Wednesday, May 13, 2015

Cisco Sees Strength in Data Centers and Cloud, SP Business Remains Challenged

Cisco reported third quarter revenue of $12.1 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.4 billion or $0.47 per share, and non-GAAP net income of $2.8 billion or $0.54 per share. Overall revenue was up 5.1% compared to the same period a year ago.

"Cisco is in a very strong position and we delivered another solid quarter. Our vision and strategy are working and we are executing very well in a tough environment, as evidenced in our revenue growth, profitability, strong gross margins and cash generation. Our customers feel the pace of change and disruption in every industry and market, and know their success depends on digitizing their business. Whether they are the disruptor or the incumbent, they are coming to Cisco as their strategic partner. We believe we are pulling away from our competition using the same formula we've always used: integrating our industry-leading products in every category into architectures and solutions that deliver real outcomes. We've created this opportunity and it is ours to execute," stated John Chambers, Cisco chairman and CEO.

"I am extremely honored and proud to have led Cisco for the last 20 years and to get us to this positive inflection point. We have a tremendous opportunity to extend our lead in the industry, and with Chuck Robbins as the CEO for Cisco's next chapter, we have exactly the right leader to capture that opportunity. I could not be more confident in our future."

Some highlights:

  • U.S. Public sector growth of 10%
  • Service Provider business remains "challenged". Orders declined 7% globally and 17% in the U.S.
  • Nexus 3K and 9K sales were up 144% y/y. Cisco now has 2,650 Nexus 9K and ACI customers, as well as over 580 APIC controller customers
  • Nexus 9K + APIC orders were up 27% q/q, and Cisco expects growth to continue in Q4
  • Data center revenues were up 21% y/y with UCS now on an over $3 billion run rate and over 43,800 customers
  • NGN Routing was up 4% y/y
  • Gross margins remain solid in switching
  • Wireless was up 9% y/y/ and Meraki was up 92% y/y
  • Security was up 14% y/y
  • Collaboration was up 7% y/y
  • There were over 15 million users of Webex
  • Returned $2.1 billion to shareholders through share repurchases and dividends


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