Form 8-K - Current report

CSCO Cisco Systems Inc

CSCO Cisco Systems Inc

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 12, 2024

CISCO SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Delaware

001-39940

77-0059951

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)


170 West Tasman Drive, San Jose, California		95134-1706
(Address of principal executive offices)		(Zip Code)

(408) 526-4000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Common Stock, par value $0.001 per share

CSCO

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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. ☐

Item 2.02.

Results of Operations and Financial Condition.

On May 15, 2024, Cisco Systems, Inc. (“Cisco”) reported its results of operations for its fiscal third quarter 2024 ended April 27, 2024. A copy of the press release issued by Cisco concerning the foregoing results is furnished herewith as Exhibit 99.1.

The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of Cisco, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing. The information in this report, including the exhibit hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

The attached exhibit includes non-GAAP net income, non-GAAP gross margins, non-GAAP operating expenses, non-GAAP operating income and margin, non-GAAP effective tax rates, non-GAAP interest and other income (loss), net, and non-GAAP net income per share data for the periods presented. It also includes future estimated ranges for gross margin, operating margin, tax provision rate and EPS on a non-GAAP basis.

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 measures 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 its historical projected results of operations.

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, acquisition-related/divestiture costs, significant asset impairments and restructurings, significant litigation settlements and other contingencies (such as legal and indemnification settlements and the supplier component remediation amounts), Russia-Ukraine war costs, gains and losses on investments, 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.

As described above, Cisco excludes the following items from one or more of its non-GAAP measures when applicable:

Share-based compensation expense. These expenses consist primarily of expenses for employee restricted stock and restricted stock units, employee stock options, and employee stock purchase rights, including such expenses associated with acquisitions. Cisco excludes share-based compensation expense from its non-GAAP measures primarily because they are non-cash expenses and Cisco believes that it is useful to investors to understand the impact of share-based compensation to its results of operations.

Amortization of acquisition-related intangible assets. Cisco incurs amortization of intangible assets (which may include impairment charges from the write-downs of purchased intangible assets) in connection with acquisitions. Such intangible assets may include purchased intangible assets with finite lives, capitalized in process research and development and goodwill. Cisco excludes these items because Cisco does not believe these expenses are reflective of ongoing operating results in the period incurred. These amounts arise from Cisco’s prior acquisitions and have no direct correlation to the operation of Cisco’s business.

Acquisition-related/divestiture costs. In connection with its business combinations, Cisco incurs compensation expense, changes to the fair value of contingent consideration, as well as professional fees and other direct expenses such as restructuring activities related to the acquired company. In addition, from time to time Cisco enters into foreign currency transactions related to pending acquisitions, and may incur gains or losses on such transactions. Cisco may also from time to time incur gains or losses from divestitures of a business area as well as professional fees and other direct expenses associated with such transactions. Cisco excludes such compensation expense, changes to the fair value of contingent consideration, fees, other direct expenses, and gains and losses, as they are related to acquisitions and divestitures and have no direct correlation to the operation of Cisco’s business.

Significant asset impairments and restructurings. Cisco from time to time incurs significant asset impairments, restructuring charges, and gains or losses on asset disposals. Cisco excludes these items, when significant, because it does not believe they are reflective of ongoing business and operating results.

Significant litigation settlements and other contingencies. Cisco from time to time may incur charges or benefits related to significant litigation settlements and other contingencies. Cisco excludes these charges or benefits, when significant, because it does not believe they are reflective of ongoing business and operating results.

Russia-Ukraine War Costs. In March 2022, in connection with the Russian invasion of Ukraine, Cisco announced its intention to stop business operations in Russia and Belarus for the foreseeable future. Cisco has begun an orderly wind-down and exit of its business in Russia and Belarus. Cisco has and may incur certain non-recurring charges related to this exit plan. These charges include non-recoverability of certain assets, special personnel-related charges in order to support impacted employees (unrelated to ordinary compensation expenses), potential future litigation and other contingencies, and other exit related costs, among others. Cisco excludes these charges because it believes they are not normal and recurring with respect to ongoing business and operating results. These excluded amounts do not include any impacts to revenue.

Gains and losses on investments. Cisco excludes gains and losses on our marketable equity investments and our investments in privately held companies, because it does not believe they are reflective of ongoing business and operating results.

Income tax effects of the foregoing. This amount is used to present each of the amounts described above on an after-tax basis consistent with the presentation of non-GAAP net income.

Significant tax matters. Cisco may incur tax charges or benefits that are (i) related to prior periods or (ii) not reflective of its ongoing provision for income taxes. These tax charges or benefits may be the result of events such as changes in tax legislation, court decisions, and/or tax settlements. Cisco excludes these charges or benefits, when significant, because it does not believe they are reflective of ongoing business and operating results.

From time to time in the future, there may be other items that Cisco may exclude if it believes that doing so is consistent with the goal of providing useful information to investors and management.

Cisco will incur share-based compensation expense, amortization of acquisition-related intangible assets, acquisition-related costs, and gains and losses on investments, in future periods. Significant asset impairments, restructurings, significant litigation settlements and other contingencies, Russia-Ukraine war costs, and divestiture costs could occur in future periods. Cisco could also be impacted by significant tax matters in future periods.

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Appointment of Certain Officer; Departure of Certain Officer

Effective May 15, 2024, as part of organizational changes with respect to Cisco’s executive leadership team, Cisco appointed Gary Steele as President, Go-to-Market. As part of Mr. Steele’s new role, he will assume responsibility for Cisco’s global sales, partner, and marketing operations. In connection with Mr. Steele’s appointment, on May 12, 2024, Jeff Sharritts, Cisco’s Executive Vice President and Chief Customer and Partner Officer, was informed that he would no longer remain in his role as Cisco’s Executive Vice President and Chief Customer and Partner Officer, effective May 15, 2024. Mr. Sharritts will remain employed by Cisco until July 15, 2024.

Mr. Steele, 61, joined Cisco in March 2024 as Cisco’s Executive Vice President and General Manager, Splunk, upon the close of Cisco’s acquisition of Splunk Inc. (“Splunk”). Prior to Cisco, Mr. Steele served as Splunk’s President, Chief Executive Officer, and a member of Splunk’s board of directors, from 2022 until 2024. Prior to joining Splunk, Mr. Steele served as Chief Executive Officer and a member of the board of directors of Proofpoint, Inc. (“Proofpoint”), from 2002 to 2022, and served as the Chair of the board of directors of Proofpoint from 2018 to 2021. From 1997 to 2002, Mr. Steele served as Chief Executive Officer of Portera Systems Inc. (“Portera”). Before Portera, Mr. Steele served as the Vice President and General Manager of the Middleware and Data Warehousing Product Group at Sybase, Inc. Mr. Steele also served in business development, marketing, and engineering roles at Sun Microsystems, Inc. and Hewlett-Packard Company. Since 2018, Mr. Steele has served as a member of the board of directors of Upwork Inc. Mr. Steele previously served as a member of the board of directors of Vonage Holdings Corp., from 2016 to 2021.

Compensatory Arrangements of Certain Officer

In connection with his appointment, on May 15, 2024, Mr. Steele entered into a letter agreement with Cisco (the “Letter Agreement”), providing for an annual base salary of $1 million; the ability to participate in Cisco’s Executive Incentive Plan following Mr. Steele’s onboarding with Cisco, which is currently expected to occur in the fourth quarter of Cisco’s fiscal year 2024, with a bonus target equal to 160% of his annual base salary (“Target Annual Bonus”); management’s recommendation to the Compensation and Management Development Committee of Cisco’s Board of Directors that Mr. Steele be approved for a fiscal year 2025 equity award with an approximate grant date fair value of $18 million and a transformational performance-based equity award for fiscal year 2025 with an approximate grant date fair value of $2.5 million; and Cisco’s payment or reimbursement of Mr. Steele’s reasonable legal fees incurred in connection with the Letter Agreement. The Letter Agreement supersedes all prior agreements between Mr. Steele and Cisco, except for the Retention Bonus (as defined below).

The Letter Agreement further provides that Mr. Steele will remain entitled to the change in control severance protections under Mr. Steele’s employment agreement with Splunk, which provide that, upon a Good Leaver Termination during the period beginning on Mr. Steele’s start date and ending on the 18-month anniversary of the closing date (March 18, 2024) of Cisco’s acquisition of Splunk (the “Closing Date”), Mr. Steele will receive a lump sum cash amount equal to (a) the sum of (i) 24 months of Mr. Steele’s monthly annual salary plus (ii) two times 160% of Mr. Steele’s annual salary plus (iii) a pro-rated Target Annual Bonus (as defined in the Letter Agreement), less applicable deductions, as cash severance; and (b) the premiums required to continue Mr. Steele’s group health care coverage for a period of 18 months. A “Good Leaver Termination” occurs if (a) Cisco terminates Mr. Steele’s employment without “Cause” (as defined in the Letter Agreement); (b) Mr. Steele resigns with “Good Reason” (as

defined in the Letter Agreement); (c) in the event of Mr. Steele’s death or “Permanent Disability” (as defined in the Letter Agreement); or (d) Mr. Steele voluntarily terminates his active employment effective following the first anniversary of the Closing Date (provided Mr. Steele provides at least 90 days written notice prior to ceasing active employment with Cisco).

In connection with Cisco’s acquisition of Splunk, Mr. Steele was granted a cash retention bonus in the amount of $15 million (the “Retention Bonus”), which vests one-third on the 12-month anniversary of the Closing Date and then the remaining two-thirds in equal quarterly installments over the immediately following 24 months, subject to Mr. Steele’s continued employment with Cisco. In addition, in connection with Cisco’s acquisition of Splunk, Mr. Steele’s unvested equity awards in Splunk were converted to cash awards (the “Unvested Cash Awards”). The Unvested Cash Awards vest on the same vesting schedule as the corresponding Splunk equity award, subject to Mr. Steele’s continued employment with Cisco, provided that, pursuant to the Letter Agreement, the Unvested Cash Awards other than the award granted on February 27, 2024, will vest on March 18, 2025 or, if earlier, the date of Mr. Steele’s Good Leaver Termination.

The foregoing description of the Letter Agreement and the Retention Bonus are qualified in their entirety by reference to the Letter Agreement, a copy of which is filed herewith as Exhibit 10.1, and the Retention Bonus agreement, a copy of which is attached as Exhibit A to the Letter Agreement.

In connection with his appointment, Mr. Steele has entered into a standard form of Indemnity Agreement with Cisco which provides for indemnification of an indemnitee to the fullest extent permitted by law. The foregoing description of the Indemnity Agreement does not purport to be complete and is qualified in its entirety by the full text of the form of Indemnity Agreement, which was filed with the Securities and Exchange Commission on January 25, 2021 as Exhibit 10.1 to Cisco’s Current Report on Form 8-K.

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits


Exhibit Number		Description of Document

99.1		Press Release of Cisco, dated May 15, 2024, reporting the results of operations for Cisco’s fiscal third quarter 2024 ended April 27, 2024.

10.1		Letter Agreement, dated May 15, 2024, between Cisco and Gary Steele.

104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


		CISCO SYSTEMS, INC.

Dated: May 15, 2024	By:	/s/ R. Scott Herren
	Name:	R. Scott Herren
	Title:	Executive Vice President and Chief Financial Officer

Exhibit 99.1

LOGO


Press Contact:				Investor Relations Contact:
Robyn Blum				Sami Badri
Cisco				Cisco
1 (408) 930-8548				1 (469) 420-4834
rojenkin@cisco.com				sambadri@cisco.com

CISCO REPORTS THIRD QUARTER EARNINGS

News Summary:

•

$12.7 billion in revenue, down 13% year over year, in line with expectations and reflects our customers’ continued implementation of products on-hand

•

Strong profitability with GAAP gross margin of 65.1% and non-GAAP gross margin of 68.3%

•

Transformed business model, further enhanced by the Splunk acquisition:

•

Total subscription revenue of $6.9 billion including Splunk, representing 54% of total revenue

•

Total annualized recurring revenue (ARR) at $29.2 billion including $4.2 billion from Splunk, up 22% year over year, and product ARR at $15.5 billion, up 44% year over year

•

Gary Steele, former Splunk CEO, named president of Go-to-Market, effective immediately

•

Q3 FY 2024 Results:

•

Revenue: $12.7 billion

•

Decrease of 13% year over year

•

Splunk contributed $413 million in revenue

•

Earnings per Share: GAAP: $0.46; Non-GAAP: $0.88

•

GAAP EPS decreased 41% year over year, which includes a negative $0.09 impact from the Splunk acquisition

•

Non-GAAP EPS decreased 12% year over year, which includes a negative $0.01 impact from the Splunk acquisition

•

Q4 FY 2024 Guidance:

•

Revenue: $13.4 billion to $13.6 billion

•

Earnings per Share: GAAP: $0.46 to $0.51; Non-GAAP: $0.84 to $0.86

•

FY 2024 Guidance:

•

Revenue: $53.6 billion to $53.8 billion

•

Earnings per Share: GAAP: $2.46 to $2.51; Non-GAAP: $3.69 to $3.71

SAN JOSE, Calif. — May 15, 2024 — Cisco today reported third quarter results for the period ended April 27, 2024. Cisco reported third quarter revenue of $12.7 billion, net income on a generally accepted accounting principles (GAAP) basis of $1.9 billion or $0.46 per share, and non-GAAP net income of $3.6 billion or $0.88 per share.

“We delivered a solid Q3 performance in what remains a dynamic environment” said Chuck Robbins, chair and CEO of Cisco. “Our unique ability to bring together networking, security, observability, and data enables Cisco to offer our customers unrivaled digital resilience for the AI era.”

“Revenue, gross margin and non-GAAP EPS in Q3 were at the high end or above our guidance range, both including and excluding Splunk, resulting in continued operating leverage,” said Scott Herren, CFO of Cisco. “Customers are consuming the equipment shipped over the last few quarters in line with our expectations and we are seeing stabilization of demand as a result. The addition of Splunk to our product line will be a catalyst for further growth.”

Gary Steele Named President of Go-to-Market

Cisco has named Gary Steele as President of Go-to-Market, effective immediately. Steele is well known for his operational excellence, and in this new role, he will work closely with Robbins to set and execute against Cisco’s strategic plans and goals. He will continue to lead the Splunk team through the integration process to ensure a seamless integration into Cisco.

Cisco also announced that Jeff Sharritts, Cisco’s Chief Customer and Partner Officer, will depart Cisco after a successful 24-year career at the company. Sharritts will remain with Cisco until mid-July to ensure a seamless transition.

GAAP Results


	Q3 FY 2024		Q3 FY 2023		Vs. Q3 FY 2023
Revenue	$	12.7 billion	$	14.6 billion		(13	)%
Net Income	$	1.9 billion	$	3.2 billion		(41	)%
Diluted Earnings per Share (EPS)	$	0.46	$	0.78		(41	)%

The acquisition of Splunk, including financing costs, had a negative impact of $0.09 to GAAP EPS, for the third quarter of fiscal 2024.

Non-GAAP Results


	Q3 FY 2024		Q3 FY 2023		Vs. Q3 FY 2023
Net Income	$	3.6 billion	$	4.1 billion		(14	)%
EPS	$	0.88	$	1.00		(12	)%

The acquisition of Splunk, including financing costs, had a negative impact of $0.01 to Non-GAAP EPS, for the third quarter of fiscal 2024.

Reconciliations between net income, EPS, and other measures on a GAAP and non-GAAP basis are provided in the tables located in the section entitled “Reconciliations of GAAP to non-GAAP Measures.”

Cisco Declares Quarterly Dividend

Cisco has declared a quarterly dividend of $0.40 per common share to be paid on July 24, 2024, to all stockholders of record as of the close of business on July 5, 2024. Future dividends will be subject to Board approval.

Financial Summary

All comparative percentages are on a year-over-year basis unless otherwise noted.

Q3 FY 2024 Highlights

Revenue — Total revenue was $12.7 billion, down 13%, with product revenue down 19% and service revenue up 6%. Cisco completed the acquisition of Splunk Inc. (“Splunk”) in the third quarter of fiscal 2024. Splunk contributed $413 million of total revenue for the third quarter of fiscal 2024.

Revenue by geographic segment was: Americas down 15%, EMEA down 9%, and APJC down 12%. Product revenue performance reflected growth in Security up 36% and Observability up 27%. Networking was down 27%. Product revenue in Collaboration was flat. Security and Observability, excluding Splunk, grew 3% and 14%, respectively, in the third quarter of fiscal 2024.

Gross Margin — On a GAAP basis, total gross margin, product gross margin, and service gross margin were 65.1%, 63.5%, and 69.2%, respectively, as compared with 63.4%, 62.7%, and 65.4%, respectively, in the third quarter of fiscal 2023.

On a non-GAAP basis, total gross margin, product gross margin, and service gross margin were 68.3%, 66.9%, and 71.6%, respectively, as compared with 65.2%, 64.5%, and 67.3%, respectively, in the third quarter of fiscal 2023.

Total gross margins by geographic segment were: 67.9% for the Americas, 69.6% for EMEA and 67.4% for APJC.

Operating Expenses — On a GAAP basis, operating expenses were $6.1 billion, up 15%, and were 47.9% of revenue. Non-GAAP operating expenses were $4.3 billion, down 5%, and were 34.0% of revenue.

Operating Income — GAAP operating income was $2.2 billion, down 44%, with GAAP operating margin of 17.2%. Non-GAAP operating income was $4.3 billion, down 12%, with non-GAAP operating margin at 34.2%.

Provision for Income Taxes — The GAAP tax provision rate was 15.6%. The non-GAAP tax provision rate was 19.0%.

Net Income and EPS — On a GAAP basis, net income was $1.9 billion and EPS was $0.46, each a decrease of 41%. On a non-GAAP basis, net income was $3.6 billion, a decrease of 14%, and EPS was $0.88, a decrease of 12%.

Cash Flow from Operating Activities — $4.0 billion for the third quarter of fiscal 2024, a decrease of 24%, compared with $5.2 billion for the third quarter of fiscal 2023.

Balance Sheet and Other Financial Highlights

Cash and Cash Equivalents and Investments — $18.8 billion at the end of the third quarter of fiscal 2024, compared with $26.1 billion at the end of fiscal 2023.

Remaining Performance Obligations (RPO) — $38.8 billion, up 21% in total, with 52% of this amount to be recognized as revenue over the next 12 months. Product RPO were up 29% and service RPO were up 14%.

Deferred Revenue — $27.5 billion, up 13% in total, with deferred product revenue up 18%. Deferred service revenue was up 9%.

Capital Allocation — In the third quarter of fiscal 2024, we returned $2.9 billion to stockholders through share buybacks and dividends. We declared and paid a cash dividend of $0.40 per common share, or $1.6 billion, and repurchased approximately 26 million shares of common stock under our stock repurchase program at an average price of $49.22 per share for an aggregate purchase price of $1.3 billion. The remaining authorized amount for stock repurchases under the program is $7.2 billion with no termination date.

Acquisitions

In the third quarter of fiscal 2024, we closed the following acquisitions:

•

Splunk Inc., a public cybersecurity and observability company

•

Isovalent, Inc., a privately held cloud native solutions company

Guidance

Cisco estimates the following results for the fourth quarter of fiscal 2024:


Q4 FY 2024
Revenue			$13.4 billion - $13.6 billion
Non-GAAP gross margin rate			66.5% – 67.5%
Non-GAAP operating margin rate			31.5% – 32.5%
Non-GAAP EPS			$0.84 – $0.86

Our Q4 FY 2024 guidance includes $950 million to $1 billion in revenue from Splunk and a negative impact to non-GAAP EPS of approximately ($0.03) as the interest impact from financing the acquisition more than offsets the operating benefit.

Cisco estimates that GAAP EPS will be $0.46 to $0.51 for the fourth quarter of fiscal 2024.

Cisco estimates the following results for fiscal 2024:


FY 2024
Revenue			$53.6 billion - $53.8 billion
Non-GAAP EPS			$3.69 – $3.71

Cisco estimates that GAAP EPS will be $2.46 to $2.51 for fiscal 2024.

Our Q4 FY 2024 guidance assumes an effective tax provision rate of approximately 18% for GAAP and non-GAAP results. Our FY 2024 guidance assumes an effective tax provision rate of approximately 17% for GAAP and approximately 19% for non-GAAP results.

A reconciliation between the guidance on a GAAP and non-GAAP basis is provided in the tables entitled “GAAP to non-GAAP Guidance” located in the section entitled “Reconciliations of GAAP to non-GAAP Measures.”

Editor’s Notes:

•

Q3 fiscal year 2024 conference call to discuss Cisco’s results along with its guidance will be held on Wednesday, May 15, 2024 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, May 15, 2024 to 4:00 p.m. Pacific Time, May 21, 2024 at 1-800-391-9851 (United States) or 1-203-369-3268 (international). The replay will also be available via webcast on the Cisco Investor Relations website at https://investor.cisco.com.

•

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 15, 2024. 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 the GAAP to non-GAAP reconciliation information, will be available on the Cisco Investor Relations website at https://investor.cisco.com.

CISCO SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per-share amounts)

(Unaudited)


	Three Months Ended						Nine Months Ended
	April 27, 2024			April 29, 2023			April 27, 2024			April 29, 2023
REVENUE:
Product	$	9,024		$	11,092		$	29,395		$	31,492
Service		3,678			3,479			10,766			10,303

Total revenue		12,702			14,571			40,161			41,795

COST OF SALES:
Product		3,295			4,136			10,695			12,353
Service		1,134			1,203			3,419			3,437

Total cost of sales		4,429			5,339			14,114			15,790

GROSS MARGIN		8,273			9,232			26,047			26,005
OPERATING EXPENSES:
Research and development		1,948			1,962			5,804			5,598
Sales and marketing		2,559			2,526			7,523			7,301
General and administrative		736			641			2,050			1,788
Amortization of purchased intangible assets		297			70			430			212
Restructuring and other charges		542			87			677			328

Total operating expenses		6,082			5,286			16,484			15,227

OPERATING INCOME		2,191			3,946			9,563			10,778
Interest income		411			262			1,095			650
Interest expense		(357	)		(109	)		(588	)		(316	)
Other income (loss), net		(10	)		(142	)		(232	)		(265	)

Interest and other income (loss), net		44			11			275			69

INCOME BEFORE PROVISION FOR INCOME TAXES		2,235			3,957			9,838			10,847
Provision for income taxes		349			745			1,680			2,192

NET INCOME	$	1,886		$	3,212		$	8,158		$	8,655

Net income per share:
Basic	$	0.47		$	0.79		$	2.01		$	2.11

Diluted	$	0.46		$	0.78		$	2.00		$	2.11

Shares used in per-share calculation:
Basic		4,042			4,089			4,051			4,100

Diluted		4,060			4,110			4,071			4,111

CISCO SYSTEMS, INC.

REVENUE BY SEGMENT

(In millions, except percentages)


	April 27, 2024
	Three Months Ended					Nine Months Ended
	Amount		Y/Y%			Amount		Y/Y%
Revenue:
Americas	$	7,372		(15	)%	$	23,904		(2	)%
EMEA		3,458		(9	)%		10,606		(5	)%
APJC		1,873		(12	)%		5,652		(9	)%

Total	$	12,702		(13	)%	$	40,161		(4	)%

Amounts may not sum and percentages may not recalculate due to rounding.

CISCO SYSTEMS, INC.

GROSS MARGIN PERCENTAGE BY SEGMENT

(In percentages)


	April 27, 2024
	Three Months Ended		Nine Months Ended
Gross Margin Percentage:
Americas		67.9%		66.5%
EMEA		69.6%		69.1%
APJC		67.4%		67.5%

CISCO SYSTEMS, INC.

REVENUE FOR GROUPS OF SIMILAR PRODUCTS AND SERVICES

(In millions, except percentages)


	April 27, 2024
	Three Months Ended					Nine Months Ended
	Amount		Y/Y%			Amount		Y/Y%
Revenue:
Networking	$	6,522		(27	)%	$	22,425		(11	)%
Security		1,304		36	%		3,288		14	%
Collaboration		987		—	%		3,093		2	%
Observability		211		27	%		589		21	%

Total Product		9,024		(19	)%		29,395		(7	)%
Services		3,678		6	%		10,766		5	%

Total	$	12,702		(13	)%	$	40,161		(4	)%

Security and Observability, excluding Splunk, grew 3% and 14%, respectively, in the third quarter of fiscal 2024, and 3% and 17%, respectively, for the first nine months of fiscal 2024.

Amounts may not sum and percentages may not recalculate due to rounding.

CISCO SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)


	April 27, 2024		July 29, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	8,913	$	10,123
Investments		9,857		16,023
Accounts receivable, net of allowance of $81 at April 27, 2024 and $85 at July 29, 2023		5,127		5,854
Inventories		3,118		3,644
Financing receivables, net		3,443		3,352
Other current assets		5,428		4,352

Total current assets		35,886		43,348
Property and equipment, net		2,000		2,085
Financing receivables, net		3,251		3,483
Goodwill		58,633		38,535
Purchased intangible assets, net		11,819		1,818
Deferred tax assets		5,527		6,576
Other assets		5,882		6,007

TOTAL ASSETS	$	122,998	$	101,852

LIABILITIES AND EQUITY
Current liabilities:
Short-term debt	$	11,891	$	1,733
Accounts payable		2,054		2,313
Income taxes payable		1,867		4,235
Accrued compensation		3,211		3,984
Deferred revenue		15,751		13,908
Other current liabilities		5,334		5,136

Total current liabilities		40,108		31,309
Long-term debt		20,102		6,658
Income taxes payable		2,869		5,756
Deferred revenue		11,724		11,642
Other long-term liabilities		2,427		2,134

Total liabilities		77,230		57,499

Total equity		45,768		44,353

TOTAL LIABILITIES AND EQUITY	$	122,998	$	101,852

CISCO SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


	Nine Months Ended
	April 27, 2024			April 29, 2023
Cash flows from operating activities:
Net income	$	8,158		$	8,655
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, and other		1,684			1,304
Share-based compensation expense		2,274			1,720
Provision for receivables		19			11
Deferred income taxes		(245	)		(1,343	)
(Gains) losses on divestitures, investments and other, net		224			243
Change in operating assets and liabilities, net of effects of acquisitions and divestitures:
Accounts receivable		1,286			1,494
Inventories		530			(894	)
Financing receivables		92			1,126
Other assets		(382	)		(428	)
Accounts payable		(300	)		156
Income taxes, net		(5,223	)		1,120
Accrued compensation		(1,092	)		25
Deferred revenue		211			1,055
Other liabilities		(86	)		(324	)

Net cash provided by operating activities		7,150			13,920

Cash flows from investing activities:
Purchases of investments		(3,044	)		(7,652	)
Proceeds from sales of investments		3,874			802
Proceeds from maturities of investments		5,804			3,789
Acquisitions, net of cash and cash equivalents acquired		(25,874	)		(96	)
Purchases of investments in privately held companies		(82	)		(162	)
Return of investments in privately held companies		146			72
Acquisition of property and equipment		(472	)		(616	)
Other		(2	)		(24	)

Net cash used in investing activities		(19,650	)		(3,887	)

Cash flows from financing activities:
Issuances of common stock		347			316
Repurchases of common stock—repurchase program		(3,772	)		(3,029	)
Shares repurchased for tax withholdings on vesting of restricted stock units		(765	)		(444	)
Short-term borrowings, original maturities of 90 days or less, net		1,547			(602	)
Issuances of debt		24,159			—
Repayments of debt		(2,195	)		(500	)
Repayments of Splunk convertible debt, net		(3,140	)		—
Dividends paid		(4,778	)		(4,713	)
Other		(52	)		(4	)

Net cash provided by (used in) financing activities		11,351			(8,976	)

Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents		(39	)		(90	)

Net (decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents		(1,188	)		967
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period		11,627			8,579

Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period	$	10,439		$	9,546

Supplemental cash flow information:
Cash paid for interest	$	350		$	306
Cash paid for income taxes, net	$	7,150		$	2,414

CISCO SYSTEMS, INC.

REMAINING PERFORMANCE OBLIGATIONS

(In millions, except percentages)


	April 27, 2024					January 27, 2024					April 29, 2023
	Amount		Y/Y%			Amount		Y/Y%			Amount		Y/Y%
Product	$	18,876		29	%	$	16,249		12	%	$	14,681		9	%
Service		19,898		14	%		19,407		12	%		17,401		4	%

Total	$	38,774		21	%	$	35,656		12	%	$	32,082		6	%

We expect 52% of total RPO at April 27, 2024 will be recognized as revenue over the next 12 months.

CISCO SYSTEMS, INC.

DEFERRED REVENUE

(In millions)


	April 27, 2024		January 27, 2024		April 29, 2023
Deferred revenue:
Product	$	12,856	$	11,640	$	10,895
Service		14,619		14,131		13,365

Total	$	27,475	$	25,771	$	24,260

Reported as:
Current	$	15,751	$	14,011	$	13,249
Noncurrent		11,724		11,760		11,011

Total	$	27,475	$	25,771	$	24,260

CISCO SYSTEMS, INC.

DIVIDENDS PAID AND REPURCHASES OF COMMON STOCK

(In millions, except per-share amounts)


	DIVIDENDS				STOCK REPURCHASE PROGRAM						TOTAL
Quarter Ended	Per Share		Amount		Shares		Weighted- Average Price per Share		Amount		Amount
Fiscal 2024
April 27, 2024	$	0.40	$	1,615		26	$	49.22	$	1,256	$	2,871
January 27, 2024	$	0.39	$	1,583		25	$	49.54	$	1,254	$	2,837
October 28, 2023	$	0.39	$	1,580		23	$	54.53	$	1,252	$	2,832
Fiscal 2023
July 29, 2023	$	0.39	$	1,589		25	$	50.49	$	1,254	$	2,843
April 29, 2023	$	0.39	$	1,593		25	$	49.45	$	1,259	$	2,852
January 28, 2023	$	0.38	$	1,560		26	$	47.72	$	1,256	$	2,816
October 29, 2022	$	0.38	$	1,560		12	$	43.76	$	502	$	2,062

CISCO SYSTEMS, INC.

RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

GAAP TO NON-GAAP NET INCOME

(In millions)


	Three Months Ended						Nine Months Ended
	April 27, 2024			April 29, 2023			April 27, 2024			April 29, 2023
GAAP net income	$	1,886		$	3,212		$	8,158		$	8,655
Adjustments to cost of sales:
Share-based compensation expense		139			106			381			293
Amortization of acquisition-related intangible assets		249			156			605			462
Acquisition-related/divestiture costs		12			1			13			4

Total adjustments to GAAP cost of sales		400			263			999			759

Adjustments to operating expenses:
Share-based compensation expense		665			518			1,877			1,431
Amortization of acquisition-related intangible assets		297			70			430			212
Acquisition-related/divestiture costs		264			55			403			178
Russia-Ukraine war costs		(10	)		2			(12	)		7
Significant asset impairments and restructurings		542			87			677			328

Total adjustments to GAAP operating expenses		1,758			732			3,375			2,156

Adjustments to interest and other income (loss), net:
(Gains) and losses on investments		(7	)		123			132			188

Total adjustments to GAAP interest and other income (loss), net		(7	)		123			132			188

Total adjustments to GAAP income before provision for income taxes		2,151			1,118			4,506			3,103

Income tax effect of non-GAAP adjustments		(484	)		(219	)		(1,045	)		(623	)
Significant tax matters		—			—			—			164

Total adjustments to GAAP provision for income taxes		(484	)		(219	)		(1,045	)		(459	)

Non-GAAP net income	$	3,553		$	4,111		$	11,619		$	11,299

CISCO SYSTEMS, INC.

RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

GAAP TO NON-GAAP EPS


	Three Months Ended						Nine Months Ended
	April 27, 2024			April 29, 2023			April 27, 2024			April 29, 2023
GAAP EPS	$	0.46		$	0.78		$	2.00		$	2.11
Adjustments to GAAP:
Share-based compensation expense		0.20			0.15			0.55			0.42
Amortization of acquisition-related intangible assets		0.13			0.06			0.25			0.16
Acquisition-related/divestiture costs		0.07			0.01			0.10			0.04
Significant asset impairments and restructurings		0.13			0.02			0.17			0.08
(Gains) and losses on investments		—			0.03			0.03			0.05
Income tax effect of non-GAAP adjustments		(0.12	)		(0.05	)		(0.26	)		(0.15	)
Significant tax matters		—			—			—			0.04

Non-GAAP EPS	$	0.88		$	1.00		$	2.85		$	2.75

Amounts may not sum due to rounding.

CISCO SYSTEMS, INC.

GAAP TO NON-GAAP EPS

IMPACT OF SPLUNK ACQUISITION, INCLUDING FINANCING COSTS


	Three Months Ended
	April 27, 2024
GAAP EPS Impact	$	(0.09	)
Amortization of intangible assets		0.05
Acquisition-related costs		0.05
Income tax effect of non-GAAP adjustments		(0.02	)

Non-GAAP EPS Impact	$	(0.01	)

Amounts may not sum due to rounding.

CISCO SYSTEMS, INC.

RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

GROSS MARGINS, OPERATING EXPENSES, OPERATING MARGINS, INTEREST AND OTHER INCOME (LOSS), NET,

AND NET INCOME

(In millions, except percentages)


	Three Months Ended
	April 27, 2024
	Product Gross Margin			Service Gross Margin			Total Gross Margin			Operating Expenses			Y/Y			Operating Income			Y/Y			Interest and other income (loss), net			Net Income			Y/Y
GAAP amount	$	5,729		$	2,544		$	8,273		$	6,082			15	%	$	2,191			(44	)%	$	44		$	1,886			(41	)%
% of revenue		63.5	%		69.2	%		65.1	%		47.9	%					17.2	%					0.3	%		14.8	%
Adjustments to GAAP amounts:
Share-based compensation expense		57			82			139			665						804						—			804
Amortization of acquisition-related intangible assets		249			—			249			297						546						—			546
Acquisition/divestiture-related costs		4			8			12			264						276						—			276
Significant asset impairments and restructurings		—			—			—			542						542						—			542
Russia-Ukraine war costs		—			—			—			(10	)					(10	)					—			(10	)
(Gains) and losses on investments		—			—			—			—						—						(7	)		(7	)
Income tax effect/significant tax matters		—			—			—			—						—						—			(484	)

Non-GAAP amount	$	6,039		$	2,634		$	8,673		$	4,324			(5	)%	$	4,349			(12	)%	$	37		$	3,553			(14	)%

% of revenue		66.9	%		71.6	%		68.3	%		34.0	%					34.2	%					0.3	%		28.0	%


	Three Months Ended
	April 29, 2023
	Product Gross Margin			Service Gross Margin			Total Gross Margin			Operating Expenses			Operating Income			Interest and other income (loss), net			Net Income
GAAP amount	$	6,956		$	2,276		$	9,232		$	5,286		$	3,946		$	11		$	3,212
% of revenue		62.7	%		65.4	%		63.4	%		36.3	%		27.1	%		0.1	%		22.0	%
Adjustments to GAAP amounts:
Share-based compensation expense		40			66			106			518			624			—			624
Amortization of acquisition-related intangible assets		156			—			156			70			226			—			226
Acquisition/divestiture-related costs		1			—			1			55			56			—			56
Significant asset impairments and restructurings		—			—			—			87			87			—			87
Russia-Ukraine war costs		—			—			—			2			2			—			2
(Gains) and losses on investments		—			—			—			—			—			123			123
Income tax effect/significant tax matters		—			—			—			—			—			—			(219	)

Non-GAAP amount	$	7,153		$	2,342		$	9,495		$	4,554		$	4,941		$	134		$	4,111

% of revenue		64.5	%		67.3	%		65.2	%		31.3	%		33.9	%		0.9	%		28.2	%

Amounts may not sum and percentages may not recalculate due to rounding.

CISCO SYSTEMS, INC.

RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

GROSS MARGINS, OPERATING EXPENSES, OPERATING MARGINS, INTEREST AND OTHER INCOME (LOSS), NET,

AND NET INCOME

(In millions, except percentages)


	Nine Months Ended
	April 27, 2024
	Product Gross Margin			Service Gross Margin			Total Gross Margin			Operating Expenses			Y/Y			Operating Income			Y/Y			Interest and other income (loss), net			Net Income			Y/Y
GAAP amount	$	18,700		$	7,347		$	26,047		$	16,484			8	%	$	9,563			(11	)%	$	275		$	8,158			(6	)%
% of revenue		63.6	%		68.2	%		64.9	%		41.0	%					23.8	%					0.7	%		20.3	%
Adjustments to GAAP amounts:
Share-based compensation expense		157			224			381			1,877						2,258						—			2,258
Amortization of acquisition-related intangible assets		605			—			605			430						1,035						—			1,035
Acquisition/divestiture-related costs		5			8			13			403						416						—			416
Significant asset impairments and restructurings		—			—			—			677						677						—			677
Russia-Ukraine war costs		—			—			—			(12	)					(12	)					—			(12	)
(Gains) and losses on investments		—			—			—			—						—						132			132
Income tax effect/significant tax matters		—			—			—			—						—						—			(1,045	)

Non-GAAP amount	$	19,467		$	7,579		$	27,046		$	13,109			—	%	$	13,937			2	%	$	407		$	11,619			3	%

% of revenue		66.2	%		70.4	%		67.3	%		32.6	%					34.7	%					1.0	%		28.9	%


	Nine Months Ended April 29, 2023
	Product Gross Margin			Service Gross Margin			Total Gross Margin			Operating Expenses			Operating Income			Interest and other income (loss), net			Net Income
GAAP amount	$	19,139		$	6,866		$	26,005		$	15,227		$	10,778		$	69		$	8,655
% of revenue		60.8	%		66.6	%		62.2	%		36.4	%		25.8	%		0.2	%		20.7	%
Adjustments to GAAP amounts:
Share-based compensation expense		111			182			293			1,431			1,724			—			1,724
Amortization of acquisition-related intangible assets		462			—			462			212			674			—			674
Acquisition/divestiture-related costs		4			—			4			178			182			—			182
Significant asset impairments and restructurings		—			—			—			328			328			—			328
Russia-Ukraine war costs		—			—			—			7			7			—			7
(Gains) and losses on investments		—			—			—			—			—			188			188
Income tax effect/significant tax matters		—			—			—			—			—			—			(459	)

Non-GAAP amount	$	19,716		$	7,048		$	26,764		$	13,071		$	13,693		$	257		$	11,299

% of revenue		62.6	%		68.4	%		64.0	%		31.3	%		32.8	%		0.6	%		27.0	%

Amounts may not sum and percentages may not recalculate due to rounding.

CISCO SYSTEMS, INC.

RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

EFFECTIVE TAX RATE

(In percentages)


	Three Months Ended						Nine Months Ended
	April 27, 2024			April 29, 2023			April 27, 2024			April 29, 2023
GAAP effective tax rate		15.6	%		18.8	%		17.1	%		20.2	%
Total adjustments to GAAP provision for income taxes		3.4	%		0.2	%		1.9	%		(1.2	)%

Non-GAAP effective tax rate		19.0	%		19.0	%		19.0	%		19.0	%

GAAP TO NON-GAAP GUIDANCE


Q4 FY 2024	Gross Margin Rate	Operating Margin Rate	Earnings per Share ⁽¹⁾
GAAP	63% – 64%	18.5% –19.5%	$0.46 – $0.51
Estimated adjustments for:
Share-based compensation expense	1.0%	6.0%	$0.15 – $0.16
Amortization of acquisition-related intangible assets and acquisition/divestiture-related costs	2.5%	6.5%	$0.19 – $0.20
Significant asset impairments and restructurings	—	0.5%	$0.01 – $0.02

Non-GAAP	66.5% – 67.5%	31.5% –32.5%	$0.84 – $0.86


FY 2024		Earnings per Share ⁽¹⁾
GAAP		$2.46 – $2.51
Estimated adjustments for:
Share-based compensation expense		$0.58 – $0.59
Amortization of acquisition-related intangible assets and acquisition/divestiture-related costs		$0.46 – $0.47
Significant asset impairments and restructurings		$0.13 – $0.14
(Gains) and losses on investments		$0.03

Non-GAAP		$3.69 – $3.71

⁽¹⁾	Estimated adjustments to GAAP earnings per share are shown after income tax effects.

Except as noted above, this guidance does not include the effects of any future acquisitions/divestitures, asset impairments, Russia-Ukraine war costs, restructurings, (gains) and losses on investments and significant tax matters or other events, which may or may not be significant unless specifically stated.

Forward Looking Statements, Non-GAAP Information and Additional Information

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 ability to bring together networking, security, observability, and data to enable us to offer digital resilience to our customers, the stabilization of demand for our products, and the addition of Splunk to our product line as a catalyst for future growth) and the future financial performance of Cisco (including the guidance for Q4 FY 2024 and full year FY 2024) 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; our development and use of artificial intelligence; 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, key growth areas, and in certain geographical locations, as well as maintaining leadership in Networking and services; the timing of orders and manufacturing and customer lead times; supply constraints; 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 market; 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, other intellectual property, antitrust, stockholder and other matters, and governmental investigations; our ability to achieve the benefits of restructurings and possible changes in the size and timing of related charges; cyber attacks, data breaches or other incidents; vulnerabilities and critical security defects; our ability to protect personal data; evolving regulatory uncertainty; terrorism; natural catastrophic events (including as a result of global climate change); any 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, 2024 and September 7, 2023, 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 27, 2024 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 gross margins, non-GAAP operating expenses, non-GAAP operating income and margin, non-GAAP effective tax rates, non-GAAP interest and other income (loss), net, and non-GAAP net income per share data for the periods presented. It also includes future estimated ranges for gross margin, operating margin, tax provision rate and EPS on a non-GAAP basis.

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.

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.

Annualized recurring revenue represents the annualized revenue run-rate of active subscriptions, term licenses, operating leases and maintenance contracts at the end of a reporting period, net of rebates to customers and partners as well as certain other revenue adjustments. Includes both revenue recognized ratably as well as upfront on an annualized basis.

About Cisco

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Exhibit 10.1

LOGO

May 14, 2024

Gary Steele

Dear Gary,

I’m delighted to offer you a new role at Cisco, where you’ll continue as part of 80,000+ people who change the way the world works, lives, plays, and learns! But our edge doesn’t come from our world-changing technology, it comes from our people. People just like you.

If you decide to accept this offer, we offer something exceptional - it’s called Our People Deal. It is all about what Cisco will offer you, and what we ask of you in return. Below you’ll find the beginning of what Cisco has for you.

We’re offering you an exempt position as President at grade level 101. You’ll report solely and directly to me, Chuck Robbins and your principal location of employment will be in our San Francisco office. You will have duties and authorities consistent with such title.

When you’ll start

We’re planning for you to continue employment under the terms of this offer letter, effective on May 15, 2024 (start date), or another date we agree for you to transition to your new role under this offer letter.

What you’ll be paid

•

Your salary will be USD $1,000,000 per year (“Annual Salary”), which equals USD $38,461.54, paid every other week.

•

Until you onboard with Cisco, which is currently expected to occur as soon as practicable in the fourth quarter of Cisco’s FY2024 fiscal year, (the “Onboard Date”). You will continue to participate in the executive incentive bonus plan sponsored by Splunk Inc., a Delaware corporation until your Onboard date. After the Onboard Date, you will be eligible to participate in the Executive Incentive Plan. Your Bonus Target under the Executive Incentive Plan is 160% of your Annual Salary (“Target Annual Bonus”).

•

You will be eligible to participate in the Deferred Compensation Plan and you will receive enrollment materials after the Onboard Date.

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Management will recommend that the Compensation and Management Development Committee of the Cisco Systems, Inc. Board of Directors (the “Committee”) approve for you a fiscal 2025 refresh equity award with an approximate grant date fair value of USD $18,000,000, and a fiscal 2025 transformational performance-based restricted stock unit award with an approximate grant date fair value of USD $2,500,000. The 2025 awards will be granted at the same time the fiscal 2025 refresh equity awards are granted to similarly situated executives (typically granted in September), subject to you remaining actively employed by Cisco on such grant date and further subject to the same terms and conditions of the fiscal 2025 refresh equity awards to similarly situated executives.

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In future fiscal years, you will be annually considered by the Compensation Committee for equity award grants generally consistent with the methodology applicable to other Cisco executives at your grade.

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You were granted a cash retention bonus in connection with Cisco’s acquisition of Splunk, Inc. (the “Acquisition”) in the amount of USD $15,000,000 (“Retention Bonus”), which will remain subject to your retention bonus award agreement attached as Exhibit A hereto (your “Retention Bonus Agreement”); provided that references therein to your “employment agreement” are hereby amended to refer to this offer letter.

•

The unvested cash awards you received upon conversion of your Splunk equity awards in the Acquisition (the “Unvested Cash Awards”) will vest in accordance with the existing terms of such awards, with all Unvested Cash Awards (other than those received upon conversion of the Splunk equity award granted on February 27, 2024) vesting on the earlier of March 18, 2025 or your earlier Good Leaver Termination (as defined in Appendix A attached hereto).

•

The Company shall reimburse you or pay directly your reasonable legal fees incurred in connection with this offer.

Severance

In the event of a Good Leaver Termination that occurs during the Protection Period (as defined in Appendix A), you will be entitled to severance payments as outlined and subject to the terms and conditions set forth in Appendix A.

What happens next?

Gary, please signify your acceptance of our offer by signing and emailing this offer letter to [***] – [***] on May 14, 2024.

Get in touch if you have any questions. Reach out to me personally, or your recruiter, who is also a great source of information. It’s been a pleasure getting to know you, Gary. I look forward to having you continue on our team!

Chuck Robbins

Chief Executive Officer

LOGO

A few last things to note

This offer is not a guarantee. While we certainly hope that you’ll have a long and successful career with us, employment with Cisco is employment at-will. That means both you and Cisco can end the employment relationship at any time, with or without cause or notice.

In accepting this offer, you agree to everything specified in this letter, not to what your recruiter, hiring manager, or others at Cisco may have communicated before. This offer letter, your Retention Bonus Agreement attached hereto, as modified by this offer letter, the documents evidencing your Unvested Cash Awards, the following documents you previously signed: the Cisco Proprietary Information and Inventions Assignment Agreement, the Technology Transfer Assessment, the Arbitration Agreement, the Immigration Sponsorship Questionnaire, the Voluntary Self-Identification Form, the Cisco Code of Business Conduct, and the Non-Competition Agreement will be the entire agreement between you and Cisco relating to your employment. In addition, any confidential/proprietary/trade secrets information and inventions agreement(s) between you and Cisco, Splunk, or any predecessor, will remain in effect as it pertains to subject matters existing prior to your start date. At all times during your employment, you agree to abide in all material respects by Cisco’s employment policies and procedures, as such policies and procedures are in effect. If any policy or procedure conflicts with any express term of this offer letter, the offer letter will control. Except as provided for here, this offer letter supersedes and replaces any prior verbal or written agreements between you and Cisco, including without limitation your employment agreement dated September 20, 2023.

Parachute payments

Notwithstanding anything set forth herein to the contrary, if any payment or benefit that you would receive from the Company or any other party whether in connection with the provisions herein or otherwise (the “Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment will be equal to the Best Results Amount. The “Best Results Amount” will be either (x) the full amount of such Payment or (y) such lesser amount as would result in no portion of the Payment being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local employment taxes, income taxes and the Excise Tax, results in your receipt, on an after-tax basis, of the greater amount notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting parachute payments is necessary so that the Payment equals the Best Results Amount, reduction will occur in the following order: reduction of cash payments; cancellation of accelerated vesting of stock awards; and reduction of employee benefits. In the event that acceleration of vesting of stock award compensation is to be reduced, such acceleration of vesting will be canceled in the reverse order of the date of grant of your equity awards.

Cisco will select a professional services firm to make all of the determinations required to be made under these paragraphs relating to parachute payments. Cisco will request that the firm provide detailed supporting calculations both to Cisco and you prior to the date on which the event that triggers the Payment occurs if administratively feasible, or subsequent to such date if events occur that result in parachute payments to you at that time. For purposes of making the calculations required under these paragraphs relating to parachute payments, the firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith determinations concerning the application of the Code. Cisco and you will furnish to the firm such information and documents as the firm may reasonably request in order to make a determination under these paragraphs relating to parachute payments. Cisco will bear all costs the firm may reasonably incur in connection with any calculations contemplated by these paragraphs relating to parachute payments. Any such determination by the firm will be binding upon the Company and you, and Cisco will have no liability to you for the determinations of the firm.

Once you’ve signed it, the terms of this agreement can only change if there is subsequent written agreement from Cisco signed by you.

Sign here to signify you accept this offer on the terms above:

The Following must be returned for your acceptance to be complete:

[Signature Page to Offer Letter]

Appendix A

Severance

If any of the following events (each, a “Good Leaver Termination”) occurs during the period beginning on your start date and ending on the eighteen (18) month anniversary of the closing of the Acquisition (the “Protection Period”):

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Cisco terminates your employment without “Cause” (as defined below),

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you resign your employment with “Good Reason” (as defined below),

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in the event of your death or “Permanent Disability” (as defined below), or

•

you voluntarily terminate active employment effective following the first anniversary of the Closing Date (provided you provide at least ninety (90) days’ prior written notice prior to ceasing active employment (i.e., notice period is not intended to constitute (“garden leave”)),

and you (or your estate/beneficiaries or representatives, if applicable) deliver to Cisco a signed release agreement (the “Release”), and satisfy all conditions to make the Release effective within sixty (60) days following your termination (or such shorter period required by Cisco), then no later than the sixty-first (61st) day following your termination (provided that, in the event that the potential payment period spans two (2) taxable years, the payment will be made in the second (2nd) taxable year), Cisco will pay you a lump sum equal to: (a) the sum of (i) twenty-four (24) months of your monthly Annual Salary plus (ii) two (2) times 160% of your Annual Salary plus (iii) a pro-rated Target Annual Bonus (based on the number of days to have elapsed in the applicable performance period as of your termination divided by the number of days in the full performance period (less any portion of the Target Annual Bonus that has already been paid)), less applicable deductions, as cash severance; and (b) the premiums required to continue your group health care coverage for a period of eighteen (18) months following your termination, under the applicable provisions of COBRA for you and your eligible dependents at the same level and for the same eligible dependents covered as of your termination date which will be “grossed up” to cover taxes. If you choose and are eligible to continue your health coverage through COBRA, you are solely responsible for timely election of COBRA continuing coverage and for making all COBRA premium payments. Any severance payments following a Good Leaver Termination shall not take into account reductions to Annual Salary.

After the expiration of the Protection Period, you will be eligible for severance benefits in accordance with any of Cisco’s then-applicable agreements and/or policies and the definitions of “Cause,” “Good Reason,” and “Permanent Disability” that apply to any termination payments or benefits to which you may be entitled will have the meaning ascribed to such term in Cisco’s applicable agreements and/or policies.

For purposes of determining whether a Good Leaver Termination occurred during the Protection Period, the following definitions will apply:

•

“Cause” will mean a termination for any of the following reasons: (i) your continued refusal to perform your duties to Cisco or its affiliates (other than due to your death or physical or mental infirmity ) after a written demand has been delivered to you by Cisco’s Chief Executive Officer or the Board (and which refusal continues for at least sixty (60) calendar days following such demand); (ii) your engaging in an act of gross negligence or willful and material misconduct in the performance of your employment obligation and duties; (iii) your being convicted of, or a plea of no contest to, a felony; (iv) your committing an act of fraud against, or willful misappropriation of property belonging to Cisco or its affiliates; or (v) your material breach of this offer letter, the Non- Competition Agreement between you and Cisco dated September 20, 2023, the Cisco Code of Business Conduct, or the Proprietary Information and Inventions Assignment Agreement between you and Cisco dated November 19, 2023. In the event of a termination for “Cause” during the Protection Period, Cisco will provide written notice of the reason for termination in the case of any termination for “Cause” and you shall have, in the case of (v) above, not less than sixty (60) calendar days following such notice to cure such breach, if curable. No action or inaction shall be treated as willful unless done or not done in bad faith and without a reasonable belief such action or inaction was in the best interests of Cisco or its affiliates. Any action or inaction based upon instruction from a more senior executive of Cisco or the Board or based upon advice of counsel to Cisco or any of its affiliates shall not constitute Cause. You shall not be terminated for Cause absent a majority resolution from the Board.

•

A resignation with “Good Reason” will occur if you resign your employment on the occurrence of any of the following events: (1) your then-current annual base salary is reduced by Cisco by 10% or more below the amount specified in this offer letter (other than an equivalent percentage reduction in annual base salaries that applies to Cisco executives generally); (2) a material change, adverse to you, in your title or any requirement that you report to any person(s) other than Chuck Robbins; (3) a material breach by Cisco of any payment obligation under this offer letter; or (4) notice that you must relocate to a facility or location more than thirty (30) miles from your then-current work location; provided, however, that with respect to each occurrence, you must (a) within ninety (90) days following your knowledge of its occurrence, deliver to Cisco a written explanation specifying the specific basis for your belief that you are entitled to terminate your employment for Good Reason, (b) give Cisco an opportunity to cure any of the foregoing within thirty (30) days following delivery of such explanation and (c) provided Cisco has failed to cure any of the foregoing within such thirty (30) day cure period, terminate your employment within thirty (30) days following expiration of such cure period.

•

“Permanent Disability” means your inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of twelve (12) months or more. A determination of such Permanent Disability will be made in accordance with Cisco policy.

Exhibit A

Retention Bonus Agreement

Execution Version

CISCO SYSTEMS, INC.

NOTICE OF GRANT OF

ACQUISITION RETENTION BONUS

Notice is hereby given of the following retention bonus (the “Award”), which is payable by Cisco Systems, Inc., a Delaware corporation (the “Company”), subject to the terms and conditions set forth herein:


Specified Employee:		Gary Steele
Grant Date:		March 20, 2024
Type of Award:		Cash Retention Bonus
Retention Bonus Value:		US$15,000,000
Vesting Commencement Date:		Closing Date

Vesting Schedule.

So long as Specified Employee continues in Employment through each Vesting Date, the Award shall vest in accordance with the following schedule: one-third (1/3) of the total amount of the Award granted pursuant to this Notice shall vest on the one (1)-year anniversary of the Vesting Commencement Date and two-thirds (2/3) of the total amount of the Award granted pursuant to this Notice shall vest in equal quarterly installments over the immediately following two (2)-year period ending on the third (3rd) anniversary of the Vesting Commencement Date (each such date, a “Vesting Date”).

In no event shall the Award continue to vest after Specified Employee’s Employment has terminated or Specified Employee fails to satisfy any of the Conditions; provided that, if Specified Employee’s Employment terminates as a result of a Good Leaver Termination (as defined in Specified Employee’s employment agreement with the Company dated September 20, 2023) that occurs prior to the first (1st) anniversary of the Closing Date, one-third (1/3) of the Award shall vest as of such termination, subject to the terms of the employment agreement. However, Specified Employee will be paid for vested but unpaid benefits within two full pay cycles following termination of Employment.

Notwithstanding anything to the contrary in this Notice or the Agreement, in the event the Agreement and Plan of Merger by and among the Company, Spirit Merger Corp. and Splunk Inc. (“Splunk”), dated as of September 20, 2023, is terminated prior to the closing of the acquisition of Splunk (the “Acquisition”), then the Award shall be of no force and effect, shall not be payable, and shall expire on the first business day following such termination.

For purposes of this Notice, “Employment” means employment with the Company or any of its parents, subsidiaries or affiliates including, following the closing of the Acquisition, Splunk, in accordance with the terms of Specified Employee’s employment agreement.

Should Specified Employee request a reduction to Specified Employee’s work commitment to less than thirty (30) hours per week, then the Administrator shall have the right to extend the period over which the Award shall thereafter vest. The decision whether to approve Specified Employee’s request for any reduced work commitment shall be at the sole discretion of the Administrator. However, in no event shall the Vesting Schedule for the Award be extended in a manner that violates applicable law or results in the imposition of taxation under Code Section 409A of the Internal Revenue Code of 1986, as amended, for

U.S. taxpayers, as applicable. For purposes of this Notice and the Agreement, “Administrator” shall mean the Company’s Board of Directors (the “Board”) or a designated committee thereof. Unless the Board provides otherwise, the Company’s Compensation & Management Development Committee shall be the designated committee.

Specified Employee agrees to be bound by the terms of the Award as set forth in this Notice and the Agreement attached hereto.

No Employment Contract. Nothing in this Notice or in the attached Agreement shall confer upon Specified Employee any right to continue in Employment for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any parent, subsidiary or affiliate company employing Specified Employee) or of Specified Employee, which rights are hereby expressly reserved by each, to terminate Specified Employee’s Employment at any time for any reason, with or without cause.

Definitions. All capitalized terms in this Notice shall have the meaning assigned to them in this Notice and the Acquisition Retention Bonus Plan and Agreement (the “Agreement”) attached hereto.

[Signature Page Follows]

By their signatures below, the Company and Specified Employee agree that the Award is governed by this Notice and the Agreement, which is attached and made a part of this document. Specified Employee acknowledges receipt of the Agreement, represents that Specified Employee has read and is familiar with its provisions, and hereby accepts the Award subject to all of its terms and conditions.

CISCO SYSTEMS, INC.

/s/ Greg Tesimale

Greg Tesimale

Senior Director, People & Communities

SPECIFIED EMPLOYEE

/s/Gary Steele

[Signature]

Gary Steele

Executive Vice President

03/20/2024

[DATE SIGNED]

ACQUISITION RETENTION BONUS

PLAN AND AGREEMENT

Recitals

A. Specified Employee is to render valuable employment services to the Company (or a parent, subsidiary, or affiliate thereof).

B. All capitalized terms in this Agreement shall have the meaning assigned to them in this Agreement or the attached Notice of Grant of Acquisition Retention Bonus (the “Notice”).

Agreement

NOW, THEREFORE, it is hereby agreed as follows:

1. Grant of Retention Bonus. The Company hereby grants to Specified Employee, as of the Grant Date, the Award, which represents a conditional right of Specified Employee to receive a payment in the form of cash based on the Retention Bonus Value specified in the Notice.

2. Payment of Retention Bonus. Within two full pay cycles from each Vesting Date, the Company (or a parent, subsidiary, or affiliate thereof, as applicable) shall make a cash payment under the Award with respect to that portion of the Award that vested on such Vesting Date, subject to applicable withholdings related to Tax-Related Items. The amount payable as of each Vesting Date shall be a non-variable amount equal to (x) that portion of the Award’s Retention Bonus Value vesting on such Vesting Date multiplied by (y) the applicable currency exchange rate for the country in which Specified Employee resides, if Specified Employee resides outside of the United States, as reported in the Wall Street Journal at https://www.wsj.com/market-data/currencies/exchangerates for the trading day immediately preceding the Closing Date. Prior to the time that the Award is paid upon vesting, Specified Employee shall have no rights other than those of a general creditor. The Award represents an unfunded and unsecured obligation.

3. Acceptance of Agreement. Specified Employee must expressly accept the terms and conditions of the Award as set forth in the Notice and this Agreement by signing or otherwise accepting and returning the Notice within ninety (90) days after the Company sends the Notice and Agreement to Specified Employee. If Specified Employee does not accept the Award in the manner instructed by the Administrator, the Award will be subject to cancellation.

4. Non-Transferability. The Award shall not be anticipated, assigned, attached, garnished, optioned, transferred or made subject to any creditor’s process, whether voluntarily or involuntarily or by operation of law, except by will or by the laws of descent and distribution. Notwithstanding the foregoing, with respect to any portion of the Award that has vested prior to Specified Employee’s death but before the cash payment with respect to such vested amount was made, Specified Employee may designate one or more death beneficiaries whom may receive payment under this Award with respect to such vested amount by timely filing the prescribed form with the Administrator. A death beneficiary designation may be changed by filing the prescribed form with the Administrator at any time before Specified Employee’s death. If no death beneficiary was designated or if no designated death beneficiary survives Specified Employee, then after Specified Employee’s death any unpaid cash attributable to the vested portion of the Award shall be transferred or distributed to Specified Employee’s estate.

5. Termination of Employment. In the event of the termination of Specified Employee’s Employment for any reason (whether or not later found to be invalid or in breach of the employment laws in the jurisdiction where Specified Employee is employed, or the terms of Specified Employee’s employment agreement, if any), the unvested portion of the Award (if any) shall be immediately forfeited without consideration; provided that, if Specified Employee’s Employment terminates as a result of a Good Leaver Termination that occurs prior to the first (1st) anniversary of the Closing Date, one-third (1/3) of the Award shall vest as of such termination, subject to the terms of the employment agreement. For purposes of the preceding sentence, Specified Employee’s right to vest in the Award will terminate effective as of the date of Specified Employee’s termination of Employment.

6. Taxes. Regardless of any action the Administrator or Specified Employee’s employer takes with respect to any and all income tax, social taxes or insurance contributions, payroll tax, payment on account or other tax-related items related to the Award and legally payable by Specified Employee (“Tax-Related Items”), Specified Employee acknowledges that the ultimate liability for all Tax-Related Items with respect to the Award is and remains Specified Employee’s responsibility and may exceed the amount actually withheld by the Administrator or the employer. Specified Employee further acknowledges that the Administrator and/or the employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including the grant, vesting or payment thereunder; and (ii) do not commit to and are under no obligation to structure the terms or any aspect of the Award to reduce or eliminate Specified Employee’s liability for Tax-Related Items or achieve any particular tax result. Further, if Specified Employee becomes subject to taxation in more than one jurisdiction between the Grant Date and the date of any relevant taxable event, Specified Employee acknowledges that the Administrator and/or the employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

7. Tax and Legal Advice. The holder of this Award represents, warrants and acknowledges that neither the Company nor the employer has made any warranties or representations to such holder with respect to any Tax-Related Items, legal or financial consequences of the transactions contemplated by this Agreement, and the holder is in no manner relying on the Administrator, the employer or the Administrator’s or the employer’s representatives for an assessment of such consequences. THE HOLDER OF THIS AWARD UNDERSTANDS THAT THE LAWS AND REGULATIONS GOVERNING THIS AWARD ARE SUBJECT TO CHANGE. THE HOLDER OF THIS AWARD SHOULD CONSULT THE HOLDER’S OWN PROFESSIONAL TAX, LEGAL AND FINANCIAL ADVISOR REGARDING THE AWARD. THE HOLDER UNDERSTANDS THAT NEITHER THE COMPANY NOR ANY PARENT COMPANY, SUBSIDIARY OR AFFILIATE IS PROVIDING ANY TAX, LEGAL, OR FINANCIAL ADVICE, NOR IS THE ADMINISTRATOR OR THE EMPLOYER MAKING ANY RECOMMENDATION REGARDING HOLDER’S ACCEPTANCE OF THIS AWARD. NOTHING STATED HEREIN IS INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING TAX OR OTHER PENALTIES.

8. Successors and Assigns. Subject to the limitations set forth in this Agreement, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and Specified Employee, Specified Employee’s assigns and the legal representatives, heirs and legatees of Specified Employee’s estate.

9. Notices. Any notice required to be given or delivered to the Administrator under the terms of this Agreement shall be in writing and addressed to the Administrator at its principal corporate offices. Any notice required to be given or delivered to Specified Employee shall be in writing and addressed to Specified Employee at the address maintained for Specified Employee in the Administrator’s records. All notices shall be deemed sufficient when delivered personally or sent by confirmed mail.

10. Construction. The Notice, this Agreement, and the Award evidenced hereby constitute the entire agreement between Specified Employee and the Company on the subject matter hereof and supersede all proposals, written or oral, and all other communications between the parties related to the subject matter hereof. All decisions of the Administrator with respect to any questions or issues arising under the Notice or this Agreement shall be conclusive and binding on all persons having an interest in this Award. If any provision of this Agreement is held to be unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the parties to the extent possible. In any event, all other provisions of this Agreement shall be deemed valid and enforceable to the full extent possible.

11. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to the conflict of laws principles thereof. For purposes of litigating any dispute that may arise directly or indirectly from this Agreement, the parties hereby submit and consent to the exclusive jurisdiction of the State of California and agree that any such litigation shall be conducted only in the courts of California or the federal courts of the United States for the Northern District of California and no other courts.

12. Leave of Absence. Unless otherwise determined by the Administrator and except as would be prohibited or otherwise required by any applicable law, rule or regulation or would result in adverse legal or tax consequences, the following provisions shall apply upon Specified Employee’s commencement of an authorized leave of absence:

(a) The Vesting Schedule in effect for any outstanding portion of the Award held by Specified Employee at the time of Specified Employee’s commencement of an authorized leave of absence shall continue in effect and Specified Employee shall continue to vest in accordance with the Vesting Schedule during the period Specified Employee remains on such authorized leave of absence; provided that, in no event shall Specified Employee be entitled to vest for more than 90 days of authorized leaves of absence during any rolling 12-month period (the “LOA Limit”).

(b) If Specified Employee exceeds the LOA Limit during any rolling 12-month period, any then-unvested portion of the Award held by such Specified Employee shall be suspended immediately following the expiration of the LOA Limit and any unvested portion of the Award shall not vest during the remainder of the rolling 12-month period. Upon return from Specified Employee’s authorized leave of absence, the Vesting Schedule shall be extended by the number of days by which Specified Employee has exceeded the LOA Limit.

13. Further Instruments. The parties agree to execute such further instruments and to take such further action as may be reasonably necessary to carry out the purposes and intent of this Agreement.

14. Personal Data Protection. Specified Employee hereby acknowledges the following:

(a) The Company (“Data Controller”) collects and processes Specified Employee’s personal data, including, but not limited to, Specified Employee’s name, home address and telephone number, date of birth, social insurance number (or any other social or national identification number), salary, nationality, job title, residency status, or directorships, details of all awards or any other entitlements that may have been awarded, canceled, vested, unvested or outstanding (“Personal Data”) for the purpose of implementing, administering and managing Specified Employee’s Award (“Purpose”). The legal basis for such processing is the performance of the employment contract between Specified Employee and the Data Controller.

(b) The legal basis for the processing of Personal Data is that the processing is necessary for the performance of a contract to which Specified Employee is a party (namely, this Agreement).

(c) In order to fulfil the Purpose, Personal Data may be communicated to authorized persons working for the Data Controller (including the Administrator), any of its parent companies, subsidiaries or affiliates, or to any third parties assisting in the implementation, administration and management of Specified Employee’s Award (“Recipients”).

(d) Some Recipients may be located outside of the country in which Specified Employee resides in a territory not affording a sufficient level of personal data protection, in particular, in the United States. Prior to transferring Personal Data to any of such Recipients, the Data Controller shall ensure that all necessary safeguards are implemented so as to protect the confidentiality and the security of Personal Data, in particular by executing standard contractual clauses.

(e) Personal Data will be held only as long as is necessary for the fulfillment of the Purpose, i.e. for 5 years following the last vesting date.

(f) Subject to the conditions provided by applicable law, Specified Employee is entitled to obtain information on the Personal Data which is being processed in Specified Employee’s respect by the Data Controller or on its behalf, to object to processing of such Personal Data, to make use of Specified Employee’s right to data portability, to have Specified Employee’s Personal Data rectified or deleted, to have the processing of Specified Employee’s Personal Data restricted, as well as to provide specific instructions to the Data Controller as to the manner in which Specified Employee would like Specified Employee’s Personal Data to be dealt with post mortem. Any queries or requests regarding Specified Employee’s Personal Data should be made in writing to the Company’s representative relating to the Award, who may be contacted at: https://cisco.service-now.com/helpzone. Specified Employee can also lodge a complaint with the relevant data protection authority in Specified Employee’s country of residence. These rights can be exercised by submitting a written request to Specified Employee’s local human resources representative.

15. No Entitlement or Claims for Compensation.

(a) Specified Employee’s rights, if any, in respect of or in connection with this Award is derived solely from the discretionary decision of the Company to permit Specified Employee to benefit from a discretionary award. By accepting this Award, Specified Employee expressly acknowledges that there is no obligation on the part of the Administrator to grant any additional Awards to Specified Employee or benefits in lieu of such Awards, even if Awards have been granted in the past. All decisions with respect to future grants of Awards, if any, will be at the sole discretion of the Administrator.

(b) The Award is an extraordinary item of remuneration and not intended to replace any pension rights or compensation and is not to be considered compensation of a continuing or recurring nature, or part of Specified Employee’s normal or expected compensation, and in no way represents any portion of Specified Employee’s salary, compensation or other remuneration for any purpose, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments, and in no event should be considered as compensation for, or relating in any

way to, past services for the Company, the employer or any parent, subsidiary or affiliate thereof, except to the extent required by applicable law. The value of the Award is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company, the employer or any parent, subsidiary or affiliate thereof and which is outside the scope of Specified Employee’s written employment agreement, if any, and, therefore it will not be, nor be deemed to be, earned, accrued or gained monthly, quarterly, semi-annually, annually or other than on a one-time only basis under the terms of this Award.

(d) This Award shall not give Specified Employee a right to remain in an employment relationship with the Company or a parent, subsidiary or affiliate thereof. The employer reserves the right to terminate Specified Employee’s Employment at any time, with or without cause, and for any reason.

(e) The grant of the Award will not be interpreted to form an employment contract with the Company.

(f) Specified Employee also understands that none of the Company, the employer or any parent, subsidiary or affiliate thereof is responsible for any foreign exchange fluctuation between Specified Employee’s local currency and the United States Dollar that may affect the value of this Award.

(g) Except as otherwise provided in the Award, no claim or entitlement to compensation or damages shall arise from forfeiture of the Award resulting from the termination of Specified Employee’s Employment by the Company or any of its parents, subsidiaries or affiliates (for any reason whatsoever and whether or not later found to be invalid or in breach of the employment laws in the jurisdiction where Specified Employee is employed, or the terms of Specified Employee’s employment agreement, if any) and, in consideration of the grant of this Award to which Specified Employee is not otherwise entitled, Specified Employee irrevocably agrees never to institute any such claim with respect to the Award against the Company or its parents, subsidiaries or affiliates, waive Specified Employee’s ability, if any, to bring any such claim, and release the Company and its parents, subsidiaries and affiliates from any such claim; if notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by accepting this Award, Specified Employee shall be deemed irrevocably to have agreed to not pursue such claim and agree to execute any and all documents necessary to request the withdrawal of such claim.

(h) Specified Employee agrees that Specified Employee’s rights hereunder (if any) shall be subject to set-off for any valid debts Specified Employee owes the Company or its parents, subsidiaries or affiliates.

(i) Unless otherwise provided by the Administrator in its discretion, the Award and the benefits evidenced by this Agreement do not create any entitlement to have the Award transferred to, or assumed by, another company, nor to be exchanged, cashed out or substituted for in connection with any corporate transaction affecting the Company’s ordinary shares.

16. Electronic Delivery. The Administrator may, in its sole discretion, decide to deliver any documents related to the Award by electronic means. Specified Employee hereby consents to receive such documents by electronic delivery and agrees to utilize, with respect to the Award, an on-line or electronic system established and maintained by the Administrator or a third party designated by the Administrator.

17. Language. If this Agreement is translated into a language other than English and the meaning of the translated version is different from the English version, the English version will take precedence.

18. Imposition of Other Requirements. The Administrator reserves the right to impose other requirements on the Award to the extent the Administrator determines it is necessary or advisable in order to comply with local law or facilitate the administration of the Award. Specified Employee agrees to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. Furthermore, Specified Employee acknowledges that the laws of the country in which Specified Employee is working at the time of grant, vesting or payment under the Award (including any rules or regulations governing securities, foreign exchange, tax, labor, or other matters) may subject Specified Employee to additional procedural or regulatory requirements that Specified Employee is and will be solely responsible for and must fulfill.

19. Administrator Policies. The Award shall be subject to any special terms and conditions set forth in any applicable policy (and any amendments thereto) that the Administrator (or a designee of the Administrator) has adopted or will adopt in the future, including, but not limited to, any policy related to the vesting or transfer of cash awards so long as such terms and conditions are not inconsistent with the terms of the Award or Specified Employee’s employment agreement or add new covenants or obligations upon Specified Employee.

Document and Entity Information	May 12, 2024
Cover [Abstract]
Amendment Flag	false
Entity Central Index Key	0000858877
Document Type	8-K
Document Period End Date	May 12, 2024
Entity Registrant Name	CISCO SYSTEMS, INC.
Entity Incorporation State Country Code	DE
Entity File Number	001-39940
Entity Tax Identification Number	77-0059951
Entity Address, Address Line One	170 West Tasman Drive
Entity Address, City or Town	San Jose
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	95134-1706
City Area Code	(408)
Local Phone Number	526-4000
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Security 12b Title	Common Stock, par value $0.001 per share
Trading Symbol	CSCO
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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/s/ Gary Steele

Gary Steele

Start Date: May 15, 2024