Cisco Q4 earnings: ‘we’re gaining market share and innovating in AI’

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Written on Aug 16, 2023

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Cisco reports market-beating results for its fiscal fourth quarter.
Its management still issued conservative guidance for the full year.
Cisco stock is now up nearly 20% versus its year-to-date low.

Cisco Systems Inc (NASDAQ: CSCO) jumped 3.0% in extended hours after reporting a strong fourth quarter on the back of a 30% sequential increase in product orders.

Cisco issues conservative guidance

Its guidance for the full year, though, was not particularly exciting. Cisco now expects its revenue to fall between $57 billion and $58.2 billion in fiscal 2024 on $4.01 to $4.08 of adjusted per-share earnings.

In comparison, analysts were at $58.3 billion and $4.04 a share, respectively. Chuck Robbins – the Chief Executive of Cisco Systems said in a press release today:

We’re seeing solid demand, gaining market share, and innovating in key areas like AI, security, and cloud. This momentum gives us confidence in our ability to capture the many opportunities ahead.

Note that the digital communications technology company is known for being conservative in projecting its full-year performance.

Notable figures in Cisco’s Q4 earnings report

Net income printed at $3.96 billion versus the year-ago $3.56 billion
Adjusted EPS also improved significantly from 83 cents to $1.14
Revenue climbed 16% on a year-over-year basis to $15.2 billion
FactSet consensus was $1.06 per share on $15.05 billion in revenue

On Wednesday, Cisco Systems Inc also announced 39 cents a share of quarterly dividend. According to its CFO Scott Herren:

Our business model transformation drove double-digit growth in software revenue, product ARR, and total RPO, leading to greater visibility and predictability.

Cisco’s revenue from individual segments

Other notable figures in the earnings press release include a more-than-expected 20% annualised growth in “Product” revenue. The Finance Chief added:

We’re committed to expanding operating leverage and increasing shareholder returns over the long term.

The multinational brought in $3.55 billion from “Services” in its recently concluded quarter – up 4.0%. Its gross margin also improved by 280 basis points to come in at 64.1%.

Wall Street currently has a consensus “overweight” rating on Cisco stock that is now up nearly 20% versus its year-to-date low.