Cisco Systems Inc. ( CSCO) may have less cash to burn on new acquisitions after using some of its repatriated funds to pay down its debt last quarter.
 
Credit Suisse Group analyst Sami Badri has lowered his estimated M&A budget from about $15 billion to about $10 billion over the next two years after the networking titan reported earnings on Wednesday, May 16, after the market close, saying in his research note that the debt payments were unexpected. Shares of Cisco fell almost 4% on Thursday following the report. 
 
During its third fiscal quarter ending in April, the San Jose, Calif.-based networking company repatriated $67 billion in overseas cash, using $6 billion to pay down its short-term debt, and $5.3 billion to pay down its long-term debt. The company also paid a $1.5 billion tax charge.

Cisco has acquired more than 15 companies in the past two years, and Badri previously noted that about 80% of Cisco's acquisitions over the last four years have been software-focused.

Raymond James analyst Simon Leopold said Cisco's M&A strategy will likely focus on smaller software companies as well as "novel technologies that will allow it to differentiate and innovate" such as semiconductors and optics.

The company announced on May 1 that it is buying artificial intelligence developer Accompany Inc. for $270 million in cash and assumed equity awards. Cisco expects the deal to close in the fourth fiscal quarter of 2018.

Earlier this year, Cisco also closed its $1.9 billion-acquisition of calling software company BroadSoft Inc., and acquired IT security infrastructure company Skyport Systems Inc. for an unidentified amount.

In March, TheStreet's sister site TheDeal reported that cybersecurity firm FireEye Inc. (FEYE) could be an acquisition target for Cisco.

Editor's note: This article was originally published by The Deal, a sister publication of TheStreet that offers sophisticated insight and analysis on all types of deals, from inception to integration. Click here for a free trial.

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