Cisco (CSCO) Q1 2025 Earnings Report

cisco reported a fourth consecutive quarter of declining revenue even as results beat analysts’ estimates. The stock fell 2.5% in extended trading.

Here’s how the company fared compared to the LSEG consensus:

• Earnings per share: 91 cents adjusted versus 87 cents expected
• Revenue: $13.84 billion vs. $13.77 billion expected

Cisco’s revenue fell 6% in the quarter ended Oct. 26, from $14.7 billion a year earlier, according to a statement. Net income fell to $2.71 billion, or 68 cents per share, from $3.64 billion, or 89 cents per share, in the same quarter a year earlier.

Network revenue fell 23% to $6.75 billion, slightly below the $6.8 billion consensus of analysts surveyed by StreetAccount.

Security revenue doubled to $2.02 billion, beating the StreetAccount consensus of $1.93 billion. Cisco’s revenue from collaboration was $1.09 billion, slightly below the consensus estimate of $1.04 billion.

Cisco CEO Chuck Robbins said on Wednesday’s earnings call that large-scale customer orders for AI infrastructure surpassed $300 million in the quarter. Server manufacturers such as Dell and HPE They have also focused on selling hardware that can help customers implement generative AI.

“We’ve made more design wins and remain confident we will exceed our goal of $1 billion in AI orders this fiscal year from web-scale customers,” Robbins said.

Cisco has announced hardware that contains Nvidia graphics processing units, which are widely used to train AI models, Robbins said.

“Over time, you’ll see us supporting other GPUs as the market demands,” he said. “But that partnership is still going well. It’s still early. And I think 2025 is when we’ll start to see real enterprise deployment of some of these technologies.”

For now, companies are upgrading data center infrastructure to prepare for AI and the widespread deployment of AI applications, Robbins said.

US government agencies have delayed deals with Cisco, rather than scrapping them entirely. The Fiscal Responsibility Act of 2023, which became law in June last year, has limited US government spending, said Scott Herren, Cisco’s chief financial officer.

Herren said that with Republicans poised to control the White House and both chambers of Congress, he hopes to “get a budget in place relatively soon.”

During the quarter, Cisco acquired security startups DeepFactor and Robust Intelligence.

Cisco raised its full-year guidance to $3.60 to $3.66 in adjusted earnings per share on $55.3 billion to $56.3 billion in revenue, up from a previous forecast of $3.52 to $3.58 in EPS and $55 billion to $56.2 billion in revenue. Guidance would indicate projected revenue growth of 3.3% in the middle of the range.

Analysts had expected adjusted earnings for the year of $3.58 per share on $55.89 billion in revenue.

As of Wednesday’s close, Cisco shares were up 17% so far this year, while the S&P 500 index is up about 26% in that stretch.

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