Cisco Systems Inc. (CSCO) witnessed a significant boost in after-hours trading today, as its share price escalated to $52.12, marking a 4.93% increase. The substantial trading volume of 8.68 million shares indicates robust investor confidence, driven by Cisco’s promising financial performance and strategic acquisitions.
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Summary of Today’s Key Financial Updates:
- Cisco reported quarterly revenue of $12.7 billion, reflecting a 13% decline year-over-year but aligning with market expectations. This mirrors the trend of customers utilizing existing product inventories.
- The company maintained strong profitability, with a GAAP gross margin of 65.1% and a non-GAAP gross margin of 68.3%.
- Highlighting its transformed business model, Cisco now reports $6.9 billion in total subscription revenue, which includes contributions from its recent acquisition of Splunk, accounting for 54% of total revenue.
- Total annualized recurring revenue (ARR) has reached $29.2 billion, with Splunk contributing $4.2 billion, showing a 22% increase year-over-year. Product ARR alone surged by 44% to $15.5 billion.
- Gary Steele, the former CEO of Splunk, has been appointed president of Go-to-Market, effective immediately, marking a significant leadership realignment aimed at bolstering Cisco’s market strategies.
Q3 FY 2024 Detailed Results:
- Revenue stood at $12.7 billion, down by 13% year-over-year, with Splunk contributing $413 million.
- GAAP earnings per share were $0.46, a 41% decrease from the previous year, inclusive of a $0.09 negative impact from the Splunk acquisition.
- Non-GAAP earnings per share were $0.88, decreasing by 12% year-over-year, which includes a marginal $0.01 negative impact from Splunk.
Looking Ahead – Q4 FY 2024 and Full-Year Guidance:
- For Q4, Cisco projects revenue between $13.4 billion and $13.6 billion and forecasts earnings per share ranging from $0.46 to $0.51 on a GAAP basis and $0.84 to $0.86 on a non-GAAP basis.
- For the full fiscal year, Cisco expects revenue to be between $53.6 billion and $53.8 billion, with GAAP earnings per share projected between $2.46 and $2.51, and non-GAAP earnings per share between $3.69 and $3.71.
Leadership Update: Gary Steele steps into his role as President of Go-to-Market today, where he will play a crucial role in driving Cisco’s strategic initiatives alongside Robbins. His appointment follows his successful tenure at Splunk, emphasizing his expertise in operational excellence. Steele will also oversee the integration of Splunk into Cisco, ensuring a smooth transition and alignment with Cisco’s long-term goals.
These announcements were made as part of Cisco’s earnings release for the quarter ending April 27, 2024, underscoring the company’s strategic direction and ongoing adjustments to its operational structure in response to dynamic market conditions.
