Cisco CEO Chuck Robbins speaking on CNBC’s Squawk Box outside the World Economic Forum in Davos, Switzerland, January 22, 2025.
Gerry Miller | CNBC
Cisco reported better-than-expected earnings and revenue for its fiscal first quarter on Wednesday. The stock was up about 5% in extended trading.
Here are the company’s results compared to LSEG consensus estimates:
- Earnings per share: $1 adjusted against 98 cents expected
- Income: 14.88 billion dollars against $14.77 billion expected
Revenue increased 8 percent from $13.84 billion for the same period a year earlier, Cisco said in a statement. Net income rose to $2.86 billion, or 72 cents per share, from $2.71 billion, or 68 cents per share, a year ago.
It was Cisco’s fourth consecutive quarter of growth, following a string of four consecutive year-over-year revenue declines as the company faced economic uncertainty and delayed spending by government agencies.
Cisco’s networking business, its largest unit, saw sales rise 15% to $7.77 billion. Analysts expected revenue of $7.47 billion for this segment, according to StreetAccount.
Most of the growth in data center spending is focused on artificial intelligence, as companies step up investments in servers with graphics processing units, primarily Nvidia. Cisco is trying to more closely associate itself with the AI boom and last month introduced a new Ethernet switch based on Nvidia silicon.
Cisco said AI infrastructure orders from “hyperscaler customers” reached $1.3 billion, “reflecting a significant acceleration in growth.”
“Our relevance in the AI space continues to grow,” CFO Mark Patterson said in the press release. “We have a multi-year, multi-billion dollar campus renewal opportunity that is beginning to gain momentum, with strong demand for our updated networking products. »
For the fiscal second quarter, Cisco said it expects revenue between $15 billion and $15.2 billion, beating the average estimate of $14.6 billion, according to LSEG. Adjusted earnings will be between $1.01 and $1.03 per share, beating the average estimate of 99 cents.
Full-year revenue will be between $60.2 billion and $61 billion, with earnings per share of between $4.08 and $4.14, Cisco said. Analysts expect revenue of $59.7 billion and EPS of $4.04.
While networks are growing and performing better than expected, Cisco’s other two main segments have seen revenue declines and have failed to meet Wall Street’s expectations.
Sales at the company’s security unit fell 2% from a year earlier to $1.98 billion, missing the average estimate of $2.16 billion, according to StreetAccount. And collaboration sales fell 3% to $1.06 billion, below the average estimate of $1.09 billion.
Cisco shares are up 25% this year as of Wednesday’s close, outpacing the Nasdaq’s 21% gain.
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