And Cisco's profit margin is...

Cisco announced earnings today. You can read the details in the Cisco press release or in press articles summarizing the data presented in the earnings call. What I found interesting was the Cisco gross profit margin: 63% (= $5723M / $9089M).

We have pointed out previously the fact that Cisco has one of the highest gross profit margins the world, other than software companies which have essentially zero cost of goods sold. The profit margin is obscenely high, in fact. High to the point that Exxon-Mobile and other oil companies would be drawn and quartered if they had profit margins that high (about 40% for Exxon in the quarter ending Sept 2008).

So, 63 cents of every dollar that customers paid Cisco was gross profit on the sale last quarter. People will rightly point out that Cisco still had to pay salaries, taxes, and other expenses with that money. But Exxon-Mobile had to do the same thing with only 40 cents of every dollar paid to it, and it was similar with every other company with a lower gross profit margin.

If you ever wondered if Cisco is charging high prices, the latest numbers filed with the SEC provide yet another data point.