Cisco Reports Strong Q3 Earnings, Announces CFO Transition

Networking giant Cisco Systems reported better-than-expected third-quarter earnings on Wednesday, with revenue rising 11% year over year to $14.15 billion. According to CNBC, the company posted adjusted earnings per share of 96 cents, surpassing analyst expectations of 92 cents for the quarter ending April 26, 2025.

The solid performance comes amid what CEO Chuck Robbins described as an “uncertain macroeconomic environment,” highlighting Cisco’s ability to maintain growth despite broader market challenges. The company also announced a key leadership transition with current CFO Scott Herren set to retire on July 26 after joining in 2020.

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Financial Performance Exceeds Expectations

Cisco’s networking segment, which remains the company’s core business, saw revenue increase 8% to $7.07 billion, exceeding analyst projections of $6.81 billion. The company’s overall net income rose to $2.49 billion, or 62 cents per share, from $1.89 billion, or 46 cents per share, in the same quarter last year.

The company returned $3.1 billion to stockholders through share buybacks and dividends during the quarter. According to Cisco’s official newsroom, the company paid a cash dividend of $0.41 per common share, totaling $1.6 billion, and repurchased approximately 25 million shares of common stock under its stock repurchase program.

Cash flow from operating activities reached $4.1 billion for the third quarter, representing a 2% increase compared to the $4.0 billion generated in the third quarter of fiscal 2024. The company ended the quarter with $15.6 billion in cash and investments, down from $17.9 billion at the end of fiscal 2024.

Leadership Changes and Future Outlook

In a significant leadership announcement, Cisco revealed that Mark Patterson, the company’s chief strategy officer and a nearly 25-year veteran, will succeed Scott Herren as Chief Financial Officer. Additionally, Jeetu Patel, Cisco’s executive vice president and chief product officer, is being promoted to president and chief product officer.

Looking ahead, management provided optimistic guidance for the coming quarter, projecting adjusted earnings per share between 96 cents and 98 cents on revenue of $14.5 billion to $14.7 billion. This outlook slightly exceeded analyst expectations of 95 cents per share, according to data compiled by Barchart.

AI Infrastructure Momentum Continues

“The momentum we are seeing with AI is fueled by the power of our secure networking portfolio, our trusted global partnerships, and the value we bring to our customers,” said CEO Chuck Robbins in the earnings statement. This follows the company’s previous quarterly report where Cisco disclosed AI infrastructure orders exceeding $350 million.

Security-related revenue, boosted by the $27 billion Splunk acquisition completed last year, jumped 54% to $2.01 billion, though this fell short of analyst consensus estimates of $2.17 billion. The integration of Splunk continues to be a key focus area as Cisco expands its security and observability capabilities.

Market Position and Investor Response

As of Wednesday’s market close before the earnings announcement, Cisco shares were up 3.5% for the year, outperforming the relatively flat S&P 500 index during the same period. The company’s ability to exceed expectations across key metrics positions it well against competitors in the networking infrastructure space.

Cisco’s remaining performance obligations (RPO), an important indicator of future revenue, stood at $41.7 billion, up 7% in total, with 51% of this amount expected to be recognized as revenue over the next 12 months. Product RPO increased by 10% while services RPO grew by 5%.

For investors seeking additional information, Cisco held its Q3 fiscal year 2025 conference call on Wednesday, May 14, 2025, at 1:30 p.m. Pacific Time to discuss results and provide further insights into its strategic direction under the evolving leadership team.

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