cisco-annual-report-2021

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, future responses to and effects of the COVID-19 pandemic, 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
Cisco designs and sells a broad range of technologies that power the Internet. We are integrating our platforms across networking,
security, collaboration, applications and the cloud. These platforms are designed to help our customers manage more users,
devices and things connecting to their networks. This will enable us to provide customers with a highly secure, intelligent
platform for their digital business.
A summary of our results is as follows (in millions, except percentages and per-share amounts):
July 31,
2021
Three Months Ended
July 25,
2020 Variance
July 31,
2021
Years Ended
July 25,
2020 Variance
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,126 $ 12,154 8% $ 49,818 $ 49,301 1%
Gross margin percentage . . . . . . . . . . . . . . . . . . 63.6% 63.2% 0.4 pts 64.0% 64.3% (0.3) pts
Research and development . . . . . . . . . . . . . . . . . $ 1,713 $ 1,565 9% $ 6,549 $ 6,347 3%
Sales and marketing . . . . . . . . . . . . . . . . . . . . . . $ 2,448 $ 2,218 10% $ 9,259 $ 9,169 1%
General and administrative . . . . . . . . . . . . . . . . $ 521 $ 494 5% $ 2,152 $ 1,925 12%
Total R&D, sales and marketing,
general and administrative . . . . . . . . . . . . . . . . . $ 4,682 $ 4,277 9% $ 17,960 $ 17,441 3%
Total as a percentage of revenue . . . . . . . . . . . . . 35.7% 35.2% 0.5 pts 36.1% 35.4% 0.7 pts
Amortization of purchased intangible assets
included in operating expenses . . . . . . . . . . . . . $ 79 $ 33 139 % $ 215 $ 141 52%
Restructuring and other charges
included in operating expenses . . . . . . . . . . . . . $ 8 $ 127 (94)% $ 886 $ 481 84%
Operating income as a percentage of revenue . . 27.2% 26.7% 0.5 pts 25.8% 27.6% (1.8) pts
Interest and other income (loss), net . . . . . . . . . . $ 160 $ 59 171% $ 429 $ 350 23%
Income tax percentage . . . . . . . . . . . . . . . . . . . . 19.4% 20.3% (0.9) pts 20.1% 19.7% 0.4 pts
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,009 $ 2,636 14% $ 10,591 $ 11,214 (6)%
Net income as a percentage of revenue . . . . . . . 22.9% 21.7% 1.2 pts 21.3% 22.7% (1.4) pts
Earnings per share—diluted . . . . . . . . . . . . . . . $ 0.71 $ 0.62 15% $ 2.50 $ 2.64 (5)%
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