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Cisco Systems, Inc. (NASDAQ: CSCO) reported fiscal first-quarter financial results after markets closed Wednesday. The company said that it had $0.61 in earnings per share (EPS) and $12.1 billion in revenue, compared with consensus estimates from Thomson Reuters that called for $0.60 in EPS on $12.11 billion in revenue. The same period from last year had $0.61 in EPS and $12.35 billion in revenue.

During the quarter, total revenues dipped by 2%, consisting of a drop in product revenue by 3% and service revenue falling 1%. Also 32% of total revenue was from recurring offers, up over 3 percentage points from this time last year.

Deferred revenue came out to $18.6 billion, up 10% in total, with deferred product revenue up 16%, driven largely by subscription-based and software offers, and deferred service revenue was up 5%. The portion of product deferred revenue related to recurring software and subscription offers increased 37%.

Looking ahead to the fiscal second quarter, management is expecting to see EPS in the range of $0.58 to $0.60 and revenue growth in the range of 1% to 3%. The consensus estimates are calling for $0.58 in EPS and $11.7 billion in revenue for the coming quarter.

On the books, cash, cash equivalents, and investments totaled $71.6 billion at the end of this quarter, compared with $70.5 billion at the end of fiscal 2017.

Chuck Robbins, CEO of Cisco, commented:

Our results in Q1 demonstrate the continued progress we’re making on our strategy. The network has never been more critical to business success. Cisco is delivering more insights and intelligence as we help our customers build highly secure, intelligent platforms for digital business.

Shares of Cisco closed Wednesday at $34.11, with a consensus analyst price target of $35.73 and a 52-week range of $29.12 to $34.75. Following the announcement, the stock was initially up over 3.5% at $35.32 in the after-hours trading session.