Cisco's Q1 profit would have sunk from US$618 to US$250 if stock options had been counted as a cost, the company said.
Cisco made the information public in a quarterly report filed with the US Securities and Exchange Commission (SEC).
Analysts were surprised by the size of Cisco' options cost estimate, saying it may be overstated.
"I don't think it carries so much value," said Deutsche Bank analyst Raj Srikanth. "To some extent, it assumes that all the options outstanding will get exercised."
Stock options became a hot topic after the WorldCom and Enron collapses, prompting talk of standardising accounting procedures to treat them as an expense. There have been differing opinions on how options would be covered by such legislation.
Earlier this month, Cisco and 32 other vendors moved to increase disclosure of options-related information, in a bid to circumvent any legislation that might compel them to do so.