CSCO · 10-K · 2026A · Full report
Supply Chain Commitments
CISCO SYSTEMS, INC. · 2026-09-02 · Importance 77 · Surprise 82 · No source text
Cisco increased purchase commitments with contract manufacturers and suppliers for Cisco Silicon One and other products to meet hyperscaler and broader customer demand. The company is also committing to memory and other components to secure supply and pricing, while increasing supplier deposits and prepayments, materially expanding supply-chain exposure. Inventory increased to $5.7 billion from $3.2 billion, reflecting higher Cisco Silicon One demand and memory prices, while inventory purchase commitments rose to $17.2 billion from $7.6 billion and deposits and prepayments reached $1.1 billion. Cisco identified risks from customer order cancellations or rescheduling, architecture changes, demand declines, product obsolescence, and potentially significant tariffs and other trade policies.
Key facts
- Inventory purchase commitments were $17,165 million as of July 25, 2026 compared with $7,599 million as of July 26, 2025. source
- Purchase commitments with contract manufacturers and suppliers due in less than 1 year: $14,341 million. source
- Inventory purchase commitments with contract manufacturers and suppliers as of July 25, 2026: $17,165 million. source
- Inventory purchase commitments with contract manufacturers and suppliers as of July 26, 2025: $7,599 million. source
- Inventories were $5,694 million as of July 25, 2026 compared with $3,164 million as of July 26, 2025. source
- Inventory purchase commitments with contract manufacturers and suppliers increased by 126% from the end of fiscal 2025 to July 25, 2026. source
- The combined increase of inventory and inventory purchase commitments compared with the end of fiscal 2025 was 112%. source
- We regularly increased purchase commitments related to manufacturing Cisco Silicon One and other products to meet demand from hyperscalers and other customers and expect to continue entering into additional purchase commitments including for memory and certain components. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| liability | negative | realized | -7.4% | Inventory purchase commitments were $17,165 million as of July 25, 2026 compared with $7,599 million as of July 26, 2025. |
| assets | positive | realized | +1.9% | Inventories were $5,694 million as of July 25, 2026 compared with $3,164 million as of July 26, 2025. |
| liability | negative | committed | -1.7% | Purchase commitments with contract manufacturers and suppliers due in 1 to 3 years: $2,558 million. |
| operating_income | positive | realized | +0.2% | Total provisions for inventory and the liability related to purchase commitments with contract manufacturers and suppliers were $387… |
| liability | negative | realized | — | Purchase commitments with contract manufacturers and suppliers due in less than 1 year: $14,341 million. |
| liability | negative | realized | — | Inventory purchase commitments with contract manufacturers and suppliers increased by 126% from the end of fiscal 2025 to July 25, 2026. |
| liability | negative | probable | — | We regularly increased purchase commitments related to manufacturing Cisco Silicon One and other products to meet demand from hyperscalers… |
| assets | negative | realized | — | Inventory as of July 25, 2026 increased by 80% compared to the end of fiscal 2025. |
| assets | negative | probable | — | Cisco expects its inventory balances may increase in future quarters as it works to fulfill demand. |
| assets | positive | realized | — | Inventory deposits and prepayments were $1,104 million as of July 25, 2026. |
| liability | negative | committed | — | A significant portion of reported purchase commitments consists of firm, noncancelable, and unconditional commitments. |