Cisco Reports Fourth Quarter and Fiscal Year 2008 Earnings

Market Wire, August, 2008

Cisco (NASDAQ: CSCO)

--  Q4 Net Sales: $10.4 billion (increase of 10% year over year)

--  Q4 Net Income: $2.0 billion GAAP; $2.4 billion non-GAAP

--  Q4 Earnings per Share: $0.33 GAAP (increase of 6% year over year);
    $0.40 non-GAAP (increase of 11% year over year)

--  FY 2008 Net Sales: $39.5 billion (increase of 13% year over year)

--  FY 2008 Net Income: $8.1 billion GAAP; $9.6 billion non-GAAP

--  FY 2008 Earnings per Share: $1.31 GAAP (increase of 12% year over
    year); $1.56 non-GAAP (increase of 16% year over year)
    

Cisco (NASDAQ: CSCO), the worldwide leader in networking that transforms how people connect, communicate and collaborate, today reported its fourth quarter and fiscal year results for the period ended July 26, 2008. Cisco reported fourth quarter net sales of $10.4 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.0 billion or $0.33 per share, and non-GAAP net income of $2.4 billion or $0.40 per share.

"Cisco delivered solid quarterly and annual results as network-enabled business process changes and productivity increases gain traction on a global basis," said John Chambers, chairman and CEO, Cisco. "Today's strong results demonstrate the company's ability to execute. The market is clearly in transition, and we will use this time as an opportunity to expand our share of customer spend and to aggressively move into market adjacencies."

Chambers continued, "Our focus is on our portfolio approach to technology innovation, a broad global footprint, and management dedicated to sustainable differentiation and execution. We believe we are entering the next phase of the Internet as growth and productivity will center on collaboration enabled by networked Web 2.0 technologies."

                              Q4 GAAP Results

                                  Q4 2008        Q4 2007      Vs. Q4 2007
                               -------------- -------------- -------------
Net Sales                      $ 10.4 billion $  9.4 billion         + 9.9%
Net Income                     $  2.0 billion $  1.9 billion         + 4.4%
Earnings per Share             $         0.33 $         0.31         + 6.5%



                           Q4 Non-GAAP Results

                                  Q4 2008        Q4 2007      Vs. Q4 2007
                               -------------- -------------- -------------
Net Income                     $  2.4 billion $  2.3 billion         + 5.6%
Earnings per Share             $         0.40 $         0.36         +11.1%



                           Fiscal Year GAAP Results

                                  FY 2008        FY 2007      Vs. FY 2007
                               -------------- -------------- -------------
Net Sales                      $ 39.5 billion $ 34.9 billion         +13.2%
Net Income                     $  8.1 billion $  7.3 billion         + 9.8%
Earnings per Share             $         1.31 $         1.17         +12.0%


                         Fiscal Year Non-GAAP Results

                                  FY 2008        FY 2007      Vs. FY 2007
                               -------------- -------------- -------------
Net Income                     $  9.6 billion $  8.4 billion         +14.5%
Earnings per Share             $         1.56 $         1.34         +16.4%

A reconciliation between GAAP net income and non-GAAP net income is provided in the table on page 7.

Cisco will discuss fourth quarter and fiscal year 2008 results and business outlook on a conference call and webcast at 1:30 p.m. Pacific Time today. Call information and related charts are available at http://investor.cisco.com .

Other Financial Highlights

--  Cash flows from operations were $3.5 billion for the fourth quarter of
    fiscal 2008, compared with $2.7 billion for the fourth quarter of fiscal
    2007, and compared with $3.0 billion for the third quarter of fiscal 2008.
    Cash flows from operations were $12.1 billion for fiscal 2008, compared
    with $10.1 billion for fiscal 2007.

--  Cash and cash equivalents and investments were $26.2 billion at the
    end of fiscal 2008, compared with $22.3 billion at the end of fiscal 2007,
    and compared with $24.4 billion at the end of the third quarter of fiscal
    2008.

--  During the fourth quarter of fiscal 2008, Cisco repurchased 54 million
    shares of common stock at an average price of $25.11 per share for an
    aggregate purchase price of $1.35 billion.  During fiscal 2008, Cisco
    repurchased 372 million shares of common stock at an average price of
    $27.80 per share for an aggregate purchase price of $10.4 billion.  As of
    July 26, 2008, Cisco had repurchased and retired 2.6 billion shares of
    Cisco common stock at an average price of $20.60 per share for an aggregate
    purchase price of approximately $53.6 billion since the inception of the
    stock repurchase program.  The remaining authorized repurchase amount as of
    July 26, 2008 was $8.4 billion with no termination date.

--  Days sales outstanding in accounts receivable (DSO) at the end of the
    fourth quarter of fiscal 2008 were 34 days, compared with 38 days at the
    end of the fourth quarter of fiscal 2007, and compared with 39 days at the
    end of the third quarter of fiscal 2008.

--  Inventory turns on a GAAP basis were 11.8 in the fourth quarter of
    fiscal 2008, compared with 10.3 in the fourth quarter of fiscal 2007, and
    compared with 11.0 in the third quarter of fiscal 2008.  Non-GAAP inventory
    turns were 11.5 in the fourth quarter of fiscal 2008, compared with 10.1 in
    the fourth quarter of fiscal 2007, and compared with 10.7 in the third
    quarter of fiscal 2008.