Cisco Systems, Inc.(NASDAQ: CSCO) stock rose over 5.8% in the after-hours session on November 15th, 2017 (Source: Google finance). The group reported that their overall products orders rose 1% during the first quarter of 2018. Their Americas products orders rose 1%, while EMEA and APJC enhanced 2% and 1% respectively. Cisco stock generated over 12.9% returns in this year to date (as on November 15th, 2017; Source: Google finance).
The group’s Security segment revenue rose 8% during the first quarter of 2018 against pcp driven by unified threat, advanced threat and web security. Deferred revenue enhanced 42%driven by subscription-based software offers. Service revenue rose only 1% boosted by rising software and solutions services. They launched a new portfolio of subscription offers called Business Critical and High Value Services powered by AI to predict future IT failures during the quarter. Deferred product revenue from their recurring software and subscription offers surged 37% yoy to $5.2 billion.
The group generated 32% of their overall revenue from recurring offers during the first quarter which is a rise of over 3 points from a year ago. Overall revenue fell 2% yoy to $12.1 billion, hurt by product revenue which fell 3% but service revenue rose 1%.
The group’s new subscription-based Catalyst 9000 switching platform has been adopted by more than 1,100 customers in just over three months. Cisco forecasts this bullish momentum to continue throughout fiscal 2018. Moreover, the group’s clients continue to shift to 10 gig, 40 gig and 100 gig architectures while adopt multi-cloud adoption. Over 4,000 ACI customers are leveraging the better business agility with network automation, simplified management and enhanced security. Cisco finished the acquisitions of Springpath, Inc. and Perspica, Inc.
For the second quarter of fiscal year 2018, the group expects a revenue growth in the range of 1% to 3% on a year-over-year basis while forecasts the non-GAAP gross margin rate to be in the range of 62.5% to 63.5%. Non-GAAP operating margin rate is forecasted to be in the range of 29.5% to 30.5% while Non-GAAP earnings per share is expected to range from $0.58 to $0.60.