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Cisco Demonstrates Solid Execution in Q3FY14

New Markets and Technologies Drive Plan to Return to Growth

SAN JOSE, CA -- (Marketwired) -- 05/14/14 -- Cisco (NASDAQ: CSCO)

  • Q3 Revenue: $11.5 billion
  • Q3 Earnings per Share: $0.42 GAAP; $0.51 non-GAAP

Cisco, the worldwide leader in networking that transforms how people connect, communicate and collaborate, today reported its third quarter results for the period ended April 26, 2014. Cisco reported third quarter revenue of $11.5 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.2 billion or $0.42 per share, and non-GAAP net income of $2.6 billion or $0.51 per share.

"I'm pleased with our performance in Q3. Our financial results exceeded the guidance we provided last quarter as we demonstrated clear progress on returning to growth. The entire team is focused on moving Cisco forward aggressively and we remain confident in our long-term goal to be the #1 IT company," stated John Chambers, Cisco chairman and chief executive officer.

                               GAAP Results

                                      Q3 2014       Q3 2013    Vs. Q3 2013
                                   ------------- ------------- -----------
Revenue                            $11.5 billion $12.2 billion        (5.5)%
Net Income                         $ 2.2 billion $ 2.5 billion       (12.0)%
Earnings per Share                 $0.42         $0.46                (8.7)%

                             Non-GAAP Results

                                       Q3 2014       Q3 2013   Vs. Q3 2013
                                    ------------  ------------ -----------
Net Income                         $ 2.6 billion $ 2.7 billion        (3.2)%
Earnings per Share                 $0.51         $0.51                  --%

Revenue for the first nine months of fiscal 2014 was $34.8 billion, compared with $36.2 billion for the first nine months of fiscal 2013. Net income for the first nine months of fiscal 2014, on a GAAP basis, was $5.6 billion or $1.06 per share, compared with $7.7 billion or $1.44 per share for the first nine months of fiscal 2013. Non-GAAP net income for the first nine months of fiscal 2014 was $8.0 billion or $1.51 per share, compared with $8.0 billion or $1.50 per share for the first nine months of fiscal 2013.

A reconciliation between net income on a GAAP basis and non-GAAP net income is provided in the table following the Consolidated Statements of Operations.

Cisco will discuss third quarter results and business outlook on a conference call and webcast at 1:30 p.m. Pacific Time today. Call information and related charts are available at

Cash and Cash Equivalents and Investments

  • Cash flows from operations were $3.2 billion for the third quarter of fiscal 2014, compared with $2.9 billion for the second quarter of fiscal 2014, and compared with $3.1 billion for the third quarter of fiscal 2013.

  • Cash and cash equivalents and investments were $50.5 billion at the end of the third quarter of fiscal 2014, compared with $47.1 billion at the end of the second quarter of fiscal 2014, and compared with $50.6 billion at the end of the fourth quarter of fiscal 2013.

Dividends and Stock Repurchase Program

  • Cisco repurchased approximately 90 million shares of common stock under the stock repurchase program at an average price of $22.24 per share for an aggregate purchase price of $2.0 billion during the third quarter of fiscal 2014. As of April 26, 2014, Cisco had repurchased and retired 4.2 billion shares of Cisco common stock at an average price of $20.56 per share for an aggregate purchase price of approximately $86.9 billion since the inception of the stock repurchase program. The remaining authorized amount for stock repurchases under this program as of April 26, 2014 was approximately $10.1 billion with no termination date.

  • During the third quarter of fiscal 2014, Cisco paid a cash dividend of $0.19 per common share, or $974 million.

"We executed well this quarter with a focus on operational excellence," stated Frank Calderoni, Cisco executive vice president and chief financial officer. "Our strong and consistent cash generation demonstrates the value of our business model."

Internet of Everything

  • Cisco announced plans to build the world's largest global Intercloud for the Internet of Everything (IoE) together with a set of partners, a distributed network and security architecture designed for high-value application workloads, real-time analytics, "near infinite" scalability and full compliance with local data sovereignty laws.
  • Cisco and AGT International announced a Smart City Global Strategic Alliance that plans to deliver the promise of the IoE through edge analytics and cloud technologies that dramatically change the way cities are managed and safeguarded.
  • Cisco selected Toronto as the location for one of four global Cisco® Internet of Everything Innovation Centers, representing a planned investment of up to $100 million over 10 years.

Next Generation of IT

  • Cisco's Visual Networking Index™ Global Mobile Data Traffic Forecast Update for 2013 to 2018 projects that worldwide mobile data traffic is expected to increase nearly 11-fold over the next four years and reach an annual run rate of 190 exabytes by 2018.
  • Cisco announced it worked with Fira de Barcelona and the GSMA to successfully provide one of the world's largest carrier-grade Wi-Fi networks at the GSMA's Mobile World Congress 2014 at Fira Gran Via in Barcelona, underscoring the growing importance of Wi-Fi to cellular.
  • Cisco, AT&T, GE, IBM and Intel announced the formation of the Industrial Internet Consortium™, an open membership group focused on breaking down the barriers of technology silos to support better access to big data with improved integration of the physical and digital worlds.
  • Cisco announced Managed Threat Defense, a managed security solution that applies real-time, predictive analytics designed to detect attacks and protect against advanced malware across customers' extended networks.


  • Cisco extended Application Centric Infrastructure (ACI) by introducing the Cisco Application Policy Infrastructure Controller (APIC) Enterprise Module, which extends to the WAN and access networks.
  • Cisco continued delivering on its vision for fog computing with the announcement of Cisco IOx, transforming the network edge into a distributed computing infrastructure for applications that take advantage of the billions of devices already connected in the Internet of Things (IoT).
  • Cisco announced OpenAppID, allowing for the ability to create and integrate new open source application identification capabilities into its Snort engine.
  • Cisco announced an agreement with CableLabs to provide them with core infrastructure and Videoscape components for a new IPTV Innovations Lab in Louisville, Colorado designed to provide cable system operator members with a state-of-the-art location for Internet Protocol (IP) video testing.
  • Cisco and Sony became the first companies to publicly demonstrate the live delivery of full-frame rate 4K 60P content at NAB 2014.

Editor's Notes:

  • Q3 fiscal year 2014 conference call to discuss Cisco's results along with its business outlook will be held on Wednesday, May 14, 2014 at 1:30 p.m. Pacific Time. Conference call number is 1-888-848-6507 (United States) or 1-212-519-0847 (international).
  • Conference call replay will be available from 4:00 p.m. Pacific Time on May 14, 2014 to 11:59 p.m. Pacific Time on June 1, 2014 at 1-800-945-7422 (United States) or 1-203-369-3952 (international). The replay will also be available via webcast from May 14, 2014 through July 19, 2014 on the Cisco Investor Relations website at
  • Additional information regarding Cisco's financials as well as a webcast of the conference call with visuals designed to guide participants through the call, will be available at 1:30 p.m. Pacific Time, May 14, 2014. Text of the conference call's prepared remarks will be available within 24 hours of completion of the call. The webcast will include both the prepared remarks and the question-and-answer session. This information, along with GAAP reconciliation information, will be available on the Cisco Investor Relations website at

About Cisco

Cisco (NASDAQ: CSCO) is the worldwide leader in IT that helps companies seize the opportunities of tomorrow by proving that amazing things can happen when you connect the previously unconnected. For ongoing news, please go to

This release may be deemed to contain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other things, statements regarding future events (such as our strategy and execution, our ability and plan to return to growth, our goal to be the #1 IT company, financial strength, strong cash generation and value of our business model) and the future financial performance of Cisco that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including: business and economic conditions and growth trends in the networking industry, our customer markets and various geographic regions; global economic conditions and uncertainties in the geopolitical environment; overall information technology spending; the growth and evolution of the Internet and levels of capital spending on Internet-based systems; variations in customer demand for products and services, including sales to the service provider market and other customer markets; the return on our investments in certain priorities, including our foundational priorities, and in certain geographical locations; the timing of orders and manufacturing and customer lead times; changes in customer order patterns or customer mix; insufficient, excess or obsolete inventory; variability of component costs; variations in sales channels, product costs or mix of products sold; our ability to successfully acquire businesses and technologies and to successfully integrate and operate these acquired businesses and technologies; our ability to achieve expected benefits of our partnerships; increased competition in our product and service markets, including the data center; dependence on the introduction and market acceptance of new product offerings and standards; rapid technological and market change; manufacturing and sourcing risks; product defects and returns; litigation involving patents, intellectual property, antitrust, shareholder and other matters, and governmental investigations; natural catastrophic events; a pandemic or epidemic; our ability to achieve the benefits anticipated from our investments in sales, engineering, service, marketing and manufacturing activities; our ability to recruit and retain key personnel; our ability to manage financial risk, and to manage expenses during economic downturns; risks related to the global nature of our operations, including our operations in emerging markets; currency fluctuations and other international factors; changes in provision for income taxes, including changes in tax laws and regulations or adverse outcomes resulting from examinations of our income tax returns; potential volatility in operating results; and other factors listed in Cisco's most recent reports on Forms 10-Q and 10-K filed on February 20, 2014 and September 10, 2013, respectively. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in Cisco's most recent reports on Forms 10-Q and 10-K as each may be amended from time to time. Cisco's results of operations for the three and nine months ended April 26, 2014 are not necessarily indicative of Cisco's operating results for any future periods. Any projections in this release are based on limited information currently available to Cisco, which is subject to change. Although any such projections and the factors influencing them will likely change, Cisco will not necessarily update the information, since Cisco will only provide guidance at certain points during the year. Such information speaks only as of the date of this release.

This release includes non-GAAP net income, non-GAAP effective tax rates, non-GAAP net income per share data, non-GAAP inventory turns and free cash flow.

These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Cisco believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Cisco's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Cisco's results of operations in conjunction with the corresponding GAAP measures.

Cisco believes that the presentation of non-GAAP net income, non-GAAP effective tax rates, and non-GAAP net income per share data, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and results of operations. In addition, Cisco believes that the presentation of non-GAAP inventory turns provides useful information to investors and management regarding financial and business trends relating to inventory management based on the operating activities of the periods presented. Cisco believes that the presentation of free cash flow, which it defines as the net cash provided by operating activities less cash used to acquire property and equipment, to be a liquidity measure that provides useful information to management and investors because of its intent to return a stated percentage of free cash flow to shareholders in the form of dividends and stock repurchases. Cisco further regards free cash flow as a useful measure because it reflects cash that can be used to, among other things, invest in its business, make strategic acquisitions, repurchase common stock, and pay dividends on its common stock, after deducting capital investments.

For its internal budgeting process, Cisco's management uses financial statements that do not include, when applicable, share-based compensation expense, amortization of acquisition-related intangible assets, impact to cost of sales from purchase accounting adjustments to inventory, acquisition-related/divestiture costs, significant asset impairments and restructurings, significant litigation and other contingencies (such as the supplier component remediation charge in the second quarter of fiscal 2014 and the patent litigation settlement with TiVo, Inc. incurred in the fourth quarter of fiscal 2013), the income tax effects of the foregoing, and significant tax matters. Cisco's management also uses the foregoing non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Cisco. In prior periods, Cisco has excluded other items that it no longer excludes for purposes of its non-GAAP financial measures. From time to time in the future, there may be other items that Cisco may exclude for purposes of its internal budgeting process and in reviewing its financial results.
For additional information on the items excluded by Cisco from one or more of its non-GAAP financial measures, refer to the Form 8-K regarding this release furnished today to the Securities and Exchange Commission.

Copyright © 2014 Cisco and/or its affiliates. All rights reserved. Cisco, the Cisco logo, Videoscape and the Visual Networking Index are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S. and other countries. To view a list of Cisco trademarks, go to: Third-party trademarks mentioned in this document are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company. This document is Cisco Public Information.

                            CISCO SYSTEMS, INC.
                  (In millions, except per-share amounts)

                                  Three Months Ended     Nine Months Ended
                                 --------------------  --------------------
                                 April 26,  April 27,  April 26,  April 27,
                                    2014       2013       2014       2013
                                 ---------  ---------  ---------  ---------
  Product                        $   8,820  $   9,559  $  26,640  $  28,293
  Service                            2,725      2,657      8,145      7,897
                                 ---------  ---------  ---------  ---------
    Total revenue                   11,545     12,216     34,785     36,190
                                 ---------  ---------  ---------  ---------
  Product                            3,595      3,782     11,665     11,387
  Service                              944        923      2,756      2,710
                                 ---------  ---------  ---------  ---------
    Total cost of sales              4,539      4,705     14,421     14,097
                                 ---------  ---------  ---------  ---------
GROSS MARGIN                         7,006      7,511     20,364     22,093
  Research and development           1,565      1,542      4,701      4,425
  Sales and marketing                2,342      2,375      7,030      7,178
  General and administrative           460        530      1,426      1,674
  Amortization of purchased
   intangible assets                    71         89        207        329
  Restructuring and other
   charges                              26         33        336        105
                                 ---------  ---------  ---------  ---------
    Total operating expenses         4,464      4,569     13,700     13,711
                                 ---------  ---------  ---------  ---------
OPERATING INCOME                     2,542      2,942      6,664      8,382
  Interest income                      170        162        508        483
  Interest expense                    (146)      (145)      (422)      (440)
  Other income (loss), net              76        (14)       187        (69)
                                 ---------  ---------  ---------  ---------
    Interest and other income
     (loss), net                       100          3        273        (26)
                                 ---------  ---------  ---------  ---------
 INCOME TAXES                        2,642      2,945      6,937      8,356
Provision for income taxes             461        467      1,331        643
                                 ---------  ---------  ---------  ---------
  NET INCOME                     $   2,181  $   2,478  $   5,606  $   7,713
                                 =========  =========  =========  =========

Net income per share:
  Basic                          $    0.42  $    0.47  $    1.06  $    1.45
                                 =========  =========  =========  =========
  Diluted                        $    0.42  $    0.46  $    1.06  $    1.44
                                 =========  =========  =========  =========
Shares used in per-share
  Basic                              5,143      5,329      5,271      5,316
                                 =========  =========  =========  =========
  Diluted                            5,180      5,387      5,311      5,361
                                 =========  =========  =========  =========

Cash dividends declared per
 common share                    $    0.19  $    0.17  $    0.53  $    0.45
                                 =========  =========  =========  =========

                  (In millions, except per-share amounts)

                                  Three Months Ended     Nine Months Ended
                                 --------------------  --------------------
                                 April 26,  April 27,  April 26,  April 27,
                                    2014       2013       2014       2013
                                 ---------  ---------  ---------  ---------
GAAP net income                  $   2,181  $   2,478  $   5,606  $   7,713
  Adjustments to cost of sales:
    Share-based compensation
     expense                            51         44        146        136
    Amortization of acquisition-
     related intangible assets         181        146        530        416
    Supplier component
     remediation charge                 --         --        655         --
    Impact to cost of sales from
     purchase accounting
     adjustments to inventory           --         --         --         40
     related/divestiture costs           1         --          1         --
                                 ---------  ---------  ---------  ---------
  Total adjustments to GAAP cost
   of sales                            233        190      1,332        592
                                 ---------  ---------  ---------  ---------
  Adjustments to operating
    Share-based compensation
     expense                           302        230        867        749
    Amortization of acquisition-
     related intangible assets          71         89        207        329
     related/divestiture costs          68         16        483         70
    Significant asset
     impairments and
     restructurings                     26        (17)       336         55
                                 ---------  ---------  ---------  ---------
  Total adjustments to GAAP
   operating expenses                  467        318      1,893      1,203
                                 ---------  ---------  ---------  ---------
  Total adjustments to GAAP
   income before provision for
   income taxes                        700        508      3,225      1,795
                                 ---------  ---------  ---------  ---------
  Income tax effect of non-GAAP
   adjustments                        (156)      (141)      (649)      (506)
  Significant tax matters              (85)      (117)      (154)      (983)
                                 ---------  ---------  ---------  ---------
  Total adjustments to GAAP
   provision for income taxes         (241)      (258)      (803)    (1,489)
                                 ---------  ---------  ---------  ---------
Non-GAAP net income              $   2,640  $   2,728  $   8,028  $   8,019
                                 ---------  ---------  ---------  ---------

Diluted net income per share:
GAAP                             $    0.42  $    0.46  $    1.06  $    1.44
                                 ---------  ---------  ---------  ---------
Non-GAAP                         $    0.51  $    0.51  $    1.51  $    1.50
                                 ---------  ---------  ---------  ---------


                                  Three Months Ended     Nine Months Ended
                                 --------------------  --------------------
                                 April 26,  April 27,  April 26,  April 27,
                                    2014       2013       2014       2013
                                 ---------  ---------  ---------  ---------
GAAP effective tax rate               17.4%      15.9%      19.2%       7.7%
Tax effect of non-GAAP
 adjustments to net income             3.6%       5.1%       1.8%      13.3%
                                 ---------  ---------  ---------  ---------
Non-GAAP effective tax rate           21.0%      21.0%      21.0%      21.0%
                                 ---------  ---------  ---------  ---------

                             CISCO SYSTEMS, INC.
                                (In millions)

                                                     April 26,     July 27,
                                                        2014         2013
                                                    -----------  -----------
Current assets:
  Cash and cash equivalents                         $     6,241  $     7,925
  Investments                                            44,228       42,685
  Accounts receivable, net of allowance for
   doubtful accounts of $247 at April 26, 2014 and
   $228 at July 27, 2013                                  4,443        5,470
  Inventories                                             1,528        1,476
  Financing receivables, net                              4,071        4,037
  Deferred tax assets                                     2,504        2,616
  Other current assets                                    1,273        1,312
                                                    -----------  -----------
    Total current assets                                 64,288       65,521
Property and equipment, net                               3,310        3,322
Financing receivables, net                                3,537        3,911
Goodwill                                                 24,076       21,919
Purchased intangible assets, net                          3,461        3,403
Other assets                                              3,184        3,115
                                                    -----------  -----------
TOTAL ASSETS                                        $   101,856  $   101,191
                                                    ===========  ===========
Current liabilities:
  Short-term debt                                   $       508  $     3,283
  Accounts payable                                        1,051        1,029
  Income taxes payable                                       --          192
  Accrued compensation                                    2,813        3,182
  Deferred revenue                                        9,198        9,262
  Other current liabilities                               4,945        5,048
                                                    -----------  -----------
    Total current liabilities                            18,515       21,996
Long-term debt                                           20,384       12,928
Income taxes payable                                      1,530        1,748
Deferred revenue                                          3,953        4,161
Other long-term liabilities                               1,678        1,230
                                                    -----------  -----------
Total liabilities                                        46,060       42,063
Total equity                                             55,796       59,128
                                                    -----------  -----------
TOTAL LIABILITIES AND EQUITY                        $   101,856  $   101,191
                                                    ===========  ===========

                            CISCO SYSTEMS, INC.
                               (In millions)

                                                       Nine Months Ended
                                                    April 26,    April 27,
                                                       2014         2013
                                                   -----------  -----------
Cash flows from operating activities:
  Net income                                       $     5,606  $     7,713
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation, amortization, and other                1,811        1,851
    Share-based compensation expense                     1,009          880
    Provision for receivables                               48           46
    Deferred income taxes                                 (181)          48
    Excess tax benefits from share-based
     compensation                                          (84)         (48)
    (Gains) losses on investments and other, net          (228)         (68)
    Change in operating assets and liabilities,
     net of effects of acquisitions and
      Accounts receivable                                1,064         (439)
      Inventories                                          (50)         238
      Financing receivables                                332         (448)
      Other assets                                         180          (41)
      Accounts payable                                      (2)          91
      Income taxes, net                                   (356)        (642)
      Accrued compensation                                (411)         (48)
      Deferred revenue                                    (309)        (169)
      Other liabilities                                    291          (56)
                                                   -----------  -----------
        Net cash provided by operating activities        8,720        8,908
                                                   -----------  -----------
Cash flows from investing activities:
  Purchases of investments                             (27,884)     (23,969)
  Proceeds from sales of investments                    14,490        7,279
  Proceeds from maturities of investments               12,048       13,234
  Acquisition of property and equipment                   (950)        (843)
  Acquisition of businesses, net of cash and cash
   equivalents acquired                                 (2,784)      (6,371)
  Purchases of investments in privately held
   companies                                              (315)        (140)
  Return of investments in privately held
   companies                                               119          110
  Proceeds from sales of property and equipment            168           57
  Other                                                    (30)         (10)
                                                   -----------  -----------
        Net cash used in investing activities           (5,138)     (10,653)
                                                   -----------  -----------
Cash flows from financing activities:
  Issuances of common stock                              1,053        1,193
  Repurchases of common stock - repurchase program      (7,965)      (1,554)
  Shares repurchased for tax withholdings on
   vesting of restricted stock units                      (345)        (249)
  Short-term borrowings, original maturities less
   than 90 days, net                                        (2)         (20)
  Issuances of debt                                      8,001           --
  Repayments of debt                                    (3,274)          --
  Excess tax benefits from share-based
   compensation                                             84           48
  Dividends paid                                        (2,784)      (2,392)
  Other                                                    (34)          42
                                                   -----------  -----------
        Net cash used in financing activities           (5,266)      (2,932)
                                                   -----------  -----------
Net decrease in cash and cash equivalents               (1,684)      (4,677)
Cash and cash equivalents, beginning of period           7,925        9,799
                                                   -----------  -----------
Cash and cash equivalents, end of period           $     6,241  $     5,122
                                                   -----------  -----------
Supplemental cash flow information:
Cash paid for interest                             $       561  $       562
Cash paid for income taxes, net                    $     1,868  $     1,236

 Certain reclassifications have been made to prior period amounts to conform
                    to the current period's presentation.

                                (In millions)

                                                    April 26,     July 27,
                                                      2014          2013
                                                  ------------  ------------
Cash and cash equivalents and investments:
  Cash and cash equivalents                       $      6,241  $      7,925
  Fixed income securities                               42,269        39,888
  Publicly traded equity securities                      1,959         2,797
                                                  ------------  ------------
    Total                                         $     50,469  $     50,610
                                                  ============  ============

                        TO FREE CASH FLOW (NON-GAAP)
                               (In millions)

                                                Three Months Ended
                                       April 26,   January 25,   April 27,
                                          2014         2014         2013
                                      -----------  -----------  -----------
Net cash provided by operating
 activities                           $     3,198  $     2,873  $     3,094
Acquisition of property and equipment        (373)        (262)        (291)
                                      -----------  -----------  -----------
Free cash flow                        $     2,825  $     2,611  $     2,803
                                      ===========  ===========  ===========

                   (In millions, except per-share amounts)

                        DIVIDENDS        STOCK REPURCHASE PROGRAM     TOTAL
                    ----------------- ------------------------------ -------
Quarter Ended       Per Share  Amount Shares Price per Share  Amount  Amount
                    --------- ------- ------ --------------- ------- -------
Fiscal 2014
  April 26, 2014    $    0.19 $   974     90 $         22.24 $ 2,005 $ 2,979
  January 25, 2014  $    0.17 $   896    185 $         21.73 $ 4,020 $ 4,916
  October 26, 2013  $    0.17 $   914     84 $         23.65 $ 2,000 $ 2,914

Fiscal 2013
  July 27, 2013     $    0.17 $   918     47 $         24.80 $ 1,160 $ 2,078
  April 27, 2013    $    0.17 $   905     41 $         20.85 $   860 $ 1,765
  January 26, 2013  $    0.14 $   743     25 $         20.15 $   500 $ 1,243
  October 27, 2012  $    0.14 $   744     15 $         16.44 $   253 $   997

                         ACCOUNTS RECEIVABLE AND DSO
                          (In millions, except DSO)

                                          April 26,  January 25,  April 27,
                                             2014        2014        2013
                                         ----------- ----------- -----------
Accounts receivable, net                 $     4,443 $     4,378 $     4,942
Days sales outstanding in accounts
 receivable (DSO)                                 35          36          37

              (In millions, except annualized inventory turns)

                                                Three Months Ended
                                       April 26,   January 25,   April 27,
                                          2014         2014         2013
                                      -----------  -----------  -----------
Annualized inventory turns - GAAP            11.8         13.8         12.4
  Cost of sales adjustments                  (0.6)        (2.3)        (0.5)
                                      -----------  -----------  -----------
Annualized inventory turns - non-GAAP        11.2         11.5         11.9

GAAP cost of sales                    $     4,539  $     5,204  $     4,705
  Cost of sales adjustments:
    Share-based compensation expense          (51)         (52)         (44)
    Amortization of acquisition-
     related intangible assets               (181)        (182)        (146)
    Supplier component remediation
     charge                                    --         (655)          --
     costs                                     (1)          --           --
                                      -----------  -----------  -----------
Non-GAAP cost of sales                $     4,306  $     4,315  $     4,515
                                      -----------  -----------  -----------

                              DEFERRED REVENUE
                               (In millions)

                                       April 26,   January 25,   April 27,
                                          2014         2014         2013
                                      -----------  -----------  -----------
Service                               $     8,746  $     8,843  $     8,705
  Unrecognized revenue on product
   shipments and other deferred
   revenue                                  3,669        3,549        3,257
  Cash receipts related to
   unrecognized revenue from two-tier
   distributors                               736          852          723
                                      -----------  -----------  -----------
  Total product deferred revenue            4,405        4,401        3,980
                                      -----------  -----------  -----------
      Total                           $    13,151  $    13,244  $    12,685
                                      ===========  ===========  ===========
Reported as:
  Current                             $     9,198  $     9,350  $     9,055
  Noncurrent                                3,953        3,894        3,630
                                      -----------  -----------  -----------
      Total                           $    13,151  $    13,244  $    12,685
                                      ===========  ===========  ===========

Press Contact:
Robyn Jenkins-Blum
1 (408) 853-9848
Email Contact

Investor Relations Contact:
Marilyn Mora
1 (408) 527-7452
Email Contact

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In his General Session at DevOps Summit, Asaf Yigal, Co-Founder & VP of Product at, explored the value of Kibana 4 for log analysis and provided a hands-on tutorial on how to set up Kibana 4 and get the most out of Apache log files. He examined three use cases: IT operations, business intelligence, and security and compliance. Asaf Yigal is co-founder and VP of Product at log analytics software company In the past, he was co-founder of social-trading platform Currensee, which...
SYS-CON Events announced today that Catchpoint, a global leader in monitoring, and testing the performance of online applications, has been named "Silver Sponsor" of DevOps Summit New York, which will take place on June 7-9, 2016 at the Javits Center in New York City. Catchpoint radically transforms the way businesses manage, monitor, and test the performance of online applications. Truly understand and improve user experience with clear visibility into complex, distributed online systems.Founde...
Today air travel is a minefield of delays, hassles and customer disappointment. Airlines struggle to revitalize the experience. GE and M2Mi will demonstrate practical examples of how IoT solutions are helping airlines bring back personalization, reduce trip time and improve reliability. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Dr. Sarah Cooper, M2Mi’s VP Business Development and Engineering, explored the IoT cloud-based platform technologies driving t...
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data...
"eFolder does a lot of different things but we protect data and we are focused on protecting data no matter where it resides," explained Carlo Tapia, Product Marketing Manager at eFolder, in this interview at Cloud Expo, held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
Cloud computing is unquestionably one of the driving forces of DevOps, as the automation of operations transforms enterprise software development. DevOps, however, is more than a technology trend, as it represents a move toward silo-busting, self-organizing horizontal teams that drive business velocity. At the same time, enterprise Digital Transformation represents an upheaval across the enterprise, as customer preferences and behavior drive enterprise technology decisions. This transformation ...
Just over a week ago I received a long and loud sustained applause for a presentation I delivered at this year’s Cloud Expo in Santa Clara. I was extremely pleased with the turnout and had some very good conversations with many of the attendees. Over the next few days I had many more meaningful conversations and was not only happy with the results but also learned a few new things. Here is everything I learned in those three days distilled into three short points.
Most of the IoT Gateway scenarios involve collecting data from machines/processing and pushing data upstream to cloud for further analytics. The gateway hardware varies from Raspberry Pi to Industrial PCs. The document states the process of allowing deploying polyglot data pipelining software with the clear notion of supporting immutability. In his session at @ThingsExpo, Shashank Jain, a development architect for SAP Labs, discussed the objective, which is to automate the IoT deployment proces...
DevOps is about increasing efficiency, but nothing is more inefficient than building the same application twice. However, this is a routine occurrence with enterprise applications that need both a rich desktop web interface and strong mobile support. With recent technological advances from Isomorphic Software and others, rich desktop and tuned mobile experiences can now be created with a single codebase – without compromising functionality, performance or usability. In his session at DevOps Su...
In demand-intensive mobile and web applications, an emerging pattern is to host the Systems of Engagement in the cloud (for maximum responsiveness) but keep the Systems of Record with the other important business systems in the company datacenter, often on a tightly secured mainframe. But what about the space in between? In this IBM Redpaper publication, we show that the IBM Bluemix cloud platform offers technologies that make it easy for cloud-based SoEs to securely connect to on-premises IBM...
As organizations realize the scope of the Internet of Things, gaining key insights from Big Data, through the use of advanced analytics, becomes crucial. However, IoT also creates the need for petabyte scale storage of data from millions of devices. A new type of Storage is required which seamlessly integrates robust data analytics with massive scale. These storage systems will act as “smart systems” provide in-place analytics that speed discovery and enable businesses to quickly derive meaningf...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
OpsHub, Inc. has announced enhanced support for DevOps and Migration for both Team Foundation Server and Visual Studio On-line in a heterogeneous environment. With added support for build and release entities in OpsHub Integration Manager (OIM) Microsoft customers can now leverage Visual Studio build and release services to manage DevOps processes in a heterogeneous environment. With the enhanced support customers can manage the DevOps process in Team Foundation Server while undertaking activit...
The buzz continues for cloud, data analytics and the Internet of Things (IoT) and their collective impact across all industries. But a new conversation is emerging - how do companies use industry disruption and technology enablers to lead in markets undergoing change, uncertainty and ambiguity? Organizations of all sizes need to evolve and transform, often under massive pressure, as industry lines blur and merge and traditional business models are assaulted and turned upside down. In this new da...