Cisco Systems Inc (NASDAQ:CSCO) stock rose 6.59% (As on May 15, 11:37:42 AM UTC-4, Source: Google Finance) after the company enjoyed another quarter of growing demand amid the artificial intelligence boom, helping it to beat expectations on earnings and revenue as it posted its third-quarter financial results. Net income for the quarter rose from $1.89 billion a year earlier to $2.49 billion. Product orders up 20% year over year; up 9% excluding Splunk, with growth across all geographies and customer markets. The product revenue id up 15% and services revenue up 3%. Revenue by geographic segment was: Americas up 14%, EMEA up 8%, and APJC up 9%. Product revenue performance reflected growth in Security up 54%, Observability up 24%, Networking up 8%, and Collaboration up 4%. On a non-GAAP basis, total gross margin, product gross margin, and services gross margin were 68.6%, 67.6%, and 71.3%, respectively, as compared with 68.3%, 66.9%, and 71.6%, respectively, in the third quarter of fiscal 2024.
Moreover, in the third quarter of fiscal 2025, the company closed the acquisition of SnapAttack, a privately held company that offers a threat detection and engineering platform. Remaining Performance Obligations (RPO) was $41.7 billion, up 7% in total, with 51% of this amount expected to be recognized as revenue over the next 12 months. Product RPO was up 10% and services RPO was up 5%.
CSCO in the third quarter of FY25 has reported the adjusted earnings per share of 96 cents, beating the analysts’ estimates for the adjusted earnings per share of 92 cents. The company had reported the adjusted revenue growth of 11 percent to $14.15 billion in the third quarter of FY25, beating the analysts’ estimates for revenue of $14.08 billion. Non-GAAP operating income was $4.9 billion, up 12%, with non-GAAP operating margin at 34.5%.
Looking to the current quarter, Cisco said it’s targeting earnings of 96 to 98 cents on revenue of between $14.5 billion and $14.7 billion. That compares well with the analyst forecast of earnings of 95 cents on sales of $14.58 billion.
Meanwhile, Robbins also revealed a couple of executive changes coming up, revealing that the company’s Chief Financial Officer Scott Herren will retire at the end of July. Herren joined Cisco in 2020, having previously held the CFO role at Autodesk Inc. Robbins said he has a successor lined up: Mark Patterson, a 25-year Cisco veteran who is currently the company’s chief strategy officer.