Cisco Systems, Inc (NASDAQ: CSCO) stock fell over 4.7% on Feb 10th, 2021 pre-market session (Source: Google finance) as there was no topline growth though the company posted better than expected results for the second quarter of FY 21. During the quarter, product revenue was down 1% and service revenue was up 2%. The revenue by geographic segment was: Americas down 1%, EMEA up 2%, and APJC down 4%. Product revenue was driven by growth in Security, up 10%. Infrastructure Platforms was down 3% and Applications was flat. On a non-GAAP basis, the total gross margin, product gross margin, and service gross margin were 66.9%, 66.6%, and 67.9%, respectively, as compared with 66.4%, 65.9%, and 67.7%, respectively, in the second quarter of fiscal 2020. Total gross margins by geographic segment were: 67.5% for the Americas, 66.9% for EMEA and 64.8% for APJC. On a non-GAAP basis, the company reported 2% rise in net income to $3.4 billion. Cash and Cash Equivalents and Investments were $30.6 billion at the end of the second quarter of fiscal 2021, compared to $29.4 billion at the end of fiscal 2020. Deferred Revenue was $20.8 billion, up 12% in total, with deferred product revenue up 16%. Deferred service revenue was up 9%. Remaining Performance Obligations was $28.2 billion at the end of the second quarter of fiscal 2021, up 13%.
CSCO in the second quarter of FY 21 has reported the adjusted earnings per share of 79 cents, beating the analysts’ estimates for the adjusted earnings per share of 76 cents, according to the Zacks Consensus Estimate. The company had reported flat adjusted revenue growth to $11.96 billion in the second quarter of FY 21, beating the analysts’ estimates for revenue by 0.31%.
Meanwhile, in the second quarter of fiscal 2021, the company had closed the acquisition of Portshift, a privately held applications security solutions company, and the acquisition of assets and the team of Banzai Cloud Zrt., a company that specializes in deploying cloud-native applications. In the second quarter of fiscal 2021, the company had announced an amendment to the definitive merger agreement under which the company previously agreed to acquire Acacia Communications, Inc. The acquisition is projected to close during the third quarter of fiscal 2021, subject to closing conditions, including Acacia stockholder approval. The company also plans to acquire IMImobile PLC, a United Kingdom publicly-traded cloud communications software and services company. The acquisition is projected to close during the third quarter of fiscal 2021.
For Q3 FY 21, the company expects revenue to grow 3.5% – 5.5% Y/Y and Non-GAAP EPS to range between $0.80 – $0.82.