Cisco reports revenue of USD $14.1 billion & surge in profits

Cisco has reported financial results for the third quarter of its 2025 fiscal year, with revenue, earnings per share and product orders all showing significant year-on-year increases.

The company delivered revenue of USD $14.1 billion for the quarter, representing an 11% increase compared to the same period a year earlier. According to the company, product revenue increased by 15% while services revenue was up 3% over the comparable period.

GAAP net income for the third quarter grew to USD $2.5 billion, up 32% from last year's USD $1.9 billion. Earnings per share on a GAAP basis were USD $0.62, a 35% increase year-on-year. Non-GAAP net income also showed growth, reaching USD $3.8 billion or USD $0.96 per share, a year-on-year rise of 8% and 9% respectively.

Product orders grew by 20% year-over-year, or 9% when excluding the impact of Splunk, with the company reporting growth across all geographies and customer markets. AI infrastructure orders from webscale customers exceeded USD $600 million, surpassing Cisco's USD $1 billion target for the year one quarter earlier than anticipated.

Geographically, revenue increased by 14% in the Americas, 8% in EMEA and 9% in the APJC region. Analysis by product segment saw security solutions up by 54%, observability products up by 24%, networking up by 8%, and collaboration products up by 4%.

Gross margins were recorded on a GAAP basis at 65.6% for the company as a whole, 64.4% for products, and 68.7% for services. Non-GAAP gross margin stood at 68.6%, with product and services gross margins at 67.6% and 71.3%, respectively. Operating expenses on a GAAP basis were flat year-over-year at USD $6.1 billion, representing 42.9% of revenue, while non-GAAP operating expenses were USD $4.8 billion, up 12% and making up 34.1% of revenue.

The company recorded GAAP operating income of USD $3.2 billion, an increase of 46%, translating into an operating margin of 22.6%. Non-GAAP operating income was USD $4.9 billion, up 12% year-on-year, resulting in a non-GAAP operating margin of 34.5%.

Cash flow from operating activities totalled USD $4.1 billion for the quarter, a 2% increase year-over-year. As of the end of the quarter, Cisco reported cash, cash equivalents and investments of USD $15.6 billion, compared to USD $17.9 billion at the end of fiscal 2024.

Remaining performance obligations reached USD $41.7 billion, up 7%, with 51% expected to be recognised as revenue over the coming 12 months. Deferred revenue also rose by 2%, reaching USD $28 billion overall.

On capital allocation, Cisco returned USD $3.1 billion to shareholders through share buybacks and dividends during the quarter. The cash dividend paid was USD $0.41 per common share, amounting to USD $1.6 billion, while the company repurchased approximately 25 million shares at an average price of USD $59.78 per share, for a total of USD $1.5 billion. The remaining authorised amount for stock repurchases is USD $15.4 billion, with no set termination date.

Cisco also completed its acquisition of SnapAttack, a privately held company that provides a threat detection and engineering platform.

Guidance for the fourth quarter forecasts revenue in the range of USD $14.5 billion to USD $14.7 billion. Non-GAAP earnings per share are estimated at USD $0.96 to USD $0.98, while GAAP earnings per share are forecast at USD $0.62 to USD $0.67. For the full 2025 fiscal year, Cisco anticipates revenue between USD $56.5 billion and USD $56.7 billion, with GAAP earnings per share guidance of USD $2.53 to USD $2.58 and non-GAAP earnings per share between USD $3.77 and USD $3.79.

Chair and Chief Executive Officer Chuck Robbins said, "Cisco once again had strong quarterly results with clear demand for our technologies. The momentum we are seeing with AI is fueled by the power of our secure networking portfolio, our trusted global partnerships, and the value we bring to our customers."

Scott Herren, Chief Financial Officer, commented, "Another quarter of solid execution in Q3 drove revenue, margins and EPS above our guidance ranges. Our innovation positions us well for future growth and our operational discipline is generating strong cash flows, enabling us to deliver significant shareholder returns."