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Thu, November 13, 2025

Meta and Cisco Earnings with G-255 Trade Indicators and Long Credit Digest November 12, 2025

Post the Meta 6 part offering and now over 100 of the world's 255 largest issuers of corporate debt having reported September earnings, more companies are adding net debt than in the 33-year history of the systematic trading model.

USD credit spreads have widened accordingly.

We will see more money repatriated to shareholders via share buyback, dividends and corporate borrowing in 2025 than in any year prior.

For US IG credit spreads to move tighter, all credit rallies going back to when we first introduced the systematic credit trading model in 1995 at Fidelity start with the highest quality credit.

Meta (META, Aa3/AA- attractive long credit / equity) 3Q ended September 30

Meta reported 3Q operating revenue growth of 26.5% YoY. Operating income rose 18% YoY

3Q Operating Metrics

  • Daily Active Users rose 2% QoQ and 8% YoY.

  • Ave Revenue/Person rose 12% QoQ and 14% YoY.

  • YoY Ad Impressions rose 14% YoY.

  • Price per ad rose 10% YoY

  • 9mos operating cash flow rose 26% YoY to $79.5 billion

  • 9mos free cash flow fell 23% YoY to $31.2 billion

Meta projects revenue to be in the range of $56 billion to $59 billion. The company anticipates continued strong growth in advertising revenue but expects a lower year-over-year revenue contribution from its Reality Labs division.

Financial Position: Meta has generated $172 billion in cash over the past 7 quarters while spending $230 billion. Of that outflow, only $115 billion (50%) relates to capex or reinvestment in the core Meta businesses. The company has returned $65.3 billion to shareholders via share repurchases and dividends and paid $23.7 billion in taxes tied to employee share awards over the same period. In total, 43% of every dollar of operating cash flow has been returned to shareholders and employees.

As a result, Meta's net cash position has declined from $47 billion to $15.6 billion in less than 2 years.

On October 30, 2025. Meta raised $30 billion in an unprecedented 6-part new issue of Meta corporate bonds ranging from 5 to 40 years in maturity. Given the growth in Meta's spending rate, the company should run through money raised in less than 5 quarters.

Credit Trading Model Indicator: There are currently 19 secondary Meta USD bonds in circulation totaling $56.2 billion. The systematic trading model has 2 undervalued and 6 long trading indicators. All of the long trade indicators are the recent new supply.

Recent new supply: See below

Equity Trading Model Indicator: META equity is a long trade indicator its current price.

New G-255 Supply October 30

Meta has generated $80 bil of cash flow in the first 9 mos. of 2025

Cisco Systems (CSCO, A1/AA- long credit / equity) 1Q ended October 25

Cisco reported 1Q operating revenue growth of 15.95% YoY. Operating income rose 13% YoY

3Q Operating Metrics

  • Networking Revenue +15% YoY

  • Security Revenue (-2)% YoY

  • Collaboration Revenue (-3)% YoY

  • Services Revenue +2% YoY

  • Operating cash flow fell -14% YoY to $3.212 billion

  • Free cash flow fell -17% YoY to $2.898 billion

2Q 2026, Cisco revenue now projected: Between $15.0 billion and $15.2 billion (vs. analyst expectations around $14.64 billion).Non-GAAP Operating Margin: 33.5% to 34.5%.

Financial Position: Cisco has $12.5 billion of net debt (-7%) YoY and is returning $6 billion/year to shareholders.

Credit Trading Model Indicator: There are currently 16 USD secondary CSCO bonds in circulation totaling $25.75 billion. The systematic trading model has 5 undervalued and 3 long trading indicators.

Recent new supply: February 19, 2025, CSCO 5.1 02/24/35 $1 billion + 58/10Y now trades -1bp to NIP

Equity Trading Model Indicator: CSCO equity is a long trade indicator below $214.77/shr.

Disclaimer - This report is not intended as, and does not constitute an offer, or a solicitation to buy or sell any securities or financial instruments. All data, levels, opinions, and representations herein are provided for informational purposes only and should not be relied upon for making investment decisions. Past performance is not indicative of future results. The authors of this report assume no liability for losses or damages arising from the use of this information. Investors should consult with a qualified financial advisor before making any investment decisions. The information in this report is based on sources believed to be reliable, but no guarantee is made as to its accuracy, completeness, or timeliness.