Cisco (CSCO) Unveils Ambitious Revenue and Profit Targets for Fiscal 2025

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• Cisco Systems (CSCO) recently announced fiscal third-quarter earnings, surpassing consensus estimates despite a year-over-year decline.
• The integration of newly acquired Splunk contributed significantly to the revenue, adding $413 million.
• “Customers are consuming the equipment shipped over the last few quarters in line with our expectations and we are seeing stabilization of demand as a result,” stated CFO Scott Herren.

This detailed analysis covers Cisco’s fiscal Q3 earnings, highlighting the impact of its Splunk acquisition and providing insights into future financial expectations.

CSCO Stock: Q3 Earnings Top Views

Cisco’s fiscal third-quarter earnings report revealed a 12% decline in earnings and a 13% drop in revenue year-over-year. However, the results were above the guidance range, with an adjusted earnings per share of 88 cents, beating the analyst’s expectation of 83 cents. The total revenue reached $12.7 billion, surpassing the forecasted $12.53 billion.

Product Orders and Market Response

Despite the overall decline, Cisco saw a 4% rise in product orders compared to a 12% decline in the previous quarter. Following the earnings release, Cisco’s stock experienced initial gains but eventually closed down by 2.7% at $48.33.

CSCO Stock: Fiscal 2025 Revenue Outlook

Looking ahead, Cisco provided guidance for the July quarter of fiscal 2024, projecting earnings of 85 cents per share and expecting revenue around $13.5 billion. For fiscal 2025, the company anticipates low to mid-single-digit revenue growth and aims to maintain a non-GAAP operating income margin at about 32%.

Impact of Splunk Acquisition

The acquisition of Splunk is seen as a strategic move to bolster Cisco’s position in cybersecurity and data analytics. Management forecasts Splunk’s revenue for the upcoming July quarter to be between $950 million and $1 billion, which is below the market’s expectation of $1.065 billion.

Investor Day June 4

Cisco is set to host an Investor Day on June 4, where it will discuss long-range financial goals and further integration strategies for Splunk. This event is crucial as investors look for reassurance on Cisco’s future direction amidst market challenges.

Cisco Stock: Splunk Deal

The $28 billion acquisition of Splunk marks a significant expansion into cybersecurity for Cisco. This move is part of Cisco’s broader strategy to diversify its revenue streams beyond traditional networking hardware into software and services.

Conclusion

Cisco’s recent fiscal report and the acquisition of Splunk highlight its strategic shifts and adaptation to the evolving tech landscape. As the company continues to integrate Splunk and refine its business model, the upcoming fiscal year will be pivotal in determining its position in the competitive tech market.

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