research and development expenditures are applied generally to all product areas, with specific areas of focus being identified from time to time. Our expenditures for research and development costs were expensed as incurred.

The industry in which we compete is subject to rapid technological developments, evolving standards, changes in customer requirements, and new product introductions and enhancements. As a result, our success depends, in part, on our ability, on a cost-effective and timely basis, to continue to enhance our existing products and to develop and introduce new products that improve performance and reduce total cost of ownership. To achieve these objectives, our management and engineering personnel work with customers to identify and respond to customer needs, as well as with other innovators of internet networking products, including universities, laboratories, and corporations. We also expect to continue to make acquisitions and

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~~strategic~~Research investments, where appropriate, to provide us with access to new technologies. Nonetheless, there can be no assurance that we will be able to successfully develop products to address new customer requirements and ~~technological changes or that those products will achieve market acceptance.~~Development

The industry in which we compete is subject to rapid technological developments, evolving standards, changes in customer requirements, and new product introductions and enhancements. As a result, our success depends, in part, on our ability, on a cost-effective and timely basis, to continue to enhance our existing products and to develop and introduce new products that improve performance and reduce total cost of ownership. To achieve these objectives, our management and engineering personnel work with customers to identify and respond to customer needs, as well as with other innovators of Internet networking products, including universities, laboratories, and corporations. We also expect to continue to make acquisitions and strategic investments, where appropriate, to provide us with access to new technologies. Nonetheless, there can be no assurance that we will be able to successfully develop products to address new customer requirements and technological changes or that those products will achieve market acceptance.

Manufacturing

We rely on contract manufacturers for our manufacturing needs. We presently use a variety of independent third-party companies to provide services related to printed-circuit board assembly, in-circuit test, product repair, and product assembly. Proprietary software in electronically programmable memory chips is used to configure products that meet customer requirements and to maintain quality control and security. The manufacturing process enables us to configure the hardware and software in unique combinations to meet a wide variety of individual customer requirements. The manufacturing process also uses automated testing equipment and burn-in procedures, as well as comprehensive inspection, testing, and statistical process controls, which are designed to help ensure the quality and reliability of our products. The manufacturing processes and procedures are generally certified to International Organization for Standardization 9001 standards.

Our arrangements with contract manufacturers generally provide for quality, cost, and delivery requirements, as well as manufacturing process terms, such as inventory management; flexibility regarding capacity, quality, and cost management; oversight of manufacturing; and conditions for use of our intellectual property. We have not entered into any significant long-term contracts with any contract manufacturers. We generally have the option to renew arrangements on an as-needed basis. These arrangements with contract manufacturers generally do not commit us to purchase any particular amount or any quantities beyond amounts covered by orders or forecasts that we submit covering discrete periods of time.

Patents, Intellectual Property, and Licensing

We seek to establish and maintain our proprietary rights in our technology and products through the use of patents, copyrights, trademarks, and trade secret laws. We have a program to file applications for and obtain patents, copyrights, and trademarks in the United States and in selected foreign countries where we believe filing for such protection is appropriate. We also seek to maintain our trade secrets and confidential information by nondisclosure policies and through the use of appropriate confidentiality agreements. We have obtained a substantial number of patents and trademarks in the United States and in other countries. There can be no assurance, however, that the rights obtained can be successfully enforced against infringing products in every jurisdiction. Although we believe the protection afforded by our patents, copyrights, trademarks, and trade secrets has value, the rapidly changing technology in the networking industry and uncertainties in the legal process make our future success dependent 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.

Many of our products are designed to include software or other intellectual property licensed from third parties. While it may be necessary in the future to seek or renew licenses relating to various aspects of our products, we believe, based upon past experience and standard industry practice, that such licenses generally could be obtained on commercially reasonable terms. Nonetheless, there can be no assurance that the necessary licenses would be available on acceptable terms, if at all. Our inability to obtain certain licenses or other rights or to obtain such licenses or rights on favorable terms, or the need to engage in litigation regarding these matters, could materially harm our business, operating results, and financial condition. Moreover, inclusion in our products of software or other intellectual property licensed from third parties on a nonexclusive basis can limit our ability to protect our proprietary rights in our products.

The industry in which we compete is characterized by rapidly changing technology, a large number of patents, and frequent claims and related litigation regarding patent and other intellectual property rights. There can be no assurance that our patents and other proprietary rights will not be challenged, invalidated, or circumvented; that others will not assert intellectual property rights to technologies that are relevant to us; or that our rights will give us a competitive advantage. ~~In addition~~Further, ~~the laws of~~ some ~~foreign countries may not protect our proprietary rights to the same extent as the laws of the United States~~U.S. ~~The~~governmental ~~risks~~entities ~~associated with patents~~ and ~~intellectual~~courts ~~property~~have ~~are~~expressed ~~more~~a ~~fully~~position ~~discussed~~that ~~in “Item 1A~~U.S. ~~Risk~~copyright ~~Factors,”~~and ~~including~~patent ~~the~~protection ~~risk~~should ~~factors entitled “Our proprietary rights may prove difficult to enforce,” “We may~~ be ~~found~~limited to ~~infringe on intellectual property rights of others,” and “We rely on the availability of third-party licenses.”~~

Government Regulation

We are subject to numerous regulations and laws in the United States and abroad that involve matters central to our business. Many of these regulations and laws are evolving and their applicability and scope, as interpreted by courts and regulators, remain uncertain. These regulations and laws involve a variety of matters including privacy, data protection and personal information, cybersecurity, operational resilience, artificial intelligence, tax, trade, encryption technology, environmental sustainability (including climate change), human rights, product certification, and national security.

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protecting inventions and works of authorship created by humans. Therefore, U.S. copyright or patent protection for inventions or works developed in part or wholly by generative AI tools may be limited, or not available at all. In addition, the laws of some foreign countries may not protect our proprietary rights to the same extent as the laws of the United States.

The risks associated with patents and intellectual property are more fully discussed in “Item 1A. Risk Factors,” including the risk factors entitled “Our proprietary rights may prove difficult to enforce,” “We may be found to infringe on intellectual property rights of others,” and “We rely on the availability of third-party licenses.”

Government Regulation

We are subject to numerous regulations and laws in the United States and abroad that involve matters central to our business. Many of these regulations and laws are evolving and their applicability and scope, as interpreted by courts and regulators, remain uncertain. These regulations and laws involve a variety of matters including privacy, data protection and personal information, cybersecurity, operational resilience, AI, tax, trade, encryption technology, environmental sustainability (including climate change), human rights, product certification, and national security.

A failure, or alleged failure, by us to comply with regulations or laws could materially harm our business, operating results, or financial condition. For additional information about government regulation and laws applicable to our business, see “Item 1A. Risk Factors,” including the risk factor entitled “Our business, operating results and financial condition could be materially harmed by evolving regulatory uncertainty or obligations applicable to our products and services” and Note 14 to the Consolidated Financial Statements, subsection (f) “Legal Proceedings.”

Talent and Culture

At Cisco, we value our people and our technology, and we leverage our broader ecosystems to positively impact the world and pursue our ~~purpose~~Purpose to Power an Inclusive Future for All. Our goal is to attract, retain, and develop talent in order to help our customers connect and secure their infrastructure, and accelerate their digital agility. Our relationship with our employees is one of mutual benefit. Our employees bring talent and ingenuity to everything we do, and in turn, we provide employees with meaningful careers and development opportunities.

Cisco is currently ranked #23 on the Fortune 100 Best Companies to Work For® ~~2024~~2025 in the United States. Fortune and Great Place to Work have published their United States rankings since 1998, and Cisco has been recognized on every annual list. In fiscal 2025, Cisco iswas ~~currently~~recognized #1as ina ~~the~~top ~~following~~three 18workplace ~~countries:~~in ~~Australia,~~14 ~~Canada,~~countries ~~Costa~~by ~~Rica,~~Great ~~France,~~Place ~~Indonesia,~~to ~~Ireland~~Work, ~~Italy,~~including ~~Japan,~~#1 ~~Korea,~~wins ~~Mexico,~~in ~~Norway~~Australia, ~~Peru~~Brazil, ~~Portugal~~Canada, ~~Saudi~~Costa ~~Arabia~~Rica, ~~Singapore~~Ireland, ~~Spain~~Peru, ~~Switzerland~~ and ~~the United Kingdom~~Singapore.

As of July 2726, ~~2024~~2025, we had approximately 9086,~~400~~200 employees and they are categorized as follows:

WeCompensation ~~support our employees through times of change~~ and enable them to be their best. We do this by fostering a Conscious Culture. Conscious Culture speaks to the importance of everyone being aware — “conscious” — of the environment they are part of, and feeling accountable, empowered, and expected to contribute to creating a culture where all Cisco employees feel safe and can thrive. Conscious Culture encourages employees to be aware of how we treat one another and to speak up when we see behavior that’s out of step with our beliefs. We believe there is a direct connection between the culture we create internally and how our people are helping to bring about a better world. Benefits

InOur ~~the~~total ~~same~~compensation ~~way~~philosophy ~~that every employee at Cisco~~ is ~~responsible~~designed ~~for~~to ~~our~~attract, ~~Conscious Culture~~reward, ~~we also want every employee to feel responsible for~~ and ~~contribute~~retain ~~to our purpose to Power an Inclusive Future for All~~talent. WeIt ~~believe~~provides ~~this~~market iscompetitive, asperformance-based ~~much~~compensation aaligned ~~commitment~~with ~~from~~each ~~Cisco~~employee’s ascontribution itand isimpact ~~from~~to ~~our employees. Our people often ask~~ the ~~toughest~~value ~~questions around how~~ we ~~are~~drive ~~impacting~~to ~~society~~our ~~for~~customers, ~~the better~~partners, ~~from~~and ~~addressing homelessness to combating climate change~~stockholders. ~~And~~We ~~often~~reward ~~the~~and ~~best~~recognize ~~ideas~~our ~~for how we can do even more come directly from them. Future~~ employees ~~expect it too. We recognize that talent increasingly wants to work~~ for aeffecting ~~company~~innovation, ~~where~~collaboration, ~~their~~profitability, ~~work has meaning~~ and ~~where~~growth ~~they~~within ~~see~~our ~~their~~geographies, ~~values~~product ~~reflected~~lines, inand ~~the organization~~functions.

Inclusion & Diversity

Inclusion and diversity are core components in our Conscious Culture. Inclusivity is our strength and our priority. We want every employee to feel valued, respected, and heard. We are prioritizing inclusion and diversity across the company, recognizing that connecting people of all experiences and backgrounds allows us to improve innovation and collaboration.

In order to continue accelerating diversity and finding extraordinary talent, we have designed a framework that includes introducing new tools and technologies to help accurately map the talent market, creating job roles that attract highly qualified diverse candidates, and expanding the diversity within our interview panels.

We currently have a total of 31 Inclusive Communities supporting full-spectrum diversity globally, including gender, ethnicity, race, sexual orientation, age, ability, veteran status, religion, culture, background, as well as varied experiences, strengths, and perspectives. These thriving communities continue to be a source of strength and support for employees, and they help to foster a more Conscious Culture by providing opportunities for proximity and learning.

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Cisco has signed the CEO Action for Diversity & Inclusion Pledge. The CEO Action for Diversity & Inclusion Pledge is a CEO-driven pledge to drive measurable action and meaningful change in advancing diversity, equity and inclusion in the workplace. We are delivering on these actions by accelerating diversity across the full-spectrum of diversity — including gender, age, race, ethnicity, sexual orientation, ability, nationality, religion, veteran status, background, culture, experience, strengths and perspectives. At Cisco, it starts at the top: As of July 27, 2024, 36% of our Executive Leadership Team (ELT) are women and 43% are diverse in terms of gender or ethnicity.

We publish certain gender diversity and ethnic diversity workforce data annually. Across our global company, we have driven broad improvements in overall workforce diversity. Based on our fiscal 2023 data, our global employee base was comprised of 29% women, 71% men and 0.1% nonbinary, and our U.S. employee base was comprised of the following ethnicities: 48.2% White/Caucasian, 33.5% Asian, 6.5% Hispanic/Latino, 5.6% African American/Black, 2.0% two or more races (not Hispanic or Latino), 0.3% American Indian or Alaska Native, 0.2% Native Hawaiian/Other Pacific Islander, and 3.7% prefer to not to disclose/unknown.

With respect to social justice, Cisco has been partnering across the globe to scale and amplify our positive impact. We have published our Social Justice Beliefs & Actions, which is our blueprint for how we respond to injustice and address inequity for any community. We are creating actions that can be replicated and scaled and are designed to cover the full spectrum of diversity, inclusive of gender, generation, race, ethnicity, sexual orientation, ability, nationality, and background — which is the foundation of our Conscious Culture. This work is part of a plan for Cisco to drive transformational, generational impact for vulnerable communities. Our Social Justice Action Office helps drive accountability, progress, and excellence in our strategic actions in this area, which are designed to address the broader ecosystem including our employees, partners, customers, and suppliers.

Compensation and Benefits

Our total compensation philosophy is designed to attract, reward, and retain talent. It provides market competitive, performance-based compensation aligned with each employee’s contribution and impact to the value we drive to our customers, partners and stockholders. We reward and recognize our employees for effecting innovation, collaboration, profitability, and growth within our geographies, product lines, and functions.

Cisco has always been committed to compensating our employees fairly and equitably. We are a founding signatory of the White House Equal Pay Pledge and the Parity.org pledge, and are a leader in the charge to make fair pay a reality for all employees through the Employers for Pay Equity Consortium. We have also introduced an innovative and inclusive framework that provides us powerful analytics to evaluate our complex compensation system. For example, by using these powerful analytics, we are able to test for pay parity on a regular basis, and when gaps are found, we strive to correct them.

As part of our Social Justice Beliefs and Actions, we have expanded our pay parity program beyond base salary to include additional forms of compensation fairness such as promotion, bonuses, and stock decisions made in our rewards programs. We aim to ensure the program addresses all employees across the full spectrum of diversity incorporating our global self-reported data collection.

Health & Well-being

We have an ongoing commitment to focus on the health, safety, and well-being of our employees. We seek to provide our employees and their families with high-quality, flexible, and convenient benefits and resources for their physical, mental, and financial well-being. We strive to support our employees as they balance careers and personal lives, as well as their own physical, emotional, and financial health. We continue to emphasize a focus on both physical and mental health, recognizing the need to create an environment where employees can speak openly about mental health and other matters.

We ~~host ongoing discussions with our employees during the Cisco Beat and Cisco Check-Ins, our regular company-wide virtual meetings, and continue to emphasize our Safe to Talk program. We~~ offer mindfulness courses, employee assistance program offerings, and out-of-network provider benefits for substance abuse and mental health treatment, and more. In fiscal ~~2024~~2025, we continued to offer employees “A Day for Me,” which were paid days off that allowed for each individual to recharge and rest. We employ a hybrid work model in certain countries, giving our employees the flexibility to work offsite or at onsite Cisco locations.

Employee Development

WeCisco ~~know~~is ~~careers~~advancing ~~are~~new ~~not~~approaches ~~static~~to ~~pathways~~leading, ~~that~~learning, ~~look~~and ~~the~~working ~~same~~in ~~for everyone. We also know that~~ the ~~world~~age of ~~work~~AI. ~~will~~We ~~continue~~invest toin ~~rapidly~~developing ~~evolve,~~strategic ~~requiring~~capabilities ~~new skillsets. At Cisco, we believe~~ that ~~your~~drive ~~career~~business ~~is owned by you~~growth, ~~supported~~while byenabling ~~your~~employees’ ~~leader,~~personal and ~~enabled~~professional ~~by Cisco~~development. ~~Cisco~~By ~~believes~~aligning inskilling ~~open-ended~~with ~~self-directed~~our ~~learning,~~Guiding ~~understanding~~Principles ~~that each individual knows best what skills~~ and ~~resources~~business ~~they need to succeed. This means that while each employee has the power to shape their career on their own terms~~priorities, ~~they~~we ~~also~~put ~~have~~learning aat ~~supportive ecosystem to develop~~ the ~~skills~~center ~~they~~of ~~need to succeed both today and tomorrow~~innovation. ~~We strive to~~

Recognizing that each career is unique, we provide personalized learning opportunities in multiple formats that fit into employees’ daily work. We are also unifying our leadership development approach to offer a full range of programs for employees at all levels, reflecting our belief that you lead from every seat. The principle of “one company, many careers” guides us, and we are using data insights from skills intelligence to match people and opportunities. Learning and development are reinforced in our performance processes. Success at Cisco depends on both what is achieved and how it is achieved, with leaders supporting ongoing development through regular feedback and check-ins.

Employee Engagement

We believe that strong communication is key in our Conscious Culture. These communications include the Cisco Beat, which are regular all-hands meetings, and Cisco Check-Ins, which are ad-hoc meetings for important conversations, and weekly team leader check-ins, which we refer to as a “Team Space Check-In.” In fiscal 2025, we have seen a high level of employee engagement. As an example, there were approximately 2 million Team Space Check-Ins by our employees in fiscal 2025, reflecting approximately 65,700 employees (excludes certain of the employees who joined Cisco during fiscal 2024 through the Splunk acquisition) submitting Team Space Check-Ins. Employees also participate in our global Engagement Pulse Survey and the Real Deal Survey. These surveys allow our employees to provide confidential feedback on our culture, company strategy and trust in their direct leaders.

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create a culture of “one company, many careers.” We provide our people with career strategies focused on areas we know determine a successful career at Cisco—personal brand, network, expertise, and experience—and have created customized offerings that map to each of them.

Employee Engagement

We believe that strong communication is key in our Conscious Culture. These communications include the Cisco Beat, which are regular all-hands meetings, and Cisco Check-Ins, which are ad-hoc meetings for important conversations, and weekly team leader check-ins, which we refer to as a “Team Space Check-In.” In fiscal 2024, we have seen a high level of employee engagement. As an example, there were approximately 2.3 million Team Space Check-Ins by our employees in fiscal 2024, reflecting approximately 70,300 employees (excludes employees who recently joined Cisco during fiscal 2024 through the Splunk acquisition) submitting Team Space Check-Ins. Employees also participate in our global Engagement Pulse Survey and the Real Deal Survey. These surveys allow our employees to provide confidential feedback on our culture, company strategy and trust in their direct leaders.

Purpose Report and ESG Reporting Hub

Additional information regarding Cisco’s ESG initiatives and progress can be found in our annual Purpose Report and on our ESG Reporting Hub at https://www.cisco.com/go/esg-hub. The contents of our Purpose Report, our ESG Reporting Hub and related supplemental information are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC.

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Information about our Executive Officers

The following table shows the name, age, and position as of August 31, ~~2024~~2025 of each of our executive officers:

Name

Age

Position with the Company

Charles H. Robbins

5859

Chair and Chief Executive Officer

R. Scott Herren

Executive Vice President and Chief Financial Officer

Mark Patterson

Executive Vice President and Chief Financial Officer

Gary Steele

President, Go-to-Market

Jeetendra Patel

President, Chief Product Officer

Deborah L. Stahlkopf

5455

Executive Vice President and Chief Legal Officer

Thimaya Subaiya

4647

Executive Vice President, Operations

Oliver Tuszik

Executive Vice President, Global Sales

Mr. Robbins serves as our Chief Executive Officer since July 2015, as a member of the Board of Directors since May 2015, and as Chair of the Board since December 2017. Mr. Robbins joined Cisco in December 1997, from which time until March 2002 he held a number of managerial positions within Cisco’s sales organization. Mr. Robbins was promoted to Vice President in March 2002, assuming leadership of Cisco’s U.S. channel sales organization. Additionally, in July 2005, Mr. Robbins assumed leadership of Cisco’s Canada channel sales organization. In December 2007, Mr. Robbins was promoted to Senior Vice President, U.S. Commercial, and, in August 2009 he was appointed Senior Vice President, U.S. Enterprise, Commercial and Canada. In July 2011, Mr. Robbins was named Senior Vice President, Americas. In October 2012, Mr. Robbins was promoted to Senior Vice President, Worldwide Field Operations, in which position he served until assuming the role of Chief Executive Officer. Mr. Robbins is also a member of the board of directors of BlackRock, Inc. (since 2017).

Mr. ~~Herren~~Patterson joined Cisco in ~~December~~September ~~2020~~2000 and serves as our Executive Vice President and Chief Financial Officer. ~~Prior~~since toJuly ~~joining~~2025. ~~Cisco~~Previously, Mr. ~~Herren~~Patterson served as ~~Senior~~Cisco’s Executive Vice President and Chief ~~Financial~~Strategy Officer offrom ~~Autodesk,~~March ~~Inc.~~2024 ~~(“Autodesk”) since November 2014. Prior~~ to ~~joining~~July ~~Autodesk~~2025, ~~Mr. Herren served~~ as Senior Vice President ~~of Finance at Citrix Systems~~, ~~Inc.~~Chief ~~(“Citrix”)~~of ~~from~~Staff ~~September 2011~~ to ~~October~~the ~~2014,~~Chair and inCEO afrom ~~variety~~October of2018 ~~other~~to ~~leadership roles after joining Citrix in~~ March ~~2000~~2024, ~~including~~ as Senior Vice President, ~~and~~Strategy, ~~Managing~~Planning, ~~Director~~and Operations for ~~EMEA~~Worldwide ~~and~~Sales ~~Vice President~~ and ~~General~~Marketing ~~Manager~~from ofJuly ~~Citrix’s~~2015 ~~virtualization~~to ~~systems~~October ~~group. Before joining Citrix~~2018, ~~Mr.~~and ~~Herren spent over 15 years~~ in ~~senior~~various ~~strategy~~other leadership and ~~financial~~finance ~~positions~~roles at ~~FedEx~~Cisco ~~Corporation and International Business Machines Corporation. Mr. Herren is a member of the board of directors of Rubrik, Inc. (~~since ~~2021)~~2000.

Mr. ~~Steele~~Patel joined Cisco in ~~March~~July ~~2024~~2020 and serves as our President, ~~Go-to-Market~~and Chief Product Officer since May 2025. Previously, Mr. ~~Steele~~Patel served ~~joined~~as Cisco’s as Executive Vice President and ~~General~~Chief ~~Manager,~~Product ~~Splunk~~Officer ~~upon~~from ~~the~~August ~~close~~2024 ofto ~~Cisco’s~~May ~~acquisition~~2025, ofas ~~Splunk~~Executive inVice ~~March~~President ~~2024,~~ and ~~was~~General ~~promoted to President~~Manager, ~~Go-to-Market~~Security inand ~~May~~Collaboration ~~2024.~~from ~~Prior~~June 2021 to ~~joining~~August ~~Cisco~~2024, ~~Mr.~~and ~~Steele~~as ~~served~~Senior asVice President and ~~Chief~~General ~~Executive~~Manager, ~~Officer~~Security ofand ~~Splunk~~Collaboration from ~~April~~July ~~2022~~2020 to ~~March~~June ~~2024~~2021. Prior to joining ~~Splunk~~Cisco, Mr. ~~Steele~~Patel served as the Chief ~~Executive~~Product Officer ofand ~~Proofpoint~~Chief Strategy Officer at Box, Inc. (“Box”) from ~~November~~September ~~2002~~2017 to ~~March~~July ~~2022.~~2020, ~~From~~and ~~1997~~as toSenior ~~2002,~~Vice ~~Mr.~~President ~~Steele~~of ~~served~~Platform asand Chief ~~Executive~~Strategy Officer offrom ~~Portera~~August ~~Systems~~2015 ~~Inc.~~to ~~(“Portera”)~~September 2017. ~~Before~~Prior ~~Portera~~to joining Box, Mr. ~~Steele~~Patel served as ~~the Vice President and~~ General Manager ~~of the Middleware~~ and ~~Data~~Chief ~~Warehousing~~Executive ~~Product Group~~ of ~~Sybase,~~the ~~Inc.~~Syncplicity ~~Mr. Steele also served in~~ business ~~development,~~unit ~~marketing,~~of ~~and~~EMC ~~engineering~~Corporation ~~roles~~(now atpart ~~Sun~~of ~~Microsystems,~~Dell Technologies Inc. ~~and Hewlett-Packard Company~~). Mr. ~~Steele~~Patel is a member of the board of directors of ~~Upwork~~Jones ~~Inc.~~Lang LaSalle Incorporated (since ~~2018~~2019).

Ms. Stahlkopf joined Cisco in August 2021 and serves as our Executive Vice President and Chief Legal Officer. Prior to joining Cisco, Ms. Stahlkopf spent 14 years at Microsoft, where she served most recently as Corporate Vice President, General Counsel and Corporate Secretary, Corporate, External and Legal Affairs from April 2018 to July 2021. Ms. Stahlkopf also served in other leadership roles at Microsoft, including as Vice President and Deputy General Counsel from December 2015 to April 2018 and as Associate General Counsel from December 2010 to December 2015. Prior to joining Microsoft, Ms. Stahlkopf practiced law at Perkins Coie LLP and Cooley Godward LLP. Ms. Stahlkopf is a member of the board of directors of NextEra Energy, Inc. (since 2023).

Mr. Subaiya joined Cisco in July 2018 and serves as our Executive Vice President of Operations since March 2024. Previously, Mr. Subaiya served as Cisco’s Senior Vice President, Chief Transformation Officer from March 2023 to March 2024, as Senior Vice President and General Manager, Customer Experience from November 2021 to March 2023, and as Senior Vice President, Customer Experience Operations and Renewals from July 2018 to November 2021. Prior to joining Cisco, Mr. Subaiya spent 8 years at Salesforce, Inc. (“Salesforce”) where he served in a variety of leadership roles, including most recently as its Chief Operating Officer of Customer Success. Before joining Salesforce, Mr. Subaiya held various leadership roles in business development and global planning and strategy at Oracle Corporation. Mr. Subaiya is a member of the board of directors of Genpact Limited (since 2025).

11Mr. Tuszik joined Cisco in July 2013 and serves as our Executive Vice President of Global Sales since April 2025. Previously, Mr. Tuszik served as Cisco’s Senior Vice President, EMEA Sales from August 2023 to April 2025, as Senior Vice President, Global Partner and GM Routes to Market Sales from December 2020 to August 2023, as Senior Vice President, Worldwide Partner Organization from July 2018 to December 2020, and as Vice President, Country Leader Germany from July 2013 to July 2018. Prior to joining Cisco, Mr. Tuszik spent over 10 years at Computacenter AG & Co. oHG, most recently serving as Chief Executive Officer Germany.

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Item 1A.			Risk Factors

Set forth below and elsewhere in this report and in other documents we file with the SEC are descriptions of the risks and uncertainties that could cause our actual results to differ materially from the results contemplated by the forward-looking statements contained in this report.

Risks Related to our Business and Industry

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

Our operating results 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 an uncertain global economic environment. These factors include:

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

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

•Our ability to maintain appropriate inventory levels and purchase commitments

•Price and product competition in the communications and networking industries, which can change rapidly due to technological innovation and different business models from various geographic regions

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

•The introduction and market acceptance of new technologies and products, and our success in new and evolving markets, and in emerging technologies, including AI, as well as the adoption of new standards

•Variations in sales channels, product costs, mix of products sold, or mix of direct sales and indirect sales

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

•Manufacturing and customer lead times

•Fluctuations in our gross margins, and the factors that contribute to such fluctuations

•The ability of our direct sale customers, channel partners, contract manufacturers and suppliers to obtain financing or to fund capital expenditures, especially ~~during a period of global credit market disruption or~~ in the event of ~~customer~~direct sale customers, channel partner, contract manufacturer or supplier financial problems

•Actual events, circumstances, outcomes, and amounts differing from judgments, assumptions, and estimates used in determining the values of certain assets (including the amounts of related valuation allowances), liabilities, and other items reflected in our Consolidated Financial Statements

•How well we execute on our strategy and operating plans and the impact of changes in our business model that could result in significant restructuring charges

•Our ability to achieve targeted cost reductions

•Benefits anticipated from our investments

•Changes in tax laws or accounting rules, or interpretations thereof

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. Any of the foregoing factors, or any other factors discussed elsewhere herein, could materially harm our business, results of operations, and financial condition.

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

Challenging global economic conditions, including tariffs or other trade barriers, rising inflation, or other changes, ~~worldwide~~ have from time to time contributed, and may continue to contribute, to slowdowns in the communications and networking industries at large, as well as in specific segments and markets in which we operate, resulting in: reduced demand for our products as a result of continued constraints on IT-related capital spending by our customers, particularly service provider and cloud as well as enterprise and other customer markets; increased price competition for our products, not only from our competitors but also as a consequence of customers disposing of unutilized products; risk of excess and obsolete inventories; risk of supply constraints; risk of excess facilities and manufacturing capacity; and higher overhead costs as a percentage of revenue and higher interest expense.

The global macroeconomic environment can be challenging and ~~inconsistent~~uncertain. InFor ~~certain prior periods~~example, ~~we have seen a broad-based weakening in~~ the ~~global macroeconomic environment which has impacted and could~~ impact inof ~~the~~uncertainty ~~future~~regarding ~~certain~~global ofcentral ~~our~~bank ~~markets.~~monetary ~~Additionally~~policy, the instability in the ~~global~~geopolitical ~~credit~~environment ~~markets,~~in ~~the~~many ~~impact~~parts of ~~uncertainty~~the ~~regarding~~world ~~global~~(including ~~central~~as ~~bank~~a ~~monetary~~

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~~policy, the instability in the geopolitical environment in many parts of the world (including as a~~ result of the on-going Russia and Ukraine war, ~~the~~Middle ~~Israel-Hamas~~East ~~war~~conflicts and wars, and China-Taiwan relations), ~~the current economic challenges in China, including global economic ramifications of Chinese economic difficulties,~~ and other disruptions may continue to put pressure on global economic conditions. If global economic and market conditions, ~~or economic conditions in key markets,~~ were to deteriorate, we may experience material harm to our business, operating results, and financial condition.

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. In addition, previous reports of certain intelligence gathering methods of the U.S. government could affect customers’ perception of the products of IT companies which design and manufacture products in the United States. Trust and confidence in us as an IT supplier are critical to the development and growth of our markets. Impairment of that trust, or foreign regulatory actions taken in response to reports of certain intelligence gathering methods of the U.S. government, could affect the demand for our products from customers outside of the United States and could have a negative impact on our operating results.

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

As a result of a variety of factors discussed in this report, our revenue for a particular quarter is difficult to predict, which can be exacerbated during periods when the global macroenvironment is challenging and ~~inconsistent and~~ can result in market uncertainty. Our revenue may grow at a slower rate than in past periods, or decline as it did in ~~fiscal 2024 and~~ certain prior periods on a year-over-year basis. Our ability to meet financial expectations could also be negatively impacted if the nonlinear sales pattern seen in some of our past quarters recurs in future periods. During the first nine months of fiscal 2024, we experienced a decline in product demand resulting in a decrease of revenue as customers continued to scrutinize spend as they needed additional time to implement elevated levels of product shipments received in prior quarters. We have also experienced periods of time during which shipments have exceeded net bookings or manufacturing issues have delayed shipments, leading to nonlinearity in shipping patterns. In addition to making it difficult to predict revenue for a particular period, nonlinearity in shipping can increase costs, because irregular shipment patterns result in periods of underutilized capacity and periods in which overtime expenses may be incurred, as well as in potential additional inventory management-related costs. In addition, to the extent that manufacturing issues and any related component shortages result in delayed shipments in the future, and particularly in periods in which our contract manufacturers are operating at higher levels of capacity, it is possible that revenue for a quarter could be negatively impacted if such matters occur and are not remediated within the same quarter.

The timing of large orders can also have a significant impact on our business and operating results from quarter to quarter. From time to time, we receive large orders that have a significant effect on our operating results in the period in which the order is recognized as revenue. The timing of such orders is difficult to predict, and the timing of revenue recognition from such orders may affect period to period changes in revenue. As a result, our operating results could vary materially from quarter to quarter based on the receipt of such orders and their ultimate recognition as revenue. Longer than normal manufacturing lead times in the past have caused, and in the future could cause, some customers to place the same or a similar order multiple times within our various sales channels and to cancel the duplicative orders upon shipment or receipt of the product, or to also place orders with other vendors with shorter manufacturing lead times. Such multiple ordering (along with other factors) or risk of order cancellation may cause difficulty in predicting our revenue. Further, our efforts to improve manufacturing lead-time performance may result in more variability and less predictability in our revenue and operating results. In addition, when facing component supply-related challenges, we have in the past and may in the future increase our efforts in procuring components in order to meet customer expectations, which in turn contributes to an increase in inventory and purchase commitments. These increases in our inventory and purchase commitments to shorten lead times could also lead to potential material excess and obsolete inventory charges or other negative impacts to our product gross margin in future periods if product demand significantly decreases for a sustained duration, we are unable to generate demand for certain products planned for development, or we are unable to continue to mitigate the remaining supply chain exposures. Product demand conditions for future periods can be difficult to predict or may persist longer than anticipated. We plan our operating expense levels based primarily on forecasted revenue levels. These expenses and the impact of long-term commitments are relatively fixed in the short term. A shortfall in revenue could lead to operating results being below expectations because we may not be able to quickly reduce these fixed expenses in response to short-term business changes. Any of the above factors could materially harm our operations and financial results. For additional information and a further discussion of impacts and risks related to our inventory commitments and our purchase commitments with contract manufacturers and suppliers, see “Results of Operations—Product Gross Margin—Supply Chain Impacts and Risks”, “Liquidity and Capital Resources—Inventory Supply Chain” under Item 7 and Note 14 to the Consolidated Financial Statements of this report.

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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 ability to fulfill orders, could have an adverse impact on our business and operating results, and our failure to estimate customer demand properly may result in excess or obsolete component supply, which could negatively impact our gross margins.

The fact that we do not own or operate the bulk of our manufacturing facilities and that we are reliant on our extended supply chain could have an adverse impact on the supply of our products and on our business and operating results. Financial problems of either contract manufacturers or component suppliers, reservation of manufacturing capacity at our contract manufacturers by other companies, and industry consolidation occurring within one or more component supplier markets, such as the semiconductor market, in each case, could either limit supply or increase costs.

A reduction or interruption in supply, including disruptions on our global supply chain, caused in part by public health emergencies, geopolitical tensions (including as a result of China-Taiwan relations) or a significant natural disaster (including as a result of climate change); a significant increase in the price of one or more components (including as a result of inflation); a failure to adequately authorize procurement of inventory by our contract manufacturers; a failure to appropriately cancel, reschedule, or adjust our requirements based on our business needs; or a decrease in demand for our products could materially harm our business, operating results, and financial condition and could materially damage customer relationships. Furthermore, as a result of binding price or purchase commitments with suppliers, we may be obligated to purchase components at prices that are higher than those available in the current market. In the event that we become committed to purchase components at prices in excess of the current market price when the components are actually used, our gross margins could decrease. In addition, vendors may be under pressure to allocate product to certain customers for business, regulatory or political reasons, and/or demand changes in agreed pricing as a condition of supply. Although we have generally secured additional supply or taken other mitigation actions when significant disruptions have occurred, if similar situations occur in the future, they could materially harm our business, results of operations, and financial condition.12

~~Our~~Table ~~growth and ability to meet customer demands depend in part on our ability to obtain timely deliveries~~ of parts from our suppliers and contract manufacturers. We have experienced component shortages in the past, including shortages caused by manufacturing process issues, that have affected our operations, including longer than normal lead times. For example, in recent periods, there was a market shortage of semiconductor and other component supply which affected lead times, the cost of that supply, and our ability to meet customer demand for our products. Additionally, we may in the future experience a shortage of certain component parts as a result of our own manufacturing issues, manufacturing issues at our suppliers or contract manufacturers, capacity problems experienced by our suppliers or contract manufacturers including capacity or cost problems resulting from industry consolidation, or strong demand for those parts. Growth in the economy is likely to create greater pressures on us and our suppliers to accurately project overall component demand and component demands within specific product categories and to establish optimal component levels and manufacturing capacity, especially for labor-intensive components, components for which we purchase a substantial portion of the supply, or the re-ramping of manufacturing capacity for highly complex products. During periods of shortages or delays the price of components may increase, or the components may not be available at all, and we may also encounter shortages if we do not accurately anticipate our needs. We may not be able to secure enough components at reasonable prices or of acceptable quality to build new products in a timely manner in the quantities or configurations needed. Accordingly, our revenue and gross margins could suffer until other sources can be developed. Contents

A reduction or interruption in supply, including disruptions on our global supply chain, caused in part by public health emergencies, geopolitical tensions (including as a result of China-Taiwan relations, increasing tariffs or any other trade tensions) or a significant natural disaster (including as a result of climate change); a significant increase in the price of one or more components (including as a result of inflation); a failure to adequately authorize procurement of inventory by our contract manufacturers; a failure by suppliers to deliver on our contracts; a failure to appropriately cancel, reschedule, or adjust our requirements based on our business needs; or a decrease in demand for our products could materially harm our business, operating results, and financial condition and could materially damage customer relationships. Furthermore, as a result of binding price or purchase commitments with suppliers, we may be obligated to purchase components at prices that are higher than those available in the current market. In the event that we become committed to purchase components at prices in excess of the current market price when the components are actually used, our gross margins could decrease. In addition, vendors may be under pressure to allocate product to certain customers for business, regulatory or political reasons, and/or demand changes in agreed pricing as a condition of supply. Although we have generally secured additional supply or taken other mitigation actions when significant disruptions have occurred, if similar situations occur in the future, they could materially harm our business, results of operations, and financial condition.

Our growth and ability to meet customer demands depend in part on our ability to obtain timely deliveries of parts from our suppliers and contract manufacturers. We have experienced component shortages in the past, including shortages caused by manufacturing process issues, that have affected our operations, including longer than normal lead times. Additionally, we may in the future experience a shortage of certain component parts as a result of our own manufacturing issues, manufacturing issues at our suppliers or contract manufacturers, capacity problems experienced by our suppliers or contract manufacturers including capacity or cost problems resulting from industry consolidation, or strong demand for those parts. Growth in the economy is likely to create greater pressures on us and our suppliers to accurately project component demand and to establish optimal component levels and manufacturing capacity, especially for labor-intensive components, components for which we purchase a substantial portion of the supply, or the re-ramping of manufacturing capacity for highly complex products. During periods of shortages or delays the price of components may increase, or the components may not be available at all, and we may also encounter shortages if we do not accurately anticipate our needs. We may not be able to secure enough components at reasonable prices or of acceptable quality to build new products in a timely manner in the quantities or configurations needed. Accordingly, our revenue and gross margins could suffer until other sources can be developed.

Although in many cases we use standard parts and components for our products, certain components are presently available only from a single source or limited sources, and a global economic downturn and related market uncertainty could negatively impact the availability of components from one or more of these sources, especially during times when there are supplier constraints based on labor and other actions taken during economic downturns. We may not be able to diversify sources in a timely manner, which could harm our ability to deliver products to customers and seriously impact present and future sales.

We believe that we may be faced with the following challenges in the future: new markets in which we participate may grow quickly, which may make it difficult to quickly obtain significant component capacity; as we acquire companies and new technologies, we may be dependent on unfamiliar supply chains or relatively small supply partners; and we face competition for certain components that are supply-constrained, from existing competitors, and companies in other markets.

Manufacturing capacity and component supply constraints could ~~continue to~~ be significant issues for us as they have been in certain prior periods. We purchase components from a variety of suppliers and use several contract manufacturers to provide manufacturing services for our products. During the normal course of business, in order to improve manufacturing lead-time performance and to help ensure adequate component supply, we enter into agreements with contract manufacturers and suppliers that either allow them to procure inventory based upon criteria as defined by us or that establish the parameters defining our requirements. In certain instances, these agreements allow us the option to cancel, reschedule, and adjust our requirements based on our business needs prior to firm orders being placed. When facing component supply-related challenges, we have increased our efforts in procuring components in order to meet customer expectations, such as we have done in past periods due to supply constraints, which in turn contributes to an increase in inventory and purchase commitments. In fiscal 2025, we entered into additional purchase commitments with contract manufacturers and suppliers related to manufacturing Cisco Silicon One and other products to meet demand from webscale and other customers. We expect to continue entering into these additional purchase commitments in fiscal 2026. These past efforts and additional purchase commitments significantly increased our supply chain exposure, which resulted in negative impacts to our product gross margin in recent periods and may result in further negative impacts in future periods. On August 26, 2025, we settled a legal dispute with a supplier relating to purchase obligations arising under long-term supply arrangements, which resulted in a charge to product cost of sales, which is described in Note 21 to the Consolidated Financial Statements. The remaining and new supply chain exposures include potential material excess and obsolete or other charges if product demand significantly decreases for a sustained duration, we are unable to generate demand for certain products planned for development, or we are otherwise unable to mitigate these supply chain exposures. Product demand conditions for future periods can be difficult to predict or may persist longer than anticipated.

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commitments. In past periods, we increased our inventory and purchase commitments in light of the supply constraints seen industry-wide due to component shortages. These increases in our inventory and purchase commitments to shorten lead times could also lead to potential material excess and obsolete inventory charges or other negative impacts to our product gross margin in future periods if we fail to anticipate customer demand properly and product demand significantly decreases for a sustained duration, we are unable to generate demand for certain products planned for development, or we are unable to continue to mitigate the remaining supply chain exposures. Product demand conditions for future periods can be difficult to predict or may persist longer than anticipated. For additional information and a further discussion of impacts and risks related to our inventory commitments and our purchase commitments with contract manufacturers and suppliers, see “Results of Operations—Product Gross Margin—Supply Chain Impacts and Risks” and, “Liquidity and Capital Resources—Inventory Supply Chain” under Item 7 and Note 14 to the Consolidated Financial Statements of this report.

We expect gross margin to vary over time, and our level of product gross margin may not be sustainable.

Although our product gross margin increased in fiscal ~~2024~~2025, our level of product gross margins ~~have~~has declined in certain prior periods, and could decline in future periods due to adverse impacts from various factors, including:

•Changes in customer, geographic, or product mix, including the mix of hardware and software

•Introduction of new products, including products with price-performance advantages, and new business models (including continuing to increase the use of business models where revenue is recognized over multiple periods)

•Our ability to reduce production costs

•Entry into new markets or growth in lower margin markets, including markets with different pricing and cost structures, through acquisitions or internal development

•Sales discounts

•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, especially during periods of supply constraints for certain costs, such as those that have impacted the market for components, including semiconductors and memory in past periods, and which costs have in the past and may continue to be exacerbated by inflation

•Excess inventory, inventory holding charges, and obsolescence charges

•Changes in shipment volume

•The timing of revenue recognition and revenue deferrals

•Increased costs (including those caused by tariffs or economic conditions, including inflation), loss of cost savings or dilution of savings due to changes in component pricing or charges incurred due to inventory holding periods if parts ordering does not correctly anticipate product demand or if the financial health of either contract manufacturers or suppliers deteriorates

•Lower than expected benefits from value engineering

•Increased price competition, including competitors from Asia, especially from China

•Changes in distribution channels

•Increased warranty or royalty costs

•Increased amortization of purchased intangible assets, especially from acquisitions

•How well we execute on our strategy and operating plans

Changes in service gross margin may result from various factors such as changes in the mix between technical support services and advanced services, as well as the timing of technical support service contract initiations and renewals, the addition of personnel and other related costs, and other resources to support higher levels of service business in future periods.

Sales to the service provider and cloud market are especially volatile, and weakness in orders from this industry may harm our operating results and financial condition.

Sales to the service provider and cloud market have been characterized by large and sporadic purchases, especially relating to our router sales and sales of certain other Networking and Collaboration products, in addition to longer sales cycles. ~~Service~~Although service provider and cloud product orders ~~significantly~~increased during fiscal 2025, service provider and cloud market product orders decreased ~~during~~in fiscal 2024, and at various times in the past we have experienced ~~similar~~significant ~~declines~~weakness in ~~certain~~product ~~prior~~orders ~~periods~~from the service provider and cloud market. Product orders from the service provider and cloud market could ~~continue~~decline toin ~~decline~~the future and, as has been the case in the past, such weakness could persist over extended periods of time given fluctuating market conditions. Products in the service provider and cloud market could also face a high degree of customer concentration, with bespoke product designs and features that would be difficult to sell to alternate customers should the primary customer reduce its product orders with Cisco. Sales activity in this industry depends upon the stage of completion of expanding network infrastructures; the availability of funding; and the extent to which service provider and cloud customers are affected by regulatory, economic, and business conditions in the country of operations. Weakness in orders from this industry, including as a result of any slowdown in capital expenditures by service providers (which may be more prevalent during a global economic downturn, or periods of economic, political or regulatory uncertainty), could materially harm our business, operating results, and financial condition. Such slowdowns may continue or recur in future periods. Orders from this industry could decline for many reasons other than the competitiveness of our products and services within their respective markets. For example, in the past, many of our service provider and cloud customers have been negatively impacted by slowdowns in the general economy, by overcapacity, by changes in the service provider and cloud market, by regulatory developments, and by constraints on capital availability, resulting in business failures and substantial reductions in spending and expansion plans. These conditions have negatively impacted our business and operating results in the past, and could materially harm our business and operating

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funding; and the extent to which service provider and cloud customers are affected by regulatory, economic, and business conditions in the country of operations. Weakness in orders from this industry, including as a result of any slowdown in capital expenditures by service providers (which may be more prevalent during a global economic downturn, or periods of economic, political or regulatory uncertainty), could materially harm our business, operating results, ~~and financial condition. Such slowdowns may continue or recur~~ in future periods. Orders from this industry could decline for many reasons other than the competitiveness of our products and services within their respective markets. For example, in the past, many of our service provider and cloud customers have been negatively impacted by slowdowns in the general economy, by overcapacity, by changes in the service provider and cloud market, by regulatory developments, and by constraints on capital availability, resulting in business failures and substantial reductions in spending and expansion plans. These conditions have negatively impacted our business and operating results in the past, and could materially harm our business and operating results in any future period. Finally, service provider and cloud customers typically have longer implementation cycles; require a broader range of services, including design services; demand that vendors take on a larger share of risks; often require acceptance provisions, which can lead to a delay in revenue recognition; and expect financing from vendors. All these factors can add further risk to business conducted with service providers.

Disruption of or changes in our distribution model could harm our sales and margins.

If we fail to manage distribution of our products and services properly, or if our distributors’ financial condition or operations weaken, our revenue and gross margins could be negatively impacted. A substantial portion of our products and services is sold through our channel partners, and the remainder is sold through direct sales. Our channel partners include systems integrators, service providers, other third-party resellers, and distributors. Systems integrators and service providers typically sell directly to end users and often provide system installation, technical support, professional services, and other support services in addition to network equipment sales. Systems integrators also typically integrate our products into an overall solution, and a number of service providers are also systems integrators. Distributors stock inventory and typically sell to systems integrators, service providers, and other third-party resellers. We refer to sales through distributors as our two-tier system of sales to the end ~~customer~~user. If sales through indirect channels increase, this may lead to greater difficulty in forecasting the mix of our products and, to a degree, the timing of orders from our customers.

Historically, we have seen fluctuations in our gross margins based on changes in the balance of our distribution channels. There can be no assurance that changes in the balance of our distribution model in future periods would not have an adverse effect on our gross margins and profitability. Some factors could result in disruption of or changes in our distribution model, which could harm our sales and margins, including the following: competition with some of our channel partners, including through our direct sales, which may lead these channel partners to use other suppliers that do not directly sell their own products or otherwise compete with them; some of our channel partners may demand that we absorb a greater share of the risks that their customers may ask them to bear; some of our channel partners may have insufficient financial resources and may not be able to withstand changes and challenges in business conditions; and revenue from indirect sales could suffer if our distributors’ financial condition or operations weaken. In addition, we depend on our channel partners globally to comply with applicable regulatory requirements. To the extent that they fail to do so, that could materially harm our business, operating results, and financial condition. Further, sales of our products outside of agreed territories can result in disruption to our distribution channels.

The markets in which we compete are intensely competitive, which could negatively impact our achievement of revenue growth.

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. These market factors represent a competitive threat to us. We compete with numerous vendors in each product category. The overall number of our competitors providing niche product solutions may increase. Also, the identity and composition of competitors may change as we increase our activity in newer product areas, and in key priority areas. For example, as products related to network programmability, such as software defined networking (SDN) products, have become more prevalent, we have faced increased competition from companies that develop networking products based on commoditized hardware, referred to as “white box” hardware, to the extent customers decide to purchase those product offerings instead of ours. In addition, the growth in demand for technology delivered as a service enables new competitors to enter the market. As we continue to expand globally, we may see new competition in different geographic regions. In particular, we have experienced price-focused competition from competitors in Asia, especially from China, and we anticipate this will continue. For information regarding our competitors, see the section entitled “Competition” contained in “Item 1. Business” of this report.

Some of our competitors compete across many of our product lines, while others are primarily focused in a specific product area. Barriers to entry are relatively low, and new ventures to create products that do or could compete with our products are regularly formed. In addition, some of our competitors may have greater resources, including technical and engineering resources, than we do. As we expand into new markets, we will face competition not only from our existing competitors but also from other competitors, including existing companies with strong technological, marketing, and sales positions in those markets. We also sometimes face competition from resellers and distributors of our products. Companies with which we have strategic alliances in some areas may be competitors in other areas, and this trend may increase. For example, the enterprise data center is undergoing a fundamental transformation arising from the convergence of technologies, including computing, networking, storage, and software, that previously were segregated. Due to several factors, including the availability of highly scalable and general purpose microprocessors, application specific integrated circuits offering advanced services, standards based protocols, cloud computing and virtualization, the convergence of technologies within the enterprise data center is spanning multiple, previously independent, technology segments. Also, some of our current and potential competitors for enterprise data center business have made acquisitions, or announced new strategic alliances, designed to position them to provide end-to-end technology solutions for the enterprise data center. As a result of all of these developments, we face greater

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~~also from other competitors, including existing companies with strong technological, marketing, and sales positions in those markets. We also sometimes face~~ competition ~~from resellers and distributors of our products. Companies with which we have strategic alliances~~ in ~~some areas may be competitors in other areas, and this trend may increase. For example,~~ the enterprise data center is undergoing a fundamental transformation arising from the convergence of technologies, including computing, networking, storage, and software, that previously were segregated. Due to several factors, including the availability of highly scalable and general purpose microprocessors, ASICs offering advanced services, standards based protocols, cloud computing and virtualization, the convergence of technologies within the enterprise data center is spanning multiple, previously independent, technology segments. Also, some of our current and potential competitors for enterprise data center business have made acquisitions, or announced new strategic alliances, designed to position them to provide end-to-end technology solutions for the enterprise data center. As a result of all of these developments, we face greater competition in the development and sale of enterprise data center technologies, including competition from entities that are among our long-term strategic alliance partners. Companies that are strategic alliance partners in some areas of our business may acquire or form alliances with our competitors, thereby reducing their business with us.

We also face competition from customers to which we license or supply technology and suppliers from which we transfer technology. The inherent nature of networking requires interoperability. As such, we must cooperate and at the same time compete with many companies. Any inability to effectively manage these complicated relationships with customers, suppliers, and strategic alliance partners could materially harm our business, operating results, and financial condition and accordingly affect our chances of success.

If we do not successfully manage our strategic alliances, we may not realize the expected benefits from such alliances, and we may experience increased competition or delays in product development.

We have several strategic alliances with large and complex organizations and other companies with which we work to offer complementary products and services. These arrangements are generally limited to specific projects, the goal of which is generally to facilitate product compatibility and adoption of industry standards. There can be no assurance we will realize the expected benefits from these strategic alliances or from joint ventures. If successful, these relationships may be mutually beneficial and result in industry growth. However, alliances carry an element of risk because, in most cases, we must compete in some business areas with a company with which we have a strategic alliance and, at the same time, cooperate with that company in other business areas. Also, if these companies fail to perform or if these relationships fail to materialize as expected, we could suffer delays in product development or other operational difficulties. Joint ventures can be difficult to manage, given the potentially different interests of joint venture partners.

Inventory management relating to our sales to our two-tier distribution channel is complex, and excess inventory may harm our gross margins.

We must manage inventory relating to sales to our distributors effectively, because inventory held by them could affect our results of operations. Our distributors may increase orders during periods of product shortages, cancel orders if their inventory is too high, or delay orders in anticipation of new products. They also may adjust their orders in response to the supply of our products and the products of our competitors that are available to them, and in response to seasonal fluctuations in end-user demand. Our distributors are generally given business terms that allow them to return a portion of inventory, receive credits for changes in selling price, and participate in various cooperative marketing programs. Inventory management remains an area of focus as we balance the need to maintain strategic inventory levels to ensure competitive lead times against the risk of inventory obsolescence because of rapidly changing technology and customer requirements. When facing component supply-related challenges, we have ~~increased~~in the past and may in the future increase our efforts in procuring components or enter additional purchase commitments with contract manufacturers and suppliers in order to meet customer expectations. If we ultimately determine that we have excess inventory, we may have to reduce our prices and write down inventory, which in turn could result in lower gross margins.

Issues related to the development and use of artificial intelligence (AI) could give rise to legal and/or regulatory action, damage our reputation or otherwise materially harm our business.

We currently incorporate AI technology in certain of our commercial offerings and in our business operations. Our research and development of AI technology remains ongoing. AI presents risks and challenges and may result in unintended consequences, including inadvertent disclosure or misuse of intellectual property, confidential, personal, and/or competitive information, that could affect our reputation, our further AI development or our and our customers’ adoption and use of this technology. AI algorithms and training methodologies may be flawed. Additionally, AI technologies are complex and rapidly evolving, and we face significant competition in the market and from other companies regarding such technologies. Leveraging AI capabilities to potentially improve our internal functions and operations also presents risks, costs, and challenges. While we aim to develop and use AI responsibly and attempt to identify and mitigate ethical and legal issues and risks presented by its use, we may be unsuccessful in identifying or resolving issues and risks before they arise. The AI-related legal and regulatory landscape is constantly evolving and therefore remains uncertain and may be inconsistent from jurisdiction to jurisdiction. Our obligations to comply with the evolving legal and regulatory landscape could entail significant costs or limit our ability to incorporate certain AI capabilities into our offerings. AI-related issues, deficiencies and/or failures could also give rise to legal and/or regulatory action (including with respect to proposed legislation regulating AI in jurisdictions such as the European Union and others, and as a result of new and different applications of existing and new data protection, privacy, intellectual property, and other laws); damage our reputation; or otherwise materially harm our business.

Our financial performance may be negatively impacted by demand for, and costs to deliver, our software subscription offerings; and interruptions or performance problems associated with these offerings, including interruptions or performance problems caused by third-party providers on which we rely, may negatively impact our business and financial results.

In recent years, we have shifted our business model to deliver more recurring software and subscription offerings. This shift in our business model was accelerated by recent acquisitions, including our acquisition of Splunk in the third quarter of fiscal 2024. Market acceptance of our software subscription offerings, which includes our as-a-service solutions, can be affected by a variety of factors, including: security, reliability, performance, terms of service, support terms, customer preference, community engagement, concerns regarding data privacy or data protection, and the enactment of laws or regulations in jurisdictions in which we operate. To generate sales 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. Any failure to do so could result in decreased revenue, reduced sales, increased churn or otherwise negatively impact our results of operations and financial condition. Further, growth of our software subscription offerings depends, in part, on the ability of customers to use and access these solutions. We have experienced, and may in the future experience, interruptions in service, storage failures, and other performance-related problems due to a variety of factors, such as infrastructure and software

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operations and financial condition. Further, growth of our software subscription offerings depends, in part, on the ability of customers to use and access these solutions. We have experienced, and may in the future experience, interruptions in service, storage failures, and other performance-related problems due to a variety of factors, such as infrastructure and software changes, human or software errors, capacity constraints, unauthorized access, denial of service or other cyber attacks. In some instances, we may not be able to timely identify the cause or causes of these performance problems and, even if timely identified, we may be unable to timely remediate the underlying cause. It may become increasingly difficult to maintain and improve our performance for our software subscription offerings, especially during peak usage times and as our solutions become more complex and our user traffic increases. Performance-related issues of our software subscription offerings may result in increased operational costs, delays in new feature rollouts, customer loss, reputational damage, and legal or regulatory liability, including liability under customer contracts or for losses suffered by our customers.

To deliver our software subscription offerings, we have incurred and will continue to incur substantial costs to implement and maintain this business. We make significant investments to increase or maintain capacity and to develop and implement new technologies in our infrastructure and operations, including those provided by third-party providers on which we rely. We may not be successful in developing or implementing these technologies. To the extent that we do not effectively scale our operations to meet the needs of our customers and to maintain performance as our customers expand their use of our solutions, we may not be able to grow this business as quickly as we anticipate, our customers may reduce or cancel use of our solutions, and we may be unable to compete as effectively and our business and results of operations may be harmed. Additionally, if our costs associated with our software subscription offerings were to significantly increase, our business, results of operations and financial condition may be negatively impacted. We are also subject to the risk of performance-related problems or interruption of the services provided by third-party providers on which we rely, which could cause revenues for software subscription offerings to decline, damage to our reputation, legal liability exposure, and/or increased expenses, all of which could negatively impact our business, results of operations, and financial condition.

We depend upon the development of new products and services, and enhancements to existing products and services, and if we fail to predict and respond to emerging technological trends and customers’ changing needs, our operating results and market share may suffer.

The markets for our products and services are characterized by rapidly changing technology, evolving industry standards, new product and service introductions, and evolving methods of building and operating networks. Our operating results depend on our ability to develop and introduce new products and services into existing and emerging markets and to reduce the production costs of existing products. If customers do not purchase and/or renew our offerings our business could be harmed.

The process of developing new technology, including more programmable, flexible and virtual networks, and technology related to other market transitions— such as ~~artificial intelligence~~AI, security, observability, and cloud— is complex and uncertain, and if we fail to accurately predict customers’ changing needs and emerging technological trends our business could be harmed. We must commit significant resources, including the investments we have been making in our strategic priorities to developing new products and services before knowing whether our investments will result in products and services the market will accept. In particular, if our model of the evolution of networking, security, or observability does not emerge as we believe it will, or these industries do not evolve as we believe they will, or if our strategy for addressing this evolution is not successful, many of our strategic initiatives and investments may be of no or limited value. For example, if we do not timely introduce products related to these markets ~~in a timely fashion~~, or if ~~product~~such ~~offerings~~products inor ~~this~~offerings ~~market~~ that ultimately succeed in these markets are based on technology, or an approach to technology, that differs from ours, our business could be harmed. Similarly, our business could be harmed if we fail to develop, or fail to develop in a timely fashion, offerings to address other transitions, or if the offerings addressing these other transitions that ultimately succeed are based on technology, or an approach to technology, different from ours. In addition, our business could be negatively impacted in periods surrounding our new product introductions if customers delay purchasing decisions to qualify or otherwise evaluate the new product offerings. We have also been seeking to meet the evolving needs of customers which include offering our products and solutions in the manner in which customers wish to consume them. As a part of these efforts, we continue to make changes to how we are organized and how we build and deliver our technology, including changes in our business models with customers. If our strategy for addressing our customer needs, or the architectures and solutions we develop do not meet those needs, or the changes we are making in how we are organized and how we build and deliver or technology is incorrect or ineffective, our business could be harmed.

Furthermore, we may not execute successfully on our vision or strategy because of challenges with regard to product planning and timing, technical hurdles that we fail to overcome in a timely fashion, or a lack of appropriate resources. This could result in competitors, some of which may also be our strategic alliance partners, providing those solutions before we do and loss of market share, revenue, and earnings. In addition, the growth in demand for technology delivered as a service enables new competitors to enter the market. The success of new products and services depends on several factors, including proper new product and service definition, component costs, timely completion and introduction of these products and services, differentiation of new products and services from those of our competitors, and market acceptance of these products and services. There can be no assurance that we will successfully identify new product and services opportunities, develop and bring new products and services to market in a timely manner, or achieve market acceptance of our products and services or that products, services and technologies developed by others will not render our products, services or technologies obsolete or noncompetitive. The products and technologies in our other product categories and key priority areas may not prove to have the market success we anticipate, and we may not successfully identify and invest in other emerging or new products and services.

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services. There can be no assurance that we will successfully identify new product and services opportunities, develop and bring new products and services to market in a timely manner, or achieve market acceptance of our products and services or that products, services and technologies developed by others will not render our products, services or technologies obsolete or noncompetitive. The products and technologies in our other product categories and key priority areas may not prove to have the market success we anticipate, and we may not successfully identify and invest in other emerging or new products and services.

Changes in industry structure and market conditions could lead to charges related to discontinuances of certain of our products or businesses, asset impairments and workforce reductions or restructurings.

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. Any resource realignment, or decision to limit investment in or dispose of or otherwise exit businesses, may result in the recording of special charges, such as inventory and technology-related write-offs, workforce reduction or restructuring costs, charges relating to consolidation of excess facilities, or claims from third parties who were resellers or users of discontinued products. Our estimates with respect to the useful life or ultimate recoverability of our carrying basis of assets, including purchased intangible assets, could change as a result of such assessments and decisions. Although in certain instances our supply agreements allow us the option to cancel, reschedule, and adjust our requirements based on our business needs prior to firm orders being placed, our loss contingencies may include liabilities for contracts that we cannot cancel with contract manufacturers and suppliers. Further, our estimates relating to the liabilities for excess facilities are affected by changes in real estate market conditions. Additionally, we are required to perform goodwill impairment tests on an annual basis and between annual tests in certain circumstances, and future goodwill impairment tests may result in a charge to earnings. From time to time we initiate restructuring plans. Our business may not be more efficient or effective than prior to implementation of such plans. Our restructuring activities, including any related charges and the impact of the related headcount restructurings, could materially harm our business, operating results, and financial condition.

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 our operating results.

While we intend to focus on managing our costs and expenses, over the long term, we also intend to invest in personnel and other resources related to our engineering, sales, service and marketing functions as we realign and dedicate resources on key priority areas, such as AI, cloud, and cybersecurity. We also intend to focus on maintaining leadership in core networking and services. We are likely to recognize the costs associated with these investments earlier than some of the anticipated benefits, and the return on these investments may be lower, or may develop more slowly, than we expect. If we do not achieve the benefits anticipated from these investments (including if our selection of areas for investment does not play out as we expect), or if the achievement of these benefits is delayed, our operating results may be negatively impacted.

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

Our growth depends upon market growth, our ability to enhance our existing products, and our ability to introduce new products on a timely basis. We intend to continue to address the need to develop new products and enhance existing products through acquisitions of other companies, product lines, technologies, and personnel. Acquisitions involve numerous risks, including the following:

•Difficulties or delays in integrating the operations (including IT security), systems, technologies, products, and personnel of the acquired companies, particularly with companies that have large and widespread operations and/or complex products (such as Splunk)

•Diversion of management’s attention from normal daily operations of the business and the challenges of managing larger and more widespread operations resulting from acquisitions

•Potential difficulties in completing projects associated with in-process research and development intangibles

•Difficulties in entering markets in which we have no or limited direct prior experience and where competitors in such markets have stronger market positions

•Initial dependence on unfamiliar supply chains or relatively small supply partners

•Insufficient revenue to offset increased expenses associated with acquisitions

•The potential loss of key employees, customers, distributors, vendors and other business partners of the companies we acquire following and continuing after announcement of acquisition plans

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Acquisitions have in the past and may in the future also cause us to:

•Issue common stock that would dilute our current stockholders’ percentage ownership

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

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

•Assume liabilities

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•Record goodwill and intangible assets that are subject to impairment testing on a regular basis and potential periodic impairment charges

•Incur amortization expenses related to certain intangible assets

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

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

•Become subject to intellectual property or other litigation

Mergers and acquisitions of high-technology companies are inherently risky and subject to many factors outside of our control, and no assurance can be given that our previous or future acquisitions will be successful and will not materially harm our business, operating results, or financial condition. Failure to manage and successfully integrate acquisitions could materially harm our business and operating results. Prior acquisitions have resulted in a wide range of outcomes, from successful introduction of new products and technologies to a failure to do so. Even when an acquired company has already developed and marketed products, there can be no assurance that product enhancements will be made in a timely fashion or that pre-acquisition due diligence will have identified all possible issues that might arise with respect to such products. In addition, our effective tax rate for future periods is uncertain and could be impacted by mergers and acquisitions. Risks described with respect to new product development also apply to acquisitions.

Entrance into new or developing markets exposes us to additional competition and will likely increase demands on our service and support operations.

As we focus on new market opportunities and key priority areas, such as AI, cloud, and cybersecurity, we compete with companies of all sizes. Several of our competitors may have greater resources, including technical and engineering resources, than we do. Additionally, as customers complete infrastructure deployments, they may require greater levels of service, support, and financing than we have provided in the past, especially in emerging countries. Demand for these types of service, support, or financing contracts may increase in the future. There can be no assurance that we can provide products, service, support, and financing to effectively compete for these market opportunities. Further, entry into other markets has subjected and will subject us to additional risks, particularly to those markets, including the effects of general market conditions and reduced consumer confidence. For example, as we add direct selling capabilities globally to meet changing customer demands, we will face increased legal and regulatory requirements.

If we do not successfully manage our strategic alliances, we may not realize the expected benefits from such alliances, and we may experience increased competition or delays in product development.

Product quality problems could lead to reduced revenue, gross margins, and net income.

We produce highly complex products that incorporate leading-edge technology, including both hardware and software. Software typically contains bugs or other quality or reliability problems that can unexpectedly interfere with its intended operations or the intended operation of the systems in which our software is installed. There can be no assurance that our pre-shipment or pre-release testing programs will be adequate to detect all defects, either ones in individual products or ones that could affect numerous shipments, which might interfere with customer satisfaction, reduce sales opportunities, or affect gross margins. From time to time, we have had to replace certain components and provide remediation in response to the discovery of defects or bugs in products that we had shipped. There can be no assurance that such remediation, depending on the product involved, would not have a material impact. An inability to cure a product defect or bug could result in the failure of a product line, temporary or permanent withdrawal from a product or market, damage to our reputation, inventory costs, product reengineering expenses or legal liability, any of which could materially harm our revenue, margins, and net income.

Due to the global nature of our operations, political or economic changes or other factors in a specific country or region could harm our operating results and financial condition.

We conduct significant sales and customer support operations in countries around the world. As such, our growth depends in part on our increasing sales into emerging countries. We also depend on non-U.S. operations of our contract manufacturers, component suppliers and distribution partners. Our business in emerging countries in the aggregate experienced a decline in orders in certain prior periods. We continue to assess the sustainability of any improvements in our business in these countries and there can be no assurance that our investments in these countries will be successful. Our future results could be negatively impacted by a variety of political, economic or other factors relating to our operations inside and outside the United States, any or all of which could materially harm our operating results and financial condition, including the following: impacts from

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component suppliers and distribution partners. Our business in emerging countries in the aggregate experienced a decline in orders in certain prior periods. We continue to assess the sustainability of any improvements in our business in these countries and there can be no assurance that our investments in these countries will be successful. Our future results could be negatively impacted by a variety of political, economic or other factors relating to our operations inside and outside the United States, any or all of which could materially harm our operating results and financial condition, including the following: impacts from global central bank monetary policy; issues related to the political relationship between the United States and other countries that can affect regulatory matters, affect the willingness of customers in those countries to purchase products from companies headquartered in the United States or affect our ability to procure components if a government body were to deny us access to those components; government-related disruptions or shutdowns; the challenging and inconsistent global macroeconomic environment; foreign currency exchange rates; geopolitical tensions (including China-Taiwan relations); political or social unrest; economic instability or weakness or natural disasters in a specific country or region, including economic challenges in China and global economic ramifications of Chinese economic difficulties; environmental protection regulations (including new laws and regulations related to climate change); trade protection measures, such as tariffs; other legal and regulatory requirements, some of which may affect our ability to import our products to, export our products from, or sell our products in various countries or affect our ability to procure components; political considerations that affect service provider and government spending patterns; health or similar issues, including pandemics or epidemics; difficulties in staffing and managing international operations; and adverse tax consequences, including imposition of withholding or other taxes on our global operations.

Issues related to the development and use of artificial intelligence (AI) could give rise to legal and/or regulatory action, damage our reputation or otherwise materially harm of our business.

We currently incorporate AI technology in certain of our products and services and in our business operations. Our research and development of such technology remains ongoing. AI presents risks and challenges and may result in unintended consequences that could affect its further development or our and our customers’ adoption and use of this technology. AI algorithms and training methodologies may be flawed. Additionally, AI technologies are complex and rapidly evolving, and we face significant competition in the market and from other companies regarding such technologies. Leveraging AI capabilities to potentially improve our internal functions and operations also presents further risks, costs, and challenges. While we aim to develop and use AI responsibly and attempt to identify and mitigate ethical and legal issues presented by its use, we may be unsuccessful in identifying or resolving issues before they arise. The AI-related legal and regulatory landscape remains uncertain and may be inconsistent from jurisdiction to jurisdiction. Our obligations to comply with the evolving legal and regulatory landscape could entail significant costs or limit our ability to incorporate certain AI capabilities into our offerings. AI-related issues, deficiencies and/or failures could also give rise to legal and/or regulatory action, including with respect to proposed legislation regulating AI in jurisdictions such as the European Union and others, and as a result of new applications of existing data protection, privacy, intellectual property, and other laws; damage our reputation; or otherwise materially harm our business.

We are exposed to the credit risk of some of our customers and to credit exposures in weakened markets, which could result in material losses.

Most of our sales are on an open credit basis, with typical payment terms of 30 days in the United States, and, because of local customs or conditions, longer in some markets outside the United States. Beyond our open credit arrangements, we have also experienced demands for customer financing and facilitation of leasing arrangements. Our loan financing arrangements may include not only financing the acquisition of our products and services but also providing additional funds for other costs associated with network installation and integration of our products and services. Our exposure to the credit risks relating to our financing activities may increase if our customers are negatively impacted by a global economic downturn or periods of economic uncertainty. There can be no assurance that programs we have in place to monitor and mitigate credit risks will be effective. In the past, there have been significant bankruptcies among customers both on open credit and with loan or lease financing arrangements, particularly among ~~internet~~Internet businesses and service providers, causing us to incur economic or financial losses. There can be no assurance that additional losses will not be incurred. Although these losses have not been material to date, future losses, if incurred, could materially harm our business, operating results, or financial condition. Additionally, to the degree that turmoil in the credit markets makes it more difficult for some customers to obtain financing, those customers’ ability to pay could be adversely impacted, which in turn could materially harm our business, operating results, and financial condition.

We are exposed to fluctuations in the market values of our portfolio investments and in interest rates; impairment of our investments could harm our earnings.

We maintain an investment portfolio of various holdings, types, and maturities. Our portfolio includes available-for-sale debt investments and equity investments, the values of which are subject to market price volatility. If such investments suffer market price declines, as we experienced with some of our investments in the past, we may recognize in earnings the decline in the fair value of our investments below their cost basis. Our privately held investments are subject to risk of loss of investment capital. These investments are inherently risky because the markets for the technologies or products they have under development are typically in the early stages and may never materialize. We could lose our entire investment in these companies. For information regarding the market risks associated with the fair value of portfolio investments and interest rates, refer to the section titled “Quantitative and Qualitative Disclosures About Market Risk.”

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We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows.

Because a significant portion of our business is conducted outside the United States, we face exposure to adverse movements in foreign currency exchange rates, including emerging market currencies which can have extreme currency volatility. An increase in the value of the dollar could increase the real cost to our customers of our products in those markets outside the United States where we sell in dollars and a weakened dollar could increase the cost of local operating expenses and procurement of raw materials to the extent that we must purchase components in foreign currencies. These exposures may change over time as business practices evolve, and they could materially harm our financial results and cash flows.

Failure to retain and recruit key personnel would harm our ability to meet key objectives.

Our success has always depended in large part on our ability to attract and retain highly skilled technical, managerial, sales, and marketing personnel. Competition for such personnel is intense, especially in the Silicon Valley area of Northern California and other major United States locations. Stock incentive plans are designed to reward employees for their long-term contributions and provide incentives for them to remain with us. Volatility or lack of positive performance in our stock price or equity incentive awards, or changes to our overall compensation program, including our stock incentive program, resulting from the management of share dilution and share-based compensation expense or otherwise, may also negatively impact our ability to retain key employees. As a result of one or more of these factors, we may increase our hiring in geographic areas outside the United States, which could subject us to additional geopolitical and exchange rate risk. The loss of services of any of our key personnel; the inability to retain and attract qualified personnel in the future; or delays in hiring required personnel, particularly in engineering and sales fields, could make it difficult to meet key objectives, such as timely and effective product introductions. In addition, companies in our industry whose employees accept positions with competitors frequently claim that competitors have engaged in improper hiring practices. We have received these claims in the past and may receive additional claims in the future.

~~Adverse resolution of litigation or governmental investigations may harm our operating results or financial condition.~~20

WeTable ~~are a party to lawsuits in the normal course~~ of our business. Any litigation can be costly, lengthy, and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict. An unfavorable resolution of lawsuits or governmental investigations could materially harm our business, operating results, or financial condition. For additional information regarding certain of the matters in which we are involved, see Note 14 to the Consolidated Financial Statements, subsection (f) “Legal Proceedings.”Contents

other major United States locations. Stock incentive plans are designed to reward employees for their long-term contributions and provide incentives for them to remain with us. Volatility or lack of positive performance in our stock price or equity incentive awards, or changes to our overall compensation program, including our stock incentive program, resulting from the management of share dilution and share-based compensation expense or otherwise, may also negatively impact our ability to retain key employees. As a result of one or more of these factors, we may increase our hiring in geographic areas outside the United States, which could subject us to additional geopolitical and exchange rate risk. The loss of services of any of our key personnel; the inability to retain and attract qualified personnel in the future; or delays in hiring required personnel, particularly in engineering and sales fields, could make it difficult to meet key objectives, such as timely and effective product introductions. In addition, companies in our industry whose employees accept positions with competitors frequently claim that competitors have engaged in improper hiring practices. We have received these claims in the past and may receive additional claims in the future.

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

We are a party to a variety of claims, litigation and governmental investigations in the normal course of our business. Claims, litigation and governmental investigations may arise from a wide variety of business practices and initiatives, including major new product releases, significant business transactions, warranty or product claims, employment practices, and regulation. Any claim, litigation or governmental investigation can be costly, lengthy, and disruptive to normal business operations. For example, on August 26, 2025, we settled a legal dispute with a supplier relating to purchase obligations arising under long-term supply arrangements, which resulted in a charge to product cost of sales, which is described in Note 21 to the Consolidated Financial Statements. Moreover, the results of complex legal proceedings are difficult to predict, and management's view of these matters may change in the future. An unfavorable resolution of claims, litigation or governmental investigations could materially harm our business, operating results, or financial condition. For additional information regarding certain of the matters in which we are involved, see Note 14 to the Consolidated Financial Statements, subsection (f) “Legal Proceedings.”

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

As is the case with leading products around the world, our products are subject to efforts by third parties to produce counterfeit versions of our products. While we work diligently with law enforcement authorities in various countries to block the manufacture of counterfeit goods and to interdict their sale, and to detect counterfeit products in customer networks, and have succeeded in prosecuting counterfeiters and their distributors, resulting in fines, imprisonment and restitution to us, there can be no guarantee that such efforts will succeed. While counterfeiters often aim their sales at customers who might not have otherwise purchased our products due to lack of verifiability of origin and service, such counterfeit sales, to the extent they replace otherwise legitimate sales, could negatively impact our operating results.

Changes in our provision for income taxes or adverse outcomes resulting from examination of our income tax returns could negatively impact our results.

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 have higher tax rates; by changes in the valuation of our deferred tax assets and liabilities; by changes to foreign-derived intangible income, global intangible low-tax income and base erosion and anti-abuse tax, research and development capitalization and amortization, and corporate alternative minimum tax laws, regulations, or interpretations thereof; by expiration of or lapses in tax incentives; by transfer pricing adjustments, including the effect of acquisitions on our legal structure; by tax effects of nondeductible compensation; by tax costs related to intercompany realignments; by changes in accounting principles; or by changes in tax laws and regulations, treaties, or interpretations thereof, including changes to the taxation of earnings of our foreign subsidiaries, the deductibility of expenses attributable to foreign income, and the foreign tax credit rules. Significant judgment is required to determine the recognition and measurement attribute prescribed in the accounting guidance for uncertainty in income taxes. The Organisation for Economic Co-operation and Development (OECD), an international association comprised of 38 countries, including the United States, has made changes, including a Pillar Two framework that imposes a minimum tax rate of 15% in each taxing jurisdiction, and is contemplating additional changes to numerous long-standing tax principles. There can be no assurance that these changes and any contemplated changes if finalized, once adopted by countries, will not have an adverse impact on our provision for income taxes. Further, as a result of certain of our ongoing employment and capital investment actions and commitments, our income in certain countries was subject to reduced tax rates. Our failure to meet these commitments could adversely impact our provision for income taxes. In addition, we are subject to the continuous examination of our income tax returns by the Internal Revenue Service and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. There can be no assurance that the outcomes from these continuous examinations will not have an adverse effect on our operating results and financial condition.

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commitments, our income in certain countries was subject to reduced tax rates. Our failure to meet these commitments could adversely impact our provision for income taxes. In addition, we are subject to the continuous examination of our income tax returns by the Internal Revenue Service (IRS) and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. There can be no assurance that the outcomes from these continuous examinations will not have an adverse effect on our operating results and financial condition.

Our business and operations are especially subject to the risks of earthquakes, floods, and other natural catastrophic events (including as a result of global climate change).

Our corporate headquarters, including certain of our research and development operations are located in the Silicon Valley area of Northern California, a region known for seismic activity. Additionally, a certain number of our facilities are located near rivers that have experienced flooding in the past. Also certain of our customers, suppliers and logistics centers are located in regions that have been or may be affected by earthquake, tsunami and flooding or other weather-related activity which in the past has disrupted, and in the future could disrupt, the flow of supply chain components and delivery of products. In addition, global climate change may result in significant natural disasters occurring more frequently and/or with greater intensity, such as drought, wildfires, storms, sea-level rise, changing precipitation, and flooding. We have not to date experienced a material event as a result of these kinds of natural disasters; however, the occurrence of any such event in the future could materially harm our business, operating results, and financial condition.

Terrorism, war, and other events may harm our business, operating results and financial condition.

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 on-going Russia-Ukraine war and ~~the~~Middle ~~Israel-Hamas~~East ~~war~~conflicts and wars), and other events (such as economic sanctions, trade restrictions and reactions of the governments, markets and the general public, including the sanctions and restrictions related to the on-going Russia-Ukraine war) may cause further disruptions to the economies of the United States and other countries and create further uncertainties or could otherwise negatively impact our business, operating results, and financial condition. Likewise, events such as loss of infrastructure and utilities services such as energy, transportation, or telecommunications could have similar negative impacts. To the extent that such disruptions or uncertainties result in delays or cancellations of customer orders or the manufacture or shipment of our products, our business, operating results, and financial condition could be materially harmed.

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

As of the end of fiscal ~~2024~~2025, we have senior unsecured notes outstanding in an aggregate principal amount of $2024.38 billion that mature at specific dates from calendar year ~~2025~~2026 through 2064. We have also established a commercial paper program under which we may issue short-term, unsecured commercial paper notes on a private placement basis up to a maximum aggregate amount outstanding at any time of $15.0 billion., Weand we had $103.95 billion in commercial paper notes outstanding under this program as of July 2726, ~~2024~~2025. There can be no assurance that our incurrence of this debt or any future debt, including any additional debt to refinance maturing debt, will be a better means of providing liquidity to us than would our use of our existing cash resources. Further, we cannot be assured that our maintenance of this indebtedness or incurrence of future indebtedness will not negatively impact our operating results or financial condition. In addition, changes by any rating agency to our credit rating can negatively impact the value and liquidity of both our debt and equity securities, as well as the terms upon which we may borrow under our commercial paper program or future debt issuances.

Our reputation and/or business could be negatively impacted by ~~ESG~~ matters relating to environmental, social, and governance and/or our reporting of such matters.

~~There~~We isare ansubject ~~increasing~~to ~~focus~~evolving ~~from~~and ~~regulators~~sometimes conflicting, ~~certain investors~~laws, ~~and other stakeholders concerning environmental~~regulations, ~~social~~policies, and ~~governance~~investor ~~(“ESG”) matters, both in the United States~~ and ~~internationally.~~other Westakeholder ~~communicate~~expectations ~~certain~~concerning ~~ESG-related initiatives~~environmental, ~~goals~~social, and~~/or~~ ~~commitments~~governance ~~regarding environmental~~ matters, ~~diversity~~such ~~and~~as ~~inclusion,~~environmental ~~responsible~~sustainability ~~sourcing~~ and ~~social~~climate ~~investments~~change, ~~and~~both ~~other matters,~~ in ~~our annual Purpose Report, on our website, in our filings with~~ the ~~SEC,~~United States and ~~elsewhere~~internationally. ~~These~~Any initiatives, goals, or commitments we disclose in this regard involve risks and uncertainties and could be difficult to achieve and costly to implement. For example, in September 2021, we announced our goal to achieve net zero across all scopes of greenhouse gas emissions by 2040, the achievement of which relies, in large part, on the accuracy of our estimates and assumptions around the enhanced power efficiency of our products, the adoption of renewable energy at customer and supplier sites, and the adoption of certain of our products and services by our customers. We could fail to achieve, or be perceived to fail to achieve, our 2040 net zero goal or other ~~ESG-related~~ initiatives, goals, or commitments. In addition, wein ~~could~~a beclimate ~~criticized~~where ~~for~~there ~~the~~are ~~timing,~~changing ~~scope~~and orincreasingly ~~nature~~divergent ofviews on where our focus should be on these matters, our initiatives, goals, or commitments, or ~~for~~ any revisions to them~~. To the extent that our required and voluntary disclosures about ESG matters increase~~, weare ~~could~~often be criticized ~~for~~and the accuracy, adequacy, or completeness of such disclosures challenged. Our actual or perceived failure to achieve our ~~ESG-related~~ initiatives, goals, or commitments, or otherwise successfully manage investor or other stakeholder expectations on these matters, could negatively impact our reputation or otherwise ~~materially~~ harm our business.

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Risks Related to Intellectual Property

Our proprietary rights may prove difficult to enforce.

We generally rely on patents, copyrights, trademarks, and trade secret laws to establish and maintain proprietary rights in our technology and products. Although we have been issued numerous patents and other patent applications are currently pending, there can be no assurance that any of these patents or other proprietary rights will not be challenged, invalidated, or circumvented or that our rights will, in fact, provide competitive advantages to us. Furthermore, many key aspects of networking technology are governed by industry-wide standards, which are usable by all market entrants. In addition, there can be no assurance that patents will be issued from pending applications or that claims allowed on any patents will be sufficiently broad to protect our technology. In addition, the laws of some foreign countries may not protect our proprietary rights to the same extent as do the laws of the United States. The outcome of any actions taken in these foreign countries may be different than if such actions were determined under the laws of the United States. Although we are not dependent on any individual patents or group of patents for particular segments of the business for which we compete, if we are unable to protect our proprietary rights to the totality of the features (including aspects of products protected other than by patent rights) in a market, we may find ourselves at a competitive disadvantage to others who need not incur the substantial expense, time, and effort required to create innovative products that have enabled us to be successful.

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circumvented or that our rights will, in fact, provide competitive advantages to us. Furthermore, many key aspects of our technology are governed by industry-wide standards, which are usable by all market entrants. In addition, there can be no assurance that patents will be issued from pending applications or that claims allowed on any patents will be sufficiently broad to protect our technology. Additionally, some U.S. governmental entities and courts have expressed a position that U.S. copyright and patent protection should be limited to protecting inventions and works of authorship created by humans. Therefore, U.S. copyright or patent protection for inventions or works developed in part or wholly by generative AI tools may be limited, or not available at all. In addition, the laws of some foreign countries may not protect our proprietary rights to the same extent as do the laws of the United States. The outcome of any actions taken in these foreign countries may be different than if such actions were determined under the laws of the United States. Although we are not dependent on any individual patents or group of patents for particular segments of the business in which we compete, if we are unable to protect our proprietary rights to the totality of the features (including aspects of products protected other than by patent rights) in a market, we may find ourselves at a competitive disadvantage to others who need not incur the substantial expense, time, and effort required to create innovative products that have enabled us to be successful.

We may be found to infringe on intellectual property rights of others.

Third parties, including customers, have in the past and may in the future assert claims or initiate litigation related to exclusive patent, copyright, trademark, and other intellectual property rights to technologies and related standards that are relevant to us. These assertions have increased over time as a result of our growth and the general increase in the pace of patent claims assertions, particularly in the United States. Because of the existence of a large number of patents in the ~~networking~~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 determine in advance whether a product or any of its components infringes or will infringe on the patent rights of others. The asserted claims and/or initiated litigation can include claims against us or our manufacturers, suppliers, or customers, alleging infringement of their proprietary rights with respect to our existing or future products or components of those products. Regardless of the merit of these claims, they can be time-consuming, result in costly litigation and diversion of technical and management personnel, or require us to develop a non-infringing technology or enter into license agreements. Where claims are made by customers, resistance even to unmeritorious claims could damage customer relationships. There can be no assurance that licenses will be available on acceptable terms and conditions, if at all, or that our indemnification by our suppliers will be adequate to cover our costs if a claim were brought directly against us or our customers. Furthermore, because of the potential for high court awards, including injunctive relief, that are not necessarily predictable, it is not unusual to find even arguably unmeritorious claims settled for significant amounts. If any infringement or other intellectual property claim made against us by any third party is successful, if we are required to indemnify a customer with respect to a claim against the customer, or if we fail to develop non-infringing technology or license the proprietary rights on commercially reasonable terms and conditions, our business, operating results, and financial condition could be materially harmed. For additional information regarding our indemnification obligations, see Note 14(e) to the Consolidated Financial Statements contained in this report. Our exposure to risks associated with the use of intellectual property may be increased as a result of acquisitions, as we have a lower level of visibility into the development process with respect to such technology or the care taken to safeguard against infringement risks. Further, in the past, third parties have made infringement and similar claims after we have acquired technology that had not been asserted prior to our acquisition.

We rely on the availability of third-party licenses.

Many of our ~~products~~commercial offerings are designed to include software or other intellectual property licensed from third parties. It may be necessary in the future to seek or renew licenses relating to various aspects of these products. There can be no assurance that the necessary licenses would be available on acceptable terms, if at all. The inability to obtain certain licenses or other rights or to obtain such licenses or rights on favorable terms, or the need to engage in litigation regarding these matters, could materially harm our business, operating results, and financial condition. Moreover, the inclusion in our ~~products~~commercial offerings of software or other intellectual property licensed from third parties on a nonexclusive basis could limit our ability to protect our proprietary rights in our products.

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Risks Related to Cybersecurity, Privacy, and Regulatory Requirements

Cyber attacks, data breaches or other incidents impacting our solutions and IT environment may disrupt our operations, harm our operating results and financial condition, and damage our reputation or otherwise materially harm our business; and cyber attacks, data breaches or other incidents on our customers’ or third-party providers’ networks, or in third-party products we use, could result in claims of liability against us, give rise to legal and/or regulatory action, damage our reputation or otherwise materially harm our business.

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 cloud-based services operated or enabled by us, or by third parties upon which we rely, on or through which our and third-party data are stored, processed, or can be accessed (collectively, our “IT environment”). We anticipate continuing to be increasingly subject to such attempts as cyber attacks become more sophisticated and difficult to predict and protect against. Despite our active implementation of security and other measures, our solutions and IT environment have been, and continue to be, vulnerable to cyber attacks, incidents, data breaches, malware, inadvertent error, disruptions, failures, physical security breaches, tampering or other theft or misuse, including by employees, contingent workers, and malicious actors. Additionally, nation-state actors or their agents have in the past successfully attacked our IT environment and have also exploited vulnerabilities in our solutions to carry out attacks, and we anticipate that these attacks and the exploitation of vulnerabilities in our solutions will continue and may intensify during periods of diplomatic or armed conflict. Further, a cyber attack or other incident could go undetected and persist in our environments for extended periods. Cyber-related events have caused, and in the future could result in, compromise to, the disruption of access to, or the operation of our solutions and IT environment or those of our customers or third-party providers upon which we rely, or result in confidential information stored on our systems or our customers’ or other third-party systems being improperly accessed, processed, disclosed now (or in the future), or be lost or stolen. Efforts to limit the ability of malicious actors to disrupt the operations of the Internet or undermine our security efforts are costly to implement and may not be successful. Breaches of security in our IT environment, our customers’ or third-party providers’ networks, or in third-party products we use, regardless of whether the 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 infrastructure or security tools that protect the integrity of our solutions and IT environment, could, in each case, result in claims of legal and/or regulatory action against us, damage our reputation or otherwise materially harm our business. The occurrence of a cyber attack, data breach or other incident could subject us to liability to our customers, data subjects, suppliers, business partners, employees, and others, give rise to legal and/or regulatory action, could damage our reputation or could otherwise negatively impact our business, any of which could materially harm our business, operating results, and financial condition.

Vulnerabilities and critical security defects, prioritization decisions regarding remedying vulnerabilities or security defects, failure of third-party providers to remedy vulnerabilities or security defects, or customers not deploying security updates in a timely manner or deciding not to upgrade our solutions could result in claims of liability against us, damage our reputation, or otherwise materially harm our business.23

The products and services (together, our “solutions”) we sell to customers, and the cloud-based services operated or enabled by us, or by third parties upon which we rely, inevitably contain vulnerabilities or security defects (despite our efforts to prevent and detect them through secure development lifecycle practices, testing, and other means), which have not been remedied or cannot be disclosed without compromising security. We also make prioritization decisions in determining which vulnerabilities or security defects to fix and the timing of these fixes. Even when we prioritize a vulnerability or security defect, in certain instances it has taken, and in the future could take, time for us to develop a remedy and the remedy may ultimately be insufficient to fully fix the issue. In addition, workarounds or other mitigation efforts in certain instances have not been, and in the future may not be, available or sufficient to protect customers prior to a security update being made available. Vulnerabilities can persist even after we have issued security updates if we have not identified and addressed the root cause of a particular vulnerability, if customers have not installed the most recent updates, if the attackers exploited the vulnerabilities before a security update is applied to install additional malware to further compromise customers’ systems, or if a previously patched vulnerability is inadvertently reintroduced due to a security regression during future development. Additionally, customers may also need to test security updates before they can be deployed which can delay implementation. When customers do not deploy security updates in a timely manner, use solutions that are end of life and no longer receive security updates, or decide not to upgrade to the latest versions of our solutions containing the security update, they are left vulnerable. In addition, we rely on third-party providers of software and cloud-based services on which our and third-party data is stored or processed, and we cannot control the timing at which third-party providers remedy vulnerabilities, which could leave us vulnerable. Failure to comply with internal security policies and standards, including secure development lifecycle practices, failure to prevent or promptly mitigate vulnerabilities and security defects, prioritization errors in remedying vulnerabilities or security defects, failure of third-party providers to remedy vulnerabilities or security defects, or customers not deploying

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accessed (collectively, our “IT environment”). We anticipate continuing to be increasingly subject to such attempts as cyber attacks become more sophisticated and difficult to predict and protect against. Furthermore, the emergence and maturation of AI capabilities has led to new and/or more effective methods of cyber attacks. Despite our active implementation of security ~~updates~~and other measures, our solutions and IT environment have been, and continue to be, vulnerable to cyber attacks, incidents, data breaches, malware, inadvertent error, disruptions, failures, physical security breaches, tampering or other theft or misuse, including by employees, contingent workers, and malicious actors. Additionally, nation-state actors or their agents have in the past successfully attacked our IT environment and have also exploited vulnerabilities in our solutions to carry out attacks, and we anticipate that these attacks and the exploitation of vulnerabilities in our solutions will continue and may intensify during periods of diplomatic or armed conflict or other geopolitical tensions. Further, a ~~timely~~cyber ~~manner~~attack, vulnerability exploitation, or ~~deciding~~other incident could go undetected and persist in our environments, or those of our customers or third-party providers upon which we rely, for extended periods. Cyber-related events have caused, and in the future could result in, compromise to, or the disruption of access to, the operation of our solutions and IT environment or those of our customers or third-party providers upon which we rely, or result in confidential information stored on our systems or our customers’ or other third-party systems being improperly accessed, processed, disclosed now (or in the future), or being lost or stolen. Efforts to limit the ability of malicious actors to disrupt the operations of the Internet or undermine our security efforts are costly to implement and may not be successful. Breaches of security in our IT environment, our customers’ or third-party providers’ networks, or in third-party products we use, regardless of whether the breach is attributable to ~~upgrade~~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 infrastructure or security tools that protect the integrity of our solutions and IT environment, could, in each case, result in claims of legal and/or regulatory action against us, damage our reputation or otherwise materially harm our business. The occurrence of a cyber attack, data breach or other incident could subject us to direct or indirect liability to our customers, data subjects, suppliers, business partners, employees, and others, give rise to legal and/or regulatory action, could damage our reputation or could otherwise negatively impact our business, any of which could materially harm our business, operating results, and financial condition.

~~Our~~Vulnerabilities ~~actual~~and critical security defects, prioritization decisions regarding remedying vulnerabilities or ~~perceived~~security defects, failure of third-party providers to ~~adequately~~remedy ~~protect~~vulnerabilities ~~personal~~or ~~data~~security ~~could~~defects, ~~result~~or customers not deploying security updates in ~~claims~~a oftimely ~~legal~~manner ~~and/~~or ~~regulatory~~deciding ~~action~~not to upgrade our solutions to those with security updates or security enhancements applied could result in claims of liability against us, damage our reputation, or otherwise materially harm our business.

~~Global~~The ~~privacy~~products and ~~data~~services ~~protection-related~~(together, ~~laws~~our “solutions”) we sell to customers, and ~~regulations~~the ~~are~~cloud-based ~~evolving~~services operated or enabled by us, ~~extensive~~or by third parties upon which we rely, ~~and~~inevitably ~~complex.~~contain ~~Compliance~~vulnerabilities ~~with~~or ~~these~~security ~~laws~~defects ~~and~~(despite ~~regulations~~our isefforts ~~difficult~~to prevent and ~~costly.~~detect Inthem ~~addition~~through secure development lifecycle practices, ~~evolving~~testing, ~~legal~~or ~~requirements~~other ~~restricting~~means), which have not been remedied or ~~controlling~~cannot ~~the~~be ~~collection,~~disclosed ~~processing,~~without compromising security. We also make prioritization decisions in determining which vulnerabilities or ~~cross-border~~security ~~transmission~~defects to fix and the timing of ~~data~~these fixes. Even when we prioritize a vulnerability or security defect, ~~including~~in ~~for~~certain ~~regulation~~instances ofit ~~cloud-based~~has ~~services~~taken, ~~could~~and ~~materially~~in ~~affect~~the ~~our~~future ~~customers’~~could ~~ability~~take, time for us to ~~use,~~develop and ~~our~~test ~~ability~~a remedy and the remedy may ultimately be insufficient to ~~sell,~~fully ~~our~~fix ~~products~~the ~~and~~issue ~~services~~or may be found to create other issues. ~~The~~In ~~interpretation~~addition, ~~and~~workarounds ~~application~~or ofother ~~these~~mitigation ~~laws~~efforts in ~~some~~certain instances ishave ~~uncertain~~not been, and ~~our~~in ~~legal~~the ~~and~~future ~~regulatory~~may ~~obligations~~not ~~are~~be, ~~subject~~available or sufficient to ~~frequent~~protect ~~changes~~customers prior to a security update being made available. ~~For~~Vulnerabilities ~~example,~~can persist even after we have issued security updates if we have not identified and addressed the ~~European~~root ~~Union’s~~cause ~~(“EU”)~~of ~~General~~a ~~Data~~particular ~~Protection~~vulnerability, ~~Regulation~~if ~~(“GDPR”)~~customers ~~applies~~have tonot ~~our~~installed ~~activities~~the ~~conducted~~most ~~from~~recent anupdates, ~~establishment~~if inthe attackers exploited the EUvulnerabilities orbefore ~~related~~a security update is applied (such as to ~~products~~install ~~and~~additional ~~services~~malware ~~offered~~to infurther ~~the~~compromise EUcustomers’ ~~and~~systems), ~~imposes~~or if a ~~range~~previously ofpatched ~~compliance~~vulnerability ~~obligations~~is ~~regarding~~inadvertently ~~the~~reintroduced ~~handling~~due ofto ~~personal~~a ~~data~~security regression during future development or a changed deployment. Additionally, wecustomers ~~are~~may ~~subject~~also desire to ~~California’s~~test ~~Consumer~~security ~~Privacy~~updates ~~Act,~~before ~~Singapore’s~~they ~~Personal~~can ~~Data~~be ~~Protection~~deployed ~~Act,~~which ~~and~~can ~~other~~delay ~~laws~~implementation. When customers do not deploy security updates in a timely manner, ~~regulations~~use solutions that are end of life and ~~obligations~~no ~~that~~longer ~~relate~~receive security updates, decide not to upgrade to the ~~handling~~latest versions of ~~personal~~our ~~data.~~solutions ~~Our~~containing ~~actual~~security updates or ~~perceived~~security ~~failure~~enhancements, configure our solutions in insecure ways, or fail to ~~comply~~sufficiently ~~with~~monitor ~~applicable~~activity ~~laws~~on those solutions, they are left vulnerable. In addition, we rely on third-party providers of software (including open source) and ~~regulations~~cloud-based orservices ~~other~~on ~~obligations~~which ~~relating~~our toand ~~personal~~third-party data, is stored or toprocessed, ~~protect~~and ~~personal~~we ~~data~~cannot ~~from~~control ~~unauthorized~~the ~~access,~~timing ~~use,~~at orwhich ~~other~~third-party ~~processing~~providers remedy vulnerabilities, which could ~~subject~~leave us tovulnerable. ~~liability~~Failure to ~~our~~comply ~~customers,~~with ~~data~~internal ~~subjects,~~security ~~suppliers,~~policies ~~business~~and ~~partners~~standards, ~~employees~~including secure development lifecycle practices, failure to prevent or promptly mitigate vulnerabilities and ~~others~~security defects, ~~give~~prioritization ~~rise~~errors toin ~~legal~~remedying ~~and/~~vulnerabilities or ~~regulatory~~security ~~action~~defects, ~~could~~failure ~~damage~~of ~~our~~third-party ~~reputation~~providers to remedy vulnerabilities or ~~could~~security ~~otherwise~~defects, ~~negatively~~or ~~impact~~customers not deploying security updates in a timely manner, deciding not to upgrade solutions, or configuring our ~~business~~solutions in insecure ways could, ~~any~~in each case, result in claims of ~~which~~legal ~~could~~and/or ~~materially~~regulatory ~~harm~~action against us, damage our ~~operating~~reputation, ~~results~~or ~~and~~otherwise ~~financial~~materially ~~condition~~harm our business.

Our ~~business,~~actual ~~operating~~or ~~results~~perceived failure to adequately protect and ~~financial~~appropriately ~~condition~~use data could beresult ~~materially~~in ~~harmed~~claims byof ~~evolving~~legal and/or regulatory ~~uncertainty~~action oragainst ~~obligations~~us, ~~applicable~~damage to our ~~products~~reputation, ~~and~~or ~~services~~otherwise materially harm our business.

~~Changes~~Global inprivacy ~~regulatory requirements applicable to the industries~~ and ~~sectors~~data inprotection-related ~~which~~laws ~~we operate, in the United States~~ and in other countries, could materially affect the sales and use of our products and services. In particular, economic sanctions and changes to export and import control requirements have impacted and may continue to impact our ability to sell and support our products and services in certain jurisdictions. In addition, changes in telecommunications regulations ~~could impact our service provider customers’ purchase of our products and services~~, ~~and~~including they could also impact sales of our own regulated offerings. Government procurement policies, priorities, regulations, technology initiatives and/or other obligations often give rise to evolving privacy, cybersecurity, operational resilience, or other requirements, and the failure or delay to meet and maintain such requirements could negatively impact our business, including by limiting our ability to sell products and services, directly or indirectly, to public sector, critical infrastructure and other customers. Additional areas of uncertainty that could impact sales of our products and services include laws, ~~regulations,~~are ~~or customer procurement requirements related to encryption technology~~evolving, ~~data~~extensive, artificial intelligence, privacy, cybersecurity, operational resilience, environmental sustainability (including climate change), human rights, product certification, product accessibility, country of origin, and ~~national security controls applicable to our supply chain~~complex. ~~Changes~~Compliance ~~in regulatory requirements or our actual or perceived failure to comply~~ with ~~applicable~~these laws and regulations oris ~~other~~difficult ~~obligations~~and ~~could~~costly. ~~materially~~In ~~harm our business~~addition, ~~operating~~evolving ~~results,~~legal ~~and~~requirements ~~financial~~restricting ~~condition.~~

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or controlling the collection, processing, use or cross-border transmission of data, including regulation of cloud-based services, could materially affect our customers’ ability to use, and our ability to sell, our products and services. The interpretation and application of these laws in some instances is uncertain, and our legal and regulatory obligations are subject to frequent changes. For example, the European Union’s (“EU”) General Data Protection Regulation (“GDPR”) applies 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 compliance obligations regarding the handling of personal data for both ourselves and our customers. Additionally, we are subject to California’s Consumer Privacy Act, Singapore’s Personal Data Protection Act, and other laws, regulations, and obligations around the world that govern the handling of personal data. Our actual or perceived failure to comply with applicable laws and regulations or other obligations relating to the use of data and protecting data from unauthorized access, use, or other processing, could subject us to claims of liability, or give rise to legal and/or regulatory action, damage our reputation, and/ or otherwise negatively impact our business, any of which could materially harm our operating results and financial condition.

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

Changes in regulatory requirements applicable to the industries and sectors in which we operate, in the United States and in other countries, could materially affect the sales and use of our products and services. In particular, economic sanctions and changes to export and import control requirements have impacted and may continue to impact our ability to sell and support our products and services in certain jurisdictions. In addition, changes in telecommunications regulations could impact our service provider customers’ purchase of our products and services, and they could also impact sales of our own regulated offerings. Government and other customers' procurement policies, priorities, regulations, technology initiatives and/or other obligations often give rise to evolving privacy, cybersecurity, operational resilience, data governance, or other requirements; the failure or delay in meeting and maintaining compliance with such requirements could negatively impact our business, including by limiting our ability to sell products and services, directly or indirectly, to public sector, critical infrastructure, and other customers. Additional areas of uncertainty that could impact sales of our products and services include laws, regulations, or customer procurement requirements related to encryption technology, data, AI, privacy, cybersecurity, operational resilience, environmental sustainability (including climate change), human rights, product certification, product and digital accessibility, country of origin, and national security and other security controls applicable to our offerings and supply chain. Changes in regulatory requirements or our actual or perceived failure to comply (or to enable our customers to comply when using our offerings) with applicable laws, regulations, or other obligations could materially harm our business, operating results, and financial condition.

Risks Related to Ownership of Our Stock

Our stock price may be volatile.

Historically, our common stock has experienced substantial price volatility, particularly as a result of variations between our actual financial results and the published expectations of analysts and as a result of announcements by our competitors and us. Furthermore, speculation in the press or investment community about our strategic position, financial condition, results of operations, business, security of our products, or significant transactions can cause changes in our stock price. In addition, the stock market has experienced extreme price and volume fluctuations that have affected the market price of many technology companies, in particular, and that have often been unrelated to the operating performance of these companies. These factors, as well as general economic and political conditions and the announcement of proposed and completed acquisitions or other significant transactions, or any difficulties associated with such transactions, by us or our current or potential competitors, may materially harm the market price of our common stock in the future. Additionally, volatility, lack of positive performance in our stock price or changes to our overall compensation program, including our stock incentive program, may negatively impact our ability to retain key employees, virtually all of whom are compensated, in part, based on the performance of our stock price.


Item 1B.			Unresolved Staff Comments

None.

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Item 1C.			Cybersecurity

We recognize the critical importance of maintaining the trust and confidence of our customers, employees, and other stakeholders. To help mitigate the cybersecurity risks that we face, we maintain processes for identifying, assessing, and managing such risks.

Our incident response functions, which include our Security and Trust Organization (“S&TO”) under the leadership of our Chief Security and Trust Officer, have established internal policies, processes, and procedures to monitor, detect, investigate, respond to, and escalate management of internal and external cybersecurity threats and incidents. We maintain policies and procedures for the escalation of cybersecurity incidents, assessed as potentially being or becoming material, to designated members of our senior management for further assessment. We also, as necessary, inform our independent registered public accounting firm of significant cybersecurity matters and any relevant developments.

To help identify, assess, and mitigate cybersecurity threats that we face to our business, S&TO, in addition to its own capabilities, partners with Cisco’s Talos Threat Intelligence Group and third parties, including governments and peer companies, to share and receive threat intelligence and other information. S&TO actively monitors for and evaluates cybersecurity vulnerabilities, threats, and incidents observable on the ~~internet~~Internet and the dark web. In addition to monitoring risks from threats to our own business, we operate third-party risk management programs to help identify and manage risks from cybersecurity threats arising from third-party suppliers and service providers on which we rely. These programs leverage on-going security-focused risk assessments based on industry practices, audits, and contractual requirements.

We strive to embed security into our products and services through the Cisco Secure Development Lifecycle (CSDL). The CSDL introduces security and privacy considerations throughout the lifecycle of our products and services. In addition, S&TO advises business units and functional areas on addressing cybersecurity risks and monitors initiatives to mitigate and manage such risks over time. Our business units or functional areas are responsible for managing risks and ensuring that security policies and standards are implemented within the respective business unit or function. S&TO also conducts mandatory cybersecurity training for our employees and provides employees with tools to report suspected incidents.

S&TO engages third parties in connection with our cybersecurity risk management processes, including cybersecurity consultants and auditors, to conduct evaluations of our IT security controls and provide certifications for industry-standard security frameworks. In addition, we maintain a global privacy program to assess and manage privacy risks related to how we are collecting, using, sharing, and storing personal data, which is subject to assessment by an independent, third-party privacy assessor.

Our Chief Security and Trust Officer, who reports to our Executive Vice President, Operations, works collaboratively across our business to implement policies and procedures designed to protect our IT environment and our products and services from cybersecurity threats, and to promptly respond to cybersecurity incidents in accordance with our incident response policies and procedures. Our Chief Security and Trust Officer has extensive cybersecurity experience and has served in various roles in information technology and information security for over 25 years.

The Chief Security and Trust Officer provides regular reports on the status of cybersecurity risks, priorities, and focus areas to our executive leadership team. In addition, information on cybersecurity risks is further integrated into our broader enterprise risk management program through our internal audit function, which incorporates such information in regular audits of our cybersecurity and data protection controls and processes.

Our Board of Directors oversees risks related to cybersecurity threats to our business directly and through its Audit Committee. The Audit Committee receives regular reports on cybersecurity risks, priorities, and focus areas from our Chief Security and Trust Officer at least four times a year and receives a live presentation at least twice a year. Our Board of Directors also regularly receives updates from the Audit Committee on its oversight activities and, on occasion, receives updates directly from our Chief Security and Trust Officer. Additionally, the Chief Security and Trust Officer provides more frequent updates to the Board of Directors and Audit Committee if necessary due to a cybersecurity threat, incident, or other development.

As of the date of this Annual Report on Form 10-K, we do not believe our business, operating results, or financial condition have been materially affected by cybersecurity risks, including as a result of previously identified cybersecurity incidents. For more information on our cybersecurity related risks, see “Item 1A. Risk Factors” of this Annual Report on Form 10-K.

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Item 2.			Properties

Our corporate headquarters are located at an owned site in San Jose, California, in the United States of America. The locations of our headquarters by geographic segment are as follows:

Americas

EMEA

APJC

San Jose, California, USA

Amsterdam, Netherlands

Singapore

In addition to our headquarters site, we own additional sites in the United States, which include facilities in the surrounding areas of San Jose, California; Research Triangle Park, North Carolina; and Richardson, Texas. In addition, we lease office space in many U.S. locations.

Outside the United States our operations are conducted primarily in leased sites. Other significant sites (in addition to the two non-U.S. headquarters locations) are located in Australia, Belgium, Canada, China, Germany, India, Israel, Norway, Poland, and the United Kingdom.

We believe that our existing facilities, including both owned and leased, are in good condition and suitable for the conduct of our business.


Item 3.			Legal Proceedings

For a description of pending legal proceedings in which we are involved, see Note 14 “Commitments and Contingencies - (f) Legal Proceedings” of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K, which is incorporated herein by reference.


Item 4.			Mine Safety Disclosures

Not applicable.

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PART II


Item 5.			Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

(a)Cisco common stock is traded on the Nasdaq Global Select Market under the symbol CSCO. There were 3230,~~405~~790 registered stockholders as of August 3028, ~~2024~~2025.

(b)None.

(c)Issuer purchases of equity securities (in millions, except per-share amounts):

Period	TotalNumber ofSharesPurchased	Average Price Paidper Share		Total Number of SharesPurchased as Part ofPublicly AnnouncedPlans or Programs	Approximate Dollar Value of SharesThat May Yet Be PurchasedUnder the Plans or Programs
April 28, 2024 to May 25, 2024	12	$	47.44	12	$	6,585
April 27, 2025 to May 24, 2025	7	$	60.71	7	$	15,023
May 26, 2024 to June 22, 2024	18	$	46.08	18	$	5,770
May 25, 2025 to June 21, 2025	5	$	64.63	5	$	14,659
June 23, 2024 to July 27, 2024	13	$	47.19	13	$	5,170
June 22, 2025 to July 26, 2025	7	$	68.36	7	$	14,174
Total	4319	$	4664.8065	4319

On September 13, 2001, we announced that our Board of Directors had authorized a stock repurchase program. As of July 2726, ~~2024~~2025, the remaining authorized amount for stock repurchases under this program is approximately $514.2 billion with no termination date.

For the majority of restricted stock units granted, the number of shares issued on the date the restricted stock units vest is net of shares withheld to meet applicable tax withholding requirements. Although these withheld shares are not issued or considered common stock repurchases under our stock repurchase program and therefore are not included in the preceding table, they are treated as common stock repurchases in our financial statements as they reduce the number of shares that would have been issued upon vesting (see Note 15 to the Consolidated Financial Statements).

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Stock Performance Graph

The information contained in this Stock Performance Graph section shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), except to the extent that Cisco specifically incorporates it by reference into a document filed under the Securities Act of 1933, as amended, or the Exchange Act.

The following graph shows a five-year comparison of the cumulative total stockholder return on Cisco common stock with the cumulative total returns of the S&P 500 Index, and the S&P Information Technology Index. The graph tracks the performance of a $100 investment in the Company’s common stock and in each of the indexes (with the reinvestment of all dividends) on the date specified. Stockholder returns over the indicated period are based on historical data and should not be considered indicative of future stockholder returns.

Comparison of 5-Year Cumulative Total Return Among Cisco Systems, Inc.,

the S&P 500 Index, and the S&P Information Technology Index

	July 2019		July 2020		July 2021		July 2022		July 2023		July 2024
	July 2020		July 2021		July 2022		July 2023		July 2024		July 2025
Cisco Systems, Inc.	$	100.00	$	84123.7013	$	~~104~~103.3083	$	87123.9509	$	~~104~~116.2778	$	98172.9219
S&P 500	$	100.00	$	108.39	$	150.48	$	143.50	$	161.94	$	~~195~~232.8222
S&P Information Technology	$	100.00	$	~~129~~147.4003	$	~~190~~138.2692	$	~~179~~176.7700	$	~~227~~235.7411	$	~~304~~292.2359


Item 6.			[Reserved]

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Item 7.			Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Annual Report on Form 10-K, including this Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts are statements that could be deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “momentum,” “seeks,” “estimates,” “continues,” “endeavors,” “strives,” “may,” variations of such words, and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those under “Part I, Item 1A. Risk Factors,” and elsewhere herein. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update any forward-looking statements for any reason.

OVERVIEW

A summary of our results is as follows (in millions, except percentages and per-share amounts):

	Three Months Ended									Years Ended
	July 27, 2024			July 29, 2023			Variance			July 27, 2024			July 29, 2023			Variance
	July 26, 2025			July 27, 2024			Variance			July 26, 2025			July 27, 2024			Variance
Revenue	$	1314,~~642~~673		$	1513,~~203~~642		~~(10)~~8	%		$	5356,~~803~~654		$	5653,~~998~~803		~~(6)~~5	%
Gross margin percentage	6463.42		%	64.14		%	0(1.32)		pts	64.79		%	6264.7		%	2.0.2		pts
Research and development	$	2,~~179~~380		$	12,~~953~~179		129	%		$	79,~~983~~300		$	7,~~551~~983		616	%
Sales and marketing	$	2,~~841~~818		$	2,~~579~~841		10(1)	%		$	10,~~364~~966		$	910,~~880~~364		56	%
General and administrative	$	~~763~~706		$	~~690~~763		11(8)	%		$	2,~~813~~992		$	2,~~478~~813		146	%
Total R&D, sales and marketing, general and administrative	$	5,~~783~~904		$	5,~~222~~783		112	%		$	2123,~~160~~258		$	1921,~~909~~160		610	%
Total as a percentage of revenue	4240.42		%	3442.34		%	8(2.12)		pts	3941.31		%	3439.93		%	41.48		pts
Restructuring and other charges included in operating expenses	$	~~112~~35		$	~~203~~112		(4569)	%		$	~~789~~744		$	~~531~~789		49(6)	%
Operating income as a percentage of revenue	1921.20		%	2819.02		%	(81.8)		pts	2220.68		%	2622.46		%	(31.8)		pts
Interest and other income (loss), net	$	(~~222~~88)		$	~~218~~(222)		NM(60)	%		$	53(660)		$	~~287~~53		~~(82)~~NM	%
Income tax percentage	915.80		%	119.58		%	(15.7)2		pts	158.63		%	1715.76		%	(27.13)		pts
Net income	$	2,~~162~~550		$	32,~~958~~162		~~(45)~~18	%		$	10,~~320~~180		$	1210,~~613~~320		(181)	%
Net income as a percentage of revenue	1517.84		%	2615.08		%	~~(10~~1.2)6		pts	1918.20		%	2219.12		%	(21.92)		pts
Earnings per share—diluted	$	0.5464		$	0.9754		~~(44)~~19	%		$	2.5455		$	32.0754		~~(17)~~—	%

Percentages may not recalculate due to rounding.

NM — Not meaningful

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CISCO SYSTEMS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Fiscal ~~2024~~2025 Compared with Fiscal ~~2023~~2024

In fiscal ~~2024~~2025, ~~total~~we delivered strong revenue ~~decreased~~growth across all geographies and solid margins as we saw a positive demand environment. Total revenue increased by 65% compared with fiscal ~~2023~~2024. InOur ~~March~~results ~~2024,~~for wefiscal ~~completed~~2025 ~~the~~include ~~acquisition~~a offull ~~Splunk~~year ~~Inc.~~of (“Splunk~~”),~~'s ~~which~~results ~~contributed~~compared to approximately ~~$1.4~~four ~~billion~~months ~~in total revenue~~ for fiscal 2024. Within total revenue, product revenue ~~decreased~~increased by 96% and services revenue increased by 53%. In fiscal ~~2024~~2025, total software revenue was $1822.43 billion ~~across all product areas and services~~, an increase of 921%, driven by the contribution of Splunk. Total subscription revenue increased 1115%, ~~partially~~ driven by the contribution of Splunk.

~~During~~Total ~~the~~gross ~~first~~margin ~~nine~~increased ~~months~~by of0.2 ~~fiscal~~percentage ~~2024~~points. Product gross margin increased by 0.2 percentage points, wedriven ~~experienced~~by abenefits ~~decline~~from inSplunk ~~product~~and ~~demand~~productivity asimprovements, ~~customers~~partially ~~continued~~offset toby ~~scrutinize~~negative ~~spend~~impacts from pricing, a charge as ~~they~~a ~~needed~~result ~~additional~~of ~~time~~a tolegal ~~implement~~dispute ~~elevated~~with ~~levels~~a supplier, and the amortization of ~~product~~purchased ~~shipments~~intangible ~~received~~assets inprimarily ~~prior~~related ~~quarters~~to Splunk. InAs ~~the~~a ~~fourth~~percentage ~~quarter~~ of ~~fiscal~~revenue, ~~2024~~research weand ~~saw~~development, ~~improvement~~sales inand ~~product~~marketing, ~~demand~~and ~~across~~general ~~all~~and ~~geographic~~administrative ~~segments~~expenses, ~~and~~collectively, ~~customer~~increased ~~markets~~by as1.8 ~~customers~~percentage ~~largely~~points. ~~completed~~Operating ~~the~~income ~~installation~~as a percentage of ~~their~~revenue ~~product~~decreased ~~shipments~~by 1.8 ~~While~~percentage wepoints ~~continue~~primarily due to ~~operate~~increases in aamortization ~~highly~~of ~~competitive~~purchased ~~environment~~intangible assets and ~~the~~share-based ~~overall~~compensation ~~macroeconomic~~expense ~~environment~~in ~~remains~~fiscal ~~challenging~~2025, and ~~uncertain,~~a wecharge ~~plan~~in tothe ~~continue~~fourth toquarter ~~invest~~of infiscal ~~key~~2025 ~~priority~~as ~~areas~~a result of a legal dispute with ~~the~~a ~~objective~~supplier. ofDiluted ~~driving~~earnings ~~profitable~~per ~~growth~~share ~~over~~was ~~the~~flat ~~long~~compared ~~term~~with fiscal 2024.

~~Total~~In ~~gross~~terms ~~margin~~of ~~increased~~our bygeographic ~~2.0~~segments, ~~percentage~~revenue ~~points.~~from ~~Product~~the ~~gross~~Americas ~~margin~~ increased by 2$1.07 ~~percentage points~~billion, ~~largely~~EMEA ~~driven~~revenue increased by ~~favorable~~$0.7 ~~product~~billion ~~mix, productivity benefits~~ and ~~benefits~~revenue ~~from~~in ~~Splunk,~~our ~~partially~~APJC ~~offset~~segment increased by ~~negative~~$0.5 ~~impacts from pricing~~billion. AsFrom a ~~percentage~~customer ofmarket ~~revenue~~perspective, ~~research~~product ~~and~~revenue ~~development,~~growth ~~sales~~was ~~and~~led ~~marketing,~~by ~~and~~the ~~general~~enterprise market and ~~administrative~~the ~~expenses,~~service ~~collectively,~~provider ~~increased~~and bycloud 4market.4 ~~percentage~~The ~~points.~~revenue ~~Operating~~increase ~~income~~in asour aservice ~~percentage~~provider ofand ~~revenue~~cloud ~~decreased~~market was driven by ~~3.8~~AI ~~percentage~~infrastructure ~~points~~revenue ~~driven~~from ~~primarily~~webscale bycustomers. ~~incremental~~From ~~operating~~a ~~expenses~~product ~~from~~category ~~Splunk~~perspective, ~~higher~~the ~~restructuring~~product ~~and~~revenue ~~other~~increased ~~charges~~6% ~~and~~year ~~higher~~over ~~amortization~~year, ofdriven ~~purchased~~by ~~intangible~~a ~~assets~~growth in ~~fiscal~~revenue ~~2024.~~in ~~Diluted~~Security ~~earnings~~of ~~per~~59%, ~~share~~Observability ~~decreased~~of by26%, 17and Collaboration of 1%, ~~driven~~partially offset by a ~~decrease~~decline in Networking of 183%. inThe ~~net~~product ~~income~~revenue ~~partially~~growth ~~offset~~in bySecurity aand ~~decrease~~Observability were each driven in ~~diluted~~large ~~share~~part ~~count~~by ofthe 43contribution ~~million~~of ~~shares~~Splunk.

InWe ~~terms~~continue ofto ~~our~~operate ~~geographic~~in ~~segments,~~a ~~revenue~~highly ~~from~~competitive ~~the~~environment, ~~Americas~~and ~~decreased~~one bythat ~~$1.5~~is ~~billion,~~complex ~~EMEA~~especially ~~revenue~~with ~~decreased~~respect byto ~~$1.0~~tariffs ~~billion~~ and ~~revenue~~trade ~~in our APJC segment decreased by $0~~policy.7 ~~billion.~~ We ~~experienced~~plan ato ~~product~~continue ~~revenue~~to ~~decline~~invest in ~~the~~key ~~enterprise~~priority ~~and~~areas ~~service~~with ~~provider~~the ~~and~~objective ~~cloud~~of ~~markets.~~driving ~~Product~~profitable ~~revenue~~growth inover the ~~public~~long ~~sector market was flat~~term. ~~From~~We aremain ~~product~~focused ~~category~~on ~~perspective,~~delivering ~~total~~innovation ~~product~~across ~~revenue~~our ~~decreased~~technologies 9%to ~~year~~assist ~~over~~our ~~year,~~customers ~~driven by a decline~~ in ~~revenue~~executing inon ~~Networking~~their ofdigital ~~15%,~~transformations ~~partially offset by growth in Security of 32%~~ and ~~Observability~~on ofaccelerating ~~27%,~~innovation ~~each~~across ~~driven~~our inportfolio. ~~large~~We ~~part~~believe bythat ~~the~~we ~~contribution~~are ofmaking ~~Splunk.~~progress ~~Product~~on ~~revenue~~our ~~grew~~strategic ~~in Collaboration by 2%~~priorities.

We remain focused on delivering innovation across our technologies to assist our customers in executing on their digital transformations and on accelerating innovation across our portfolio. We believe that we are making progress on our strategic priorities.31

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CISCO SYSTEMS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Fourth Quarter Snapshot

For the fourth quarter of fiscal ~~2024~~2025, as compared with the fourth quarter of fiscal ~~2023~~2024, total revenue ~~decreased~~increased by 108%. Within total revenue, product revenue ~~decreased~~increased by 1510% and services revenue ~~increased~~was ~~by 6%~~flat. With regard to our geographic segment performance, on a year-over-year basis, revenue in Americas ~~decreased~~increased by 119%, EMEA ~~decreased~~increased by 114% and APJC ~~decreased~~increased by 67%. From a product category perspective, we experienced a product revenue ~~decline~~growth in Networking, ~~partially offset by growth in~~ Security, ~~and~~ Observability, ~~driven~~and ~~in large part by the contribution of Splunk. Product revenue in~~ Collaboration ~~was flat~~. Total gross margin ~~increased~~decreased by 01.32 percentage points, driven primarily by ~~favorable~~a ~~product~~charge ~~mix~~as ~~and~~a ~~the~~result ~~contribution~~of ~~from~~a ~~Splunk,~~legal ~~partially~~dispute ~~offset~~with bya ~~negative impacts from pricing~~supplier. As a percentage of revenue, research and development, sales and marketing, and general and administrative expenses, collectively, ~~increased~~decreased by 82.12 percentage points. Operating income as a percentage of revenue ~~decreased~~increased by 81.8 percentage points primarily driven by ~~incremental~~lower ~~operating~~amortization ~~expenses~~of ~~from~~purchased ~~Splunk~~intangible ~~and~~assets, ~~higher~~lower ~~amortization~~restructuring ofand ~~purchased~~other ~~intangible~~charges, ~~assets.~~and ~~Diluted~~a ~~earnings~~decrease ~~per~~in ~~share~~cash ~~decreased~~compensation byexpenses ~~44%~~from acquisitions, ~~driven~~partially offset by a ~~decrease~~charge inas ~~net~~a ~~income~~result of 45a legal dispute with a supplier. Diluted earnings per share increased by 19%, ~~partially~~primarily ~~offset~~driven by athe ~~decrease~~revenue inincrease ~~diluted~~and ~~share~~the ~~count~~increase ofin 58our ~~million~~operating ~~shares~~margin percentage.

Strategy and Priorities

For a full discussion of our strategy and priorities, see “Item 1. Business.”

Other Key Financial Measures

The following is a summary of our other key financial measures for fiscal ~~2024~~2025 compared with fiscal ~~2023~~2024 (in millions):

Fiscal 2024

Fiscal 2023

Fiscal 2025

Fiscal 2024

Cash and cash equivalents and investments

$1716,~~854~~110

$2617,~~146~~854

Cash provided by operating activities

$1014,~~880~~193

$1910,~~886~~880

Remaining performance obligations

$4143,~~048~~533

$3441,~~868~~048

Repurchases of common stock—stock repurchase program

$5,~~764~~995

$45,~~271~~764

Dividends paid

$6,~~384~~437

$6,~~302~~384

Inventories

$3,~~373~~164

$3,~~644~~373

Total debt

$3028,~~962~~093

$830,~~391~~962

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CISCO SYSTEMS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires us to make judgments, assumptions, and estimates that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Note 2 to the Consolidated Financial Statements describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements. The accounting policies described below are significantly affected by critical accounting estimates. Such accounting policies require significant judgments, assumptions, and estimates used in the preparation of the Consolidated Financial Statements, and actual results could differ materially from the amounts reported based on these policies.

Revenue Recognition

We enter into contracts with customers that can include various combinations of products and services which are generally distinct and accounted for as separate performance obligations~~. As a result~~, ~~our~~resulting in contracts that may contain multiple performance obligations. We determine whether arrangements are distinct based on whether the customer can benefit from the product or service on its own or together with other resources that are readily available and whether our commitment to transfer the product or service to the customer is separately identifiable from other obligations in the contract. We classify our hardware, perpetual software licenses, and SaaS as distinct performance obligations. Term software licenses represent multiple obligations, which include software licenses and software maintenance. In transactions where we deliver hardware or software, we are typically the principal and we record revenue and costs of goods sold on a gross basis.

We recognize revenue upon transfer of control of promised goods or services in a contract with a customer in an amount that reflects the consideration we expect to receive in exchange for those products or services. Transfer of control occurs once the customer has the contractual right to use the product, generally upon shipment, electronic delivery (or when the software is available for download by the customer), or once title and risk of loss has transferred to the customer. Transfer of control can also occur over time for software maintenance and services as the customer receives the benefit over the contract term. Our hardware and perpetual software licenses are distinct performance obligations where revenue is recognized upfront upon transfer of control. Term software licenses include multiple performance obligations where the term licenses are recognized upfront upon transfer of control, with the associated software maintenance revenue recognized ratably over the contract term as services and software updates are provided. SaaS arrangements do not include the right for the customer to take possession of the software during the term, and therefore have one distinct performance obligation which is satisfied over time with revenue recognized ratably over the contract term as the customer consumes the services. On our product sales, we record consideration from shipping and handling on a gross basis within net product sales. We record our revenue net of any associated sales taxes.

Revenue is allocated among these performance obligations in a manner that reflects the consideration that we expect to be entitled to for the promised goods or services based on standalone selling prices (SSP). SSP is estimated for each distinct performance obligation and judgment may be required in their determination. The best evidence of SSP is the observable price of a product or service when we sell the goods separately in similar circumstances and to similar customers. In instances where SSP is not directly observable, we determine SSP using information that may include market conditions and other observable inputs.

We assess relevant contractual terms in our customer contracts to determine the transaction price. We apply judgment in identifying contractual terms and determining the transaction price as we may be required to estimate variable consideration when determining the amount of revenue to recognize. Variable consideration includes potential contractual penalties and various rebate, cooperative marketing and other incentive programs that we offer to our distributors, channel partners and customers that we sell to directly. When determining the amount of revenue to recognize, we estimate the expected usage of these programs, applying the expected value or most likely estimate and update the estimate at each reporting period as actual utilization becomes available. We also consider the customers’ right of return in determining the transaction price, where applicable. If actual credits received by ~~distributors~~customers under these programs were to deviate significantly from our estimates, which are based on historical experience, our revenue could be adversely affected.

See Note 3 to the Consolidated Financial Statements for more details.

Inventory Valuation and Liability for Purchase Commitments with Contract Manufacturers and Suppliers

Inventory is written down based on excess and obsolete inventories, determined primarily by future demand forecasts. Inventory write-downs are measured as the difference between the cost of the inventory and net realizable value, based upon assumptions about future demand, and are charged to the provision for inventory. At the point of the loss recognition, ~~which~~a new, lower cost basis for that inventory is aestablished, ~~component~~and ofsubsequent ~~our~~changes ~~cost~~in offacts ~~sales.~~and Atcircumstances do not result in the restoration or increase in that newly established cost basis.

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~~the~~We ~~point~~record ofa ~~the~~provision ~~loss~~for ~~recognition~~firm, ~~a new~~noncancelable, ~~lower~~and ~~cost~~unconditional ~~basis~~purchase ~~for~~commitments ~~that~~with ~~inventory~~contract ismanufacturers ~~established,~~ and ~~subsequent~~suppliers ~~changes~~for quantities in ~~facts~~excess ~~and~~of ~~circumstances~~our dofuture ~~not~~demand ~~result~~forecasts inconsistent with the ~~restoration~~valuation orof ~~increase~~our inexcess ~~that~~and ~~newly~~obsolete ~~established~~inventory. Both provisions are a component of cost ~~basis~~of sales.

WeOur ~~record~~total aprovisions for inventory and the liability related to purchase commitments with contract manufacturers and suppliers were $493 million, $819 million, and $730 million in fiscal 2025, 2024, and 2023, respectively. If there were to be a sudden and significant decrease in demand for ~~firm~~our products, ~~noncancelable~~or a higher incidence of inventory obsolescence because of rapidly changing technology or customer requirements, then we could be required to increase our inventory write-downs and ~~unconditional~~our liability for purchase commitments with contract manufacturers and suppliers, and accordingly our profitability, could be adversely affected. We regularly evaluate our exposure for ~~quantities~~inventory inwrite-downs, ~~excess~~and the adequacy of our ~~future~~liability ~~demand~~for ~~forecasts~~purchase ~~consistent~~commitments. ~~with~~For further discussion around the ~~valuation~~supply chain impacts and risks, see “—Results of ~~our~~Operations—Gross ~~excess~~Margin—Supply Chain Impacts and ~~obsolete~~Risks” ~~inventory~~and “—Liquidity and Capital Resources—Inventory Supply Chain” under Item 7 of this report.

Our provision for inventory was $576 million, $307 million, and $102 million in fiscal 2024, 2023, and 2022, respectively. The provision for the liability related to purchase commitments with contract manufacturers and suppliers was $243 million, $423 million, and $227 million in fiscal 2024, 2023, and 2022, respectively. If there were to be a sudden and significant decrease in demand for our products, if there were a higher incidence of inventory obsolescence because of rapidly changing technology or customer requirements, or if supply constraints were to continue, we could be required to increase our inventory write-downs, and our liability for purchase commitments with contract manufacturers and suppliers, and accordingly our profitability, could be adversely affected. We regularly evaluate our exposure for inventory write-downs, and the adequacy of our liability for purchase commitments. For further discussion around the supply chain impacts and risks, see “—Results of Operations—Gross Margin—Supply Chain Impacts and Risks” and “—Liquidity and Capital Resources—Inventory Supply Chain” under Item 7 of this report.

Loss Contingencies

We are subject to the possibility of various losses arising in the ordinary course of business. We consider the likelihood of the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss, in determining loss contingencies. An estimated loss contingency is accrued when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. We regularly evaluate information available to us to determine whether such accruals should be made or adjusted and whether new accruals are required.

Valuation of Goodwill and Purchased Intangible Assets

Goodwill

Our methodology for allocating the purchase price relating to purchase acquisitions is determined through established valuation techniques. Goodwill represents a residual value as of the acquisition date, which in most cases results in measuring goodwill as an excess of the purchase consideration transferred plus the fair value of any noncontrolling interest in the acquired company over the fair value of net assets acquired, including contingent consideration. We perform goodwill impairment tests on an annual basis in the fourth fiscal quarter and between annual tests in certain circumstances for each reporting unit. The assessment of fair value for goodwill and purchased intangible assets is based on factors that market participants would use in an orderly transaction in accordance with the guidance for the fair value measurement of nonfinancial assets.

In response to changes in industry and market conditions, we could be required to strategically realign our resources and consider restructuring, disposing of, or otherwise exiting businesses, which could result in an impairment of goodwill. There was no impairment of goodwill in fiscal ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023. For the annual impairment testing in fiscal ~~2024~~2025, the excess of the fair value over the carrying value for each of our reporting units was $4756.05 billion for the Americas, $6580.91 billion for EMEA, and $2532.39 billion for APJC.

During the fourth quarter of fiscal ~~2024~~2025, we performed a sensitivity analysis for goodwill impairment with respect to each of our respective reporting units and determined that a hypothetical 10% decline in the fair value of each reporting unit would not result in an impairment of goodwill for any reporting unit.

Purchased Intangible Assets

The accounting for acquisitions requires significant estimates and judgments in the valuation of purchased intangible assets. Critical estimates used in the valuation of purchased intangible assets include, but are not limited to, the amount and timing of expected future cash flows, useful lives and discount rates. While our estimates of fair value are based on assumptions that are believed to be reasonable, these assumptions are inherently uncertain and unpredictable and would not reflect unanticipated events and circumstances that may occur.

35We make judgments about the recoverability of purchased intangible assets with finite lives whenever events or changes in circumstances indicate that an impairment may exist. Recoverability of purchased intangible assets with finite lives is measured

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CISCO SYSTEMS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

~~believed~~by comparing the carrying amount of the asset group to the future undiscounted cash flows the asset group is expected to generate. We review indefinite-lived intangible assets for impairment annually or whenever events or changes in circumstances indicate that the asset might be ~~reasonable~~impaired. If the asset is considered impaired, ~~these~~the ~~assumptions~~amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. Assumptions and estimates about future values and remaining useful lives of our purchased intangible assets are ~~inherently~~complex ~~uncertain~~and subjective. They can be affected by a variety of factors, including external factors such as industry and ~~unpredictable~~economic trends, and ~~would~~internal ~~not~~factors ~~reflect~~such ~~unanticipated~~as ~~events~~changes in our business strategy and ~~circumstances~~our ~~that~~internal ~~may~~forecasts. ~~occur~~Our ongoing consideration of all the factors described previously could result in impairment charges in the future, which could adversely affect our net income.

We make judgments about the recoverability of purchased intangible assets with finite lives whenever events or changes in circumstances indicate that an impairment may exist. Recoverability of purchased intangible assets with finite lives is measured by comparing the carrying amount of the asset group to the future undiscounted cash flows the asset group is expected to generate. We review indefinite-lived intangible assets for impairment annually or whenever events or changes in circumstances indicate that the asset might be impaired. If the asset is considered impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. Assumptions and estimates about future values and remaining useful lives of our purchased intangible assets are complex and subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our internal forecasts. Our ongoing consideration of all the factors described previously could result in impairment charges in the future, which could adversely affect our net income.

Income Taxes

We are subject to income taxes in the United States and numerous foreign jurisdictions. Our effective tax rates differ from the statutory rate, primarily due to the tax impact of state taxes, foreign operations, R&D tax credits, foreign-derived intangible income deductions, global intangible low-taxed income, tax audit settlements, nondeductible compensation, and international realignments. Our effective tax rate was 158.63%, 1715.76%, and 1817.47% in fiscal ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, respectively.

Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. Although we believe our reserves are reasonable, no assurance can be given that the final tax outcome of these matters will not be different from that which is reflected in our historical income tax provisions and accruals. We adjust these reserves indue ~~light~~to of changing facts and circumstances, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate, asand ~~well as~~ the related net interest and penalties.

Significant judgment is also required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, we consider all available evidence, including past operating results, estimates of future taxable income, and the feasibility of tax planning strategies. If we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.

Our provision for income taxes is subject to volatility and could be adversely impacted by earnings being lower than anticipated in countries that have lower tax rates and higher than anticipated in countries that have higher tax rates; by changes in the valuation of our deferred tax assets and liabilities; by changes to foreign-derived intangible income deduction, global intangible low-tax income and base erosion and anti-abuse tax, research and development capitalization and amortization, and corporate alternative minimum tax laws, regulations, or interpretations thereof; by expiration of or lapses in tax incentives; by transfer pricing adjustments, including the effect of acquisitions on our legal structure; by tax effects of nondeductible compensation; by tax costs related to intercompany realignments; by changes in accounting principles; or by changes in tax laws and regulations, treaties, or interpretations thereof, including changes to the taxation of earnings of our foreign subsidiaries, the deductibility of expenses attributable to foreign income, and the foreign tax credit rules. Significant judgment is required to determine the recognition and measurement attributes prescribed in the accounting guidance for uncertainty in income taxes. The OECD, an international association comprised of 38 countries, including the United States, has made changes, including a Pillar Two framework that imposes a minimum tax rate of 15% in each taxing jurisdiction, and is contemplating additional changes to numerous long-standing tax principles. There can be no assurance that these changes and any contemplated changes if finalized, once adopted by countries, will not have an adverse impact on our provision for income taxes. As a result of certain of our ongoing employment and capital investment actions and commitments, our income in certain countries was subject to reduced tax rates. Our failure to meet these commitments could adversely impact our provision for income taxes. In addition, we are subject to the continuous examination of our income tax returns by the IRS and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. There can be no assurance that the outcomes from these continuous examinations will not have an adverse impact on our operating results and financial condition.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

RESULTS OF OPERATIONS

ASubsequent ~~discussion~~to ~~regarding~~the ~~our~~issuance ~~financial condition and results~~ of ~~operations~~our ~~for~~earnings ~~fiscal~~release ~~2024~~on ~~compared~~August to13, ~~fiscal~~2025, ~~2023~~we issettled ~~presented~~a ~~below.~~legal Adispute ~~discussion~~with ~~regarding~~a ~~our~~supplier, ~~financial~~resulting ~~condition~~in ~~and~~a ~~results~~GAAP ofcharge ~~operations for fiscal 2023 compared~~ to ~~fiscal~~product ~~2022,~~cost ~~with the exception~~ of ~~Product Revenue by Category~~sales, which is ~~discussed~~described ~~herein,~~in ~~can~~Note be21 ~~found~~to ~~under~~the ~~Item~~Consolidated 7Financial Statements. The information in ~~our~~this Annual Report on Form 10-K ~~for~~supersedes the ~~fiscal~~information ~~year~~contained ~~ended~~in ~~July 29,~~our ~~2023,~~earnings ~~filed with the SEC on September 7, 2023~~release.

A discussion regarding our financial condition and results of operations for fiscal 2025 compared to fiscal 2024 is presented below. A discussion regarding our financial condition and results of operations for fiscal 2024 compared to fiscal 2023 can be found under Item 7 in our Annual Report on Form 10-K for the fiscal year ended July 27, 2024, filed with the SEC on September 5, 2024.

Revenue

The following table presents the breakdown of revenue between product and services (in millions, except percentages):

	Years Ended									~~2024~~2025 vs. ~~2023~~2024
	July 27, 2024			July 29, 2023			July 30, 2022			Variance in Dollars		Variance in Percent
	July 26, 2025			July 27, 2024			July 29, 2023			Variance in Dollars		Variance in Percent
Revenue:
Product	$	3941,~~253~~608		$	4339,~~142~~253		$	3843,~~018~~142		$	(32,~~889)~~355	~~(9)~~6	%
Percentage of revenue	73.04		%	7573.70		%	7375.7		%
Services	1415,~~550~~046			1314,~~856~~550			13,~~539~~856			~~694~~496		53	%
Percentage of revenue	2726.06		%	2427.30		%	2624.3		%
Total	$	5356,~~803~~654		$	5653,~~998~~803		$	5156,~~557~~998		$	(32,~~195)~~851	~~(6)~~5	%

Amounts may not sum and percentages may not recalculate due to rounding.

Total revenue for fiscal 2024 includes approximately $1.4 billion relating to the acquisition of Splunk, which consisted of approximately $1.1 billion in product revenue and approximately $240 million in services revenue.

We manage our business primarily on a geographic basis, organized into three geographic segments. Our revenue, which includes product and services for each segment, is summarized in the following table (in millions, except percentages):

	Years Ended									~~2024~~2025 vs. ~~2023~~2024
	July 27, 2024			July 29, 2023			July 30, 2022			Variance in Dollars		Variance in Percent
	July 26, 2025			July 27, 2024			July 29, 2023			Variance in Dollars		Variance in Percent
Revenue:
Americas	$	3133,~~971~~656		$	3331,~~447~~971		$	2933,~~814~~447		$	(1,~~476)~~685	~~(4)~~5	%
Percentage of revenue	59.4		%	5859.74		%	5758.87		%
EMEA	14,~~117~~824			1514,~~135~~117			1315,~~715~~135			~~(1,018)~~707		~~(7)~~5	%
Percentage of revenue	26.2		%	26.62		%	26.6		%
APJC	78,~~716~~174			87,~~417~~716			8,~~027~~417			~~(701)~~458		~~(8)~~6	%
Percentage of revenue	14.34		%	14.83		%	1514.68		%
Total	$	5356,~~803~~654		$	5653,~~998~~803		$	5156,~~557~~998		$	(32,~~195)~~851	~~(6)~~5	%

Amounts may not sum and percentages may not recalculate due to rounding.

Total revenue in fiscal ~~2024~~2025 ~~decreased~~increased by 65% compared with fiscal ~~2023~~2024. Product revenue ~~decreased~~increased by 96% and services revenue increased by 53%. Our total revenue reflected ~~declines~~growth across each of our geographic segments.

In addition to the impact of macroeconomic factors, including the IT spending environment and the level of spending by government entities, revenue by segment in a particular period may be significantly impacted by the timing of revenue recognition for complex transactions with multiple performance obligations. In addition, certain customers tend to make large and sporadic purchases, and the revenue related to these transactions may also be affected by the timing of revenue recognition, which in turn would impact the revenue of the relevant segment.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Product Revenue by Segment

The following table presents the breakdown of product revenue by segment (in millions, except percentages):

	Years Ended									~~2024~~2025 vs. ~~2023~~2024
	July 27, 2024			July 29, 2023			July 30, 2022			Variance in Dollars		Variance in Percent
	July 26, 2025			July 27, 2024			July 29, 2023			Variance in Dollars		Variance in Percent
Product revenue:
Americas	$	2324,~~142~~637		$	2523,~~019~~142		$	2125,~~620~~019		$	(1,~~877)~~495	~~(8)~~6	%
Percentage of product revenue	59.02		%	5859.0		%	5658.90		%
EMEA	1011,~~645~~122			1110,~~866~~645			1011,~~545~~866			~~(1,221)~~477		~~(10)~~4	%
Percentage of product revenue	2726.17		%	27.51		%	27.75		%
APJC	5,~~466~~849			65,~~257~~466			56,~~854~~257			~~(791)~~383		~~(13)~~7	%
Percentage of product revenue	1314.91		%	1413.59		%	1514.45		%
Total	$	3941,~~253~~608		$	4339,~~142~~253		$	3843,~~018~~142		$	(32,~~889)~~355	~~(9)~~6	%

Amounts may not sum and percentages may not recalculate due to rounding.

Americas

Product revenue in the Americas segment ~~decreased~~increased by 86%., ~~The~~with ~~product~~growth ~~revenue decrease was driven by declines~~ in the enterprise market and the service provider and cloud ~~markets,~~market. ~~partially~~The ~~offset by~~ growth in the ~~public~~service ~~sector~~provider and cloud market. ~~The~~was ~~acquisition~~driven ofby ~~Splunk~~AI ~~contributed~~infrastructure ~~$784~~revenue ~~million~~from ofwebscale ~~product~~customers. ~~revenue~~These toincreases ~~the~~were ~~Americas~~partially ~~segment~~offset by a decline in ~~fiscal~~the ~~2024~~public sector market. From a country perspective, product revenue ~~decreased~~increased ~~by 7%~~ in the United States, ~~11% in~~ Canada, ~~10%~~and inBrazil ~~Mexico~~by ~~and~~7%, 114%, inand ~~Brazil.~~8%, respectively.

EMEA

~~The~~Product ~~decrease in product~~ revenue in the EMEA segment ofincreased 10by 4%, ~~was~~ driven by ~~declines~~growth ~~across~~in ~~each~~the ofpublic ~~our~~sector ~~customer~~and enterprise markets., ~~The~~partially ~~acquisition~~offset ofby ~~Splunk~~a ~~contributed~~slight ~~$228~~decline ~~million~~in ~~of product revenue to~~ the ~~EMEA~~service ~~segment~~provider ~~for~~and ~~fiscal~~cloud ~~2024~~market. From a country perspective, product revenue ~~decreased~~increased ~~by 10%~~ in the United Kingdom, ~~14% in~~ Germany, and 11France by 9%, in4%, ~~France~~and 6%, respectively.

APJC

Product revenue in the APJC segment ~~decreased~~increased by 137%, ~~driven~~with bygrowth ~~declines~~ across each of our customer markets. ~~The~~From ~~acquisition~~a ofcountry ~~Splunk~~perspective, ~~contributed $122 million of~~ product revenue toincreased ~~the APJC segment~~ in ~~fiscal~~Japan, ~~2024.~~Australia, ~~From a country perspective~~India, ~~product~~and ~~revenue~~China ~~decreased~~ by 87% ~~in Japan~~, 511% ~~in Australia~~, 1711%, ~~in India~~ and 3510% ~~in China~~respectively.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Product Revenue by Category

In addition to the primary view on a geographic basis, we also prepare financial information related to product categories and customer markets for various purposes. Effective fiscal 2024, we began reporting our product revenue in the following categories: Networking, Security, Collaboration, and Observability and conformed our product revenue for prior periods to the current year presentation.

The following table presents product revenue by category (in millions, except percentages):

Years Ended

~~2024~~2025 vs. ~~2023~~2024

~~2023 vs. 2022~~

July 27, 2024

July 29, 2023

July 30, 2022

Variance in Dollars

Variance in Percent

Variance in Dollars

Variance in Percent

July 26, 2025

July 27, 2024

July 29, 2023

Variance in Dollars

Variance in Percent

Product revenue:

Networking

2928,~~229~~304

3429,~~570~~229

2934,~~265~~570

(~~5,341~~925)

(153)

~~5,305~~

Security

58,~~075~~094

35,~~859~~075

3,~~699~~859

13,~~216~~019

3259

~~160~~

Collaboration

4,~~113~~154

4,~~052~~113

4,~~472~~052

6141

~~(420)~~

~~(9)~~

Observability

~~837~~1,055

~~661~~837

~~581~~661

~~176~~218

2726

Total

3941,~~253~~608

4339,~~142~~253

3843,~~018~~142

(32,~~889)~~355

~~(9)~~6

~~5,124~~

Amounts may not sum and percentages may not recalculate due to rounding.

Networking

~~Fiscal~~The Networking product category consists of our core networking technologies of switching, routing, wireless, and servers. Revenue from the Networking product category decreased by 3%, or $0.9 billion. Revenue declined across the portfolio as a result of product shipments returning to normalized levels during the first half of fiscal 2025 from the elevated levels of product shipments we experienced in the first half of fiscal 2024. ~~Compared~~Within ~~with~~the ~~Fiscal~~portfolio, ~~2023~~the revenue decline was primarily driven by servers. We also experienced a revenue decline in switching as a result of a decline in campus switching.

The Networking product category consists of our core networking technologies of switching, routing, wireless, and servers. Revenue from the Networking product category decreased by 15%, or $5.3 billion. During fiscal 2024, we saw customers scrutinizing spend and needing additional time to implement elevated levels of product shipments received in prior quarters. Revenue declined in both campus switching and data center switching, primarily driven by declines in our Catalyst 9000 series and Nexus 9000 series offerings. We experienced a revenue decline in enterprise routing, although we saw revenue growth in our SD-WAN offerings. The decrease in wireless was primarily driven by our WiFi-6 products and Meraki offerings. We also saw a revenue decline in routed optical networking.

Fiscal 2023 Compared with Fiscal 2022

Revenue from the Networking product category increased by 18%, or $5.3 billion. Revenue grew in both campus switching and data center switching. This was primarily driven by strong growth in our Catalyst 9000 series, Nexus 9000 series and Meraki switching offerings. The increase in enterprise routing was primarily driven by growth in Catalyst 8000 routers, SD-WAN and IoT routing offerings. Wireless grew primarily driven by our WiFi-6 products and Meraki offerings. Revenue in routed optical networking was flat, primarily driven by growth in our Core routing portfolio, including our Cisco 8000 series offerings and growth in our webscale provider market.

Security

~~Fiscal~~The ~~2024~~Security ~~Compared~~product ~~with~~category ~~Fiscal~~consists ~~2023~~of our Network Security, Identity and Access Management, SASE and Threat Intelligence, Detection, and Response offerings. Revenue in our Security product category increased by 59%, or $3.0 billion, primarily driven by Threat Intelligence, Detection, and Response offerings, which includes the offerings from Splunk, and to a lesser extent, growth in our SASE and Network Security offerings.

The Security product category consists of our Network Security, Identity and Access Management, SASE and Threat Intelligence, Detection, and Response offerings. Revenue in our Security product category increased by 32%, or $1.2 billion, primarily driven by the contribution of Splunk offerings and growth across the portfolio. The Security product category grew 4%, not including the contribution from Splunk offerings.

Fiscal 2023 Compared with Fiscal 2022

Revenue in the Security product category increased by 4%, or $160 million, primarily driven by growth in our Secure Access Service Edge and Zero Trust offerings.

Collaboration

~~Fiscal~~The ~~2024~~Collaboration ~~Compared~~product ~~with~~category ~~Fiscal~~consists ~~2023~~of our Webex Suite, Collaboration Devices, Contact Center and CPaaS offerings. Revenue in our Collaboration product category increased 1%, or $41 million, primarily driven by revenue growth in our Collaboration Devices, CPaaS and Contact Center offerings, partially offset by a decline in our Webex Suite offerings.

The Collaboration product category consists of our Webex Suite, Collaboration Devices, Contact Center and CPaaS offerings. Revenue in our Collaboration product category increased 2%, or $61 million, primarily driven by growth across the portfolio, except our Meetings offering.Observability

39The Observability product category consists of our network assurance, monitoring and analytics and observability suite offerings. Revenue in our Observability product category increased by 26%, or $218 million, primarily driven by our Observability Suite offerings from Splunk and growth in our ThousandEyes network services offerings, partially offset by a decline in monitoring and analytics.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Fiscal 2023 Compared with Fiscal 2022

Revenue in the Collaboration product category decreased 9%, or $420 million, primarily driven by declines in Collaboration Devices and Meetings, partially offset by growth in our Calling and Contact Center offerings.

Observability

Fiscal 2024 Compared with Fiscal 2023

The Observability product category consists of our network assurance, monitoring and analytics and observability suite offerings. Revenue in our Observability product category increased by 27%, or $176 million, driven by growth in our ThousandEyes offering and the contribution from Observability Suite, our Splunk offering. Product revenue in the Observability product category increased 15%, not including the contribution from Splunk.

Fiscal 2023 Compared with Fiscal 2022

Revenue in our Observability product category increased 14%, or $80 million, driven by growth in our ThousandEyes and monitoring and analytics offerings.

Services Revenue by Segment

The following table presents the breakdown of services revenue by segment (in millions, except percentages):

	Years Ended									~~2024~~2025 vs. ~~2023~~2024
	July 27, 2024			July 29, 2023			July 30, 2022			Variance in Dollars		Variance in Percent
	July 26, 2025			July 27, 2024			July 29, 2023			Variance in Dollars		Variance in Percent
Services revenue:
Americas	$	89,~~829~~019		$	8,~~427~~829		$	8,~~194~~427		$	~~402~~190	52	%
Percentage of service revenue	6059.79		%	60.87		%	60.58		%
EMEA	3,~~472~~702			3,~~269~~472			3,~~171~~269			~~203~~230		67	%
Percentage of service revenue	2324.96		%	23.69		%	23.46		%
APJC	2,~~249~~325			2,~~160~~249			2,~~173~~160			8976		43	%
Percentage of service revenue	15.5		%	15.65		%	1615.06		%
Total	$	1415,~~550~~046		$	1314,~~856~~550		$	13,~~539~~856		$	~~694~~496	53	%

Amounts may not sum and percentages may not recalculate due to rounding.

Services revenue increased 53%, primarily driven by ~~growth in our solution support~~software, ~~advisory~~cloud ~~services~~ and ~~software~~virtualization support ~~offerings.~~from ~~The acquisition of~~ Splunk ~~also~~and ~~contributed~~product tooffering ~~the~~support ~~growth in~~ services ~~revenue for fiscal 2024~~. Services revenue increased across ~~all~~each of our geographic segments. ~~Services revenue grew 3%, not including the contribution from Splunk.~~

Gross Margin

The following table presents the gross margin for products and services (in millions, except percentages):

	AMOUNT						PERCENTAGE
Years Ended	July 2726, ~~2024~~2025		July 2927, ~~2023~~2024		July 3029, ~~2022~~2023		July 2726, ~~2024~~2025		July 2927, ~~2023~~2024		July 3029, ~~2022~~2023
Gross margin:
Product	$	2426,~~914~~487	$	2624,~~552~~914	$	2326,~~204~~552	63.57	%	6163.5	%	61.05	%
Services	910,~~914~~303		9,~~201~~914		9,~~044~~201		68.15	%	6668.41	%	66.84	%
Total	$	3436,~~828~~790	$	3534,~~753~~828	$	3235,~~248~~753	64.79	%	6264.7	%	62.57	%

40Product Gross Margin

The following table summarizes the key factors that contributed to the change in product gross margin percentage from fiscal 2024 to fiscal 2025:


	Product Gross Margin Percentage
Fiscal 2024	63.5	%
Productivity (1)	2.0	%
Product pricing	(1.6)	%
Mix of products sold	1.1	%
Legal dispute with supplier	(0.8)	%
Amortization of purchased intangible assets	(0.4)	%
Others	(0.1)	%
Fiscal 2025	63.7	%

(1) Productivity includes overall manufacturing-related costs, such as component costs, warranty expense, provisions for inventory and the liability related to purchase commitments with contract manufacturers and suppliers, freight, logistics, shipment volume, and other items not categorized elsewhere.

Product gross margin increased by 0.2 percentage points primarily driven by benefits from Splunk and productivity improvements, partially offset by negative impacts from pricing, a charge as a result of a legal dispute with a supplier, and amortization of purchased intangible assets primarily related to Splunk. The productivity improvements were primarily driven

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

~~Product~~by ~~Gross~~the ~~Margin~~effects of higher shipment volume and lower total provisions for inventory and the liability related to purchase commitments with contract manufacturers and suppliers.

The following table summarizes the key factors that contributed to the change in product gross margin percentage from fiscal 2023 to fiscal 2024:

	Product Gross Margin Percentage
Fiscal 2023	61.5	%
Productivity (1)	1.7	%
Product pricing	(0.6)	%
Mix of products sold	2.0	%
Amortization of purchased intangible assets	(0.9)	%
Others	(0.2)	%
Fiscal 2024	63.5	%

(1) Productivity includes overall manufacturing-related costs, such as component costs, warranty expense, provision for inventory, freight, logistics, shipment volume, and other items not categorized elsewhere.

Product gross margin increased by 2.0 percentage points primarily driven by favorable product mix, productivity benefits, largely driven by lower freight and other costs, and benefits from Splunk. This was partially offset by the amortization of purchased intangible assets primarily related to Splunk, and negative impacts from pricing.

Supply Chain Impacts and Risks

In past periods, we took multiple actions in order to mitigate component shortages and address significant supply constraints., ~~These~~which ~~supply constraints~~ resulted in the need to secure long-term supply and increased our inventory supply chain balances compared to historical levels. ~~This~~In fiscal 2025, we entered into additional purchase commitments with contract manufacturers and suppliers related to manufacturing Cisco Silicon One and other products to meet demand from webscale and other customers. We expect to continue entering into these additional purchase commitments in ~~turn~~fiscal ~~has~~2026. These actions and additional purchase commitments have in turn significantly increased our supply chain exposure, which has resulted in negative impacts to our product gross margin in recent periods and may result in further negative impacts in future periods. ~~This~~In ~~exposure~~addition, ~~includes~~on August 26, 2025, we settled a legal dispute with a supplier relating to purchase obligations arising under long-term supply arrangements, which resulted in a charge to product cost of sales, which is described in Note 21 to the Consolidated Financial Statements. The remaining and new supply chain exposures include potential material excess and obsolete or other charges if product demand significantly decreases for a sustained duration, we are unable to generate demand for certain products planned for development, or we are otherwise unable to mitigate ~~the~~these ~~remaining~~ supply chain exposures. Additionally, 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.

Services Gross Margin

Our services gross margin percentage increased by 10.74 percentage points primarily due to higher sales volume, ~~lower headcount-related~~ and lower delivery costs, ~~lower~~partially ~~variable~~offset ~~compensation~~by ~~expense~~higher ~~and~~headcount-related ~~favorable mix of service offerings~~costs.

Our services gross margin normally experiences some fluctuations due to various factors such as the timing of contract initiations in our renewals, our strategic investments in headcount, and the resources we deploy to support the overall service business. Other factors include the mix of service offerings, as the gross margin from our advanced services is typically lower than the gross margin from technical support services.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Gross Margin by Segment

The following table presents the total gross margin for each segment (in millions, except percentages):

	AMOUNT						PERCENTAGE
Years Ended	July 2726, ~~2024~~2025		July 2927, ~~2023~~2024		July 3029, ~~2022~~2023		July 2726, ~~2024~~2025		July 2927, ~~2023~~2024		July 3029, ~~2022~~2023
Gross margin:
Americas	$	2122,~~372~~962	$	21,~~350~~372	$	1921,~~117~~350	6668.82	%	6366.8	%	6463.18	%
EMEA	910,~~755~~545		109,~~016~~755		810,~~969~~016		6971.1	%	6669.21	%	6566.42	%
APJC	5,~~187~~431		5,~~424~~187		5,~~241~~424		6766.24	%	6467.42	%	6564.34	%
Segment total	3638,~~312~~938		36,~~788~~312		3336,~~326~~788		6768.57	%	6467.5	%	64.65	%
Unallocated corporate items (1)	(12,~~484~~148)		(1,~~035~~484)		(1,~~078~~035)
Total	$	3436,~~828~~790	$	3534,~~753~~828	$	3235,~~248~~753	64.79	%	6264.7	%	62.57	%

(1) The unallocated corporate items include the effects of amortization and impairments of acquisition-related intangible assets, share-based compensation expense, significant litigation settlements (which includes the supplier-related legal settlement as described in Note 21 to the Consolidated Financial Statements) and other contingencies, charges related to asset impairments and restructurings, and certain other charges. We do not allocate these items to the gross margin for each segment because management does not include such information in measuring the performance of the operating segments.

Amounts may not sum and percentages may not recalculate due to rounding.

WeThe ~~experienced~~Americas segment had a gross margin percentage increase indriven ~~our~~by ~~Americas~~positive ~~segment~~impacts ~~due~~from to productivity ~~benefits,~~improvements and favorable product mix ~~and higher services gross margin~~, partially offset by ~~negative impacts from~~ pricing erosion.

~~Gross~~The gross margin percentage increase in our EMEA segment ~~increased~~was primarily due to ~~favorable~~positive ~~product~~impacts ~~mix,~~from productivity ~~benefits~~improvements and ~~higher~~favorable ~~services~~product ~~gross margin~~mix, partially offset by ~~negative impacts from~~ pricing erosion.

The APJC segment had a gross margin percentage ~~increase~~decrease ~~was~~driven ~~due~~primarily toby ~~favorable~~pricing ~~product~~erosion ~~mix~~ and ~~productivity~~lower ~~benefits~~services gross margin, partially offset by ~~negative~~positive impacts from ~~pricing~~productivity improvements and favorable product mix.

~~Research and Development (“R&D”), Sales and Marketing, and General and Administrative (“G&A”) Expenses~~40

R&D, sales and marketing, and G&A expenses are summarized in the following table (in millions, except percentages):

	Years Ended									2024 vs. 2023
	July 27, 2024			July 29, 2023			July 30, 2022			Variance in Dollars		Variance in Percent
Research and development	$	7,983		$	7,551		$	6,774		$	432	6	%
Percentage of revenue	14.8		%	13.2		%	13.1		%
Sales and marketing	10,364			9,880			9,085			484		5	%
Percentage of revenue	19.3		%	17.3		%	17.6		%
General and administrative	2,813			2,478			2,101			335		14	%
Percentage of revenue	5.2		%	4.3		%	4.1		%
Total	$	21,160		$	19,909		$	17,960		$	1,251	6	%
Percentage of revenue	39.3		%	34.9		%	34.8		%

R&D Expenses

R&D expenses increased due to higher share-based compensation expense, incremental expenses from Splunk, higher cash compensation from acquisitions and higher discretionary spending, partially offset by lower headcount-related expenses and lower variable compensation expense.

We continue to invest in R&D in order to bring a broad range of products to market in a timely fashion. If we believe that we are unable to enter a particular market in a timely manner with internally developed products, we may purchase or license technology from other businesses, or we may partner with or acquire businesses as an alternative to internal R&D.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Research and Development (“R&D”), Sales and Marketing, and General and Administrative (“G&A”) Expenses

R&D, sales and marketing, and G&A expenses are summarized in the following table (in millions, except percentages):


	Years Ended									2025 vs. 2024
	July 26, 2025			July 27, 2024			July 29, 2023			Variance in Dollars		Variance in Percent
Research and development	$	9,300		$	7,983		$	7,551		$	1,317	16	%
Percentage of revenue	16.4		%	14.8		%	13.2		%
Sales and marketing	10,966			10,364			9,880			602		6	%
Percentage of revenue	19.4		%	19.3		%	17.3		%
General and administrative	2,992			2,813			2,478			179		6	%
Percentage of revenue	5.3		%	5.2		%	4.3		%
Total	$	23,258		$	21,160		$	19,909		$	2,098	10	%
Percentage of revenue	41.1		%	39.3		%	34.9		%

R&D Expenses

R&D expenses increased primarily due to higher headcount-related expenses reflecting our investments in AI, share-based compensation expense, cash compensation expenses from acquisitions, and discretionary spending.

Sales and Marketing Expenses

Sales and marketing expenses increased primarily due to ~~incremental~~higher headcount-related expenses, cash compensation expenses from ~~Splunk~~acquisitions, ~~higher~~ share-based compensation expense, ~~higher~~and discretionary spending, ~~higher headcount-related expenses and higher cash compensation from acquisitions,~~ partially offset by lower contracted services spending ~~and lower variable compensation expense~~.

G&A Expenses

G&A expenses increased primarily due to higher ~~acquisition~~headcount-related ~~costs, incremental~~ expenses ~~from Splunk~~, ~~higher~~ share-based compensation expense, ~~higher~~ and discretionary spending ~~and higher headcount-related expenses~~, partially offset by lower ~~contracted~~acquisition-related ~~services~~costs ~~spending~~ and lower ~~variable~~contracted ~~compensation~~services ~~expense~~spending.

Effect of Foreign Currency

In fiscal ~~2024~~2025, foreign currency fluctuations, net of hedging, ~~increased~~decreased the combined R&D, sales and marketing, and G&A expenses by approximately $3016 million, or 0.21%, compared with fiscal ~~2023~~2024.

Amortization of Purchased Intangible Assets

The following table presents the amortization of purchased intangible assets including impairment charges (in millions):

Years Ended

July 2726, ~~2024~~2025

July 2927, ~~2023~~2024

July 3029, ~~2022~~2023

Amortization of purchased intangible assets:

Cost of sales

~~955~~1,174

~~649~~955

~~749~~649

Operating expenses

~~698~~1,028

~~282~~698

~~328~~282

Total

12,~~653~~202

~~931~~1,653

~~1,077~~931

The increase in amortization of purchased intangible assets was primarily due to ~~amortization~~the acquisition of ~~purchased~~Splunk ~~intangibles~~and ~~from~~other ~~our~~ recent acquisitions, ~~including~~partially ~~$569~~offset ~~million~~by ~~due~~certain topurchased ~~the~~intangible assets that became fully amortized in larger part from our fiscal 2021 acquisition of ~~Splunk~~Acacia, and lower impairment charges ~~of $145 million~~ in fiscal ~~2024~~2025. ~~These~~Impairment ~~increases~~charges related to purchased intangible assets were ~~partially~~$40 ~~offset~~million byand ~~certain~~$145 ~~purchased~~million ~~intangible~~for ~~assets~~fiscal ~~that~~2025 ~~became~~and ~~fully~~fiscal ~~amortized~~2024, respectively. The impairment charges were ~~primarily~~a ~~due~~result toof declines in estimated fair ~~value~~values resulting from the reductions in or the elimination of expected future cash flows associated with certain ofin-process ~~our~~research ~~IPR&D~~and development and technology intangible assets.

Restructuring and Other Charges

We recognized total restructuring and other charges, which are included in operating expenses, of $~~789~~744 million and $~~531~~789 million in fiscal ~~2024~~2025 and ~~2023~~2024, respectively.

In the first quarter of fiscal 2025, we announced a restructuring plan in order to allow us to invest in key growth opportunities and drive more efficiencies in our business. This restructuring plan is expected to impact approximately 7% of our global workforce. The total pre-tax charges are estimated to be up to $1 billion. We expect this plan to be substantially completed by the end of fiscal 2025.41

In the third quarter of fiscal 2024, we initiated a restructuring plan in order to realign the organization and enable further investment in key priority areas, of which approximately 5% of our global workforce would be impacted. In connection with this plan, we incurred charges of $654 million for fiscal 2024 and the plan is substantially complete.

In fiscal 2023, we announced a restructuring plan in order to rebalance the organization and enable further investment in key priority areas. We incurred cumulative charges of $670 million and completed this plan in fiscal 2024.

We expect to reinvest substantially all of the cost savings from these restructuring plans in our key priority areas and key growth opportunities. As a result, the overall cost savings from these restructuring plans are not expected to be material for future periods.

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In the first quarter of fiscal 2025, we announced a restructuring plan in order to allow us to invest in key growth opportunities and drive more efficiencies in our business. This restructuring plan is expected to impact approximately 7% of our global workforce with estimated pre-tax charges of approximately $1 billion. In connection with this restructuring plan, we incurred charges of $744 million during fiscal 2025. We expect this plan to be substantially completed by the end of the second quarter of fiscal 2026.

In the third quarter of fiscal 2024, we initiated a restructuring plan in order to realign the organization and enable further investment in key priority areas. In connection with this plan, we incurred charges of $654 million for fiscal 2024 and the plan is complete.

Operating Income

The following table presents our operating income and our operating income as a percentage of revenue (in millions, except percentages):

Years Ended	July 2726, ~~2024~~2025			July 2927, ~~2023~~2024			July 3029, ~~2022~~2023
Operating income	$	1211,~~181~~760		$	1512,~~031~~181		$	1315,~~969~~031
Operating income as a percentage of revenue	2220.68		%	2622.46		%	2726.14		%

Operating income decreased by 193%, and as a percentage of revenue operating income decreased by 31.8 percentage points. These changes ~~were~~resulted primarily from ahigher ~~revenue~~share-based ~~decrease,~~compensation ~~incremental operating expenses from Splunk~~expense, higher ~~restructuring and other charges and higher~~ amortization of purchased intangible assets, ~~partially~~a ~~offset~~charge byas a ~~gross~~result ~~margin~~of ~~percentage~~a ~~increase~~legal ~~(driven~~dispute bywith ~~favorable~~a ~~product mix~~supplier, ~~productivity~~and ~~benefits,~~higher ~~partially~~cash ~~offset~~compensation byexpenses ~~negative impacts~~ from ~~pricing)~~acquisitions.

Interest and Other Income (Loss), Net

Interest Income (Expense), Net The following table summarizes interest income and interest expense (in millions):

Years Ended

~~2024~~2025 vs. ~~2023~~2024

July 27, 2024

July 29, 2023

July 30, 2022

Variance in Dollars

July 26, 2025

July 27, 2024

July 29, 2023

Variance in Dollars

Interest income

1,~~365~~001

~~962~~1,365

~~476~~962

~~403~~(364)

Interest expense

(1,~~006~~593)

(~~427~~1,006)

(~~360~~427)

(~~579~~587)

Interest income (expense), net

~~359~~(592)

~~535~~359

~~116~~535

(~~176~~951)

~~Interest~~The decrease in interest income ~~increased~~was driven by a ~~higher~~lower average balance of cash and available-for-sale debt investments and ~~higher~~lower interest rates. The increase in interest expense was primarily driven by higher interest rates and the issuances of senior notes and commercial paper during fiscal 2024. We incurred incremental net interest expense of approximately $500 million during fiscal 2024 to finance the acquisition of Splunk. We expect lower interest income in future periods due to a ~~lower~~higher average balance of ~~cash and available-for-sale~~ debt ~~investments~~outstanding ~~and~~during ~~higher interest expense due to~~ the ~~higher outstanding balance of debt~~period.

Other Income (Loss), Net The components of other income (loss), net, are summarized as follows (in millions):

	Years Ended						~~2024~~2025 vs. ~~2023~~2024
	July 27, 2024		July 29, 2023		July 30, 2022		Variance in Dollars
	July 26, 2025		July 27, 2024		July 29, 2023		Variance in Dollars
Gains (losses) on investments, net:
Available-for-sale debt investments	$	(67100)	$	(2167)	$	9(21)	$	(4633)
Marketable equity investments	65126		3765		~~(38)~~37		2861
Privately held investments	~~(164)~~56		(~~193~~164)		~~486~~(193)		29220
Net gains (losses) on investments	~~(166)~~82		(~~177~~166)		~~457~~(177)		11248
Other gains (losses), net	(~~140~~150)		(71140)		(6571)		(6910)
Other income (loss), net	$	(~~306~~68)	$	(~~248~~306)	$	~~392~~(248)	$	~~(58)~~238

The change in our other income (loss), net was primarily driven by ~~higher~~lower ~~losses~~impairment ~~in our available-for-sale debt investments and unfavorable impacts from foreign exchange~~charges, ~~partially offset by~~ higher unrealized gains on our ~~marketable~~privately ~~equity~~held investments, and ~~lower~~higher ~~net~~gains ~~losses~~ on our ~~privately~~marketable ~~held~~equity investments.

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Provision for Income Taxes

The provision for income taxes resulted in an effective tax rate of 158.63% for fiscal ~~2024~~2025, compared with 1715.76% for fiscal ~~2023~~2024. The net 27.13 percentage points decrease in the effective tax rate was primarily due to ana ~~increase~~$720 inmillion ~~discrete~~ tax ~~benefits~~benefit ~~relating~~related to ~~prior~~the U.S. Tax Court opinion issued during the first quarter of fiscal 2025 regarding the U.S. taxation of deemed foreign dividends in the transition year ~~return-to-provision~~of ~~true~~the upTax Cut and Job Act ("Tax Act") (our fiscal 2018) and an increase in stock-based compensation windfall ~~benefit~~.

For a full reconciliation of our effective tax rate to the U.S. federal statutory rate of 21% and for further explanation of our provision for income taxes, see Note 18 to the Consolidated Financial Statements.

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LIQUIDITY AND CAPITAL RESOURCES

The following sections discuss the effects of changes in our balance sheet, our capital allocation strategy including stock repurchase program and dividends, our contractual obligations, and certain other commitments and activities on our liquidity and capital resources.

Balance Sheet and Cash Flows

Cash and Cash Equivalents and Investments The following table summarizes our cash and cash equivalents and investments (in millions):

July 27, 2024

July 29, 2023

Increase (Decrease)

July 26, 2025

July 27, 2024

Increase (Decrease)

Cash and cash equivalents

78,~~508~~346

107,~~123~~508

~~(2,615)~~838

Available-for-sale debt investments

97,~~865~~381

159,~~592~~865

(52,~~727~~484)

Marketable equity securities

~~481~~383

~~431~~481

50(98)

Total

1716,~~854~~110

2617,~~146~~854

(81,~~292~~744)

The net decrease in cash and cash equivalents and investments from fiscal ~~2023~~2024 to fiscal ~~2024~~2025 was primarily driven by ~~a net outflow for the acquisition of Splunk of $27.5 billion,~~ cash returned to stockholders in the form of cash dividends of $6.4 billion and repurchases of common stock of $56.80 billion, ~~repayment~~net repayments of debt ofand ~~$1.8~~short-term ~~billion,~~borrowing ~~net cash paid for our other acquisitions, excluding Splunk,~~ of $12.38 billion, and capital expenditures of $0.79 billion. These uses of cash were partially offset by ~~the issuance of senior notes for~~ net ~~proceeds of $13.4 billion, net~~ cash provided by operating activities of $1014.92 billion ~~and net issuances of commercial paper notes of $10~~.8 ~~billion.~~ The net cash provided by operating activities during fiscal ~~2024~~2025 ~~includes~~benefited ~~the~~from ~~fiscal~~lower ~~2023 federal~~ tax ~~payment of $2~~payments.~~8 billion that was deferred by the IRS as a result of the California floods and the U.S. transition tax payment of $1.4 billion.~~

We maintain an investment portfolio of various holdings, types, and maturities. We classify our investments as short-term investments based on their nature and their availability for use in current operations. We believe the overall credit quality of our portfolio is strong, with our cash equivalents and our available-for-sale debt investment portfolio consisting primarily of high quality investment-grade securities. We believe that our strong cash and cash equivalents and investments position allows us to use our cash resources for strategic investments to gain access to new technologies, for acquisitions, for customer financing activities, for working capital needs, and for the repurchase of shares of common stock and payment of dividends as discussed below.

Securities Lending We periodically engage in securities lending activities with certain of our available-for-sale debt investments. These transactions are accounted for as a secured lending of the securities, and the securities are typically loaned only on an overnight basis. We require collateral equal to at least 102% of the fair market value of the loaned security and that the collateral be in the form of cash or liquid, high-quality assets. We engage in these secured lending transactions only with highly creditworthy counterparties, and the associated portfolio custodian has agreed to indemnify us against collateral losses. We did not experience any losses in connection with the secured lending of securities during the periods presented. As of July 2726, ~~2024~~2025 and July 2927, ~~2023~~2024, we had no outstanding securities lending transactions.

Free Cash Flow and Capital Allocation As part of our capital allocation strategy, we target to return a minimum of 50% of our free cash flow annually to our stockholders through cash dividends and repurchases of common stock.

We define free cash flow as net cash provided by operating activities less cash used to acquire property and equipment. The following table reconciles our net cash provided by operating activities to free cash flow (in millions):

Years Ended

July 2726, ~~2024~~2025

July 2927, ~~2023~~2024

July 3029, ~~2022~~2023

Net cash provided by operating activities

1014,~~880~~193

1910,~~886~~880

1319,~~226~~886

Acquisition of property and equipment

(~~670~~905)

(~~849~~670)

(~~477~~849)

Free cash flow

1013,~~210~~288

1910,~~037~~210

1219,~~749~~037

We expect that cash provided by operating activities may fluctuate in future periods as a result of a number of factors, including fluctuations in our operating results, the rate at which products are shipped during the quarter (which we refer to as shipment linearity), the timing and collection of accounts receivable and financing receivables, inventory and supply chain management, deferred revenue and the timing and amount of tax and other payments. For additional discussion, see “Part I, Item 1A. Risk Factors” in this report.

45We consider free cash flow to be a liquidity measure that provides useful information to management and investors because of our intent to return a stated percentage of free cash flow to stockholders in the form of dividends and stock repurchases. We

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~~deferred~~further ~~revenue~~regard free cash flow as a useful measure because it reflects cash that can be used to, among other things, invest in our business, make strategic acquisitions, repurchase common stock, and pay dividends on our common stock, after deducting capital investments. A limitation of the ~~timing~~utility ~~and~~of ~~amount~~free cash flow as a measure of ~~tax~~financial performance and ~~other~~liquidity ~~payments.~~is ~~For~~that ~~additional~~the ~~discussion~~free cash flow does not represent the total increase or decrease in our cash balance for the period. In addition, ~~see~~we ~~“Part~~have Iother required uses of cash, ~~Item 1A~~including repaying the principal of our outstanding indebtedness. ~~Risk~~Free ~~Factors”~~cash flow is not a measure calculated in ~~this~~accordance ~~report~~with U.S. generally accepted accounting principles and should not be regarded in isolation or as an alternative for net cash provided by operating activities or any other measure calculated in accordance with such principles, and other companies may calculate free cash flow in a different manner than we do.

We consider free cash flow to be a liquidity measure that provides useful information to management and investors because of our intent to return a stated percentage of free cash flow to stockholders in the form of dividends and stock repurchases. We further regard free cash flow as a useful measure because it reflects cash that can be used to, among other things, invest in our business, make strategic acquisitions, repurchase common stock, and pay dividends on our common stock, after deducting capital investments. A limitation of the utility of free cash flow as a measure of financial performance and liquidity is that the free cash flow does not represent the total increase or decrease in our cash balance for the period. In addition, we have other required uses of cash, including repaying the principal of our outstanding indebtedness. Free cash flow is not a measure calculated in accordance with U.S. generally accepted accounting principles and should not be regarded in isolation or as an alternative for net cash provided by operating activities or any other measure calculated in accordance with such principles, and other companies may calculate free cash flow in a different manner than we do.

The following table summarizes the dividends paid and stock repurchases (in millions, except per-share amounts):

	DIVIDENDS				STOCK REPURCHASE PROGRAM					TOTAL
Years Ended	Per Share		Amount		Shares	Weighted-Average Price per Share		Amount		Amount
July 26, 2025	$	1.62	$	6,437	105	$	56.53	$	5,995	$	12,432
July 27, 2024	$	1.58	$	6,384	117	$	49.45	$	5,764	$	12,148
July 29, 2023	$1.54	~~1.54~~	$6,302	~~6,302~~	88	$48.49	~~48.49~~	$	4,271	$	10,573
July 30, 2022	$	1.50	$	6,224	146	$	52.82	$	7,734	$	13,958

On August 1413, ~~2024~~2025, our Board of Directors declared a quarterly dividend of $0.4041 per common share to be paid on October 2322, ~~2024~~2025, to all stockholders of record as of the close of business on October 23, ~~2024~~2025. Future dividends will be subject to the approval of our Board of Directors.

The remaining authorized amount for stock repurchases under this program is approximately $514.2 billion, with no termination date.

Accounts Receivable, Net The following table summarizes our accounts receivable, net (in millions):

July 27, 2024

July 29, 2023

Increase (Decrease)

July 26, 2025

July 27, 2024

Increase (Decrease)

Accounts receivable, net

6,~~685~~701

56,~~854~~685

~~831~~16

Our accounts receivable net, as of July 2726, ~~2024~~2025 ~~increased~~was byflat ~~approximately~~year ~~14%~~over ~~compared~~year ~~with~~as the ~~end~~increase ofin ~~fiscal~~the ~~2023, primarily due to timing and~~ amount of product and service billings atwas ~~the~~substantially ~~end~~offset ofby ~~fiscal~~improved ~~2024~~shipment ~~compared~~linearity ~~with~~in the ~~end~~fourth quarter of fiscal ~~2023~~2025.

Inventory Supply Chain The following table summarizes our inventories and inventory purchase commitments with contract manufacturers and suppliers (in millions):

July 27, 2024

July 29, 2023

July 30, 2022

Variance vs. July 29, 2023

Variance vs. July 30, 2022

July 26, 2025

July 27, 2024

July 29, 2023

Variance vs. July 27, 2024

Variance vs. July 29, 2023

Inventories

3,~~373~~164

3,~~644~~373

23,~~568~~644

(~~271~~209)

~~805~~(480)

Inventory purchase commitments

57,~~158~~599

75,~~253~~158

127,~~964~~253

(2,~~095)~~441

~~(7,806)~~346

Inventory deposits and prepayments

~~973~~825

~~1,109~~973

1,~~484~~109

(~~136~~148)

(~~511~~284)

The following table summarizes our inventory purchase commitments with contract manufacturers and suppliers by period (in millions):

	July 27, 2024		July 29, 2023		July 30, 2022		Variance vs. July 29, 2023		Variance vs. July 30, 2022
	July 26, 2025		July 27, 2024		July 29, 2023		Variance vs. July 27, 2024		Variance vs. July 29, 2023
Less than 1 year	$	37,~~952~~202	$	53,~~270~~952	$	95,~~954~~270	$	(13,~~318)~~250	$	(61,~~002)~~932
1 to 3 years	~~1,085~~320		1,~~783~~085		21,~~240~~783		(~~698~~765)		(1,~~155~~463)
3 to 5 years	~~121~~77		~~200~~121		~~770~~200		(7944)		(~~649~~123)
Total	$	5,158	$	7,253	$	12,964	$	(2,095)	$	(7,806)
Total(1)	$	7,599	$	5,158	$	7,253	$	2,441	$	346

46 (1) The purchase commitments with contract manufacturers and suppliers as of July 26, 2025 has been reduced to give effect to the settlement of a legal dispute with a supplier over purchase obligations arising under certain long-term supply arrangements. See Note 21 to the Consolidated Financial Statements.

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Inventory as of July 2726, ~~2024~~2025 decreased by 76% and inventory purchase commitments with contract manufacturers and suppliers ~~decreased~~increased by 2947% from our balances at the end of fiscal ~~2023~~2024. The combined ~~decrease~~increase of 2226% in our inventory and inventory purchase commitments as compared with the end of fiscal ~~2023~~2024 was primarily ~~due~~related to ~~our~~commitments ~~continued~~with ~~efforts~~contract manufacturers and suppliers related to ~~work~~manufacturing ~~with~~Cisco ~~contract~~Silicon ~~manufacturers~~One and ~~suppliers~~other products to ~~optimize~~meet the demand from webscale and other customers. We expect our inventory ~~and~~balances ~~purchase~~may ~~commitment~~increase ~~levels~~in future quarters as we work to fulfill this demand.

WeIn addition, we have increased our levels of inventory in recent years in order to help mitigate risks in our supply chain., Weand ~~also~~ began increasing our inventory supply chain balances starting in fiscal 2021 in order to address significant supply constraints seen industry-wide at the time. The increases were primarily due to arrangements to secure supply and pricing for certain product components and commitments with contract manufacturers to meet customer demand and to address extended lead times, as well as advance payments with suppliers to secure future supply, as a result of the supply constraints. Our risks of future material excess and obsolete inventory and related losses are further outlined in the Result of Operations—Product Gross Margin section.

We purchase components from a variety of suppliers and use several contract manufacturers to provide manufacturing services for our products. During the normal course of business, in order to manage manufacturing lead times and help ensure adequate component supply, we enter into agreements with contract manufacturers and suppliers that allow them to procure inventory based upon criteria as defined by us or that establish the parameters defining our requirements and our commitment to securing manufacturing capacity.

Our inventory purchase commitments are for short-term product manufacturing requirements as well as for commitments to suppliers to secure manufacturing capacity. Certain of our inventory purchase commitments are entered into directly with suppliers and relate to fixed-dollar commitments to secure supply and pricing for certain product components for multi-year periods. A significant portion of our reported purchase commitments arising from these agreements are firm, noncancelable, and unconditional commitments. In certain instances, these agreements allow us the option to cancel, reschedule, and adjust our requirements based on our business needs prior to firm orders being placed.

Inventory and supply chain management remain areas of focus as we balance the need to maintain supply chain flexibility to help ensure competitive lead times with the risk of inventory obsolescence because of supply constraints, rapidly changing technology and customer requirements. We believe the amount of our inventory and inventory purchase commitments is appropriate for our current and expected customer demand and revenue levels.

Financing Receivables and Guarantees The following table summarizes our financing receivables (in millions):

July 27, 2024

July 29, 2023

Increase (Decrease)

July 26, 2025

July 27, 2024

Increase (Decrease)

Loan receivables, net

5,~~808~~591

5,~~857~~808

(49217)

Lease receivables, net

~~906~~936

~~978~~906

~~(72)~~30

Total, net

6,~~714~~527

6,~~835~~714

(~~121~~187)

Financing Receivables Our financing arrangements include loans and leases. Our loan receivables include customer financing for purchases of our hardware, software and services (including technical support and advanced services), and also may include additional funds for other costs associated with network installation and integration of our products and services. Lease receivables include sales-type leases. Arrangements related to leases are generally collateralized by a security interest in the underlying assets. Financing receivables decreased by 23% as compared with the end of fiscal ~~2023~~2024.

Financing Guarantees In the normal course of business, third parties may provide financing arrangements to our customers and channel partners under financing programs. The financing arrangements provided by third parties are related to leases and loans and typically have terms of up to three years. In some cases, we provide guarantees to third parties for these lease and loan arrangements. The financing arrangements to channel partners consist of revolving short-term financing provided by third parties, with payment terms generally ranging from 60 to 90 days. In certain instances, these financing arrangements result in a transfer of our receivables to the third party. The receivables are derecognized upon transfer, as these transfers qualify as true sales, and we receive payments for the receivables from the third party based on our standard payment terms.

The volume of channel partner financing was $2724.19 billion, $3227.1 billion, and $2732.91 billion in fiscal ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, respectively. These financing arrangements facilitate the working capital requirements of the channel partners, and in some cases, we guarantee a portion of these arrangements. The balance of the channel partner financing subject to guarantees was $1.23 billion and $1.72 billion as of July 2726, ~~2024~~2025 and July 2927, ~~2023~~2024, respectively. We could be called upon to make payments under these guarantees in the event of nonpayment by the channel partners. Historically, our payments under these arrangements have been immaterial. Where we provide a guarantee, we defer the revenue associated with the channel partner financing arrangement in accordance with revenue recognition policies, or we record a liability for the fair value of the guarantees. In either case, the deferred revenue is recognized as revenue when the guarantee is removed. As of July 27, 2024,

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financing arrangement in accordance with revenue recognition policies, or we record a liability for the fair value of the guarantees. In either case, the deferred revenue is recognized as revenue when the guarantee is removed. As of July 26, 2025, the total maximum potential future payments related to these guarantees was approximately $~~127~~123 million, of which approximately $13 million was recorded as deferred revenue.

Borrowings

Senior Notes The following table summarizes the principal amount of our senior notes (in millions):

	Maturity Date	July 2726, ~~2024~~2025		July 2927, ~~2023~~2024
Senior notes:
Fixed-rate notes:
2.20%	September 20, 2023	$	—	$	750
3.50%	June 15, 2025	$	—	$	500
3.625%	March 4, 2024	—		1,000
4.90%	February 26, 2026	1,000		1,000
3.50%	June 15, 2025	500		500
4.90%	February 26, 2026	1,000		—
2.95%	February 28, 2026	750		750
2.50%	September 20, 2026	1,500		1,500
4.80%	February 26, 2027	2,000		—2,000
4.85%	February 26, 2029	2,500		—
4.55%	February 24, 2028	1,000		—
4.95%	February 26, 2031	2,500		—
4.85%	February 26, 2029	2,500		2,500
5.05%	February 26, 2034	2,500		—
4.75%	February 24, 2030	1,000		—
4.95%	February 26, 2031	2,500		2,500
4.95%	February 24, 2032	1,000		—
5.05%	February 26, 2034	2,500		2,500
5.10%	February 24, 2035	1,250		—
5.90%	February 15, 2039	2,000		2,000
5.50%	January 15, 2040	2,000		2,000
5.30%	February 26, 2054	2,000		—2,000
5.35%	February 26, 2064	1,000		—
5.50%	February 24, 2055	750		—
Total		$	20,250	$	8,500
5.35%	February 26, 2064	1,000		1,000
Total		$	24,750	$	20,250

In February ~~2024~~2025, we issued senior notes for an aggregate principal amount of $~~13.~~5.0 billion.

Interest is payable semiannually on each class of the senior fixed-rate notes, each of which is redeemable by us at any time, subject to a make-whole premium. We were in compliance with all debt covenants as of July 2726, ~~2024~~2025.

Commercial Paper We have a short-term debt financing program in which up to $15.0 billion is available through the issuance of commercial paper notes. We use the proceeds from the issuance of commercial paper notes for general corporate purposes. We had $3.5 billion and $10.9 billion in commercial paper notes outstanding as of July 2726, ~~2024~~2025, and ~~no commercial paper notes outstanding as of~~ July 2927, ~~2023~~2024, respectively.

Credit Facility On February 2, 2024, we entered into an amended and restated 5-year $5.0 billion unsecured revolving credit agreement. The interest rate for the credit agreement is determined based on a formula using certain market rates. The credit agreement requires that we comply with certain covenants, including that we maintain an interest coverage ratio (defined in the agreement as the ratio of consolidated EBITDA to consolidated interest expense) of not less than 3.0 to 1.0. As of July 2726, ~~2024~~2025, we were in compliance with all associated covenants and we had not borrowed any funds under our credit agreement.

~~Remaining Performance Obligations The following table presents the breakdown of remaining performance obligations (in millions):~~47

	July 27, 2024		July 29, 2023		Increase (Decrease)
Product	$	20,055	$	15,802	$	4,253
Services	20,993		19,066		1,927
Total	$	41,048	$	34,868	$	6,180
Short-term RPO	$	20,882	$	17,910	$	2,972
Long-term RPO	20,166		16,958		3,208
Total	$	41,048	$	34,868	$	6,180

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

~~Total~~Remaining ~~remaining~~Performance ~~performance~~Obligations The ~~obligations~~following ~~increased~~table ~~18%~~presents ~~in fiscal 2024. Total remaining performance obligations as of July 27, 2024 includes $3.5 billion related to~~ the ~~acquisition~~breakdown of ~~Splunk. Remaining performance obligations for product increased 27% and~~ remaining performance obligations ~~for~~(in ~~services increased 10%, compared to fiscal 2023. We expect approximately 51% of total remaining performance obligations to be recognized as revenue over the next 12 months.~~millions):


	July 26, 2025		July 27, 2024		Increase (Decrease)
Product	$	21,572	$	20,055	$	1,517
Services	21,961		20,993		968
Total	$	43,533	$	41,048	$	2,485

Short-term RPO	$	21,723	$	20,882	$	841
Long-term RPO	21,810		20,166		1,644
Total	$	43,533	$	41,048	$	2,485

Total remaining performance obligations increased 6% in fiscal 2025. Remaining performance obligations for product increased 8% and remaining performance obligations for services increased 5%, compared to fiscal 2024. We expect approximately 50% of total remaining performance obligations to be recognized as revenue over the next 12 months.

Deferred Revenue The following table presents the breakdown of deferred revenue (in millions):

July 27, 2024

July 29, 2023

Increase (Decrease)

July 26, 2025

July 27, 2024

Increase (Decrease)

Product

13,~~219~~490

1113,~~505~~219

~~1,714~~271

Services

15,~~256~~289

1415,~~045~~256

~~1,211~~33

Total

28,~~475~~779

2528,~~550~~475

~~2,925~~304

Reported as:

Current

16,~~249~~416

1316,~~908~~249

~~2,341~~167

Noncurrent

12,~~226~~363

1112,~~642~~226

~~584~~137

Total

28,~~475~~779

2528,~~550~~475

~~2,925~~304

Total deferred revenue increased 111% in fiscal ~~2024~~2025. The increase in deferred product revenue of 152% was primarily due to ~~the contribution from the Splunk acquisition of $1.7 billion and~~ increased deferrals related to our recurring software offerings. ~~The~~Deferred ~~increase~~service ~~in deferred services~~ revenue ~~of 9%~~ was ~~driven~~flat byyear ~~higher~~over ~~business volume and the impact of contract renewals and the contribution of the Splunk acquisition, partially offset by ongoing amortization of deferred services revenue~~year.

Contractual Obligations

The impact of contractual obligations on our liquidity and capital resources in future periods should be analyzed in conjunction with the factors that impact our cash flows from operations discussed previously. In addition, we plan for and measure our liquidity and capital resources through an annual budgeting process. The following table summarizes our contractual obligations at July 2726, ~~2024~~2025 (in millions):

PAYMENTS DUE BY PERIOD

July 27, 2024

Total

Less than 1 Year

1 to 3 Years

3 to 5 Years

More than 5 Years

July 26, 2025

Total

Less than 1 Year

1 to 3 Years

3 to 5 Years

More than 5 Years

Operating leases

1,~~420~~748

~~409~~429

~~502~~569

~~256~~381

~~253~~369

Purchase commitments with contract manufacturers and suppliers

57,~~158~~599

37,~~952~~202

~~1,085~~320

~~121~~77

—

Other purchase obligations

38,~~998~~136

12,~~295~~399

13,~~736~~247

~~822~~2,383

~~145~~107

Senior notes

20,253

500

5,253

2,500

12,000

Long-term debt

24,753

1,751

4,502

3,500

15,000

Transition tax payable

41,~~092~~595

1,~~819~~595

~~2,273~~—

—

Other long-term liabilities

1,~~557~~745

—

~~232~~298

~~178~~221

1,~~147~~226

Total by period

3645,~~478~~576

713,~~975~~376

118,~~081~~936

36,~~877~~562

1316,~~545~~702

Other long-term liabilities (uncertainty in the timing of future payments)

12,~~789~~240

Total

3847,~~267~~816

~~Operating Leases For more information on our operating leases, see Note 8 to the Consolidated Financial Statements.~~48

Purchase Commitments with Contract Manufacturers and Suppliers We purchase components from a variety of suppliers and use several contract manufacturers to provide manufacturing services for our products. Our inventory purchase commitments are for short-term product manufacturing requirements as well as for commitments to suppliers to secure manufacturing capacity. Certain of our inventory purchase commitments are directly with suppliers and relate to fixed-dollar commitments to secure supply and pricing for certain product components for multi-year periods. A significant portion of our reported purchase commitments arising from these agreements are firm, noncancelable, and unconditional commitments. We record a liability for firm, noncancelable, and unconditional purchase commitments for quantities in excess of our future demand forecasts consistent with the valuation of our excess and obsolete inventory. See further discussion in “Inventory Supply Chain.”

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CISCO SYSTEMS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Operating Leases For more information on our operating leases, see Note 8 to the Consolidated Financial Statements.

Purchase Commitments with Contract Manufacturers and Suppliers We purchase components from a variety of suppliers and use several contract manufacturers to provide manufacturing services for our products. Our inventory purchase commitments are for short-term product manufacturing requirements as well as for commitments to suppliers to secure manufacturing capacity. Certain of our inventory purchase commitments are directly with suppliers and relate to fixed-dollar commitments to secure supply and pricing for certain product components for multi-year periods. A significant portion of our reported purchase commitments arising from these agreements are firm, noncancelable, and unconditional commitments. The purchase commitments with contract manufacturers and suppliers as of July 26, 2025 has been reduced to give effect to the settlement of a legal dispute with a supplier over purchase obligations arising under certain long-term supply arrangements. See Note 21 to the Consolidated Financial Statements. We record a liability for firm, noncancelable, and unconditional purchase commitments for quantities in excess of our future demand forecasts consistent with the valuation of our excess and obsolete inventory. See further discussion in “Inventory Supply Chain.”

Other Purchase Obligations Other purchase obligations represent an estimate of all contractual obligations in the ordinary course of business, other than operating leases and commitments with contract manufacturers and suppliers, for which we have not received the goods or services. Purchase orders are not included in the preceding table as they typically represent our authorization to purchase rather than binding contractual purchase obligations.

Long-Term Debt The amount of long-term debt in the preceding table represents the principal amount of the respective debt instruments. See Note 12 to the Consolidated Financial Statements.

Transition Tax Payable Transition tax payable represents future cash tax payments associated with the one-time U.S. transition tax on accumulated earnings for foreign subsidiaries as a result of the Tax ~~Cuts and Jobs~~ Act ~~(“the Tax Act”)~~.

Other Long-Term Liabilities Other long-term liabilities primarily include noncurrent income taxes payable, accrued liabilities for deferred compensation, deferred tax liabilities, and certain other long-term liabilities. Due to the uncertainty in the timing of future payments, our noncurrent income taxes payable of approximately $12.72 billion and deferred tax liabilities of $7675 million were presented as one aggregated amount in the total column on a separate line in the preceding table. Noncurrent income taxes payable include uncertain tax positions. See Note 18 to the Consolidated Financial Statements.

Other Commitments

In connection with our acquisitions, we have agreed to pay certain additional amounts contingent upon the continued employment with us of certain employees of the acquired entities. See Note 4 to the Consolidated Financial Statements.

WeOf ~~also~~the ~~have~~total ~~certain~~carrying ~~funding~~value ~~commitments~~of ~~primarily~~our ~~related~~investments toin ~~our~~ privately held ~~investments.~~companies ~~The~~as ~~funding~~of ~~commitments~~July 26, ~~were~~2025, $0.2 8 billion ~~and~~of such investments are considered to be in variable interest entities which are unconsolidated. We have total funding commitments of $0.3 billion asrelated to privately held investments. The carrying value of ~~July 27,~~these ~~2024~~investments and ~~July 29~~the additional funding commitments, ~~2023~~collectively, ~~respectively~~represent our maximum exposure related to privately held investments. See Note 10 to the Consolidated Financial Statements.

In the ordinary course of business, we have privately held investments and provide financing to certain customers. Certain of these investments are considered to be variable interest entities. We evaluate on an ongoing basis our privately held investments and customer financings, and we have determined that as of July 27, 2024 there were no material unconsolidated variable interest entities.

On an ongoing basis, we reassess our privately held investments and customer financings to determine if they are variable interest entities and if we would be regarded as the primary beneficiary pursuant to the applicable accounting guidance. As a result of this ongoing assessment, we may be required to make additional disclosures or consolidate these entities. Because we may not control these entities, we may not have the ability to influence these events.

We provide financing guarantees, which are generally for various third-party financing arrangements extended to our channel partners. We could be called upon to make payments under these guarantees in the event of nonpayment by the channel partners. See the previous discussion of these financing guarantees under “Financing Receivables and Guarantees.”

Liquidity and Capital Resource Requirements

Based on past performance and current expectations, we believe our cash and cash equivalents, investments, cash generated from operations, and ability to access capital markets and committed credit lines will satisfy, through at least the next 12 months, our liquidity requirements, both in total and domestically, including the following: working capital needs (including inventory and other supply related payments), capital expenditures, investment requirements, stock repurchases, cash dividends, contractual obligations, commitments, principal and interest payments on debt, pending acquisitions, future customer financings, and other liquidity requirements associated with our operations. There are no other transactions, arrangements, or relationships with unconsolidated entities or other persons that are reasonably likely to materially affect the liquidity and the availability of, as well as our requirements for, capital resources.

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Item 7A.			Quantitative and Qualitative Disclosures About Market Risk

Our financial position is exposed to a variety of risks, including interest rate risk, equity price risk, and foreign currency exchange risk.

Interest Rate Risk

Available-for-Sale Debt Investments We maintain an investment portfolio of various holdings, types, and maturities. Our primary objective for holding available-for-sale debt investments is to achieve an appropriate investment return consistent with preserving principal and managing risk. At any time, a sharp rise in market interest rates could have a material adverse impact on the fair value of our available-for-sale debt investment portfolio. Conversely, declines in interest rates, including the impact from lower credit spreads, could have a material adverse impact on interest income for our investment portfolio. Our available-for-sale debt investments are held for purposes other than trading. Our available-for-sale debt investments are not leveraged as of July 2726, ~~2024~~2025. We monitor our interest rate and credit risks, including our credit exposures to specific rating categories and to individual issuers. We believe the overall credit quality of our portfolio is strong.

The following tables present the hypothetical fair values of our available-for-sale debt investments, including the hedging effects when applicable, as a result of selected potential market decreases and increases in interest rates. The market changes reflect immediate hypothetical parallel shifts in the yield curve of plus or minus 50 basis points (BPS), plus 100 BPS, and plus 150 BPS. The hypothetical fair values as of July 2726, ~~2024~~2025 and July 2927, ~~2023~~2024 are as follows (in millions):


	VALUATION OF SECURITIES GIVEN AN INTEREST RATE DECREASE OF X BASIS POINTS			FAIR VALUE AS OF JULY 26, 2025	VALUATION OF SECURITIES GIVEN AN INTEREST RATE INCREASE OF X BASIS POINTS
	(150 BPS)	(100 BPS)	(50 BPS)		50 BPS	100 BPS	150 BPS
Available-for-sale debt investments	$7,454	$7,430	$7,405	$7,381	$7,356	$7,332	$7,307


	VALUATION OF SECURITIES GIVEN AN INTEREST RATE DECREASE OF X BASIS POINTS			FAIR VALUE AS OF JULY 27, 2024	VALUATION OF SECURITIES GIVEN AN INTEREST RATE INCREASE OF X BASIS POINTS
	(150 BPS)	(100 BPS)	(50 BPS)		50 BPS	100 BPS	150 BPS
Available-for-sale debt investments	$10,057	$9,993	$9,929	$9,865	$9,800	$9,736	$9,672

	VALUATION OF SECURITIESGIVEN AN INTEREST RATEDECREASE OF X BASIS POINTS			FAIR VALUEAS OF JULY 29, 2023	VALUATION OF SECURITIESGIVEN AN INTEREST RATEINCREASE OF X BASIS POINTS
	(150 BPS)	(100 BPS)	(50 BPS)		50 BPS	100 BPS	150 BPS
Available-for-sale debt investments	$15,901	$15,798	$15,695	$15,592	$15,489	$15,386	$15,284

Financing Receivables As of July 26, 2025, our financing receivables had a carrying value of $6.5 billion, compared with $6.7 billion as of July 27, 2024. As of July 26, 2025, a hypothetical 50 BPS increase or decrease in market interest rates would change the fair value of our financing receivables by a decrease or increase of approximately $0.1 billion, respectively.

~~Financing Receivables~~Debt As of July 2726, ~~2024~~2025, ~~our~~we ~~financing~~had ~~receivables~~$24.8 ~~had~~billion ain principal amount of senior fixed-rate notes outstanding. The carrying ~~value~~amount of the senior notes was $624.76 billion, ~~compared~~and ~~with~~the ~~$6.8~~related ~~billion~~fair asvalue ofbased ~~July 29,~~on ~~2023~~market prices was $25.0 billion. As of July 2726, ~~2024~~2025, a hypothetical 50 BPS increase or decrease in market interest rates would change the fair value of ~~our~~the ~~financing~~fixed-rate ~~receivables~~debt, by a decrease or increase of approximately $0.18 billion, respectively. However, this hypothetical change in interest rates would not impact the interest expense on the fixed-rate debt.

Debt As of July 27, 2024, we had $20.3 billion in principal amount of senior fixed-rate notes outstanding. The carrying amount of the senior notes was $20.1 billion, and the related fair value based on market prices was $20.4 billion. As of July 27, 2024, a hypothetical 50 BPS increase or decrease in market interest rates would change the fair value of the fixed-rate debt, excluding the $0.5 billion of hedged debt, by a decrease or increase of approximately $0.7 billion, respectively. However, this hypothetical change in interest rates would not impact the interest expense on the fixed-rate debt that is not hedged.

At any time, a sharp rise in market interest rates could cause us to incur additional interest expense to the extent we issue additional commercial paper or other debt.

Equity Price Risk

Marketable Equity Investments The fair value of our marketable equity investments is subject to market price volatility. We hold equity securities for strategic purposes or to diversify our overall investment portfolio. These equity securities are held for purposes other than trading. The total fair value of our marketable equity securities was $~~481~~383 million and $~~431~~481 million as of July 2726, ~~2024~~2025 and July 2927, ~~2023~~2024, respectively.

Privately Held Investments These investments are recorded in other assets in our Consolidated Balance Sheets. As of July 2726, ~~2024~~2025, the total carrying amount of our investments in privately held investments ~~were~~was ~~each~~$1.9 billion and $1.8 billion atas of July 2726, ~~2024~~2025 and July 2927, ~~2023~~2024, respectively. Some of these companies in which we invested are in the startup or development stages. These investments are inherently risky because the markets for the technologies or products these companies are developing are typically in the early stages and may never materialize. We could lose our entire investment in these companies. Our evaluation of privately held investments is based on the fundamentals of the businesses invested in, including, among other factors, the nature of their technologies and potential for financial return.

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Foreign Currency Exchange Risk

Our foreign exchange forward contracts outstanding at fiscal year-end are summarized in U.S. dollar equivalents as follows (in millions):

	July 27, 2024				July 29, 2023
	July 26, 2025				July 27, 2024
	Notional Amount		Fair Value		Notional Amount		Fair Value
Forward contracts:
Purchased	$	34,~~586~~498	$	(5921)	$	3,~~014~~586	$	(3359)
Sold	$	34,~~848~~480	$	6022	$	23,~~406~~848	$	3160

We conduct business globally in numerous currencies. The direct effect of foreign currency fluctuations on revenue has not been material because our revenue is primarily denominated in U.S. dollars. However, if the U.S. dollar strengthens relative to other currencies, such strengthening could have an indirect effect on our revenue to the extent it raises the cost of our products to non-U.S. customers and thereby reduces demand. A weaker U.S. dollar could have the opposite effect. However, the precise indirect effect of currency fluctuations is difficult to measure or predict because our revenue is influenced by many factors in addition to the impact of such currency fluctuations.

Approximately 7075% of our operating expenses are U.S.-dollar denominated. In fiscal ~~2024~~2025, foreign currency fluctuations, net of hedging, ~~increased~~decreased our combined R&D, sales and marketing, and G&A expenses by approximately $3016 million, or 0.21%, as compared with fiscal ~~2023~~2024. To reduce variability in operating expenses and service cost of sales caused by non-U.S.-dollar denominated operating expenses and costs, we may hedge certain forecasted foreign currency transactions with currency options and forward contracts. These hedging programs are not designed to provide foreign currency protection over long time horizons. In designing a specific hedging approach, we consider several factors, including offsetting exposures, significance of exposures, costs associated with entering into a particular hedge instrument, and potential effectiveness of the hedge. The gains and losses on foreign exchange contracts mitigate the effect of currency movements on our operating expenses and service cost of sales.

We also enter into foreign exchange forward and option contracts to reduce the short-term effects of foreign currency fluctuations on receivables and payables that are denominated in currencies other than the functional currencies of the entities. The market risks associated with these foreign currency receivables and payables relate primarily to variances from our forecasted foreign currency transactions and balances. We do not enter into foreign exchange forward or option contracts for speculative purposes.

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Item 8.			Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID 238)			5453
Reports of Management			5755
Consolidated Balance Sheets			5856
Consolidated Statements of Operations			5957
Consolidated Statements of Comprehensive Income			6058
Consolidated Statements of Cash Flows			6159
Consolidated Statements of Equity			6260
Notes to Consolidated Financial Statements			6361
Note 1: Basis of Presentation			6361
Note 2: Summary of Significant Accounting Policies			6361
Note 3: Revenue			6967
Note 4: Acquisitions			7169
Note 5: Goodwill and Purchased Intangible Assets			7472
Note 6: Restructuring and Other Charges			7674
Note 7: Balance Sheet and Other Details			7774
Note 8: Leases			7876
Note 9: Financing Receivables			8078
Note 10: Investments			8381
Note 11: Fair Value			8583
Note 12: Borrowings			8684
Note 13: Derivative Instruments			8886
Note 14: Commitments and Contingencies			9188
Note 15: Stockholders’ Equity			9391
Note 16: Employee Benefit Plans			9492
Note 17: Accumulated Other Comprehensive Income (Loss)			9895
Note 18: Income Taxes			9996
Note 19: Segment Information and Major Customers			~~102~~99
Note 20: Net Income per Share			~~103~~100
Note 21: Subsequent Event			101

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Cisco Systems, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Cisco Systems, Inc. and its subsidiaries (the “Company”) as of July 2726, ~~2024~~2025 and July 2927, ~~2023~~2024, and the related consolidated statements of operations, of comprehensive income, of stockholders' equity and of cash flows for each of the three years in the period ended July 2726, ~~2024~~2025, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of July 2726, ~~2024~~2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of July 2726, ~~2024~~2025 and July 2927, ~~2023~~2024, and the results of its operations and its cash flows for each of the three years in the period ended July 2726, ~~2024~~2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of July 2726, ~~2024~~2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Splunk Inc. (“Splunk”) from its assessment of internal control over financial reporting as of July 27, 2024, because it was acquired by the Company in a purchase business combination during 2024. We have also excluded Splunk from our audit of internal control over financial reporting. Splunk is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent approximately 3% and 3%, respectively, of the related consolidated financial statement amounts as of and for the year ended July 27, 2024.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

~~Critical Audit Matters~~53

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition for Certain Product and Services Revenue

As described in Note 2 to the consolidated financial statements, the Company derives revenue from contracts with customers that can include various combinations of products and services which are generally distinct and accounted for as separate performance obligations. The Company recognizes revenue upon transfer of control of promised goods or services in a contract with a customer in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. Transfer of control occurs once the customer has the contractual right to use the product, generally upon shipment, electronic delivery (or when the software is available for download by the customer), or once title and risk of loss has transferred to the customer. Transfer of control can also occur over time for software maintenance and services as the customer receives the benefit over the contract term. In certain customer arrangements, management applies judgment in identifying contractual terms and determining the transaction price and management may be required to estimate variable consideration when determining the amount of revenue to recognize. For the year ended July 27, 2024, the Company’s total revenue was $53.8 billion, of which the majority relates to certain product and services revenue.

The principal considerations for our determination that performing procedures relating to revenue recognition for certain product and services revenue is a critical audit matter are the significant judgment by management in identifying contractual terms in certain customer arrangements and a high degree of auditor judgment and effort in performing procedures and evaluating audit evidence relating to revenue recognition for certain product and services revenue.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process, including obtaining an understanding of management’s process for identifying and evaluating terms and conditions in certain customer arrangements and evaluating management’s determination of the impact of those terms and conditions on revenue recognition. These procedures also included, among others, testing, on a sample basis, (a) the completeness and accuracy of management’s identification and evaluation of terms and conditions by examining customer arrangements; (b) management’s process for determining the appropriate amount and timing of revenue recognition based on the contractual terms identified in customer arrangements; (c) revenue transactions by obtaining and inspecting source documents, such as contracts, purchase orders, invoices, and proof of delivery; and (d) the timing of recognition of revenue transactions.

Acquisition of Splunk — Valuation of Customer Contracts and Related Relationships Asset and the Technology Asset Acquired

As described in Note 4 to the consolidated financial statements, on March 18, 2024, the Company completed the acquisition of Splunk for total consideration of approximately $27 billion. The Company acquired $10.6 billion of intangible assets in connection with the acquisition. Of these acquired intangible assets, $6.1 billion of customer-related assets were recorded, of which the majority relates to customer contracts and related relationships, and $3.9 billion for a technology asset was recorded. The customer contracts and related relationships asset was valued using the with-and-without method under the income approach. The technology asset was valued using the multi-period excess earnings method under the income approach. The present value of projected future cash flows included significant judgment and assumptions regarding projected future revenues, projected expenses, attrition rates, the revenue build up period, and the discount rate for the customer contracts and related relationships asset and projected future revenues, projected expenses, the technology obsolescence rate, and the discount rate for the technology asset.

The principal considerations for our determination that performing procedures relating to the valuation of the customer contracts and related relationships asset and the technology asset acquired in connection with the acquisition of Splunk is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the customer-related and technology assets acquired; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to projected future revenues, projected expenses, attrition rates, the revenue build up period, and the discount rate for the customer contracts and related relationships asset and projected future revenues, projected expenses, the technology obsolescence rate, and the discount rate for the technology asset; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

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~~Addressing~~Critical ~~the~~Audit matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the customer contracts and related relationships asset and the technology asset acquired. These procedures also included, among others, (i) reading the purchase agreement; (ii) testing management’s process for developing the fair value estimate of the customer contracts and related relationships asset and the technology asset; (iii) evaluating the appropriateness of the income approach methods used by management; (iv) testing the completeness and accuracy of the underlying data used in the income approach methods; and (v) evaluating the reasonableness of significant assumptions used by management related to projected future revenues, projected expenses, attrition rates, the revenue build up period, and the discount rate for the customer contracts and related relationships asset and projected future revenues, projected expenses, the technology obsolescence rate, and the discount rate for the technology asset. Evaluating management’s assumptions related to projected future revenues, projected expenses, attrition rates, the revenue build up period, and the technology obsolescence rate involved considering (i) the current and past performance of Splunk; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the income approach methods and (ii) the reasonableness of the discount rate assumptions for the customer contracts and related relationships asset and the technology asset.Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition for Certain Products and Services

As described in Note 2 to the consolidated financial statements, the Company derives revenue from contracts with customers that can include various combinations of products and services which are generally distinct and accounted for as separate performance obligations. The Company recognizes revenue upon transfer of control of promised goods or services in a contract with a customer in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. Transfer of control occurs once the customer has the contractual right to use the product, generally upon shipment, electronic delivery (or when the software is available for download by the customer), or once title and risk of loss has transferred to the customer. Transfer of control can also occur over time for software maintenance and services as the customer receives the benefit over the contract term. For the year ended July 26, 2025, the Company’s total revenue was $56.7 billion, of which the majority relates to certain product and services revenue.

The principal consideration for our determination that performing procedures relating to revenue recognition for certain products and services is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company's revenue recognition.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process. These procedures also included, among others (i) testing revenue recognized for a sample of revenue transactions by obtaining and inspecting source documents, such as executed contracts, purchase orders, invoices, and proof of delivery; (ii) testing the appropriate amount and timing of revenue recognition based on the contractual terms identified in certain customer arrangements; and (iii) confirming a sample of outstanding customer invoice balances as of July 26, 2025 and, for confirmations not returned, obtaining and inspecting source documents, such as purchase orders, invoices, proof of delivery, and subsequent cash receipts.

/s/ PricewaterhouseCoopers LLP

San Jose, California

September 53, ~~2024~~2025

We have served as the Company’s auditor since 1988.

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Reports of Management

Statement of Management’s Responsibility

Cisco’s management has always assumed full accountability for maintaining compliance with our established financial accounting policies and for reporting our results with objectivity and the highest degree of integrity. It is critical for investors and other users of the Consolidated Financial Statements to have confidence that the financial information that we provide is timely, complete, relevant, and accurate. Management is responsible for the fair presentation of Cisco’s Consolidated Financial Statements, prepared in accordance with accounting principles generally accepted in the United States of America, and has full responsibility for their integrity and accuracy.

Management, with oversight by Cisco’s Board of Directors, has established and maintains a strong ethical climate so that our affairs are conducted to the highest standards of personal and corporate conduct. Management also has established an effective system of internal controls. Cisco’s policies and practices reflect corporate governance initiatives that are compliant with the listing requirements of Nasdaq and the corporate governance requirements of the Sarbanes-Oxley Act of 2002.

We are committed to enhancing stockholder value and fully understand and embrace our fiduciary oversight responsibilities. We are dedicated to ensuring that our high standards of financial accounting and reporting, as well as our underlying system of internal controls, are maintained. Our culture demands integrity, and we have the highest confidence in our processes, our internal controls and our people, who are objective in their responsibilities and who operate under the highest level of ethical standards.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting for Cisco. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Management (with the participation of the principal executive officer and principal financial officer) conducted an evaluation of the effectiveness of Cisco’s internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that Cisco’s internal control over financial reporting was effective as of July 2726, ~~2024~~2025. In accordance with guidance issued by the Securities and Exchange Commission staff, companies are permitted to exclude acquisitions from their assessment of internal control over financial reporting for a period not to exceed one year from the date of the acquisition. Management’s assessment of the effectiveness of our internal control over financial reporting as of July 27, 2024 did not include the internal controls of Splunk Inc., which we acquired on March 18, 2024. We have included the financial results of Splunk Inc. in our Consolidated Financial Statements since the date of acquisition. Total assets and total revenues of Splunk Inc. represented approximately 3 percent of each of our total consolidated assets and total consolidated revenue as of and for the year ended July 27, 2024. PricewaterhouseCoopers LLP, an independent registered public accounting firm, has audited the effectiveness of Cisco’s internal control over financial reporting and has issued a report on Cisco’s internal control over financial reporting, which is included in their report on the preceding pages.

/S/ CHARLES H. ROBBINS						/S/ R.MARK ~~SCOTT HERREN~~PATTERSON
Charles H. Robbins						R.Mark ~~Scott Herren~~Patterson
Chair and Chief Executive Officer						Executive Vice President and Chief Financial Officer
September 5, 2024						September 5, 2024
September 3, 2025						September 3, 2025

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CISCO SYSTEMS, INC.

Consolidated Balance Sheets

(in millions, except par value)

	July 27, 2024		July 29, 2023
	July 26, 2025		July 27, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	78,~~508~~346	$	107,~~123~~508
Investments	107,~~346~~764		1610,~~023~~346
Accounts receivable, net of allowance of $87 at July 27, 2024 and $85 at July 29, 2023	6,685		5,854
Accounts receivable, net of allowance of $69 at July 26, 2025 and $87 at July 27, 2024	6,701		6,685
Inventories	3,~~373~~164		3,~~644~~373
Financing receivables, net	3,~~338~~061		3,~~352~~338
Other current assets	5,~~612~~950		45,~~352~~612
Total current assets	3634,~~862~~986		4336,~~348~~862
Property and equipment, net	2,~~090~~113		2,~~085~~090
Financing receivables, net	3,~~376~~466		3,~~483~~376
Goodwill	5859,~~660~~136		3858,~~535~~660
Purchased intangible assets, net	119,~~219~~175		111,~~818~~219
Deferred tax assets	67,~~262~~356		6,~~576~~262
Other assets	56,~~944~~059		65,~~007~~944
TOTAL ASSETS	$	~~124~~122,~~413~~291	$	~~101~~124,~~852~~413
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt	$	115,~~341~~232	$	111,~~733~~341
Accounts payable	2,~~304~~528		2,~~313~~304
Income taxes payable	1,~~439~~857		41,~~235~~439
Accrued compensation	3,~~608~~611		3,~~984~~608
Deferred revenue	16,~~249~~416		1316,~~908~~249
Other current liabilities	5,~~643~~420		5,~~136~~643
Total current liabilities	4035,~~584~~064		3140,~~309~~584
Long-term debt	1922,~~621~~861		619,~~658~~621
Income taxes payable	32,~~985~~165		53,~~756~~985
Deferred revenue	12,~~226~~363		1112,~~642~~226
Other long-term liabilities	2,~~540~~995		2,~~134~~540
Total liabilities	7875,~~956~~448		5778,~~499~~956
Commitments and contingencies (Note 14)
Equity:
Cisco stockholders’ equity:
Preferred stock, $0.001 par value: 5 shares authorized; none issued and outstanding	—		—
Common stock and additional paid-in capital, $0.001 par value: 20,000 shares authorized; 4,007 and 4,066 shares issued and outstanding at July 27, 2024 and July 29, 2023, respectively	45,800		44,289
Common stock and additional paid-in capital, $0.001 par value: 20,000 shares authorized; 3,960 and 4,007 shares issued and outstanding at July 26, 2025 and July 27, 2024, respectively	47,747		45,800
Retained earnings	~~1,087~~50		1,~~639~~087
Accumulated other comprehensive loss	(~~1,430~~954)		(1,~~575~~430)
Total equity	4546,~~457~~843		4445,~~353~~457
TOTAL LIABILITIES AND EQUITY	$	~~124~~122,~~413~~291	$	~~101~~124,~~852~~413

See Notes to Consolidated Financial Statements.

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CISCO SYSTEMS, INC.

Consolidated Statements of Operations

(in millions, except per-share amounts)

Years Ended

July 2726, ~~2024~~2025

July 2927, ~~2023~~2024

July 3029, ~~2022~~2023

REVENUE:

Product

3941,~~253~~608

4339,~~142~~253

3843,~~018~~142

Services

1415,~~550~~046

1314,~~856~~550

13,~~539~~856

Total revenue

5356,~~803~~654

5653,~~998~~803

5156,~~557~~998

COST OF SALES:

Product

1415,~~339~~121

1614,~~590~~339

1416,~~814~~590

Services

4,~~636~~743

4,~~655~~636

4,~~495~~655

Total cost of sales

1819,~~975~~864

2118,~~245~~975

1921,~~309~~245

GROSS MARGIN

3436,~~828~~790

3534,~~753~~828

3235,~~248~~753

OPERATING EXPENSES:

Research and development

79,~~983~~300

7,~~551~~983

67,~~774~~551

Sales and marketing

10,~~364~~966

910,~~880~~364

9,~~085~~880

General and administrative

2,~~813~~992

2,~~478~~813

2,~~101~~478

Amortization of purchased intangible assets

~~698~~1,028

~~282~~698

~~313~~282

Restructuring and other charges

~~789~~744

~~531~~789

6531

Total operating expenses

2225,~~647~~030

2022,~~722~~647

1820,~~279~~722

OPERATING INCOME

1211,~~181~~760

1512,~~031~~181

1315,~~969~~031

Interest income

1,~~365~~001

~~962~~1,365

~~476~~962

Interest expense

(1,~~006~~593)

(~~427~~1,006)

(~~360~~427)

Other income (loss), net

(~~306~~68)

(~~248~~306)

~~392~~(248)

Interest and other income (loss), net

53(660)

~~287~~53

~~508~~287

INCOME BEFORE PROVISION FOR INCOME TAXES

1211,~~234~~100

1512,~~318~~234

1415,~~477~~318

Provision for income taxes

~~1,914~~920

21,~~705~~914

2,~~665~~705

NET INCOME

10,~~320~~180

1210,~~613~~320

1112,~~812~~613

Net income per share:

Basic

2.5556

32.0855

23.8308

Diluted

2.5455

32.0754

23.8207

Shares used in per-share calculation:

Basic

43,~~043~~976

4,~~093~~043

4,~~170~~093

Diluted

43,~~062~~998

4,~~105~~062

4,~~192~~105

See Notes to Consolidated Financial Statements.

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CISCO SYSTEMS, INC.

Consolidated Statements of Comprehensive Income

(in millions)

Years Ended	July 2726, ~~2024~~2025		July 2927, ~~2023~~2024		July 3029, ~~2022~~2023
Net income	$	10,~~320~~180	$	1210,~~613~~320	$	1112,~~812~~613
Available-for-sale investments:
Change in net unrealized gains and losses, net of tax benefit (expense) of $(47), $35, and $174 for fiscal 2024, 2023, and 2022, respectively	146		(78)		(557)
Change in net unrealized gains and losses, net of tax benefit (expense) of $(31), $(47), and $35 for fiscal 2025, 2024, and 2023, respectively	121		146		(78)
Net (gains) losses reclassified into earnings, net of tax expense (benefit) of $(14), $(4), and $5 for fiscal 2024, 2023, and 2022, respectively	53		17		(4)
Net (gains) losses reclassified into earnings, net of tax expense (benefit) of $(37), $(14), and $(4) for fiscal 2025, 2024, and 2023, respectively	63		53		17
	199		(61)		(561)
	184		199		(61)
Cash flow hedging instruments:
Change in unrealized gains and losses, net of tax benefit (expense) of $(30), $(7), and $(20) for fiscal 2024, 2023, and 2022, respectively	98		22		67
Change in unrealized gains and losses, net of tax benefit (expense) of $(7), $(30), and $(7) for fiscal 2025, 2024, and 2023, respectively	22		98		22
Net (gains) losses reclassified into earnings, net of tax (benefit) expense of $12, $15, and $7 for fiscal 2024, 2023, and 2022, respectively	(37)		(48)		(22)
Net (gains) losses reclassified into earnings, net of tax (benefit) expense of $11, $12, and $15 for fiscal 2025, 2024, and 2023, respectively	(36)		(37)		(48)
	61		(26)		45
	(14)		61		(26)
Net change in cumulative translation adjustment and actuarial gains and losses, net of tax benefit (expense) of $2, $19, and $(44) for fiscal 2024, 2023, and 2022, respectively	(115)		134		(689)
Net change in cumulative translation adjustment and actuarial gains and losses, net of tax benefit (expense) of $2, $2, and $19 for fiscal 2025, 2024, and 2023, respectively	306		(115)		134
Other comprehensive income (loss)	~~145~~476		47145		~~(1,205)~~47
Comprehensive income	$	10,~~465~~656	$	1210,~~660~~465	$	1012,~~607~~660

See Notes to Consolidated Financial Statements.

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CISCO SYSTEMS, INC.

Consolidated Statements of Cash Flows

(in millions)

Years Ended

July 2726, ~~2024~~2025

July 2927, ~~2023~~2024

July 3029, ~~2022~~2023

Cash flows from operating activities:

Net income

10,~~320~~180

1210,~~613~~320

1112,~~812~~613

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation, amortization, and other

2,~~507~~811

12,~~726~~507

1,~~957~~726

Share-based compensation expense

3,~~074~~641

23,~~353~~074

12,~~886~~353

Provision for receivables

3424

3134

5531

Deferred income taxes

(~~972~~1,133)

(~~2,085~~972)

(~~309~~2,085)

(Gains) losses on divestitures, investments and other, net

~~215~~(38)

~~206~~215

~~(453)~~206

Change in operating assets and liabilities, net of effects of acquisitions and divestitures:

Accounts receivable

(~~289~~22)

~~734~~(289)

~~(1,009)~~734

Inventories

~~275~~209

~~(1,069)~~275

(1,~~030~~069)

Financing receivables

76214

~~1,102~~76

1,~~241~~102

Other assets

(~~671~~499)

5(671)

~~(1,615)~~5

Accounts payable

~~(90)~~257

27(90)

~~(55)~~27

Income taxes, net

(41,~~539~~839)

1(4,~~218~~539)

~~(690)~~1,218

Accrued compensation

(~~696~~53)

~~651~~(696)

~~(427)~~651

Deferred revenue

~~1,220~~248

21,~~326~~220

12,~~328~~326

Other liabilities

~~416~~193

48416

~~535~~48

Net cash provided by operating activities

1014,~~880~~193

1910,~~886~~880

1319,~~226~~886

Cash flows from investing activities:

Purchases of investments

(4,~~230~~589)

(104,~~871~~230)

(610,~~070~~871)

Proceeds from sales of investments

42,~~136~~643

14,~~054~~136

21,~~660~~054

Proceeds from maturities of investments

64,~~367~~943

56,~~978~~367

5,~~686~~978

Acquisitions, net of cash and cash equivalents acquired

(~~25,994~~291)

(~~301~~25,994)

(~~373~~301)

Purchases of investments in privately held companies

(~~284~~383)

(~~185~~284)

(~~186~~185)

Return of investments in privately held companies

~~202~~306

90202

~~237~~90

Acquisition of property and equipment

(~~670~~905)

(~~849~~670)

(~~477~~849)

Other

~~(5)~~9

(235)

76(23)

Net cash provided by (used in) investing activities

~~(20~~1,~~478)~~733

(520,~~107~~478)

1(5,~~553~~107)

Cash flows from financing activities:

Issuances of common stock

~~714~~736

~~700~~714

~~660~~700

Repurchases of common stock - repurchase program

(56,~~787~~000)

(45,~~293~~787)

(74,~~689~~293)

Shares repurchased for tax withholdings on vesting of restricted stock units

(~~992~~1,222)

(~~597~~992)

(~~692~~597)

Short-term borrowings, original maturities of 90 days or less, net

~~478~~(31)

~~(602)~~478

~~606~~(602)

Issuances of debt

3119,~~818~~292

—31,818

~~1,049~~—

Repayments of debt

(922,~~826~~073)

(~~500~~9,826)

(~~3,550~~500)

Repayments of Splunk convertible debt, net of capped call proceeds

~~(3,140)~~—

—(3,140)

—

Dividends paid

(6,~~384~~437)

(6,~~302~~384)

(6,~~224~~302)

Other

(3780)

(3237)

(~~122~~32)

Net cash provided by (used in) financing activities

6(15,~~844~~815)

~~(11~~6,~~626)~~844

(1511,~~962~~626)

Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents

(3143)

(~~105~~31)

(~~180~~105)

Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents

~~(2,785)~~68

3(2,~~048~~785)

(13,~~363)~~048

Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of fiscal year

118,~~627~~842

811,~~579~~627

98,~~942~~579

Cash, cash equivalents, restricted cash and restricted cash equivalents, end of fiscal year

8,~~842~~910

118,~~627~~842

811,~~579~~627

Supplemental cash flow information:

Cash paid for interest

~~583~~1,500

~~376~~583

~~355~~376

Cash paid for income taxes, net

73,~~426~~892

37,~~571~~426

3,~~663~~571

See Notes to Consolidated Financial Statements.

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CISCO SYSTEMS, INC.

Consolidated Statements of Equity

(in millions, except per-share amounts)

	Shares ofCommonStock	Common StockandAdditionalPaid-In Capital		Retained Earnings ~~(Accumulated Deficit)~~		AccumulatedOtherComprehensiveLoss		Total Equity
BALANCE AT JULY 31, 2021	4,217	$	42,346	$	(654)	$	(417)	$	41,275
Net income				11,812				11,812
Other comprehensive income (loss)						(1,205)		(1,205)
Issuance of common stock	54	660						660
Repurchase of common stock	(146)	(1,490)		(6,244)				(7,734)
Shares repurchased for tax withholdings on vesting of restricted stock units and other	(13)	(692)						(692)
Cash dividends declared ($1.50 per common share)				(6,224)				(6,224)
Share-based compensation		1,886						1,886
Other	(2)	4		(9)				(5)
BALANCE AT JULY 30, 2022	4,110	$	42,714	$	(1,319)	$	(1,622)	$	39,773
Net income				12,613				12,613
Other comprehensive income (loss)						47		47
Issuance of common stock	57	700						700
Repurchase of common stock	(88)	(930)		(3,341)				(4,271)
Shares repurchased for tax withholdings on vesting of restricted stock units and other	(13)	(551)						(551)
Cash dividends declared ($1.54 per common share)				(6,302)				(6,302)
Share-based compensation		2,353						2,353
Other	—	3		(12)				(9)
BALANCE AT JULY 29, 2023	4,066	$	44,289	$	1,639	$	(1,575)	$	44,353
Net income				10,320				10,320
Other comprehensive income (loss)						145		145
Issuance of common stock	78	714						714
Repurchase of common stock	(117)	(1,292)		(4,472)				(5,764)
Shares repurchased for tax withholdings on vesting of restricted stock units and other	(20)	(997)						(997)
Cash dividends declared ($1.58 per common share)				(6,384)				(6,384)
Share-based compensation		3,074						3,074
Other		12		(16)				(4)
BALANCE AT JULY 27, 2024	4,007	$	45,800	$	1,087	$	(1,430)	$	45,457
Net income				10,180				10,180
Other comprehensive income (loss)						476		476
Issuance of common stock	80	736						736
Repurchase of common stock	(105)	(1,230)		(4,765)				(5,995)
Shares repurchased for tax withholdings on vesting of restricted stock units and other	(22)	(1,209)						(1,209)
Cash dividends declared ($1.62 per common share)				(6,437)				(6,437)
Share-based compensation		3,641						3,641
Other		9		(15)				(6)
BALANCE AT JULY 26, 2025	3,960	$	47,747	$	50	$	(954)	$	46,843

See Notes to Consolidated Financial Statements.

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CISCO SYSTEMS, INC.

Notes to Consolidated Financial Statements

1.Basis of Presentation

The fiscal year for Cisco Systems, Inc. (the “Company,” “Cisco,” “we,” “us,” or “our”) is the 52 or 53 weeks ending on the last Saturday in July. Fiscal ~~2024~~2025, fiscal ~~2023~~2024 and fiscal ~~2022~~2023 were each 52-week fiscal years. The Consolidated Financial Statements include our accounts and those of our subsidiaries and those of our investments consolidated under the voting interest method. All intercompany accounts and transactions have been eliminated. We conduct business globally and are primarily managed on a geographic basis in the following three geographic segments: the Americas; Europe, Middle East, and Africa (EMEA); and Asia Pacific, Japan, and China (APJC).

Our consolidated financial statements include our accounts and investments consolidated under the voting interest model. The noncontrolling interests attributed to these investments are not presented as a separate component in the equity section of the Consolidated Balance Sheets as these amounts are not material for any of the fiscal periods presented. The share of earnings attributable to the noncontrolling interests are not presented separately in the Consolidated Statements of Operations as these amounts are not material for any of the fiscal periods presented.

Certain reclassifications have been made to the amounts for prior years in order to conform to the current year’s presentation. We have evaluated subsequent events through the date that the financial statements were issued.

2.Summary of Significant Accounting Policies

(a) Cash and Cash Equivalents We consider all highly liquid investments purchased with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. ~~Cash and cash equivalents are maintained with various financial institutions.~~

(b) Available-for-Sale Debt Investments We classify our investments in fixed income securities as available-for-sale debt investments. Our available-for-sale debt investments primarily consist of U.S. government, U.S. government agency, non-U.S. government and agency, corporate debt, U.S. agency mortgage-backed securities, commercial paper and certificates of deposit. These available-for-sale debt investments are primarily held in the custody of a major financial institution. A specific identification method is used to determine the cost basis of available-for-sale debt investments sold. These investments are recorded in the Consolidated Balance Sheets at fair value. ~~Unrealized~~and unrealized gains and losses on these investments are included as a separate component of accumulated other comprehensive income (loss) (AOCI), net of tax. We classify our investments as current based on the nature of the investments and their availability for use in current operations.

•Marketable equity securities have readily determinable fair value (RDFV) that are measured and recorded at fair value through income.

•Non-marketable equity securities do not have RDFV and are measured using a measurement alternative recorded at cost less any impairment, plus or minus changes resulting from qualifying observable price changes. For certain of these securities, we have elected to apply the net asset value (NAV) practical expedient. The NAV is the estimated fair value of these investments.

•Equity method investments are securities we do not control, but are able to exert significant influence over the investee. These investments are measured at cost less any impairment, plus or minus our share of equity method investee income or loss.

(d) Impairments of Investments For our available-for-sale debt securities in an unrealized loss position, we determine whether a credit loss exists. In this assessment, among other factors, we consider the extent to which the fair value is less than the amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security. If factors indicate a credit loss exists, an allowance for credit loss is recorded to other income (loss), net, limited by the amount that the fair value is less than the amortized cost basis. The amount of fair value change relating to all other factors is recognized in other comprehensive income (OCI).

We hold non-marketable equity and other investments (“privately held investments”) which are included in other assets in the Consolidated Balance Sheets. We monitor these investments for impairments and make reductions in carrying values if we determine that an impairment charge is required based primarily on the financial condition and near-term prospects of these companies.

63(e) Inventories Inventories are stated at the lower of cost or net realizable value. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. We provide inventory write-downs based on excess and obsolete inventories determined primarily by future demand forecasts. The write-down is measured as the difference between the cost of the inventory and net realizable value based upon assumptions about future demand and charged to the provision for inventory, which is a component of cost of sales. At the point of loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost

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CISCO SYSTEMS, INC.

Notes to Consolidated Financial Statements (Continued)

~~(e) Inventories Inventories are stated at the lower of cost or net realizable value. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out~~ basis. We provide inventory write-downs based on excess and obsolete inventories determined primarily by future demand forecasts. The write-down is measured as the difference between the cost of the inventory and net realizable value based upon assumptions about future demand and charged to the provision for inventory, which is a component of cost of sales. At the point of loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. In addition, we record a liability for firm, noncancelable, and unconditional purchase commitments with contract manufacturers and suppliers for quantities in excess of our future demand forecasts consistent with our valuation of excess and obsolete inventory.

(f) Allowance for Accounts Receivable, Contract Assets and Financing Receivables We estimate our allowances for credit losses using relevant available information from internal and external sources, related to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. When assessing for credit losses, we determine collectibility by pooling our assets with similar characteristics.

The allowances for credit losses are each measured on a collective basis when similar risk characteristics exist. Our internal credit risk ratings are categorized as 1 through 10, with the lowest credit risk rating representing the highest quality. Assets that do not share risk characteristics are evaluated on an individual basis. The allowances for credit losses are each measured by multiplying the exposure probability of default, the probability the asset will default within a given time frame, by the loss given default rate, the percentage of the asset not expected to be collected due to default, based on the pool of assets.

Probability of default rates are published quarterly by third-party credit agencies. Adjustments to our internal credit risk ratings may take into account including, but not limited to, various customer-specific factors, the potential sovereign risk of the geographic locations in which the customer is operating and macroeconomic conditions. These factors are updated regularly or when facts and circumstances indicate that an update is deemed necessary.

(g) Financing Receivables and Guarantees We provide financing arrangements, including loan receivables and lease receivables, for certain qualified channel partners and end-~~user~~users ~~customers~~ to build, maintain, and upgrade their networks, and we record accrued interest on the portfolio. Loan receivables represent financing arrangements related to the sale of our hardware, software, and services (including technical support and advanced services), and also may include additional funding for other costs associated with network installation and integration of our products and services. Loan receivables have terms of one year to three years on average. Lease receivables represent sales-type leases resulting from the sale of Cisco’s and complementary third-party products and are typically collateralized by a security interest in the underlying assets. Lease receivables consist of arrangements with terms of four years on average.

Outstanding financing receivables that are aged 31 days or more from the contractual payment date are considered past due. We do not accrue interest on financing receivables that are considered impaired and more than 120 days past due unless either the receivable has not been collected due to administrative reasons or the receivable is well secured and in the process of collection. Financing receivables may be placed on nonaccrual status earlier if, in management’s opinion, a timely collection of the full principal and interest becomes uncertain. After a financing receivable has been categorized as nonaccrual, interest will be recognized when cash is received. A financing receivable may be returned to accrual status after all of the customer’s delinquent balances of principal and interest have been settled, and the customer remains current for an appropriate period.

We facilitate arrangements for third-party financing extended to channel partners, consisting of revolving short-term financing, generally with payment terms ranging from 60 to 90 days. In certain instances, these financing arrangements result in a transfer of our receivables to the third party. The receivables are derecognized upon transfer, as these transfers qualify as ~~true~~a ~~sales~~sale, and we receive a payment for the receivables from the third party based on our standard payment terms. These financing arrangements facilitate the working capital requirements of the channel partners, and, in some cases, we guarantee a portion of these arrangements. We could be called upon to make payments under these guarantees inif the ~~event~~channel ofpartners ~~nonpayment~~do bynot ~~the channel partners~~pay. Deferred revenue relating to these financing arrangements is recorded in accordance with revenue recognition policies or for the fair value of the financing guarantees.

(h) Leases We lease real estate, information technology (IT) and other equipment and vehicles. We also have arrangements with certain suppliers and contract manufacturers which includes the leasing of dedicated space and equipment costs. Our leases have the option to extend or terminate the lease when it is reasonably certain that we will exercise that option.

As a lessee, we determine if an arrangement is a lease at commencement. Our right-of-use (ROU) lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments related to the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. We use incremental borrowing rates based on information available at the commencement date to determine the present value of our lease payments. Certain of our lease agreements contain variable lease payments. Our variable lease payments can fluctuate depending on the level of activity or the cost of certain services where we have elected to combine lease and non-lease components. While these payments are not included as part of our lease liabilities, they are recognized as variable lease expense in the period they are incurred.

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Notes to Consolidated Financial Statements (Continued)

variable lease payments can fluctuate depending on the level of activity or the cost of certain services where we have elected to combine lease and non-lease components. While these payments are not included as part of our lease liabilities, they are recognized as variable lease expense in the period they are incurred.

We provide leasing of our equipment and complementary third-party products primarily through our channel partners and distributors, for which the income arising from these leases is recognized through interest income. As a lessor, we determine if an arrangement is a lease at inception. We provide leasing arrangements for our equipment to certain qualified customers. Our lease portfolio primarily consists of sales-type leases. We allocate the consideration in a bundled contract with our customers based on relative standalone selling prices of our lease and non-lease components. The residual value on our leased equipment is determined at the inception of the lease based on an analysis of estimates of the value of equipment, market factors and historical customer behavior. Residual value estimates are reviewed on a periodic basis and other-than-temporary declines are expensed in the period they occur. Our leases generally provide an end-of-term option for the customer to extend the lease under mutually-agreed terms, return the leased equipment, or purchase the equipment for either the then-market value of the equipment or a pre-determined purchase price. If a customer chooses to terminate their lease prior to the original end of termination date, the customer is required to pay all remaining lease payments in full.

(i) Depreciation and Amortization Property and equipment are stated at cost, less accumulated depreciation or amortization, whenever applicable. Depreciation and amortization expenses for property and equipment were approximately $0.7 billion, ~~$0.7~~for ~~billion,~~each ~~and~~of ~~$0.8 billion for~~ fiscal ~~2024~~2025, ~~2023~~2024, and ~~2022, respectively~~2023. Depreciation and amortization are computed using the straight-line method, generally over the following periods:


Asset Category						Period
Buildings						25 years
Building improvements						Up to 15 years
Leasehold improvements						Shorter of remaining lease term or up to 15 years
Production, engineering, computer and other equipment and related software						Up to 5 years
Operating lease assets						Based on lease term
Furniture and fixtures						5 years

(j) Business Combinations We allocate the fair value of the purchase consideration of our acquisitions to the tangible assets, liabilities, and intangible assets acquired, including in-process research and development (IPR&D), based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. IPR&D is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment thereafter. When an IPR&D project is completed, the IPR&D is reclassified as an amortizable purchased intangible asset and amortized over the asset’s estimated useful life. Acquisition-related expenses and related restructuring costs are recognized separately from the business combination and are expensed as incurred.

(k) Goodwill and Purchased Intangible Assets Goodwill is tested for impairment on an annual basis in the fourth fiscal quarter and, when specific circumstances dictate, between annual tests. When impaired, the carrying value of goodwill is written down to fair value. Identifying a potential impairment consists of comparing the fair value of a reporting unit with its carrying amount, including goodwill. Purchased intangible assets with finite lives are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets. See “Long-Lived Assets” for our policy regarding impairment testing of purchased intangible assets with finite lives. Purchased intangible assets with indefinite lives are assessed for potential impairment annually or when events or circumstances indicate that their carrying amounts might be impaired.

(l) Long-Lived Assets Long-lived assets that are held and used by us are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability of long-lived assets is based on an estimate of the undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets that management expects to hold and use is based on the difference between the fair value of the asset and its carrying value. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.

(m) Fair Value Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be either recorded or disclosed at fair value, we consider the principal or most advantageous market in which we would transact, and we also consider assumptions that market participants would use when pricing the asset or liability.

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Notes to Consolidated Financial Statements (Continued)

advantageous market in which we would transact, and we also consider assumptions that market participants would use when pricing the asset or liability.

The accounting guidance for fair value measurement requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The fair value hierarchy is as follows:

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. We use inputs such as actual trade data, benchmark yields, broker/dealer quotes, and other similar data, which are obtained from quoted market prices, independent pricing vendors, or other sources, to determine the ultimate fair value of assets or liabilities.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The fair values are determined based on model-based techniques such as discounted cash flow models using inputs that we could not corroborate with market data.

(n) Derivative Instruments We recognize derivative instruments as either assets or liabilities and measure those instruments at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. For a derivative instrument designated as a fair value hedge, the gain or loss is recognized in earnings in the period of change together with the offsetting loss or gain on the hedged item attributed to the risk being hedged. For a derivative instrument designated as a cash flow hedge, the gain or loss is initially reported as a component of AOCI and subsequently reclassified into earnings when the hedged exposure affects earnings. For a derivative instrument designated as a net investment hedge of our foreign operations, the gain or loss is recorded in the cumulative translation adjustment within AOCI together with the offsetting loss or gain of the hedged exposure of the underlying foreign operations. For derivative instruments that are not designated as accounting hedges, changes in fair value are recognized in earnings in the period of change. We record derivative instruments in the statements of cash flows to operating, investing, or financing activities consistent with the cash flows of the hedged item.

Hedge effectiveness for foreign exchange forward contracts used as cash flow hedges is assessed by comparing the change in the fair value of the hedge contract with the change in the fair value of the forecasted cash flows of the hedged item. Hedge effectiveness for equity forward contracts and foreign exchange net investment hedge forward contracts is assessed by comparing changes in fair value due to changes in spot rates for both the derivative and the hedged item. For foreign exchange option contracts, hedge effectiveness is assessed based on the hedging instrument’s entire change in fair value. Hedge effectiveness for interest rate swaps is assessed by comparing the change in fair value of the swap with the change in the fair value of the hedged item due to changes in the benchmark interest rate.

(o) Foreign Currency Translation Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment, where that local currency is the functional currency, are translated to U.S. dollars at exchange rates in effect at the balance sheet date, with the resulting translation adjustments directly recorded to a separate component of AOCI. Income and expense accounts are translated at average exchange rates during the year. Remeasurement adjustments are recorded in other income (loss), net.

(p) Concentrations of Risk Cash and cash equivalents are maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions with reputable credit and therefore bear minimal credit risk. We seek to mitigate our credit risks by spreading such risks across multiple counterparties and monitoring the risk profiles of these counterparties.

We perform ongoing credit evaluations of our customers and, with the exception of certain financing transactions, do not require collateral from our customers. We receive certain of our components from sole suppliers. Additionally, we rely on a limited number of contract manufacturers and suppliers to provide manufacturing services for our products. The inability of a contract manufacturer or supplier to fulfill our supply requirements could materially impact future operating results.

66(q) Revenue Recognition We enter into contracts with customers that can include various combinations of products and services which are generally distinct and accounted for as separate performance obligations, resulting in contracts that may contain multiple performance obligations. We determine whether arrangements are distinct based on whether the customer can benefit from the product or service on its own or together with other resources that are readily available and whether our

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CISCO SYSTEMS, INC.

Notes to Consolidated Financial Statements (Continued)

(q) Revenue Recognition We enter into contracts with customers that can include various combinations of products and services which are generally distinct and accounted for as separate performance obligations. As a result, our contracts may contain multiple performance obligations. We determine whether arrangements are distinct based on whether the customer can benefit from the product or service on its own or together with other resources that are readily available and whether our commitment to transfer the product or service to the customer is separately identifiable from other obligations in the contract. We classify our hardware, perpetual software licenses, and SaaS as distinct performance obligations. Term software licenses represent multiple obligations, which include software licenses and software maintenance. In transactions where we deliver hardware or software, we are typically the principal and we record revenue and costs of goods sold on a gross basis. We refer to our term software licenses, security software licenses, SaaS, and associated service arrangements as subscription offers. Revenue from subscription offers includes revenue recognized over time as well as upfront.

An allowance for future sales returns is established based on historical trends in product return rates. The allowance for future sales returns as of July 27, 2024 and July 29, 2023 was $37 million and $39 million, respectively, and was recorded as a reduction of our accounts receivable and revenue.

Significant Judgments

We assess relevant contractual terms in our customer contracts to determine the transaction price. We apply judgment in identifying contractual terms and determining the transaction price as we may be required to estimate variable consideration when determining the amount of revenue to recognize. Variable consideration includes potential contractual penalties and various rebate, cooperative marketing and other incentive programs that we offer to our distributors, channel partners and direct sale customers. When determining the amount of revenue to recognize, we estimate the expected usage of these programs, applying the expected value or most likely estimate and update the estimate at each reporting period as actual utilization becomes available. We also consider the customers’ right of return in determining the transaction price, where applicable.

We assess certain software licenses, such as for security software, that contain critical updates or upgrades which customers can download throughout the contract term. Without these updates or upgrades, the functionality of the software would diminish over a relatively short time period. These updates or upgrades provide the customer the full functionality of the purchased security software licenses and are required to maintain the security license’s utility as the risks and threats in the environment are rapidly changing. In these circumstances, the revenue from these software arrangements is recognized as a single performance obligation satisfied over the contract term.

(r) Advertising Costs We expense advertising costs as incurred. Advertising costs included within sales and marketing expenses were approximately $~~210~~186 million, $~~205~~210 million, and $~~219~~205 million for fiscal ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, respectively.

(s) Share-Based Compensation Expense We measure and recognize the compensation expense for all share-based awards made to employees and directors, including ~~employee stock options,~~ restricted stock units (RSUs), performance-based restricted stock units (PRSUs), ~~and~~ employee stock purchases related to the Employee Stock Purchase Plan (Employee Stock Purchase Rights) and employee stock options based on estimated fair values. Share-based compensation expense is reduced for forfeitures as they occur.

67(t) Software Development Costs Software development costs, including costs to develop software sold, leased, or otherwise marketed, that are incurred subsequent to the establishment of technological feasibility are capitalized. Costs incurred during the application development stage for internal-use software and cloud-based applications are capitalized. Such software development costs capitalized during the periods presented were not material.

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Notes to Consolidated Financial Statements (Continued)

(t) Software Development Costs Software development costs, including costs to develop software sold, leased, or otherwise marketed, that are incurred subsequent to the establishment of technological feasibility are capitalized. Costs incurred during the application development stage for internal-use software and cloud-based applications are capitalized. Such software development costs capitalized during the periods presented were not material.

(u) Income Taxes Income tax expense is based on pretax financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized.

We account for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. We classify the liability for unrecognized tax benefits as current to the extent that we anticipate payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax positions are recognized in the provision for income taxes.

(v) Computation of Net Income per Share Basic net income per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. Diluted shares outstanding includes the dilutive effect of in-the-money options, unvested restricted stock, and restricted stock units. The dilutive effect of such equity awards is calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock options and the amount of compensation cost for future service that we have not yet recognized are collectively assumed to be used to repurchase shares.

(w) Consolidation of Variable Interest Entities Our approach in assessing the consolidation requirement for variable interest entities focuses on identifying which enterprise has the power to direct the activities that most significantly impact the variable interest entity’s economic performance and which enterprise has the obligation to absorb losses or the right to receive benefits from the variable interest entity. Should we conclude that we are the primary beneficiary of a variable interest entity, the assets, liabilities, and results of operations of the variable interest entity will be included in our Consolidated Financial Statements.

(x) Use of Estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and judgments that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Estimates are used for the following, among others:

▪•Revenue recognition

▪•Allowances for accounts receivable, sales returns, and financing receivables

▪•Inventory valuation and liability for purchase commitments with contract manufacturers and suppliers

▪•Loss contingencies and product warranties

▪•Fair value measurements

▪•Valuation of goodwill and purchased intangible assets

▪•Income taxes

The actual results that we experience may differ materially from our estimates.

(y) Recent Accounting ~~Standards or~~ Updates ~~Not~~Recently ~~Yet Effective as of Fiscal Year End~~Adopted

Segment Reporting In November 2023, the Financial Accounting Standards Board (FASB) issued an accounting standard update that expands the disclosure requirements for reportable segments, primarily through enhanced disclosures around significant segment expenses. ~~The~~We adopted this accounting standard update ~~will be effective~~ for our fiscal 2025 Form 10-K onwith acomparative ~~retrospective~~periods ~~basis,~~updated ~~and~~to ~~early~~reflect ~~adoption~~additional ~~is permitted~~disclosures. WeSee ~~are~~Note ~~currently evaluating the impact of this accounting standard update on our segment disclosures~~19.

(z) Recent Accounting Standards or Updates Not Yet Effective as of Fiscal Year End

Improvements on Income Tax Disclosures In December 2023, the FASB issued an accounting standard update expanding the requirements for disclosure of disaggregated information about the effective tax rate reconciliation and income taxes paid. The accounting standard update will be effective for our fiscal 2026 Form 10-K. We are currently evaluating the impact of this accounting standard update on our income tax disclosures.

68Disaggregation of Income Statement Expenses In November 2024, the FASB issued an accounting standard update expanding the disclosure requirements about specific expense categories, primarily through disaggregated information on income statement line items. The accounting standard update will be effective for our fiscal 2028 Form 10-K, and early adoption is permitted. We are currently evaluating the impact of this accounting standard update on our Consolidated Financial Statements.

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Notes to Consolidated Financial Statements (Continued)

3.Revenue

(a)Disaggregation of Revenue

We disaggregate our revenue into groups of similar products and services that depict the nature, amount, and timing of revenue and cash flows for our various offerings. The sales cycle, contractual obligations, customer requirements, and go-to-market strategies differ for each of our product categories, resulting in different economic risk profiles for each category. Effective in the first quarter of fiscal 2024, we began reporting our product and service revenue in the following categories: Networking, Security, Collaboration, Observability, and Services and conformed our product revenue for prior periods to the current year presentation.

The following table presents this disaggregation of revenue (in millions):

Years Ended

July 2726, ~~2024~~2025

July 2927, ~~2023~~2024

July 3029, ~~2022~~2023

Product revenue:

Networking

2928,~~229~~304

3429,~~570~~229

2934,~~265~~570

Security

58,~~075~~094

35,~~859~~075

3,~~699~~859

Collaboration

4,~~113~~154

4,~~052~~113

4,~~472~~052

Observability

~~837~~1,055

~~661~~837

~~581~~661

Total Product

3941,~~253~~608

4339,~~142~~253

3843,~~018~~142

Services

1415,~~550~~046

1314,~~856~~550

13,~~539~~856

Total

53,803

56,998

51,557

Total revenue

56,654

53,803

56,998

Amounts may not sum due to rounding.

Networking consists of our core networking technologies of switching, routing, wireless, and servers. These technologies consist of both hardware and software offerings, including software licenses and SaaS. Our hardware and perpetual software in this category are distinct performance obligations where revenue is recognized upfront upon transfer of control. Term software licenses are multiple performance obligations where the term license is recognized upfront upon transfer of control with the associated software maintenance revenue recognized ratably over the contract term. SaaS arrangements in this category have one distinct performance obligation which is satisfied over time with revenue recognized ratably over the contract term.

Security consists of our Network Security, Identity and Access Management, SASE and Threat Intelligence, Detection, and Response offerings. These products consist of both hardware and software offerings, including software licenses and SaaS. Updates and upgrades for the term software licenses are critical for our software to perform its intended commercial purpose because of the continuous need for our software to secure our customers’ network environments against frequent threats. Therefore, security software licenses are generally represented by a single distinct performance obligation with revenue recognized ratably over the contract term. Our hardware and perpetual software in this category are distinct performance obligations where revenue is recognized upfront upon transfer of control. SaaS arrangements in this category have one distinct performance obligation which is satisfied over time with revenue recognized ratably over the contract term.

Collaboration consists of our Webex Suite, Collaboration Devices, Contact Center and CPaaS offerings. These products consist primarily of software offerings, including software licenses and SaaS, as well as hardware. Our perpetual software and hardware in this category are distinct performance obligations where revenue is recognized upfront upon transfer of control. Term software licenses are multiple performance obligations where the term license is recognized upfront upon transfer of control with the associated software maintenance revenue recognized ratably over the contract term. SaaS arrangements in this category have one distinct performance obligation which is satisfied over time with revenue recognized ratably over the contract term.

Observability consists of our network assurance, monitoring and analytics and observability suite offerings. These products consist primarily of software offerings, including software licenses and SaaS. Our perpetual software in this category are distinct performance obligations where revenue is recognized upfront upon transfer of control. Term software licenses are multiple performance obligations where the term license is recognized upfront upon transfer of control with the associated software maintenance revenue recognized ratably over the contract term. SaaS arrangements in this category have one distinct performance obligation which is satisfied over time with revenue recognized ratably over the contract term.

69In addition to our product offerings, we provide a broad range of service and support options for our customers, including technical support services and advanced services. Technical support services represent the majority of these offerings which are distinct performance obligations that are satisfied over time with revenue recognized ratably over the contract term. Advanced services are distinct performance obligations that are satisfied over time with revenue recognized as services are delivered.

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Notes to Consolidated Financial Statements (Continued)

Inarrangements ~~addition~~ to ~~our~~customers ~~product offerings, we provide a broad range of service and support options~~ for our ~~customers~~hardware, ~~including~~software ~~technical support services~~ and ~~advanced~~service ~~services~~offerings. ~~Technical~~Refer ~~support~~to ~~services~~Note ~~represent~~9 ~~the~~for ~~majority~~additional ~~of these offerings which are distinct performance obligations that are satisfied over time with revenue recognized ratably over the contract term~~information. ~~Advanced~~For ~~services~~these ~~are~~arrangements, ~~distinct~~cash ~~performance~~is ~~obligations~~typically ~~that~~received ~~are satisfied~~ over time ~~with revenue recognized as services are delivered~~.

The sales arrangements as discussed above are typically made pursuant to customer purchase orders based on master purchase or partner agreements. Cash is received based on our standard payment terms which is typically 30 days. We provide financing arrangements to customers for our hardware, software and service offerings. Refer to Note 9 for additional information. For these arrangements, cash is typically received over time.

Subscription revenue includes revenue recognized from our term software licenses, security software licenses, SaaS, and associated service arrangements. Our subscription revenue is recorded in product and services revenue in our Consolidated Statements of Operations as follows (in millions):

Years Ended

July 2726, ~~2024~~2025

July 2927, ~~2023~~2024

July 3029, ~~2022~~2023

Product

1417,~~078~~783

1114,~~931~~078

1011,~~030~~931

Services

13,~~302~~743

1213,~~709~~302

12,~~363~~709

Total

2731,~~380~~526

2427,~~640~~380

2224,~~393~~640

The majority of our product subscription revenue is recognized over time and the remainder is recognized upfront. Substantially all of our services subscription revenue is recognized over time based on the contract term.

(b)Contract Balances

Accounts Receivable

Accounts receivable, net was $6.7 billion as of each of July 2726, ~~2024~~2025 ~~compared~~and ~~to $5.9 billion as of~~ July 2927, ~~2023~~2024, as reported on the Consolidated Balance Sheets.

The allowances for credit loss for our accounts receivable are summarized as follows (in millions):

	July 27, 2024		July 29, 2023		July 30, 2022
	July 26, 2025		July 27, 2024		July 29, 2023
Allowance for credit loss at beginning of fiscal year	$	8587	$	8385	$	~~109~~83
Provisions (benefits)	36		39		64
Provisions	33		36		39
Recoveries (write-offs), net	(3451)		(3734)		(8137)
Foreign exchange and other	—		—		(9)
Allowance for credit loss at end of fiscal year	$	69	$	87	$	85
Allowance for credit loss at end of fiscal year	$	87	$	85	$	83

Contract Assets and Liabilities

Gross contract assets by our internal risk ratings are summarized as follows (in millions):

	July 27, 2024		July 29, 2023
	July 26, 2025		July 27, 2024
1 to 4	$	1,~~266~~358	$	~~672~~1,266
5 to 6	1,~~456~~868		~~954~~1,456
7 and Higher	7273		6072
Total	$	23,~~794~~299	$	12,~~686~~794

Contract assets consist of unbilled receivables and are recorded when revenue is recognized in advance of scheduled billings to our customers. These amounts are primarily related to software and service arrangements where transfer of control has occurred but we have not yet invoiced. As of July 2726, ~~2024~~2025 and July 2927, ~~2023~~2024, our contract assets for these unbilled receivables, net of allowances, were $23.72 billion and $12.67 billion, respectively, of which $1.7 billion and $1.4 billion, respectively, were included in other current assets, ~~and~~with remaining balances included in other assets.

Contract liabilities consist of deferred revenue. Deferred revenue was $28.58 billion as of July 2726, ~~2024~~2025 compared to $2528.65 billion as of July 2927, ~~2023~~2024. We recognized approximately $1316.81 billion of revenue during fiscal ~~2024~~2025 that was included in the deferred revenue balance at July 2927, ~~2023~~2024.

70(c)Capitalized Contract Acquisition Costs

We capitalize direct and incremental costs incurred to acquire contracts, primarily sales commissions, for which the associated revenue is expected to be recognized in future periods. We incur these costs in connection with both initial contracts and renewals. These costs are initially deferred and typically amortized over the term of the customer contract which corresponds to the period of benefit. Capitalized contract acquisition costs were $1.5 billion and $1.3 billion as of July 26, 2025 and July 27, 2024, respectively, and were included in other current assets and other assets. The amortization expense associated with these costs was $957 million, $742 million, and $723 million for fiscal 2025, 2024, and 2023, respectively, and was included in sales and marketing expenses.

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Notes to Consolidated Financial Statements (Continued)

(c)Capitalized Contract Acquisition Costs

We capitalize direct and incremental costs incurred to acquire contracts, primarily sales commissions, for which the associated revenue is expected to be recognized in future periods. We incur these costs in connection with both initial contracts and renewals. These costs are initially deferred and typically amortized over the term of the customer contract which corresponds to the period of benefit. Capitalized contract acquisition costs were $1.3 billion and $1.1 billion as of July 27, 2024 and July 29, 2023, respectively, and were included in other current assets and other assets. The amortization expense associated with these costs was $742 million, $723 million, and $679 million for fiscal 2024, 2023, and 2022, respectively, and was included in sales and marketing expenses.

4.Acquisitions

(a) Fiscal 2025 Acquisitions Summary

Allocation of the total purchase consideration for acquisitions we completed during fiscal 2025 is summarized as follows (in millions):


Fiscal 2025	Purchase Consideration		Net Tangible Assets Acquired (Liabilities Assumed)		Purchased Intangible Assets		Goodwill
Total acquisitions	$	293	$	(21)	$	121	$	193

The total purchase consideration of $293 million related to our acquisitions completed during fiscal 2025 consisted primarily of cash consideration. The total cash and cash equivalents acquired from these acquisitions was approximately $15 million.

The purchase price allocation for acquisitions completed during fiscal 2025 is preliminary and subject to revision as additional information about fair value of assets and liabilities become available. Additional information that existed as of the acquisition date but is currently unknown to us may become known during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date.

(b) Fiscal 2024 Acquisitions Summary

Allocation of the total purchase consideration for acquisitions we completed during fiscal 2024 is summarized as follows (in millions):


Fiscal 2024	Purchase Consideration		Net Tangible Assets Acquired (Liabilities Assumed)		Purchased Intangible Assets		Goodwill
Splunk	$	27,090	$	(2,761)	$	10,550	$	19,301
Other acquisitions	1,370		(47)		500		917
Total acquisitions	$	28,460	$	(2,808)	$	11,050	$	20,218

Acquisition of Splunk Inc.

On March 18, 2024, we completed the acquisition of Splunk Inc. (“Splunk”), a public cybersecurity and observability company. Under the terms of the agreement, we agreed to pay $157 per share in cash, representing approximately $27 billion in merger consideration.

Purchase Consideration

The following table summarizes the purchase consideration for the Splunk acquisition (in millions):


	Amount
Cash paid for outstanding Splunk common stock	$	26,950
Fair value of converted Splunk equity awards attributable to pre-acquisition services	137
Settlement of pre-existing relationships	3
Total purchase consideration	$	27,090

~~A summary of the preliminary allocation of the total purchase consideration for Splunk is presented as follows (in millions):~~69

	Amount
Cash and cash equivalents	$	2,422
Investments	285
Accounts receivable, net	623
Goodwill	19,301
Purchased intangible assets	10,550
Deferred tax assets	1,308
Other current and noncurrent assets	1,176
Accounts payable	(39)
Accrued compensation	(337)
Current portion of deferred revenue	(1,768)
Splunk convertible notes	(3,344)
Deferred tax liabilities	(2,523)
Noncurrent portion of deferred revenue	(86)
Other current and other noncurrent liabilities	(478)
Total	$	27,090

The purchase price allocation for Splunk is preliminary and subject to revision as additional information about fair value of assets and liabilities becomes available. Additional information that existed as of the acquisition date but is currently unknown to us may become known during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date.

Our Consolidated Statements of Operations for fiscal 2024 includes revenue of approximately $1.4 billion and a net loss of $557 million attributable to Splunk since the date of acquisition.

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CISCO SYSTEMS, INC.

Notes to Consolidated Financial Statements (Continued)

WeAllocation ~~incurred $82 million~~ of ~~transaction~~the ~~costs~~total ~~related~~purchase toconsideration ~~the~~for Splunk ~~acquisition~~is ~~and~~presented ~~these costs were expensed~~ as ~~incurred~~follows ~~in general and administrative expenses~~ (~~“G&A”) expenses~~ in ~~the Consolidated Statements of Operations. We incurred $79 million of these transaction costs in fiscal 2024.~~millions):

In connection with the Splunk acquisition, we assumed $3.1 billion aggregate principal amount of notes consisting of Splunk's 1.125% Convertible Senior Notes due 2025, 0.75% Convertible Senior Notes due 2026 and 1.125% Convertible Senior Notes due 2027 (collectively, the “Splunk Convertible Notes”). The Splunk Convertible Notes had an aggregate fair value of $3.3 billion as of the acquisition date. The Splunk Convertible Notes are convertible and may be settled into cash based on a defined conversion ratio for each note. On the date of the acquisition, we notified holders of their right to convert their notes. In addition, we assumed Splunk’s capped call contracts which were intended to reduce potential dilution or offset any cash payments. The capped calls were settled in full in the third quarter of fiscal 2024, which resulted in receipt of aggregate cash proceeds of $202 million, and were included in other current assets in total purchase consideration noted above. As of July 27, 2024, we have settled $3.1 billion of the Splunk Convertible Notes, net of capped calls.


	Amount
Cash and cash equivalents	$	2,422
Investments	285
Accounts receivable, net	623
Goodwill	19,301
Purchased intangible assets	10,550
Deferred tax assets	1,308
Other current and noncurrent assets	1,176
Accounts payable	(39)
Accrued compensation	(337)
Current portion of deferred revenue	(1,768)
Splunk convertible notes	(3,344)
Deferred tax liabilities	(2,523)
Noncurrent portion of deferred revenue	(86)
Other current and other noncurrent liabilities	(478)
Total	$	27,090

~~The~~Our ~~goodwill~~Consolidated ~~generated~~Statements ~~from~~of ~~Splunk~~Operations isfor ~~primarily~~fiscal ~~related~~2024 toincludes ~~expected~~revenue ~~synergies~~of approximately $1.4 billion ~~Goodwill~~and isa ~~not~~net ~~deductible~~loss ~~for~~of ~~income~~$557 million ~~tax~~attributable ~~purposes~~to Splunk since the date of acquisition.

~~Purchased~~We ~~Intangible~~incurred ~~Assets~~$82 million of transaction costs related to the Splunk acquisition and these costs were expensed as incurred in G&A in the Consolidated Statements of Operations. We incurred $79 million of these transaction costs in fiscal 2024.

The ~~following~~goodwill ~~table~~generated ~~presents~~from asSplunk ofis ~~the~~primarily ~~acquisition~~related ~~date~~to ~~details~~expected ofsynergies. ~~the~~Goodwill ~~purchased~~is not deductible for income tax purposes. Refer to Note 5. Goodwill and Purchased Intangible Assets for details about our intangible assets acquired ~~(in~~through ~~millions,~~the ~~except~~Splunk ~~years):~~acquisition.

	Weighted-Average Useful Life (in Years)	Amount
Customer related	9.1	$	6,140
Technology	6.0	3,900
Trade name	12.0	510
Total		$	10,550

The majority of customer-related intangible assets relates to customer contracts and related relationships. The customer contracts and related relationships intangible asset represents the fair value of future projected revenue that will be derived from sales of products to existing customers of Splunk. The asset was valued using the with-and-without method under the income approach. In the with-and-without method, the fair value was measured by the difference between the present values of the cash flows with and without the existing customers in place over the period of time necessary to reacquire the customers. The present value of projected future cash flows included significant judgment and assumptions regarding projected future revenues, projected expenses, attrition rates, the revenue build up period, and the discount rate.

Technology represents the preliminary estimated fair value of Splunk’s security and observability technologies. The technology intangible asset was valued using the multi-period excess earnings method under the income approach. This method reflects the present value of the projected cash flows that are expected to be generated by the technology asset less charges representing the contribution of other assets to those cash flows. The present value of projected future cash flows included significant judgment and assumptions regarding projected future revenues, projected expenses, the technology obsolescence rate, and the discount rate.

Trade name represents the preliminary estimated fair value of the Splunk trade name. The fair value was determined by applying the relief-from-royalty method under the income approach. This method is based on the application of a royalty rate to forecasted revenue under the trade name.

Compensation Expense Related to Splunk

In connection with the Splunk acquisition, we have agreed to pay certain additional amounts contingent upon the continued employment with Cisco of certain Splunk employees. For fiscal 2024, the compensation expense was $413 million. As of July 27, 2024, we estimated that future cash compensation expense of up to $1.1 billion may be required to be recognized pursuant to acquisition-related agreements.

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CISCO SYSTEMS, INC.

Notes to Consolidated Financial Statements (Continued)

Pro forma Financial Information

The unaudited pro forma financial information in the table below summarizes the combined results of our operations and Splunk’s operations, as though the acquisition of Splunk had been completed as of the beginning of fiscal 2023. The pro forma financial information for fiscal 2024 combines our results for this period with the results of Splunk for the period beginning August 1, 2023, through July 27, 2024. The pro forma financial information for fiscal 2023 combines our historical results for that period with the historical results of Splunk for the year ended July 31, 2023.

The following table summarizes the pro forma financial information (in millions):


Years Ended	July 27, 2024		July 29, 2023
Total revenue	$	56,761	$	60,841
Net income	$	9,280	$	10,078

The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition and the cost of financing the acquisition had taken place at the beginning of fiscal 2023. The financial information for the periods presented above includes pro forma adjustments for amortization of purchased intangible assets, costs related to financing the acquisition and transaction costs.

~~The~~Other ~~above~~2024 pro forma financial information includes only the impacts of the Splunk acquisition because the effects of the other acquisitions detailed below, individually and in the aggregate, were not material to our financial results.Acquisitions

~~Other~~The ~~Acquisitions~~total purchase consideration of $1.4 billion related to the other acquisitions we completed during fiscal 2024 consisted primarily of cash consideration. The total cash and cash equivalents acquired from these other acquisitions was approximately $24 million.

We completed several additional acquisitions during fiscal 2024 for an aggregate cash consideration of $1.4 billion. A summary of the allocation of the total purchase consideration of these additional acquisitions is presented as follows (in millions):70

Fiscal 2024			Purchase Consideration						Net Tangible Assets Acquired (Liabilities Assumed)						Purchased Intangible Assets						Goodwill
Total other acquisitions			$	1,370					$	(47)					$	500					$	917

The total purchase consideration related to these other acquisitions completed during fiscal 2024 consisted primarily of cash consideration. The total cash and cash equivalents acquired from these acquisitions was approximately $24 million. Total transaction costs related to these acquisition activities were $25 million, $24 million, and $49 million for fiscal 2024, 2023, and 2022, respectively. These transaction costs were expensed as incurred in G&A in the Consolidated Statements of Operations.

The purchase price allocation for these acquisitions completed during recent periods is preliminary and subject to revision as additional information about fair value of assets and liabilities becomes available. Additional information that existed as of the acquisition date but is currently unknown to us may become known during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date.

The goodwill generated from these acquisitions completed during fiscal 2024 is primarily related to expected synergies. The goodwill is generally not deductible for income tax purposes.

Fiscal 2023 Acquisitions

Allocation of the purchase consideration for acquisitions completed in fiscal 2023 is summarized as follows (in millions):

Fiscal 2023			Purchase Consideration						Net Tangible Assets Acquired (Liabilities Assumed)						Purchased Intangible Assets						Goodwill
Total acquisitions			$	315					$	(18)					$	150					$	183

The total purchase consideration related to our acquisitions completed during fiscal 2023 consisted of cash consideration and vested share-based awards assumed. The total cash and cash equivalents acquired from these acquisitions was approximately $7 million.

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CISCO SYSTEMS, INC.

Notes to Consolidated Financial Statements (Continued)

InAllocation ~~fiscal~~of ~~2022,~~the ~~we paid~~ total purchase consideration offor ~~$364 million~~acquisitions ~~for~~completed ~~our~~during ~~acquisitions.~~fiscal 2023 is summarized as follows (in millions):

Compensation Expense Related to Acquisitions including Splunk


Fiscal 2023	Purchase Consideration		Net Tangible Assets Acquired (Liabilities Assumed)		Purchased Intangible Assets		Goodwill
Total acquisitions	$	315	$	(18)	$	150	$	183

(d) Compensation Expense Related to Acquisitions

In connection with our acquisitions, we have agreed to pay certain additional amounts contingent upon the continued employment with Cisco of certain employees of the acquired entities.

The following table summarizes the compensation expense related to acquisitions (in millions):

July 27, 2024

July 29, 2023

July 30, 2022

July 26, 2025

July 27, 2024

July 29, 2023

Compensation expense related to acquisitions

~~618~~876

~~222~~618

~~271~~222

~~Total~~As ~~compensation~~of ~~expense~~July 26, ~~related~~2025, towe ~~acquisitions~~estimated ~~for~~that ~~fiscal~~future ~~2024~~cash ~~include~~compensation expense of up to $~~413~~618 million ~~related~~may be required to ~~the~~be ~~Splunk~~recognized pursuant to these applicable acquisition agreements.

As(e) Other ofAcquisition ~~July 27,~~and ~~2024,~~Divestiture we estimated that future cash compensation expense of up to $1.6 billion may be required to be recognized pursuant to these applicable acquisition agreements, which includes up to $1.1 billion related to the Splunk acquisition. Information

Total transaction costs related to acquisition and divestiture activities during fiscal 2025, 2024, and 2023, inclusive of Splunk, were $12 million, $104 million and $26 million, respectively. These transaction costs were expensed as incurred in G&A in the Consolidated Statements of Operations.

The goodwill generated from acquisitions completed during fiscal 2025, 2024, and 2023 is primarily related to expected synergies. The goodwill is generally not deductible for income tax purposes.

The Consolidated Financial Statements include the operating results of each acquisition from the date of acquisition. Pro forma results of operations and the revenue and net income subsequent to the acquisition date for the acquisitions completed during fiscal 2025, 2024, and 2023, with the exception of Splunk, have not been presented because the effects of the acquisitions were not material to our financial results.

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CISCO SYSTEMS, INC.

Notes to Consolidated Financial Statements (Continued)

5.Goodwill and Purchased Intangible Assets

(a)Goodwill

The following tables present the goodwill allocated to our reportable segments as of July 2726, ~~2024~~2025 and July 2927, ~~2023~~2024, as well as the changes to goodwill during fiscal ~~2024~~2025 and ~~2023~~2024 (in millions):


	Balance at July 27, 2024		Acquisitions, net of Divestitures		Foreign Currency Translation and Other		Balance at July 26, 2025
Americas	$	36,169	$	121	$	178	$	36,468
EMEA	14,283		47		67		14,397
APJC	8,208		23		40		8,271
Total	$	58,660	$	191	$	285	$	59,136


	Balance at July 29, 2023		Splunk		Other Acquisitions		Foreign Currency Translation and Other		Balance at July 27, 2024
Americas	$	24,035	$	11,619	$	573	$	(58)	$	36,169
EMEA	9,118		4,980		207		(22)		14,283
APJC	5,382		2,702		137		(13)		8,208
Total	$	38,535	$	19,301	$	917	$	(93)	$	58,660

	Balance at July 30, 2022		Acquisitions		Foreign Currency Translation and Other		Balance at July 29, 2023
Americas	$	23,882	$	123	$	30	$	24,035
EMEA	9,062		44		12		9,118
APJC	5,360		16		6		5,382
Total	$	38,304	$	183	$	48	$	38,535

(b)Purchased Intangible Assets

The following tables present details of our intangible assets acquired through acquisitions completed during fiscal ~~2024~~2025 and ~~2023~~2024 (in millions, except years):

	FINITE LIVES									INDEFINITELIVES		TOTAL
	TECHNOLOGY			CUSTOMERRELATED			TRADE NAME			IPR&D
	CUSTOMERRELATED			TECHNOLOGY			TRADE NAME			IPR&D
Fiscal 2024	Weighted-Average UsefulLife (in Years)	Amount		Weighted-Average UsefulLife (in Years)	Amount		Weighted-Average UsefulLife (in Years)	Amount		Amount		Amount
Fiscal 2025	Weighted-Average UsefulLife (in Years)	Amount		Weighted-Average UsefulLife (in Years)	Amount		Weighted-Average UsefulLife (in Years)	Amount		Amount		Amount
Splunk	6.0	$	3,900	9.1	$	6,140	12.0	$	510	$	—	$	10,550
Total acquisitions	3.5	$	16	3.8	$	105	—	$	—	$	—	$	121
Others	4.8	400		4.9	83		1.3	3		14		500
Total		$	4,300		$	6,223		$	513	$	14	$	11,050


	FINITE LIVES									INDEFINITE LIVES		TOTAL
	CUSTOMER RELATED			TECHNOLOGY			TRADE NAME			IPR&D
Fiscal 2024	Weighted- Average Useful Life (in Years)	Amount		Weighted- Average Useful Life (in Years)	Amount		Weighted- Average Useful Life (in Years)	Amount		Amount		Amount
Splunk	9.1	$	6,140	6.0	$	3,900	12.0	$	510	$	—	$	10,550
Others	4.9	83		4.8	400		1.3	3		14		500
Total acquisitions		$	6,223		$	4,300		$	513	$	14	$	11,050

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CISCO SYSTEMS, INC.

Notes to Consolidated Financial Statements (Continued)

	FINITE LIVES						INDEFINITELIVES		TOTAL
	TECHNOLOGY			CUSTOMERRELATIONSHIPS			IPR&D
Fiscal 2023	Weighted-Average UsefulLife (in Years)	Amount		Weighted-Average UsefulLife (in Years)	Amount		Amount		Amount
Total acquisitions	3.7	$	138	1.8	$	12	$	—	$	150

The following tables present details of our purchased intangible assets (in millions):


July 26, 2025	Gross		Accumulated Amortization		Net
Purchased intangible assets with finite lives:
Customer related	$	6,341	$	(1,268)	$	5,073
Technology	5,254		(1,606)		3,648
Trade name	526		(72)		454
Total purchased intangible assets with finite lives	12,121		(2,946)		9,175
In-process research and development, with indefinite lives	—		—		—
Total	$	12,121	$	(2,946)	$	9,175


July 27, 2024	Gross		Accumulated Amortization		Net
Purchased intangible assets with finite lives:
Customer related	$	6,844	$	(829)	$	6,015
Technology	6,680		(2,006)		4,674
Trade name	553		(49)		504
Total purchased intangible assets with finite lives	14,077		(2,884)		11,193
In-process research and development, with indefinite lives	26		—		26
Total	$	14,103	$	(2,884)	$	11,219

July 29, 2023	Gross		Accumulated Amortization		Net
Purchased intangible assets with finite lives:
Technology	$	2,998	$	(1,691)	$	1,307
Customer related	1,228		(905)		323
Other	40		(22)		18
Total purchased intangible assets with finite lives	4,266		(2,618)		1,648
In-process research and development, with indefinite lives	170		—		170
Total	$	4,436	$	(2,618)	$	1,818

Purchased intangible assets include intangible assets acquired through acquisitions as well as through direct purchases or licenses.

Impairment charges related to purchased intangible assets were $40 million for fiscal 2025 and $145 million for fiscal 2024. Impairment charges were as a result of declines in estimated fair value resulting from the reductions in or the elimination of expected future cash flows associated with certain ofin-process ~~our~~research ~~IPR&D~~and development and technology intangible assets.

The following table presents the amortization of purchased intangible assets, including impairment charges (in millions):

Years Ended

July 2726, ~~2024~~2025

July 2927, ~~2023~~2024

July 3029, ~~2022~~2023

Amortization of purchased intangible assets:

Cost of sales

~~955~~1,174

~~649~~955

~~749~~649

Operating expenses

~~698~~1,028

~~282~~698

~~328~~282

Total

12,~~653~~202

~~931~~1,653

~~1,077~~931

The estimated future amortization expense of purchased intangible assets with finite lives as of July 2726, ~~2024~~2025 is as follows (in millions):

Fiscal Year	Amount
2025	$	2,138
2026	$	1,828
2026	$	1,789
2027	1,480
2027	$	1,445
2028	1,401
2028	$	1,365
2029	1,275
2029	$	1,265
2030	991
Thereafter	$2,200	~~3,191~~
Total	$	9,175

7573

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CISCO SYSTEMS, INC.

Notes to Consolidated Financial Statements (Continued)

6.Restructuring and Other Charges

In the first quarter of fiscal 2025, we announced a restructuring plan (the “Fiscal 2025 Plan”), in order to allow us to invest in key growth opportunities and drive more efficiencies in our business. The Fiscal 2025 Plan is expected to impact approximately 7% of our global workforce, with estimated pre-tax charges of up to $1 billion consisting of severance and other one-time termination benefits, and other costs. WeIn ~~expect~~connection ~~this~~with the Fiscal 2025 Plan, we incurred charges of $744 million in fiscal 2025 and the plan is expected to be substantially completed byin the ~~end~~second quarter of fiscal ~~2025~~2026. The aggregate pre-tax charges are primarily cash-based and consist of severance and other one-time termination benefits, and other costs.

InWe ~~the third quarter of fiscal 2024, we~~ initiated a restructuring plan in fiscal 2024 (the “Fiscal 2024 Plan”), in order to realign the organization and enable further investment in key priority areas~~, of which approximately 5% of our global workforce would be impacted~~. In connection with the Fiscal 2024 Plan, we incurred cumulative charges of $654 million ~~for fiscal 2024~~ and the plan is ~~substantially~~ complete. The aggregate pretax charges related to this plan were primarily cash-based and consist of severance and other one-time termination benefits and other costs.

We initiated a restructuring plan in fiscal 2023 (the “Fiscal 2023 Plan”), which was completed in fiscal 2024. In connection with the Fiscal 2023 Plan, we incurred cumulative charges of $670 million and the plan is complete. The aggregate pretax charges related to this plan were primarily cash-based and consist of severance and other one-time termination benefits, real estate-related charges, and other costs.

The following table summarizes the activities related to ~~the~~our restructuring ~~and~~liability, which is included in other ~~charges,~~current asliabilities ~~discussed~~on ~~above~~our Consolidated Balance Sheets (in millions):

	FISCAL 2024 PLAN				FISCAL 2023 AND PRIOR PLANS
	FISCAL 2025 PLAN				FISCAL 2024 AND PRIOR PLANS
	Employee Severance		Other		EmployeeSeverance		Other		Total
Liability as of July 31, 2021	$	—	$	—	$	16	$	18	$	34
Liability as of July 30, 2022	$	—	$	—	$	2	$	7	$	9
Charges	—		—		9		(3)		6
Cash payments	—		—		(23)		(2)		(25)
Non-cash items	—		—		—		(6)		(6)
Liability as of July 30, 2022	—		—		2		7		9
Charges	—		—		465		66		531
Cash payments	—		—		(302)		(12)		(314)
Non-cash items	—		—		2		(15)		(13)
Liability as of July 29, 2023	—		—		167		46		213
Charges	~~627~~—		27—		~~104~~731		3158		789
Cash payments	~~(426)~~—		~~(3)~~—		(~~251~~677)		(1114)		(691)
Non-cash items	—		~~(15)~~—		—		(2237)		(37)
Liability as of July 27, 2024	$—	~~201~~	$—	9	$221	20	$53	44	$274	~~274~~
Charges	617		127		—		—		744
Cash payments	(582)		(9)		(170)		(9)		(770)
Non-cash items	31		(72)		(29)		(31)		(101)
Liability as of July 26, 2025	$	66	$	46	$	22	$	13	$	147

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CISCO SYSTEMS, INC.

Notes to Consolidated Financial Statements (Continued)

7.Balance Sheet and Other Details

The following tables provide details of selected balance sheet and other items (in millions, except percentages):

Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents

July 27, 2024

July 29, 2023

July 26, 2025

July 27, 2024

Cash and cash equivalents

78,~~508~~346

107,~~123~~508

Restricted cash and restricted cash equivalents included in other current assets

~~765~~564

~~191~~765

Restricted cash and restricted cash equivalents included in other assets

~~569~~—

~~1,313~~569

Total

8,~~842~~910

118,~~627~~842

Our restricted cash and restricted cash equivalents are funds primarily related to contractual obligations with suppliers.

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CISCO SYSTEMS, INC.

Notes to Consolidated Financial Statements (Continued)

Inventories

July 27, 2024

July 29, 2023

July 26, 2025

July 27, 2024

Raw materials

21,~~039~~744

12,~~685~~039

Work in process

83261

~~264~~83

Finished goods

~~1,027~~933

1,~~493~~027

Service-related spares

~~216~~220

~~186~~216

Demonstration systems

168

Total

3,~~373~~164

3,~~644~~373

Property and Equipment, Net

July 27, 2024

July 29, 2023

July 26, 2025

July 27, 2024

Gross property and equipment:

Land, buildings, and building and leasehold improvements

4,~~247~~045

4,~~229~~247

Production, engineering, computer and other equipment and related software

5,~~160~~178

5,~~355~~160

Operating lease assets

~~115~~51

~~135~~115

Furniture, fixtures and other

~~351~~316

~~339~~351

Total gross property and equipment

9,~~873~~590

109,~~058~~873

Less: accumulated depreciation and amortization

(7,~~783~~477)

(7,~~973~~783)

Total

2,~~090~~113

2,~~085~~090

Remaining Performance Obligations (RPO)

July 27, 2024

July 29, 2023

July 26, 2025

July 27, 2024

Product

2021,~~055~~572

1520,~~802~~055

Services

2021,~~993~~961

1920,~~066~~993

Total

4143,~~048~~533

3441,~~868~~048

Short-term RPO

2021,~~882~~723

1720,~~910~~882

Long-term RPO

2021,~~166~~810

1620,~~958~~166

Total

4143,~~048~~533

3441,~~868~~048

Amount to be recognized as revenue over the next 12 months

5150

Deferred revenue

28,~~475~~779

2528,~~550~~475

Unbilled contract revenue

1214,~~573~~754

912,~~318~~573

Total

4143,~~048~~533

3441,~~868~~048

Unbilled contract revenue represents noncancelable contracts for which we have not invoiced, have an obligation to perform, and revenue has not yet been recognized in the financial statements.

77Deferred Revenue


	July 26, 2025		July 27, 2024
Product	$	13,490	$	13,219
Services	15,289		15,256
Total	$	28,779	$	28,475
Reported as:
Current	$	16,416	$	16,249
Noncurrent

Filing Compare · CISCO SYSTEMS, INC.