Cisco Systems (CSCO-US) delivered a robust start to fiscal 2025, reporting earnings and revenue above Wall Street expectations and raising its full-year outlook. The results, released after markets closed on November 12, sent shares up 7% in after-hours trading to $79.18, extending year-to-date gains to 25%.
AI-Driven Growth
Cisco now expects full-year revenue between $60.2 billion and $61 billion, up from its prior forecast of $59–60 billion. Adjusted EPS is projected at $4.08–$4.14, also above earlier guidance.
CEO Chuck Robbins emphasized that the widespread adoption of AI technologies is reshaping enterprise networking needs. "Secure networks are critical to realizing AI’s potential," Robbins said, adding that Cisco is positioned for its strongest year in history.
Q1 Earnings Beat
For the quarter, Cisco reported:
-
Net income: $2.86 billion, or $0.72 per share (vs. $2.71 billion, $0.68 per share last year).
-
Adjusted EPS: $1.00, topping analyst estimates of $0.98.
-
Revenue: $14.88 billion, up 8% year-over-year and above consensus of $14.78 billion.
Hardware revenue rose 10% to $11.1 billion, driven by enterprise demand for AI server architecture. Orders from hyperscale cloud providers totaled $1.3 billion, outpacing overall product growth. Service revenue increased modestly by 2% to $3.81 billion.
Outlook for Q2
Cisco forecasts Q2 revenue of $15–15.2 billion and adjusted EPS of $1.01–$1.03, both ahead of analyst expectations. Analysts note that AI and cloud infrastructure demand has rebounded, with enterprise spending momentum improving. If AI server penetration continues, Cisco could sustain double-digit growth into the second half of 2025.
Market Assessment
At $79.18, Cisco trades at a P/E ratio of about 19, slightly below the Nasdaq tech average. Analysts view Cisco’s cross-sector strategy in AI infrastructure, enterprise networking, and security as positioning it well to benefit from the AI cycle.
Still, some caution remains. If AI capital expenditure peaks prematurely, enterprise IT budgets could shift, requiring Cisco to prove the durability of its growth trajectory.
The Bottom Line
Cisco’s Q1 results highlight how AI networking demand is reshaping the hardware sector. With hyperscaler orders surging and forecasts raised, the company is on track for its strongest year yet. But sustaining momentum will depend on whether AI spending continues at current levels—or cools as budgets adjust.