Overview of Cisco’s (CSCO) 3Q24 Earnings Quality

The accounting-related benefits continued into the latest quarter

We remember back in the dotcom days when CSCO was the go-to way to invest in the rapid growth of the internet. A quarter of a century later, the stock has been relegated to sideline duty and merely watching the current AI-driven euphoria. Sales have been declining for the last few quarters, but the stock has recently shown some signs of life following the announcement of several AI initiatives.

We noted several unsustainable, accounting-related benefits in the company’s 2Q24. After reviewing the 3Q24 10-Q, we continued to see some unsustainable tailwinds that could easily revert to headwinds in upcoming quarters that we believe investors should be aware of as they try to time CSCO’s comeback. Below we will examine those items as well as take a deeper look at the overall quality of CSCO’s non-GAAP results.

Let’s get behind the numbers…

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