Cisco Systems reported Q2 EPS of $0.57
Cisco Systems (NASDAQ: CSCO) reported Q2 EPS of $0.57, $0.01, up compared with analyst estimates of $0.56. Revenue for the quarter was $11.6 billion versus an estimate of $11.55 billion.
Cisco Systems sees Q3 2017 EPS of $0.57-$0.59, versus the consensus of $0.58.
Revenue: (2)% to 0% year over year
Chuck Robbins, Cisco CEO said. “We are pleased with the quarter and the continued customer momentum as we help them drive security, automation and intelligence across the network and into the cloud,” “This quarter we announced our intent to acquire AppDynamics which, combined with Cisco’s networking analytics, will provide customers with unprecedented insights into business performance. We will remain focused on accelerating innovation across our portfolio as we continue to deliver value to customers and shareholders.”
Cisco as a service: Focus on subscription services buoys stock following earnings release.
Cisco stock dropped 1% just after the results were released, then began moving up to around a 2% gain during Wednesday’s conference call as executives discussed macro concerns that had led to a weak forecast in the previous quarter had quieted somewhat, particularly in the U.S.
Cisco executives also outlined plans to merge more of the company’s hardware revenue to the type of subscription plans that are commonly associated with software. Cisco’s focus on software has partly been fuelled by a desire for recurring revenues, which Kramer revealed grew 9% year-over-year to 31% of total revenue.
While much of the recurring revenue is for software, Kramer also said that around 10% of product revenue is now of a recurring nature. “We’re trying to find new ways to do that in networking,” Kramer said in an interview, mentioning the model of acquired company Meraki, which bundles hardware with subscription software, and the new Spark-branded smart whiteboard the company introduced last month.