Summary
Cisco Systems, Inc. reported stable revenue for the third quarter of fiscal year 2022, largely in line with the prior year's comparable period, totaling $12.8 billion. This stability was achieved despite significant headwinds, including ongoing global supply chain constraints and the impact of COVID-19 lockdowns in China, which particularly affected component availability. The company's product revenue saw a modest increase of 3%, driven by growth in networking and security solutions, while service revenue declined by 8%. Profitability remained strong, with operating income increasing by 4% to $3.6 billion and diluted earnings per share rising by 7% to $0.73. This performance reflects the company's ability to manage expenses effectively, with total operating expenses decreasing by 4% year-over-year, partly due to the benefit of an extra week in the prior year's comparable quarter. Cisco continues its strategic focus on software and subscription-based offerings, aiming for long-term profitable growth amidst a challenging macroeconomic and competitive landscape.
Financial Highlights
56 data points| Revenue | $12.84B |
| Cost of Revenue | $4.71B |
| Gross Profit | $8.12B |
| R&D Expenses | $1.71B |
| Operating Expenses | $4.51B |
| Operating Income | $3.61B |
| Interest Expense | $90.00M |
| Net Income | $3.04B |
| EPS (Basic) | $0.73 |
| EPS (Diluted) | $0.73 |
| Shares Outstanding (Basic) | 4.15B |
| Shares Outstanding (Diluted) | 4.17B |
Key Highlights
- 1Total revenue remained flat at $12.8 billion for Q3 FY2022 compared to Q3 FY2021.
- 2Product revenue increased by 3% year-over-year to $9.45 billion, while service revenue decreased by 8% to $3.39 billion.
- 3Operating income grew by 4% to $3.61 billion, with operating income as a percentage of revenue improving to 28.1% from 27.1% in the prior year.
- 4Diluted earnings per share increased by 7% to $0.73.
- 5The company experienced impacts from supply chain constraints, including component shortages and COVID-19 lockdowns in China, which affected product shipments.
- 6Cisco announced its intention to stop business operations in Russia and Belarus, impacting revenue by approximately 1% and resulting in non-recurring charges of $67 million.
- 7Cash provided by operating activities for the first nine months of fiscal 2022 was $9.55 billion, and free cash flow was $9.21 billion.