Technology
CISCO REPORTS FOURTH QUARTER AND FISCAL YEAR 2024 EARNINGS
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1 month agoon
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SAN JOSE, Calif., Aug. 14, 2024 /PRNewswire/ —
News Summary:
Product order growth of 14% year over year; up 6% excluding SplunkRevenue of $13.6 billion in Q4 FY 2024, above the high end of our guidance rangeStrong margins:Q4 FY 2024 GAAP gross margin of 64.4% and Non-GAAP gross margin of 67.9%FY 2024 GAAP gross margin of 64.7% and Non-GAAP gross margin of 67.5%, the highest in 20 yearsSolid growth in software and recurring metrics in FY 2024, enhanced by SplunkTotal subscription revenue of $27.4 billion including Splunk, representing 51% of total revenueTotal annualized recurring revenue (ARR) at $29.6 billion, including $4.3 billion from Splunk, up 22% year over yearTotal software revenue at $18.4 billion, up 9% year over year, with software subscription revenue of $16.4 billion, up 15% year over year, making up 89% of total software revenueQ4 FY 2024 Results:Revenue: $13.6 billionDecrease of 10% year over yearEarnings per Share: GAAP: $0.54; Non-GAAP: $0.87GAAP EPS decreased 44% year over yearNon-GAAP EPS decreased 24% year over yearFY 2024 Results:Revenue: $53.8 billion Decrease of 6% year over yearEarnings per Share: GAAP: $2.54; Non-GAAP: $3.73GAAP EPS decreased 17% year over yearNon-GAAP EPS decreased 4% year over yearQ1 FY 2025 Guidance: Revenue: $13.65 billion to $13.85 billionEarnings per Share: GAAP: $0.35 to $0.42; Non-GAAP: $0.86 to $0.88FY 2025 Guidance: Revenue: $55.0 billion to $56.2 billionEarnings per Share: GAAP: $1.93 to $2.05; Non-GAAP: $3.52 to $3.58
Cisco today reported fourth quarter and fiscal year results for the period ended July 27, 2024. Cisco reported fourth quarter revenue of $13.6 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.2 billion or $0.54 per share, and non-GAAP net income of $3.5 billion or $0.87 per share.
“We delivered a strong close to fiscal 2024,” said Chuck Robbins, chair and CEO of Cisco. “In our fourth quarter, we saw steady customer demand with order growth across the business as customers rely on Cisco to connect and protect all aspects of their organizations in the era of AI.”
“Revenue, gross margin and EPS in Q4 were at the high end or above our guidance range, demonstrating our operating discipline,” said Scott Herren, CFO of Cisco. “As we look to build on our performance, we remain laser focused on growth and consistent execution as we invest to win in AI, cloud and cybersecurity, while maintaining capital returns.”
Q4 GAAP Results
Q4 FY 2024
Q4 FY 2023
Vs. Q4 FY 2023
Revenue
$
13.6 billion
$
15.2 billion
(10) %
Net Income
$
2.2 billion
$
4.0 billion
(45) %
Diluted Earnings per Share (EPS)
$
0.54
$
0.97
(44) %
The acquisition of Splunk, including financing costs, had a negative impact of $0.16 to GAAP EPS, for the fourth quarter of fiscal 2024.
Q4 Non-GAAP Results
Q4 FY 2024
Q4 FY 2023
Vs. Q4 FY 2023
Net Income
$
3.5 billion
$
4.7 billion
(25) %
EPS
$
0.87
$
1.14
(24) %
The acquisition of Splunk, including financing costs, had a negative impact of $0.04 to Non-GAAP EPS, for the fourth quarter of fiscal 2024.
Fiscal Year GAAP Results
FY 2024
FY 2023
Vs. FY 2023
Revenue
$
53.8 billion
$
57.0 billion
(6) %
Net Income
$
10.3 billion
$
12.6 billion
(18) %
EPS
$
2.54
$
3.07
(17) %
The acquisition of Splunk, including financing costs, had a negative impact of $0.25 to GAAP EPS, for fiscal 2024.
Fiscal Year Non-GAAP Results
FY 2024
FY 2023
Vs. FY 2023
Net Income
$
15.2 billion
$
16.0 billion
(5) %
EPS
$
3.73
$
3.89
(4) %
The acquisition of Splunk, including financing costs, had a negative impact of $0.04 to Non-GAAP EPS, for fiscal 2024.
Reconciliations between net income, EPS, and other measures on a GAAP and non-GAAP basis are provided in the tables located in the section entitled “Reconciliations of GAAP to non-GAAP Measures.”
Cisco Declares Quarterly Dividend
Cisco has declared a quarterly dividend of $0.40 per common share to be paid on October 23, 2024, to all stockholders of record as of the close of business on October 2, 2024. Future dividends will be subject to Board approval.
Financial Summary
All comparative percentages are on a year-over-year basis unless otherwise noted.
Q4 FY 2024 Highlights
Revenue — Total revenue was $13.6 billion, down 10%, with product revenue down 15% and services revenue up 6%. Splunk contributed approximately $960 million of total revenue for the fourth quarter of fiscal 2024.
Revenue by geographic segment was: Americas down 11%, EMEA down 11%, and APJC down 6%. Product revenue performance reflected growth in Security up 81% and Observability up 41%. Networking was down 28%. Product revenue in Collaboration was flat. Security and Observability, excluding Splunk, grew 6% and 12%, respectively, in the fourth quarter of fiscal 2024.
Gross Margin — On a GAAP basis, total gross margin, product gross margin, and services gross margin were 64.4%, 63.0%, and 67.8%, respectively, as compared with 64.1%, 63.6%, and 65.7%, respectively, in the fourth quarter of fiscal 2023.
On a non-GAAP basis, total gross margin, product gross margin, and services gross margin were 67.9%, 67.0%, and 70.3%, respectively, as compared with 65.9%, 65.5%, and 67.5%, respectively, in the fourth quarter of fiscal 2023.
Total gross margins by geographic segment were: 67.7% for the Americas, 69.2% for EMEA and 66.4% for APJC.
Operating Expenses — On a GAAP basis, operating expenses were $6.2 billion, up 12%, and were 45.2% of revenue. Non-GAAP operating expenses were $4.8 billion, up 4%, and were 35.4% of revenue.
Operating Income — GAAP operating income was $2.6 billion, down 38%, with GAAP operating margin of 19.2%. Non-GAAP operating income was $4.4 billion, down 17%, with non-GAAP operating margin at 32.5%.
Provision for Income Taxes — The GAAP tax provision rate was 9.8%. The non-GAAP tax provision rate was 16.6%.
Net Income and EPS — On a GAAP basis, net income was $2.2 billion, a decrease of 45%, and EPS was $0.54, a decrease of 44%. On a non-GAAP basis, net income was $3.5 billion, a decrease of 25%, and EPS was $0.87, a decrease of 24%.
Cash Flow from Operating Activities — $3.7 billion for the fourth quarter of fiscal 2024, a decrease of 37% compared with $6.0 billion for the fourth quarter of fiscal 2023.
FY 2024 Highlights
Revenue — Total revenue was $53.8 billion, a decrease of 6%. Splunk contributed approximately $1.4 billion of total revenue for fiscal 2024.
Net Income and EPS — On a GAAP basis, net income was $10.3 billion, a decrease of 18%, and EPS was $2.54, a decrease of 17%. On a non-GAAP basis, net income was $15.2 billion, a decrease of 5% compared to fiscal 2023, and EPS was $3.73, a decrease of 4%.
Cash Flow from Operating Activities — $10.9 billion for fiscal 2024, a decrease of 45% compared with $19.9 billion for fiscal 2023.
Balance Sheet and Other Financial Highlights
Cash and Cash Equivalents and Investments — $17.9 billion at the end of the fourth quarter of fiscal 2024, compared with $18.8 billion at the end of the third quarter of fiscal 2024, and compared with $26.1 billion at the end of fiscal 2023.
Remaining Performance Obligations (RPO) — $41.0 billion, up 18% in total, with 51% of this amount to be recognized as revenue over the next 12 months. Product RPO were up 27% and services RPO were up 10%.
Deferred Revenue — $28.5 billion, up 11% in total, with deferred product revenue up 15%. Deferred service revenue was up 9%.
Capital Allocation — In the fourth quarter of fiscal 2024, we returned $3.6 billion to stockholders through share buybacks and dividends. We declared and paid a cash dividend of $0.40 per common share, or $1.6 billion, and repurchased approximately 43 million shares of common stock under our stock repurchase program at an average price of $46.80 per share for an aggregate purchase price of $2.0 billion. The remaining authorized amount for stock repurchases under the program is $5.2 billion with no termination date.
Guidance
Cisco estimates the following results for the first quarter of fiscal 2025:
Q1 FY 2025
Revenue
$13.65 billion – $13.85 billion
Non-GAAP gross margin
67% – 68%
Non-GAAP operating margin
32% – 33%
Non-GAAP EPS
$0.86 – $0.88
Cisco estimates that GAAP EPS will be $0.35 to $0.42 for the first quarter of fiscal 2025.
Cisco estimates the following results for fiscal 2025:
FY 2025
Revenue
$55.0 billion – $56.2 billion
Non-GAAP EPS
$3.52 – $3.58
Cisco estimates that GAAP EPS will be $1.93 to $2.05 for fiscal 2025.
Our Q1 FY 2025 and FY 2025 guidance assumes an effective tax provision rate of approximately 17% for GAAP and approximately 19% for non-GAAP results.
A reconciliation between the guidance on a GAAP and non-GAAP basis is provided in the tables entitled “GAAP to non-GAAP Guidance” located in the section entitled “Reconciliations of GAAP to non-GAAP Measures.”
Editor’s Notes:
Q4 fiscal year 2024 conference call to discuss Cisco’s results along with its guidance will be held on Wednesday, August 14, 2024 at 1:30 p.m. Pacific Time. Conference call number is 1-888-848-6507 (United States) or 1-212-519-0847 (international).
Conference call replay will be available from 4:00 p.m. Pacific Time, August 14, 2024 to 4:00 p.m. Pacific Time, August 20, 2024 at 1-866-510-4837 (United States) or 1-203-369-1943 (international). The replay will also be available via webcast on the Cisco Investor Relations website at https://investor.cisco.com.
Additional information regarding Cisco’s financials, as well as a webcast of the conference call with visuals designed to guide participants through the call, will be available at 1:30 p.m. Pacific Time, August 14, 2024. Text of the conference call’s prepared remarks will be available within 24 hours of completion of the call. The webcast will include both the prepared remarks and the question-and-answer session. This information, along with the GAAP to non-GAAP reconciliation information, will be available on the Cisco Investor Relations website at https://investor.cisco.com.
CISCO SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per-share amounts)
(Unaudited)
Three Months Ended
Fiscal Year Ended
July 27,
2024
July 29,
2023
July 27,
2024
July 29,
2023
REVENUE:
Product
$ 9,858
$ 11,650
$ 39,253
$ 43,142
Services
3,784
3,553
14,550
13,856
Total revenue
13,642
15,203
53,803
56,998
COST OF SALES:
Product
3,644
4,237
14,339
16,590
Services
1,217
1,218
4,636
4,655
Total cost of sales
4,861
5,455
18,975
21,245
GROSS MARGIN
8,781
9,748
34,828
35,753
OPERATING EXPENSES:
Research and development
2,179
1,953
7,983
7,551
Sales and marketing
2,841
2,579
10,364
9,880
General and administrative
763
690
2,813
2,478
Amortization of purchased intangible assets
268
70
698
282
Restructuring and other charges
112
203
789
531
Total operating expenses
6,163
5,495
22,647
20,722
OPERATING INCOME
2,618
4,253
12,181
15,031
Interest income
270
312
1,365
962
Interest expense
(418)
(111)
(1,006)
(427)
Other income (loss), net
(74)
17
(306)
(248)
Interest and other income (loss), net
(222)
218
53
287
INCOME BEFORE PROVISION FOR INCOME TAXES
2,396
4,471
12,234
15,318
Provision for income taxes
234
513
1,914
2,705
NET INCOME
$ 2,162
$ 3,958
$ 10,320
$ 12,613
Net income per share:
Basic
$ 0.54
$ 0.97
$ 2.55
$ 3.08
Diluted
$ 0.54
$ 0.97
$ 2.54
$ 3.07
Shares used in per-share calculation:
Basic
4,018
4,071
4,043
4,093
Diluted
4,035
4,093
4,062
4,105
CISCO SYSTEMS, INC.
REVENUE BY SEGMENT
(In millions, except percentages)
July 27, 2024
Three Months Ended
Fiscal Year Ended
Amount
Y/Y%
Amount
Y/Y%
Revenue:
Americas
$ 8,068
(11) %
$ 31,971
(4) %
EMEA
3,511
(11) %
14,117
(7) %
APJC
2,064
(6) %
7,716
(8) %
Total
$ 13,642
(10) %
$ 53,803
(6) %
Amounts may not sum and percentages may not recalculate due to rounding.
CISCO SYSTEMS, INC.
GROSS MARGIN PERCENTAGE BY SEGMENT
(In percentages)
July 27, 2024
Three Months Ended
Fiscal Year Ended
Gross Margin Percentage:
Americas
67.7 %
66.8 %
EMEA
69.2 %
69.1 %
APJC
66.4 %
67.2 %
CISCO SYSTEMS, INC.
REVENUE FOR GROUPS OF SIMILAR PRODUCTS AND SERVICES
(In millions, except percentages)
July 27, 2024
Three Months Ended
Fiscal Year Ended
Amount
Y/Y %
Amount
Y/Y %
Revenue:
Networking
$ 6,804
(28) %
$ 29,229
(15) %
Security
1,787
81 %
5,075
32 %
Collaboration
1,019
— %
4,113
2 %
Observability
248
41 %
837
27 %
Total Product
9,858
(15) %
39,253
(9) %
Services
3,784
6 %
14,550
5 %
Total
$ 13,642
(10) %
$ 53,803
(6) %
Security and Observability, excluding Splunk, grew 6% and 12%, respectively, in the fourth quarter of fiscal 2024, and 4% and 15%, respectively, for fiscal 2024.
Amounts may not sum and percentages may not recalculate due to rounding.
CISCO SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
July 27,
2024
July 29,
2023
ASSETS
Current assets:
Cash and cash equivalents
$ 7,508
$ 10,123
Investments
10,346
16,023
Accounts receivable, net of allowance
of $87 at July 27, 2024 and $85 at July 29, 2023
6,685
5,854
Inventories
3,373
3,644
Financing receivables, net
3,338
3,352
Other current assets
5,612
4,352
Total current assets
36,862
43,348
Property and equipment, net
2,090
2,085
Financing receivables, net
3,376
3,483
Goodwill
58,660
38,535
Purchased intangible assets, net
11,219
1,818
Deferred tax assets
6,262
6,576
Other assets
5,944
6,007
TOTAL ASSETS
$ 124,413
$ 101,852
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt
$ 11,341
$ 1,733
Accounts payable
2,304
2,313
Income taxes payable
1,439
4,235
Accrued compensation
3,608
3,984
Deferred revenue
16,249
13,908
Other current liabilities
5,643
5,136
Total current liabilities
40,584
31,309
Long-term debt
19,621
6,658
Income taxes payable
3,985
5,756
Deferred revenue
12,226
11,642
Other long-term liabilities
2,540
2,134
Total liabilities
78,956
57,499
Total equity
45,457
44,353
TOTAL LIABILITIES AND EQUITY
$ 124,413
$ 101,852
CISCO SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Fiscal Year Ended
July 27,
2024
July 29,
2023
Cash flows from operating activities:
Net income
$ 10,320
$ 12,613
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, and other
2,507
1,726
Share-based compensation expense
3,074
2,353
Provision for receivables
34
31
Deferred income taxes
(972)
(2,085)
(Gains) losses on divestitures, investments and other, net
215
206
Change in operating assets and liabilities, net of effects of acquisitions and divestitures:
Accounts receivable
(289)
734
Inventories
275
(1,069)
Financing receivables
76
1,102
Other assets
(671)
5
Accounts payable
(90)
27
Income taxes, net
(4,539)
1,218
Accrued compensation
(696)
651
Deferred revenue
1,220
2,326
Other liabilities
416
48
Net cash provided by operating activities
10,880
19,886
Cash flows from investing activities:
Purchases of investments
(4,230)
(10,871)
Proceeds from sales of investments
4,136
1,054
Proceeds from maturities of investments
6,367
5,978
Acquisitions, net of cash and cash equivalents acquired
(25,994)
(301)
Purchases of investments in privately held companies
(284)
(185)
Return of investments in privately held companies
202
90
Acquisition of property and equipment
(670)
(849)
Other
(5)
(23)
Net cash used in investing activities
(20,478)
(5,107)
Cash flows from financing activities:
Issuances of common stock
714
700
Repurchases of common stock – repurchase program
(5,787)
(4,293)
Shares repurchased for tax withholdings on vesting of restricted stock units
(992)
(597)
Short-term borrowings, original maturities of 90 days or less, net
478
(602)
Issuances of debt
31,818
—
Repayments of debt
(9,826)
(500)
Repayments of Splunk convertible debt, net
(3,140)
—
Dividends paid
(6,384)
(6,302)
Other
(37)
(32)
Net cash provided by (used in) financing activities
6,844
(11,626)
Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted
cash equivalents
(31)
(105)
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents
(2,785)
3,048
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of fiscal year
11,627
8,579
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of fiscal year
$ 8,842
$ 11,627
Supplemental cash flow information:
Cash paid for interest
$ 583
$ 376
Cash paid for income taxes, net
$ 7,426
$ 3,571
CISCO SYSTEMS, INC.
REMAINING PERFORMANCE OBLIGATIONS
(In millions, except percentages)
July 27, 2024
April 27, 2024
July 29, 2023
Amount
Y/Y %
Amount
Y/Y %
Amount
Y/Y %
Product
$ 20,055
27 %
$ 18,876
29 %
$ 15,802
12 %
Services
20,993
10 %
19,898
14 %
19,066
9 %
Total
$ 41,048
18 %
$ 38,774
21 %
$ 34,868
11 %
We expect 51% of total RPO at July 27, 2024 will be recognized as revenue over the next 12 months.
CISCO SYSTEMS, INC.
DEFERRED REVENUE
(In millions)
July 27,
2024
April 27,
2024
July 29,
2023
Deferred revenue:
Product
$ 13,219
$ 12,856
$ 11,505
Services
15,256
14,619
14,045
Total
$ 28,475
$ 27,475
$ 25,550
Reported as:
Current
$ 16,249
$ 15,751
$ 13,908
Noncurrent
12,226
11,724
11,642
Total
$ 28,475
$ 27,475
$ 25,550
CISCO SYSTEMS, INC.
DIVIDENDS PAID AND REPURCHASES OF COMMON STOCK
(In millions, except per-share amounts)
DIVIDENDS
STOCK REPURCHASE PROGRAM
TOTAL
Quarter Ended
Per Share
Amount
Shares
Weighted-
Average Price
per Share
Amount
Amount
Fiscal 2024
July 27, 2024
$ 0.40
$ 1,606
43
$ 46.80
$ 2,002
$ 3,608
April 27, 2024
$ 0.40
$ 1,615
26
$ 49.22
$ 1,256
$ 2,871
January 27, 2024
$ 0.39
$ 1,583
25
$ 49.54
$ 1,254
$ 2,837
October 28, 2023
$ 0.39
$ 1,580
23
$ 54.53
$ 1,252
$ 2,832
Fiscal 2023
July 29, 2023
$ 0.39
$ 1,589
25
$ 50.49
$ 1,254
$ 2,843
April 29, 2023
$ 0.39
$ 1,593
25
$ 49.45
$ 1,259
$ 2,852
January 28, 2023
$ 0.38
$ 1,560
26
$ 47.72
$ 1,256
$ 2,816
October 29, 2022
$ 0.38
$ 1,560
12
$ 43.76
$ 502
$ 2,062
CISCO SYSTEMS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES
GAAP TO NON-GAAP NET INCOME
(In millions)
Three Months Ended
Fiscal Year Ended
July 27,
2024
July 29,
2023
July 27,
2024
July 29,
2023
GAAP net income
$ 2,162
$ 3,958
$ 10,320
$ 12,613
Adjustments to cost of sales:
Share-based compensation expense
133
103
514
396
Amortization of acquisition-related intangible assets
331
168
936
630
Acquisition-related/divestiture costs
21
14
34
18
Supplier component remediation charge (adjustment), net
—
(9)
—
(9)
Total adjustments to GAAP cost of sales
485
276
1,484
1,035
Adjustments to operating expenses:
Share-based compensation expense
660
520
2,537
1,951
Amortization of acquisition-related intangible assets
268
70
698
282
Acquisition-related/divestiture costs
297
63
700
241
Russia-Ukraine war costs
—
(7)
(12)
—
Significant asset impairments and restructurings
112
203
789
531
Total adjustments to GAAP operating expenses
1,337
849
4,712
3,005
Adjustments to interest and other income (loss), net:
Russia-Ukraine war costs
49
—
49
—
(Gains) and losses on investments
(32)
(55)
100
133
Total adjustments to GAAP interest and other income (loss), net
17
(55)
149
133
Total adjustments to GAAP income before provision for income
taxes
1,839
1,070
6,345
4,173
Income tax effect of non-GAAP adjustments
(315)
(215)
(1,360)
(838)
Significant tax matters
(155)
(133)
(155)
31
Total adjustments to GAAP provision for income taxes
(470)
(348)
(1,515)
(807)
Non-GAAP net income
$ 3,531
$ 4,680
$ 15,150
$ 15,979
CISCO SYSTEMS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES
GAAP TO NON-GAAP EPS
Three Months Ended
Fiscal Year Ended
July 27,
2024
July 29,
2023
July 27,
2024
July 29,
2023
GAAP EPS
$ 0.54
$ 0.97
$ 2.54
$ 3.07
Adjustments to GAAP:
Share-based compensation expense
0.20
0.15
0.75
0.57
Amortization of acquisition-related intangible assets
0.15
0.06
0.40
0.22
Acquisition-related/divestiture costs
0.08
0.02
0.18
0.06
Russia-Ukraine war costs
0.01
—
0.01
—
Significant asset impairments and restructurings
0.03
0.05
0.19
0.13
(Gains) and losses on investments
(0.01)
(0.01)
0.02
0.03
Income tax effect of non-GAAP adjustments
(0.08)
(0.05)
(0.33)
(0.20)
Significant tax matters
(0.04)
(0.03)
(0.04)
0.01
Non-GAAP EPS
$ 0.87
$ 1.14
$ 3.73
$ 3.89
Amounts may not sum or recalculate due to rounding.
CISCO SYSTEMS, INC.
GAAP TO NON-GAAP EPS
IMPACT OF SPLUNK ACQUISITION, INCLUDING FINANCING COSTS
July 27, 2024
Three Months Ended
Fiscal Year Ended
GAAP EPS Impact
$ (0.16)
$ (0.25)
Amortization of acquisition-related intangible assets
0.09
0.14
Acquisition-related costs
0.06
0.11
Income tax effect of non-GAAP adjustments
(0.03)
(0.05)
Non-GAAP EPS Impact
$ (0.04)
$ (0.04)
Amounts may not sum due to rounding.
CISCO SYSTEMS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES
GROSS MARGINS, OPERATING EXPENSES, OPERATING MARGINS, INTEREST AND OTHER INCOME (LOSS), NET,
AND NET INCOME
(In millions, except percentages)
Three Months Ended
July 27, 2024
Product
Gross
Margin
Services
Gross
Margin
Total
Gross
Margin
Operating
Expenses
Y/Y
Operating
Income
Y/Y
Interest
and
other
income
(loss),
net
Net
Income
Y/Y
GAAP amount
$ 6,214
$ 2,567
$ 8,781
$ 6,163
12 %
$ 2,618
(38) %
$ (222)
$ 2,162
(45) %
% of revenue
63.0 %
67.8 %
64.4 %
45.2 %
19.2 %
(1.6) %
15.8 %
Adjustments to GAAP amounts:
Share-based compensation
expense
57
76
133
660
793
—
793
Amortization of acquisition-
related intangible assets
331
—
331
268
599
—
599
Acquisition/divestiture-related
costs
5
16
21
297
318
—
318
Russia-Ukraine war costs
—
—
—
—
—
49
49
Significant asset impairments
and restructurings
—
—
—
112
112
—
112
(Gains) and losses on
investments
—
—
—
—
—
(32)
(32)
Income tax effect/significant tax
matters
—
—
—
—
—
—
(470)
Non-GAAP amount
$ 6,607
$ 2,659
$ 9,266
$ 4,826
4 %
$ 4,440
(17) %
$ (205)
$ 3,531
(25) %
% of revenue
67.0 %
70.3 %
67.9 %
35.4 %
32.5 %
(1.5) %
25.9 %
Three Months Ended
July 29, 2023
Product
Gross
Margin
Services
Gross
Margin
Total
Gross
Margin
Operating
Expenses
Operating
Income
Interest
and
other
income
(loss),
net
Net
Income
GAAP amount
$ 7,413
$ 2,335
$ 9,748
$ 5,495
$ 4,253
$ 218
$ 3,958
% of revenue
63.6 %
65.7 %
64.1 %
36.1 %
28.0 %
1.4 %
26.0 %
Adjustments to GAAP amounts:
Share-based compensation expense
40
63
103
520
623
—
623
Amortization of acquisition-related intangible assets
168
—
168
70
238
—
238
Acquisition/divestiture-related costs
14
—
14
63
77
—
77
Russia-Ukraine war costs
—
—
—
(7)
(7)
—
(7)
Supplier component remediation charge (adjustment), net
(9)
—
(9)
—
(9)
—
(9)
Significant asset impairments and restructurings
—
—
—
203
203
—
203
(Gains) and losses on investments
—
—
—
—
—
(55)
(55)
Income tax effect/significant tax matters
—
—
—
—
—
—
(348)
Non-GAAP amount
$ 7,626
$ 2,398
$ 10,024
$ 4,646
$ 5,378
$ 163
$ 4,680
% of revenue
65.5 %
67.5 %
65.9 %
30.6 %
35.4 %
1.1 %
30.8 %
Amounts may not sum and percentages may not recalculate due to rounding.
CISCO SYSTEMS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES
GROSS MARGINS, OPERATING EXPENSES, OPERATING MARGINS, INTEREST AND OTHER INCOME (LOSS), NET,
AND NET INCOME
(In millions, except percentages)
Fiscal Year Ended
July 27, 2024
Product
Gross
Margin
Services
Gross
Margin
Total
Gross
Margin
Operating
Expenses
Y/Y
Operating
Income
Y/Y
Interest
and
other
income
(loss),
net
Net
Income
Y/Y
GAAP amount
$ 24,914
$ 9,914
$ 34,828
$ 22,647
9 %
$ 12,181
(19) %
$ 53
$ 10,320
(18) %
% of revenue
63.5 %
68.1 %
64.7 %
42.1 %
22.6 %
0.1 %
19.2 %
Adjustments to GAAP amounts:
Share-based compensation
expense
214
300
514
2,537
3,051
—
3,051
Amortization of acquisition-
related intangible assets
936
—
936
698
1,634
—
1,634
Acquisition/divestiture-related
costs
10
24
34
700
734
—
734
Russia-Ukraine war costs
—
—
—
(12)
(12)
49
37
Significant asset impairments and
restructurings
—
—
—
789
789
—
789
(Gains) and losses on investments
—
—
—
—
—
100
100
Income tax effect/significant tax
matters
—
—
—
—
—
—
(1,515)
Non-GAAP amount
$ 26,074
$ 10,238
$ 36,312
$ 17,935
1 %
$ 18,377
(4) %
$ 202
$ 15,150
(5) %
% of revenue
66.4 %
70.4 %
67.5 %
33.3 %
34.2 %
0.4 %
28.2 %
Fiscal Year Ended
July 29, 2023
Product
Gross
Margin
Services
Gross
Margin
Total
Gross
Margin
Operating
Expenses
Operating
Income
Interest
and
other
income
(loss),
net
Net
Income
GAAP amount
$ 26,552
$ 9,201
$ 35,753
$ 20,722
$ 15,031
$ 287
$ 12,613
% of revenue
61.5 %
66.4 %
62.7 %
36.4 %
26.4 %
0.5 %
22.1 %
Adjustments to GAAP amounts:
Share-based compensation expense
151
245
396
1,951
2,347
—
2,347
Amortization of acquisition-related intangible assets
630
—
630
282
912
—
912
Acquisition/divestiture-related costs
18
—
18
241
259
—
259
Supplier component remediation charge (adjustment),
net
(9)
—
(9)
—
(9)
—
(9)
Significant asset impairments and restructurings
—
—
—
531
531
—
531
(Gains) and losses on investments
—
—
—
—
—
133
133
Income tax effect/significant tax matters
—
—
—
—
—
—
(807)
Non-GAAP amount
$ 27,342
$ 9,446
$ 36,788
$ 17,717
$ 19,071
$ 420
$ 15,979
% of revenue
63.4 %
68.2 %
64.5 %
31.1 %
33.5 %
0.7 %
28.0 %
Amounts may not sum and percentages may not recalculate due to rounding.
CISCO SYSTEMS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES
EFFECTIVE TAX RATE
(In percentages)
Three Months Ended
Fiscal Year Ended
July 27,
2024
July 29,
2023
July 27,
2024
July 29,
2023
GAAP effective tax rate
9.8 %
11.5 %
15.6 %
17.7 %
Total adjustments to GAAP provision for income taxes
6.8 %
4.0 %
2.9 %
0.3 %
Non-GAAP effective tax rate
16.6 %
15.5 %
18.5 %
18.0 %
GAAP TO NON-GAAP GUIDANCE
Q1 FY 2025
Gross Margin
Operating Margin
Earnings per
Share (2)
GAAP
63.5% – 64.5%
14% – 15%
$0.35 – $0.42
Estimated adjustments for:
Share-based compensation expense
1.0 %
6.0 %
$0.16 – $0.17
Amortization of acquisition-related intangible assets and acquisition/divestiture-related
costs
2.5 %
6.5 %
$0.17 – $0.18
Significant asset impairments and restructurings(1)
—
5.5 %
$0.13 – $0.16
Non-GAAP
67% – 68%
32% – 33%
$0.86 – $0.88
FY 2025
Earnings per
Share (2)
GAAP
$1.93 – $2.05
Estimated adjustments for:
Share-based compensation expense
$0.74 – $0.76
Amortization of acquisition-related intangible assets and acquisition/divestiture-related costs
$0.60 – $0.62
Significant asset impairments and restructurings (1)
$0.19 – $0.21
Non-GAAP
$3.52 – $3.58
(1) On August 14, 2024, Cisco announced a restructuring plan to allow it to invest in key growth opportunities and drive more efficiencies in its business. In connection with this restructuring plan, Cisco currently estimates that it will recognize pre-tax charges of up to $1 billion consisting of severance and other one-time termination benefits, and other costs. Cisco expects to recognize approximately $700 million to $800 million of these charges in the first quarter of fiscal 2025 with the remaining amount expected to be recognized during the rest of the fiscal year.
(2) Estimated adjustments to GAAP earnings per share are shown after income tax effects.
Except as noted above, this guidance does not include the effects of any future acquisitions/divestitures, significant asset impairments and restructurings, significant litigation settlements and other contingencies, Russia–Ukraine war costs, gains and losses on investments, significant tax matters, or other items, which may or may not be significant.
Forward Looking Statements, Non-GAAP Information and Additional Information
This release may be deemed to contain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other things, statements regarding future events (such as our customers’ reliance on Cisco to connect and protect their organizations in the era of AI and our focus on growth and consistent execution as we invest in AI, cloud and cybersecurity, while maintaining capital returns) and the future financial performance of Cisco (including the guidance for Q1 FY 2025 and full year FY 2025) that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including: business and economic conditions and growth trends in the networking industry, our customer markets and various geographic regions; global economic conditions and uncertainties in the geopolitical environment; our development and use of artificial intelligence; overall information technology spending; the growth and evolution of the Internet and levels of capital spending on Internet-based systems; variations in customer demand for products and services, including sales to the service provider market, cloud, enterprise and other customer markets; the return on our investments in certain priorities, key growth areas, and in certain geographical locations, as well as maintaining leadership in Networking and services; the timing of orders and manufacturing and customer lead times; supply constraints; changes in customer order patterns or customer mix; insufficient, excess or obsolete inventory; variability of component costs; variations in sales channels, product costs or mix of products sold; our ability to successfully acquire businesses and technologies and to successfully integrate and operate these acquired businesses and technologies; our ability to achieve expected benefits of our partnerships; increased competition in our product and services markets, including the data center market; dependence on the introduction and market acceptance of new product offerings and standards; rapid technological and market change; manufacturing and sourcing risks; product defects and returns; litigation involving patents, other intellectual property, antitrust, stockholder and other matters, and governmental investigations; our ability to achieve the benefits of restructurings and possible changes in the size and timing of related charges; cyber attacks, data breaches or other incidents; vulnerabilities and critical security defects; our ability to protect personal data; evolving regulatory uncertainty; terrorism; natural catastrophic events (including as a result of global climate change); any pandemic or epidemic; our ability to achieve the benefits anticipated from our investments in sales, engineering, service, marketing and manufacturing activities; our ability to recruit and retain key personnel; our ability to manage financial risk, and to manage expenses during economic downturns; risks related to the global nature of our operations, including our operations in emerging markets; currency fluctuations and other international factors; changes in provision for income taxes, including changes in tax laws and regulations or adverse outcomes resulting from examinations of our income tax returns; potential volatility in operating results; and other factors listed in Cisco’s most recent reports on Forms 10-Q and 10-K filed on May 21, 2024 and September 7, 2023, respectively. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in Cisco’s most recent reports on Forms 10-Q and 10-K as each may be amended from time to time. Cisco’s results of operations for the three months and the year ended July 27, 2024 are not necessarily indicative of Cisco’s operating results for any future periods. Any projections in this release are based on limited information currently available to Cisco, which is subject to change. Although any such projections and the factors influencing them will likely change, Cisco will not necessarily update the information, since Cisco will only provide guidance at certain points during the year. Such information speaks only as of the date of this release.
This release includes non-GAAP net income, non-GAAP gross margins, non-GAAP operating expenses, non-GAAP operating income and margin, non-GAAP effective tax rates, non-GAAP interest and other income (loss), net, and non-GAAP net income per share data for the periods presented. It also includes future estimated ranges for gross margin, operating margin, tax provision rate and EPS on a non-GAAP basis.
These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles (GAAP) and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Cisco believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Cisco’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Cisco’s results of operations in conjunction with the corresponding GAAP measures.
Cisco believes that the presentation of non-GAAP measures when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and its historical and projected results of operations.
For its internal budgeting process, Cisco’s management uses financial statements that do not include, when applicable, share-based compensation expense, amortization of acquisition-related intangible assets, acquisition-related/divestiture costs, significant asset impairments and restructurings, significant litigation settlements and other contingencies, Russia–Ukraine war costs, gains and losses on investments, the income tax effects of the foregoing and significant tax matters. Cisco’s management also uses the foregoing non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Cisco. In prior periods, Cisco has excluded other items that it no longer excludes for purposes of its non-GAAP financial measures. From time to time in the future there may be other items that Cisco may exclude for purposes of its internal budgeting process and in reviewing its financial results. For additional information on the items excluded by Cisco from one or more of its non-GAAP financial measures, refer to the Form 8-K regarding this release furnished today to the Securities and Exchange Commission.
Annualized recurring revenue represents the annualized revenue run-rate of active subscriptions, term licenses, operating leases and maintenance contracts at the end of a reporting period, net of rebates to customers and partners as well as certain other revenue adjustments. Includes both revenue recognized ratably as well as upfront on an annualized basis.
About Cisco
Cisco (Nasdaq: CSCO) is the worldwide technology leader that securely connects everything to make anything possible. Our purpose is to power an inclusive future for all by helping our customers reimagine their applications, power hybrid work, secure their enterprise, transform their infrastructure, and meet their sustainability goals. Discover more at newsroom.cisco.com and follow us on X at @Cisco.
Copyright © 2024 Cisco and/or its affiliates. All rights reserved. Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S. and other countries. To view a list of Cisco trademarks, go to: www.cisco.com/go/trademarks. Third-party trademarks mentioned in this document are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company. This document is Cisco Public Information.
RSS Feed for Cisco: https://newsroom.cisco.com/rss-feeds
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SOURCE Cisco Systems, Inc.
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Horizon Media Study Finds That Social Shopping is Quickly Replacing Ecommerce
Published
57 mins agoon
September 24, 2024By
Millennials and Gen X Growing Group Who Scroll to Shop; Live and Virtual Shopping Driving More Brand Purchases
NEW YORK, Sept. 24, 2024 /PRNewswire/ — As Gen Z and Millennials increasingly research and purchase products through social media as well through live and virtual shopping, gaming, and automated reality platforms, social shopping is set to outpace e-commerce, putting pressure on brands that face a collapsing consumer purchasing journey. How consumers are behaving and the implications for brands, social media platforms, and retail media outlets are the subject of The Rise of Social Shopping, released by Horizon Media today.
The findings from the WHY Group, Horizon Media’s intelligence center of excellence, and Night Market, Horizon’s commerce affiliate, demonstrate that social shopping is quickly replacing ecommerce. The results show that one in four people today are scrolling to shop. Among social shoppers, 80% say they make a purchase twice a month and 73% expect to purchase at least once a month in the upcoming year, with Millennials most likely to be frequent shoppers. Those not currently shopping on social are open and ready: 75% of Gen Z, 76% of Millennials and 61% of Gen X feel comfortable purchasing on social media. Marketers need to tap into these platforms to connect with customers where they are to drive additional revenue.
Beyond the Gen Z adopters, Millennials and Gen X are also quickly shifting online buying habits to social platforms including TikTok, Pinterest, Snapchat, Facebook, and Instagram. In addition to live shopping, gaming platforms such as Twitch and Roblox now connect brands to buyers.
More than half of products purchased through these platforms are brand name and purchases span categories – more than 40% include Apparel, Beauty, Electronics, and Personal Care. Impulse buys are big, including trending and seasonal products.
The market opportunity is large: Social commerce revenue is projected to reach $6.2 trillion globally by 2030 (Statista). Instagram, Facebook, YouTube and Tik Tok have already integrated shopping into their user experience and more brands are jumping in to generate revenue. More than 72% of social shoppers say they could replace at least some of their online shopping with social shopping.
However, the biggest hurdle to more widespread acceptance is scammers and the trustworthiness of online shopping. Brand verification is key and a large opportunity to generate sales. Marketers need to invest and promote safety in their brands. Once this happens, they will capture more market share.
“We are witnessing one of the most radical shifts in behavior we’ve seen since the adoption of ecommerce,” said George Musli, Chief Business Officer, Night Market. “Social shopping promises a dynamic, personalized experience that can shorten the marketing funnel and blur the boundaries between online and offline retail. Marketers need to capitalize on the platforms poised for growth. Today gaming experiences are already making an impact, especially among Millennials. Brands that jump in will be in a prime position to grow when uptake expands.”
The Rise of Social Shopping report includes the following key findings:
Social Shopping in Tik Tok, and Beyond
Despite reports that the introduction of Tik Tok Shop would spell the app’s demise, people disagree
Just 12% of social shoppers agree that social shopping on places like Tik Tok is making social media less fun, a figure matched by 13% of non-social shoppers
Beyond Tik Tok, there is significant opportunity across Meta properties and YouTube, especially with older cohorts
Facebook is not only one of the most used platforms but also the most trusted for social and non-social shoppers alike
Marketers can take advantage of introducing new products and promotions by targeting the more than 4 in 10 non-social shoppers that already see social media as a place to gather inspiration or research
Live streaming and virtual shopping are new commerce channels
Live shopping and virtual shopping are gaining traction, adding new dimensions to the experience
This shift in shopping behavior goes beyond Gen Z, with Millennials and even Gen X embracing new ways to purchase through social media, gaming experiences, AR, and VR
Among social shoppers 58% of Millennials have purchase form a livestream and would again, 56% of Gen X are open to trying. This extends to virtual shopping with 48% of Millennials planning to do this again, and 40% of Gen X open. These new avenues can bring incremental sales for marketers promoting their brands in new ways
Social Shopping Excels with Relational Buyers
Shoppers see social commerce as a way to support small businesses, foster community, and promote social good, while social shoppers further associate it with endorsements and personalized recommendations
Social shopping excels in creating connections in a way that traditional online shopping does not
Users are looking for inspiration (55% of the population, 60% of Gen Z). Marketers can help them discover a brand or product they didn’t even know they needed
Timing is Key for Purchases
Impulse buys are big including trending and seasonal products
Brands can encourage immediate buying with reminders to purchase and exclusive offers
Influencer partnerships, trending hashtags and seasonal products can also be instrumental in generating hype for products and services
Marketers can evaluate the content users are browsing and what products they are considering to purchase, and serve an ad that leads to a verified brand page (and contains some other enticements like free shipping) to drive sales
“Social shopping is now officially a part of the online ecosystem, tapping into community in a way that online does not,” Pam Wake, VP, Why Group. “Social offers a rich environment for brands to foster connections, build loyalty and consequently create unique shopping experiences that blur the boundaries between commerce and community. Marketers can tap into existing fandoms, subcultures and niche communities that are drawn together by shared values, norms, behaviors and identity makers.”
For more findings, as well as recommendations for how brands can translate these insights into action and engagement, access the full report at The Rise of Social Shopping.
Methodology:
We surveyed 1,008 adults 18-59 who use social media and shop online, including n=499 that are current social shoppers (purchasing via social commerce avenues including social media, gaming or AR/VR) and n=509 who are not.
The sample was balanced to the US general population by age, gender, region and income. Surveys were fielded between 4/30/2024 and 5/7/2024.
About Night Market
Night Market, which is part of Horizon, is a multi-service retail and commerce agency that helps clients maximize business performance, growth, and outcomes. We offer a comprehensive range of retail and commerce solutions designed to help ignite and accelerate growth across marketplaces, retail, DTC, and omnichannel. From media to creative, customer experience (CX), and digital transformation (DX), we combine the right mix of human and technical capabilities to design and deliver experiences across owned, leased, contextual, and experiential platforms that influence consumer perceptions and behavior and drive transactions. Founded in 2020 with a focus on being a business partner and a business driver as much, if not more, than an agency.
About Horizon Media
Horizon Media, the largest U.S. media agency delivers data-driven business outcomes for some of the most innovative and ambitious brands. Founded in 1989, headquartered in New York, and with offices in Los Angeles and Toronto, the company employs 2,400 people and has media investments of more than $8.5 billion. Horizon Media’s fundamental belief is that business is personal, which drives its approach to connecting brands with their customers and engaging with its own employees resulting in industry-leading workplace satisfaction levels (Glassdoor). The company is consistently recognized by independent media outlets for its client excellence and has earned several “Best Workplaces” awards reflecting its commitment to DEI and the life and well-being of everyone at Horizon Media.
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SOURCE Horizon Media
Technology
Bella Protocol Unveils Revolutionary AI-Powered Trading Tools in Major Brand Upgrade
Published
57 mins agoon
September 24, 2024By
Building Smarter, Accessible Solutions for Crypto Traders and Yield Farmers
SINGAPORE, Sept. 24, 2024 /PRNewswire/ — Bella Protocol, a suite of DeFi products focused on unlocking liquidity potential and maximizing crypto yields, has officially unveiled its highly anticipated AI-powered trading tools. This launch marks a pivotal moment in the platform’s evolution, representing not only a significant brand upgrade but also a major step forward in democratizing advanced crypto trading strategies. With these AI-driven innovations, Bella reaffirms its commitment to making crypto trading and yield farming smarter, more efficient, and accessible to users of all experience levels—from beginners to seasoned traders.
Bella Protocol’s new AI-powered tools are designed to tackle some of the most pressing challenges in the DeFi space, including the complexity of trading strategies, the need for constant market monitoring, and the inaccessibility of advanced yield optimization techniques for everyday users. With these innovations, Bella makes it easier for users to navigate the DeFi landscape and unlock the full potential of their crypto assets.
At the core of this launch are the Bella Signal Bot and Bella Research Bot (the latter to be released by early October), two groundbreaking products that harness the power of artificial intelligence to deliver real-time trading signals and in-depth market analysis. The Bella Signal Bot provides users with actionable long and short signals across 12 perpetual token pairs, including popular pairs like BTC/USDT, ETH/USDT, SOL/USDT, XRP/USDT, and BNB/USDT. The selection of token pairs will continue to expand, giving traders more opportunities to make informed decisions quickly and effectively. Tailored to suit different trading strategies, the bot runs on five distinct AI models, ensuring that both novice and professional traders can benefit from its insights.
Meanwhile, the soon-to-be-released Bella Research Bot is poised to revolutionize how users access and analyze market data. Powered by a large language model (LLM), the bot offers comprehensive insights into crypto projects, trading trends, and market sentiment, all delivered directly through Telegram. This tool simplifies portfolio management by delivering real-time fundamental data, making it easier for users to stay ahead of the market without the need for intensive research.
In addition to its AI-powered tools, Bella Protocol has introduced Tuner, a simulation tool for Uniswap v3 designed for quant traders and advanced liquidity providers. Bella Tuner enables users to fine-tune and back test liquidity provision strategies with precise, tick-level accuracy.
Beyond trading, Bella Protocol’s existing products, Flex Savings and LP Farm, will continue to simplify and expand access to yield farming for a wider audience. Flex Savings enables non-technical users to earn passive income by providing liquidity to platforms like Curve, featuring automated compounding and gas fee savings to maximize returns without constant oversight. LP Farm is designed to optimize liquidity provision returns on zkSync Era, Mantle, and Manta Pacific, utilizing a mutually beneficial mechanism that enhances liquidity for decentralized exchanges while offering liquidity providers lucrative staking incentives.
As Felix Xu, co-founder of Bella Protocol, shared, “Our latest product release and brand upgrade mark a new chapter in Bella’s journey. We’re not just building tools—we’re building solutions that are reshaping the way users engage with DeFi. Our AI-powered tools are designed to remove the complexity from crypto trading and yield farming, giving users of all experience levels the ability to make smarter, data-driven decisions. With AI at the core of our platform, we’re making it possible for anyone, regardless of experience, to optimize their crypto portfolios and take advantage of cutting-edge trading strategies. This is just the beginning.”
Looking forward, Bella Protocol is focused on expanding its suite of AI-driven products, continuously refining its existing offerings, and exploring new ways to integrate blockchain and AI to provide users with the best tools for navigating the rapidly evolving DeFi landscape. As the platform grows, its commitment to creating a seamless, secure, and inclusive DeFi experience remains stronger than ever.
For more information about Bella Protocol, please visit https://bella.fi/, follow Bella Protocol on Twitter, or join the community.
About Bella Protocol
Bella Protocol is a DeFi project that provides a suite of AI-powered trading tools, including the Bella Signal Bot and Bella Research Bot, which are available via Telegram and offer tailored trading signals and detailed market insights. Additionally, Bella Protocol offers auto-compounding yield aggregator and quantitative analysis tools, including a yield protocol Bella LP Farm, which is live on zkSync, Mantle Network and Manta Network, an Ethereum-based smart yield aggregator Bella Flex Savings, and a Uniswap V3 simulator called Tuner.
Media Contact
Ryan Walker
R.J. Walker & Co.
ryan@rjwalkerco.com
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SOURCE Bella Protocol
Technology
EQT Active Core Infrastructure fund holds final close
Published
57 mins agoon
September 24, 2024By
Total fee-generating commitments for the Fund amount to USD 3.2 billion (EUR 2.9 billion), including fee-generating co-investments of USD 0.3 billion (EUR 0.3 billion)EQT Active Core Infrastructure is a longer-hold strategy with a focus on downside protection, and applies EQT’s active ownership approach and value creation playbook to core infrastructure companies in Europe and North America.The Fund has already made three highly thematic investments that align with the strategy’s investment criteria and core focus.
STOCKHOLM, Sept. 24, 2024 /PRNewswire/ — EQT is pleased to announce that the EQT Active Core Infrastructure fund (or the “Fund”) has held its final close. Total fee-generating commitments for the Fund amount to USD 3.2 billion (EUR 2.9 billion), including fee-generating co-investments of USD 0.3 billion (EUR 0.3 billion).
Applying the global platform’s active ownership approach, industry insights, and local market access, Active Core Infrastructure seeks to leverage EQT’s 15-year track record of building strong and resilient infrastructure businesses for the future. It invests in companies that provide essential services to society and aims to offer an attractive risk-return proposition based on stable cash yield generation, inflation protection, low volatility, and a long-term value creation opportunity.
The Fund is backed by a well-diversified global investor base consisting of blue-chip clients, including pension funds, insurance companies, sovereign wealth funds, family offices, and private wealth platforms.
Alex Greenbaum, Partner and Head of EQT Active Core Infrastructure, said: “We have an exciting deal pipeline of attractive, thematic investment opportunities ahead of us, and are pleased to have already partnered with three businesses that share our vision to deliver long-term, sustainable growth. We see significant potential in core infrastructure against the current macroeconomic outlook, with the possibility to acquire high quality assets while creating value using our proven active ownership approach, and I am excited to further scale the strategy in the years ahead.”
The Fund has capitalised on the higher interest rate environment of the last two years and has invested across three thematically sourced, high-quality, and downside-protected companies, which demonstrate strong value creation potential:
Ocea Group, a provider of smart water and heat sub-metering infrastructure in FranceRadius Global Infrastructure, an owner and operator of critical digital infrastructure sites globallyTion Renewables, a renewable energy producer and operator with a diversified portfolio of utility-scale solar, wind and battery storage across the European Union and the United Kingdom
Contact
EQT Press Office, press@eqtpartners.com
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https://mb.cision.com/Main/87/4041486/3015205.pdf
Press Release, EQT Active Core Infrastructure, 240924
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