Cisco Releases Fourth Quarter and Full Year Results for Fiscal 2022

Fourth quarter results for fiscal year 2022:

Sales : $13.1 billion

Same as last year

Earnings per share : GAAP earnings per share of $0.68; non-GAAP earnings per share of $0.83

GAAP earnings per share decreased 4% year-on-year

Non-GAAP earnings per share decreased 1% year-over-year

Full-year results for fiscal year 2022:

Sales: $51.6 billion

3% year-on-year growth

Earnings per share : GAAP earnings per share of $2.82; non-GAAP earnings per share of $3.36

GAAP earnings per share increased 13% year-over-year

Non-GAAP earnings per share increased 4% year-over-year

First quarter 2023 financial outlook:

Sales: 2% to 4% year-on-year growth

Earnings per share: GAAP earnings per share of $0.64 to $0.68; non-GAAP earnings per share of $0.82 to $0.84

Full-year 2023 financial outlook:

Sales: 4% to 6% year-on-year growth

Earnings per share: GAAP earnings per share of $2.77 to $2.88; non-GAAP earnings per share of $3.49 to $3.56

Beijing, August 18, 2022 - Cisco today released its fourth quarter and full year results for fiscal year 2022 ending July 30, 2022. Cisco's fourth quarter sales were $13.1 billion, net income calculated according to generally accepted accounting principles (GAAP) was $2.8 billion, or $0.68 per share, and non-GAAP net income was $3.4 billion, or $0.83 per share.

"We closed out the fiscal year with strong momentum, driven by our fourth quarter," said Chuck Robbins, Cisco chairman and CEO. "Our team demonstrated strong execution in a volatile market environment, resulting in our highest full-year earnings per share in history on a non-GAAP basis. Our full-year order intake and backlog both reached record levels, reflecting our continued confidence in the strong demand for innovation and the overall value we deliver to our customers as they accelerate their digital transformation."

"Total sales in the fourth quarter exceeded our expectations, driven by strong execution by our teams and the actions we took to mitigate the impact of changes in global supply conditions," said Scott Herren, Cisco's chief financial officer. "Our operating discipline was reflected in our solid operating margins and strong free cash flow generation, which enabled us to return nearly $4 billion to shareholders in the fourth quarter. We continue to make good progress in our business model transformation, with a RPO of more than $31 billion and an order backlog that gives us confidence in our ability to deliver even stronger financial performance in the future."

A detailed reconciliation of net income, earnings per share and other measures calculated in accordance with GAAP and non-GAAP conditions is provided in the tables titled "Reconciliation of GAAP to Non-GAAP Measures."

Financial Highlights

All comparative percentages are year-over-year figures unless otherwise stated.

Fiscal 2022 Fourth Quarter Results Highlights

Sales - Total sales were flat at $13.1 billion, with product sales and service sales flat year-over-year.

Sales in each region were as follows: Americas down 3%, EMEA up 8%, APJC down 2%. Product sales growth was driven by end-to-end security up 20%, optimized application experience up 8%, and collaboration up 2%. Security, Agile Networks down 1%, and Future Internet down 10%.

Gross Profit Margin - Total gross profit margin, product gross profit margin and service gross profit margin, calculated on a GAAP basis, were 61.3%, 59.1% and 67.5%, respectively, compared to 63.6%, 62.7% and 66.2%, respectively, in the fourth quarter of fiscal 2021.

On a non-GAAP basis, total gross margin, product gross margin and service gross margin were 63.3%, 61.3% and 69.0%, respectively, compared with 65.6%, 65.0% and 67.4%, respectively, in the fourth quarter of fiscal 2021.

The total gross profit margins for each region are as follows: 62.6% for the Americas, 64.4% for EMEA (Europe, Middle East and Africa), and 63.6% for APJC (Asia Pacific, Japan and Greater China).

Operating Expenses - GAAP operating expenses were $4.6 billion, down 4%, and represented 35.0% of sales. Non-GAAP operating expenses were $4.1 billion, down 4%, and represented 30.9% of sales.

Operating Income - GAAP operating income was $3.4 billion, down 4%, and GAAP operating margin was 26.2%. Non-GAAP operating income was $4.2 billion, down 4%, and non-GAAP operating margin was 32.4%.

Income Tax Withholding - GAAP tax withholding rate is 17.6%. Non-GAAP tax withholding rate is 18.5%.

Net Income and EPS - GAAP net income was $2.8 billion, down 6%, and EPS was $0.68, down 4%. Non-GAAP net income was $3.4 billion, down 3%, and EPS was $0.83, down 1%.

Cash flow from operating activities - $3.7 billion in the fourth quarter of fiscal 2022, a decrease of 18% from $4.5 billion in the fourth quarter of fiscal 2021.

Fiscal Year 2022 Full Year Results Highlights

Sales - Total sales were $51.6 billion, up 3%.

Net Income and EPS - GAAP net income was $11.8 billion, up 12%, and EPS was $2.82, up 13%. Non-GAAP net income was $14.1 billion, up 3% compared to fiscal 2021, and EPS was $3.36, up 4% compared to fiscal 2021.

Cash flow from operating activities - $13.2 billion for the full year Fiscal 2022, down 14% from fiscal 2021.

Balance Sheet and Other Performance Highlights

Cash and Cash Equivalents and Investments - $19.3 billion at the end of the fourth quarter of fiscal 2022, compared to $20.1 billion at the end of the third quarter of fiscal 2022 and $24.5 billion at the end of fiscal 2021.

Unfulfilled obligations - $31.5 billion, up 2% in total, of which 54% will be recognized as revenue in the next 12 months. Product unfulfilled obligations increased 6% and service unfulfilled obligations decreased 1%.

Deferred sales - were $23.3 billion, up 5% overall, with product deferred sales up 11% and services deferred sales up 1%.

Capital Allocation - In the fourth quarter of fiscal 2022, we returned $4.0 billion to shareholders through share repurchases and dividends. We declared and paid a cash dividend of $0.38 per common share, or $1.6 billion, and repurchased approximately 54 million shares of common stock under our share repurchase program at an average repurchase price of $44.02 per share for a total repurchase price of $2.4 billion. The remaining authorized share repurchase amount under the program is $15.2 billion with no expiration date.

Performance Outlook

Cisco expects to achieve the following results for the first quarter of fiscal 2023:

First quarter of fiscal year 2023

Cisco expects GAAP earnings per share of $0.64 to $0.68 for the first quarter of fiscal 2023.

For full fiscal 2023, Cisco expects to achieve the following results:

Fiscal Year 2023

Cisco expects full-year fiscal 2023 GAAP earnings per share to be $2.77 to $2.88.

Our first quarter fiscal 2023 and full year fiscal 2023 guidance assumes an effective tax provision rate of 19% for both GAAP and non-GAAP tax rates.

A reconciliation of the outlook based on GAAP to non-GAAP is included in the table titled “GAAP to Non-GAAP Outlook” located in the section titled “Reconciliation of GAAP to Non-GAAP Measures.”