Summary
Cisco Systems, Inc. (CSCO) filed its quarterly report for the period ending January 24, 2025. The company reported total revenue of $13.99 billion, a 9% increase year-over-year, primarily driven by an 11% rise in product revenue, significantly boosted by the inclusion of Splunk's contributions. Services revenue also saw a 6% increase. Despite revenue growth, net income declined by 8% to $2.43 billion, leading to a diluted EPS of $0.61, down from $0.65 in the prior year period. This decline was influenced by a significant increase in operating expenses, including higher R&D, Sales & Marketing, and G&A, as well as higher amortization of purchased intangible assets and restructuring charges. For the six-month period, total revenue grew 1% to $27.83 billion, while net income saw a more substantial decrease of 18% to $5.14 billion. The company continues to invest heavily in R&D, with a 19% increase in R&D expenses for the six-month period. Cisco highlighted its strategic focus on integrating AI across its portfolio and its commitment to returning capital to shareholders through dividends and stock repurchases, recently authorizing an additional $15 billion for share repurchases.
Financial Highlights
56 data points| Revenue | $13.99B |
| Cost of Revenue | $4.88B |
| Gross Profit | $9.11B |
| R&D Expenses | $2.30B |
| Operating Expenses | $6.00B |
| Operating Income | $3.11B |
| Net Income | $2.43B |
| EPS (Basic) | $0.61 |
| EPS (Diluted) | $0.61 |
| Shares Outstanding (Basic) | 3.98B |
| Shares Outstanding (Diluted) | 4.00B |
Key Highlights
- 1Total revenue for the quarter reached $13.99 billion, an increase of 9% year-over-year, with product revenue up 11% and services revenue up 6%.
- 2The inclusion of Splunk significantly boosted revenue, particularly in the Security and Observability product categories, and contributed to a 23% increase in total subscription revenue.
- 3Despite revenue growth, net income for the quarter decreased by 8% to $2.43 billion, and diluted EPS fell to $0.61 from $0.65 year-over-year.
- 4Operating expenses increased across R&D (18%), Sales and Marketing (9%), and G&A (17%) for the quarter, leading to a decrease in operating income as a percentage of revenue from 24.2% to 22.3%.
- 5The company announced a restructuring plan impacting approximately 7% of its global workforce, with estimated pre-tax charges of up to $1 billion.
- 6Cisco's Board of Directors authorized an additional $15 billion for its stock repurchase program, demonstrating continued commitment to returning capital to shareholders.
- 7Remaining Performance Obligations (RPO) increased slightly to $41.27 billion, indicating a solid pipeline of future revenue.