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  • Driving Shareholder Value

    Kelly Kramer

    Executive Vice President, Chief Financial Officer

    June 9, 2015

  • This presentation 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. Please

    see Ciscos filings with the SEC, including its most recent filings on Form 10-K and Form 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.

    During this presentation references to historical financial measures of Cisco will include references to non-GAAP financial measures.

    Cisco provides a reconciliation between GAAP and non-GAAP financial information on our website at www.cisco.com under

    Financial Info in the Investor Relations section.

    http://investor.cisco.com/investor-relations/financial-information/Financial-Results/default.aspx

    Non-GAAP measures for future periods would not include, when applicable, share-based compensation expense, amortization of

    acquisition-related intangible assets, impact to cost of sales from purchase accounting adjustments to inventory, acquisition-

    related/divestiture costs, significant asset impairments and restructurings, significant litigation settlements, the income tax effects of

    the foregoing, significant tax matters, and other items that Cisco may exclude from time to time in the future, such as significant

    gains or losses from contingencies.

    Forward-looking Statements

    GAAP Reconciliation

    Cisco and/or its affiliates. All rights reserved. Cisco Public 2 Investor Day 2015

    http://investor.cisco.com/investor-relations/financial-information/Financial-Results/default.aspxhttp://investor.cisco.com/investor-relations/financial-information/Financial-Results/default.aspxhttp://investor.cisco.com/investor-relations/financial-information/Financial-Results/default.aspxhttp://investor.cisco.com/investor-relations/financial-information/Financial-Results/default.aspxhttp://investor.cisco.com/investor-relations/financial-information/Financial-Results/default.aspxhttp://investor.cisco.com/investor-relations/financial-information/Financial-Results/default.aspxhttp://investor.cisco.com/investor-relations/financial-information/Financial-Results/default.aspxhttp://investor.cisco.com/investor-relations/financial-information/Financial-Results/default.aspxhttp://investor.cisco.com/investor-relations/financial-information/Financial-Results/default.aspxhttp://investor.cisco.com/investor-relations/financial-information/Financial-Results/default.aspx

  • Cisco and/or its affiliates. All rights reserved. Cisco Public Investor Day 2015

    Profitable Growth Strategic Investments Capital Return

    Core Financial Values

    Cisco and/or its affiliates. All rights reserved. Cisco Public 3 Investor Day 2015

  • Cisco and/or its affiliates. All rights reserved. Cisco Public Investor Day 2015

    Leading Market Share

    #1 = 9 | #2 = 2

    50% 46% 45% 31% 34%

    14%

    77% 53% 67% 50% 39%

    #1 ENT

    Routing

    #1 Wireless

    LAN

    #1 Switching:

    Modular / Fixed

    #1 Voice #1 SP

    Routing

    #2 Storage:

    Area Networks

    #1

    TelePresence

    #1 Web

    Conferencing

    #2 X86

    Blade Servers

    #1 Network

    Security

    #1 Cloud

    Infrastructure*

    Cisco and/or its affiliates. All rights reserved. Cisco Public 4 Investor Day 2015

    Source: DellOro, Synergy, Infonetics, ACG; Q1CY15 Market share data

    Cisco Network Security share DOES include Sourcefire; Web Conferencing is SaaS

    * Q4CY14 Synergy data

  • Cisco and/or its affiliates. All rights reserved. Cisco Public Investor Day 2015

    Cisco Competitive Advantage

    Source: DellOro, Synergy, Infonetics, ACG; Q1CY15 Market share data

    Cisco Network Security share DOES include Sourcefire; Web Conferencing is SaaS

    Competitors listed above are not the only competitors in these markets and share shown is relative share versus listed competitors

    * Q4CY14 Synergy data

    Cisco

    Huawei

    HP

    Juniper

    Brocade

    Rest of Market

    Cisco

    Alcatel-Lucent

    Juniper

    Ericsson

    Huawei

    Rest of Market

    Cisco

    HP

    Huawei

    Juniper

    Arista

    Rest of Market

    Cisco

    Avaya

    Mitel

    Unify

    Microsoft

    Rest of Market

    Cisco

    Aruba

    Ruckus

    HP

    Rest of Market

    Cisco

    Brocade

    HP

    Qlogic

    Rest of Market

    Cisco

    Polycom

    Huawei

    Logitech

    Vidyo

    Rest of Market

    Cisco

    Citrix

    Microsoft

    Adobe

    Intercall

    Rest of Market

    Cisco

    Checkpoint

    PAN

    Fortinet

    Dell

    Juniper

    McAfee

    Rest of Market

    Cisco

    HP

    Lenovo

    Dell

    Hitachi

    Rest of Market

    Cisco

    HP

    Microsoft

    Dell

    IBM

    #1 ENT

    Routing

    #1 Wireless

    LAN

    #1 Switching:

    Modular / Fixed

    #1 Voice #1 SP

    Routing

    #2 Storage:

    Area Networks

    #1

    TelePresence

    #1 Web

    Conferencing

    #2 X86

    Blade Servers

    #1 Network

    Security

    #1 Cloud

    Infrastructure*

    Cisco and/or its affiliates. All rights reserved. Cisco Public 5 Investor Day 2015

  • Cisco and/or its affiliates. All rights reserved. Cisco Public Investor Day 2015

    Performance Against Our Financial Strategy

    Revenue $B

    CAGR = 3%

    Delivering EPS growth

    with expanding

    Operating Margins

    Executing portfolio trade-offs to fund growth areas

    Enhancing software and

    service offerings to drive

    growth and profitability

    $1.62

    $1.85

    $2.02 $2.06 $2.18

    FY11 FY12 FY13 FY14 FY15E

    Non-GAAP EPS $

    CAGR = 8%

    $43

    $46 $49

    $47 $49

    26%

    28%

    28% 28%

    29%

    FY11 FY12 FY13 FY14 FY15E

    RevenueNon-GAAP Operating Margin

    FY15E assumes mid-point of Q415 guidance

    Cisco and/or its affiliates. All rights reserved. Cisco Public 6 Investor Day 2015

  • Cisco and/or its affiliates. All rights reserved. Cisco Public Investor Day 2015

    Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15

    Product Orders Growth Tale of Two Cities

    Executing well in

    Commercial,

    Enterprise and Public

    Sector

    Increasing relevance

    with SPs driving

    wallet share

    When SP and/or EM

    return to growth

    ~1-3pts on total

    product orders

    (4%) 1%

    1%

    1% 5%

    2%

    0% 6% 9% 9% 10% 8%

    (8)% (5)% (9)% (9)% (1)% (5)%

    (4%)

    3%

    (12)%

    Total

    Product

    SP &

    Emerging

    Markets

    Rest of

    Business

    Cisco and/or its affiliates. All rights reserved. Cisco Public 7 Investor Day 2015

    YoY Growth Rates

  • Cisco and/or its affiliates. All rights reserved. Cisco Public Investor Day 2015

    Business Becoming More Predictable

    Product Deferred growth driven by subscription

    businesses (41% of total, up from 22% in FY11)

    - Meraki, Security, Collaboration

    - Software, ELAs

    Product Subscription Deferred 4-yr CAGR >25%

    ~20% of NTM secured and ~10% of following year

    Driving more software as well as recurring revenue

    FY11 FY15E

    $12

    $15

    4-yr CAGR

    5%

    9%

    4% Service

    Product

    Deferred Revenue

    The FY15E amount is an estimate. Actual results may differ materially due to a variety of factors listed in Ciscos SEC filings, including business and economic conditions.

    $B

    Cisco and/or its affiliates. All rights reserved. Cisco Public 8 Investor Day 2015

  • Cisco and/or its affiliates. All rights reserved. Cisco Public Investor Day 2015

    Driving Operational Excellence

    Incremental Growth

    $0.08 of Opex for every $1.00 of

    Incremental Revenue Growth

    Disciplined Opex Management

    Rigorous portfolio management

    Driving efficiencies to create

    capacity to invest

    Investing in strategic long-term

    growth areas

    $43.2 $48.7

    $16.0 $16.4

    FY11 LTM

    Revenue

    Non-GAAP Opex

    $5.5B

    $0.4B

    $B

    Cisco and/or its affiliates. All rights reserved. Cisco Public 9 Investor Day 2015

  • Cisco and/or its affiliates. All rights reserved. Cisco Public Investor Day 2015

    70%

    30%

    Material Shift of R&D Portfolio to Fuel Profitable Growth

    78%

    22%

    FY14 R&D $5.4B

    FY15E R&D ~$5.5B

    Security, Software, & Cloud

    Security, Software, & Cloud

    Disciplined and deliberate

    portfolio planning

    Shifting investment to key

    growth areas

    Meraki, Security, Collab,

    Cloud, Virtualization, SDN

    Within Core dynamic

    shifts over $1B

    To Web 2.0 accounts

    Packet Optical

    Non-GAAP R&D

    Cisco and/or its affiliates. All rights reserved. Cisco Public 10 Investor Day 2015

    The FY15E amount is an estimate. Actual results may differ materially due to a variety of factors listed in Ciscos SEC fil