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
In Q2 2024, Cisco Systems Inc (CSCO) reported a revenue of $12.791 billion, reflecting a 6% decrease year-over-year. The decline was anticipated given macroeconomic uncertainties and inventory digestion challenges faced by enterprise and service provider customers. Despite the revenue drop, Cisco demonstrated strong operating leverage with an impressive non-GAAP operating margin of 33%. Management emphasized ongoing strategic transformation towards software subscriptions, showcasing ARR growth of 6% and a notable shift towards recurring revenue streams.
Notably, management maintained a stable outlook and raised its quarterly dividend to $0.40 per share, indicating confidence in the company’s cash flow generation and commitment to returning value to shareholders. The pending acquisition of Splunk is positioned as a catalyst for significant software growth by adding approximately $4 billion in ARR once completed, although it remains subject to regulatory approval.
Key Performance Indicators
Revenue
12.79B
QoQ: -12.80% | YoY:-12.22%
Gross Profit
8.39B
65.61% margin
QoQ: -12.19% | YoY:-9.10%
Operating Income
3.11B
QoQ: -27.32% | YoY:-21.24%
Net Income
2.63B
QoQ: -27.60% | YoY:-18.00%
EPS
0.65
QoQ: -27.78% | YoY:-17.72%
Revenue Trend
Margin Analysis
Key Insights
- Total Revenue: $12.79 billion (down 6% YoY)
- Product Revenue: $9.22 billion (down 9% YoY)
- Service Revenue: $3.6 billion (up 4% YoY)
- Gross Margin: 66.7% (up 280 bps YoY)
- Operating Income: $3.108 billion (down 21% YoY)