Core Insights - Cisco Systems (CSCO) reported strong second-quarter fiscal 2025 results, with non-GAAP earnings of 94 cents per share, exceeding estimates by 3.3% and reflecting an 8% year-over-year increase [1] - Revenues reached $14 billion, surpassing the consensus estimate by 0.9% and showing a 9.4% year-over-year growth [2] Financial Performance - Total product revenues were $10.11 billion, accounting for 73.1% of total revenues, with an 11% year-over-year increase [5] - Service revenues amounted to $3.76 billion, representing 26.9% of total revenues, and increased by 5.6% year over year [5] - Annualized Recurring Revenues (ARR) for the quarter were $30.1 billion, up 22% year over year, with product ARR growth of 41% [5] Revenue Breakdown - Networking revenues were $6.85 billion, down 3% year over year [4] - Security revenues surged to $2.11 billion, marking a 117% year-over-year increase [4] - Collaboration revenues increased by 1% to $996 million, while observability revenues grew by 47% to $277 million [4] Regional Performance - Americas' revenues rose by 9% year over year to $8.20 billion [6] - EMEA revenues jumped 11% year over year to $3.86 billion [6] - APJC revenues climbed 8% year over year to $1.93 billion [6] Operating Metrics - Non-GAAP gross margin improved to 68.7%, up 200 basis points year over year [7] - Non-GAAP operating income was reported at $4.86 billion, reflecting a 15.3% year-over-year increase, with an operating margin of 34.7% [8] Balance Sheet and Shareholder Returns - Cash and cash equivalents totaled $16.9 billion, down from $18.67 billion [9] - Total debt was $31.03 billion, slightly decreased from $31.99 billion [9] - Cisco returned $2.8 billion to shareholders through buybacks and dividends, repurchasing approximately 21 million shares [10] Guidance - For Q3 fiscal 2025, Cisco expects non-GAAP earnings between 90 cents and 92 cents per share, with revenues projected between $13.9 billion and $14.1 billion [11] - For the full fiscal 2025, non-GAAP earnings are anticipated to be between $3.68 and $3.74 per share, with revenues expected in the range of $56 billion to $56.5 billion [12]

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Group 1 - Cisco Systems Inc reported a top- and bottom-line win for the fiscal second quarter, with an optimistic earnings and revenue outlook for 2025, leading to a 2.7% increase in shares to $64.23, after reaching a 24-year high of $66.50 [1] - The stock has shown a 35% lead over the past nine months and is breaking above resistance at the $63 region, bouncing off support from its 20-day moving average [2] - Cisco's 50-day call/put volume ratio of 5.19 ranks higher than 96% of annual readings, indicating a bullish sentiment among traders, with 92,000 calls and 28,000 puts traded, significantly above typical volume [3] Group 2 - Melius Research has raised its price target for Cisco to $80 from $73, reflecting positive market sentiment following the earnings report [1] - The stock is on track for its best day since November, indicating strong investor interest and confidence [2] - The most active options contract is the March 65 call, suggesting a focus on short-term bullish strategies [3]

Core Insights - Cisco Systems Inc. reported strong second-quarter fiscal 2025 earnings, exceeding consensus estimates, leading to a 6.6% increase in stock price during after-market trading [1][2]. Financial Performance - Adjusted earnings per share for the quarter were $0.94, surpassing the Zacks Consensus Estimate of $0.91 and up from $0.87 a year ago [2]. - Quarterly revenues reached $13.99 billion, exceeding the Zacks Consensus Estimate by 0.91% and up from $12.79 billion year-over-year, marking revenue growth after four consecutive quarters of decline [2]. Product Performance - Networking sales continued to face challenges due to weak demand from telecommunications and cable service providers, but revenues from networking products exceeded consensus estimates in the last quarter [3]. - Revenues from observability, services, security, and collaboration increased year-over-year, also beating respective consensus estimates [4]. Strategic Developments - The acquisition of Splunk in March 2024 positively impacted adjusted earnings per share sooner than anticipated, enhancing Cisco's recurring revenue base [5]. - The launch of AI-powered Hypershield strengthened Cisco's security portfolio, with AI infrastructure orders exceeding $350 million in the second quarter and total orders around $700 million, with expectations to exceed $1 billion in fiscal 2025 [6]. Future Guidance - Cisco raised its fiscal 2025 EPS projection to a range of $3.68-$3.74 from a previous estimate of $3.60-$3.66, with the midpoint of $3.71 above the current Zacks Consensus Estimate of $3.65 [8]. - Revenue projections for fiscal 2025 were increased to $56-56.5 billion from $55.3-56.3 billion, with the midpoint of $56.25 billion also above the current Zacks Consensus Estimate of $55.93 billion [8]. Market Position - The Zacks Consensus Estimate for fiscal 2025 earnings has improved by 0.3% in the last 60 days, indicating a year-over-year increase of 3.9% for revenues and 6.9% for EPS in fiscal 2026 [10]. - Cisco's stock provided a 25.9% return over the past year, slightly outperforming the S&P 500's return of 23.4% [12]. Valuation Metrics - Cisco has a forward P/E ratio of 17.09X for the current financial year, compared to 17.32X for the industry and 18.62X for the S&P 500 [13]. - The company has a return on equity of 25.7%, significantly higher than the industry's -5.53% and the S&P 500's 16.84% [13]. Analyst Sentiment - The short-term average price target for Cisco's stock indicates a potential increase of 3.6% from the last closing price of $62.53, with a target range of $78-$56, suggesting a maximum upside of 24.7% and a maximum downside of 10.4% [14].

Q2 Fiscal Year 2025 Conference Call February 12, 2025 Forward-Looking Statements This presentation contains projections and other forward-looking statements regarding future events or the future financial performance of Cisco, including future operating results. These projections and statements are only predictions. Actual events or results may differ materially from those in the projections or other forward-looking statements. Please see Cisco's filings with the SEC, including its most recent filings on Fo ...

Financial Data and Key Metrics Changes - Total revenue for Q2 was $14 billion, up 9% year-over-year [32] - Non-GAAP net income was $3.8 billion, with non-GAAP earnings per share at $0.94 [32] - Total annual recurring revenue (ARR) ended at $30.1 billion, an increase of 22% [34] - Total subscription revenue increased 23% to $7.9 billion, representing 56% of total revenue [34] - Non-GAAP gross margin was 68.7%, up 200 basis points year-over-year [37] Business Line Data and Key Metrics Changes - Total product revenue was $10.2 billion, up 11% [32] - Security revenue surged 117%, primarily driven by Splunk offerings [33] - Collaboration revenue grew 1%, while Observability revenue increased by 47% [34] - Networking product orders decreased by 3%, with growth in Wireless and Switching offset by a decline in servers [33] Market Data and Key Metrics Changes - Product orders increased by 29% year-over-year, with organic product orders up 11% [36] - Service Provider & Cloud orders rose by 75%, while Enterprise orders were up 27% [36] - Americas orders increased by 30%, EMEA by 24%, and APJC by 35% [36] Company Strategy and Development Direction - The company is focusing on AI infrastructure, with AI orders surpassing $350 million in Q2 [8] - Cisco's strategy includes significant investments in AI and security, with new product launches like AI Defense and Hypershield [19][21] - The company is committed to returning value to shareholders through dividends and share repurchases, with an additional $15 billion authorized for buybacks [8][39] Management's Comments on Operating Environment and Future Outlook - Management noted strong demand across various segments despite geopolitical risks and uncertainties [60] - The company is prepared for potential impacts from proposed U.S. tariffs and has built flexibility into its operations [42][43] - Management expects revenue to ramp up in the second half of the fiscal year, driven by AI-related orders [113] Other Important Information - The company announced an increase in dividends and a commitment to return significant value to shareholders [8][39] - The integration of Splunk is progressing well, with revenue and profitability exceeding expectations [27][102] Q&A Session Summary Question: Federal exposure and potential layoffs - Management indicated that U.S. federal business is less than 10% of total business, with most coming from the DoD, and they do not expect significant changes in performance [49][51] Question: Co-packaged optics and long-term strategy - Management stated they will continue to evolve offerings to meet market demands, including integrated optics [54] Question: Customer spending propensity - Management observed strong demand across geographies and segments, with customers eager to invest in technology despite uncertainties [62] Question: New Nexus switch and AI readiness - Management highlighted the innovation in the new switch and confirmed that demand is driven by customers preparing for AI [70][73] Question: AI orders and revenue conversion - Management expects AI orders to begin converting into revenue in the second half of the fiscal year [113] Question: Splunk performance and security trends - Management clarified that Splunk is growing double digits and is performing in line with expectations [102] Question: Demand response to tariffs - Management noted no evidence of customers pulling demand ahead due to tariffs, as the environment remains fluid [90] Question: Competitive landscape and project announcements - Management acknowledged the competitive landscape but expressed confidence in Cisco's ability to capture emerging opportunities [131]

Cisco Systems showcased robust revenue growth and strategic advancements in AI and cybersecurity.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. ...

Cisco Systems (CSCO) reported $13.99 billion in revenue for the quarter ended January 2025, representing a year-over-year increase of 9.4%. EPS of $0.94 for the same period compares to $0.87 a year ago.The reported revenue represents a surprise of +0.91% over the Zacks Consensus Estimate of $13.87 billion. With the consensus EPS estimate being $0.91, the EPS surprise was +3.30%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall St ...

Cisco Systems (CSCO) came out with quarterly earnings of $0.94 per share, beating the Zacks Consensus Estimate of $0.91 per share. This compares to earnings of $0.87 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 3.30%. A quarter ago, it was expected that this seller of routers, switches, software and services would post earnings of $0.87 per share when it actually produced earnings of $0.91, delivering a surprise of 4.60%.Ov ...

Cisco Systems (CSCO) reported fiscal second-quarter results that topped analysts’ expectations and raised its full-year guidance, sending shares higher in extended trading Wednesday. The networking-equipment provider posted revenue of $14 billion, up 9% year-over-year and above the analyst consensus tracked by Visible Alpha. Cisco’s adjusted earnings rose to $3.8 billion, or 94 cents per share, from $3.5 billion, or 87 cents per share, a year earlier, also topping expectations.  Cisco said the gains came a ...