Cisco Systems Inc (NASDAQ:CSCO) stock rose 0.16% (As on May 18, 11:14:42 AM UTC-4, Source: Google Finance) after the company’s large backlog of products due to supply chain constraints has hit demand for new orders from customers. Cisco’s product orders fell 23% in the third quarter, even as the maker of routers, security services and software products reported a quarterly profit that beat estimates, helped by its aggressive steps to resolve supply chain bottlenecks.

The remaining performance obligations are at $32.1 billion, up 6%, with 53% to be recognized as revenue over the next 12 months. Total software revenue is now $4.3 billion, which annualizes to about $17 billion. This was up 18% year-over-year. Annualized revenue run rate is now $23.8 billion, up 6% from a year ago, with product ARR up 10%. Total subscription revenue rose 17%. Of all the product areas, networking, or “Secure, Agile Networks” in Cisco-speak, rose a whopping 29%. This is, by far, Cisco’s largest product area and currently comprises 52% of total revenue. This growth is driven by the fact that the network is the foundation for digital transformation. Companies are modernizing compute by moving to the cloud, changing the way people work, which relies on mobility, and connecting everything as part of “smart” initiatives. This mandates network evolution, and Cisco still has the broadest portfolio with the largest share. The product area known as “End to End Security” posted revenue of $958 million, representing 2% growth. The collaboration revenue bucket fell 13%, posting revenue of $985 million.

CSCO in the third quarter of FY 23 has reported the adjusted earnings per share of $1, beating the analysts’ estimates for the adjusted earnings per share of 97 cents. The company had reported the adjusted revenue growth of 14 percent to $14.6 billion in the third quarter of FY 23, beating the analysts’ estimates for revenue of $14.4 billion.

Cisco is now creeping up on the $60 billion annual revenue mark, which is a number that seemed out of reach just a few years ago when revenue seemed stuck just under $50 billion. Looking ahead, Cisco expects to earn between $1.05 and $1.07 per share in the fourth quarter, with revenue expected to grow in the 14% to 16% range, the midpoint slightly ahead of the expectation of $1.03 per share and 14.1% growth. The company also raised its full-year number, expecting earning to grow to $3.80 to $3.82 a share and revenue to grow 10% to 10.5%.