Cisco Surpasses Expectations with Strong Q3 Results, Driven by AI-Fueled Demand

Cisco raises full-year results forecast on AI-driven demand; shares rise

May 14 (Reuters) - Cisco Systems (CSCO.O), opens new tab raised its annual results forecast on Wednesday, betting on steady demand from cloud customers for its networking equipment, driven by the artificial intelligence boom. Shares of the San Jose, California-based company rose 4% in extended trading. Cisco, with products such as ethernet switches and routers, has benefited from a boom in data center investment, as technology giants have ramped up capital expenditure to meet the computing power needed to run generative AI applications. The company expects its revenue to be between $56.5 billion and $56.7 billion for fiscal 2025, compared with its prior forecast of $56 billion to $56.5 billion. Analysts, on average, expect $56.47 billion, according to data compiled by LSEG. Cisco now expects to post annual adjusted profit between $3.77 and $3.79 per share, compared to its prior projection of $3.68 to $3.74 apiece. Revenue for the third quarter ended April 26 came in at $14.15 billion, ahead of analysts' estimate of $14.08 billion. On an adjusted basis, Cisco earned 96 cents per share in the quarter, also beating an estimate of 92 cents per share. Reporting by Juby Babu in Mexico City; Editing by Alan Barona Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Business

Cisco reports earnings and revenue beat, issues better-than-expected forecast

Cisco Chairman and CEO Chuck Robbins speaks at a keynote address at the Cisco Live! conference in Las Vegas on June 7, 2023. Cisco reported earnings and revenue that topped analysts' estimates on Wednesday and issued guidance that also exceeded Wall Street's prediction. Here's how the company did in comparison with LSEG consensus: Revenue increased 11% during the quarter, which ended on April 26, from $12.7 billion a year earlier, according to a statement. Net income rose to $2.49 billion, or 62 cents per share, from $1.89 billion, or 46 cents per share, a year ago. Management called for 96 cents to 98 cents in fiscal 2025 earnings per share on $14.5 billion to $14.7 billion in revenue. Analysts surveyed by LSEG had predicted 95 cents in adjusted earnings per share on $14.58 billion in revenue. Cisco said the guidance factors in the expected impact of President Donald Trump's sweeping tariffs on goods imported into the U.S. Cisco reported over $600 million in artificial intelligence infrastructure orders from web companies. That brings the total for the fiscal year to over $1.25 billion. Cisco said the sum passed the $1 billion mark a quarter ahead of schedule. During the quarter, Cisco started selling a Webex AI agent for customer service, and it announced Ethernet switches that contain AMD Pensando data processing units that could help with hardware consolidation. Networking revenue rose 8% to $7.07 billion, Cisco said. Analysts polled by StreetAccount had expected $6.81 billion. Revenue from security products jumped 54% to $2.01 billion, below StreetAccount's $2.17 billion consensus. The unit includes the addition of Splunk, which Cisco bought last year for $27 billion. As of Wednesday's close, Cisco shares were up 3.5 for the year%, while the S&P 500 index was about flat. Executives will discuss the results on a conference call with analysts starting at 4:30 p.m. ET.

Wells Fargo upgrades this tech stock after an earnings beat, sees strong AI momentum

Emerging artificial intelligence opportunities could push Cisco higher, according to Wells Fargo. Analyst Aaron Rakers upgraded the technology stock to overweight from equal weight. He also lifted his his price target to $75 from $72, signaling 22% upside. Rakers pointed to accelerating AI momentum and diversification for the company as one driver for his rating change. Exiting its fiscal third quarter, Cisco already managed to surpass its $1 billion cumulative order target for the fiscal year. With this, the company could continue to diversify into other AI opportunities, such as large-scale sovereign AI opportunities and long-term traditional enterprise adoption. "We also see Cisco as well-positioned for longer-term enterprise AI (hundreds of millions); NVIDIA alignment a differentiator," he wrote. "With this, we think investor sentiment will become increasingly positive on Cisco's internal Silicon One competitive positioning." Cisco's orders have also grown at a solid pace this year. Rakers believes that the company could return to a higher valuation once investors completely factor in this AI traction plus increasing confidence in returning to sustained growth. "With increasing confidence in a normalizing order growth recovery, we see Cisco as presenting a continued EPS upside + value rerate story," the analyst wrote. Rakers also highlighted its mature subscriptions base, now estimated at 56% of Cisco's total revenue and more than 40% of its total product revenue. He added that Cisco also has the ability "capitalize on a broadening enterprise campus/branch networking upgrade cycle." The upgrade comes after Cisco report fiscal third-quarter results that beat analyst expectations, sending shares higher by 4%. Year to date, the stock has climbed more than 3%. CSCO YTD mountain CSCO year to date Analysts are somewhat split on the stock. Of the 24 who cover Cisco, 13 rate it a buy or strong buy, according to LSEG. Another 11 have a hold rating on shares.

Cisco beats expectations and its stock rises on growing AI momentum - SiliconANGLE

Cisco beats expectations and its stock rises on growing AI momentum Cisco Systems Inc. enjoyed another quarter of growing demand amid the artificial intelligence boom, helping it to beat expectations on earnings and revenue as it posted its third-quarter earnings results. The company reported earnings before certain costs such as stock compensation of 96 cents per share on revenue of $14.15 billion, up 15% from the same period one year ago. The numbers were good, surpassing Wall Street's forecasts of 92 cents per share and $14.08 billion in revenue. Net income for the quarter rose from $1.89 billion a year earlier to $2.49 billion today. Cisco Chief Executive Chuck Robbins (pictured) hailed the company's "strong quarterly results", saying it was benefiting from "clear demand" for its technologies. "The momentum we are seeing with AI is fueled by the power of our secure networking portfolio, our trusted global partnerships and the value we bring to our customers." The company said its AI infrastructure orders from web companies topped more than $600 million in the quarter, bringing the total in this fiscal year to more than $1.25 billion. According to Robbins, this meant the company surpassed the $1 billion mark a full quarter ahead of schedule. On a conference call with analysts, numerous web companies are exploring its networking technologies for AI workloads. He called out Meta Platforms Inc. in particular, saying it has explored using Ethernet fabrics for AI clusters as an alternative to InfiniBand, which is the networking technology sold by Nvidia Corp. to link clusters of graphics processing units together. "It has been the intent of these customers from day one to move away from InfiniBand," Robbins told analysts. "And the gating factor was how soon did they feel good about the technology?". The answer, according to Robbins, is that they "feel very good about the technology and how it's enabling them to run these training models over, over native Ethernet or some enhanced Ethernet that we're delivering." With regard to Cisco's segments, the results were mixed. The company's biggest business is networking hardware, which accounts for just over half of its total sales. Revenue there rose 8% to $7.07 billion in the quarter, easing past the Street's target of $6.81 billion. However, the security segment was disappointing, with sales coming to just $2.01 billion, below the forecast of $2.17 billion. Looking to the current quarter, Cisco said it's targeting earnings of 96 cents to 98 cents on revenue of between $14.5 billion and $14.7 billion. That compares well with the analyst forecast of earnings of 95 cents on sales of $14.58 billion. Robbins admitted that the macroeconomic environment remains uncertain, but he said the guidance still factors in the expected impact of President Donald Trump's sweeping tariffs on products imported into the U.S. Encouragingly, the tariffs don't seem to have had much of an impact on customer's buying habits, Robbins said. "We haven't seen any meaningful change in their purchasing, and so we haven't seen any customers really fundamentally slowing down," he added. During the previous quarter, Cisco announced a new Webex AI agent for customer service applications, unveiled a host of new security innovations at its annual RSAC Conference 2025 in San Francisco, plus the first prototype of its quantum networking chip, which is designed for quantum computing but also has applications for AI. Robbins also revealed a couple of executive changes coming up, revealing that the company's Chief Financial Officer Scott Herren will retire at the end of July. Herren joined Cisco in 2020, having previously held the CFO role at Autodesk Inc. Robbins said he has a successor lined up in the shape of Mark Patterson, a 25-year Cisco veteran who is currently the company's chief strategy officer. Cisco's stock gained more than 2% in extended trading, and is up about 3.5% in the year to date. In contrast, the S&P 500 Index is more or less flat.

Cisco hasn't been bitten by Elon Musk's DOGE just yet, even as an AI Arab Spring opens up fresh opportunities

While other enterprise tech providers have bemoaned the impact of Elon Musk's DOGE activities in the US public sector, no such complaints are forthcoming from Cisco. As the firm turned in Q3 revenues of $14.15 billion, up 11% year-on-year, and net income of $3.83 billion, CEO Chuck Robbins was able to point to public sector orders up eight percent in all geographies, with US Federal orders growing at double digits during the quarter. He added: During the quarter, our AI-powered, cloud-managed Meraki for Government networking solution also achieved FedRAMP authorization from the US Government. That said, there are some pain points, he acknowledged: I would say there still continues to be stress on the civilian side obviously, with agencies that have been shut down with employees who are worried about their jobs, there's a lot of just human capital concern on the civilian side, but it's also important to remember that, that's about a quarter of our Federal business, 75% of it is Intelligence and Department of Defense. Away from the government space, Robbins said product orders from service provider and cloud customers continue to be strong, up 32% year-on-year, with three of the top six web scalers each growing orders in the triple digits. He commented: From a customer behavior perspective, first of all, we haven't seen any meaningful change in how they're purchasing. So we haven't seen any customers really fundamentally slowing down. They're still committed to the technology transition. I think the AI transition is just so important that they are going to continue to spend until they just absolutely have to stop. I think that, as of right now, they are still comfortable....I'm sure there was an order here or there from a customer who decided to pull something forward because they were concerned about tariffs. But we looked at a ton of data points to see if we saw any signs of broad-based pull ahead business, and we did not. Cisco's AI infrastructure orders surpassed $600 million in Q4, bringing the yearly total above $1 billion a quarter ahead of schedule. Robbins re-iterated that Cisco sees the AI market opportunity as being built around three distinct, but connected pillars: First, AI training infrastructure for web-scale customers, combinations of our Cisco 8-K, Silicon One optics and optical systems are being deployed by 5 of the 6 largest web scalers. Second, AI inference and enterprise clouds. Our accelerated innovation in hardware and software, coupled with our NVIDIA partnership is designed to simplify and derisk AI infrastructure deployment for the enterprise. And third, AI network connectivity. Customers are leveraging our technology platforms to help modernize, secure and automate their network operations to prepare for pervasive deployment of AI agents and applications. With a genetic AI, the network is fundamentally constrained and will require ultrafast, low-latency, energy-efficient networks, which we can deliver. AI orders from enterprise customers continue to show momentum, he said: Enterprises are seeking simple, seamless, scalable and secure solutions for their AI deployments which we are ready to deliver through our expanding partnership with NVIDIA. This week, as President Trump continued his Middle East tour, Cisco announced a new multi-phase investment program in the Kingdom of Saudi Arabia with the Kingdom launching a new AI company, HUMAIN. Cisco is one of a number of tech partners announced for this endeavor. Amazon Web Services will invest $5.3 billion in HUMAIN to help it create a so-called "AI Zone" in Saudi Arabia, while AMD announced a $10 billion collaboration with HUMAIN to build AI infrastructure and data centers, and NVIDIA will deliver 18,000 Blackwell semiconductors, Of Cisco's contribution, Robbins explained: We will be a strategic technology partner contributing to their AI infrastructure build-outs. This partnership aligns with Saudi Vision 2030, contributing to the Kingdom's transformation into a diversified digital economy and enhancing its global and regional competitiveness in the AI era. There's huge growth opportunity here, he added: On the Middle East front, I will just tell you that [HUMAIN CEO Tareq Amin] made a comment to me that they're behind and they're going to catch up. So I think they're going to spend a lot of money, and I think they're going to spend it as quickly as they possibly can. It's hundreds of billions of dollars at the end of the day that they will be spending...Our discussions with them have been around the networking, compute, security and observability, so that represents a pretty good opportunity for us, as big as any of the major web scalers in the United States is how I would think about it. In conclusion, Robbins argued that Cisco continues to see onward momentum due to its track record and global presence: We have customer trust. We have the ability to understand both the cloud customers as well as the enterprise customers and the public sector customers. So when sovereign clouds are being discussed, we have a unique perspective across all of those segments. We understand what they need in long-term partnerships. A solid quarter that exceeded analysts expectations. Given the nature of its core businesses, Cisco remains well-placed to take advantage of current trends in the enterprise space.

Cisco Delivers Strong Earnings as AI Infrastructure Orders Grow

Cisco (CSCO) reported fiscal third-quarter revenue and profits that topped analysts' projections, thanks in part to strong demand for AI infrastructure. The networking-equipment provider's revenue rose 11% year-over-year to $14.15 billion, above the analyst consensus from Visible Alpha. Adjusted net income of $3.83 billion, or 96 cents per share, improved from $3.55 billion, or 88 cents per share, in the year-ago quarter and exceeded estimates. The gains came as AI infrastructure orders surpassed $600 million in the period, which Cisco said brought its yearly total above $1 billion a quarter ahead of schedule. The results show "clear demand for our technologies," CEO Chuck Robbins said. "The momentum we are seeing with AI is fueled by the power of our secure networking portfolio, our trusted global partnerships, and the value we bring to our customers." Looking ahead, Cisco projected fiscal fourth-quarter revenue of $14.5 billion to $14.7 billion and adjusted earnings per share of 96 cents to 98 cents. Analysts were looking for $14.53 billion and EPS of 95 cents, respectively. The results come after Cisco earlier this month unveiled a quantum computing chip it claims "could accelerate impactful quantum computing and networking applications from decades away to just 5-10 years." Cisco shares gained over 3% in after-hours trading. The stock was up close to 4% for 2025 through Wednesday's close.

Cisco (CSCO) Q3: Stock Bullish On AI Firepower, Saudi Pact - Cisco Systems (NASDAQ:CSCO)

Cisco Systems Inc CSCO will report its third-quarter earnings Wednesday after the market close, with Wall Street expecting earnings per share of 92 cets and revenue of $14.08 billion. The stock has climbed 25.4% over the past year, despite being down 3.87% year-to-date and slipping 6.92% in the past month. However, over the last five trading days, Cisco stock has regained 2.53%, and a confluence of bullish technical signals suggests momentum may just be heating up. Let's take a look at what's propelling Cisco's stock and how the charts are setting up ahead of earnings. Read Also: How To Earn $500 A Month From Cisco Stock Ahead Of Q3 Earnings A Strategic AI Infusion Cisco just added a major dose of AI credibility to its board, appointing Kevin Weil, Chief Product Officer at OpenAI, effective May 12. Weil's resume includes product leadership at X (formerly Twitter), Instagram and now OpenAI -- the company behind ChatGPT. CEO Chuck Robbins said that Cisco would "leverage his deep expertise in AI and product innovation to guide our strategic initiatives." That's not all. Cisco also announced an expanded partnership with Saudi Arabia's HUMAIN AI, aiming to power the Kingdom's AI infrastructure under Vision 2030. Additional collaborations with G42 and the AI Infrastructure Partnership (AIP) across the UAE and the U.S. further entrench Cisco in the global AI arms race. Cisco Stock Strongly Bullish Ahead Of Q3 Earnings Chart created using Benzinga Pro Cisco stock at $61.38 trades decisively above its eight-, 20-, 50- and 200-day simple moving averages, triggering a string of bullish technical signals. The eight-day SMA sits at $60.30, the 20-day at $58.07, the 50-day at $59.13 and the 200-day at $56.79 -- all beneath the current price. The Moving Average Convergence Divergence (MACD) indicator clocks in at 0.79, further reinforcing the bullish momentum. Meanwhile, the Relative Strength Index (RSI) is at 64.67 -- elevated, but not yet in overbought territory. Cisco Analysts See 9% Upside Cisco Analysts Ratings & Consensus Estimates: The consensus rating on Cisco stock stands at Buy, with an average price target of $62.65. Recent bullish sentiment from top Wall Street firms reinforces that view. The three most recent analyst updates -- from Evercore ISI Group, Rosenblatt and JPMorgan -- carry an average price target of $66.67, implying an upside of roughly 8.66% from current levels. CSCO Price Action: Cisco stock was trading down 1.25% at $61.01 at the time of publication on Wednesday. Read Next: Cisco's Partners With AIP In Latest AI Push Photo: Shutterstock CSCOCisco Systems Inc$61.02-1.22%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum83.57Growth27.65Quality29.37Value20.46Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Cisco Shares Climb After Q3 EPS, Revenue Beat Estimates: Details - Cisco Systems (NASDAQ:CSCO)

Cisco Systems, Inc. CSCO released its third-quarter results after Wednesday's closing bell. Here's a look at the details from the report. The Details: Cisco reported quarterly earnings of 96 cents per share, which beat the analyst consensus estimate of 92 cents. Quarterly revenue came in at $14.15 billion, which beat the Street estimate of $14.08 billion and is up from revenue of $12.70 billion from the same period last year. Read Next: Nvidia Climbs On Saudi AI Investments: Analyst Estimates $15 Billion To $20 Billion In Revenue Cisco also reported product orders were up 20% year-over-year, up 9% excluding Splunk, with growth across all geographies and customer markets. AI Infrastructure orders taken from webscale customers exceeded $600 million, surpassing the company's $1 billion target one quarter early. "Cisco once again had strong quarterly results with clear demand for our technologies," said Chuck Robbins, chair and CEO of Cisco. "The momentum we are seeing with AI is fueled by the power of our secure networking portfolio, our trusted global partnerships, and the value we bring to our customers." Outlook: Cisco sees fourth-quarter adjusted earnings of between 96 cents and 98 cents per share, versus the 95 cent estimate, and revenue in a range of $14.5 billion and $14.7 billion, versus the $14.58 billion estimate. Cisco raised its fiscal 2025 EPS guidance from between $3.68 and $3.74 per share to between $3.77 and $3.79 per share, versus the $3.73 estimate. The company raised its fiscal 2025 revenue forecast from a range of $56 billion to $56.50 billion to a new range of $56.5 billion to $56.7 billion, versus the $56.47 billion estimate. CSCO Price Action: According to data from Benzinga Pro, Cisco stock was up 3.90% at $63.68 after-hours Wednesday. Read Next: Quantum Stocks Are Hot In 2025: Biggest Movers To Watch Photo: Shutterstock CSCOCisco Systems Inc$63.562.88%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum83.57Growth27.65Quality29.37Value20.46Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Cisco Q3 2025 Earnings: AI Spending Resisted Tariff Uncertainty

"They're going to continue to spend [on AI] until they just absolutely have to stop," Cisco CEO Chuck Robbins said. Cisco Systems joined the ranks of other technology vendors reporting no negative effects in recent quarterly earnings from economic uncertainty and global tariff spats, with the networking and networking giant seeing continued customer investment in artificial intelligence and maintaining its revenue forecast for the current fiscal quarter. CEO Chuck Robbins told analysts during the vendor's fiscal 2025 third quarter earnings call on Wednesday that for customers, "the AI transition is just so important that they're going to continue to spend until they just absolutely have to stop." "We haven't seen any customers really fundamentally slowing down," Robbins (pictured) said. "They're still committed to the technology transition." [RELATED: Cisco Announces Investment In 'Visionary' Upstart Gruve.ai] CFO Scott Herren-who plans to retire at the end of the fiscal year-said channel partners have reported that no customers are delaying projects and that the vendor's fiscal fourth quarter guidance takes into account uncertainty over what happens to non-China tariffs after President Donald Trump's 90-day pause ends July 9. Herren said channel partners reported no customers making orders early to avoid future price increases due to tariffs, which could have pulled forward revenue that the San Jose, Calif.-based company would have generated next quarter. The earnings call covered the three months ended April 26. "We looked at channel inventory, which you would think would go up," he said. "It did not. It actually was down." Vendors including IBM, Microsoft and Google have also reported growing AI demand and sustained revenue growth during the quarter despite uncertainty created by the Trump Administration's rapidly shifting tariff policies. Herren said that Cisco's on-hand webscale product inventory went down during the quarter. The time between Meraki product shipment and activation remained at pre-pandemic levels. Pipeline and customer requests for future ship dates also showed "nothing out of the ordinary." Although Elon Musk's cost-cutting Department of Government Efficiency (DOGE) wasn't explicitly named on the call, when asked about Cisco's public sector business, Robbins said that he was pleased with the division's performance: 8 percent growth year over year and 3 percent globally in organic growth. The U.S. federal business saw double-digit order growth in the quarter. "There still continues to be stress on the civilian side, obviously, with agencies that have been shut down, with employees who are worried about their jobs, there's a lot of just human capital concern on the civilian side," Robbins said. "But it's also important to remember that that's about a quarter of our federal business. Seventy-five percent of it is intelligence and the Department of Defense." On Cisco's forecast for the fiscal 2025 fourth quarter, Herren said he factored in "a small impact on us for the tariffs on steel and aluminum," but hasn't "broken out and quantified the dollar value that goes with that ... because the puck keeps moving on this." He said Cisco is assuming that over the fourth quarter, the vendor "assumes current tariffs and exemptions remain in place," with "China at 30 percent, partially offset by an exemption for semiconductors and certain electronic components; Mexico and Canada at 25 percent for the components and products that are not eligible for the current USMCA [United States-Mexico-Canada Agreement, the successor to NAFTA] exemptions," the CFO said. Herren is also assuming that other countries keep a base 10-percent tariff rate until July 9, reverting to country-specific tariffs offset by the semiconductor and electronic components exemption. "We'll continue to leverage our world-class supply chain team to help mitigate the impact where appropriate through the flexibility and agility we have built into our operations over the last few years," he said. "The size and scale of our supply chain provides us some unique advantages as we support our customers globally." Should global tariffs spark increased infrastructure and manufacturing investment in the U.S., Robbins said that "Cisco is well-positioned to help connect and protect these capital-intensive investments at scale." Year-to-date orders for Cisco's industrial internet of things (IOT) portfolio grew 35 percent year over year during the quarter. Cisco reported that networking product sales grew 8 percent year over year to $7 billion in revenue. The vendor saw double-digit growth in switching and enterprise routing products and triple-digit sequential growth in orders for Wi-Fi 7. Customers invested in modernizing their infrastructure, with the network seen as key for achieving real-time benefits from AI agents. "While they may not know exactly what those applications are going to look like right now, they absolutely know they're going to need the most modern networks they can have," Robbins said. Looking ahead, Cisco is focused on embedding security into the network, with customers expressing interest in removing physical firewalls from their infrastructure. Spending on networking and data center-related Cisco wares to meet cloud and AI demands will continue beyond 2025 globally, Robbins said. "I don't anticipate that 2025 is going to be a peak year," he said. "This has many years to run." Once public cloud infrastructure for training is built out, enterprises will spend on their own data centers to perform AI inferencing, Herren added. Customers also are moving from the InfiniBand standard to Ethernet for running AI training models, Robbins said. Webscale customers ordered more than $600 million in AI infrastructure, leading to Cisco passing its $1 billion target a quarter early. The vendor reported about $350 million in orders the prior quarter. "The $1 billion target ... was really to give you all more confidence that we were serious in this space," Robbins told analysts. "The results have now said that these customers are taking us seriously." Cisco executives on the call told analysts that the newly announced deal with Saudi Arabia's HUMAIN AI initiative did not count toward the $600 million in AI infrastructure deals and that the $1 billion is a sales target with revenue coming in the second half of the year. About two-thirds of the AI infrastructure orders during the quarter were for systems based on the Cisco Silicon One G200 processor. The rest were in optics. "Those customers are telling us that if we could get more capacity out, they would buy more," Robbins said. "It's actually doing well right now and we've got a number of other chips that are in various stages of the process for next-generation platforms that we're also looking forward to." The CEO said that Cisco's silicon investments are a differentiator, with customer orders requiring fast execution. "At the end of the day, if we didn't have the silicon, it would probably make it virtually impossible for us to be successful long term here," he said. "If we miss with these customers, then we sit on the sidelines for a while." Enterprise AI orders, while hard to separate out from other data, have seen an acceleration "in the hundreds of millions of dollars, not in the billions yet," he said. When asked about Cisco's Nvidia partnership, Robbins said that most of the vendors' joint offers will start rolling out in about 60 days. Cisco continues to see a lack of demand for co-packaged optics (CPO) Silicon One offers, Robbins said. "As soon as customers are asking for it, we will be first in market, ready to deliver it," he said. Cisco reported product orders up 20 percent year over year including Splunk. Without Splunk, orders grew 9 percent. By customer market, service provider and cloud order grew 32 percent year over year, and enterprise grew 22 percent. Cisco reported $14.1 billion in revenue for the quarter, up 11 percent year over year. Net income using generally accepted accounting principles (GAAP) was $2.5 billion. GAAP operating income was $3.2 billion, up 46 percent. Product revenue grew 15 percent year over year to $10.4 billion. Services revenue grew 3 percent to $3.8 billion. Within product revenue, security products portfolio sales grew 54 percent year over year to $2 billion. Splunk performed "slightly ahead of" Cisco's expectations on revenue and profitability, Herren said. Cisco's secure access, extended detection and response (XDR) and Hypershield security products collectively added more than 370 new customers in the quarter. Observability grew 24 percent year over year to $261 million. And the collaboration portfolio-which includes Webex-grew 4 percent year over year to $1 billion. Total annual recurring revenue (ARR) was $30.6 billion at the end of the quarter, up 5 percent year over year. Total subscription revenue grew 15 percent to $7.9 billion, representing 56 percent of total Cisco revenue. Total software revenue was up 25 percent, hitting $5.6 billion. Software subscription revenue grew 26 percent year over year. Cisco's cash flow from operating activities for the third fiscal quarter was $4.1 billion, up 2 percent year over year. The vendor ended the quarter with $15.6 billion in cash and cash equivalents and investments. The company's remaining performance obligations (RPO) was $41.7 billion, up 7 percent year over year. Cisco expects about half of that to become revenue over the next 12 months. Product RPO grew 10 percent year over year to $20.8 billion. Services RPO grew 5 percent to $20.9 billion. Cisco forecasted fourth fiscal quarter revenue between $14.5 billion and $14.7 billion. It forecasted fiscal year 2025 revenue of $56.5 billion to $56.7 billion. Cisco's stock traded at about $63 a share Wednesday after market close, up about 2 percent.

Cisco Hits AI Target a Quarter Early | The Motley Fool

Cisco posted solid year-over-year growth and topped Wall Street expectations while also issuing guidance for the final three months of its fiscal year that were ahead of what analysts had expected. Sales of security equipment led the way, up 54% from a year ago, and Cisco is increasingly proving its relevance in the AI conversation. The company said it took more than $600 million in AI infrastructure orders in the quarter, surpassing its $1 billion target for the full fiscal year one quarter ahead of schedule. In March, the company rolled out its Webex AI agent for customer service applications. Cisco is also doing a good job of controlling costs, reporting flat operating expenses from a year ago. Overall gross margin inched up slightly, fueling a solid increase in operating income. Management is forecasting $0.96 to $0.98 in earnings per share for the fiscal fourth quarter on revenue of $14.5 billion to $14.7 billion, offering some upside to the consensus $0.95 per share on $14.5 billion in sales. Cisco shares were flat for the year coming into earnings, but that follows a big post-Liberation Day plunge and slow recovery in recent weeks. Investors were encouraged by the results, sending Cisco shares up 4% in aftermarket trading on Wednesday following the release but ahead of the company's conference call with investors. The AI story and Cisco's role in that story as a provider of secure switches and other necessary products is likely to continue to build steam. Ahead of its earnings announcement, Cisco made headlines as part of a group partnering with Saudi Arabia's newly formed AI company, Humain AI. The stock has been choppy this year in large part due to concerns about the impact of tariffs and trade restrictions, and although those worries have begun to ease, expect management to be asked about trade tensions on the postearnings call. The bottom line is that Cisco, one of the darlings of the late 1990s tech explosion, remains as relevant as ever in the AI era.

Cisco Q3 FY25 slides: AI initiatives drive 11% revenue growth, outlook remains strong By Investing.com

Cisco Systems Inc. (NASDAQ:CSCO) reported strong financial results for its third quarter of fiscal year 2025, with revenue growing 11% year-over-year to $14.1 billion and non-GAAP earnings per share reaching $0.96, exceeding analyst expectations of $0.92. The networking giant's stock rose 2.79% in after-hours trading following the May 14 earnings release, reflecting investor confidence in the company's performance and outlook. The quarter was marked by significant momentum in artificial intelligence initiatives, strategic partnerships, and solid performance across all geographic regions, with product orders growing 20% year-over-year (9% excluding the Splunk (NASDAQ:SPLK) acquisition). Quarterly Performance Highlights Cisco delivered robust financial results across key metrics in Q3 FY25. The company reported total revenue of $14.1 billion, representing an 11% increase compared to the same period last year. Non-GAAP earnings per share came in at $0.96, while profitability remained strong with a gross margin of 68.6% and operating margin of 34.5%. As shown in the following breakdown of revenue by geographic region: The Americas region led revenue generation with $8.38 billion and a 67.7% gross margin, followed by EMEA (Europe, Middle East, and Africa) with $3.74 billion and a 71.2% gross margin, and APJC (Asia Pacific, Japan, and China) with $2.03 billion and a 67.2% gross margin. Revenue growth was particularly strong across several product categories, with Security showing exceptional performance at 54% year-over-year growth, largely driven by the Splunk acquisition. Observability grew 24%, while Networking, the company's largest segment, increased by 8%. The following chart illustrates revenue performance by category: Product orders grew 20% year-over-year, or 9% excluding Splunk, with the Americas region showing the strongest growth at 27% (12% excluding Splunk). By customer segment, Service Provider & Cloud demonstrated the most robust growth at 32% (27% excluding Splunk). Strategic AI Initiatives Artificial intelligence emerged as a key growth driver for Cisco during the quarter, with the company reporting over $600 million in AI infrastructure orders. This momentum aligns with CEO Chuck Robbins' statement during the earnings call that "We believe the AI opportunity for us is strong." Cisco's strategic AI initiatives include several high-profile partnerships and investments, as detailed in the following slide: The company joined HUMAIN (Saudi Arabia's AI enterprise) as a founding partner, participated in the AI Infrastructure Partnership (AIP) alongside BlackRock (NYSE:BLK), Microsoft (NASDAQ:MSFT), and NVIDIA (NASDAQ:NVDA), and extended its partnership with G42 to advance AI innovation in the UAE. These initiatives position Cisco to capitalize on the growing demand for AI infrastructure and solutions globally. Cisco's approach to accelerating AI adoption spans multiple areas, from AI training infrastructure to inference, connectivity, software platforms, and services: The company is strategically integrating AI capabilities across its product portfolio, with AI assistants in Security and Collaboration solutions, while also leveraging AI to enhance customer value through its service offerings. Detailed Financial Analysis Cisco's financial performance demonstrated strength across multiple metrics. The company's non-GAAP income statement highlights include revenue of $14.15 billion, gross margin of 68.6%, operating expenses of $4.82 billion, and net income of $3.83 billion, resulting in earnings per share of $0.96. Recurring revenue streams showed continued growth, with Annualized Recurring Revenue (ARR) reaching $30.6 billion, up 5% year-over-year. Product ARR stood at $16.8 billion, while Services ARR was $13.9 billion. Remaining Performance Obligations (RPO), representing future revenue under contract, grew 7% year-over-year to $41.7 billion, with short-term RPO at $21.1 billion and long-term RPO at $20.6 billion. Cisco maintained a strong cash position with $15.64 billion in cash, cash equivalents, and investments. The company generated $4.06 billion in operating cash flow and returned $3.13 billion to shareholders through $1.50 billion in share repurchases (25 million shares at an average price of $59.78) and $1.63 billion in dividends ($0.41 per share). Forward-Looking Statements Looking ahead, Cisco provided guidance for both the fourth quarter and full fiscal year 2025. For Q4 FY25, the company expects: Revenue is projected to be between $14.5 billion and $14.7 billion, with non-GAAP gross margin between 67.5% and 68.5%, operating margin between 33.5% and 34.5%, and earnings per share between $0.96 and $0.98. For the full fiscal year 2025, Cisco forecasts: Total revenue is expected to reach between $56.5 billion and $56.7 billion, with non-GAAP earnings per share between $3.77 and $3.79. The company noted potential headwinds from tariffs, including China tariffs at 30% and Mexico and Canada tariffs at 25%, which could impact margins in the coming quarter. Despite these challenges, Cisco's guidance reflects confidence in continued growth, particularly in AI-related segments. Conclusion Cisco's Q3 FY25 results demonstrate the company's successful execution of its strategic initiatives, particularly in artificial intelligence, while maintaining strong financial performance across its core business segments. With robust product orders, expanding partnerships, and growing recurring revenue streams, Cisco appears well-positioned to capitalize on emerging opportunities in AI infrastructure and enterprise technology. While potential tariff headwinds present challenges for the upcoming quarter, the company's positive guidance for both Q4 and the full fiscal year suggests continued confidence in its growth trajectory. Investors responded favorably to the results, as evidenced by the 2.79% increase in after-hours trading, bringing the stock price to $63.00. Full presentation: