Articles Tagged: working capital

3 articles found

Cisco’s FY2025 Q2: High-60s gross margins and $2.0bn free cash flow, but a sub-1 current ratio keeps pressure on the balance sheet

Cisco Systems posted $13.99 billion in revenue and $0.61 in GAAP diluted EPS for fiscal Q2 2025 (quarter ended January 25, 2025), with gross margin holding at roughly 65%, according to the company’s 10-Q filed on February 18, 2025. The quarter’s operating cash flow reached $2.24 billion and free cash flow $2.03 billion, while the company returned approximately $2.67 billion to shareholders via buybacks and dividends, SEC filings show. Yet beneath those sturdy profitability indicators sits a current ratio below 0.9–0.95 depending on the quarter and a negative working capital position that merits close scrutiny, according to Financial Modeling Prep data derived from the filings. Deferred revenue—an imperfect proxy for the health of software and subscription contracts—remained broadly stable quarter-to-quarter, hinting at stickiness in Cisco’s pivot toward software and observability layers following the Splunk acquisition. However, this raises questions about growth momentum and sales execution as hardware cycles normalize and macro tailwinds fade. This article interrogates the quality of Cisco’s earnings mix, the durability of its cash engine, and the resilience of its balance sheet, synthesizing SEC filings with Financial Modeling Prep quantitative analytics and recent market pricing from Yahoo Finance.

Cisco SystemsCSCOFY2025 Q2+12 more

IBM’s $240 reset: why a 19% drawdown is forcing a harder look at cash conversion, leverage, and the AI promise

International Business Machines shares have slipped to roughly $240, nearly 19% below their 52‑week high of $296.16, as investors reassess the durability of its AI-led narrative and the quality of cash generation behind it. According to Yahoo Finance, the stock has fallen about 16% over the past month on elevated volumes, with a pronounced downdraft around the late‑July earnings window. The stakes are clear: IBM is asking investors to pay up for a higher-quality, software‑heavy portfolio, while the market is demanding near-term cash flow that comfortably funds a sizable dividend and services a large debt stack. The company’s latest quarterly filing shows healthy operating margins but softer cash conversion, a combination that has energized skeptics just as enthusiasm for “enterprise AI” has grown more discriminating. Bulls and bears now agree on one thing—execution over the next two quarters matters more than slideware. This article reconstructs the price action, reconciles it with the SEC‑filed fundamentals, and weighs the Street’s longer‑dated expectations against the nearer‑term evidence.

IBMInternational Business MachinesAI+17 more

Nvidia’s AI Flywheel: Self-Funding Growth Machine or Late-Cycle Euphoria?

In late May, Nvidia reported a quarter that would be outlandish for most companies and merely exceptional for itself: $44.06 billion in revenue and $18.78 billion in net income for Q1 FY2026, the fiscal quarter ended April 27, 2025, according to SEC filings. Free cash flow in the period reached $26.19 billion—enough to cover aggressive buybacks, rising R&D, and capital investments while still lifting the cash stockpile. Shares subsequently pushed to fresh 52-week highs, peaking near $183.88, according to Yahoo Finance. Investors are asking a deceptively simple question with complex implications: Is Nvidia’s run the rational repricing of a dominant platform business or a late-cycle overshoot tethered to capex exuberance at the hyperscalers? This article examines the financial evidence, valuation and cash conversion dynamics, and the practical constraints that could test the durability of this AI bull case. We synthesize official filings and market data to separate verified operating power from speculative extrapolation—and to identify what would have to go right, or wrong, from here.

NvidiaAI acceleratorshyperscaler capex+6 more