Wednesday, February 11, 2015

Cisco Builds Momentum - Q2 Revenue at $11.9 Billion, up 7%

Cisco reported stronger than expected second quarter revenue of $11.9 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.4 billion or $0.46 per share, and non-GAAP net income of $2.7 billion or $0.53 per share.

"Our Q2 results reflect continued progress as we transform Cisco to become the #1 IT company. In the quarter we grew revenues by 7%, with strong EPS growth, and saw the best balance of growth across all our geographies, products, and segments. We delivered this strong performance despite a volatile economic environment," stated Cisco chairman and CEO John Chambers. "Our strong momentum is the direct result of how well we have managed our company transformation over the last three plus years and our leadership position in the key technology transitions of cloud, mobility, big data, security, collaboration, and the Internet of Everything. Every nation, every company, everything is becoming digitized and the network is at the center of this transformation."

Highlights for quarter:

  • Sales in US grew 7% y/y…compared with 3% y/y in Q1
  • Sales in Latin America returned to double digit growth up 12% y/y, with sales in Mexico up 21% y/y
  • Sales in EMEA were up 7% y/y, with UK up 17% y/y, Germany up 12% y/y and Southern Europe up 20% y/y
  • Sales in India grew 11% y/y 
  • Sales in China dropped 19% y/y
  • Gross margins remain stable in switching.
  • Sales of Nexus 3K and 9K switches grew 350% y/y. The Nexus 9K data center switch passed the 1 million installed ports mark 
  • Cisco now has approximately 1,700 Nexus 9K and ACI customers, up from 970 in Q1.  APIC customers grew to over 300. Chambers said Cisco is pulling ahead of its competitors in SDN because market is "seeing benefits of ACI" especially powerpoints of aspirational competitors. Chambers says APIC and ACI will become cornerstone of next-gen architecture.
  • UCS sales have reached over $3B revenue run rate…over 41,000 customers incl. 85% of Fortune 500 
  • High end routing sales were up 5% y/y
  • Wireless sales grew 18% y/y, with Meraki’s cloud networking business up 100% y/y. Chambers said the Meraki group is on a stellar growth path with a annual run rate of $400 million.
  • Collaboration solution sales grew 10% y/y, with deferred Collaboration revenue up 26% y/y 
  • Cisco's Board of Directors declared a quarterly dividend of $0.21 per common share, a two-cent increase over the previous quarter's dividend.
  • Cash and cash equivalents and investments were $53.0 billion at the end of the second quarter.

See also