Cisco reports strong Q3 performance driven by AI momentum

Cisco has announced robust financial results for the third quarter of fiscal year 2025, ending April 26, 2025. The company reported total revenue of USD 14.1 billion, an increase of 11% compared to the same period last year, exceeding their own projections.

The company's profitability also saw significant growth. Generally Accepted Accounting Principles (GAAP) net income stood at USD 2.5 billion, resulting in a GAAP earnings per share (EPS) of USD 0.62, a 35% jump year over year. On a non-GAAP basis, net income was USD 3.8 billion, with a non-GAAP EPS of USD 0.96, showing a 9% increase from the previous year.

A key highlight in the report was the strong demand for Cisco's products, with overall product sales. Cisco reported a 20% increase in total product orders year over year. Even when excluding the contribution from the recent acquisition of Splunk, product orders still grew by a solid 9%, demonstrating organic demand across Cisco's portfolio. A particularly noteworthy area of growth was in Artificial Intelligence (AI) infrastructure. Orders from webscale customers specifically for AI infrastructure solutions exceeded USD 600 million during the quarter. This strong performance in AI not only highlights Cisco's crucial role in building the infrastructure for the AI revolution but also enables the company to hit its internal target of USD 1 billion in AI infrastructure orders one quarter ahead of its initial schedule.

Looking ahead, Cisco provided a positive outlook for the upcoming fourth quarter of fiscal year 2025. The company projects revenue to be in the range of USD 14.5 billion to USD 14.7 billion. Anticipated profitability for the next quarter includes GAAP EPS between USD 0.62 and USD 0.67 and non-GAAP EPS between USD 0.96 and USD 0.98.

Overall, Cisco's third-quarter results paint a picture of a company executing well, benefiting from broad market demand, and capitalising on strategic growth areas like AI infrastructure. The strong revenue growth and profitability, coupled with positive forward guidance, suggest continued momentum for Cisco in the near term.