Chuck Robbins, Cisco CEO, speaking on CNBC’s Squawk Box outside the World Economic Forum in Davos, Switzerland on Jan. 22, 2025.
Gerry Miller | CNBC
Cisco reported better-than-expected profit and revenue for its fiscal first quarter on Wednesday. The stock rose more than 7% in extended trading.
Here’s how the company did in comparison with consensus estimates from LSEG:
Earnings per share: $1 adjusted vs. 98 cents expectedRevenue: $14.88 billion vs. $14.77 billion expected
Revenue increased 8% from $13.84 billion in the same period a year earlier, Cisco said in a statement. Net income climbed to $2.86 billion, or 72 cents per share, from $2.71 billion, or 68 cents per share, a year ago.
It’s the fourth straight quarter of growth for Cisco following a stretch of four consecutive year-over-year revenue declines, as the company contended with economic uncertainty and delayed spending from government agencies.
Cisco’s networking business, its biggest unit, saw sales climb 15% to $7.77 billion. Analysts were expecting revenue for that segment of $7.47 billion, according to StreetAccount.
Most of the growth in data center spending is focused on artificial intelligence, as companies bolster their investments in servers packed with graphics processing units, primarily from Nvidia. Cisco is trying to tie itself more closely to the AI boom, and last month introduced a new Ethernet switch based on Nvidia silicon.
Cisco said that AI infrastructure orders from “hyperscaler customers” reached $1.3 billion, “reflecting a significant acceleration in growth.”
“Our relevance in AI continues to build,” CFO Mark Patterson said in the press release. “We have a multi-year, multi-billion-dollar campus refresh opportunity starting to ramp, with strong demand for our refreshed networking products.”
For the fiscal second quarter, Cisco said it expects revenue of $15 billion to $15.2 billion, topping the $14.6 billion average estimate, according to LSEG. Adjusted earnings will be $1.01 to $1.03 per share, exceeding the 99-cent average estimate.
Revenue for the full fiscal year will be between $60.2 billion and $61 billion, with earnings per share of $4.08 to $4.14, Cisco said. Analysts expect sales of $59.7 billion and EPS of $4.04.
While networking is growing and performing better than expected, Cisco’s other two main segments saw revenue declines and missed Wall Street’s expectations.
Sales in the company’s security unit fell 2% from a year earlier to $1.98 billion, missing the average estimate of $2.16 billion, according to StreetAccount. And collaboration sales slipped 3% to $1.06 billion, trailing the $1.09 billion average estimate.
Cisco shares are up 25% this year as of Wednesday’s close, topping the 21% gain for the Nasdaq.
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