After beginning the fiscal yr on a weak notice, Cisco Methods Inc. (NASDAQ: CSCO) has regained momentum, reporting larger second-quarter income and revenue that beat analysts’ estimates. The corporate is optimistic about extending the uptrend into the rest of the yr, supported by the rising demand for its AI options.
The market reacted favorably to the constructive consequence and the San Jose-headquartered community gear maker’s inventory rallied in Wednesday’s after-hours buying and selling. The shares have grown as a lot as 40% previously six months alone, outperforming the broad market throughout that interval.
Q2 Numbers Beat
The tech agency reported adjusted earnings of $0.94 per share for the January quarter, in comparison with $0.87 per share in the identical interval final yr. Unadjusted revenue was $2.4 billion or $0.61 per share in Q2, in comparison with $2.6 billion or $0.65 per share within the comparable interval of fiscal 2024. Second-quarter income elevated to $14.0 billion from $12.79 billion within the year-ago quarter.
A 3% drop in Networking revenues, the corporate’s largest working division that accounts for practically 50% of complete revenues, was greater than offset by sturdy income progress within the Observability and Safety segments. Safety income greater than doubled, with sturdy contributions from Splunk, which joined the Cisco fold early final yr. Income grew throughout all geographical areas.
For the third quarter of 2025, the Cisco management forecasts adjusted earnings within the vary of $0.90 per share to $0.92 per share. The steerage for unadjusted earnings per share is between $0.57 and $0.61. The corporate is in search of April-quarter revenues within the $13.9-$14.1 billion vary. On the mid-point, the goal numbers are barely under Wall Road’s estimates.
Raises Targets
Buoyed by the AI-driven momentum, the corporate raised its full-year income steerage to $56.0-$56.5 billion from the sooner forecast of between $55.3 billion and $56.3 billion. Equally, the adjusted earnings per share forecast has been revised as much as $3.68-$3.74 from the beforehand introduced goal of $3.60-$3.66 per share. In the latest quarter, Cisco’s backside line benefitted from sturdy progress in gross margins to a two-decade excessive, with Splunk taking part in a key position within the progress.
Cisco’s CEO Chuck Robbins stated on the second-quarter earnings name, “We now have a dozen up to date information integrations between Cisco and Splunk throughout our safety and networking portfolio, together with Safe Firewall, Catalyst Heart, SD-WAN, and ICE. We proceed our joint promoting motions between Cisco and Splunk, together with safe — Cisco Safe Community Analytics and XDR alongside Splunk’s SIM providing enhanced capabilities to the safety operations middle. We additionally proceed to construct our market-leading observability options to speed up full-stack observability for the enterprise.”
Cisco’s inventory traded up 2% on Thursday afternoon, after opening the session at $62.53. The all-time-high closing worth of the inventory was $62.81, on February 10.
