Cisco reported better-than-expected third quarter earnings as the company saw a surge in AI infrastructure demand and strong results from Splunk.
The company reported third quarter earnings of 62 cents a share on revenue of $14.1 billion, up 11% from a year ago. Non-GAAP earnings were 96 cents a share.
Wall Street was looking for fiscal third quarter non-GAAP earnings of 92 cents a share on revenue of $14.06 billion.
Cisco said product orders were up 20% from a year ago and 9% excluding Splunk. AI infrastructure orders from hyperscale vendors topped $600 million in the quarter.
As for the outlook, Cisco projected fourth quarter revenue of $14.5 billion to $14.7 billion with non-GAAP earnings of 96 cents a share to 98 cents a share. Fiscal 2025 revenue will land between $56.5 billion to $56.7 billon with non-GAAP earnings of $3.77 a share to $3.79 cents a share.
Chuck Robbins, CEO of Cisco, said it was seeing strong demand due to secure networking and AI infrastructure.
Cisco has been stepping up its visibility in emerging technology areas including AI and quantum with a push. Consider:
- Cisco said it will join the AI Infrastructure Partnership (AIP), which is led by BlackRock, Global Infrastructure Partners (GIP), MGX, Microsoft, NVIDIA and xAI. GE Vernova and NextEra Energy also recently joined.
- The networking giant also said it will partner with Saudi Arabia's AI enterprise HUMAIN to scale cost efficient AI infrastructure. Cisco will offer its networking and data center stack, security tools and software.
- Cisco also said it extended a partnership with G42, a UAE-based AI company, to develop AI infrastructure. The two companies signed a memorandum of understanding that revolves around go-to-market, AI infrastructure expertise and global expansion. The two companies will also consider co-developing AI cybersecurity applications.
- Cisco said its quantum networking chip prototype was developed with UC Santa Barbara and generates up to 1 million entangled photo pairs per second at room temperature.
By the numbers:
- Cisco’s networking business posted third quarter revenue of $7.07 billion, up 8% from a year ago.
- Security revenue in the third quarter was up 54% to $2.01 billion.
- Collaboration revenue was up 4% to $1.03 billion.
- Observability revenue was $261 million, up 24%.
