CSCO
Cisco Systems Inc
Q3 2025 Report
Cisco Systems Inc (CSCO) Q3 2025 Financial Results: Strong Growth Amid AI Transition...
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Executive Summary
Cisco Systems Inc delivered performance in Q3 2024 characterized by solid operational execution, marked by a transformative acquisition and a strategic pivot towards subscription-based revenues. The company reported total revenue of $12.7 billion, reflecting a year-over-year decline of 13% primarily driven by inventory digestion and macroeconomic headwinds. Gross margins exceeded expectations, settling at 68.3%, attributed to favorable product mix and disciplined expense management. Management highlighted the successful integration of Splunk, which is expected to significantly enhance Cisco's software capabilities, contributing over $4 billion in annualized recurring revenue. This fiscal quarter underscored Cisco's commitment to innovation, as evidenced by the introduction of new security products and expansion in AI infrastructure, reinforcing its growth trajectory for the future.
Key Performance Indicators
Revenue
12.70B
QoQ: -0.70% | YoY:-16.45%
Gross Profit
8.09B
63.72% margin
QoQ: -3.55% | YoY:-16.97%
Operating Income
2.77B
QoQ: -11.00% | YoY:-34.96%
Net Income
1.89B
QoQ: -28.40% | YoY:-52.35%
EPS
0.47
QoQ: -27.69% | YoY:-51.55%
Revenue Trend
Margin Analysis
Key Insights
- **Revenue**: $12.7 billion, down 13% YoY
- **Gross Profit**: $8.1 billion, with a gross margin ratio of 68.3%, up 310 basis points YoY.
- **Operating Income**: $2.77 billion (operating margin at 34.2%), demonstrating a commitment to spend management amidst high investment in integration efforts.
- **Net Income**: $1.89 billion, translating into an EPS of $0.47, down from $0.97 in the same quarter last year.
- **Annual Recurring Revenue (ARR)**: $29.2 billion, growing 22% attributed predominantly to the subscription model. Management commentary points to stable win rates and performance across critical product verticals such as security (+36% including Splunk) and observability (+27%).