Cisco Reports 9% Revenue Growth but GAAP EPS Declines

Cisco Systems sees a 9% revenue growth reaching $14.0 billion, with non-GAAP EPS hitting $0.94, exceeding expectations. However, GAAP EPS fell from $0.65 to $0.61, presenting a mixed bag for investors. The outlook remains cautiously optimistic for future quarters.

Date: 13-02-2025

AI Rating: 6

Revenue Growth
Cisco Systems achieved a significant 9% increase in revenue, reaching $14.0 billion, which is above management’s guidance of $13.75 to $13.95 billion. This revenue growth highlights strong order activity, particularly benefitting from the acquisition of Splunk, and suggests robust demand in key product areas.

Earnings Per Share (EPS)
The non-GAAP EPS for the quarter was $0.94, exceeding the guidance of $0.89 to $0.91 and showcasing an 8% improvement from $0.87 a year earlier. In contrast, GAAP EPS registered a decline to $0.61 from $0.65 year-over-year. This discrepancy indicates a divergence between operational performance and reported earnings metric.

Non-GAAP Net Income
Cisco’s non-GAAP net income increased to $3.8 billion, up from $3.5 billion a year ago, which is a 6% increase. This growth is positive, reinforcing the company’s ability to maintain profitability despite some headwinds in overall earnings metrics.

Cash Flow
Cash flow from operating activities saw a remarkable increase, jumping 177% to $2.2 billion compared to $0.8 billion last year. This substantial rise indicates strong underlying operational effectiveness and financial health.

Future Outlook
Looking forward, Cisco projects Q3 FY 2025 revenue to range between $13.9 billion and $14.1 billion, with GAAP EPS between $0.57 and $0.61. The full-year forecast expects revenue between $56.0 billion and $56.5 billion, signaling cautious optimism in light of the recent performance.

The mixed signals from the earnings report, with strong revenue growth contrasted by GAAP EPS declines, could lead to varied interpretations by investors. However, the increase in non-GAAP metrics and cash flow can support positive investor sentiment in the medium term.

Stocks: CSCO