CSCO · 10-K · 2025A · Full report
Inventory and Purchase Commitments
CISCO SYSTEMS, INC. · 2025-09-03 · Importance 78 · Surprise 74
Inventory totaled $3,164 million as of July 26, 2025, a 6% decrease year-over-year, while inventory purchase commitments with contract manufacturers and suppliers totaled $7,599 million, a 47% increase versus fiscal 2024. The combined increase in inventory and purchase commitments was 26% compared with the end of fiscal 2024, driven primarily by commitments related to manufacturing Cisco Silicon One and other products to meet demand from webscale and other customers. Management states it expects inventory balances may increase in future quarters as it works to fulfill demand and notes it began increasing inventory supply chain balances starting in fiscal 2021 to mitigate industry-wide supply constraints. The company acknowledges increased risk of material excess and obsolete inventory and related losses and states it believes the amount of inventory and purchase commitments is appropriate for current and expected customer demand and revenue levels.
Key facts
- Inventory purchase commitments due in less than 1 year as of July 26, 2025: $7,202 million, up $3,250 million from July 27, 2024 and up $1,932 million from July 29, 2023.
- Inventory purchase commitments with contract manufacturers and suppliers as of July 26, 2025: $7,599 million, up $2,441 million (47%) from July 27, 2024 and up $346 million from July 29, 2023.
- Inventory deposits and prepayments as of July 26, 2025: $0 million compared with $1,109 million as of July 29, 2023, a decrease of $284 million versus July 29, 2023 and a decrease of $148 million versus July 27, 2024.
- Total provisions for inventory and liability related to purchase commitments with contract manufacturers and suppliers: $493 million in fiscal 2025, $819 million in fiscal 2024, and $730 million in fiscal 2023.
- Inventory purchase commitments due in 1 to 3 years as of July 26, 2025: $1,085 million, down $698 million versus July 27, 2024 and down $1,850 million versus July 29, 2023 (variances shown as (765) and (1,463) respectively in table).
- Inventories as of July 26, 2025: $3,164 million, down $209 million from July 27, 2024 and down $480 million from July 29, 2023.
- The purchase commitments with contract manufacturers and suppliers as of July 26, 2025 were reduced to give effect to the settlement of a legal dispute with a supplier over purchase obligations arising under certain long-term supply arrangements.
- Inventories at July 26, 2025: $3,164 million, compared with $3,373 million at July 27, 2024.
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| liability | negative | committed | -2.2% | Inventory purchase commitments due in less than 1 year as of July 26, 2025: $7,202 million, up $3,250 million from July 27, 2024 and up… |
| liability | negative | committed | -1.7% | Inventory purchase commitments with contract manufacturers and suppliers as of July 26, 2025: $7,599 million, up $2,441 million (47%) from… |
| liability | positive | realized | +0.6% | Inventory purchase commitments due in 1 to 3 years as of July 26, 2025: $1,085 million, down $698 million versus July 27, 2024 and down… |
| liability | positive | realized | +0.3% | Total provisions for inventory and liability related to purchase commitments with contract manufacturers and suppliers: $493 million in… |
| assets | negative | realized | -0.2% | Inventories as of July 26, 2025: $3,164 million, down $209 million from July 27, 2024 and down $480 million from July 29, 2023. |
| assets | negative | realized | -0.1% | Inventory deposits and prepayments as of July 26, 2025: $0 million compared with $1,109 million as of July 29, 2023, a decrease of $284… |
| liability | positive | realized | — | The purchase commitments with contract manufacturers and suppliers as of July 26, 2025 were reduced to give effect to the settlement of a… |