Cisco (CSCO) Q4 Earnings Top Estimates, Revenues Fall Y/Y

Core Viewpoint - Cisco Systems reported a decline in both earnings and revenues for the fourth quarter of fiscal 2024, with a notable drop in product revenues, while security revenues showed significant growth [1][2]. Financial Performance - Non-GAAP earnings for Q4 fiscal 2024 were 87 cents per share, exceeding the Zacks Consensus Estimate by 2.35%, but down 23.7% year over year [1]. - Total revenues decreased 10.3% year over year to $13.64 billion, slightly beating the consensus mark by 0.9% [1]. - Product revenues, which account for 72.3% of total revenues, fell 15.4% year over year to $9.86 billion [1]. - Networking revenues dropped 28% year over year to $6.80 billion, while security revenues rose 81% to $1.79 billion [1]. - Service revenues increased 6.5% year over year to $3.78 billion, representing 27.7% of total revenues [1]. Regional Performance - Revenues in the Americas decreased 11% year over year to $8.07 billion, missing the consensus mark by 0.7% [2]. - EMEA revenues declined 11% year over year to $3.51 billion but exceeded the consensus mark by 5.08% [2]. - APJC revenues fell 6% year over year to $2.06 billion, missing the consensus mark by 1.79% [2]. Margins and Expenses - Non-GAAP gross margin expanded by 200 basis points year over year to 67.9% [2]. - Non-GAAP operating margin contracted 280 basis points year over year to 32.5% [3]. - Non-GAAP operating expenses were $4.83 billion, up 3.9% year over year, with operating expenses as a percentage of revenues increasing 480 basis points to 35.4% [2][3]. Balance Sheet and Cash Flow - As of July 27, 2024, cash and cash equivalents totaled $17.9 billion, down from $18.8 billion as of April 27, 2024 [3]. - Total debt decreased to $30.96 billion from $32 billion as of April 27, 2024 [3]. - Cash flow from operating activities was $3.7 billion, lower than the previous quarter's $4 billion [3]. - Remaining performance obligations (RPO) increased 18% to $41 billion, with 51% expected to be recognized as revenue in the next 12 months [3]. Guidance - For Q1 fiscal 2025, revenues are projected between $13.65 billion and $13.85 billion, indicating a 7.5% year-over-year decline [4]. - Non-GAAP earnings are anticipated to be between 86 cents and 88 cents per share, suggesting a 24.3% year-over-year decline [4]. - For fiscal 2025, revenues are expected to range between $55 billion and $56.2 billion, with non-GAAP earnings anticipated between $3.52 and $3.58 per share [4]. Stock Performance - Cisco currently holds a Zacks Rank 2 (Buy) [5]. - CSCO shares have declined 10.1% year to date, contrasting with the Zacks Computer & Technology sector's growth of 18% [5].