cisco-annual-report-2021
RESULTS OF OPERATIONSA discussion regarding our financial condition and results of operations for fiscal 2021 compared to fiscal 2020 is presentedbelow. A discussion regarding our financial condition and results of operations for fiscal 2020 compared to fiscal 2019 canbe found under Item 7 in our Annual Report on Form 10-K for the fiscal year ended July 25, 2020, filed with the SEC onSeptember 3, 2020.RevenueThe following table presents the breakdown of revenue between product and service (in millions, except percentages):July 31,2021Years Ended 2021 vs. 2020July 25,2020July 27,2019Variancein DollarsVariancein PercentRevenue:Product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 36,014 $ 35,978 $ 39,005 $ 36 —%Percentage of revenue . . . . . . . . . . . . . . . . . . . . . . 72.3% 73.0% 75.1%Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,804 13,323 12,899 481 4%Percentage of revenue . . . . . . . . . . . . . . . . . . . . . . 27.7% 27.0% 24.9%Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 49,818 $ 49,301 $ 51,904 $ 517 1%We manage our business primarily on a geographic basis, organized into three geographic segments. Our revenue, whichincludes product and service for each segment, is summarized in the following table (in millions, except percentages):July 31,2021Years Ended 2021 vs. 2020July 25,2020July 27,2019Variancein DollarsVariancein PercentRevenue:Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 29,161 $ 29,291 $ 30,927 $ (130) —%Percentage of revenue . . . . . . . . . . . . . . . . . . . . . . 58.5% 59.4% 59.6%EMEA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,951 12,659 13,100 292 2%Percentage of revenue . . . . . . . . . . . . . . . . . . . . . . 26.0% 25.7% 25.2%APJC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,706 7,352 7,877 354 5%Percentage of revenue . . . . . . . . . . . . . . . . . . . . . . 15.5% 14.9% 15.2%Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 49,818 $ 49,301 $ 51,904 $ 517 1%Amounts may not sum and percentages may not recalculate due to rounding.Total revenue in fiscal 2021 increased by 1% compared with fiscal 2020. Product revenue was flat and service revenue increasedby 4%. Our total revenue reflected growth in EMEA and APJC. Americas was flat. Product revenue for the emerging countriesof BRICM, in the aggregate, experienced a 6% product revenue decline, with decreases in each of these countries with theexception of India.In addition to the impact of macroeconomic factors, including the IT spending environment and the level of spending bygovernment entities, revenue by segment in a particular period may be significantly impacted by several factors related torevenue recognition, including the complexity of transactions such as multiple performance obligations; the mix of financingarrangements provided to channel partners and customers; and final acceptance of the product, system, or solution, among otherfactors. In addition, certain customers tend to make large and sporadic purchases, and the revenue related to these transactionsmay also be affected by the timing of revenue recognition, which in turn would impact the revenue of the relevant segment.36
Product Revenue by SegmentThe following table presents the breakdown of product revenue by segment (in millions, except percentages):July 31,2021Years Ended 2021 vs. 2020July 25,2020July 27,2019Variancein DollarsVariancein PercentProduct revenue:Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,688 $ 21,006 $ 22,754 $ (318) (2)%Percentage of product revenue . . . . . . . . . . . . . . . 57.5% 58.4% 58.3%EMEA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,805 9,647 10,246 158 2%Percentage of product revenue . . . . . . . . . . . . . . . 27.2% 26.8% 26.3%APJC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,521 5,326 6,005 195 4%Percentage of product revenue . . . . . . . . . . . . . . . 15.3% 14.8% 15.4%Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 36,014 $ 35,978 $ 39,005 $ 36 —%Amounts may not sum and percentages may not recalculate due to rounding.AmericasProduct revenue in the Americas segment decreased by 2%. The product revenue decrease was driven by declines in theenterprise and commercial markets, partially offset by growth in the public sector and service provider markets. From a countryperspective, product revenue decreased by 1% in the United States, 18% in Mexico, and 9% in Brazil, partially offset by aproduct revenue increase of 4% in Canada.EMEAThe increase in product revenue in the EMEA segment of 2% was driven by growth in the service provider and public sectormarkets, partially offset by declines in the commercial and enterprise markets. Product revenue from emerging countries withinEMEA decreased by 7%, and product revenue for the remainder of the EMEA segment, which primarily consists of countriesin Western Europe, increased by 4%. From a country perspective, product revenue increased by 4% in Germany, partially offsetby declines in the United Kingdom and France by 1% and 2%, respectively.APJCProduct revenue in the APJC segment increased by 4%, driven by growth in the public sector, service provider and enterprisemarkets, partially offset by declines in the commercial market. From a country perspective, product revenue increased in Japan,Australia and India by 11%, 6% and 3%, respectively, partially offset by a decline of 4% in China.37
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Product Revenue by Segment
The following table presents the breakdown of product revenue by segment (in millions, except percentages):
July 31,
2021
Years Ended 2021 vs. 2020
July 25,
2020
July 27,
2019
Variance
in Dollars
Variance
in Percent
Product revenue:
Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,688 $ 21,006 $ 22,754 $ (318) (2)%
Percentage of product revenue . . . . . . . . . . . . . . . 57.5% 58.4% 58.3%
EMEA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,805 9,647 10,246 158 2%
Percentage of product revenue . . . . . . . . . . . . . . . 27.2% 26.8% 26.3%
APJC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,521 5,326 6,005 195 4%
Percentage of product revenue . . . . . . . . . . . . . . . 15.3% 14.8% 15.4%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 36,014 $ 35,978 $ 39,005 $ 36 —%
Amounts may not sum and percentages may not recalculate due to rounding.
Americas
Product revenue in the Americas segment decreased by 2%. The product revenue decrease was driven by declines in the
enterprise and commercial markets, partially offset by growth in the public sector and service provider markets. From a country
perspective, product revenue decreased by 1% in the United States, 18% in Mexico, and 9% in Brazil, partially offset by a
product revenue increase of 4% in Canada.
EMEA
The increase in product revenue in the EMEA segment of 2% was driven by growth in the service provider and public sector
markets, partially offset by declines in the commercial and enterprise markets. Product revenue from emerging countries within
EMEA decreased by 7%, and product revenue for the remainder of the EMEA segment, which primarily consists of countries
in Western Europe, increased by 4%. From a country perspective, product revenue increased by 4% in Germany, partially offset
by declines in the United Kingdom and France by 1% and 2%, respectively.
APJC
Product revenue in the APJC segment increased by 4%, driven by growth in the public sector, service provider and enterprise
markets, partially offset by declines in the commercial market. From a country perspective, product revenue increased in Japan,
Australia and India by 11%, 6% and 3%, respectively, partially offset by a decline of 4% in China.
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