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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 
_____________________________________
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 26, 2024
or
☐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 
_____________________________________
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CISCO SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 77-0059951
(State or other jurisdiction of
incorporation or organization)		 (I.R.S. Employer
Identification Number)
170 West Tasman Drive
San Jose, California 95134
(Address of principal executive office and zip code)
(408) 526-4000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and formal fiscal year, if changed since last report.)
_____________________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per shareCSCOThe Nasdaq Stock Market LLC
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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes ☐  No  ☒
Number of shares of the registrant’s common stock outstanding as of November 14, 2024: 3,982,758,260
____________________________________ 
1
Cisco Systems, Inc.
Form 10-Q for the Quarter Ended October 26, 2024
INDEX
Page
Part I
Item 1.
Item 2.
Item 3.
Item 4.
Part II.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

2
PART I. FINANCIAL INFORMATION 
Item 1.Financial Statements (Unaudited)
CISCO SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except par value)
(Unaudited)
October 26, 2024July 27, 2024
ASSETS
Current assets:
Cash and cash equivalents$9,065 $7,508 
Investments9,606 10,346 
Accounts receivable, net of allowance of $78 at October 26, 2024 and $87 at July 27, 2024
4,457 6,685 
Inventories3,143 3,373 
Financing receivables, net3,123 3,338 
Other current assets6,358 5,612 
Total current assets35,752 36,862 
Property and equipment, net2,082 2,090 
Financing receivables, net3,411 3,376 
Goodwill58,774 58,660 
Purchased intangible assets, net10,744 11,219 
Deferred tax assets6,514 6,262 
Other assets6,056 5,944 
TOTAL ASSETS$123,333 $124,413 
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt$12,364 $11,341 
Accounts payable1,996 2,304 
Income taxes payable2,096 1,439 
Accrued compensation2,861 3,608 
Deferred revenue15,615 16,249 
Other current liabilities5,610 5,643 
Total current liabilities40,542 40,584 
Long-term debt19,623 19,621 
Income taxes payable3,367 3,985 
Deferred revenue11,887 12,226 
Other long-term liabilities2,637 2,540 
Total liabilities78,056 78,956 
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; 3,974 and 4,007 shares issued and outstanding at October 26, 2024 and July 27, 2024, respectively
45,991 45,800 
Retained earnings662 1,087 
Accumulated other comprehensive loss(1,376)(1,430)
Total equity45,277 45,457 
TOTAL LIABILITIES AND EQUITY$123,333 $124,413 
See Notes to Consolidated Financial Statements.
3
CISCO SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per-share amounts)
(Unaudited) 
Three Months Ended
October 26, 2024October 28, 2023
REVENUE:
Product$10,114 $11,139 
Services3,727 3,529 
Total revenue13,841 14,668 
COST OF SALES:
Product3,526 3,957 
Services1,194 1,154 
Total cost of sales4,720 5,111 
GROSS MARGIN9,121 9,557 
OPERATING EXPENSES:
Research and development2,286 1,913 
Sales and marketing2,752 2,506 
General and administrative795 672 
Amortization of purchased intangible assets265 67 
Restructuring and other charges665 123 
Total operating expenses6,763 5,281 
OPERATING INCOME2,358 4,276 
Interest income286 360 
Interest expense(418)(111)
Other income (loss), net41 (83)
Interest and other income (loss), net(91)166 
INCOME BEFORE PROVISION FOR INCOME TAXES2,267 4,442 
Provision for (benefit from) income taxes(444)804 
NET INCOME$2,711 $3,638 
Net income per share:
Basic$0.68 $0.90 
Diluted$0.68 $0.89 
Shares used in per-share calculation:
Basic3,990 4,057 
Diluted4,013 4,087 
See Notes to Consolidated Financial Statements.
4
CISCO SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
(Unaudited)
Three Months Ended
October 26, 2024October 28, 2023
Net income$2,711 $3,638 
Available-for-sale investments:
Change in net unrealized gains and losses, net of tax benefit (expense) of $(17) and $40 for the first quarter of fiscal 2025 and 2024, respectively
54 (130)
Net (gains) losses reclassified into earnings, net of tax (benefit) expense of $(6) and $(4) for the first quarter of fiscal 2025 and 2024, respectively
19 16 
73 (114)
Cash flow hedging instruments:
Change in unrealized gains and losses, net of tax benefit (expense) of $(2) and $(9) for the first quarter of fiscal 2025 and 2024, respectively
7 29 
Net (gains) losses reclassified into earnings, net of tax (benefit) expense of $2 and $3 for the first quarter of fiscal 2025 and 2024, respectively
(7)(9)
— 20 
Net change in cumulative translation adjustment and actuarial gains and losses net, of tax benefit (expense) of $0 and $1 for the first quarter of fiscal 2025 and 2024, respectively
(19)(356)
Other comprehensive income (loss)54 (450)
Comprehensive income$2,765 $3,188 
See Notes to Consolidated Financial Statements.


5
CISCO SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
Three Months Ended
October 26, 2024October 28, 2023
Cash flows from operating activities:
Net income$2,711 $3,638 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, and other789 401 
Share-based compensation expense827 661 
Provision (benefit) for receivables(1)4 
Deferred income taxes(281)(513)
(Gains) losses on divestitures, investments and other, net(60)89 
Change in operating assets and liabilities, net of effects of acquisitions and divestitures:
Accounts receivable2,227 979 
Inventories229 307 
Financing receivables173 25 
Other assets(190)(290)
Accounts payable(269)(235)
Income taxes, net(806)(1,773)
Accrued compensation(754)(908)
Deferred revenue(971)259 
Other liabilities37 (273)
Net cash provided by operating activities3,661 2,371 
Cash flows from investing activities:
Purchases of investments(1,775)(1,850)
Proceeds from sales of investments1,490 1,280 
Proceeds from maturities of investments1,164 2,497 
Acquisitions, net of cash and cash equivalents acquired and divestitures(217)(876)
Purchases of investments in privately held companies(42)(13)
Return of investments in privately held companies77 47 
Acquisition of property and equipment(217)(134)
Other(1)1 
Net cash provided by investing activities479 952 
Cash flows from financing activities:
Repurchases of common stock—repurchase program
(2,003)(1,300)
Shares repurchased for tax withholdings on vesting of restricted stock units(165)(153)
Short-term borrowings, original maturities of 90 days or less, net68 — 
Issuances of debt5,732 — 
Repayments of debt(4,821)(750)
Dividends paid(1,592)(1,580)
Other(3)(17)
Net cash used in financing activities(2,784)(3,800)
Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents10 (45)
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents1,366 (522)
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period8,842 11,627 
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period$10,208 $11,105 
Supplemental cash flow information:
Cash paid for interest$545 $128 
Cash paid for income taxes, net$643 $3,090 


See Notes to Consolidated Financial Statements.
6
CISCO SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(in millions, except per-share amounts)
(Unaudited)
Three Months Ended October 26, 2024Shares of
Common
Stock		Common Stock
and
Additional
Paid-In Capital		Retained EarningsAccumulated
Other
Comprehensive Loss		Total
Equity
Balance at July 27, 20244,007 $45,800 $1,087 $(1,430)$45,457 
Net income2,711 2,711 
Other comprehensive income (loss)54 54 
Issuance of common stock11 — — 
Repurchase of common stock(40)(462)(1,541)(2,003)
Shares repurchased for tax withholdings on vesting of restricted stock units and other(4)(174)(174)
Cash dividends declared ($0.40 per common share)
(1,592)(1,592)
Share-based compensation827 827 
Other— (3)(3)
Balance at October 26, 20243,974$45,991 $662 $(1,376)$45,277 

Three Months Ended October 28, 2023Shares of
Common
Stock		Common Stock
and
Additional
Paid-In Capital		Retained EarningsAccumulated
Other
Comprehensive Loss		Total
Equity
Balance at July 29, 20234,066 $44,289 $1,639 $(1,575)$44,353 
Net income3,638 3,638 
Other comprehensive income (loss)(450)(450)
Issuance of common stock9 — — 
Repurchase of common stock(23)(249)(1,003)(1,252)
Shares repurchased for tax withholdings on vesting of restricted stock units and other(3)(156)(156)
Cash dividends declared ($0.39 per common share)
(1,580)(1,580)
Share-based compensation661 661 
Other1 (5)(4)
Balance at October 28, 20234,049 $44,546 $2,689 $(2,025)$45,210 












7
CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.Organization and 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 2025 and fiscal 2024 are each 52-week fiscal years. The Consolidated Financial Statements include our accounts and those of our subsidiaries. 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).
We have prepared the accompanying financial data as of October 26, 2024 and for the first quarter of fiscal 2025 and 2024, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP) have been condensed or omitted pursuant to such rules and regulations. The July 27, 2024 Consolidated Balance Sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States. However, we believe that the disclosures are adequate to make the information presented not misleading. These Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended July 27, 2024.
In the opinion of management, all normal recurring adjustments necessary to state fairly the consolidated balance sheet as of October 26, 2024, the results of operations, the statements of comprehensive income, the statements of cash flows and the statements of equity for the first quarter of fiscal 2025 and 2024, as applicable, have been made. The results of operations for the first quarter of fiscal 2025 are not necessarily indicative of the operating results for the full fiscal year or any future periods.
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 in prior periods in order to conform to the current period’s presentation. We have evaluated subsequent events through the date that the financial statements were issued.

2.Recent Accounting Pronouncements
(a)Recent Accounting Standards or Updates Not Yet Effective
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 accounting standard update will be effective for our fiscal 2025 Form 10-K on a retrospective basis, and early adoption is permitted. We are currently evaluating the impact of this accounting standard update on our segment disclosures.
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.
Disaggregation 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.

8
CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

3.Revenue
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 software-as-a-service (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.
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.
An allowance for future sales returns is established based on historical trends in product return rates. The allowance for future sales returns as of October 26, 2024 and July 27, 2024 was $42 million and $37 million, respectively, and was recorded as a reduction of our accounts receivable and revenue.
Significant Judgments
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. 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.
9
CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

(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. The following table presents this disaggregation of revenue (in millions):
Three Months Ended
October 26,
2024		October 28,
2023
Product revenue:
Networking$6,753 $8,822 
Security2,017 1,010 
Collaboration1,085 1,117 
Observability258 190 
Total Product10,114 11,139 
Services3,727 3,529 
Total$13,841 $14,668 
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, Secure Access Service Edge (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 Communication Platform as a Service (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.
In 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.
10
CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

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):
Three Months Ended
October 26, 2024October 28, 2023
Product$4,419 $3,207 
Services3,425 3,254 
Total$7,844 $6,461 
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 $4.5 billion as of October 26, 2024 compared to $6.7 billion as of July 27, 2024, as reported on the Consolidated Balance Sheets.
The allowances for credit loss for our accounts receivable are summarized as follows (in millions):
Three Months Ended
October 26, 2024October 28, 2023
Allowance for credit loss at beginning of period$87 $85 
Provisions (benefits)— 2 
Recoveries (write-offs), net(9)(5)
Allowance for credit loss at end of period$78 $82 
Contract Assets and Liabilities
Gross contract assets by our internal risk ratings are summarized as follows (in millions):
October 26,
2024		July 27,
2024
1 to 4$1,244 $1,266 
5 to 61,599 1,456 
7 and Higher71 72 
Total$2,914 $2,794 
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. Our contract assets for these unbilled receivables, net of allowances, were $2.9 billion as of October 26, 2024 and $2.7 billion as of July 27, 2024, and were included in other current assets and other assets.
Contract liabilities consist of deferred revenue. Deferred revenue was $27.5 billion as of October 26, 2024 compared to $28.5 billion as of July 27, 2024. We recognized approximately $5.3 billion of revenue during the first quarter of fiscal 2025 that was included in the deferred revenue balance at July 27, 2024.
(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
11
CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

the period of benefit. Capitalized contract acquisition costs were $1.4 billion and $1.3 billion as of October 26, 2024 and July 27, 2024, respectively, and were included in other current assets and other assets. The amortization expense associated with these costs was $208 million and $158 million for the first quarter of fiscal 2025 and fiscal 2024, respectively, and was included in sales and marketing expenses.

4.Acquisitions
A summary of the allocation of the total purchase consideration of our completed acquisitions during the first quarter of fiscal 2025 is presented as follows (in millions):
Purchase ConsiderationNet Tangible Assets Acquired (Liabilities Assumed)Purchased Intangible AssetsGoodwill
Total acquisitions$225 $(14)$105 $134 
The total purchase consideration related to our acquisitions completed during the first quarter of fiscal 2025 consisted primarily of cash consideration. The total cash and cash equivalents acquired from these acquisitions was approximately $13 million. Total transaction costs related to acquisition activities were $9 million and $31 million for the first quarter of fiscal 2025 and 2024, respectively. These transaction costs were expensed as incurred in general and administrative expenses (“G&A”) in the Consolidated Statements of Operations.
The purchase price allocation for 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 the first quarter of fiscal 2025 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 the first quarter of fiscal 2025 have not been presented because the effects of the acquisitions were not material to our financial results.
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):
Three Months Ended
October 26, 2024October 28, 2023
Compensation expense related to acquisitions$297 $49 
As of October 26, 2024, we estimated that future cash compensation expense of up to $1.3 billion may be required to be recognized pursuant to applicable acquisition agreements.

12
CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

5.Goodwill and Purchased Intangible Assets
(a)Goodwill
The following table presents the goodwill allocated to our reportable segments as of October 26, 2024 and during the first quarter of fiscal 2025 (in millions):
Balance at July 27, 2024Acquisitions, net of DivestituresForeign Currency Translation and OtherBalance at October 26, 2024
Americas$36,169 $86 $(11)$36,244 
EMEA14,283 32 (4)14,311 
APJC8,208 14 (3)8,219 
Total$58,660 $132 $(18)$58,774 
(b)Purchased Intangible Assets
The following table presents details of our intangible assets acquired through acquisitions completed during the first quarter of fiscal 2025 (in millions, except years):
 FINITE LIVESINDEFINITE LIVESTOTAL
 TECHNOLOGYCUSTOMER
RELATED		TRADE NAMEIPR&D
Weighted-
Average Useful
Life (in Years)		AmountWeighted-
Average Useful
Life (in Years)		AmountWeighted-
Average Useful
Life (in Years)		AmountAmountAmount
Total acquisitions4.0$93 4.0$12 — $— $— $105 
The following tables present details of our purchased intangible assets (in millions): 
October 26, 2024GrossAccumulated AmortizationNet
Purchased intangible assets with finite lives:
Customer related$6,856 $(1,081)$5,775 
Technology6,658 (2,206)4,452 
Trade name551 (60)491 
Total purchased intangible assets with finite lives14,065 (3,347)10,718 
In-process research and development, with indefinite lives26 — 26 
       Total$14,091 $(3,347)$10,744 
July 27, 2024GrossAccumulated AmortizationNet
Purchased intangible assets with finite lives:
Customer related$6,844 $(829)$6,015 
Technology6,680 (2,006)4,674 
Trade name553 (49)504 
Total purchased intangible assets with finite lives14,077 (2,884)11,193 
In-process research and development, with indefinite lives26 — 26 
Total$14,103 $(2,884)$11,219 
Purchased intangible assets include intangible assets acquired through acquisitions as well as through direct purchases or licenses.

13
CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

The following table presents the amortization of purchased intangible assets, including impairment charges (in millions):
Three Months Ended
October 26, 2024October 28, 2023
Amortization of purchased intangible assets:
Cost of sales$325 $186 
Operating expenses265 67 
Total$590 $253 
The estimated future amortization expense of purchased intangible assets with finite lives as of October 26, 2024 is as follows (in millions):
Fiscal YearAmount
2025 (remaining nine months)$1,571 
2026$1,818 
2027$1,474 
2028$1,393 
2029$1,271 
Thereafter$3,191 

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, of which approximately 7% of our global workforce would be impacted with estimated pre-tax charges of up to $1 billion. In connection with the Fiscal 2025 Plan, we incurred charges of $665 million in the first quarter of fiscal 2025. These aggregate pre-tax charges are primarily cash-based and consist of severance and other one-time termination benefits, and other costs. We expect the Fiscal 2025 Plan to be substantially completed by the end of fiscal 2025.
In fiscal 2024, we initiated a restructuring plan (the “Fiscal 2024 Plan”), in order to realign the organization and enable further investment in key priority areas. We completed the Fiscal 2024 Plan and incurred cumulative charges of $654 million. These aggregate pretax charges were primarily cash-based and consisted of severance and other one-time termination benefits, real estate-related charges, and other costs.
The following table summarizes the activities related to our restructuring liability, which were included in other current liabilities on our Consolidated Balance Sheets (in millions):
FISCAL 2025 PLANFISCAL 2024 PLAN
Employee SeveranceOtherEmployee SeveranceOtherTotal
Liability as of July 27, 2024$— $— $201 $9 $210 
Charges643 22 — — 665 
Cash payments(116)(1)(51)(2)(170)
Non-cash items(1)(20)— — (21)
Liability as of October 26, 2024$526 $1 $150 $7 $684 

14
CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

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
October 26,
2024		July 27,
2024
Cash and cash equivalents$9,065 $7,508 
Restricted cash and restricted cash equivalents included in other current assets763 765 
Restricted cash and restricted cash equivalents included in other assets380 569 
Total$10,208 $8,842 
Our restricted cash and restricted cash equivalents are funds primarily related to contractual obligations with suppliers.
Inventories
October 26,
2024		July 27,
2024
Raw materials$1,885 $2,039 
Work in process100 83 
Finished goods945 1,027 
Service-related spares207 216 
Demonstration systems6 8 
Total$3,143 $3,373 
Property and Equipment, Net
October 26,
2024		July 27,
2024
Gross property and equipment:
Land, buildings, and building and leasehold improvements$4,267 $4,247 
Production, engineering, computer and other equipment and related software5,135 5,160 
Operating lease assets88 115 
Furniture, fixtures and other356 351 
Total gross property and equipment9,846 9,873 
Less: accumulated depreciation and amortization
(7,764)(7,783)
Total$2,082 $2,090 
15
CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

Remaining Performance Obligations (RPO)
October 26,
2024		July 27,
2024
Product$19,882 $20,055 
Services20,108 20,993 
Total$39,990 $41,048 
Short-term RPO$20,310 $20,882 
Long-term RPO19,680 20,166 
Total$39,990 $41,048 
Amount to be recognized as revenue over the next 12 months
51 %51 %
Deferred revenue$27,502 $28,475 
Unbilled contract revenue12,488 12,573 
Total$39,990 $41,048 
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.
Deferred Revenue
October 26,
2024		July 27,
2024
Product$12,941 $13,219 
Services14,561 15,256 
Total$27,502 $28,475 
Reported as:
Current$15,615 $16,249 
Noncurrent11,887 12,226 
Total$27,502 $28,475 
Transition Tax Payable
Our income tax payable 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 is as follows (in millions):
October 26,
2024		July 27,
2024
Current$1,819 $1,819 
Noncurrent1,595 2,273 
Total$3,414 $4,092 
Our noncurrent transition tax payable has been reduced to reflect the transition tax benefit of the U.S. Tax Court opinion in Varian Medical Systems, Inc. v. Commissioner. See Note 18.
16
CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

8.Leases
(a)Lessee Arrangements
The following table presents our operating lease balances (in millions):
Balance Sheet Line ItemOctober 26, 2024July 27, 2024
Operating lease right-of-use assetsOther assets$1,092 1,066 
Operating lease liabilitiesOther current liabilities$357 $364 
Operating lease liabilitiesOther long-term liabilities938 906 
Total operating lease liabilities$1,295 $1,270 
The components of our lease expenses were as follows (in millions):
Three Months Ended
October 26, 2024October 28, 2023
Operating lease expense$114 $100 
Short-term lease expense18 11 
Variable lease expense46 56 
Total lease expense$178 $167 
Supplemental information related to our operating leases is as follows (in millions):
Three Months Ended
October 26, 2024October 28, 2023
Cash paid for amounts included in the measurement of lease liabilities — operating cash flows $114 $88 
Right-of-use assets obtained in exchange for operating leases liabilities$127 $126 
The weighted-average lease term was 4.9 years as of each of October 26, 2024 and July 27, 2024. The weighted-average discount rate was 4.0% as of each of October 26, 2024 and July 27, 2024.
The maturities of our operating leases (undiscounted) as of October 26, 2024 are as follows (in millions):
Fiscal YearAmount
2025 (remaining nine months)$319 
2026323 
2027235 
2028161 
2029128 
Thereafter285 
Total lease payments1,451 
Less: interest(156)
Total$1,295 
(b)Lessor Arrangements
Our leases primarily represent sales-type leases with terms of four years on average. 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. Interest income was $17 million and $14 million for the first quarter of fiscal 2025 and 2024, respectively, and was included in interest income in the Consolidated Statement of Operations. The net investment of our lease receivables is measured at the commencement date as the gross lease receivable, residual value less unearned income and allowance for credit loss. For additional information, see Note 9.
17
CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

Future minimum lease payments on our lease receivables as of October 26, 2024 are summarized as follows (in millions):
Fiscal YearAmount
2025 (remaining nine months)$285 
2026409 
2027128 
202878 
202973 
Thereafter83 
Total1,056 
Less: Present value of lease payments(949)
Unearned income$107 
Actual cash collections may differ from the contractual maturities due to early customer buyouts, refinancings, or defaults.
We provide financing of certain equipment through operating leases, and the amounts are included in property and equipment in the Consolidated Balance Sheets. Amounts relating to equipment on operating lease assets held by us and the associated accumulated depreciation are summarized as follows (in millions):
October 26, 2024July 27, 2024
Operating lease assets$88 $115 
Accumulated depreciation(48)(61)
Operating lease assets, net$40 $54 
Our operating lease income was $11 million and $16 million for the first quarter of fiscal 2025 and 2024, respectively, and was included in product revenue in the Consolidated Statements of Operations.
Minimum future rentals on noncancelable operating leases as of October 26, 2024 are summarized as follows (in millions):
Fiscal YearAmount
2025 (remaining nine months)$13 
202612 
20273 
Total$28 

9.Financing Receivables
(a)Financing Receivables
Financing receivables primarily consist of loan receivables and lease receivables. 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.
18
CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

A summary of our financing receivables is presented as follows (in millions):
October 26, 2024Loan ReceivablesLease ReceivablesTotal
Gross$5,583 $1,056 $6,639 
Residual value— 66 66 
Unearned income— (107)(107)
Allowance for credit loss(49)(15)(64)
Total, net$5,534 $1,000 $6,534 
Reported as:
Current$2,785 $338 $3,123 
Noncurrent2,749 662 3,411 
Total, net$5,534 $1,000 $6,534 
July 27, 2024Loan ReceivablesLease ReceivablesTotal
Gross$5,858 $965 $6,823 
Residual value— 67 67 
Unearned income— (111)(111)
Allowance for credit loss(50)(15)(65)
Total, net$5,808 $906 $6,714 
Reported as:
Current$3,071 $267 $3,338 
Noncurrent2,737 639 3,376 
Total, net$5,808 $906 $6,714 
(b)Credit Quality of Financing Receivables
The tables below present our gross financing receivables, excluding residual value, less unearned income, categorized by our internal credit risk rating by period of origination (in millions):
October 26, 2024Fiscal YearThree Months Ended
Internal Credit Risk RatingPriorJuly 31, 2021July 30, 2022July 29, 2023July 27, 2024October 26, 2024Total
Loan Receivables:
1 to 4$53 $256 $449 $736 $1,613 $504 $3,611 
5 to 620 65 107 360 939 404 1,895 
7 and Higher4 5 58 8 2 — 77 
Total Loan Receivables$77 $326 $614 $1,104 $2,554 $908 $5,583 
Lease Receivables:
1 to 4$7 $34 $50 $195 $276 $63 $625 
5 to 66 16 36 99 126 28 311 
7 and Higher— 1 2 4 6 — 13 
Total Lease Receivables$13 $51 $88 $298 $408 $91 $949 
Total$90 $377 $702 $1,402 $2,962 $999 $6,532 
19
CISCO SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

July 27, 2024Fiscal Year
Internal Credit Risk RatingPriorJuly 25, 2020July 31, 2021July 30, 2022July 29, 2023July 27, 2024Total
Loan Receivables:
1 to 4$2 $78 $341 $555 $945 $1,803 $3,724 
5 to 62 29 127 130 426 1,314 2,028 
7 and Higher3 1 10 74 14 4 106 
Total Loan Receivables$7 $108 $478 $759 $1,385 $3,121 $5,858 
Lease Receivables:
1 to 4$1 $8 $38 $46 $176 $341 $610 
5 to 61 11 22 44 129 21 228 
7 and Higher— — 1 3 4 8 16 
Total Lease Receivables$2 $19 $61 $93 $309 $370 $854 
Total$9 $127 $539 $852 $1,694 $3,491 $6,712 
The following tables present the aging analysis of gross receivables as of October 26, 2024 and July 27, 2024 (in millions):
DAYS PAST DUE
(INCLUDES BILLED AND UNBILLED)
October 26, 202431-6061-90 91+Total
Past Due		CurrentTotal120+ Still AccruingNonaccrual
Financing
Receivables		Impaired
Financing
Receivables
Loan receivables$21 $30 $32 $83 $5,500 $5,583 $7 $7 $7 
Lease receivables21 5 5 31 918 949 4 — — 
Total$42 $35 $37 $114 $6,418 $6,532 $11 $7 $7 
DAYS PAST DUE
(INCLUDES BILLED AND UNBILLED)
July 27, 202431-6061-90 91+Total
Past Due		CurrentTotal120+ Still AccruingNonaccrual
Financing
Receivables		Impaired
Financing
Receivables
Loan receivables$34 $17 $35 $86 $5,772 $5,858 $14 $7