Cisco Reports First Quarter Fiscal 2025 Financial Results

authorIntellectia.AI2024-11-14
4
CSCO.O
Illustration by Intellectia.AI

Cisco Reports First Quarter Fiscal 2025 Financial Results

San Jose, Calif., Nov. 13, 2024 — Cisco Systems, Inc. announced its financial results for the first quarter of fiscal year 2025, ending October 26, 2024, highlighting robust operational performance despite year-over-year declines in key metrics.

Key Financial Metrics

Metrics Q1 FY 2025 Year-over-Year Change Wall Street Consensus Estimates
Total Revenue $13.8B Decrease of 6% $13.77B
GAAP Earnings Per Share $0.68 Decrease of 24% -
Non-GAAP Earnings Per Share $0.91 Decrease of 18% $0.87

Cisco's first-quarter revenue was $13.8 billion, achieving the high end of its guidance range and slightly exceeding Wall Street estimates. Despite this, the figures represent a 6% year-over-year decrease, reflecting challenges in the broader market. Non-GAAP EPS of $0.91 surpassed consensus estimates and last year's performance, showcasing Cisco's strong operational management.

Revenue by Segment

Segment Revenue Type Year-over-Year Change Notes
Product Revenue - Down 9% -
Services Revenue - Up 6% -
Geographic Segments:
Americas - Down 9% -
EMEA - Down 2% -
APJC - Up 1% -
Product Segments:
Security Product Up 100% Driven by demand increase
Observability Product Up 36% Enhanced analytics focus
Networking Product Down 23% -
Collaboration Product Down 3% -

Cisco's revenue diversity reflected contrasting performances across segments, with robust growth in Security and Observability offset by declines in Networking and Collaboration. Notably, excluding contributions from Splunk, Security grew by 2% and Observability by 1% year-on-year, indicating underlying strength beyond acquisitions.

Key Developments and Operational Highlights

  • Cisco achieved a GAAP gross margin of 65.9% and a non-GAAP gross margin of 69.3%, both exceeding the company’s guidance.
  • Cash flow from operating activities reached $3.7 billion, marking a 54% increase compared to the previous year.

Executive Commentary

CEO Chuck Robbins emphasized Cisco's strategic advantage in infrastructure investment amid rising AI technologies, citing the company's wide-ranging portfolio. CFO Scott Herren credited revenue, gross margin, and EPS success as indicative of strong operational leverage and discipline.

Capital Allocation and Share Repurchase Program

Cisco returned $3.6 billion to stockholders through dividends and stock repurchases, declaring a quarterly dividend of $0.40 per share, to be distributed on January 22, 2025. Approximately 40 million shares were repurchased, with $3.2 billion remaining under the repurchase program.

Forward Guidance

Cisco projects Q2 FY 2025 revenue between $13.75 billion and $13.95 billion, with GAAP EPS expected between $0.51 and $0.56. For the full fiscal year 2025, Cisco anticipates revenue between $55.3 billion and $56.3 billion and non-GAAP EPS ranging from $3.60 to $3.66.

Market Reaction

Following the earnings announcement, Cisco's stock price experienced a positive movement, with the price increasing by 0.92%.

Share