Common-Size Income Statement
Quarterly Data
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Cisco Systems Inc., common-size consolidated income statement (quarterly data)
Based on: 10-Q (reporting date: 2026-01-24), 10-Q (reporting date: 2025-10-25), 10-K (reporting date: 2025-07-26), 10-Q (reporting date: 2025-04-26), 10-Q (reporting date: 2025-01-25), 10-Q (reporting date: 2024-10-26), 10-K (reporting date: 2024-07-27), 10-Q (reporting date: 2024-04-27), 10-Q (reporting date: 2024-01-27), 10-Q (reporting date: 2023-10-28), 10-K (reporting date: 2023-07-29), 10-Q (reporting date: 2023-04-29), 10-Q (reporting date: 2023-01-28), 10-Q (reporting date: 2022-10-29), 10-K (reporting date: 2022-07-30), 10-Q (reporting date: 2022-04-30), 10-Q (reporting date: 2022-01-29), 10-Q (reporting date: 2021-10-30), 10-K (reporting date: 2021-07-31), 10-Q (reporting date: 2021-05-01), 10-Q (reporting date: 2021-01-23), 10-Q (reporting date: 2020-10-24), 10-K (reporting date: 2020-07-25), 10-Q (reporting date: 2020-04-25), 10-Q (reporting date: 2020-01-25), 10-Q (reporting date: 2019-10-26).
The common-size income statement reveals several noteworthy trends in the company’s financial performance over the observed period. Revenue composition, profitability, and expense structures all exhibit fluctuations that warrant examination. A general observation is an increased volatility in several key metrics in the latter portion of the period, particularly from October 2023 onwards.
- Revenue Composition
- Product revenue consistently represents the majority of total revenue, generally ranging between 71% and 76%. However, a slight downward trend in product revenue as a percentage of total revenue is observed over the period, while service revenue correspondingly increases. This suggests a potential shift in the company’s revenue mix towards a greater reliance on service offerings. From January 2024, product revenue experiences a more pronounced decline, falling to approximately 71% by April 2025, before a partial recovery. Service revenue peaks in January 2022 and again in January 2025, reaching nearly 29% of total revenue.
- Gross Margin
- Gross margin remains relatively stable for much of the period, fluctuating between approximately 61% and 65%. A dip in gross margin is evident in the July 2020 and July 2022 quarters. A slight increase is observed in the latter half of the period, peaking at 65.90% in July 2024, before decreasing again.
- Operating Expenses
- Operating expenses, as a percentage of revenue, demonstrate a notable increase in October 2020, reaching 42.01%, largely driven by a significant increase in restructuring and other charges. Excluding this outlier, operating expenses generally remain between 35% and 38%. A substantial increase in operating expenses is again observed from October 2023, driven by increases in sales and marketing, and research and development. This increase continues into early 2024, peaking in January 2024 at 47.88%.
- Research and Development
- Research and development expenses generally remain consistent as a percentage of revenue, fluctuating around 13%. However, a significant increase is observed from October 2023, reaching 15.34% in January 2025, indicating a potential increase in investment in innovation.
- Sales and Marketing
- Sales and marketing expenses show a similar trend to research and development, with a marked increase beginning in October 2023. This expense reaches a peak of 20.83% in January 2024, suggesting increased efforts in customer acquisition or promotional activities.
- Net Income
- Net income as a percentage of revenue fluctuates between approximately 17% and 24%. The period from October 2023 to January 2024 shows a noticeable decline in net income margin, falling to a low of 14.85% in January 2024, likely attributable to the increased operating expenses. A recovery is observed in subsequent quarters, but the net income margin remains lower than earlier periods.
- Interest and Other Income (Loss), Net
- Interest and other income (loss), net, exhibits increased volatility in the latter part of the period. A significant negative impact is observed in January 2025, driven by a substantial loss, reducing the percentage to -1.63%. This is a notable departure from the generally positive contributions observed in prior periods.
In summary, the company demonstrates a shifting revenue mix, relatively stable gross margins, and increasing operating expenses, particularly in research and development and sales and marketing, towards the end of the observed period. These factors contribute to a decline in net income margin during the same timeframe. The increased volatility in interest and other income (loss), net, also warrants further investigation.