Cisco's operating expenses increased in Q3 2024 due to several factors:
- Organic Growth in Digital and Hosting Services: The increase in operating expenses was primarily driven by higher direct costs related to the organic growth in the digital and hosting services within cloud revenue lines1.
- Increased Amortization of Capitalized Software: Cisco also experienced higher internal licenses and fees, which contributed to the rise in operating expenses1.
- Deconversion and Acquisition Costs: Although deconversion and acquisition costs did not significantly affect the operating expenses, any increase in these areas could have an impact on the overall figure1.
In summary, Cisco's operating expenses surge in Q3 2024 was primarily driven by the company's organic growth in digital and hosting services, increased amortization of capitalized software, and higher internal licenses and fees.