Cisco Systems (NASDAQ: CSCO) — Earnings Live: What To Watch Today

Cisco is trading at $63.39 after earnings. Guidance for the next quarter and full year:

Guidance

Q4 FY2025

• Revenue: $14.5B – $14.7B

• GAAP EPS: $0.62 – $0.67

  

• Non-GAAP EPS: $0.96 – $0.98

Full-Year FY2025

• Revenue: $56.5B – $56.7B

• GAAP EPS: $2.53 – $2.58

• Non-GAAP EPS: $3.77 – $3.79

Cisco delivered a robust $14.1 billion in revenue, marking an 11% year-over-year increase, and coming in above the high end of guidance. This strength was broad-based across geographies and customer segments.

• Product orders rose 20% YoY, or 9% excluding Splunk, signaling strong end-market demand.

• AI infrastructure orders from webscale customers topped $600 million, helping Cisco hit its $1 billion AI order goal a full quarter early.

Margins also impressed:

• GAAP gross margin: 65.6% | Non-GAAP: 68.6%

• GAAP operating margin: 22.6% | Non-GAAP: 34.5%

Segment Performance

• Americas: +14% YoY

• EMEA: +8%

• APJC: +9%

By product line:

• Security: +54%

• Observability: +24%

• Networking: +8%

• Collaboration: +4%

ash & Shareholder Returns

• Operating cash flow: $4.1B (+2% YoY)

• Cash/investments on hand: $15.6B

• Returned to shareholders: $3.1B (via dividends and buybacks)

• Quarterly dividend: Maintained at $0.41/share, payable July 23

Cisco’s business is increasingly anchored in recurring revenue, with software and services making up over 40% of total sales. Key segments to watch:

• Secure, Agile Networks: Still the largest contributor, driven by enterprise hardware refresh cycles

• Security & Observability (Splunk): Now critical to margin expansion and recurring ARR

• Internet for the Future: Telco and data center routing — weaker in past quarters, sensitive to macro budgets

If Splunk growth accelerates or services outpace hardware, the market could reward Cisco with multiple expansion.

Previously, Cisco’s leadership has emphasized Splunk’s integration as a long-term driver of security + observability convergence — but many analysts have yet to bake in meaningful top-line synergy.

“We see Splunk transforming our software portfolio — not just as a bolt-on, but a catalyst across secure networking.”

If Cisco signals early cross-sell traction or faster ARR onboarding than expected, this could reshape near-term margin and software revenue expectations.

Cisco shares are dropping today before their third-quarter earnings.

There’s no notable news on the company, but shares are down 1.24%. Competitors like Ciena (NYSE: CIEN) are also seeing weakness today, so this could be some sector-related negativity leading to investors rotating out of networking stocks.

Cisco is expected to report Q3 FY25 EPS of $0.92 and revenue of $14.05 billion, squarely within company guidance of $13.9B–$14.1B. That reflects flat to modest top-line growth, with consensus focused on stability over acceleration.

The Street is largely looking for:

• Continued strength in enterprise networking

• Signs of integration progress post-Splunk acquisition

• Growth in AI-related orders (previous quarter: $350M AI bookings)

Cisco has beaten earnings estimates for four straight quarters, but revenue beats have been modest. For the stock to move higher, investors may need an uptick in FY guidance or an AI-specific revenue breakout.