2019 Annual Report Defining the Future of the Internet About Cisco Cisco (NASDAQ: CSCO) is the worldwide technology leader that has been making the Internet work since 1984. Our people, products, and partners help society securely connect and seize tomorrow’s digital opportunity today. Find news at thenetwork.cisco.com and follow us on Twitter at @Cisco. Cisco technology is creating a world of potential The Pioneer of Scientific Optics Turku Energia, Finland Cisco and ZEISS bring mechanical By extending Turku Energia’s IT network precision into a world of connected data. to its operations, Cisco helps to secure the provision of heat and power. CORE CISCO TECHNOLOGIES: CORE CISCO TECHNOLOGIES: Webex | IoT | Services IoT | Switches | Security The world’s largest mobile Europe’s largest port data network Each year, 468 million tons of cargo It’s a new day in India; Reliance Jio is move through the Port of Rotterdam. empowering women in enterprise. Cisco helps to connect and protect them all. CORE CISCO TECHNOLOGIES: CORE CISCO TECHNOLOGIES: Mobile | Services | Infrastructure IoT | Security | IoT Kinetic | Routers Discover more at: www.cisco.com. Cisco 2019 Annual Report 1 Introduction to summary report This section provides an overview of Cisco. It does not contain all of the information you should consider. Please review our Annual Report on Form 10-K, our Proxy Statement for our 2019 Annual Meeting of Shareholders, and our Corporate Social Responsibility (CSR) Report, all available on: www.cisco.com. Fiscal 2019 summary report 2 Letter to shareholders Financial highlights for fiscal 2019 2019 Annual Report 4 Defining the Future of the Internet 6 Strategy 7 Leadership Governance and responsibility 8 Visit our website to read online versions of this Annual Report, our Proxy Stakeholder engagement Statement, and our CSR Report. 16 We welcome any feedback you may have. Forward-looking statements This report contains projections and other forward-looking statements regarding future events or the future financial performance of Cisco, including future operating results. These projections and statements are only predictions. Actual events or results may differ materially from those in the projections or other forward-looking statements. See Cisco’s filings with the Securities and Exchange Commission (SEC), including its most recent filings on Forms 10-K and 10-Q, for a discussion of important risk factors that could cause actual events or results to differ materially from those in the projections or other forward-looking statements. 2 Cisco 2019 Annual Report Letter to shareholders To our shareholders, Fiscal 2019 was a great year “We are reinventing IT for Cisco. We began the architectures designed to year with our sights set on deliver a simple and secure continued growth, execution, value proposition to help our and innovation. Our teams customers succeed.” delivered all three. I truly believe — Chuck Robbins, that our portfolio has never Chairman and CEO been stronger, and I hear this from our customers as well. Technology has never been more critical to them as they navigate the complexity of their environments, and we have an opportunity to help drive their success. Four years ago, we set out to transform real-time action is critical in today’s world, integrated throughout. This innovation Cisco into a company that will lead our where success is increasingly defined by required a new application-specific customers’ architectural transitions and speed and agility. integrated circuit (ASIC) for the entire power their futures. We are reinventing IT Cisco Catalyst 9000 switching family and architectures designed to deliver a simple We also know that data is the most critical a new operating system designed to be and secure value proposition to help our asset for our customers, and we are helping open, programmable, resilient, secure, customers succeed. At the same time, we them not only gain valuable insights from it, and capable of being run on-premises or continue to explore how we can provide but also secure it. In a multicloud world with hosted in the cloud. We also innovated at the solutions to some of the world’s most more data, more users, and more services, the controller layer, introducing Cisco DNA pressing problems. the threat surface is expanding while Center as the single controller to run the hackers’ tactics continue to evolve. We entire system. Now we are adding artificial must protect users, data, and workloads Our customers drive our strategy intelligence (AI) and machine learning that are moving and expanding to the capabilities to make it more intuitive and Our strategy is aligned to the needs of cloud. We are integrating our firewall and even simpler to use. our customers and the outcomes they secure web gateway capabilities into Cisco want to achieve. As we continue to build a Umbrella, our cloud-native platform, to give For the first time, we have a completely highly secure, intelligent platform for digital customers a choice in how they deploy refreshed portfolio of campus switches, business, there are six core elements we security controls––from the network to the wireless access points, and enterprise are focused on: applications, data, security, endpoint to the cloud. We are developing routing products with software-defined cloud, infrastructure, and teams. Every the capability to orchestrate security wide area network (SD-WAN) capabilities investment we make and every product policies consistently across all environments within our intent-based networking and service we build fits within one of these with Cisco Defense Orchestrator. We are architecture. We have extended intent- categories that our customers care about. also integrating these solutions—together based networking capabilities to the with Duo, which controls user access to Internet of Things (IoT) edge to deliver We understand that the applications networks and applications, and Talos, our unprecedented scale, flexibility, and security being delivered to organizations represent industry-leading threat intelligence—into for increasingly connected environments. the technology layer closest to the an end-to-end security architecture for the We continue to drive more automation, business opportunity. This is why we are multicloud world. security, agility, cost-efficiency, and ease delivering solutions like Application Centric of use for our customers, helping make Infrastructure (Cisco ACI), which simplifies, This brings us to infrastructure. We the network the foundational driver of their optimizes, and accelerates the deployment launched our intent-based networking business outcomes. lifecycle of applications across data platform two years ago to reinvent centers and multiple clouds. Another key networking for today’s dynamic The next step is to interconnect every offering, AppDynamics, provides visibility environment. Our new network is designed domain of the expanded enterprise, from into applications to help customers make for agility using cloud and wireless IoT to operational technology (OT), from the the right decision at the right time. This capabilities, with the ability to garner campus and the branch to the data center, insights from the data, and with security and from security to cloud and service Cisco 2019 Annual Report 3 providers. This is what we are building: a This is why it is so important for us to multidomain architecture that helps securely support our customers through the entire Key milestones connect any user on any device to any lifecycle. In fiscal 2019 we delivered strong application on any network. top-line growth and profitability, reporting revenue of $51.9 billion. Revenue from Completely refreshed Technology is also at the heart of how subscriptions was 65% of our software portfolio of campus teams interact. Our customers need revenue in FY19, up 9 percentage points switches, wireless access effective and simple ways for their teams year-over-year adjusted for the divestiture points, and enterprise routing to work better together to increase of our Service Provider Video Software collaboration and productivity. They Solutions business. Today, we have a products with SD-WAN also need new ways to engage with subscription model across our Enterprise capabilities within our customers and partners to drive enhanced, Networking portfolio, and we will continue intent-based networking personalized experiences. Intimacy, speed to broaden our offerings going forward. architecture of response, and simplicity of interaction are critical. Our cognitive collaboration When our customers win, Cisco wins. That solutions use AI and machine learning is why issues such as compliance and data With 2.15 million students in to bring powerful capabilities to our privacy inform our innovation in automation, 180 countries participating in customers’ collaboration experiences. policy enforcement, and security. It is why Cisco Networking Academy With AI seamlessly integrated across the we are reinventing IT architectures to help in fiscal 2019, we exceeded collaboration suite, our customers can our customers address the unprecedented our goal of reaching two automate tasks, gain contextual insights, complexity of today’s world to drive their million Cisco Networking and build better relationships. future success. Academy students per year by 2021 When our customers win, Cisco wins With opportunity comes responsibility With intent-based networking, software I often say to our teams that when we run Introduced new software and the