Analysis of Reportable Segments
Cisco Systems Inc. operates in 3 segments: Americas; Europe, Middle East, and Africa (EMEA); and Asia Pacific, Japan, and China (APJC).
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- Statement of Comprehensive Income
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Geographic Areas
- Common Stock Valuation Ratios
- Price to FCFE (P/FCFE)
- Selected Financial Data since 2005
- Return on Equity (ROE) since 2005
- Current Ratio since 2005
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Segment Profit Margin
Cisco Systems Inc., profit margin by reportable segment
| Jul 27, 2024 | Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | Jul 25, 2020 | Jul 27, 2019 | |
|---|---|---|---|---|---|---|
| Americas | ||||||
| Europe, Middle East, and Africa (EMEA) | ||||||
| Asia Pacific, Japan, and China (APJC) |
Based on: 10-K (reporting date: 2024-07-27), 10-K (reporting date: 2023-07-29), 10-K (reporting date: 2022-07-30), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-25), 10-K (reporting date: 2019-07-27).
- Americas Segment Profit Margin
- The profit margin for the Americas segment demonstrated relative stability over the six-year period, fluctuating between 63.83% and 66.87%. There was a peak at 66.87% in 2021, followed by a decline to 63.83% in 2023, before rebounding to 66.85% in 2024. Overall, the margin remained consistently above 63%, indicating sustained profitability in this region despite minor variations.
- Europe, Middle East, and Africa (EMEA) Segment Profit Margin
- The EMEA segment experienced a gradual upward trend in profit margin across the analyzed years. Starting at 64.56% in 2019, the margin increased steadily to 69.1% by 2024. Notably, the growth was more pronounced in the latest years, with a significant jump from 66.18% in 2023 to 69.1% in 2024. This trend suggests strengthening profitability and possibly improved operational efficiency or market conditions in the EMEA region.
- Asia Pacific, Japan, and China (APJC) Segment Profit Margin
- The APJC segment showed a consistent improvement in profit margin over the period, rising from 59.45% in 2019 to 67.22% in 2024. The increase was steady, with no marked declines, reflecting continued growth and possibly expanding market presence or cost management in this segment. The margin growth rate appears robust, particularly in the final year, indicating positive momentum.
- Overall Insights
- All three geographic segments reflected healthy profit margins throughout the years, with tangible improvements especially evident in the EMEA and APJC regions. The Americas segment maintained a high and relatively stable margin, while EMEA and APJC showed sustained upward trends, with EMEA reaching the highest margin among the three by 2024. This pattern may indicate a strategic emphasis or competitive advantage developing in international markets outside the Americas.
Segment Profit Margin: Americas
Cisco Systems Inc.; Americas; segment profit margin calculation
| Jul 27, 2024 | Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | Jul 25, 2020 | Jul 27, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross margin | ||||||
| Revenue | ||||||
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | ||||||
Based on: 10-K (reporting date: 2024-07-27), 10-K (reporting date: 2023-07-29), 10-K (reporting date: 2022-07-30), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-25), 10-K (reporting date: 2019-07-27).
1 2024 Calculation
Segment profit margin = 100 × Gross margin ÷ Revenue
= 100 × ÷ =
- Revenue Trends
- Revenue demonstrates a fluctuating pattern over the period under review. It decreased from 30,927 million US dollars in July 2019 to 29,161 million US dollars in July 2021. Subsequently, revenue increased to a peak of 33,447 million US dollars in July 2023, followed by a slight decline to 31,971 million US dollars in July 2024. Overall, the trend suggests periods of contraction followed by recovery.
- Gross Margin Analysis
- Gross margin values have generally remained stable but with some fluctuations. The figure started at 20,338 million US dollars in July 2019, saw a decrease reaching a low point of 19,117 million US dollars by July 2022, then reversed the trend by increasing to approximately 21,372 million US dollars by July 2024. This indicates an initial margin compression before recovery to earlier levels.
- Segment Profit Margin
- The segment profit margin percentage exhibits moderate variability but remains relatively high throughout the period. It peaked at 66.87% in July 2021, declined to 63.83% in July 2023, and then increased again to 66.85% by July 2024. This pattern reflects some volatility in profitability but maintains overall strong performance in margin terms.
- Integrated Insights
- The relationship between revenue, gross margin, and segment profit margin suggests resilience in profitability despite revenue fluctuations. Although revenue dropped in the early part of the period, gross margin and profit margins were able to recover towards their initial levels, signaling possible efficiency improvements or cost management strategies in the inherent segment operations. The peak in gross margin and profit margins near the latter part of the period corresponds with a higher revenue figure in 2023, indicating a positive alignment among these financial metrics during that year.
Segment Profit Margin: Europe, Middle East, and Africa (EMEA)
Cisco Systems Inc.; Europe, Middle East, and Africa (EMEA); segment profit margin calculation
| Jul 27, 2024 | Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | Jul 25, 2020 | Jul 27, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross margin | ||||||
| Revenue | ||||||
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | ||||||
Based on: 10-K (reporting date: 2024-07-27), 10-K (reporting date: 2023-07-29), 10-K (reporting date: 2022-07-30), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-25), 10-K (reporting date: 2019-07-27).
1 2024 Calculation
Segment profit margin = 100 × Gross margin ÷ Revenue
= 100 × ÷ =
The analysis of the financial data for the Europe, Middle East, and Africa (EMEA) segment reveals several notable trends over the six-year period from July 27, 2019, to July 27, 2024. All figures are reported in U.S. dollars, and margins are expressed as percentages.
- Revenue Trends
- The revenue shows fluctuations over the years. It began at $13,100 million in 2019 and decreased slightly to $12,659 million in 2020. Subsequently, revenue increased steadily to reach a peak of $15,135 million in 2023 before declining again to $14,117 million in 2024. This indicates an overall growth trend with some volatility, particularly a dip during 2020 followed by recovery and an eventual minor drop in 2024.
- Gross Margin Trends
- Gross margin values exhibit a generally positive trajectory. Starting at $8,457 million in 2019, there was a slight decrease in 2020 to $8,304 million, followed by a gradual rise through 2021 and 2022. The margin peaked at $10,016 million in 2023 before experiencing a modest reduction to $9,755 million in 2024. This pattern aligns with revenue movements, showing resilience and growth despite some year-to-year fluctuations.
- Segment Profit Margin
- The segment profit margin demonstrates a consistent and upward trend throughout the period. It increased from 64.56% in 2019 to 65.6% in 2020, remained relatively stable around 65.4% to 65.37% through 2021 and 2022, then rose to 66.18% in 2023 and notably reached 69.1% in 2024. This indicates improving profitability and operational efficiency within the segment despite the variations in revenue and gross margin.
Overall, the EMEA segment shows increasing profitability driven by growing gross margins and improving segment profit margins. Although revenue peaked in 2023 and declined slightly in 2024, the segment's profit margin suggests effective cost control and enhanced operational performance. The data implies that the segment has successfully navigated market fluctuations, maintaining strong margins and yielding higher profitability towards the end of the examined period.
Segment Profit Margin: Asia Pacific, Japan, and China (APJC)
Cisco Systems Inc.; Asia Pacific, Japan, and China (APJC); segment profit margin calculation
| Jul 27, 2024 | Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | Jul 25, 2020 | Jul 27, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross margin | ||||||
| Revenue | ||||||
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | ||||||
Based on: 10-K (reporting date: 2024-07-27), 10-K (reporting date: 2023-07-29), 10-K (reporting date: 2022-07-30), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-25), 10-K (reporting date: 2019-07-27).
1 2024 Calculation
Segment profit margin = 100 × Gross margin ÷ Revenue
= 100 × ÷ =
The financial data for the Asia Pacific, Japan, and China (APJC) segment reveals several notable trends over the examined six-year period.
- Revenue
- Revenue exhibited fluctuations, beginning at $7,877 million in July 2019 and declining to $7,352 million in July 2020. Following this dip, revenue generally increased, reaching a peak of $8,417 million in July 2023 before decreasing again to $7,716 million in July 2024. Overall, the trend reflects sensitivity to external factors affecting sales, with a moderate recovery after 2020 but a recent decline in the latest year observed.
- Gross Margin
- Gross margin values followed a generally upward trajectory from $4,683 million in July 2019 to $5,424 million in July 2023. However, there was a decline to $5,187 million in July 2024, indicating pressure on cost efficiency or sales mix in the most recent period. Despite the dip, the gross margin in 2024 remains notably higher than the levels seen in 2019 and 2020.
- Segment Profit Margin
- The segment profit margin steadily increased throughout the period, starting at 59.45% in July 2019 and reaching its highest point at 67.22% in July 2024. This consistent improvement suggests enhanced profitability and operational leverage within the segment, reflecting better cost control or pricing power despite fluctuations in revenue and gross margin.
In summary, while the revenue experienced variability with a recent decline, the segment demonstrated an ability to maintain and even improve profitability as seen in the rising segment profit margin. The gross margin increase until 2023, followed by a downturn in 2024, alongside the consistent expansion of profit margin, suggests ongoing efficiency gains and a robust profit framework, albeit with sensitivity to market conditions impacting top-line performance.
Revenue
Cisco Systems Inc., revenue by reportable segment
US$ in millions
| Jul 27, 2024 | Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | Jul 25, 2020 | Jul 27, 2019 | |
|---|---|---|---|---|---|---|
| Americas | ||||||
| Europe, Middle East, and Africa (EMEA) | ||||||
| Asia Pacific, Japan, and China (APJC) | ||||||
| Segment total |
Based on: 10-K (reporting date: 2024-07-27), 10-K (reporting date: 2023-07-29), 10-K (reporting date: 2022-07-30), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-25), 10-K (reporting date: 2019-07-27).
The segment revenue data over the six-year period reveals several notable trends and fluctuations across the three geographic regions: Americas, Europe, Middle East, and Africa (EMEA), and Asia Pacific, Japan, and China (APJC).
- Americas
- The Americas segment experienced a slight decline from 2019 through 2021, dropping from 30,927 million USD to 29,161 million USD. It then saw a moderate recovery in 2022, reaching 29,814 million USD, followed by a significant increase in 2023 to 33,447 million USD. However, in 2024, revenue declined again to 31,971 million USD. Overall, the pattern indicates a relatively volatile revenue stream with a recent peak in 2023 before a partial reversal.
- Europe, Middle East, and Africa (EMEA)
- The EMEA region demonstrated steady growth over the observed period. Starting at 13,100 million USD in 2019, revenue slightly decreased in 2020 to 12,659 million USD but rebounded consistently each year thereafter, reaching a peak of 15,135 million USD in 2023 before declining somewhat to 14,117 million USD in 2024. This suggests a largely positive trend with mild fluctuations in the latest period.
- Asia Pacific, Japan, and China (APJC)
- The APJC segment experienced a downward trajectory initially, with revenue decreasing from 7,877 million USD in 2019 to 7,352 million USD in 2020. This was followed by modest recovery phases in 2021 and 2022, peaking at 8,417 million USD in 2023. However, in 2024 there was a notable decline to 7,716 million USD. The segment shows variability, with a partial recovery disrupted by a recent downturn.
- Segment Total
- The aggregated segment revenue decreased from 51,904 million USD in 2019 to a low of 49,302 million USD in 2020, followed by a gradual rise to 51,556 million USD in 2022. A pronounced increase occurred in 2023, reaching 56,999 million USD, before a decline to 53,804 million USD in 2024. The total revenues reflect the underlying regional patterns, with overall growth interspersed with periods of decline, particularly in the most recent year.
In summary, the revenues across all regions demonstrated general resilience with growth phases, especially noticeable in 2023. Nevertheless, the decreases in 2024 across all segments indicate potential challenges or market pressures affecting the business performance, warranting further investigation into specific regional factors driving these declines.
Gross margin
Cisco Systems Inc., gross margin by reportable segment
US$ in millions
| Jul 27, 2024 | Jul 29, 2023 | Jul 30, 2022 | Jul 31, 2021 | Jul 25, 2020 | Jul 27, 2019 | |
|---|---|---|---|---|---|---|
| Americas | ||||||
| Europe, Middle East, and Africa (EMEA) | ||||||
| Asia Pacific, Japan, and China (APJC) | ||||||
| Segment total |
Based on: 10-K (reporting date: 2024-07-27), 10-K (reporting date: 2023-07-29), 10-K (reporting date: 2022-07-30), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-25), 10-K (reporting date: 2019-07-27).
- Overall Segment Revenue Trend
- The total revenue across all reportable segments shows a generally upward trend from July 2019 to July 2024, increasing from $33,478 million to $36,314 million. Despite a slight decrease in some years, the overall trajectory indicates growth.
- Americas Segment
- The Americas segment exhibits fluctuations over the period with initial decline from $20,338 million in July 2019 to $19,117 million in July 2022. However, it then recovers, increasing to $21,350 million in July 2023 and stabilizing around $21,372 million by July 2024. This suggests some volatility but a positive rebound in recent years.
- Europe, Middle East, and Africa (EMEA) Segment
- The EMEA segment demonstrates steady growth overall. Starting at $8,457 million in July 2019, it experiences small fluctuations but generally increases to a peak of $10,016 million in July 2023, before a modest decline to $9,755 million in July 2024. This indicates a generally strong performance with slight recent tapering.
- Asia Pacific, Japan, and China (APJC) Segment
- The APJC segment shows a consistent upward movement from $4,683 million in July 2019 to a high of $5,424 million in July 2023, followed by a decrease to $5,187 million in July 2024. The growth over the years is notable, although the recent downturn suggests emerging challenges or market adjustments.
- Comparative Insights
- While the Americas segment remains the largest contributor, its performance has been more volatile relative to EMEA and APJC. The EMEA region shows the most consistent growth rate before a slight recent drop, and APJC demonstrates steady gains with a minor pullback in the latest period. The total segment revenue growth is largely driven by improvements in EMEA and APJC, complemented by a recovery in the Americas segment after a period of decline.