Cisco Systems, Inc. (NASDAQ: CSCO) stock lost over 11.3% on 13th August, 2020 (as of 12:26 pm GMT-4; Source: Google finance). For the fourth quarter of 2020, the firm’s overall revenue fell 9% yoy to $12.2 billion, but non-GAAP operating margin rate slightly rose by 0.4 points. Non-GAAP net income fell 5% yoy to $3.4 billion. The overall product revenue fell 13% to $8.8 billion while Infrastructure Platforms lost 16%. The ongoing pandemic hurt the commercial and enterprise markets which in turn affected the group’s switching, routing, data center, and wireless, segments.
On the bright side, the firm saw stable rise of Cat 9K, and ramped up Wi-Fi 6 products. Data center was hurt by the market and DRAM price declines. Webex segment also saw double digit rise due to rise in remote working. AppDynamics and IoT softwares also performed well offsetting pressure in Unified Communication and TP endpoints. The firm’s Security segment rose 10%, driven by network security, identity and access, advanced threat and unified threat management. The firm’s cloud security portfolio delivered double-digit growth as well as from the ongoing momentum with Duo and Umbrella offerings. The ongoing pandemic shifted to remote operations and automation to maximize personal safety driving the firm’s Catalyst 9000, security, Webex, and other SaaS-based solutions. Accordingly, Cisco is focusing on healthcare and education solutions with simpler consumption models and services to accelerate adoption. They are strengthening their portfolio to cover areas like social distancing in the workplace, effective virtual employee engagement at scale, and pop-up connected clinics. They are focusing on multi-cloud investment; 5G and Wi-Fi 6; 400-gig; optical networking; next-generation silicon; AI; and more.
The firm is also controlling cost aiming $1 billion on an annualized basis to cut their cost structure. The firm is seeing good momentum in their cloud security solutions, protecting workloads, applications, and data. They are expanding their capabilities to enable simplification and automation of customer security infrastructure. Their SecureX platform, saw over 2,100 active daily customers, two-thirds of which have two or more products active in just 6 weeks of launch.