Cisco Systems Reports 11% Revenue Growth and 32% Net Income Increase in Q3 Fiscal 2025

Cisco Systems, Inc. reported a significant increase in financial performance for the third quarter and first nine months of fiscal 2025, as detailed in its latest 10-Q filing. For the three months ended April 26, 2025, total revenue reached $14.15 billion, an 11% increase from $12.70 billion in the same period last year. Product revenue surged by 15% to $10.37 billion, while services revenue grew by 3% to $3.78 billion. Net income for the quarter was $2.49 billion, a 32% increase compared to $1.89 billion in the prior year, resulting in diluted earnings per share of $0.62, up from $0.46.

The company experienced notable changes in its operational metrics compared to the previous fiscal period. The increase in revenue was attributed to a full quarter of contributions from the acquisition of Splunk, which enhanced software revenue by 25% to $5.6 billion. Additionally, subscription revenue rose by 15%, reflecting strong demand across various product categories, particularly in security and observability, which saw increases of 54% and 24%, respectively. The Americas region led the growth, with revenue increasing by $1 billion, while EMEA and APJC segments also reported gains.

Strategically, Cisco has continued to invest in research and development, with R&D expenses rising by 20% to $2.34 billion in the latest quarter. This investment is aimed at enhancing product offerings and maintaining competitive advantages in a rapidly evolving technology landscape. The company also initiated a restructuring plan affecting approximately 7% of its workforce, with estimated pre-tax charges of up to $1 billion, aimed at driving efficiencies and focusing on key growth opportunities.

Operationally, Cisco reported a decrease in accounts receivable, which fell by 21% to $5.28 billion, primarily due to the timing of billings. The company’s cash and cash equivalents totaled $8.16 billion, up from $7.51 billion at the end of the previous fiscal year. Remaining performance obligations increased by 2% to $41.67 billion, indicating a solid backlog of future revenue. The company also maintained a robust stock repurchase program, with approximately $15.4 billion remaining authorized for buybacks.

Looking ahead, Cisco remains optimistic about its growth trajectory, despite ongoing macroeconomic challenges and competitive pressures. The company plans to continue investing in innovation and strategic priorities, including artificial intelligence and cloud solutions, to enhance customer value and drive long-term profitability. However, it acknowledges the potential for fluctuations in demand and pricing pressures, particularly in the service provider and cloud markets, which could impact future performance.