Cisco Reports First Quarter Fiscal 2025 Financial Results

Intellectia.AI2024-11-14

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%.