Company spending boosts performance! Cisco Systems, Inc. (CSCO.US) Q2 earnings report exceeds expectations, raises full-year revenue guidance.

The world's largest computer network equipment manufacturer Cisco Systems, Inc. (CSCO.US) reported better-than-expected quarterly performance and gave optimistic guidance, benefiting from increased investment in computing infrastructure by enterprise customers to utilize artificial intelligence (AI) technology. Boosted by this news, as of the time of writing, Cisco Systems, Inc. shares surged over 6% in after-hours trading on Wednesday. The financial report showed that in the second quarter of the 2025 fiscal year ending January 25, 2025, Cisco Systems, Inc. saw a 9% year-over-year growth in sales to $14 billion, surpassing analysts' average expectation of $13.9 billion. This is the first year-over-year sales growth for the company in a year. Adjusted earnings per share were $0.94, better than the analysts' average expectation of $0.91. Deferred revenue - an indicator of future sales - reached $27.8 billion, an 8% year-over-year increase. Cisco Systems, Inc.'s switches and routers are critical devices that guide data traffic in and out of networks and the internet. The company is also furthering its foray into software and services, with last year's acquisition of data processing company Splunk accelerating this transition. Data shows that product orders in the second quarter increased by 29% compared to the same period last year. The company stated that even excluding the contribution of Splunk, product orders still grew by 11% year-over-year. CEO Chuck Robbins has been working on transforming Cisco Systems, Inc. into a networking services and software provider and reducing dependence on one-time high-priced equipment sales. Cisco Systems, Inc. has made progress in this area, with products such as cloud-hosted security and remote management tools contributing billions of dollars in recurring revenue. The upgrade of network systems by enterprise customers to adapt to AI requirements partially offset the decrease in orders caused by delays in U.S. government projects. Chuck Robbins stated, "As AI becomes more pervasive, we are well-positioned to help customers expand their network infrastructure, increase data capacity, and deploy top-tier AI security solutions." Looking ahead, Cisco Systems, Inc. expects sales in the third quarter ending in April to reach $13.9 billion to $14.1 billion, with analysts' average expectations at the lower end of this range; it also anticipates sales for the 2025 fiscal year to reach $56 billion, an increase of $1 billion from previous expectations, slightly higher than analysts' average expectation of $55.97 billion. In addition, the board of Cisco Systems, Inc. has approved a new $15 billion stock repurchase plan, bringing the total size of the stock repurchase to $17 billion.