Cisco fueled by cloud networking and easing supply chain issues

Fueled by demand for cloud-driven networking and an improving supply chain, Cisco reported revenue of $13.6 billion for the second quarter of its fiscal 2023, up 7% year over year. GAAP net income was $2.8 billion or $0.67 per share, and non-GAAP net income was $3.6 billion or $0.88 per share.

“With Cisco’s strong Q2 performance, our fiscal 2023 is shaping up to be a great year,” said Chuck Robbins, chair and CEO of Cisco. “The modern, highly secure networks we are building serve as the backbone of our customers’ technology strategy. This, combined with the success of our ongoing business transformation and operational discipline gives me confidence in our future.”

Some highlights:

• Product revenue up 9% and service revenue was up 2%. 
• Software revenue was $4.2 billion, up 10% yoy. Software subscription revenue was up 15% yoy. Total subscription revenue represents 44% of overall revenue.
• Revenue by geographic segment was: Americas up 9%, EMEA up 5%, and APJC was up 1%. 
• Product revenue performance was led by growth in Secure, Agile Networks up 14%, End-to-End Security up 7%, and Optimized Application Experiences up 11%. Internet for the Future was down 1% and Collaboration was down 10%. Data center switching declined slightly.
• The company noted double-digit growth for Catalyst 9000, enterprise routing, Wireless, Meraki, DUO and ThousandEyes
• Q2 was another consecutive quarter of rapid adoption of 400-gig Cisco 8000 and Silicon One platforms
• In the web-scale segment, Cisco noted overall slowing due to normalizing product lead times. Two of the largest customers grew their orders with Cisco by over 40% in the first half of fiscal ‘23.
• On a GAAP basis, total gross margin, product gross margin, and service gross margin were 62.0%, 60.2%, and 67.2%.

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