Cisco reports Q2 results

Cisco Systems, Inc. (NASDAQ: CSCO) is reported its fourth quarter and fiscal year 2021 financial results for the period ending July 31, 2021.The networking giant reported double-digit order growth across all customer markets and geographies, including product order growth of 31 percent — its strongest year-over-year growth in over a decade. 

Cisco’s Q4 non-GAAP earnings per share came to 84 cents on revenue of $13.1 billion up 8% year-over-year. 

For the full fiscal year, Cisco’s non-GAAP EPS was flat year-over-year. Revenue was $49.8 billion, up 1% year-over-year.

Cisco reported continued momentum in transforming the business to delivering more software and subscriptions. It achieved $4 billion in software revenue in Q4 (an increase of 6% with subscription revenue up 9% year-over-year) and $15 billion for the year (an increase of 7% with subscription revenue up 15% year-over-year). 

For the first quarter, Cisco expects revenue growth of 7.5% to 9.5% year-over-year. For the full fiscal 2022, it expects revenue growth of 5% to 7% year-over-year.

Here’s what analysts expect, in line with estimates compiled by Zacks   

Earnings: $0.83 per share, estimated  
Revenue: $13.04 billion, estimated  

Non-GAAP earnings: $0.81 – $0.83 per share 

 Cisco Guidance for Q4 FY 2021 
  • Cisco expects to achieve the following results for the fourth quarter of fiscal 2021 
  • Revenue – 6% – 8% growth Y/Y 
  • Non-GAAP gross margin rate –   64% – 65% 
  • Non-GAAP operating margin rate – 32% – 33% 
  • Non-GAAP EPS – $0.81 – $0.83 
  • GAAP EPS $0.64 – to $0.69  
Earnings History 

The American multinational technology conglomerate boasts an average surprise for the past two-quarters of 2.58%. Cisco has surpassed consensus EPS estimates for the last four quarters.   

Cisco last reported its third-quarter results for the period ending May 1, 2021, on May 19. The company reported revenue of $12.8 billion and non-GAAP net income of $3.5 billion or $0.83 per share. While product revenue was up 6%, service revenue rose 8%. 

Cisco reported second-quarter revenue of $12.0 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.5 billion or $0.60 per share, and non-GAAP net income of $3.4 billion or $0.79 per share. 

During the fourth quarter of 2020, Cisco reported revenue of $12.2 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.6 billion and non-GAAP net income of $3.4 billion or $0.80 per share. For full-year 2020, Cisco made total revenue of $49.3 billion versus $ 51.9 billion in 2019, representing a decrease of 5%. It posted a net income of $ 11.2 billion against 11.6 billion in the previous year, a reduction of 4%. 

Company profile 

Founded in 1984, Cisco Systems, Inc. develops, manufactures and sells networking hardware, software, telecommunications equipment and high-technology services and products such as Internet services devices, routers, switches, remote access devices, protocol translators, and networking and network management software, among others. The company has its headquarters in San Jose, California, in the center of Silicon Valley.  

Plans ahead  

Cisco, this month, unveiled Vidcast, an asynchronous video messaging solution that enables users to create and share short video messages. Vidcast allows remote or hybrid work users to collaborate at a much faster pace. According to the company press release, Vidcast is the first innovation from the company’s new accelerator program called Webex Leap. A waitlist for beta testing of Vidcast is currently open for signups. 

The company said it plans to release various Webex Leap projects every year in additional asynchronous innovations, artificial intelligence, machine learning, and new forms of collaboration. Meanwhile, the PGA of Australia and the WPGA Tour of Australasia announced a new multi-year partnership with Webex, which will provide enhanced experiences for golf fans and strengthened industry collaboration.  

 Cisco is also in the process of buying the Israeli firm Epsagon, a cloud-based application performance company. The deal is reportedly for $500 million. “Epsagon will play a key role in expanding and accelerating Cisco’s comprehensive Full-Stack Observability roadmap. As applications have become a central part of everyday life, the complexity of IT infrastructure has increased,” says Cisco executive Liz Centoni in the company blog post on the new acquisition plan.

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