Cisco Systems(US:CSCO)2025-05-14 20:17Financial Performance - Q3 FY 2025 revenue was $14.1 billion, an increase of 11% year over year, exceeding guidance[3] - GAAP net income reached $2.5 billion, up 32% year over year, with GAAP EPS of $0.62, a 35% increase[14] - Non-GAAP net income was $3.8 billion, an 8% increase year over year, with non-GAAP EPS of $0.96, a 9% increase[9] - Total revenue for the three months ended April 26, 2025, was $14,149 million, an increase of 11% year-over-year[33] - For the three months ended April 26, 2025, the total GAAP net income was $2,491 million, representing a 32% year-over-year increase[52] - Non-GAAP net income for the nine months ended April 26, 2025, was $11,262 million, slightly down from $11,619 million for the same period in 2024[46] - The company reported operating expenses of $18,837 million for the nine months ended April 26, 2025, which is a 14% increase compared to the previous year[55] Guidance and Projections - Q4 FY 2025 revenue guidance is projected between $14.5 billion and $14.7 billion, with GAAP EPS guidance of $0.62 to $0.67[20][21] - The guidance for Q4 FY 2025 indicates a GAAP gross margin of 64.5% - 65.5% and a non-GAAP gross margin of 67.5% - 68.5%[59] - The estimated non-GAAP earnings per share for FY 2025 is projected to be between $3.77 and $3.79[59] - The company expects to recognize 51% of total remaining performance obligations of $41,667 million as revenue over the next 12 months[40] Cash Flow and Assets - Cash flow from operating activities was $4.1 billion, a 2% increase compared to $4.0 billion in Q3 FY 2024[15] - Cash and cash equivalents increased to $8,161 million as of April 26, 2025, compared to $7,508 million as of July 27, 2024[36] - Net cash provided by operating activities for the nine months ended April 26, 2025, was $9,959 million, compared to $7,150 million for the same period in 2024[38] - Total assets decreased to $119,782 million as of April 26, 2025, down from $124,413 million as of July 27, 2024[36] - Total current liabilities decreased to $34,495 million as of April 26, 2025, from $40,584 million as of July 27, 2024[36] Shareholder Returns - Cisco returned $3.1 billion to stockholders through share buybacks and dividends in Q3 FY 2025[18] - Dividends paid in the quarter ended April 26, 2025, amounted to $1,627 million, with a per-share dividend of $0.41[44] Product and Market Performance - Product orders increased by 20% year over year, with AI Infrastructure orders exceeding $600 million[5] - Security revenue grew significantly by 54% year-over-year to $2,013 million for the three months ended April 26, 2025[33] - Total product revenue for the nine months ended April 26, 2025, was $30,722 million, reflecting a 5% increase year-over-year[33] Operational Insights - Total gross margin on a GAAP basis was 65.6%, compared to 65.1% in Q3 FY 2024[12] - The gross margin for products was 64.4% and for services was 68.7%, with a total gross margin of 65.6% for the same period[52] - The company incurred significant asset impairments and restructurings amounting to $34 million in the three months ended April 26, 2025[52] - The total adjustments to GAAP amounts for share-based compensation expense were $930 million for the three months ended April 26, 2025[52] - The company reported a year-over-year increase of 12% in non-GAAP operating income for the three months ended April 26, 2025[52] Strategic Initiatives - The acquisition of SnapAttack was completed in Q3 FY 2025, enhancing Cisco's threat detection capabilities[19] - Cisco emphasizes the importance of AI technologies and their impact on operational discipline and cash flow generation[61] - Cisco has been a technology leader for over 40 years, focusing on secure connections and AI-powered solutions to enhance productivity and digital resilience[67] Non-GAAP Measures - Cisco's management uses non-GAAP measures for internal budgeting, excluding items like share-based compensation and acquisition-related costs[66] - The company believes that non-GAAP measures provide useful insights into financial and business trends when presented alongside GAAP measures[65]