We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Cisco's (CSCO) Q3 Earnings Top Estimates, Revenues Up Y/Y
Read MoreHide Full Article
Cisco Systems (CSCO - Free Report) reported third-quarter fiscal 2023 non-GAAP earnings of $1 per share, which beat the Zacks Consensus Estimate by 3.09%. The bottom line increased 15% year over year.
Revenues increased 13.5% year over year to $14.57 billion and beat the consensus mark by 1.27%.
Product revenues (76.1% of total revenues) increased 17.4% on a year-over-year basis to $11.09 billion.
Secure, Agile Networks revenues rose 29% year over year to $7.55 billion. End-to-End Security revenues were up 2% to $958 million. Internet for the Future revenues increased 5% to $1.39 billion. Optimized Application Experiences revenues were up 12% to $204 million. Revenues from Other Products increased 19% to $3 million.
Collaboration revenues decreased 13% on a year-over-year basis to $985 million.
Cisco Systems, Inc. Price, Consensus and EPS Surprise
Service revenues (23.9% of total revenues) inched up 2.7% year over year to $3.48 billion.
Quarter in Detail
Region-wise, America’s revenues increased 13% year over year to $8.63 billion. EMEA revenues increased 16% from the year-ago quarter to $3.81 billion. APJC revenues increased 11% year over year to $2.13 billion.
Annualized recurring revenues came in at $23.8 billion, up 6% year over year and product ARR increased 10% year over year.
Non-GAAP gross margin contracted 20 basis points (bps) from the year-ago quarter’s level to 65.2%.
On a non-GAAP basis, the product gross margin expanded 40 bps to 64.5%. Service gross margin contracted 160 bps to 67.3%.
Non-GAAP operating expenses were $4.55 billion, up 15.8% year over year. As a percentage of revenues, operating expenses increased 60 bps year over year to 31.3%.
Non-GAAP operating margin contracted 80 bps year over year to 33.9%.
Balance Sheet and Cash Flow
As of Apr 29, 2023, Cisco’s cash & cash equivalents and investments balance were $23.29 billion compared with $22.05 billion as of Jan 28, 2023.
Total debt (short-term plus long-term) as of Apr 29, 2023, was $8.39 billion compared with $8.89 billion as of Jan 28, 2023.
Cash flow from operating activities was $5.2 billion, higher than the $4.7 billion reported in the previous quarter.
The remaining performance obligations (“RPO”) at the end of the fiscal third quarter were $32.1 billion, up 6%, with 53% of this amount to be recognized as revenues over the next 12 months. Product RPO was up 9% and service RPO was up 4%.
Guidance
For fourth-quarter fiscal 2023, revenues are expected to grow between 14% and 16% on a year-over-year basis.
Non-GAAP gross margin is anticipated between 64.5% and 65.5% for the quarter.
Non-GAAP operating margin is anticipated between 34% and 35% for the quarter. Non-GAAP earnings are anticipated between $1.05 and $1.07 per share.
For fiscal 2023, revenues are expected to rise 10-10.5% on a year-over-year basis. Non-GAAP earnings are anticipated between $3.80 and $3.82 per share.
Image: Bigstock
Cisco's (CSCO) Q3 Earnings Top Estimates, Revenues Up Y/Y
Cisco Systems (CSCO - Free Report) reported third-quarter fiscal 2023 non-GAAP earnings of $1 per share, which beat the Zacks Consensus Estimate by 3.09%. The bottom line increased 15% year over year.
Revenues increased 13.5% year over year to $14.57 billion and beat the consensus mark by 1.27%.
Product revenues (76.1% of total revenues) increased 17.4% on a year-over-year basis to $11.09 billion.
Secure, Agile Networks revenues rose 29% year over year to $7.55 billion. End-to-End Security revenues were up 2% to $958 million. Internet for the Future revenues increased 5% to $1.39 billion. Optimized Application Experiences revenues were up 12% to $204 million. Revenues from Other Products increased 19% to $3 million.
Collaboration revenues decreased 13% on a year-over-year basis to $985 million.
Cisco Systems, Inc. Price, Consensus and EPS Surprise
Cisco Systems, Inc. price-consensus-eps-surprise-chart | Cisco Systems, Inc. Quote
Service revenues (23.9% of total revenues) inched up 2.7% year over year to $3.48 billion.
Quarter in Detail
Region-wise, America’s revenues increased 13% year over year to $8.63 billion. EMEA revenues increased 16% from the year-ago quarter to $3.81 billion. APJC revenues increased 11% year over year to $2.13 billion.
Annualized recurring revenues came in at $23.8 billion, up 6% year over year and product ARR increased 10% year over year.
Non-GAAP gross margin contracted 20 basis points (bps) from the year-ago quarter’s level to 65.2%.
On a non-GAAP basis, the product gross margin expanded 40 bps to 64.5%. Service gross margin contracted 160 bps to 67.3%.
Non-GAAP operating expenses were $4.55 billion, up 15.8% year over year. As a percentage of revenues, operating expenses increased 60 bps year over year to 31.3%.
Non-GAAP operating margin contracted 80 bps year over year to 33.9%.
Balance Sheet and Cash Flow
As of Apr 29, 2023, Cisco’s cash & cash equivalents and investments balance were $23.29 billion compared with $22.05 billion as of Jan 28, 2023.
Total debt (short-term plus long-term) as of Apr 29, 2023, was $8.39 billion compared with $8.89 billion as of Jan 28, 2023.
Cash flow from operating activities was $5.2 billion, higher than the $4.7 billion reported in the previous quarter.
The remaining performance obligations (“RPO”) at the end of the fiscal third quarter were $32.1 billion, up 6%, with 53% of this amount to be recognized as revenues over the next 12 months. Product RPO was up 9% and service RPO was up 4%.
Guidance
For fourth-quarter fiscal 2023, revenues are expected to grow between 14% and 16% on a year-over-year basis.
Non-GAAP gross margin is anticipated between 64.5% and 65.5% for the quarter.
Non-GAAP operating margin is anticipated between 34% and 35% for the quarter. Non-GAAP earnings are anticipated between $1.05 and $1.07 per share.
For fiscal 2023, revenues are expected to rise 10-10.5% on a year-over-year basis. Non-GAAP earnings are anticipated between $3.80 and $3.82 per share.
Zacks Rank & Upcoming Earnings to Watch
Cisco currently carries a Zacks Rank #3 (Hold).
Ciena (CIEN - Free Report) , CrowdStrike (CRWD - Free Report) and HP (HPQ - Free Report) are some better-ranked stocks that investors can consider in the Zacks Computer & Technology sector. All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ciena, CrowdStrike and HP are set to report their earnings results on Jun 6, May 31 and May 30, respectively.