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%.
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