Cisco declared a quarterly dividend of $0.37 per common share, a $0.01 increase or up 3% over the previous quarter's dividend, to be paid on April 28, 2021 to all stockholders of record as of the close of business on April 6, 2021. Future dividends will be subject to Board approval.
Financial Summary
All comparative percentages are on a year-over-year basis unless otherwise noted.
Q2 FY 2021 Highlights
Revenue -- Total revenue was flat at $12.0 billion, with product revenue down 1% and service revenue up 2%. Revenue by geographic segment was: Americas down 1%, EMEA up 2%, and APJC down 4%. Product revenue was led by growth in Security, up 10%. Infrastructure Platforms was down 3% and Applications was flat.
Gross Margin -- On a GAAP basis, total gross margin, product gross margin, and service gross margin were 65.1%, 64.5%, and 66.6%, respectively, as compared with 64.7%, 63.9%, and 66.6%, respectively, in the second quarter of fiscal 2020.
On a non-GAAP basis, total gross margin, product gross margin, and service gross margin were 66.9%, 66.6%, and 67.9%, respectively, as compared with 66.4%, 65.9%, and 67.7%, respectively, in the second quarter of fiscal 2020.
Total gross margins by geographic segment were: 67.5% for the Americas, 66.9% for EMEA and 64.8% for APJC.
Operating Expenses -- On a GAAP basis, operating expenses were $4.6 billion, up 4%, and were 38.1% of revenue. Non-GAAP operating expenses were $3.9 billion, down 1%, and were 32.6% of revenue.
Operating Income -- GAAP operating income was $3.2 billion, down 5%, with GAAP operating margin of 26.9%. Non-GAAP operating income was $4.1 billion, up 2%, with non-GAAP operating margin at 34.4%.
Provision for Income Taxes -- The GAAP tax provision rate was 21.8%. The non-GAAP tax provision rate was 19.0%.
Net Income and EPS -- On a GAAP basis, net income was $2.5 billion, a decrease of 12%, and EPS was $0.60, a decrease of 12%. On a non-GAAP basis, net income was $3.4 billion, an increase of 2%, and EPS was $0.79, an increase of 3%.
Cash Flow from Operating Activities -- $3.0 billion for the second quarter of fiscal 2021, a decrease of 22% compared with $3.8 billion for the second quarter of fiscal 2020.
Balance Sheet and Other Financial Highlights
Cash and Cash Equivalents and Investments -- $30.6 billion at the end of the second quarter of fiscal 2021, compared with $29.4 billion at the end of fiscal 2020.
Deferred Revenue -- $20.8 billion, up 12% in total, with deferred product revenue up 16%. Deferred service revenue was up 9%.
Remaining Performance Obligations -- $28.2 billion at the end of the second quarter of fiscal 2021, up 13%.
Capital Allocation -- In the second quarter of fiscal 2021, we returned $2.3 billion to shareholders through share buybacks and dividends. We declared and paid a cash dividend of $0.36 per common share, or $1.5 billion, and repurchased approximately 19 million shares of common stock under our stock repurchase program at an average price of $42.82 per share for an aggregate purchase price of $801 million. The remaining authorized amount for stock repurchases under the program is $9.2 billion with no termination date.
Acquisitions
In the second quarter of fiscal 2021, we closed the acquisition of Portshift, a privately held applications security solutions company, and the acquisition of assets and the team of Banzai Cloud Zrt., a company that specializes in deploying cloud-native applications.
In the
second
quarter
of
fiscal
2021, we
announced
an
amendment
to the
definitive
merger
agreement
under
which we
previously
agreed
to
acquire
Acacia
Communications,
Inc., a
public
fabless
semiconductor
company
that
develops,
manufactures
and
sells
high-speed
coherent
optical
interconnect
products
that are
designed
to
transform
communications
networks
through
improvements
in
performance,
capacity
and
cost.
Under
the
terms of
the
amended
agreement,
Cisco
would
acquire
Acacia
for $115
per
share in
cash, or
for
approximately
$4.5
billion
on a
fully
diluted
basis,
net of
cash and
marketable
securities.
The
acquisition
is
expected
to close
during
the
third
quarter
of
fiscal
2021,
subject
to
closing
conditions,
including
Acacia
stockholder
approval.
All
required
regulatory
approvals
have
been
received.
We announced our intent to acquire IMImobile PLC, a United Kingdom publicly-traded cloud communications software and services company. The acquisition is expected to close during the third quarter of fiscal 2021, subject to certain regulatory approvals and IMImobile shareholder approval.
In addition, we announced our intent to acquire Dashbase, Inc., an enterprise software company, which closed in the third quarter of fiscal 2021. We also announced our intent to acquire Slido s.r.o, a privately held company that provides an audience interaction platform. The acquisition is expected to close during the second half of fiscal 2021, subject to customary closing conditions and regulatory approvals.
