Cisco Systems (CSCO) 10-K risk factor changes: FY2021 vs FY2020

[removed: OUR BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION HAVE BEEN ADVERSELY AFFECTED AND COULD IN THE FUTURE BE MATERIALLY ADVERSELY AFFECTED BY THE] [added: Our business, results of operations and financial condition have been adversely affected and could in the future be materially adversely affected by the] COVID-19 [removed: PANDEMIC][added: pandemic.]

[removed: Vendors] [added: In addition, vendors] may be under pressure to allocate product to certain customers for business, regulatory or political reasons, and/or demand changes in agreed pricing as a condition of supply.

The COVID-19 pandemic may also result in long-term changes in customer needs for our products and services in various sectors, along with [removed: IT-][added: IT-related capital spending reductions, or shifts in spending focus, that could materially adversely affect us if we are unable to adjust our product and service offerings to match customer needs.]

[removed: The extent and/or duration of ongoing workforce] restrictions and limitations could impact our ability to enhance, develop and support existing products and services, and hold product sales and marketing events to the extent we were able to previously.

[removed: See the risk factors below entitled “Cyber-attacks, data breaches or malware may disrupt our operations, harm our operating results and financial condition, and damage our reputation, and cyber-attacks or data breaches on our customers’ networks, or in cloud-based services provided by or enabled by us, could result in claims of liability against us, damage our reputation or otherwise harm our business” and “Vulnerabilities] [added: Vulnerabilities] and critical security defects, prioritization decisions regarding remedying vulnerabilities or security defects, failure of [removed: third party] [added: third-party] providers to remedy vulnerabilities or security defects, or customers not deploying security releases or deciding not to upgrade products, services or solutions could result in claims of liability against us, damage our [removed: reputation] [added: reputation,] or otherwise [added: materially] harm our [removed: business.”][added: business.]

[removed: OUR OPERATING RESULTS MAY FLUCTUATE IN FUTURE PERIODS, WHICH MAY ADVERSELY AFFECT OUR STOCK PRICE][added: Our operating results may fluctuate in future periods, which may adversely affect our stock price.]

[removed: | | • | |] [added: -] Fluctuations in demand for our products and services, especially with respect to service providers and Internet businesses, in part due to changes in the global economic environment [removed: |]

[removed: | | • | |] [added: -] Changes in sales and implementation cycles for our products and reduced visibility into our customers’ spending plans and associated revenue [removed: |]

[removed: | | • | |] [added: -] Our ability to maintain appropriate inventory levels and purchase commitments [removed: |]

[removed: | | • | |] [added: -] Price and product competition in the communications and networking industries, which can change rapidly due to technological innovation and different business models from various geographic regions [removed: |]

[removed: | | • | |] [added: -] The overall movement toward industry consolidation among both our competitors and our customers [removed: |]

[removed: | | • | |] [added: -] The introduction and market acceptance of new technologies and products, and our success in new and evolving markets, and in emerging technologies, as well as the adoption of new standards [removed: |]

[removed: | | • | |] [added: -] The transformation of our business to deliver more software and subscription offerings where revenue is recognized over time [removed: |]

[removed: | | • | |] [added: -] Variations in sales channels, product costs, mix of products sold, or mix of direct sales and indirect sales [removed: |]

[removed: | | • | |] [added: -] The timing, size, and mix of orders from customers [removed: |]

[removed: | | • | |] [added: -] Manufacturing and customer lead times [removed: |]

[removed: | | • | |] [added: -] Fluctuations in our gross margins, and the factors that contribute to such [removed: fluctuations, as described below |][added: fluctuations]

[removed: | | • | |] [added: -] The ability of our customers, channel partners, contract manufacturers and suppliers to obtain financing or to fund capital expenditures, especially during a period of global credit market disruption or in the event of customer, channel partner, contract manufacturer or supplier financial problems [removed: |]

[removed: | | • | |] [added: -] Actual events, circumstances, outcomes, and amounts differing from judgments, assumptions, and estimates used in determining the values of certain assets (including the amounts of related valuation allowances), liabilities, and other items reflected in our Consolidated Financial Statements [removed: |]

[removed: | | • | |] [added: -] How well we execute on our strategy and operating plans and the impact of changes in our business model that could result in significant restructuring charges [removed: |]

[removed: | | • | |] [added: -] Our ability to achieve targeted cost reductions [removed: |]

[removed: | | • | |] [added: -] Benefits anticipated from our investments [removed: in engineering, sales, service, and marketing |]

[removed: | | • | |] [added: -] Changes in tax laws or accounting rules, or interpretations thereof [removed: |]

[removed: OUR OPERATING RESULTS MAY BE ADVERSELY AFFECTED BY UNFAVORABLE ECONOMIC AND MARKET CONDITIONS AND THE UNCERTAIN GEOPOLITICAL ENVIRONMENT][added: Our operating results may be adversely affected by unfavorable economic and market conditions and the uncertain geopolitical environment.]

During fiscal [removed: 2020,] [added: 2020 and the first quarter of fiscal 2021,] we continued to see a [removed: more] broad-based weakening in the global macroeconomic environment which impacted our commercial and enterprise markets.

We also experienced continuing weakness in [removed: the service provider market and] emerging countries, and we expect ongoing uncertainty in [removed: these markets.][added: this market.]

[removed: For example,] [added: Our business in] emerging countries in the aggregate experienced a decline in [removed: product] orders in [added: the first half of] fiscal [removed: 2020,] [added: 2021] and in certain prior periods.

Trust and confidence in us as an IT supplier [removed: is] [added: are] critical to the development and growth of our markets.

[removed: OUR REVENUE FOR A PARTICULAR PERIOD IS DIFFICULT TO PREDICT, AND A SHORTFALL IN REVENUE MAY HARM OUR OPERATING RESULTS][added: Our revenue for a particular period is difficult to predict, and a shortfall in revenue may harm our operating results.]

Our revenue may grow at a slower rate than in past periods or decline as it did [removed: during] [added: in the first quarter of] fiscal [added: 2021 and fiscal] 2020, and in certain prior periods on a year-over-year basis.

The timing of large orders can also have a significant effect on our business and operating results from quarter to [removed: quarter, primarily in the United States and in emerging countries.][added: quarter.]

[removed: We have experienced longer] [added: Longer] than normal manufacturing lead times in the past [removed: which] have [removed: caused] [added: caused, and in the future could cause,] some customers to place the same [added: or a similar] order multiple times within our various sales channels and to cancel the duplicative orders upon [added: shipment or] receipt of the product, or to [added: also] place orders with other vendors with shorter manufacturing lead times.

Such multiple ordering (along with other factors) or risk of order cancellation may cause difficulty in predicting our [removed: revenue and, as a result, could impair our ability to manage parts inventory effectively.][added: revenue.]

[removed: In addition,] [added: Further,] our efforts to improve manufacturing lead-time performance may result in more variability and less predictability in our revenue and operating results.

[removed: In addition, when] [added: When] facing component supply-related challenges we have increased our efforts in procuring components in order to meet customer expectations, which in turn [removed: contribute] [added: contributes] to an increase in [added: inventory and] purchase commitments.

[removed: Increases] [added: These increases] in our [added: inventory and] purchase commitments to shorten lead times could also lead to [added: significant] excess and obsolete inventory charges if the demand for our products is less than our expectations.

[removed: WE EXPECT GROSS MARGIN TO VARY OVER TIME, AND OUR LEVEL OF PRODUCT GROSS MARGIN MAY NOT BE SUSTAINABLE][added: We expect gross margin to vary over time, and our level of product gross margin may not be sustainable.]

[removed: Although our product gross margin increased in fiscal 2020, our] [added: Our] level of product gross margins declined in [removed: the fourth quarter of] fiscal [removed: 2020] [added: 2021] and have declined in certain prior periods on a year-over-year basis, and could decline in future periods due to adverse impacts from various factors, including:

[removed: | | • | |] [added: -] Changes in customer, geographic, or product mix, including mix of configurations within each product group [removed: |]

[removed: | | • | |] [added: -] Introduction of new products, including products with price-performance advantages, and new business models including the transformation of our business to deliver more software and subscription offerings [removed: |]

Risks Related to our Business and Industry

We continue to address these supply chain challenges and cost impacts, which we expect will continue at least through the first half of fiscal 2022 and potentially into the second half of fiscal 2022.

The extent and/or duration of ongoing workforce

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Challenging economic conditions worldwide have from time to time contributed, and may continue to contribute, to slowdowns in the communications and networking industries at large, as well as in specific segments and markets in which we operate, resulting in: reduced demand for our products as a result of continued constraints on IT-related capital spending by our customers, particularly service providers, and other customer markets as well; increased price competition for our products, not only from our competitors but also as a consequence of customers disposing of unutilized products; risk of excess and obsolete inventories; risk of supply constraints; risk of excess facilities and manufacturing capacity; and higher overhead costs as a percentage of revenue and higher interest expense.

In addition, when facing

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For example, in fiscal 2021, we increased our inventory and purchase commitments in light of the supply chain challenges seen industrywide due to component shortages, caused in part by the COVID-19 pandemic.

There is currently a market shortage of semiconductor and other component supply which has affected, and could further affect, lead times, the cost of that supply, and our ability to meet customer demand for our products if we cannot secure sufficient supply in a timely manner.

We expect these supply chain challenges and cost impacts to continue through at least the first half of fiscal 2022 and potentially into the second half of fiscal 2022.

We may not be able to diversify

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We believe that we may be faced with the following challenges in the future: new markets in which we participate may grow quickly, which may make it difficult to quickly obtain significant component capacity; as we acquire companies and new technologies, we may be dependent on unfamiliar supply chains or relatively small supply partners; and we face competition for certain components that are supply-constrained, from existing competitors, and companies in other markets.

For example, in fiscal 2021, we increased our inventory and purchase commitments in light of the supply chain challenges seen industrywide due to component shortages, caused in part by the COVID-19 pandemic.

These increases in our inventory and purchase commitments to shorten lead times could also lead to significant excess and obsolete inventory charges if the demand for our products is less than our expectations.

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In addition, the growth in demand for technology

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The principal competitive factors in the markets in which we presently compete and may compete in the future include the ability to sell successful business outcomes; the ability to provide a broad range of networking and communications products and services; product performance; price; the ability to introduce new products, including providing continuous new customer value and products with price-performance advantages; the ability to reduce production costs; the ability to provide value-added features such as security, reliability, and investment protection; conformance to standards; market presence; the ability to provide financing; and disruptive technology shifts and new business models.

When facing component supply-related

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assessments and decisions.

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could make it difficult to meet key objectives, such as timely and effective product introductions.

In addition, global climate change may result in significant natural disasters occurring more frequently or with greater intensity, such as drought, wildfires, storms, sea-level rise, and flooding.

Likewise, events such as loss

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Risks Related to Intellectual Property

Further, in the

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

Risks Related to Cybersecurity and Regulations

We experience cyber-attacks and other attempts to gain unauthorized access to our systems on a regular basis, and we anticipate continuing to be subject to such attempts.

Such events have and could in the future compromise or disrupt access to or the operation of our products, services, and networks or those of our customers, or result in the information stored on our systems or those of our customers being improperly accessed, processed, disclosed, lost or stolen.

Our business, operating results and financial condition could be materially harmed by regulatory uncertainty applicable to our products and services.

In particular, changes in telecommunications regulations could impact our service provider customers’ purchase of our products and offers, and they could also impact sales of our own regulated offers.

In addition, evolving legal requirements restricting or controlling the collection, processing, or cross-border transmission of data, including regulation of cloud-based services, could materially affect our customers’ ability to use, and our ability to sell, our products and offers.

related capital spending reductions, or shifts in spending focus, that could materially adversely affect us if we are unable to adjust our product and service offerings to match customer needs.

| | | | |

| --- | --- | --- | --- |

Challenging economic conditions worldwide have from time to time contributed, and may continue to contribute, to slowdowns in the communications and networking industries at large, as well as in specific segments and markets in which we operate, resulting in:

| | • | | Reduced demand for our products as a result of continued constraints on IT-related capital spending by our customers, particularly service providers, and other customer markets as well |

| | • | | Increased price competition for our products, not only from our competitors but also as a consequence of customers disposing of unutilized products |

| | • | | Risk of excess and obsolete inventories |

| | • | | Risk of supply constraints |

| | • | | Risk of excess facilities and manufacturing capacity |

| | • | | Higher overhead costs as a percentage of revenue and higher interest expense |

WE HAVE BEEN INVESTING AND EXPECT TO CONTINUE TO INVEST IN KEY PRIORITY AND GROWTH AREAS AS WELL AS MAINTAINING LEADERSHIP IN INFRASTRUCTURE PLATFORMS AND IN SERVICES, AND IF THE RETURN ON THESE INVESTMENTS IS LOWER OR DEVELOPS MORE SLOWLY THAN WE EXPECT, OUR OPERATING RESULTS MAY BE HARMED

We expect to realign and dedicate resources into key priority and growth areas, such as Security and Applications, while also focusing on maintaining leadership in Infrastructure Platforms and in Services.

However, the return on our investments may be lower, or may develop more slowly, than we expect.

Inventory management remains an area of focus.

| | • | | Obsolescence charges |

and business conditions in the country of operations.

These distributors are generally given business terms that allow them to return a portion of inventory, receive credits for changes in selling prices, and participate in various cooperative marketing programs.

Some factors could result in disruption of or changes in our distribution model, which could harm our sales and margins, including the following:

| | • | | Some of our channel partners may demand that we absorb a greater share of the risks that their customers may ask them to bear |

| | • | | Some of our channel partners may have insufficient financial resources and may not be able to withstand changes and challenges in business conditions |

| | • | | Revenue from indirect sales could suffer if our distributors’ financial condition or operations weaken |

offerings instead of ours.

The principal competitive factors in the markets in which we presently compete and may compete in the future include:

| | • | | The ability to sell successful business outcomes |

| | • | | The ability to provide a broad range of networking and communications products and services |

| | • | | Product performance |

| | • | | Price |

| | • | | The ability to introduce new products, including providing continuous new customer value and products with price-performance advantages |

| | • | | The ability to reduce production costs |

| | • | | The ability to provide value-added features such as security, reliability, and investment protection |

| | • | | Conformance to standards |

| | • | | Market presence |

| | • | | The ability to provide financing |

| | • | | Disruptive technology shifts and new business models |

| | • | | Any financial problems of either contract manufacturers or component suppliers could either limit supply or increase costs |

| | • | | Reservation of manufacturing capacity at our contract manufacturers by other companies, inside or outside of our industry, could either limit supply or increase costs |

We have experienced longer than normal lead times in the past.

See the risk factor above entitled “Our revenue for a particular period is difficult to predict, and a shortfall in revenue may harm our operating results.”

There can be no assurance

We believe that we may be faced with the following challenges in the future:

This Annual Report on Form 10-K, including this Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of [removed: 1933] [added: 1933, as amended] (the “Securities Act”) and the Securities Exchange Act of [removed: 1934] [added: 1934, as amended] (the “Exchange Act”).

Cisco designs and sells a broad range of technologies that [removed: have been powering] [added: power] the [removed: Internet since 1984.][added: Internet.]

We are integrating [removed: intent-based technologies] [added: our platforms] across networking, security, collaboration, applications and the cloud.

These [removed: technologies] [added: platforms] are designed to help our customers manage more users, devices and things connecting to their networks.

| | [added: | |] Three Months Ended | | | | | | | | | | | [added: | | | | | | |] Years Ended | | | | | | | | | | | [added: | | | | | | |]

| | [removed: July 25, 2020] | | [removed: |] [added: July 31, 2021] | [removed: July 27, 2019] | | | | [removed: Variance] | [added: July 25, 2020] | | [removed: July 25, 2020] | | | | July 27, 2019 | | | | [added: | |] Variance [added: in Dollars] | | |

| Revenue [removed: (1)] | [added: | |] $ | [removed: 12,154] [added: 13,126] | | | [added: | |] $ | [removed: 13,428] [added: 12,154] | | | [removed: (9] | [removed: )%] | [added: 8] | [added: | % | | | |] $ | [removed: 49,301] [added: 49,818] | | | [added: | |] $ | [removed: 51,904] [added: 49,301] | | | [removed: (5] | [removed: )%] | [added: 1] | [added: | % | | | |]

| Gross margin percentage | [removed: 63.2] | | [added: 63.6 | |] % | | [removed: 63.9] | | [added: 63.2 | |] % | | [removed: (0.7] | [removed: )] | [added: 0.4 | | |] pts | [removed: 64.3] | | [added: 64.0 | |] % | | [removed: 62.9] | | [added: 64.3 | |] % | | [removed: 1.4] | | [added: (0.3) | | |] pts | [added: | |]

| Research and development | [added: | |] $ | [removed: 1,565] [added: 1,713] | | | [added: | |] $ | [removed: 1,753] [added: 1,565] | | | [removed: (11] | [removed: )%] | [added: 9] | [added: | % | | | |] $ | [removed: 6,347] [added: 6,549] | | | [added: | |] $ | [removed: 6,577] [added: 6,347] | | | [removed: (3] | [removed: )%] | [added: 3] | [added: | % | | | |]

| Sales and marketing | [removed: $] | [removed: 2,218] | | | [removed: $] | [removed: 2,487] [added: 9,259] | | | [removed: (11] | [removed: )%] | | [removed: $] [added: 9,169] | [removed: 9,169] | | | [removed: $] | [added: |] 9,571 | | | [removed: (4] | [removed: )%] | | [added: 90 | | | | | | 1 | | % |]

| General and administrative | [added: | |] $ | [removed: 494] [added: 521] | | | [added: | |] $ | [removed: 566] [added: 494] | | | [removed: (13] | [removed: )%] | [added: 5] | [added: | % | | | |] $ | [removed: 1,925] [added: 2,152] | | | [added: | |] $ | [removed: 1,827] [added: 1,925] | | | [removed: 5] | [added: | 12 | |] % | | [added: | |]

| Total R&D, sales and marketing, general and administrative | [added: | |] $ | [removed: 4,277] [added: 4,682] | | | [added: | |] $ | [removed: 4,806] [added: 4,277] | | | [removed: (11] | [removed: )%] | [added: 9] | [added: | % | | | |] $ | [removed: 17,441] [added: 17,960] | | | [added: | |] $ | [removed: 17,975] [added: 17,441] | | | [removed: (3] | [removed: )%] | [added: 3] | [added: | % | | | |]

| Total as a percentage of revenue | [removed: 35.2] | | [added: 35.7 | |] % | | [removed: 35.8] | | [added: 35.2 | |] % | | [removed: (0.6] | [removed: )] | [added: 0.5 | | |] pts | [removed: 35.4] | | [added: 36.1 | |] % | | [removed: 34.6] | | [added: 35.4 | |] % | | [removed: 0.8] | | [added: 0.7 | | |] pts | [added: | |]

| Amortization of purchased intangible assets included in operating expenses | [added: | |] $ | [removed: 33] [added: 79] | | | [added: | |] $ | [removed: 38] [added: 33] | | | [removed: (13] | [removed: )%] | [added: 139] | [added: | % | | | |] $ | [removed: 141] [added: 215] | | | [added: | |] $ | [removed: 150] [added: 141] | | | [removed: (6] | [removed: )%] | [added: 52] | [added: | % | | | |]

| Restructuring and other charges included in operating expenses | [added: | |] $ | [removed: 127] [added: 8] | | | [added: | |] $ | [removed: 40] [added: 127] | | | [removed: 218] | [added: | (94) | |] % | | [added: | |] $ | [removed: 481] [added: 886] | | | [added: | |] $ | [removed: 322] [added: 481] | | | [removed: 49] | [added: | 84 | |] % | | [added: | |]

| Operating income as a percentage of revenue | [removed: 26.7] | | [removed: %] | | [removed: 27.5] | [removed: | % |] [added: 25.8] | [removed: (0.8] | [removed: )] [added: %] | [removed: pts] | [removed: 27.6] | | [removed: %] [added: 27.6] | | [removed: 27.4] [added: %] | | [removed: %] | | [removed: 0.2] [added: 27.4] | | [removed: pts] [added: %] |

| Interest and other income (loss), net | [added: | |] $ | [removed: 59] [added: 160] | | | [added: | |] $ | [removed: 14] [added: 59] | | | [removed: 321] | [added: | 171 | |] % | | [added: | |] $ | [removed: 350] [added: 429] | | | [added: | |] $ | [removed: 352] [added: 350] | | | [removed: (1] | [removed: )%] | [added: 23] | [added: | % | | | |]

| Income tax percentage [removed: (2)] | [removed: 20.3] | | [added: 19.4 | |] % | | [removed: 40.4] | | [added: 20.3 | |] % | | [removed: (20.1] | [removed: )] | [added: (0.9) | | |] pts | [removed: 19.7] | | [added: 20.1 | |] % | | [removed: 20.2] | | [added: 19.7 | |] % | | [removed: (0.5] | [removed: )] | [added: 0.4 | | |] pts | [added: | |]

| Net income [removed: (2)] | [added: | |] $ | [removed: 2,636] [added: 3,009] | | | [added: | |] $ | [removed: 2,206] [added: 2,636] | | | [removed: 19] | [added: | 14 | |] % | | [added: | |] $ | [removed: 11,214] [added: 10,591] | | | [added: | |] $ | [removed: 11,621] [added: 11,214] | | | [removed: (4] | [removed: )%] | [added: (6)] | [added: | % | | | |]

| Net income as a percentage of revenue | [removed: 21.7] | | [added: 22.9 | |] % | | [removed: 16.4] | | [added: 21.7 | |] % | | [removed: 5.3] | | [added: 1.2 | | |] pts | [removed: 22.7] | | [added: 21.3 | |] % | | [removed: 22.4] | | [added: 22.7 | |] % | | [removed: 0.3] | | [added: (1.4) | | |] pts | [added: | |]

| Earnings per share—diluted [removed: (2)] | [added: | |] $ | [removed: 0.62] [added: 0.71] | | | [added: | |] $ | [removed: 0.51] [added: 0.62] | | | [removed: 22] | [added: | 15 | |] % | | [added: | |] $ | [removed: 2.64] [added: 2.50] | | | [added: | |] $ | [removed: 2.61] [added: 2.64] | | | [removed: 1] | [added: | (5) | |] % | | [added: | |]

Fiscal [removed: 2020] [added: 2021] Compared with Fiscal [removed: 2019][added: 2020]

Total revenue [removed: decreased] [added: increased] by [removed: 5%] [added: 1%] compared with fiscal [removed: 2019.][added: 2020.]

[removed: Our product revenue declined in Infrastructure Platforms and Applications, partially offset by growth in Security, and we] [added: We] continued to make progress in the transition of our business model [removed: to] [added: delivering] increased software and subscriptions.

Within total revenue, product revenue [removed: decreased 8%] [added: increased by 10%] and service revenue increased by 3%.

Total gross margin increased by [removed: 1.4] [added: 0.4] percentage points, driven [removed: primarily] by productivity [removed: benefits] [added: benefits,] and [added: to a lesser extent, favorable] product [removed: mix] [added: mix,] partially offset by [removed: unfavorable impacts from pricing.][added: pricing erosion.]

As a percentage of revenue, research and development, sales and marketing, and general and administrative expenses, collectively, increased by [removed: 0.8] [added: 0.7] percentage points.

Operating income as a percentage of revenue increased by [removed: 0.2] [added: 0.5] percentage points.

[removed: EMEA] [added: In terms of our geographic segments,] revenue [added: from the Americas] decreased by [removed: $0.4] [added: $0.1 billion, EMEA revenue increased by $0.3] billion and revenue in our APJC segment [removed: decreased] [added: increased] by [removed: $0.5] [added: $0.4] billion.

From a customer market standpoint, we experienced product revenue [removed: declines across all customer segments, with the most significant declines] [added: growth] in the [removed: commercial] [added: public sector] and service provider [added: markets partially offset by declines in the enterprise and commercial] markets.

[removed: During] [added: As] fiscal [removed: 2020,] [added: 2021 progressed,] we saw [removed: a decline] [added: improvement] in business momentum in [removed: the commercial and enterprise] [added: our customer] markets, which we believe was [removed: significantly] related to [removed: weakness in the] [added: an improving] global macroeconomic environment.

From a product category perspective, total product revenue [removed: decreased 8%] [added: was flat] year over [removed: year.][added: year, driven by growth in revenue in Security of 7%, offset by a product revenue decline in Applications of 1%.]

[removed: These declines were] [added: Our product revenue reflected growth in Security,] partially offset by [removed: a product revenue increase] [added: declines] in [removed: Security of 12%.][added: Applications.]

For the fourth quarter of fiscal [removed: 2020,] [added: 2021,] as compared with the fourth quarter of fiscal [removed: 2019,] [added: 2020,] total revenue [removed: decreased] [added: increased] by [removed: 9%.][added: 8%.]

Within total revenue, product revenue [removed: decreased by 13%] [added: was flat] and service revenue [removed: was flat.][added: increased by 4%.]

With regard to our geographic segment performance, on a year-over-year basis, revenue in the Americas, EMEA and APJC [removed: decreased] [added: increased] by [removed: 12%,] [added: 8%,] 6% and [removed: 7%] [added: 13%,] respectively.

From a product category perspective, we experienced product revenue [removed: declines] [added: growth] in Infrastructure Platforms and [removed: Applications,] [added: Security,] offset by [removed: growth] [added: declines] in [removed: Security.][added: Applications.]

[removed: Total] [added: Product] gross margin decreased by [removed: 0.7] [added: 0.2] percentage [removed: points,] [added: points] driven by [removed: unfavorable] pricing [added: erosion,] partially offset by favorable product [removed: mix.][added: mix and lower productivity benefits.]

As a percentage of revenue, research and development, sales and marketing, and general and administrative expenses collectively [removed: decreased] [added: increased] by [removed: 0.6] [added: 0.5] percentage points.

Operating income as a percentage of revenue decreased by [removed: 0.8] [added: 1.8] percentage points.

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| | | | July 31, 2021 | | | | | | July 25, 2020 | | | | | | Variance | | | | | | July 31, 2021 | | | | | | July 25, 2020 | | | | | | Variance | | | | | |

| Operating income as a percentage of revenue | | | 27.2 | | % | | | | 26.7 | | % | | | | 0.5 | | | pts | | | 25.8 | | % | | | | 27.6 | | % | | | | (1.8) | | | pts | | |

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

In fiscal 2021, we delivered growth in revenue in a very challenging environment.

As customers have accelerated their digitization and cloud investments stemming from the COVID-19 pandemic, we focused on executing and innovating to support and assist that transition.

In the second half of fiscal 2021, we began to see customers prepare for office re-openings and hybrid work by increasing investments in their technologies.

Infrastructure Platforms was flat.

Fiscal 2021 had 53 weeks, compared with 52 weeks in fiscal 2020, thus our results for fiscal 2021 reflect an extra week compared with fiscal 2020.

We estimate that a majority of our revenue increase was attributable to the extra week.

In fiscal 2021, total software revenue was $15.0 billion across all product areas and service, an increase of 7%.

Within total software revenue, subscription revenue increased 15%.

Total gross margin decreased by 0.3 percentage points.

Product gross margin decreased by 0.2 percentage points, due to lower productivity benefits largely driven by ongoing costs related to supply chain constraints.

The effect of pricing erosion was moderate.

We have partnered with several of our key suppliers utilizing our volume purchasing and extending supply coverage, including revising supplier arrangements, to address supply chain challenges.

The total impact associated with the extra week on our cost of sales and operating expenses was approximately $150 million (excluding the impact of share-based compensation expense).

We incurred restructuring and other charges of $886 million, which resulted in a decrease of 6% in net income and a decrease of 5% in diluted earnings per share.

The “BRICM” countries experienced a product revenue decline of 6% in the aggregate, driven by a decrease in product revenue across each of the BRICM countries with the exception of India.

Infrastructure Platforms was flat.

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

We are moving towards a hybrid work model, giving our employees the flexibility to work offsite or at onsite Cisco locations.

Our strategy is to help our customers connect, secure, and automate in order to accelerate their digital agility in a cloud-first world.

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[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

We assess relevant contractual terms in our customer contracts to determine the transaction price.

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

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| Revenue: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total | | | | | | $ | 49,818 | | | | | $ | 49,301 | | | | | $ | 51,904 | | | | | $ | 517 | | | | | 1 | | % |

Our total revenue reflected growth in EMEA and APJC.

Americas was flat.

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

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(1) During the second quarter of fiscal 2019, we completed the sale of our SPVSS business.

As a result, revenue from this business will not recur in future periods.

Includes SPVSS business revenue of $168 million for fiscal 2019.

(2) Includes a $0.9 billion charge for the fourth quarter of fiscal 2019 and fiscal 2019 related to the Tax Act.

In fiscal 2020, we delivered growth in margins and earnings per share in a very challenging environment with the COVID-19 pandemic.

We saw broad-based weakening in the global macroeconomic environment during the fiscal year which impacted our commercial and enterprise markets.

We also experienced continuing weakness in the service provider market and emerging countries, and we expect ongoing uncertainty in these markets.

Diluted earnings per share increased by 1%, driven by a decrease in diluted share count of 199 million shares, partially offset by a decrease in net income of 4%.

In terms of our geographic segments, revenue from the Americas decreased by $1.6 billion, driven in large part by a product revenue decline in the United States.

The “BRICM” countries experienced a product revenue decline of 25% in the aggregate, driven by decreased product revenue in the emerging countries of India, China, Mexico and Brazil.

The decrease was driven by declines in revenue in Infrastructure Platforms and Applications of 10% and 4%, respectively.

The fourth quarter of fiscal 2019 included a $0.9 billion tax charge related to the Tax Act.

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| • | Announced a Cisco Capital Business Resiliency Program leveraging currently available funds to provide organizations with access to financing solutions to offer financial flexibility and support business continuity. This will help customers and partners access the technology they need now, invest for recovery, and defer most of the payments until early 2021. |

Our vision is to deliver highly secure, software-defined, automated and intelligent platforms for our customers.

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During fiscal 2018 and fiscal 2019, we recorded a total tax charge of $11.3 billion, consisting of $9 billion of tax expense for the U.S. transition tax on accumulated earnings of foreign subsidiaries, $1.2 billion of foreign withholding tax, and $1.1 billion of tax expense for DTA re-measurement as a result of the Tax Act.

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(1) Total revenue and product revenue not including the SPVSS business in the prior year decreased 5% and 7%, respectively.

Service revenue not including the SPVSS business in the prior year increased 3%.

Our total revenue reflected declines across each of our geographic segments.

The product revenue decrease was across all of our customer segments.

Product revenue in the APJC segment decreased by 11%, driven by declines across all of our customer segments.

This aligns our product categories with our evolving business model.

| Infrastructure Platforms | | $ | 27,122 | | | $ | 30,099 | | | $ | 28,286 | | | $ | (2,977 | ) | | (10 | )% |

| Security | | 3,154 | | | | 2,821 | | | | 2,388 | | | | 333 | | | | 12 | % |

| Other Products | | 135 | | | | 281 | | | | 999 | | | | (146 | | ) | | (52 | )% |

Infrastructure Platforms revenue decreased by 10%, or $3.0 billion.

Revenue from wireless products declined, although we saw revenue growth in our Meraki and WiFi6 products.

Revenue in our Security product category increased 12%, or $333 million, driven by higher sales of identity and access, advanced threat security, unified threat management and web security products.

The decrease in revenue from our Other Products category was primarily driven by a decrease in revenue from the SPVSS business which we divested in the second quarter of fiscal 2019.

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We had no outstanding hedging instruments for our available-for-sale debt investments as of July [removed: 25, 2020.][added: 31, 2021.]

Our available-for-sale debt investments are not leveraged as of July [removed: 25, 2020.][added: 31, 2021.]

The hypothetical fair values as of July [removed: 25, 2020] [added: 31, 2021] and July [removed: 27, 2019] [added: 25, 2020] are as follows (in millions):

| | [added: | |] VALUATION OF SECURITIES GIVEN AN INTEREST RATE DECREASE OF X BASIS POINTS | | | | | | [removed: FAIR VALUE AS] [added: | | | | | | | | | | | | FAIR VALUE AS] OF JULY 25, [removed: 2020] [added: 2020] | | [added: | | | |] VALUATION OF SECURITIES GIVEN AN INTEREST RATE INCREASE OF X BASIS POINTS | | | | | [added: | | | | | | | | | |]

| | [added: | |] (150 BPS) | | [added: | | | |] (100 BPS) | | [added: | | | |] (50 BPS) | | [added: | | | |] 50 BPS | | [added: | | | |] 100 BPS | | [added: | | | |] 150 BPS | | | [added: | | | | | |]

| Available-for-sale debt investments | [added: | |] $17,877 | | [added: | | | |] $17,788 | | [added: | | | |] $17,699 | | [removed: $17,610] | | [added: | | $17,610 | | | | | |] $17,522 | | [added: | | | |] $17,433 | | [added: | | | |] $17,344 | [added: | |]

| | [added: | |] VALUATION OF SECURITIES GIVEN AN INTEREST RATE DECREASE OF X BASIS POINTS | | | | | | [removed: FAIR] [added: | | | | | | | | | | | | FAIR] VALUE AS OF JULY [removed: 27, 2019] [added: 31, 2021] | | [added: | | | |] VALUATION OF SECURITIES GIVEN AN INTEREST RATE INCREASE OF X BASIS POINTS | | | | | [added: | | | | | | | | | |]

Financing Receivables As of July [removed: 25, 2020,] [added: 31, 2021,] our financing receivables had a carrying value of [removed: $10.8] [added: $9.3] billion, compared with [removed: $10.1] [added: $10.8] billion as of July [removed: 27, 2019.][added: 25, 2020.]

As of July [removed: 25, 2020,] [added: 31, 2021,] a hypothetical 50 BPS increase or decrease in market interest rates would change the fair value of our financing receivables by a decrease or increase of approximately $0.1 billion, respectively.

Debt As of July [removed: 25, 2020,] [added: 31, 2021,] we had [removed: $14.5] [added: $11.5] billion in principal amount of senior fixed-rate notes outstanding.

The carrying amount of the senior notes was [removed: $14.6] [added: $11.5] billion, and the related fair value based on market prices was [removed: $17.4] [added: $13.7] billion.

As of July [removed: 25, 2020,] [added: 31, 2021,] a hypothetical 50 BPS increase or decrease in market interest rates would change the fair value of the fixed-rate debt, excluding the [removed: $2.5] [added: $2.0] billion of hedged debt, by a decrease or increase of approximately [removed: $0.5] [added: $0.4] billion, respectively.

We [removed: may] hold equity securities for strategic purposes or to diversify our overall investment portfolio.

[removed: Non-marketable Equity and Other] [added: Privately Held] Investments These investments are recorded in other assets in our Consolidated Balance Sheets.

As of July [removed: 25, 2020,] [added: 31, 2021,] the total carrying amount of our [removed: non-marketable equity and other] investments [added: in privately held investments] was [removed: $1.3] [added: $1.5] billion, compared with [removed: $1.2] [added: $1.3] billion at July [removed: 27, 2019.][added: 25, 2020.]

Our evaluation of [removed: non-marketable equity and other] [added: privately held] investments is based on the fundamentals of the businesses invested in, including, among other factors, the nature of their technologies and potential for financial return.

| | [added: | |] July [removed: 25, 2020] [added: 31, 2021] | | | | | | | | [added: | | | |] July [removed: 27, 2019] [added: 25, 2020] | | | | | | | [added: | |]

| | [added: | |] Notional Amount | | | | [added: | |] Fair Value | | | | [added: | |] Notional Amount | | | | [added: | |] Fair Value | | |

| Forward contracts: | | | | | | | | | | | | | | | | [added: | | | | | | | |]

| Purchased | [added: | |] $ | 2,441 | | | [added: | |] $ | [removed: 1] [added: (14)] | | | [added: | |] $ | [removed: 2,239] [added: 2,441] | | | [added: | |] $ | [removed: 14] [added: 1] | |

| Sold | [added: | |] $ | [removed: 1,874] [added: 1,698] | | | [added: | |] $ | [removed: 4] [added: 12] | | | [added: | |] $ | [removed: 1,441] [added: 1,874] | | | [added: | |] $ | [removed: (14] [added: 4] | [removed: )] |

At July [removed: 25, 2020] [added: 31, 2021] and July [removed: 27, 2019,] [added: 25, 2020,] we had no option contracts outstanding.

In fiscal [removed: 2020,] [added: 2021,] foreign currency fluctuations, net of hedging, [removed: decreased] [added: increased] our combined R&D, sales and marketing, and G&A expenses by approximately [removed: $141] [added: $214] million, or [removed: 0.8%,] [added: 1.2%,] as compared with fiscal [removed: 2019.][added: 2020.]

The market risks associated with these foreign currency [removed: receivables, investments,] [added: receivables] and payables relate primarily to variances from our forecasted foreign currency transactions and balances.

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| Available-for-sale debt investments | | | $15,537 | | | | | | $15,427 | | | | | | $15,317 | | | | | | $15,206 | | | | | | $15,096 | | | | | | $14,986 | | | | | | $14,875 | | |

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| | | | (150 BPS) | | | | | | (100 BPS) | | | | | | (50 BPS) | | | | | | 50 BPS | | | | | | 100 BPS | | | | | | 150 BPS | | | | | | | | |

As of July 31, 2021, the total fair value of our investments in marketable equity securities was $137 million.

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

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| Available-for-sale debt investments | $22,017 | | $21,898 | | $21,779 | | $21,660 | | $21,541 | | $21,421 | | $21,302 |

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Cisco designs and sells a broad range of technologies that [removed: have been powering] [added: power] the [removed: Internet since 1984.][added: Internet.]

We are integrating [removed: intent-based technologies] [added: our platforms] across networking, security, collaboration, applications and the cloud.

These [removed: technologies] [added: platforms] are designed to help our customers manage more users, devices and things connecting to their networks.

Our customers include businesses of all sizes, public institutions, governments, and service [added: providers, including large webscale] providers.

[removed: We were incorporated in California in December 1984, and our] [added: Our] headquarters are in San Jose, California.

Through a link on the Investor Relations section of our website, we make available the following filings as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission [removed: (SEC):] [added: (SEC) at sec.gov:] our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports [added: or other information] filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act.

The information [removed: posted] [added: published] on our [added: website, or any other] website [added: referenced herein,] is not incorporated into this report.

Our customers are navigating change at an unprecedented pace and our mission is to [removed: inspire] [added: shape the future of the Internet by inspiring] new possibilities for them by helping transform their infrastructure, expand applications and analytics, address their security needs, and empower their teams.

We believe that our customers are looking for [removed: intent-based networks] [added: outcomes] that [added: are data-driven and] provide meaningful business value through automation, security, and analytics across private, hybrid, and multicloud environments.

We are also accelerating our efforts to enable the delivery of network functionality as a [removed: service.][added: service as our customers increasingly want to consume our technologies in flexible ways.]

[removed: Transforming Infrastructure][added: *Transforming Infrastructure*]

Our [removed: intent-based networking] strategy began with Software-Defined Access (SD-Access) technology, one of our leading enterprise [removed: architectures.][added: architectures and continued with the launch of our Catalyst 9000 series of switches.]

Since the initial launch, we have continued to transform our enterprise access portfolio by bringing together several technologies to form the only [removed: integrated, intent-based architecture,] [added: integrated architecture] with [added: built-in simplicity, automation and] security at the foundation.

This architecture is designed to [removed: help] [added: enable] our customers [added: to securely] connect their users and devices [added: to applications and data] over any network, to applications and data, no matter where they are.

We have introduced several innovations that extend our [removed: intent-based] networking capabilities to wireless and enterprise routing products, including [removed: SD-WAN] [added: Software-Defined Wide Area Network (SD-WAN)] and Internet of Things (IoT) edge platforms.

To further our innovation in this area, we are applying the latest [removed: technologies] [added: technologies,] such as machine learning and advanced [removed: analytics] [added: analytics,] to operate and enhance network capabilities.

These [removed: new] network product offerings are designed to enable customers to detect cybersecurity threats, [removed: for instance] [added: even] in encrypted traffic.

[removed: We] [added: As such, we] have [removed: created what is] [added: created,] in our [removed: view] [added: view,] the only network that is designed for security while maintaining privacy.

For the data center, our strategy is to deliver multicloud architectures that bring policy and operational [removed: consistency] [added: consistency,] regardless of where applications or data [removed: reside] [added: reside,] by extending our Application Centric Infrastructure (ACI) and our hyperconverged offerings.

We [removed: have made] [added: continue to make] significant investments in the development of software, silicon and optics — [removed: what] [added: which] we believe are the building blocks for the Internet for the [removed: future.][added: Future.]

We introduced Cisco Silicon One, a single unified silicon architecture, as well as the Cisco 8000 carrier-class router family built on [added: Cisco] Silicon One and our [removed: new] operating [removed: system.][added: system, Cisco IOS XR7.]

In our view, over the next several years, customers will be increasingly writing modern software applications that can run on any hybrid cloud, and will be adding billions of connections to their [removed: environment.][added: environments.]

[removed: They will need to be able to build] applications quickly, deploy them nearly anywhere, monitor experiences, and act in real time.

In our view, [removed: the network is] [added: networks are] increasingly critical to business success and we believe our customers will benefit from the insights and intelligence that we are making accessible through our highly differentiated platforms.

As [added: our customers’] people are an important competitive advantage [removed: for our customers,] [added: to them, their] teams need effective and simple ways to work better together and [added: to] interact with their customers to build better relationships and increase collaboration.

As an example, we believe our collaboration [removed: portfolio] [added: portfolio,] which includes our subscription-based Webex conferencing platform, is at the center of our customers’ strategy for enabling [added: their] teams to [removed: increase productivity.][added: be more productive and secure.]

As our core networking [removed: evolves,] [added: offerings evolve,] we expect we will add more common software features across our core networking platforms.

[removed: In terms of monetization, our] [added: We have various] software offerings [added: that] fall into the broad categories of subscription arrangements, including SaaS and term licenses, and perpetual licenses.

As part of the transformation of our business, we continued to make strides during fiscal [removed: 2020] [added: 2021] to develop and sell more software and subscription-based offerings.

We continued to make progress in shifting more of our business to software and subscriptions across our core networking portfolio, and in expanding our software [removed: offerings.]

We started with our Nexus 9000 series of switches for the data center, which along with [removed: ACI] [added: ACI,] provide enhancements in security, programmability and performance while lowering operating costs.

[removed: In fiscal 2020, we] [added: We recently] launched the Cisco 8000 portfolio, a family of high density, low power next generation routing platforms focused on our [removed: customers'] [added: customers’] evolution to support 100G and 400G connectivity speeds.

[removed: We expanded our capabilities to include network assurance and automation through] [added: Our] Cisco DNA and Cisco DNA Spaces location-based [removed: services.][added: services provide network assurance and automation for our customers’ wireless networks.]

Our Catalyst and Meraki [removed: Wi-Fi 6-based] [added: WiFi-6 based] access points are designed for high-density public or private environments to improve speed, performance, and capacity for wireless networking in both homes and enterprises.

Our Data Center portfolio incorporates various technologies and solutions including the Cisco Unified Computing System, [added: HyperFlex,] our hyperconverged offering, [removed: HyperFlex,] and software management [removed: capabilities] [added: capabilities,] which combine computing, networking, and storage infrastructure management and virtualization to deliver agility, [removed: simplicity] [added: simplicity,] and scale.

[added: Our] Applications [removed: include] [added: portfolio includes] our collaboration [removed: offerings (unified communications, Cisco TelePresence and conferencing)] [added: products] as well as [removed: AppDynamics] [added: our Applications Monitoring] and IoT software offerings.

[removed: We offer end-to-end] [added: These Webex] solutions [removed: which] can be [removed: delivered from the cloud, premise] [added: purchased on a stand-alone basis] or [removed: mixed environments, and which integrate] [added: as part of the Webex Suite that integrates] voice, video, [removed: and messaging on fixed] [added: messaging, calling, polling,] and [removed: mobile networks] [added: event solutions enabled] across a wide range of [removed: devices/endpoints] [added: devices and endpoints] such as mobile phones, tablets, desktop and laptop computers, video units, and collaboration appliances.

Our [added: analytics] applications monitor, correlate, analyze, and act on application performance and business performance data in real time.

This automated, cross-stack intelligence [removed: enables] [added: helps to enable] developers, IT operations, and business owners to make mission critical and strategic improvements.

We continue to invest in IoT as [added: we expect] the number of connected IoT devices [removed: continues] to [added: continue to] grow.

At our annual meeting of shareholders held on December 10, 2020, shareholders voted to approve changing our state of incorporation from California to Delaware.

The reincorporation became effective on January 25, 2021.

We are focusing on four customer priorities: Reimagine Applications, Power of Hybrid Work, Transforming Infrastructure and Secure the Enterprise.

*Reimagine Applications*

Customers will need to be able to build

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

We are continuing our commitment to deliver full stack observability from the application to the infrastructure to give our customers greater insights that enable faster, better decision making.

We are doing this through adding key elements to our portfolio, such as: infrastructure optimization with Intersight, network monitoring with technology from our acquisition of ThousandEyes, application performance monitoring with AppDynamics, as well as our security innovations.

*Power of Hybrid Work*

With the future of work being hybrid, we are focused on delivering highly secure collaboration experiences regardless of whether workers are physically at home or in the office.

During fiscal 2021, we have added a significant number of new features, including digital signage, touchless calls, room capacity alerts, and environmental sensors to help enable a safer return to the office.

We also extended our Webex suite of devices through our new desk camera and desk hub solutions.

In an increasingly digital and connected world, our customers are looking to modernize and transform their infrastructure.

We have continued to expand our SD-WAN offering, through our Cloud OnRamp integrations with several webscale providers to deliver predictable and highly secure application experiences.

We have also expanded our Cisco Silicon One platform from a routing focused solution to one which addresses the webscale switching market.

We also launched a new routed optical networking solution integrating our routers and pluggable optics from our recent acquisition of Acacia, which further helps to deliver cost savings to our customers.

*Secure the Enterprise*

With the rapid growth in modern applications, more distributed work environments, and increasing cyber-attacks, we believe every organization requires new or enhanced security architectures.

Our security strategy is focused on delivering a simple and

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

effective cyber-security architecture combining network, cloud and endpoint-based solutions that recognizes the critical importance of data privacy.

Our comprehensive security portfolio offers simplified protection for any workload on any cloud while minimizing the attack surface and automating security policies across an organization’s hybrid cloud footprint.

This extends to our secure access service edge (SASE) framework and Zero Trust architecture, where we have developed a cloud-delivered stack across Umbrella, a secure Internet gateway, Meraki, SD-WAN, and Viptela.

We are also delivering unified detection and response capabilities built on Cisco SecureX, our new cloud-native platform, which is a built-in platform that connects our Cisco Secure portfolio and our customers’ infrastructure.

Our strategy is to help our customers connect, secure, and automate in order to accelerate their digital agility in a cloud-first world.

To execute on our strategy and address our customer priorities, we are focusing on the following six strategic pillars:

- *Secure, Agile Networks* — Build networking solutions with built-in simplicity, security, agility and automation that can be consumed as-a-service.

- *Optimized Application Experiences* — Enabling greater speed, agility and scale of cloud-native applications.

- *Hybrid Work* — Deliver highly secure access, a safer workplace and collaboration experiences for the hybrid workforce.

- *Internet for the Future* — Transform connectivity by efficiently meeting the ever-growing demand for low-latency and higher speeds.

- *End-to-End Security* — Build simple, integrated, and high efficacy end-to-end security solutions, delivered on-premise or in the cloud.

- *Capabilities at the Edge* — Develop new capabilities for a distributed world while enhancing the developer experience and extending enterprise and carrier networks.

We have made the initial step with our new as-a-service portfolio, Cisco Plus, and our first offer, Cisco Plus hybrid cloud, which combines our data center compute, networking and storage portfolio.

Cisco Plus includes our plans to deliver networking-as-a-service, which is designed to unify networking, security and observability across access, wide area network (WAN), and cloud domains.

We will continue to invest in network-as-a-service offerings to provide our customers with flexibility in how they want to utilize our technologies.

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

offerings.

With the expansion of WiFi-6, we have expanded our portfolio to include multigigabit technology in our switches in order to manage higher bandwidth and manage network speed.

We are also expanding our Nexus 9000 portfolio with 400G speed capability in order to support growing bandwidth demands for our customers.

Our offerings within the Applications portfolio are primarily delivered as software-as-a-service, but also includes perpetual software licenses as well as hardware offerings.

Our vision is to deliver highly secure, software-defined, automated and intelligent platforms for our customers.

We are expanding our research and development (R&D) investments in certain product areas including cloud security, cloud collaboration, and application insights and analytics.

We are investing to optimize our product offerings for application to education, healthcare and other specific industries.

We are also making investments to enable us to increase automation and support the customer as the workplace changes.

In addition, we continue to remain focused on investments around Software-Defined Wide Area Network (SD-WAN), multicloud environments, 5G and WiFi-6, 400G speeds, optical networking, next generation silicon and artificial intelligence (AI).

We announced the initial development of new network product offerings featuring our intent-based networking technology with the launch of the Catalyst 9000 series of switches.

Our intent-based networking platform is designed to be intelligent, highly secure, powered by “intent” and informed by “context”— features aiming to constantly learn, adapt, automate and protect in order to optimize network operations and defend against an evolving cyber threat landscape.

Our intent-based networking offerings are designed to provide a single, highly secure network fabric that helps ensure policy consistency and network assurance; enables faster launches of new business services; and significantly improves issue resolution times while being open and extendable.

SD-Access, built on the principles of Cisco Digital Networking Architecture (DNA), provides what we see as a transformational shift in the building and managing of networks.

Our Catalyst 9000 series of switches represented the initial build in our campus portfolio of our intent-based networking capabilities and provide highly differentiated advancements in security, programmability, and performance while lowering operating costs through innovations in hardware and software.

Applications and Analytics

As our customers navigate the multicloud world, the need to connect new devices, protect their assets and monitor cloud consumption, they will require advisory cloud services that are provided in a consistent manner.

We are focused on enabling simple, intelligent, automated and highly secure clouds by delivering the infrastructure to navigate complex IT environments through our software and subscription-based offerings including Webex, Meraki cloud networking, and certain other Security and Application offerings.

We believe that customers and partners view our approach to the cloud as differentiated and unique, recognizing that we offer a solution for all cloud environments, including private, hybrid and public clouds.

Security is Foundational

We believe data is one of our customers' most strategic assets, and this data is increasingly distributed across every organization and ecosystem, on customer premises, at the edge of the network, and in the cloud.

As such, we believe that security is the top IT priority for many of our customers.

Our security strategy is focused on delivering an effective cybersecurity architecture combining network, cloud and endpoint-based solutions.

Our portfolio is designed to prevent, detect, and remediate a cyber-attack and to integrate security across networking domains.

Our intent is to enable our customers to secure their networks for a multicloud world by delivering a platform that continuously detects threats and verifies trust.

By combining a number of security technologies, we

are delivering an end-to-end, zero-trust architecture.

Additionally, through our offerings we help our customers shorten the time between threat detection and response.

Empowering Teams

We have various types of software arrangements including system software, on premise software, hybrid software and SaaS offerings.

We continue to expand on our intent-based infrastructure, which focuses on simplicity, automation, and security, allowing enterprises to manage and govern the interactions of users, devices and applications across their IT environments.

Our Applications offerings consist of both hardware and software-based solutions, including both software licenses and software-as-a-service.

Our Collaboration strategy is to make communications more effective, comprehensive, and less complex by creating innovative solutions through combining the power of software, hardware, and the network.

Our Cognitive Collaboration integrates AI and machine learning across the Webex portfolio, bringing intelligence and context to help our customers work smarter and increase productivity.

Our Webex Cloud Contact Center solution is designed to provide the agility, flexibility, scalability, security, efficiency and innovation in order to enable better customer experiences for businesses and their customers.

For on-premise collaboration markets, we launched multi-party Internet Protocol (IP) Phones to extend our reach into third-party call control platforms as well as a new series of telephony headsets which offer innovative integration with our market leading IP phone business.

Our offerings are powered by cloud-delivered threat intelligence based on our Cisco Talos technology.

All of these products are part of our integrated cybersecurity architecture that is designed to allow our customers to confront risks by continuously defending against threats and verifying trust, across their environments.

Regardless of size or industry, security continues to be a leading priority for our customers as they defend against ongoing ransomware and account breaches that represent risk of compromise and economic loss to their businesses.

We continue to integrate security across our portfolio as we believe our security solutions can help build a foundation of trust between users, devices, and applications; across clouds, networks, and mobile workers.

When targeted, our solutions help prevent attacks by continuously detecting and remediating the most advanced threats.

In fiscal 2020, we continued to invest in cloud-delivered security and extended our security platform with the launch of SecureX.

These investments included extending our zero-trust architecture with the on-going integration of Duo Security (“Duo”) and integrating Umbrella with our SD-WAN solutions to help secure our customer's network transformation toward a secure access service edge (SASE).

Building on our integrated architecture, we launched SecureX, a security platform that brings together the breadth of the Cisco Security portfolio helping our customers accelerate responsiveness across the security lifecycle.

Starting in fiscal 2019, in connection with the adoption of Accounting Standards Codification (ASC) 606, *Revenue from Contracts with Customers*, a new accounting standard related to revenue recognition, we started recognizing revenue from two-tier distributors on a sell-in method.

For a description of [removed: our material] pending legal [removed: proceedings,] [added: proceedings in which we are involved,] see Note 14 “Commitments and Contingencies - (f) Legal Proceedings” of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K, which is incorporated herein by reference.

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[removed: FORM 10-K][added: FORM 10-K]

| ☒ | [added: | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

For the fiscal year [removed: ended July 25, 2020][added: ended July 31, 2021]

| ☐ | [added: | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934 For] [added: 1934 For] the transition period from ____ to ____ | [added: | |]

Commission file [removed: number 0-18225][added: number 001-39940]

[removed: ][added: ]

| (State or other jurisdiction [removed: of incorporation] [added: of incorporation] or organization) | | | [added: | | | | | |] (IRS [removed: Employer Identification] [added: Employer Identification] No.) | [added: | |]

| 170 West Tasman Drive | | | [added: | | | | | |] 95134-1706 | [added: | |]

| San Jose, | [added: | |] California | | | [added: | | | | | |]

| (Address of principal executive offices) | | | [added: | | | | | |] (Zip Code) | [added: | |]

Registrant’s telephone number, including area code: [removed: (408) 526-4000][added: (408) 526-4000]

| Title of [removed: Each Class:] [added: each class:] | [added: | |] Trading Symbol(s) | [added: | |] Name of [removed: Each Exchange] [added: each exchange] on which [removed: Registered] [added: registered] | [added: | |]

| Common Stock, par value $0.001 per share | [added: | |] CSCO | [added: | |] The Nasdaq Stock Market LLC | [added: | |]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted [removed: and posted] pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit [removed: and post] such files).

See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting [removed: company”] [added: company,”] and “emerging growth company” in Rule 12b-2 of the Exchange Act.

| Large accelerated filer | | [added: | | | |] ☒ | | | [added: | | | | | |] Accelerated filer | | [added: | | | |] ☐ | [added: | |]

| Non-accelerated filer | | [added: | | | |] ☐ | [removed: (Do not check if a smaller reporting company)] | | [added: | | | | | |] Smaller reporting company | | [added: | | | |] ☐ | [added: | |]

| | | | | | [added: | | | | | | | | | |] Emerging growth company | | [added: | | | |] ☐ | [added: | |]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the [removed: Exchange] Act).

Aggregate market value of registrant’s common stock held by non-affiliates of the registrant, based upon the closing price of a share of the registrant’s common stock on January [removed: 24, 2020] [added: 22, 2021] as reported by the Nasdaq Global Select Market on that date: [removed: $207.1] [added: $189.0] billion

Number of shares of the registrant’s common stock outstanding as of [removed: August 28, 2020: 4,233,425,297][added: September 3, 2021: 4,217,735,917]

Portions of the registrant’s [added: definitive] Proxy Statement relating to the [removed: registrant’s 2020] [added: 2021] Annual Meeting of [removed: Shareholders,] [added: Stockholders,] to be held on December [removed: 10, 2020,] [added: 13, 2021,] are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated.

| | | [added: | | | |] PART I | | | [added: | | | | | |]

| Item 1. | | [removed: [Business](#sC6A2DDF973A65CACB26C9ED2E41C8371)] | | [removed: [1](#sC6A2DDF973A65CACB26C9ED2E41C8371)] | [added: | [Business](#id9635782a2d344aaabc654401a5ad580_16) | | | | | | [1](#id9635782a2d344aaabc654401a5ad580_16) | | |]

| Item 1A. | | [added: | | | |] [Risk [removed: Factors](#sD3A9320365D6543BA996C2B287FBE124)] [added: Factors](#id9635782a2d344aaabc654401a5ad580_19)] | | [removed: [11](#sD3A9320365D6543BA996C2B287FBE124)] | [added: | | | [13](#id9635782a2d344aaabc654401a5ad580_19) | | |]

| Item 1B. | | [added: | | | |] [Unresolved Staff [removed: Comments](#s62088710E9555E47973994684F25AB3F)] [added: Comments](#id9635782a2d344aaabc654401a5ad580_22)] | | [removed: [29](#s62088710E9555E47973994684F25AB3F)] | [added: | | | [27](#id9635782a2d344aaabc654401a5ad580_22) | | |]

| Item 2. | | [removed: [Properties](#s115E4C43A5335AA1AA2372206BAD0282)] | | [removed: [29](#s115E4C43A5335AA1AA2372206BAD0282)] | [added: | [Properties](#id9635782a2d344aaabc654401a5ad580_25) | | | | | | [27](#id9635782a2d344aaabc654401a5ad580_25) | | |]

| Item 3. | | [added: | | | |] [Legal [removed: Proceedings](#s1C3A32236CFB5629B333C3F9129EAE52)] [added: Proceedings](#id9635782a2d344aaabc654401a5ad580_28)] | | [removed: [29](#s1C3A32236CFB5629B333C3F9129EAE52)] | [added: | | | [27](#id9635782a2d344aaabc654401a5ad580_28) | | |]

| Item 4. | | [added: | | | |] [Mine Safety [removed: Disclosures](#s9F8C494EF230502B885D6B6FFA63183D)] [added: Disclosures](#id9635782a2d344aaabc654401a5ad580_31)] | | [removed: [29](#s9F8C494EF230502B885D6B6FFA63183D)] | [added: | | | [27](#id9635782a2d344aaabc654401a5ad580_31) | | |]

| | | [added: | | | |] PART II | | | [added: | | | | | |]

| Item 5. | | [added: | | | |] [Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity [removed: Securities](#s644F90876DB65FE29BBC21784770F607)] [added: Securities](#id9635782a2d344aaabc654401a5ad580_37)] | | [removed: [30](#s644F90876DB65FE29BBC21784770F607)] | [added: | | | [28](#id9635782a2d344aaabc654401a5ad580_37) | | |]

| Item 7. | | [added: | | | |] [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s676B5A64BA375AA58E84A8255899E7CF)] [added: Operations](#id9635782a2d344aaabc654401a5ad580_46)] | | [removed: [33](#s676B5A64BA375AA58E84A8255899E7CF)] | [added: | | | [30](#id9635782a2d344aaabc654401a5ad580_46) | | |]

| Item 7A. | | [added: | | | |] [Quantitative and Qualitative Disclosures About Market [removed: Risk](#sB73061CF342C56DCA1F66767F69C90B1)] [added: Risk](#id9635782a2d344aaabc654401a5ad580_79)] | | [removed: [53](#sB73061CF342C56DCA1F66767F69C90B1)] | [added: | | | [50](#id9635782a2d344aaabc654401a5ad580_79) | | |]

| Item 8. | | [added: | | | |] [Financial Statements and Supplementary [removed: Data](#sD0B87C5A7BD6508D864E8371FEFCD62E)] [added: Data](#id9635782a2d344aaabc654401a5ad580_82)] | | [removed: [55](#sD0B87C5A7BD6508D864E8371FEFCD62E)] | [added: | | | [52](#id9635782a2d344aaabc654401a5ad580_82) | | |]

| Item 9. | | [added: | | | |] [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s18E1F84FF68C518D90D088A79ABD7FD7)] [added: Disclosure](#id9635782a2d344aaabc654401a5ad580_217)] | | [removed: [104](#s18E1F84FF68C518D90D088A79ABD7FD7)] | [added: | | | [100](#id9635782a2d344aaabc654401a5ad580_217) | | |]

| Item 9A. | | [added: | | | |] [Controls and [removed: Procedures](#s4D299161BAE55BC9A7CDE8D6AEA50689)] [added: Procedures](#id9635782a2d344aaabc654401a5ad580_220)] | | [removed: [104](#s4D299161BAE55BC9A7CDE8D6AEA50689)] | [added: | | | [100](#id9635782a2d344aaabc654401a5ad580_220) | | |]

| Item 9B. | | [added: | | | |] [Other [removed: Information](#s522E7FC888FE5E24B23274068BB0F5DA)] [added: Information](#id9635782a2d344aaabc654401a5ad580_223)] | | [removed: [105](#s522E7FC888FE5E24B23274068BB0F5DA)] | [added: | | | [101](#id9635782a2d344aaabc654401a5ad580_223) | | |]

| | | [added: | | | |] PART III | | | [added: | | | | | |]

| Item 10. | | [added: | | | |] [Directors, Executive Officers and Corporate [removed: Governance](#s2E34DBA408525DB79698877051200D6F)] [added: Governance](#id9635782a2d344aaabc654401a5ad580_229)] | | [removed: [105](#s2E34DBA408525DB79698877051200D6F)] | [added: | | | [101](#id9635782a2d344aaabc654401a5ad580_229) | | |]

| Item 11. | | [added: | | | |] [Executive [removed: Compensation](#s7FDB786F5FD75DDF854DE0E763114B66)] [added: Compensation](#id9635782a2d344aaabc654401a5ad580_232)] | | [removed: [105](#s7FDB786F5FD75DDF854DE0E763114B66)] | [added: | | | [101](#id9635782a2d344aaabc654401a5ad580_232) | | |]

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

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[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

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| Item 6. | | | | | | [\[Reserved\]](#id9635782a2d344aaabc654401a5ad580_43) | | | | | | [29](#id9635782a2d344aaabc654401a5ad580_43) | | |

| | | | | | | [Signatures](#id9635782a2d344aaabc654401a5ad580_259) | | | | | | [105](#id9635782a2d344aaabc654401a5ad580_259) | | |

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

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| Item 6. | | [Selected Financial Data](#s80F4FF8C7D18549DBB24FC9106F6F868) | | [32](#s80F4FF8C7D18549DBB24FC9106F6F868) |

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| Americas | | [added: | | | |] EMEA | | [added: | | | |] APJC | [added: | |]

| San Jose, California, USA | | [added: | | | |] Amsterdam, Netherlands | | [added: | | | |] Singapore | [added: | |]

In addition to our headquarters site, we own additional sites in the United States, which include facilities in the surrounding areas of San Jose, California; Research Triangle Park, North Carolina; Richardson, Texas; [removed: Lawrenceville, Georgia;] and [removed: Boxborough, Massachusetts.][added: Lawrenceville, Georgia.]

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[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

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[removed: | (b) | None. |][added: (b)None.]

[removed: | (c) | Issuer] [added: (c)Issuer] purchases of equity securities (in millions, except per-share amounts): [removed: |]

| Period | [removed: Total Number of Shares Purchased] | | [added: Total Number of Shares Purchased] | [added: | | | | |] Average Price [removed: Paid per] [added: Paid per] Share | | | | [added: | |] Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | | [added: | | |] Approximate Dollar Value of [removed: Shares That] [added: Shares That] May Yet Be [removed: Purchased Under] [added: Purchased Under] the Plans or Programs | | |

| Total | [removed: —] | | [added: 15] | [added: | | | | |] $ | [removed: —] [added: 53.30] | | | [removed: —] | | [added: 15] | | | | [added: | | | | |]

As of July [removed: 25, 2020,] [added: 31, 2021,] the remaining authorized amount for stock repurchases under this [removed: program, including the additional authorization,] [added: program] is approximately [removed: $10.8] [added: $7.9] billion with no termination date.

*The information contained in this Stock Performance Graph section shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, [added: as amended (the “Exchange Act”),] except to the extent that Cisco specifically incorporates it by reference into a document filed under the Securities Act of [removed: 1933] [added: 1933, as amended,] or the [removed: Securities] Exchange [removed: Act of 1934.*][added: Act.*]

The following graph shows a five-year comparison of the cumulative total [removed: shareholder] [added: stockholder] return on Cisco common stock with the cumulative total returns of the S&P 500 Index, and the S&P Information Technology Index.

[removed: Shareholder] [added: Stockholder] returns over the indicated period are based on historical data and should not be considered indicative of future [removed: shareholder] [added: stockholder] returns.

[removed: ][added: ]

| | [removed: July 2015] | | [removed: | |] July 2016 | | | | [added: | |] July 2017 | | | | [added: | |] July 2018 | | | | [added: | |] July 2019 | | | | [added: | |] July 2020 | | | [added: | | | July 2021 | | |]

(a)Cisco common stock is traded on the Nasdaq Global Select Market under the symbol CSCO.

There were 36,408 registered stockholders as of September 3, 2021.

| May 2, 2021 to May 29, 2021 | | | 5 | | | | | | $ | 52.50 | | | | | 5 | | | | | | $ | 8,477 | |

| May 30, 2021 to June 26, 2021 | | | 4 | | | | | | $ | 53.50 | | | | | 4 | | | | | | $ | 8,240 | |

| June 27, 2021 to July 31, 2021 | | | 6 | | | | | | $ | 53.82 | | | | | 6 | | | | | | $ | 7,940 | |

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

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| Cisco Systems, Inc. | | | $ | 100.00 | | | | | $ | 106.89 | | | | | $ | 149.02 | | | | | $ | 203.37 | | | | | $ | 172.26 | | | | | $ | 212.11 | |

| S&P 500 | | | $ | 100.00 | | | | | $ | 116.13 | | | | | $ | 134.99 | | | | | $ | 147.86 | | | | | $ | 160.26 | | | | | $ | 222.51 | |

| S&P Information Technology | | | $ | 100.00 | | | | | $ | 130.17 | | | | | $ | 168.84 | | | | | $ | 196.81 | | | | | $ | 254.67 | | | | | $ | 374.44 | |

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| (a) | Cisco common stock is traded on the Nasdaq Global Select Market under the symbol CSCO. Information regarding quarterly cash dividends declared on Cisco’s common stock during fiscal 2020 and 2019 may be found in Supplementary Financial Data on page 104 of this report. There were 37,920 registered shareholders as of August 28, 2020. |

| | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| April 26, 2020 to May 23, 2020 | — | | | $ | — | | | — | | | $ | 10,841 | |

| May 24, 2020 to June 20, 2020 | — | | | $ | — | | | — | | | $ | 10,841 | |

| June 21, 2020 to July 25, 2020 | — | | | $ | — | | | — | | | $ | 10,841 | |

| | | | | | | | | | | | | | | | | | | | | | | | |

| Cisco Systems, Inc. | $ | 100.00 | | | $ | 111.26 | | | $ | 118.93 | | | $ | 165.80 | | | $ | 226.27 | | | $ | 191.66 | |

| S&P 500 | $ | 100.00 | | | $ | 106.87 | | | $ | 124.10 | | | $ | 144.26 | | | $ | 158.02 | | | $ | 171.27 | |

| S&P Information Technology | $ | 100.00 | | | $ | 110.10 | | | $ | 143.32 | | | $ | 185.90 | | | $ | 216.69 | | | $ | 280.40 | |

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

| | | | | | |

| --- | --- | --- | --- | --- | --- |

Five Years Ended July 25, 2020 (in millions, except per-share amounts)

| | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Years Ended | July 25, 2020 | | | | July 27, 2019 (1)(2) | | | | July 28, 2018 (1)(3) | | | | July 29, 2017 | | | | July 30, 2016 (4)(5) | | |

| Revenue | $ | 49,301 | | | $ | 51,904 | | | $ | 49,330 | | | $ | 48,005 | | | $ | 49,247 | |

| Net income | $ | 11,214 | | | $ | 11,621 | | | $ | 110 | | | $ | 9,609 | | | $ | 10,739 | |

| Net income per share—basic | $ | 2.65 | | | $ | 2.63 | | | $ | 0.02 | | | $ | 1.92 | | | $ | 2.13 | |

| Net income per share—diluted | $ | 2.64 | | | $ | 2.61 | | | $ | 0.02 | | | $ | 1.90 | | | $ | 2.11 | |

| Shares used in per-share calculation—basic | 4,236 | | | | 4,419 | | | | 4,837 | | | | 5,010 | | | | 5,053 | | |

| Shares used in per-share calculation—diluted | 4,254 | | | | 4,453 | | | | 4,881 | | | | 5,049 | | | | 5,088 | | |

| Cash dividends declared per common share | $ | 1.42 | | | $ | 1.36 | | | $ | 1.24 | | | $ | 1.10 | | | $ | 0.94 | |

| Net cash provided by operating activities | $ | 15,426 | | | $ | 15,831 | | | $ | 13,666 | | | $ | 13,876 | | | $ | 13,570 | |

| | July 25, 2020 | | | | July 27, 2019 | | | | July 28, 2018 | | | | July 29, 2017 | | | | July 30, 2016 | | |

| Cash and cash equivalents and investments | $ | 29,419 | | | $ | 33,413 | | | $ | 46,548 | | | $ | 70,492 | | | $ | 65,756 | |

| Total assets | $ | 94,853 | | | $ | 97,793 | | | $ | 108,784 | | | $ | 129,818 | | | $ | 121,652 | |

| Debt | $ | 14,583 | | | $ | 24,666 | | | $ | 25,569 | | | $ | 33,717 | | | $ | 28,643 | |

| Deferred revenue | $ | 20,446 | | | $ | 18,467 | | | $ | 19,685 | | | $ | 18,494 | | | $ | 16,472 | |

| | |

| --- | --- |

| (1) | In the second quarter of fiscal 2019, we completed the sale of the Service Provider Video Software Solutions (SPVSS) business. As a result, revenue from the SPVSS business did not recur in future periods. Revenue for the years ended July 27, 2019 and July 28, 2018 include SPVSS revenue of $168 million and $903 million, respectively. |

| (2) | In connection with the Tax Cuts and Jobs Act (“the Tax Act”), we recorded an $872 million charge which was the reversal of the previously recorded benefit associated with the U.S. taxation of deemed foreign dividends recorded in fiscal 2018 as a result of a retroactive final U.S. Treasury regulation issued during the fourth quarter of fiscal 2019. |

| (3) | In fiscal 2018, Cisco recorded a provisional tax expense of $10.4 billion related to the enactment of the Tax Act comprised of $8.1 billion of U.S. transition tax, $1.2 billion of foreign withholding tax, and $1.1 billion re-measurement of net deferred tax assets and liabilities (DTA). |

| (4) | In the second quarter of fiscal 2016, Cisco completed the sale of the SP Video CPE Business. As a result, revenue from this portion of the Service Provider Video product category did not recur in future periods. The sale resulted in a pre-tax gain of $253 million net of certain transaction costs. The year ended July 30, 2016 includes SP Video CPE Business revenue of $504 million. |

| (5) | In fiscal 2016 Cisco recognized total tax benefits of $593 million for the following: i) the Internal Revenue Service (IRS) and Cisco settled all outstanding items related to Cisco’s federal income tax returns for fiscal 2008 through fiscal 2010, as a result of which Cisco recorded a net tax benefit of $367 million; and ii) the Protecting Americans from Tax Hikes Act of 2015 reinstated the U.S. federal R&D tax credit permanently, as a result of which Cisco recognized tax benefits of $226 million. |

At the beginning of fiscal 2019, we adopted Accounting Standards Codification (ASC) 606, a new accounting standard related to revenue recognition, using the modified retrospective method to those contracts that were not completed as of July 28, 2018.

No other factors materially affected the comparability of the information presented above.

[removed: [Index] [added: [Index] to Consolidated Financial [removed: Statements](#s5A88202C116B5D5A869EDB6851529863)][added: Statements](#id9635782a2d344aaabc654401a5ad580_85)]

| [Report of Independent Registered Public Accounting [removed: Firm](#sD23227B584055C68BA09A6609FD83F08)] [added: Firm](#id9635782a2d344aaabc654401a5ad580_88)] | [removed: [56](#sD23227B584055C68BA09A6609FD83F08)] | [added: | [53](#id9635782a2d344aaabc654401a5ad580_88) | | |]

| [Reports of [removed: Management](#s46108B562DA2572187FFC0B6AD999DC2)] [added: Management](#id9635782a2d344aaabc654401a5ad580_91)] | [removed: [58](#s46108B562DA2572187FFC0B6AD999DC2)] | [added: | [55](#id9635782a2d344aaabc654401a5ad580_91) | | |]

| [Consolidated Balance [removed: Sheets](#sD57F0394241F53398CAEBAA5C9AE3E99)] [added: Sheets](#id9635782a2d344aaabc654401a5ad580_94)] | [removed: [59](#sD57F0394241F53398CAEBAA5C9AE3E99)] | [added: | [56](#id9635782a2d344aaabc654401a5ad580_94) | | |]

| [Consolidated Statements of [removed: Operations](#sA1A3D5FA69255259A41F8C2F18D695F8)] [added: Operations](#id9635782a2d344aaabc654401a5ad580_100)] | [removed: [60](#sA1A3D5FA69255259A41F8C2F18D695F8)] | [added: | [57](#id9635782a2d344aaabc654401a5ad580_100) | | |]

[removed: | [Consolidated] [added: Consolidated] Statements of Comprehensive [removed: Income (Loss)](#s4BC709B83ABE5B599F92E19F81F5CC93) | [61](#s4BC709B83ABE5B599F92E19F81F5CC93) |][added: Income]

| [Consolidated Statements of Cash [removed: Flows](#s09015FE791DA5F8995782A4B97E7144B)] [added: Flows](#id9635782a2d344aaabc654401a5ad580_109)] | [removed: [62](#s09015FE791DA5F8995782A4B97E7144B)] | [added: | [59](#id9635782a2d344aaabc654401a5ad580_109) | | |]

| [Consolidated Statements of [removed: Equity](#sC57278C4F9E45E678FA06F854FC77187)] [added: Equity](#id9635782a2d344aaabc654401a5ad580_112)] | [removed: [63](#sC57278C4F9E45E678FA06F854FC77187)] | [added: | [60](#id9635782a2d344aaabc654401a5ad580_112) | | |]

| [Notes to Consolidated Financial [removed: Statements](#sDEAE4330A20057949D807EE316AAF941)] [added: Statements](#id9635782a2d344aaabc654401a5ad580_118)] | [removed: [64](#sDEAE4330A20057949D807EE316AAF941)] | [added: | [61](#id9635782a2d344aaabc654401a5ad580_118) | | |]

| [Note 1: Basis of [removed: Presentation](#s41A89AB93FFB5230A408CB6500843C94)] [added: Presentation](#id9635782a2d344aaabc654401a5ad580_121)] | [removed: [64](#s41A89AB93FFB5230A408CB6500843C94)] | [added: | [61](#id9635782a2d344aaabc654401a5ad580_121) | | |]

[removed: | [Note 2: Summary] [added: 2.Summary] of Significant Accounting [removed: Policies](#s3BD0EBF44C5058C99E3D86E8FA3BA071) | [64](#s3BD0EBF44C5058C99E3D86E8FA3BA071) |][added: Policies]

| [Note 3: [removed: Revenue](#sB4CF0B78368551618DEF351CF2FD6159)] [added: Revenue](#id9635782a2d344aaabc654401a5ad580_130)] | [removed: [71](#sB4CF0B78368551618DEF351CF2FD6159)] | [added: | [67](#id9635782a2d344aaabc654401a5ad580_130) | | |]

[removed: | [Note 4: Acquisitions] [added: 4.Acquisitions] and [removed: Divestitures](#s9A56555D98125D6DB121A530F852FAE5) | [72](#s9A56555D98125D6DB121A530F852FAE5) |][added: Divestitures]

[removed: | [Note 5: Goodwill] [added: 5.Goodwill] and Purchased Intangible [removed: Assets](#sE226DAF1ED6553EC99E37B6E413A33E4) | [73](#sE226DAF1ED6553EC99E37B6E413A33E4) |][added: Assets]

[removed: | [Note 6: Restructuring] [added: 6.Restructuring] and Other [removed: Charges](#s7E009670C024560FADF7B6B6C70823B6) | [75](#s7E009670C024560FADF7B6B6C70823B6) |][added: Charges]

| [Note 7: Balance [removed: Sheet Details](#s8B4732B9104A5EFFA5C83DEB0E00B6C6)] [added: Sheet](#id9635782a2d344aaabc654401a5ad580_151) [and Other](#id9635782a2d344aaabc654401a5ad580_151) [Details](#id9635782a2d344aaabc654401a5ad580_151)] | [removed: [76](#s8B4732B9104A5EFFA5C83DEB0E00B6C6)] | [added: | [72](#id9635782a2d344aaabc654401a5ad580_151) | | |]

| [Note 8: [removed: Leases](#s533490e77b2a43988582f9a99d6fe2a8)] [added: Leases](#id9635782a2d344aaabc654401a5ad580_157)] | [removed: [77](#s533490e77b2a43988582f9a99d6fe2a8)] | [added: | [73](#id9635782a2d344aaabc654401a5ad580_157) | | |]

| [Note 9: Financing [removed: Receivables](#s1209CC77C84E512C94645DDB3BD1A2EB)] [added: Receivables](#id9635782a2d344aaabc654401a5ad580_163)] | [removed: [78](#s1209CC77C84E512C94645DDB3BD1A2EB)] | [added: | [75](#id9635782a2d344aaabc654401a5ad580_163) | | |]

| [Note 10: Available-for-Sale Debt and Equity [removed: Investments](#s3CB392AF5A0C5781949D4262EAED7764)] [added: Investments](#id9635782a2d344aaabc654401a5ad580_169)] | [removed: [81](#s3CB392AF5A0C5781949D4262EAED7764)] | [added: | [78](#id9635782a2d344aaabc654401a5ad580_169) | | |]

| [Note 11: Fair [removed: Value](#s67B9B3BADF715F918A3B71069127061B)] [added: Value](#id9635782a2d344aaabc654401a5ad580_172)] | [removed: [84](#s67B9B3BADF715F918A3B71069127061B)] | [added: | [80](#id9635782a2d344aaabc654401a5ad580_172) | | |]

| [Note 12: [removed: Borrowings](#s6A115F1FDC2F5998A7FF7D0B7FE81EE7)] [added: Borrowings](#id9635782a2d344aaabc654401a5ad580_175)] | [removed: [85](#s6A115F1FDC2F5998A7FF7D0B7FE81EE7)] | [added: | [81](#id9635782a2d344aaabc654401a5ad580_175) | | |]

| [Note 13: Derivative [removed: Instruments](#sB224958B2C3659AEB99088EE6EA32638)] [added: Instruments](#id9635782a2d344aaabc654401a5ad580_181)] | [removed: [87](#sB224958B2C3659AEB99088EE6EA32638)] | [added: | [83](#id9635782a2d344aaabc654401a5ad580_181) | | |]

| [removed: [Note 14:] Commitments and [removed: Contingencies](#s3CB1E244EA4554A992DF0613D4CBA410)] [added: contingencies (Note 14)] | [removed: [90](#s3CB1E244EA4554A992DF0613D4CBA410)] | [added: | | | | | | | | | |]

| [Note 16: Employee Benefit [removed: Plans](#s285064EA3BB05CA8BD06F3527DD05137)] [added: Plans](#id9635782a2d344aaabc654401a5ad580_196)] | [removed: [94](#s285064EA3BB05CA8BD06F3527DD05137)] | [added: | [90](#id9635782a2d344aaabc654401a5ad580_196) | | |]

| [Note 17: Comprehensive Income [removed: (Loss)](#sA9C09891031B5B5F8F5E925B973D622F)] [added: (Loss)](#id9635782a2d344aaabc654401a5ad580_202)] | [removed: [98](#sA9C09891031B5B5F8F5E925B973D622F)] | [added: | [94](#id9635782a2d344aaabc654401a5ad580_202) | | |]

| [Note 18: Income [removed: Taxes](#s974D52C554E1546785194A38918A5ADC)] [added: Taxes](#id9635782a2d344aaabc654401a5ad580_205)] | [removed: [99](#s974D52C554E1546785194A38918A5ADC)] | [added: | [95](#id9635782a2d344aaabc654401a5ad580_205) | | |]

| [Note 19: Segment Information and Major [removed: Customers](#s3D332447E86C55F4BBE57FE384804DFF)] [added: Customers](#id9635782a2d344aaabc654401a5ad580_208)] | [removed: [101](#s3D332447E86C55F4BBE57FE384804DFF)] | [added: | [97](#id9635782a2d344aaabc654401a5ad580_208) | | |]

| [removed: [Note 20:] Net [removed: Income] [added: income] per [removed: Share](#sB87226DE8EF2573E9AE19148507046A9)] [added: share:] | [removed: [103](#sB87226DE8EF2573E9AE19148507046A9)] | [added: | | | | | | | | | | | | | | | |]

To the Board of Directors and [removed: Shareholders] [added: Stockholders] of Cisco Systems, Inc.

We have audited the accompanying consolidated balance sheets of Cisco Systems, Inc. and its subsidiaries (the “Company”) as of July [removed: 25, 2020] [added: 31, 2021] and July [removed: 27, 2019,] [added: 25, 2020,] and the related consolidated statements of operations, comprehensive [removed: income (loss),] [added: income,] equity and cash flows for each of the three years in the period ended July [removed: 25, 2020,] [added: 31, 2021,] including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended July [removed: 25, 2020] [added: 31, 2021] appearing under Item 15 (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of July [removed: 25, 2020,] [added: 31, 2021,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of July [removed: 25, 2020] [added: 31, 2021] and July [removed: 27, 2019,] [added: 25, 2020,] and the results of its operations and its cash flows for each of the three years in the period ended July [removed: 25, 2020] [added: 31, 2021] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of July [removed: 25, 2020,] [added: 31, 2021,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.

In order to determine the transaction price, management may be required to estimate variable consideration when determining the amount [removed: and timing] of revenue [removed: recognition.][added: to recognize.]

The principal considerations for our determination that performing procedures relating to the identification of contractual terms in [added: certain] customer arrangements [removed: to determine the transaction price] is a critical audit matter are [removed: there was] [added: the] significant judgment by management in identifying contractual terms due to the volume and customized nature of the Company’s customer arrangements.

This in turn led to significant [added: auditor judgment and] effort in performing [removed: our audit] procedures [removed: which were designed] to evaluate whether the contractual terms used in the determination of the transaction price and the timing of revenue recognition were appropriately identified and determined by [removed: management and to evaluate the reasonableness of management’s estimates.][added: management.]

We are committed to enhancing [removed: shareholder] [added: stockholder] value and fully understand and embrace our fiduciary oversight responsibilities.

Based on this evaluation, management concluded that Cisco’s internal control over financial reporting was effective as of July [removed: 25, 2020.][added: 31, 2021.]

| [removed: Chairman] [added: Chair] and Chief Executive Officer | | [added: | | | |] Executive Vice President and Chief Financial Officer | [added: | |]

| | [added: | | | | |] July [added: 31, 2021 | | | | | | July] 25, [removed: 2020] [added: 2020] | | | | [added: | |] July 27, 2019 | | |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| [Note 5: Goodwill and Purchased Intangible Assets](#id9635782a2d344aaabc654401a5ad580_142) | | | [70](#id9635782a2d344aaabc654401a5ad580_142) | | |

| [Note 15: Stockholders’ Equity](#id9635782a2d344aaabc654401a5ad580_190) | | | [90](#id9635782a2d344aaabc654401a5ad580_190) | | |

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

For the year ended July 31, 2021, the Company’s total revenue was $49.8 billion.

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

| /S/ CHARLES H. ROBBINS | | | | | | /S/ R. SCOTT HERREN | | |

| Charles H. Robbins | | | | | | R. Scott Herren | | |

| September 9, 2021 | | | | | | September 9, 2021 | | |

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

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[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

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| | | | 5 | | | | | | 8 | | | | | | (3) | | |

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Acquisitions, net of cash and cash equivalents acquired and divestitures | | | (7,038) | | | | | | (327) | | | | | | (2,175) | | |

| | | | | | | | | | | | | | | | | | |

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Net income | | | | | | | | | | | | | | | 10,591 | | | | | | | | | | | | 10,591 | | |

| Repurchase of common stock | | | (64) | | | | | | (625) | | | | | | (2,277) | | | | | | | | | | | | (2,902) | | |

| BALANCE AT JULY 31, 2021 | | | 4,217 | | | | | | $ | 42,346 | | | | | $ | (654) | | | | | $ | (417) | | | | | $ | 41,275 | |

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

At our annual meeting of shareholders held on December 10, 2020, shareholders voted to approve changing our state of incorporation from California to Delaware.

The reincorporation became effective January 25, 2021.

For certain of these securities, we have elected to apply the net asset value (NAV) practical expedient.

The NAV is the estimated fair value of these investments.

- *Equity method investments* are securities we do not control, but are able to exert significant influence over the investee.

(d) Impairments of Investments For our available-for-sale debt securities in an unrealized loss position, we determine whether a credit loss exists.

In this assessment, among other factors, we consider the extent to which the fair value is less than the amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security.

If factors indicate a credit loss exists, an allowance for credit loss is recorded to other income (loss), net, limited by the amount that the fair value is less than the amortized cost basis.

| | |

| --- | --- |

| [Note 15: Shareholders’ Equity](#sA1E33046131E5A5F917C27C39529F6A9) | [94](#sA1E33046131E5A5F917C27C39529F6A9) |

| [Supplementary Financial Data (Unaudited)](#sFB49EC9E92E45C99AECA483B34D2732F) | [104](#sFB49EC9E92E45C99AECA483B34D2732F) |

September 3, 2020

| | | |

| --- | --- | --- |

| /S/ CHARLES H. ROBBINS | | /S/ KELLY A. KRAMER |

| Charles H. Robbins | | Kelly A. Kramer |

| September 3, 2020 | | September 3, 2020 |

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

(in millions, except per-share amounts)

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | 8 | | | | (3 | | ) | | (43 | | ) |

| | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| BALANCE AT JULY 29, 2017 | 4,983 | | | $ | 45,253 | | | $ | 20,838 | | | $ | 46 | | | $ | 66,137 | |

| Repurchase of common stock | (432 | ) | | (3,950 | | ) | | (13,711 | | ) | | | | | | (17,661 | | ) |

| Purchase acquisitions and other | | | | 21 | | | | | | | | | | | | 21 | | |

(d) Impairments of Investments When the fair value of a debt security is less than its amortized cost, it is deemed impaired, and we will assess whether the impairment is other than temporary.

An impairment is considered other than temporary if (i) we have the intent to sell the security, (ii) it is more likely than not that we will be required to sell the security before recovery of the entire amortized cost basis, or (iii) we do not expect to recover the entire amortized cost basis of the security.

If impairment is considered other than temporary based on condition (i) or (ii) described earlier, the entire difference between the amortized cost and the fair value of the debt security is recognized in earnings.

If an impairment is considered other than temporary based on condition (iii), the amount representing credit losses (defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis of the debt security) will be recognized in earnings, and the amount relating to all other factors will be recognized in other comprehensive income (OCI).

(f) Allowance for Doubtful Accounts The allowance for doubtful accounts is based on our assessment of the collectibility of customer accounts.

We regularly review the allowance by considering factors such as historical experience, credit quality, age of the accounts receivable balances, economic conditions that may affect a customer’s ability to pay, and expected default frequency rates.

Trade receivables are written off at the point when they are considered uncollectible.

We determine the adequacy of our allowance for credit loss by assessing the risks and losses inherent in our financing receivables by portfolio segment.

The portfolio segment is based on the types of financing offered by us to our customers: lease receivables, loan receivables, and financed service contracts.

We assess the allowance for credit loss related to financing receivables on either an individual or a collective basis.

We consider various factors in evaluating lease and loan receivables and the earned portion of financed service contracts for possible impairment on an individual basis.

These factors include our historical experience, credit quality and age of the receivable balances, and economic conditions that may affect a customer’s ability to pay.

When the evaluation indicates that it is probable that all amounts due pursuant to the contractual terms of the financing agreement, including scheduled interest payments, are unable to be collected, the financing receivable is considered impaired.

All such outstanding amounts, including any accrued interest, are assessed and reserved at the customer level.

Typically, we also consider financing receivables with a risk rating of 8 or higher to be impaired and will include them in the individual assessment for allowance.

We evaluate the remainder of our financing receivables portfolio for impairment on a collective basis and record an allowance for credit loss at the portfolio segment level.

When evaluating the financing receivables on a collective basis, we use historical default rates and expected default frequency rates published by major third-party credit-rating agencies as well as our own historical loss rate in the event of default, while also systematically giving effect to economic conditions, concentration of risk, and correlation.

Expected default frequency rates and historical default rates are published quarterly by major third-party credit-rating agencies, and the internal credit risk rating is derived by taking into consideration various customer-specific factors and macroeconomic conditions.

These factors, which include the strength of the customer’s business and financial performance, the quality of the customer’s banking relationships, our specific historical experience with the customer, the performance and outlook of the customer’s industry, the customer’s legal and regulatory environment, the potential sovereign risk of the geographic locations in which the customer is operating, and independent third-party evaluations, are updated regularly or when facts and circumstances indicate that an update is deemed necessary.

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Management’s report on our internal control over financial reporting and the report of our independent registered public accounting firm on our internal control over financial reporting are set forth, respectively, on page [removed: 58] [added: 55] under the caption “Management’s Report on Internal Control Over Financial Reporting” and on page [removed: 56] [added: 53] of this report.

There was no change in our internal control over financial reporting during our fourth quarter of fiscal [removed: 2020] [added: 2021] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

[Table of](#id9635782a2d344aaabc654401a5ad580_7) [Contents](#id9635782a2d344aaabc654401a5ad580_7)

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Required Disclosure Pursuant to Section 13(r) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)

Under Section 13(r) of the Exchange Act, we are required to disclose in our periodic reports if we or any of our affiliates knowingly conducted a transaction or dealing with entities or individuals designated pursuant to certain Executive Orders.

On March 2, 2021, the U.S. government designated the Russian Federal Security Service (the “FSB”) as a blocked party subject to such reporting requirements; however, on the same day, the U.S. Department of the Treasury’s Office of Foreign Assets Control updated General License No. 1B (the “OFAC General License”), which now also generally authorizes U.S. companies to engage in certain transactions and dealings with the FSB necessary and ordinarily incident to requesting or obtaining licenses, permits, certifications or notifications issued or registered by the FSB for the importation, distribution or use of information technology products in Russia.

During the fiscal year ended July 31, 2021, a subsidiary of Cisco filed notifications with, or applied for import licenses and permits from, the FSB as required pursuant to Russian encryption product import controls for the purpose of enabling Cisco or our subsidiaries to import and distribute certain products in Russia.

Neither Cisco nor our subsidiaries generated any gross revenues or net profits directly from such approval activity and neither Cisco nor our subsidiaries sell to the FSB.

Cisco expects that we or our subsidiaries will continue to file notifications with and apply for import licenses and permits from the FSB as required for importation and distribution of our products in Russia, if and as permitted by applicable law, including the OFAC General License.

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