Cisco's Q2 Earnings Exceed Expectations, Driven by AI Infrastructure Demand and Cloud Growth

Cisco's AI Expansion and Cloud Growth Drive Analyst Upgrades And Price Hikes, Citing Growth Like Extreme & Juniper - Cisco Systems (NASDAQ:CSCO)

Wall Street analysts rerated Cisco Systems, Inc CSCO for its upbeat quarterly report Wednesday amid an exciting earnings season. Cisco Systems reported quarterly earnings of 94 cents per share, topping the analyst consensus estimate of 91 cents. Quarterly revenue of $13.9 billion beat the $13.87 billion consensus estimate. Also Read: Iron Mountain Q4 Earnings: Storage And Data Center Revenue Growth, Dividend Climbs 10%, Strong 2025 Outlook Cisco Systems expects third-quarter EPS of 90 cents-92 cents, versus the 92 cent estimate, and revenue of $13.9 billion-$14.1 billion, versus the $13.86 billion estimate. JP Morgan analyst Samik Chatterjee maintained Cisco Systems with an Overweight and raised the price target from $69 to $73. Piper Sandler analyst James Fish reiterated Cisco Systems with a Neutral and raised the price target from $57 to $72. Rosenblatt analyst Mike Genovese upgraded Cisco Systems to Buy from Neutral with an $80 price target. BofA Securities analyst Tal Liani maintained Cisco Systems with a Buy and raised the price target to $76 from $72. Goldman Sachs analyst Michael Ng reiterated Cisco Systems with a Neutral and raised the price target from $56 to $63. JP Morgan: Cisco's second-quarter results reinforced the improvement in the demand cycle, revenue upsides for Core Networking driving greater confidence in upsides for fiscal 2025, alleviating concerns around increased scrutiny on Public Sector and Fed spending, highlighting moderate cost headwinds for tariffs, while also noting mitigation levers in the form of both pricing and supply chain flexibility, and downplaying concerns of temporary dislocations in demand trends from the pull-forward of orders to avoid tariffs. While the macro backdrop remains mixed, Cisco noted priority from Enterprise customers to spend towards modernizing infrastructure and strong Cloud demand, including triple-digit order growth from Hyperscalers and improving demand trends from Telco customers to get their networks ready for AI-led traffic demand. Regarding Enterprise adoption of AI, Cisco highlighted a significant uptick in interest for integrated systems, which Chatterjee expects to build to be a key driver of improvement in demand for the portfolio with the broader proliferation of AI investments to the Enterprises alongside continued momentum from Hyperscalers. Additionally, the analyst expects Core Networking to benefit from Enterprise AI adoption and a pull-through of other parts of the portfolio, including Security, as securing data remains a top priority for Enterprises while pursuing AI deployments, where Cisco's broader portfolio stands well positioned to benefit. Piper Sandler: Cisco faced a good setup as Fish previewed, which, given the upside, guide-up, and narrative around data center refresh, AI-traction with hyperscalers, Splunk integration, new product launches, and Campus refresh potentially down the road, has sent shares >5% higher after hours. The debate from here will center around how much the lead-metric upside had been more straightforward compared to incremental demand versus Splunk contribution. Estimates are still set up well following the guide raise, and Fish noted that Cisco could sustain mid-single-digit sales growth as the cycles contribute and the business transition is nearing an inflection point. Fish sought a better entry point and preferred other names. Rosenblatt: Genovese had been arguing that Extreme Networks Inc EXTR and Juniper Networks Inc JNPR deserve multiple expansions due to growth in software subscriptions, ARR, RPOs, and AI becoming a more significant driver of total business. The analyst upgraded Cisco and raised the price target for the same reasons. For the second quarter, Cisco increased revenues by 9% to $14.0 billion and produced EPS of $0.94, exceeding consensus on each. Total product orders grew 29% and 11%, excluding Splunk, with substantial improvement in Service Provider and Cloud orders. There was double-digit growth in ARR, RPOs, and subscriptions, which accounted for 56% of total revenue. AI infrastructure orders with Web Scalers were more than $350 million in the quarter, bringing the year-to-date total to ~$700 million and putting Cisco on track to exceed $1 billion of AI infrastructure orders in fiscal 2025. Other positives were triple-digit growth in Web-Scale orders and greater than 20% in Telco orders. Security revenues and orders more than doubled year-over-year. Cisco said it is starting to see AI orders from Enterprise customers. BofA Securities: The second-quarter results and third-quarter guidance are above expectations. Excluding Splunk, orders were up 11%, Service Provider and Cloud orders up 63%, and double-digit Data Center and Campus order growth. Demand is picking up on the back of high network utilization at the macro level following a few years of inventory absorption. AI infrastructure buildouts drive demand across Cloud, Service Provider, and Enterprise verticals. Cisco was well prepared to address the improving demand, offering a solid portfolio of Optical, Routing, Silicon, and other solutions that cater to these needs. Liani expects continued growth in the second half and 2026. The rerating reflects Liani's belief that Networking should see renewed growth on normalization of Campus switching demand and Ethernet-based AI buildouts, new product announcements should support growth re-acceleration of its Security business, and noted Splunk synergies supporting growth initiatives in Security and Observability. Additionally, Cisco's shift to recurring and subscription revenue is positive and helps support the stock, with 50% of revenue now recurring. Goldman Sachs: The strength in data center switching and improving Campus switching demand drove the upbeat quarter. Service Provider & Cloud orders strength was driven by AI infrastructure readiness projects, with 20%+ growth in telco and triple-digit growth in webscale, including >$350 million of back-end AI orders, which puts Cisco on track to exceed its $1 billion AI fiscal 2025 order target. Public Sector orders were up on strength in international public sector demand. U.S. federal represents <10% of total revenue, of which ~75% is the Department of Defense, which Cisco noted is less impacted by government efficiency efforts than civilian agencies. Ng is encouraged by Cisco's order momentum year-to-date, which increases visibility into fiscal 2026 and 2027 targets for 4%-6% annual revenue growth and its conservative outlook for gross margins, which reflect the full potential impacts for tariffs on China, Mexico, and China. Price Action: CSCO stock is up 2.81% at $64.29 at last check Thursday. Also Read: Himax Q4 Earnings: Beats Estimates, Automotive And AI Tech Drive Revenue, Raises Outlook Photo via Shutterstock CSCOCisco Systems Inc $64.192.66% Overview Rating: Speculative 50% Technicals Analysis 66 0100 Financials Analysis 40 0100 Watchlist Overview EXTRExtreme Networks Inc $15.942.71% JNPRJuniper Networks Inc $36.16-0.51% Market News and Data brought to you by Benzinga APIs

Cisco Systems Shares Climb On Better-Than-Expected Q2 Results, Strong Forward Guidance - Cisco Systems (NASDAQ:CSCO)

Cisco Systems, Inc. CSCO reported its second-quarter financial results after Wednesday's closing bell. Here's a look at the highlights from the report. The Details: Cisco reported quarterly earnings of 94 cents per share, which beat the analyst consensus estimate of 91 cents. Quarterly revenue clocked in at $13.9 billion, beating the $13.87 billion consensus estimate. The company reported product orders grew 29% year-over-year. AI Infrastructure orders reached more than $350 million, bringing the total for the first half of fiscal 2025 to approximately $700 million and non-GAAP gross margin was 68.7% for the quarter. Read Next: Inflation Runs Hot In January: 'Houston We Have A Problem,' Experts Warn "Cisco's strong quarterly results were driven by accelerating customer demand for our technology," said Chuck Robbins, CEO of Cisco. "As AI becomes more pervasive, we are well positioned to help our customers scale their network infrastructure, increase their data capacity requirements, and adopt best-in-class AI security," Robbins added. Outlook: Cisco sees third-quarter EPS between 90 cents and 92 cents, versus the 92 cent estimate, and revenue in a range of $13.9 billion to $14.1 billion, versus the $13.86 billion estimate. The company expects fiscal 2025 EPS between $3.68 and $3.74, versus the $3.66 estimate, and revenue in a range of $56 billion to $56.5 billion, versus the $55.98 billion estimate. CSCO Price Action: According to data from Benzinga Pro, Cisco Systems shares are up 6.5% after hours at $66.50 Wednesday. Read Next: Palantir Adds Elon Musk's AI Chatbot Grok To AIP Image: Shutterstock CSCOCisco Systems Inc$66.306.20%Overview Rating:Speculative50%Technicals Analysis660100Financials Analysis400100WatchlistOverviewMarket News and Data brought to you by Benzinga APIs

Cisco Systems Lands $700M AI Gold Rush Amid Increased Appetite From Tech Giants: 'Build More And We Will Buy More,' Customers Tell CEO - Invesco QQQ Trust, Series 1 (NASDAQ:QQQ), Cisco Systems (NASDAQ:CSCO)

Cisco Systems Inc. CSCO exceeded analyst expectations for the second quarter that ended on Jan. 25 and raked over $700 million in artificial intelligence orders in the six months. Massive demand from web-scale clients and inference potential were the central themes that are expected to lead the AI-driven infrastructure boom. What Happened: Responding to a question by an analyst during the earnings call, CEO Chuck Robbins delved into demand from web-scale clients versus the deployments and deliveries by the company. He said that many clients have already increased their initial order targets for 2025 by 50% and they say, "If you can build more, we will buy more." However, Robbins said the demand was "very dynamic" and depended on their clients' evolving strategies. Cisco's 'Silicon One' technology provides scalable network infrastructure solutions, helping web-scale companies efficiently manage the immense traffic demands of their data centers and optimize costs. "On the $700,000,000 in AI orders, it's a combination of systems, silicon optics and optical systems," said Robbins. About half of these orders belong to the silicon and systems segments, he added. Robbins further highlighted the massive potential of AI inference, suggesting the opportunity in inferencing "is an order of magnitude higher" than the training stage that the company has seen to date. See Also: DoorDash Surges To 42M Monthly Users As Grocery And Retail Sales Soar Amid Record Order Frequency Why It Matters: Cisco beat earnings and revenue estimates for the quarter, reporting earnings of $0.94 per share on the revenue $13.9 billion. Guidance for next quarter is $0.90-$0.92 EPS and $13.9-$14.1 billion in revenue. Full-year guidance is $3.68-$3.74 EPS and $56-$56.5 billion in revenue. Price Action: Cisco rose by 0.16%% on Wednesday and advanced further by 6.59%% in after-hours after reporting earnings. The exchange-traded fund tracking the Nasdaq 100 index, Invesco QQQ Trust, Series 1 QQQ rose by 0.059%. Cisco shares have gained 5.80% on a year-to-date basis, whereas it was up by 25.97% over the last year. The average price target among 28 analysts tracked by Benzinga is $59.5 with a 'hold' rating. The estimates range from $44 to $78 apiece. Recent ratings from Citigroup, Morgan Stanley, and Citigroup suggest a $66.67 target, implying a potential upside of 0.03%. Photo Courtesy: Shutterstock Read Next: Marriott's Digital Penetration Hits 'Historic Highs' As Bonvoy App Downloads Soar Adding 31 Million New Members CSCOCisco Systems Inc$66.656.76%Overview Rating:Speculative50%Technicals Analysis660100Financials Analysis400100WatchlistOverviewQQQInvesco QQQ Trust, Series 1$530.520.48%Market News and Data brought to you by Benzinga APIs

Why Cisco Systems Stock Is Gaining Today | The Motley Fool

Cisco Systems (CSCO 2.31%) stock is climbing higher in Thursday's trading. The company's share price was up 2% as of 2 p.m. ET. Meanwhile, the S&P 500 index was up 0.5%, and the Nasdaq Composite index was up 0.9%. Shares had been up as much as 6.3% earlier in trading. After the market closed yesterday, Cisco published results for the second quarter of its current fiscal year, which ended Dec. 31. The network technologies specialist posted sales and earnings performance for the period that beat Wall Street's target. The company's valuation is also moving higher today following new bullish coverage from analysts. In fiscal Q2, Cisco reported non-GAAP (adjusted) earnings per share of $0.94 on sales of $13.99 billion. The performance topped the average analyst estimate's call for adjusted earnings per share of $0.91 on sales of $13.87 billion. Revenue in the period was up 9.4% year over year, and the company reported artificial intelligence (AI) infrastructure orders of $350 million. Management said product orders in the period were up 29% annually -- or 11% after factoring out the contribution from Splunk. In conjunction with the earnings release, Cisco announced that it is raising its quarterly dividend to $0.41 per share, a 3% increase above its previous level. The company also said that it had received board authorization for an additional $15 billion in share repurchases. For fiscal Q3, Cisco is guiding for sales between $13.9 billion and $14.1 billion. Adjusted earnings per share are projected to be between $0.90 and $0.92. Full-year sales are expected to be between $56 billion and $56.5 billion, and adjusted earnings per share are projected to be between $3.68 and $3.74. Following the company's fiscal Q2 release, Cisco stock has received price target increases from multiple analysts. In a note published before the market opened today, Rosenblatt upgraded Cisco stock from neutral to buy and raised its one-year price target on the stock from $66 per share to $80 per share. The firm's analysts cited AI-related catalysts as reasons for the ratings and price target hikes. J.P. Morgan also published new coverage on Cisco this morning, with the lead analyst on the stock, Samik Chatterjee, maintaining an overweight rating and increasing his one-year price target from $69 per share to $73 per share. The analyst said that the company's recent quarterly report showed strong demand indicators and expects sales growth momentum and potential earnings beats to offset potential adverse tariff impacts. Adding to the bullish commentary, Bank of America maintained a buy rating on Cisco and increased its one-year price target on the stock from $72 per share to $76 per share. The company sees AI infrastructure expansion powering strong results for the company this year and expects continued growth in the second half of the fiscal year.

Cisco AI Push Sets The Stage For Q2 Earnings: Will Investors Buy In? - Cisco Systems (NASDAQ:CSCO)

Cisco Systems Inc CSCO will be reporting its second-quarter earnings on Wednesday. Wall Street expects 91 cents in EPS and $13.87 billion in revenues as the company reports after market hours. The stock is up 24.88% over the past year, 5.63% year-to-date. Cisco Positioning Itself At The Heart Of AI Action Cisco is gearing up for its earnings report with a wave of AI-driven innovations that could give its stock a turbocharged jolt. The tech giant recently launched its new smart switches featuring intelligent networking silicon and embedded data processing units (DPUs), poised to redefine AI data center designs. But that's not all -- Cisco is empowering service providers to rethink their networks to better handle the avalanche of AI data and traffic, unlocking new monetization opportunities in the process. Partnering with Mistral AI, Cisco has also rolled out an AI Renewals Agent to simplify the renewal proposal process, a key milestone in its ongoing Customer Experience (CX) evolution. As AI becomes the backbone of the next-gen internet, Cisco seems to be positioning itself at the heart of the action -- now investors will be watching closely to see how these innovations translate into dollars when the company reports earnings. Let's look at what the charts indicate for Cisco stock and how the stock currently maps against Wall Street estimates. Read Also: How To Earn $500 A Month From Cisco Stock Ahead Of Q2 Earnings Cisco Stock Moderately Bullish Ahead Of Q2 Earnings Cisco stock is exhibiting a moderately bullish trend, though slight selling pressure is emerging. The stock is trading above key moving averages, signaling sustained upward momentum. Chart created using Benzinga Pro With Cisco stock at $61.75, it is positioned above the 20-day simple moving average of $61.14 and its 50-day simple moving average (SMA) of $59.86 -- both indicating a bullish trend. Additionally, the stock remains well above its 200-day SMA of $52.65, reinforcing long-term strength. However, the eight-day SMA at $62.06 lies above the stock reflecting some selling pressure. The Moving Average Convergence Divergence (MACD) indicator stands at 0.77, further supporting a bullish outlook. However, the Relative Strength Index (RSI) of 57.02 suggests that is Cisco stock keeps rising, it could be approaching overbought territory, potentially leading to near-term consolidation or a pullback. Investors should monitor whether the stock maintains support at shorter-term moving averages to confirm the continuation of its bullish momentum. Cisco Analysts See 8% Upside Ratings & Consensus Estimates: The consensus analyst rating on Cisco stock stands at a Buy currently with a price target of $59.50. Citigroup and Morgan Stanley's latest ratings suggest an 8.01% upside for Cisco, with a $66.67 average target. Price Action: Cisco stock was trading at $62.49 at the time of publication. Read Next: US Stocks Set For A Cautious Start Ahead Of Inflation Data: Expert Says 'Strong Bull Markets Tend To Roar Back To Life After Corrections' Image: Shutterstock CSCOCisco Systems Inc$62.13-0.48%Overview Rating:Good62.5%Technicals Analysis1000100Financials Analysis400100WatchlistOverviewMarket News and Data brought to you by Benzinga APIs

Cisco delivers solid earnings and revenue beat, boosting its stock - SiliconANGLE

Cisco delivers solid earnings and revenue beat, boosting its stock Cisco Systems Inc.'s profit engines are ticking over nicely as it continues to reap the benefits of artificial intelligence demand. The company posted a solid earnings and revenue beat, following up with strong guidance to boost its stock more than 6% in extended trading. The networking hardware and software giant reported second-quarter earnings before certain costs such as stock compensation of 94 cents per share on revenue of $13.99 billion, up 9% from the same period one year earlier. That compares well with Wall Street's call for earnings of just 91 cents on sales of $13.87 billion. Net income was down 8%, but the company still reported a hefty $2.43 billion in profit from the quarter. Cisco's biggest business unit, the networking division, generated total sales of $6.85 billion, down 3% from a year ago but still above the $6.67 billion consensus estimate. Meanwhile, the security business added $2.11 billion in sales, up 117% from a year ago, thanks to the company's $28 billion acquisition of Splunk, which closed in March. Wall Street had been targeting just $2.01 billion there. Cisco Chief Financial Officer Scott Herren said on a conference call with analysts that Splunk has been accretive to the company's earnings per share much sooner than hoped. He added that Cisco's total revenue would have dropped 1% if it hadn't bought that company. Chuck Robbins (pictured), chief executive of Cisco, said the strong quarterly results were driven by "accelerating demand" for its technology. "As AI becomes more pervasive, we are well positioned to help our customers scale their network infrastructure, increase their data center capacity requirements and adopt best-in-class AI security," he said. Much of Cisco's AI traction has been driven by the data center buildouts of cloud hyperscalers such as Microsoft Corp., Meta Platforms Inc. and Google LLC, but Robbins said the company sees further opportunities to help large enterprises boost their own infrastructure for on-premises AI deployments. During the quarter, AI infrastructure orders generated more than $350 million in revenue within Cisco's networking segment. In addition, the security business also stands to benefit from AI, with Cisco recently rolling out new products to address opportunities in that area. Looking to the third quarter, Cisco said it's modeling revenue of between $13.9 billion and $14.1 billion. The midpoint of that range is just ahead of the Street's consensus view of $13.9 billion. In addition, Cisco said it's looking for earnings of 90 cents to 92 cents per share, ahead of the Street's estimate of 90 cents. A lot of people in the technology industry have been concerned about what impact the new U.S. President Donald Trump's Department of Government Efficiency might have on government information technology spending budgets. But Robbins assured analysts on the call that three-quarters of its federal government business stems from the Defense Department, which has so far been unaffected by the DOGE team's actions. He stressed that most of the headcount cutting has occurred in other federal agencies. "Everything seems to be progressing as we expected," he insisted. Moreover, Herren said that Cisco's customers do not appear to be pulling up orders before tariffs go into effect, as some analysts had feared. The company said it is raising its quarterly dividend 3% to 41 cents per share, with that increase implying a yield of 2.63% per share, up from 2.56% previously. In addition, it's also boosting its stock buyback authorization by $15 billion, bringing its total remaining authorization to $17 billion, with no deadline. The after-hours lift means that Cisco's stock is now up 5% in the year to date, just ahead of the broader S&P Index, which has gained 3%.

Cisco Systems: Revenue Surges 9% | The Motley Fool

Cisco Systems (CSCO 0.16%), a networking and telecommunications company, recently released its earnings for the second quarter of the fiscal year 2025 on Feb. 12, 2025. The release highlighted a 9% increase in revenue to $14.0 billion, surpassing management's guidance of $13.75 billion to $13.95 billion. The non-GAAP EPS was $0.94, exceeding the guidance range of $0.89 to $0.91. However, the GAAP EPS fell to $0.61 from $0.65 a year ago, reflecting a 6% decline. Overall, the quarter demonstrated Cisco's strong revenue growth and strategic focus, though GAAP earnings declined. Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in 2024-11-13 earnings report. Cisco Systems is a key player in networking and telecommunications, providing a range of products from routers to cybersecurity solutions. The company's recent focus has been on incorporating artificial intelligence (AI) across its offerings, as well as enhancing its cybersecurity capabilities. This integration is essential amid a global push for digital transformation, where robust network solutions coupled with AI features are in demand. Key success factors include innovation in product offerings, strategic acquisitions, and geographic diversification. Cisco's strategy centers on three primary areas: AI integration, strengthening cybersecurity, and expanding its network infrastructure. Innovations such as AI-driven network management aim to simplify operations and enhance customer solutions. Furthermore, the acquisition of companies like Splunk underscores Cisco's commitment to cybersecurity advancements. Cisco reported several notable outcomes this quarter. Revenue was $14.0 billion, beating its own expectations and showcasing a 9% year-over-year increase due to strong product orders, including those boosted by the Splunk acquisition, which contributed positively to profitability. Despite some declines, overall order growth was robust, particularly in security and observability segments. This speaks to the growing demand for Cisco's core networking and security products. Product orders increased by 29% year-over-year, bolstered by Splunk. Without Splunk, order growth was 11%, indicating strong core business demand. Regionally, the Americas saw revenue grow by 9%, EMEA by 11%, and APJC by 8%. Security revenues surged by 117%, observability by 47%, and collaboration by 1%, although networking revenue declined by 3%. Strategic acquisitions continue to positively influence results, aligning with Cisco's move towards robust cybersecurity solutions. Several strategic developments have echoed through Cisco's financial performance. A series of successful integrations of AI across its product line, including networks and cybersecurity, helped generate around $350 million in AI infrastructure orders. Similarly, the acquisition of Deeper Insights AI Ltd. has bolstered Cisco's AI capabilities, positioning it towards future growth. Cisco also increased its quarterly dividend by 3% to $0.41 per share, indicative of its confidence in sustained financial strength. Further commitment to shareholders is illustrated by the $15 billion addition to its stock repurchase program. Cisco's Splunk acquisition, completed earlier than expected, has brought substantial benefits, particularly in boosting Cisco's cybersecurity portfolio with advanced threat detection capabilities. This acquisition marks a significant step in aligning with market needs, as cyber threats become more sophisticated. The financial impacts of these strategic moves suggest continued positive outcomes in revenue and perhaps mitigate current downward trends in GAAP earnings. Cisco's outlook is cautiously optimistic. For the upcoming Q3 FY 2025, management anticipates revenue between $13.9 billion and $14.1 billion, with a GAAP EPS of $0.57 to $0.61. The company projects full-year FY 2025 revenue to range between $56.0 billion and $56.5 billion, alongside a GAAP EPS of $2.40 to $2.52.