Cisco Systems Inc. (NASDAQ:CSCO)

Net Income Trends

Reported net income exhibits fluctuations across the six-year period. Beginning at 11,214 million USD in mid-2020, it slightly declined to 10,591 million USD in 2021 before rising to a peak of 12,613 million USD in 2023. Subsequently, reported net income decreases noticeably in the last two years, reaching 10,180 million USD in 2025.

Adjusted Net Income Trends

Adjusted net income follows a somewhat similar pattern to reported net income, although it starts higher at 11,529 million USD in 2020. It declines to 10,458 million USD in 2021, then improves progressively to a peak of 12,552 million USD in 2023. The adjusted figures also demonstrate a subsequent decrease, ending at 10,364 million USD in 2025.

Comparative Observations

Throughout the period analyzed, adjusted net income consistently remains slightly higher than reported net income until 2023, when the differences become marginal. Both metrics peak in 2023 before declining in the following years, suggesting a potential shift in operational performance or external factors influencing profitability from 2024 onward.

Summary

The financial data reveals cyclical net income performance with growth occurring between 2021 and 2023, followed by a decline in the subsequent years. The adjusted net income, reflecting investment or accounting adjustments, tracks closely with reported figures but generally remains somewhat higher, indicating the effect of such adjustments on the company's profitability assessment.

Net Profit Margin

The reported net profit margin exhibited a declining trend over the examined period, decreasing from 22.75% in 2020 to 17.97% in 2025. Similarly, the adjusted net profit margin followed a comparable pattern, starting at 23.38% in 2020 and declining to 18.29% in 2025. The margins showed slight fluctuations between years but overall demonstrated a downward trajectory, indicating a reduction in profitability relative to revenue over time.

Return on Equity (ROE)

Reported ROE initially displayed strong performance, peaking at 29.7% in 2022 after a drop in 2021. However, from 2022 onwards, the ROE declined steadily to 21.73% by 2025. The adjusted ROE mirrored this pattern, with values starting at 30.4% in 2020, dipping in 2021, recovering somewhat in 2022 and 2023, then diminishing to 22.12% by 2025. This indicates that shareholder returns have weakened over the period analyzed.

Return on Assets (ROA)

Both reported and adjusted ROA showed relatively stable levels from 2020 through 2023, with reported ROA oscillating near 12% and adjusted ROA near the same range. However, from 2023 onwards, both metrics experienced a notable decrease, with reported ROA dropping from 12.38% to 8.32% and adjusted ROA from 12.32% to 8.47% by 2025. This suggests a decline in the efficiency of asset utilization to generate earnings in the later years of the period.

Overall Insights

The financial performance indicators reflect a general pattern of decline in profitability and returns from 2020 to 2025. Margins, as well as returns on equity and assets, show appreciable reductions particularly in the latter part of the period. Adjusted metrics closely track reported figures, indicating consistency in the adjustments made. The trends suggest challenges in maintaining profitability and efficient asset and equity utilization over time.

The financial data reveals several key trends in net income and profit margins over the six-year period under consideration.

Net Income Trends

Both reported and adjusted net incomes exhibit fluctuations across the years. Initially, reported net income decreased slightly from 11,214 million US dollars in 2020 to 10,591 million in 2021, then increased steadily to reach a peak of 12,613 million in 2023. Following this peak, there was a noticeable decline to 10,320 million in 2024 and a slight further decrease to 10,180 million in 2025.

Adjusted net income follows a similar pattern, starting at 11,529 million in 2020, dipping to 10,458 million in 2021, rising to 12,552 million in 2023, then declining to 10,519 million and 10,364 million in the subsequent two years respectively. This parallel movement suggests that adjustments made to net income have not significantly altered the overall income trajectory.

Profit Margin Trends

The reported net profit margin experienced a decline from a high of 22.75% in 2020 to 21.26% in 2021, increased again to 22.91% in 2022, then dropped to 22.13% in 2023. Thereafter, it decreased more markedly to 19.18% in 2024 and further to 17.97% in 2025. This general downward trend in profit margins during the last two years indicates reduced profitability relative to revenue.

The adjusted net profit margin demonstrates a comparable pattern: starting at 23.38% in 2020, it dropped to 20.99% in 2021, recovered to 22.02% in 2023, before declining to 19.55% in 2024 and 18.29% in 2025. These fluctuations are consistent with the adjusted net income changes and point to similar profitability pressures affecting the company.

Comparative Insights

Throughout the six-year period, adjusted net income and adjusted net profit margins tend to be slightly higher than their reported counterparts, reflecting the impact of adjustments made to exclude certain items. However, the trends in both reported and adjusted figures are closely aligned, suggesting that core operational performance changes are the primary driver of financial results rather than one-time or extraordinary items.

The data highlights a challenging period for maintaining margin levels in the most recent two years, coinciding with lower net income figures. This may warrant further analysis into cost management, pricing strategies, or external market conditions influencing profitability.

The financial data presents both reported and investment adjusted net income and return on equity (ROE) over a six-year period.

Net Income Trends

Reported net income demonstrates a fluctuating trend with an initial decrease from 11,214 million US dollars in mid-2020 to 10,591 million in mid-2021, followed by an increase peaking at 12,613 million in mid-2023. Subsequently, it declines to 10,320 million in mid-2024 and further to 10,180 million by mid-2025.

Adjusted net income follows a similar pattern, starting slightly higher at 11,529 million in mid-2020, declining to 10,458 million in mid-2021, rising again to 12,552 million by mid-2023, and then decreasing to 10,519 million in mid-2024 and 10,364 million in mid-2025.

Return on Equity (ROE) Trends

Reported ROE shows a general downward trend over the analyzed period. It begins at 29.57% in 2020, dips slightly to 25.66% in 2021, recovers to a peak of 29.7% in 2022, then gradually decreases to 28.44% in 2023, and notably falls to 22.7% in 2024 and 21.73% in 2025.

Adjusted ROE follows a comparable trajectory. Starting at 30.4% in 2020, it declines to 25.34% in 2021, rises again to 28.29% in 2022 and stabilizes near 28.3% in 2023, before decreasing to 23.14% in 2024 and 22.12% in 2025.

Comparative Observations

The reported and adjusted net income figures are closely aligned, indicating consistent adjustments with minor variations over time.

Similarly, the reported and adjusted ROE percentages track closely, both signaling a reduction in profitability efficiency from mid-2023 onward.

Overall Interpretation

In the early years (2020-2023), the company experienced recovery and growth in net income and ROE after a dip in 2021. However, from mid-2023 through 2025, both net income and ROE display a noticeable downward trend. This suggests challenges in maintaining profitability and efficient use of equity capital during the latter years analyzed.

Net Income Trends

The reported net income exhibited some volatility over the six-year period. Starting at 11,214 million USD in 2020, it decreased slightly to 10,591 million USD in 2021, followed by an increase reaching 12,613 million USD in 2023. However, it declined again in the subsequent years to 10,320 million USD in 2024 and 10,180 million USD in 2025. The adjusted net income mirrors this pattern closely, with an initial amount of 11,529 million USD in 2020, followed by fluctuations and a peak in 2023 at 12,552 million USD, eventually declining to 10,364 million USD in 2025.

Return on Assets (ROA) Trends

The reported ROA started at 11.82% in 2020 and showed a decline to 10.86% in 2021. It increased to 12.57% in 2022 and remained relatively stable around 12.3% in 2023. Post-2023, there was a marked decline to approximately 8.3% in both 2024 and 2025, indicating a moderation in asset profitability. The adjusted ROA followed a similar trajectory, beginning at 12.15% in 2020, dropping to 10.73% in 2021, then increasing to 12.32% by 2023, and finally declining to around 8.45% in the two most recent years.

Comparative Observations

The adjusted figures for both net income and ROA generally track slightly below or above the reported figures, but the overall trends are consistent across both metrics. The fluctuations suggest external or one-time factors influencing the reported values, which are somewhat normalized in the adjusted figures.

Summary of Insights

Overall, the data indicates that the company experienced growth in profitability and efficiency metrics up until 2023, with both net income and ROA peaking in that year. However, the subsequent decline in 2024 and 2025 signals challenges or changes affecting earnings and asset utilization. The consistency between reported and adjusted data suggests that the adjustments do not significantly alter the broader financial performance narrative. The pronounced drop in ROA and net income in the final two years may warrant further investigation into operational or market factors impacting performance.