CISCO SYSTEMS, INC.

CISCO SYSTEMS, INC. Annual Report - Plain Talk for Investors
Your coffee chat guide to Cisco’s year

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1. What Cisco Does & How 2023 Went

Cisco keeps the internet running with networking hardware, cybersecurity tools, collaboration software (like Webex), and smart city technology.
2023 Summary: Steady growth with mixed results. Revenue rose 11% to $57 billion, profits jumped 14% to $12.7 billion, and software subscriptions now make up 45% of sales (up from 40%). However, hardware sales slowed as companies delayed upgrades.

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2. Big Wins & Oops Moments

Wins:

• Launched AI-powered “self-healing” networks.
• Cybersecurity revenue grew 13% amid rising hacking threats.
• Acquired Splunk and others for $27.1B to boost AI/data capabilities.

Oops:

• Router/switch orders dropped due to corporate budget cuts.
• Cut 5% of workforce (4,000 jobs) to reduce costs.
• Paid a hefty $19.3B premium for acquisitions—risky if integration fails.

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3. Financial Health Check

• Cash: $25B (down slightly from $26B).
• Debt: $10B (manageable for a company this size).
• Dividends: Paid $6.3B to shareholders, marking 12 straight years of increases.
• Acquisitions: Spent $2.7B cash but gained $2.4B from purchased companies.

Verdict: Stable, but hardware declines and acquisition costs need monitoring.

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4. Risks to Watch

• Corporate tech budgets could shrink in a weak economy.
• Cloud rivals like Amazon and Microsoft are gaining ground.
• A major security breach could damage trust.
• Integrating Splunk and other acquisitions might disrupt operations.

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5. vs. Competitors: Still Leading?

• Networking: #1 with 30%+ market share, but Arista is growing faster in data centers.
• Cybersecurity: Trailing Palo Alto and CrowdStrike in growth.
• AI: Spending heavily to catch up in AI infrastructure.

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6. 2024 Outlook

• Expect 5-7% revenue growth—steady but not explosive.
• Betting big on AI tools and cost-cutting (layoffs to save $1B/year).
• Success hinges on making those expensive acquisitions pay off.

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The Bottom Line for Investors

👍 Buy if: You want stability and dividends. Cisco’s $25B cash pile, 12-year dividend streak, and shift to software subscriptions offer safety.
👎 Avoid if: You seek high growth. Hardware slowdowns, acquisition risks, and fierce competition could limit upside.

TL;DR: Cisco is a steady player in a changing tech world—reliable for dividends, but don’t expect flashy growth.