Cisco's 2025 10-K: Security Revenue Soars 59% as Networking Dips

Networking giant Cisco Systems, Inc. recently released its annual financial report, giving us a detailed look at its performance for the fiscal year ending July 26, 2025. For anyone following the tech sector, digging into a company's Form 10-K filing with the SEC is the best way to understand what's really happening beyond the headlines. Let's break down the key takeaways from Cisco's income statement.

Overall, Cisco reported a solid year, with total revenue growing 5% to $56.7 billion, up from $53.8 billion in the prior year. Net income remained relatively flat at $10.2 billion.

To get a better sense of how Cisco generates revenue and manages its costs, the following flow diagram visualizes the company's income statement from top-line sales down to bottom-line profit.

A Tale of Two Segments: Security Soars as Networking Dips

The most striking story within the report is the dramatic shift in the performance of Cisco's product categories.

• Security on the Rise: The Security division was the standout performer, with product revenue skyrocketing by 59% to $8.1 billion from $5.1 billion last year. This massive jump reflects Cisco's strategic focus and significant investments in cybersecurity, including the major acquisition of Splunk in fiscal 2024. This growth is crucial as it diversifies the company's revenue streams away from its traditional hardware business.

• Networking's Gentle Decline: In contrast, the company's largest segment, Networking, saw a modest 3% decline in product revenue, falling to $28.3 billion from $29.2 billion. While this segment remains the bedrock of the company, the slight downturn underscores the importance of growth in newer, high-demand areas like security and observability. The Observability segment, another key growth area, also posted strong results with a 26% increase in revenue to $1.1 billion.

Geographic Performance and Shareholder Returns

Geographically, Cisco saw balanced growth across all its regions. The Americas, its largest market, grew 5% to $33.7 billion. The EMEA (Europe, Middle East, and Africa) region also grew by 5%, while the APJC (Asia Pacific, Japan, and China) region saw a 6% increase in revenue.

Cisco maintained its strong commitment to returning capital to its shareholders. In fiscal 2025, the company:

• Paid $6.4 billion in dividends.
• Repurchased $6.0 billion of its common stock.

This combined total of over $12.4 billion returned to shareholders signals management's confidence in the company's financial stability and long-term cash flow generation, which saw a healthy increase to $14.2 billion from operations.

Looking Ahead

Cisco's 2025 fiscal year paints a clear picture of a company in transition. It is successfully leveraging acquisitions and strategic initiatives to build a formidable presence in the high-growth security and observability markets. While its core networking business faces headwinds, the explosive growth elsewhere is reshaping the company's profile. For investors and industry watchers, the key will be to monitor if this momentum in software-centric businesses can continue to outpace the challenges in the traditional hardware landscape.