Financing Receivables

6 Months Ended

Jan. 27, 2024

(a)Financing Receivables

Financing receivables primarily consist of loan receivables and lease receivables. Loan receivables represent financing arrangements related to the sale of our hardware, software, and services (including technical support and advanced services), and also may include additional funding for other costs associated with network installation and integration of our products and services. Loan receivables have terms of one year to three years on average. Lease receivables represent sales-type leases resulting from the sale of Cisco’s and complementary third-party products and are typically collateralized by a security interest in the underlying assets. Lease receivables consist of arrangements with terms of four years on average.

A summary of our financing receivables is presented as follows (in millions):


January 27, 2024	Loan Receivables		Lease Receivables		Total
Gross	$	5,850	$	1,099	$	6,949
Residual value	—		70		70
Unearned income	—		(110)		(110)
Allowance for credit loss	(53)		(16)		(69)
Total, net	$	5,797	$	1,043	$	6,840
Reported as:
Current	$	3,066	$	410	$	3,476
Noncurrent	2,731		633		3,364
Total, net	$	5,797	$	1,043	$	6,840


July 29, 2023	Loan Receivables		Lease Receivables		Total
Gross	$	5,910	$	1,015	$	6,925
Residual value	—		70		70
Unearned income	—		(88)		(88)
Allowance for credit loss	(53)		(19)		(72)
Total, net	$	5,857	$	978	$	6,835
Reported as:
Current	$	2,988	$	364	$	3,352
Noncurrent	2,869		614		3,483
Total, net	$	5,857	$	978	$	6,835

(b)Credit Quality of Financing Receivables

The tables below present our gross financing receivables, excluding residual value, less unearned income, categorized by our internal credit risk rating by period of origination (in millions):


January 27, 2024			Fiscal Year								Six Months Ended
Internal Credit Risk Rating	Prior		July 25, 2020		July 31, 2021		July 30, 2022		July 29, 2023		January 27, 2024		Total
Loan Receivables:
1 to 4	$	24	$	164	$	552	$	783	$	1,243	$	1,008	$	3,774
5 to 6	6		67		169		256		629		821		1,948
7 and Higher	4		4		12		87		18		3		128
Total Loan Receivables	$	34	$	235	$	733	$	1,126	$	1,890	$	1,832	$	5,850
Lease Receivables:
1 to 4	$	6	$	31	$	71	$	71	$	224	$	215	$	618
5 to 6	4		28		41		71		158		53		355
7 and Higher	1		1		2		4		5		3		16
Total Lease Receivables	$	11	$	60	$	114	$	146	$	387	$	271	$	989
Total	$	45	$	295	$	847	$	1,272	$	2,277	$	2,103	$	6,839


July 29, 2023			Fiscal Year
Internal Credit Risk Rating	Prior		July 27, 2019		July 25, 2020		July 31, 2021		July 30, 2022		July 29, 2023		Total
Loan Receivables:
1 to 4	$	10	$	53	$	251	$	791	$	1,077	$	1,784	$	3,966
5 to 6	3		14		131		287		465		936		1,836
7 and Higher	1		7		15		17		29		39		108
Total Loan Receivables	$	14	$	74	$	397	$	1,095	$	1,571	$	2,759	$	5,910
Lease Receivables:
1 to 4	$	2	$	20	$	57	$	111	$	84	$	235	$	509
5 to 6	2		13		44		58		87		191		395
7 and Higher	—		1		2		4		5		11		23
Total Lease Receivables	$	4	$	34	$	103	$	173	$	176	$	437	$	927
Total	$	18	$	108	$	500	$	1,268	$	1,747	$	3,196	$	6,837

The following tables present the aging analysis of gross receivables as of January 27, 2024 and July 29, 2023 (in millions):


	DAYS PAST DUE (INCLUDES BILLED AND UNBILLED)
January 27, 2024	31-60		61-90		91+		Total Past Due		Current		Total		120+ Still Accruing		Nonaccrual Financing Receivables		Impaired Financing Receivables
Loan receivables	$	55	$	32	$	74	$	161	$	5,689	$	5,850	$	23	$	8	$	8
Lease receivables	19		8		21		48		941		989		11		2		2
Total	$	74	$	40	$	95	$	209	$	6,630	$	6,839	$	34	$	10	$	10


	DAYS PAST DUE (INCLUDES BILLED AND UNBILLED)
July 29, 2023	31-60		61-90		91+		Total Past Due		Current		Total		120+ Still Accruing		Nonaccrual Financing Receivables		Impaired Financing Receivables
Loan receivables	$	47	$	20	$	37	$	104	$	5,806	$	5,910	$	17	$	12	$	12
Lease receivables	16		4		23		43		884		927		6		3		3
Total	$	63	$	24	$	60	$	147	$	6,690	$	6,837	$	23	$	15	$	15

Past due financing receivables are those that are 31 days or more past due according to their contractual payment terms. The data in the preceding tables is presented by contract, and the aging classification of each contract is based on the oldest outstanding receivable, and therefore past due amounts also include unbilled and current receivables within the same contract.

(c)Allowance for Credit Loss Rollforward

The allowances for credit loss and the related financing receivables are summarized as follows (in millions):


Three Months Ended January 27, 2024	CREDIT LOSS ALLOWANCES
	Loan Receivables		Lease Receivables		Total
Allowance for credit loss as of October 28, 2023	$	58	$	16	$	74
Provisions (benefits)	(1)		—		(1)
Recoveries (write-offs), net	(4)		—		(4)
Allowance for credit loss as of January 27, 2024	$	53	$	16	$	69


Three Months Ended January 28, 2023	CREDIT LOSS ALLOWANCES
	Loan Receivables		Lease Receivables		Total
Allowance for credit loss as of October 29, 2022	$	101	$	19	$	120
Provisions (benefits)	(3)		(1)		(4)
Other	(4)		1		(3)
Allowance for credit loss as of January 28, 2023	$	94	$	19	$	113


Six Months Ended January 27, 2024	CREDIT LOSS ALLOWANCES
	Loan Receivables		Lease Receivables		Total
Allowance for credit loss as of July 29, 2023	$	53	$	19	$	72
Provisions (benefits)	4		(3)		1
Recoveries (write-offs), net	(4)		—		(4)
Allowance for credit loss as of January 27, 2024	$	53	$	16	$	69


Six Months Ended January 28, 2023	CREDIT LOSS ALLOWANCES
	Loan Receivables		Lease Receivables		Total
Allowance for credit loss as of July 30, 2022	$	103	$	23	$	126
Provisions (benefits)	(4)		(4)		(8)
Other	(5)		—		(5)
Allowance for credit loss as of January 28, 2023	$	94	$	19	$	113