How did Cisco's revenue perform in this quarter compared to the previous year?

Cisco's total revenue increased by 7% year-over-year for the second quarter of fiscal year 2015, reaching $11.9 billion. This growth was driven by an 8% increase in product revenue and a 5% increase in service revenue.

What is the outlook for Cisco's service provider and emerging market segments?

The company noted continued challenges in certain emerging countries and a decline in product revenue from the service provider market. Cisco expects these challenges to persist for at least a few more quarters.

How did Cisco's profitability metrics change?

Profitability saw significant improvements. Operating income as a percentage of revenue increased by 7.1 percentage points to 22.0% for the quarter. Diluted earnings per share increased by 70% year-over-year for the quarter, reaching $0.46.

What is the company's cash position and how is it being utilized?

Cisco maintained a strong liquidity position with $53.0 billion in cash and investments as of January 24, 2015. The company continued its capital allocation strategy by returning cash to shareholders through dividends ($1.9 billion in the first six months) and share repurchases ($2.2 billion in the first six months).

CSCO 10-Q Quarterly Report Q2 FY2015 — Revenue, Net Income, EPS

Summary

Cisco Systems, Inc. reported strong financial results for the second quarter and first half of fiscal year 2015. Total revenue saw a healthy increase of 7% year-over-year for the quarter and 4% for the half, driven by an 8% rise in product revenue and a 5% rise in service revenue for the quarter. The company demonstrated significant operational leverage, with operating income as a percentage of revenue increasing by 7.1 percentage points in the quarter, largely benefiting from a favorable comparison to a large restructuring charge in the prior year's second quarter. Diluted earnings per share saw a substantial increase of 70% for the quarter and 28% for the half. The company continues to invest in key growth areas while managing costs, as evidenced by a decrease in R&D, Sales & Marketing, and G&A expenses as a percentage of revenue. The balance sheet remains robust with a strong cash position and significant investments, supporting continued shareholder returns through dividends and share repurchases.

Financial Highlights

58 data points

Beta

Revenue

$11.94B

0.6% Gross Margin

Net Income

$2.40B

0.2% Net Margin

EPS (Diluted)

$0.46

Total Assets

$104.92B

Cash & Equivalents

$4.80B

Free Cash Flow

$2.62B

Financial Statements

Beta

Revenue	$11.94B
Cost of Revenue	$4.85B
Gross Profit	$7.09B
R&D Expenses	$1.53B
Operating Expenses	$4.47B
Operating Income	$2.62B
Interest Expense	$139.00M
Net Income	$2.40B
EPS (Basic)	$0.47
EPS (Diluted)	$0.46
Shares Outstanding (Basic)	5.12B
Shares Outstanding (Diluted)	5.16B

Key Highlights

1Total revenue increased by 7% year-over-year for the quarter and 4% for the first six months of fiscal year 2015.
2Product revenue increased by 8% for the quarter and 4% for the first six months, while service revenue grew by 5% in both periods.
3Operating income as a percentage of revenue significantly improved, increasing by 7.1 percentage points to 22.0% in the quarter.
4Diluted earnings per share rose substantially, up 70% year-over-year for the quarter and 28% for the first six months.
5Gross margin percentage for products saw a significant improvement, largely due to the absence of a large prior-year remediation charge.
6The company continued its capital allocation strategy, repurchasing common stock and paying dividends.
7Cash provided by operating activities remained strong at $5.4 billion for the first six months of fiscal 2015.

CISCO SYSTEMS, INC. Quarterly Report for Q2 Ended Jan 24, 2015

Summary

Financial Highlights

Key Highlights

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