Cisco (CSCO) Q1 earnings report 2025

Cisco reported a fourth straight quarter of declining income at the same time as outcomes topped analysts’ estimates. The inventory slipped about 0.7% in prolonged buying and selling.

Here is how the corporate did compared with LSEG consensus:

• Earnings per share: 91 cents adjusted vs. 87 cents anticipated
• Income: $13.84 billion vs. $13.77 billion anticipated

Cisco’s income dropped 6% within the quarter ended Oct. 26, from $14.7 billion a yr earlier, in response to a assertion. Internet revenue fell to $2.71 billion, or 68 cents per share, from $3.64 billion, or 89 cents per share, in the identical quarter a yr in the past.

Networking income plunged 23% to $6.75 billion, barely beneath the $6.8 billion consensus of analysts surveyed by StreetAccount.

Safety income doubled to $2.02 billion, topping the StreetAccount consensus of $1.93 billion. Cisco’s income from collaboration was $1.09 billion, a bit beneath the $1.04 billion consensus estimate.

Chuck Robbins, Cisco’s CEO, stated on a Wednesday convention name that orders from large-scale purchasers for synthetic intelligence infrastructure exceeded $300 million within the quarter. Server makers equivalent to Dell and HPE have additionally targeted on gross sales of {hardware} that may assist purchasers implement generative AI.

“We now have earned extra design wins and stay assured that we’ll exceed our goal of $1 billion of AI orders this fiscal yr from web-scale clients,” Robbins stated.

Cisco has introduced {hardware} containing Nvidia graphics processing models, that are extensively used for coaching AI fashions, Robbins stated.

“Over time, you will see us assist different GPUs because the market calls for,” he stated. “However that partnership remains to be going advantageous. It is nonetheless early. And I believe 2025 is once we’ll begin to see enterprise actual deployment of a few of these applied sciences.”

For now, enterprises are updating information middle infrastructure to arrange for AI and the widespread deployment of AI purposes, Robbins stated.

U.S. authorities businesses have delayed offers with Cisco, moderately than scrapping them altogether, Robbins stated. The dynamic stems from the passing of the Fiscal Accountability Act of 2023, which has restricted U.S. authorities spending, stated Scott Herren, Cisco’s finance chief.

“It seems just like the Republicans will carry each homes of Congress and the White Home, and so I might anticipate to get a funds in place comparatively quickly,” Herren stated.

Through the quarter, Cisco acquired safety startups DeepFactor and Sturdy Intelligence.

Cisco lifted its full-year steerage to $3.60 to $3.66 in adjusted earnings per share on $55.3 billion to $56.3 billion in income, up from a previous forecast of $3.52 to $3.58 in EPS and $55 billion to $56.2 billion in income. Steerage would point out projected income progress of three.3% on the center of the vary.

Analysts anticipated adjusted earnings for the yr of $3.58 per share on $55.89 billion in income.

As of Wednesday’s shut, Cisco’s inventory was up 17% yr thus far, whereas the S&P 500 index is up round 26% over that stretch.

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