Cisco delivered strong financial results in the second quarter of fiscal year 2025, with revenue reaching $14.0 billion, marking a 9% year-over-year increase. The company’s product orders surged 29%, highlighting rising enterprise demand for Cisco’s networking, security, and AI infrastructure solutions. Notably, AI-related infrastructure orders exceeded $350 million in Q2, bringing total AI-driven orders for the first half of the fiscal year to approximately $700 million. This growth underscores Cisco’s position in scaling AI-ready networking and security solutions.
The company maintained solid profitability, reporting a GAAP gross margin of 65.1% and a non-GAAP gross margin of 68.7%. GAAP net income for the quarter was $2.4 billion, translating to earnings per share (EPS) of $0.61, while non-GAAP net income reached $3.8 billion, with EPS at $0.94. Cisco also demonstrated strong cash flow, generating $2.2 billion in operating cash flow—an increase of 177% compared to Q2 FY 2024. In response to its financial strength, Cisco increased its quarterly dividend to $0.41 per share and authorized an additional $15 billion in stock repurchases.
Cisco’s security and observability segments saw substantial growth, reflecting the company’s shift towards software-driven and AI-powered networking. Security revenue soared 117% year-over-year, while observability grew 47%. Networking revenue, however, declined by 3%, reflecting ongoing shifts in enterprise infrastructure investments. With a robust order backlog and continued AI-driven demand, Cisco remains confident in its ability to drive long-term growth.
For Q3 FY 2025, Cisco expects revenue between $13.9 billion and $14.1 billion, with non-GAAP EPS projected at $0.90 to $0.92. Full-year guidance remains strong, with expected revenue between $56.0 billion and $56.5 billion and non-GAAP EPS of $3.68 to $3.74. As Cisco continues its transition towards AI-driven networking and cybersecurity, its strategic acquisitions—including Splunk—are expected to further enhance its growth trajectory.
Key Metrics:
• Revenue:
• Q2 FY 2025: $14.0 billion (up 9% YoY)
• FY 2025 guidance: $56.0B – $56.5B
• Profitability:
• GAAP net income: $2.4 billion (-8% YoY)
• Non-GAAP net income: $3.8 billion (+6% YoY)
• GAAP EPS: $0.61 (-6% YoY), Non-GAAP EPS: $0.94 (+8% YoY)
• GAAP gross margin: 65.1%, Non-GAAP gross margin: 68.7%
• Growth Segments:
• AI infrastructure orders: $350M+ in Q2, totaling $700M+ in 1H FY 2025
• Security revenue: +117% YoY
• Observability revenue: +47% YoY
• Networking revenue: -3% YoY
• Cash Flow & Shareholder Returns:
• Operating cash flow: $2.2B (up 177% YoY)
• Dividend increase: $0.41 per share (+3%)
• Stock buyback authorization: $15 billion additional repurchase program
• Q3 & FY 2025 Guidance:
• Q3 revenue: $13.9B – $14.1B
• Q3 non-GAAP EPS: $0.90 – $0.92
• FY 2025 revenue: $56.0B – $56.5B
• FY 2025 non-GAAP EPS: $3.68 – $3.74
“Cisco’s strong quarterly results were driven by accelerating customer demand for our technology,” said Chuck Robbins, chair and CEO of Cisco. “As AI becomes more pervasive, we are well positioned to help our customers scale their network infrastructure, increase their data capacity requirements, and adopt best-in-class AI security.”
“Q2 was another quarter of solid execution which drove revenue and EPS above our guidance ranges. Splunk continues to perform in line with our expectations on the top line, and was accretive to Q2 non-GAAP EPS, earlier than we had planned,” said Scott Herren, CFO of Cisco. “Our strong cash flows have led us to increase our annual dividend again this year, as well as our overall share repurchase authorization.”
