Ladies and gentlemen, please welcome Cisco Chairman and CEO, Chuck Robbins. All right. Good morning, ladies and gentlemen. It's now 8:00 A.M., and the 2019 annual meeting of the shareholders of Cisco Systems, Inc. will please come to order. I am Chuck Robbins, Chairman and Chief Executive Officer of the company, and I will chair this meeting. On behalf of all of us at Cisco, I want to welcome you and thank you for your attendance. Before proceeding to the business portion of the meeting, I'd like to acknowledge the other directors and executives that are present today in the first few rows. I'd like to have them stand for a moment. First, I'd like to thank Steve West, who is stepping down as of the conclusion of his term today, for his leadership and significant contribution to Cisco.
Last year, he was named to the prestigious National Association of Corporate Directors Directorship 100, which speaks to his longtime impact as a board member of multiple leading technology companies. We were incredibly fortunate to have Steve as a longtime board member at Cisco for the past 23 years. I deeply appreciate his partnership, friendship, and dedication to Cisco. His insights and sound advice over the years have been a contributing factor to many of our successes. On behalf of all of us at Cisco, a huge thank you to Steve. Thank you. If the executive team and the board could just stand real quick, please. Thank you. With that, it's my pleasure to turn the meeting over to Evan Sloves, secretary of the company, to lead the business portion of the meeting.
Thanks, Chuck. The board of directors has fixed to close of business on October 11th, 2019, as the record date for the determination of shareholders entitled to vote at this meeting. Notice of this meeting was duly given to all shareholders of record on or about October 22nd, 2019. American Election Services has been appointed as the inspector of elections, and Mr. Jim Rade, who is representing American Elections, has informed me that the shareholders owning a majority of the outstanding shares of common stock are present in person or represented by proxy, and as a result, there is a quorum of shareholders for this meeting. Therefore, this meeting is now open to proceed with its business. After the formal business meeting, we'll have a business review presented by Chuck, followed by a Q&A session.
If you have a question you'd like to ask, please write your questions on the cards that are provided and pass your card to the aisle. We will now proceed to the items of business set forth in the agenda and voting on all of them will occur after I've described them. The first matter to be considered is the election of directors of the company. The following individuals have been nominated by the board upon the recommendation of the nomination and governance committee to serve as directors until the next annual meeting of shareholders and until their successors are elected and qualified. Michele Burns, Wesley Bush, Michael Capellas, Mark Garrett, Kristina Johnson, Rod McGeary , Charles Robbins, Arun Sarin, Brent Saunders, and Carol Tomé. No other nominations were received by the deadline of August 25th, 2019, therefore, the nominations are closed.
The board of directors recommend shareholders vote for each of the nominees. Our next item of business is the advisory resolution to approve executive compensation. This is a non-binding resolution that the shareholders approve the compensation of Cisco's named executive officers as disclosed pursuant to the SEC's compensation disclosure rules. The board of directors also recommend shareholders vote for this proposal. Next is the ratification of PricewaterhouseCoopers as the company's independent registered public accounting firm for the fiscal year ended July 25th, 2020. The board of directors recommend shareholders vote for this proposal. I will now introduce the resolution proposed by a shareholder for consideration. Cisco's response to this proposal can be found in the proxy statement. Kenneth Steiner has given notice of the proposed resolution. Is Xing Xiao present? Please come forward and state your name. Hi. Thank you. You have five minutes to present.
Thank you very much. Good morning, everyone. I'm a shareholder myself, I have been asked to present the proposal. This time it's reading for shareholder Kenneth Steiner. Proposal 4, independent board chairman. Shareholders request our board of directors to adopt a policy to require that a chairman of the board be an independent member of the board whenever possible. The board would have the discretion to phase in this policy for the next chief executive officer transition, implemented as it does not violate any existing agreement. If the board determines that a chairman who was independent when selected is no longer independent, the board shall select a new chairman who satisfies the requirement of the policy within a reasonable amount of time. Compliance of this policy is waived if no independent director is available and willing to serve as chairman.
An independent board chairman can better focus on improving the performance of our directors. Improvement is needed since Carol Bartz, Michele Burns, Charles Robbins, and Steven West each received more than $19 million against the vote at our 2018 annual meeting. This compares poorly with three Cisco directors who received less than $9 million against the vote each. This proposal topic received 35% support at the 2018 Cisco annual meetings, up from 27% support previously. Adopting of this policy will cost our company virtually nothing, yet can lead to improved director performance. Please vote to enhance our oversight of our CEO, independent board chairman. Thank you very much.
The board of directors recommends shareholders vote against this proposal for the reasons set forth in the proxy statement. We will now vote on each of the discussed items of business. If you have not already voted or wish to change your vote, please raise your hand to receive a ballot. Great. The polls are now closed for each item of business presented at this meeting. We'll take a few moments to calculate. Ready? Thanks. Thank you. According to the preliminary report of the Inspector of Elections, each of the person nominated as a director has been elected. Each nominee received the support of at least 94% of the shares voted, with approximately 98% average support. Each nominee also received the support of at least 64% of the company's outstanding shares.
The advisory resolution regarding executive compensation has been approved with the support of approximately 95% of the shares voted. Approximately 65% of the outstanding shares voted for this proposal. The proposal to ratify the appointment of PricewaterhouseCoopers as the company's independent registered public accounting firm has been approved with support of approximately 95% of shares voted. Approximately 80% of the outstanding shares voted for this proposal. The shareholder proposal submitted by Kenneth Steiner was not approved with approximately 71% of shares voted, voting against this proposal. Approximately 20% of the outstanding shares voted for the proposal. I will now turn the meeting back over to Chuck Robbins.
Thank you, Evan. The matters for which this annual meeting of the shareholders was called to consider have been completed. Since we've received no notice of any other business to come before the meeting, the 2019 annual meeting of shareholders is hereby adjourned. I will now proceed with a business review presentation. If you have a question you'd like to ask, please write your question on the cards that were provided and pass your card to the aisle. The online audience can also now submit their questions, and a Q&A session will follow my brief presentation. Thank you. This presentation will include forward-looking statements, and I would encourage you to look at our 10-Q and 10-K for any reconciliation issues going forward. If we look back at FY 2019 quickly, we had a very good year. I think our teams executed incredibly well. Am I on the right slide?
Here we go. We had a record year for revenue of $51.7 billion. That was up 7% year-over-year. You can see the non-GAAP EPS at $3.10, up 20%, as well as our gross margins and non-GAAP operating income, as well as non-GAAP net income. Overall, the teams executed incredibly well, during, frankly, a year of a lot of uncertainty around the world. We faced issues associated with tariffs, with geopolitical risk all around the world, from Brexit to what's going on in Washington to U.S.-China trade and other issues that are happening. I think our teams executed very well during the year. We also maintained our commitment to shareholders, driving our strong shareholder returns. You can see that we have continued to increase the dividend on an annual basis.
I believe over the last four years, plus the fiscal year to date, we returned $70 billion to our shareholders through dividends and buybacks. You can see that we have obviously been focused on reducing our share count over the years, now down to 4.5 billion shares, a 40% reduction. Our total shareholder return for one year is 36%, and over the last three years is 103%. I believe our teams have really executed and done a very good job for our shareholders. If you look at free cash flow, you can see our objective is 50%, and we have continued to deliver above that. Obviously, with repatriation and tax reform last year, we had a lot of our capital that we were able to access that had been locked up overseas.
It allowed us to increase our buybacks, and I believe that is now behind us, and we will return to our target of returning 50% of free cash flow to our shareholders on an annual basis going forward. When I look at Q1, we had a 2% growth on the revenue line to $13.2 billion 12% on non-GAAP EPS. As many of you know, and I'll talk a little bit about this in a moment, we have been very focused on our transition to more software content in our portfolio. It's important because our customers would like to consume more of our technology as software, where that makes sense and where it can solve the problems that they're trying to solve.
For us and for our shareholders, it makes sense because over time, as we get further and further through this transition, it creates more predictability in our business model and reduces our exposure to these rapid macro shifts that we see in the marketplace. In order to achieve that, we want to make sure that as we're selling our software, that we're selling those as subscriptions or as SaaS offers. You can see in Q1, we have now gotten up to 71% of our software business is now being sold as subscription or SaaS.
If you go back to our financial analyst conference that we did a few years ago, we set out some targets that we were going to try to hit. In 2020, by the end of 2020, around our software business, we said 30% of our product business would be coming from software, and I think, Kelly, 50% would be from software and services. We are on track to hit those targets by the end of 2020. With 71% last quarter coming from subscriptions and SaaS, we feel good about this transition. We obviously still have a lot more work to do because as we get to 30% of our product revenue coming from software, that means 70% isn't. We still have a lot of opportunity ahead of us, and we'll continue to stay focused on this.
If I think back to the last four years, just thinking about what we've tried to accomplish, we wanted to really make this shift in our business model. There were a few things that we needed to do. We needed to deal with some of the dynamics in the marketplace that were viewed as a negative for us. We've talked about this before. We needed to clarify our position on cloud. We needed to embrace software-defined networking. We needed to sell our technologies to our customers in whatever way they wanted to consume it. We have accomplished that in many ways now. I just went through the metrics that would outline that this transition in our business model, we're continuing to make progress on, and we'll continue to update you annually.
As long as you listen to the earnings calls, you'll hear our progress on a quarterly basis going forward. From an innovation perspective, we really wanted to increase our pace of innovation. David and Amy in the engineering organization, as well as the work that Maria has done in CX, I believe, and our customer experience organization, have all done a great job on this. We now have every product that we sell into the enterprise networking space, whether it's our wireless access points or it's our enterprise routing platforms or it's our enterprise switching platforms, they are all going through a refresh at the same time for the first time in the history of the company. Every one of those products is new. We also have consolidated to a single operating system across those for the first time in the history of the company.
We also now sell those products with a mandatory software subscription, which we've never done before. Frankly, most people didn't think we could sell the software subscription on an ethernet switch, but we have done that now. That's one piece. The work that Amy Chang and the team have done around our cognitive collaboration offerings, the work in our security portfolio that led it to the growth that we've seen in that portfolio over the years. Again, the work that's going on right now in our customer experience organization, which is really important for us as a software company, as well as for other reasons.
From a shareholder perspective, one of the big things that you will want to see from us as we increase the software business is that we actually set ourselves up to take advantage of the renewal opportunity on that software as those come up over the next few years. That's one of the big priorities that Maria has in driving the innovation that they're driving in that organization. Our culture and our teams. I see John Morgridge sitting back here, and he started the culture at this company that has lived through, and we've just tried to amplify it over the last few years. This is a company that has always had an incredible heart and an incredible concern for our community and for our colleagues and have tried to do things to give back around the world.
We're at a point in history where businesses are being asked and required to do more. Frankly, it has now become much more than just something that you do in corporate social responsibility. It is now core to your business. Whether you're looking at new ESG funds that are being established that have certain requirements around our environmental approach. Barron's rated us the number one most sustainable company in the United States in 2018. Our social responsibility issues that we're dealing with or governance, as well as just our employee base. When you look at the employees of the future and you look at the motivation and the morale of our employees, having this culture and giving back to our communities actually creates more energy inside the company and actually leads them to do better work, which leads to better outcomes for all of you.
This is no longer a corner case of just nice things to do. In my opinion, it's core to the success of the organization going forward. Just to give you an example, four years ago on the Great Place to Work list, on a global basis, we were number 19. If you don't know, two months ago, we were rated the number 1 place to work globally by Great Place to Work. We've made a lot of progress on this. I'm really proud of the team and what they've accomplished. Again, I think this is a core principle that's going to help drive our business, which is good for us and good for all of you, as well as good for our communities also. As we look to the future, we really have four areas within our customers that we're focused on right now.
Our customers have a lot more priorities than these, but these are the ones that we have a direct impact on. I'll touch on them quickly. We need to help them enable and build and deliver applications anywhere. They used to deliver all the applications from a private data center. Now they're buying SaaS applications from Salesforce and Workday. They're leveraging cloud services from Amazon and Microsoft and others, and they still have applications in their private data center. The network is actually a mission-critical part of how they deal with these changing traffic flows, as well as our ability to do analytics on the applications, et cetera. There's a lot of work we're doing to help them actually realize the value and actually create the possibility of giving them the flexibility to run applications anywhere they want to run them going forward.
Clearly, securing their data is very important. Securing everything, but if you really press them, the thing is securing their data. There's lots of technology out there. We have a great portfolio. In today's world, this is coming down to trust as much as it is anything else. We know there's a huge discussion right now globally about trust for technology vendors, technology providers. It's a big area of focus for us. I would say we have a high degree of trust with our customers, and we are working on building these new security architectures because if you think about what's happening now with these applications running everywhere, in the old days, everything was confined to a private data center. It's almost like you had a castle, and you just needed to build a secure moat around it. Today, it's everywhere.
The network has to provide a level of security in the network that allows them to deal with this changing world that they live in. We're focused very much on that as well. Transforming their infrastructure to deal with this. The traffic patterns that they see today in their networks and in their infrastructure are completely different than what they saw 20 years ago. They built their entire infrastructure. Their entire IT infrastructure was built for a private cloud world. They're now in a public cloud and SaaS world, and we have to help them actually re-architect all of their infrastructure, from their access layer to their core networks to security, to actually allow them to take advantage of this new opportunity. Then helping empower their teams.
This is more than just our collaboration portfolio, although that's a big part of it, allowing people to work more effectively together. This really enables a future of work. It enables a new employee experience. Also a lot of the work that our teams are building around automation and operational simplicity to actually enable their technical talent to spend more time on more strategic issues as opposed to the operational day-to-day issues associated with running their technology infrastructure. These are the four areas that everything fits in. It's a much deeper discussion with a lot of our customers, but that's a high-level view on what we are working on right now. As I think about what we talked about earlier with our community focus and our culture and our teams, we do believe that as an organization, we clearly have a commitment to our shareholders.
What I also believe is that our shareholders benefit when we also have a balanced view on making sure that we're taking care of our stakeholders, whether it's our employees, our partners, our customers, our communities. We don't believe that this is either/or. We do believe that by virtue of us doing the right thing for all of those stakeholders, it creates more value for our shareholders. I believe that with every ounce of my soul. This is a big focus for us going forward. We have been involved in everything from homelessness in Silicon Valley to hunger to disaster response to Our Network Academies program, just to give you a sense, in the first 20 years around the world, it was started in 1997, John. The first 20 years, 7.8 million students were educated around the world.
This fiscal year we're in alone, there'll be 3 million students that'll be touched by that program on a global basis. It is having huge impact. We've taken it into prisons. We've taken it into orphanages. It is the most powerful thing we have when we spend time with heads of state around the world around the impact that we can have on helping them achieve what they're trying to achieve in their countries. This will remain a big focus for us going forward, and I do believe, again, that staying focused on all of these stakeholders actually results in a good outcome for our shareholders as well. Thank you. That's really all I was going to cover on that. I think that we'll now address questions which have been submitted by the shareholders. We'll do our best to get through all of them.
Since we do have limited time, if we're unable to answer a question during this session, we encourage you to contact us either by telephone or by email, and someone from our investor relations team will respond in a timely manner. Marilyn?
We have no questions currently on the webcast and are waiting for cards here.
You guys can ask any questions. You'll ask plenty later.
All right, Chuck, we've got our first question here. This investor is asking, "How is Cisco's China business? Has there been any change over the last several years due to the trade war?
Yes. Kelly and I, in talking to our investors and the analyst community, we've said, "Look, the tariffs can impact us in three ways." They can impact us by directly placing tariffs on our products, and the teams have navigated that through supply chain optimization as well as we've done selective price increases to deal with it and have done, I believe, a phenomenal job of managing through that piece of it. The second is that we could be impacted in China by just having decisions made there that they would rather go with indigenous vendors and sort of have a bias towards local vendors in light of what's going on. We have definitely seen that happen. I think the last two quarters, we've talked about our business being down in the mid to upper 20%. Our orders in China. We have seen that impact.
The third thing that we said was we were concerned that this overall trade war could ultimately lead to a macro slowdown. I think in the last couple of quarters, clearly, particularly for companies who are still dependent upon capital spending, we have seen a bit of pressure in the system as well. We've seen all of those.
Thanks, Chuck. Our next question here, it's a bit lengthy, and I think it's one that we'd like to engage with the shareholder post this meeting with the investor relations team. They'd like to just state that today's the International Human Rights Day, and they're very curious about our human rights policy and our new Cisco Tech Hub that has just opened in the West Bank. Just curious on the company's human rights processes here.
Well, I think that obviously, we believe deeply in human rights around the world. I do think that that's probably got a lot of complexity, and there are probably some very specific things that you're interested in relative to that particular part of the world. I would encourage us to take that offline and have some more direct conversation. We'd be happy to do that.
Great. Thanks, Chuck. Our last question here is. An investor here is curious on your perspective on the stock price at the moment. What are your thoughts on where it is today and why?
Well, we've had a very good run. On our last earnings call, we guided to slightly negative revenue in this next quarter based on some slowing demand that we saw with our customer base. I'm very confident with the strategy we have in place. Over the long term, I think we're going to be in good shape. We hit a high of, I think, $56 or something, $58 last year. Clearly, the shareholders believe there's more room in the stock. We have a temporary challenging demand environment. We were talking about innovation earlier. We're actually leaving tonight heading up to San Francisco, and we're making a pretty significant set of announcements tomorrow on some new innovation that we've been working on for five years.
There's a lot of great stuff coming, and I think that given the strategy we've executed on, given the transition that we're delivering, we'll continue to do what we need to do, and I think the stock will work out just fine.
All right. This is our very last question.
You're kidding on the last question.
I was on the last one. We've got one final submittal here. This investor is appreciative of the investment in our CSR activity and the impact we've had on our communities. They would like to know how does Cisco plan to grow this impact especially in light of the increasing frequency and magnitude of disasters we're seeing around the world. Just like your thoughts.
We obviously we're staying balanced on the investments we need. I tell the company that we have to run a good business in order to do the things that they love to do, which is they love giving back to the community, and it's like, but we have to run a good business first, and then we can do that. I think that we put out a CSR report that actually given the focus on this, that we are actually treating with as much diligence as we do our annual report now, so that we're ensuring that all the data points are double-checked and validated. I mean, we've always done that, but we're really focused on making sure that it's incredibly accurate. I would encourage you to look at that. I think that it was a huge year of investments that we made around the world.
Specific to disaster response, I will tell you that we have a group of people inside the company that are unsung heroes. There's a core group of about 10 or 12 people that every time there's a natural disaster anywhere in the world, as a shareholder, you should just step back and be proud and think that there's some Cisco people sleeping on the ground somewhere nearby because what they do is we tend to position them when we know there's something coming like a hurricane, we position them out of harm's way. Then frankly, as soon as the storm passes, they're some of the first people in, because you know for the first responders to do what they do, the first thing we have to do is get communications infrastructure back up and running. So we work hard.
Our teams are typically in villages and towns getting wireless access up. We visited Puerto Rico about a year ago. It was unbelievable what the teams had done there. Listening to the stories of these citizens who are telling us just being able to go to the town square, get on a wireless network, and let their family know they're safe was just incredible to them. We will continue to do that. We have a core team of 10, and then I think there's about 300 engineers inside the company who have gone through training and are part of a group that we can deploy whenever that happens. It's a pride thing for our teams. They want to be there and they want to help, and we'll continue to do that going forward.
Great. Thanks, Chuck. That wraps up the Q&A.
All right. Well, again, if you still have questions, we encourage you to contact us and someone from our investor relations team will get back to you. I want to thank all of you for being shareholders, and I want to thank you for attending this meeting. Take care.