Cisco, a technology company based in San Jose, California, has reported its second-quarter earnings for fiscal year 2023. The company’s revenue for the quarter was $13.6 billion, up 7% year over year. The GAAP EPS was $0.67, which represents a 6% decrease year over year, and the non-GAAP EPS was $0.88, up 5% year over year. Cisco has continued to make progress on its business model transformation, with total annualized recurring revenue (ARR) at $23.3 billion, up 6% year over year, and product ARR up 11% year over year. Total software revenue is up 10% year over year, and software subscription revenue is up 15% year over year. The company’s dividend has increased by 3%. For Q3 FY 2023, Cisco has provided guidance for 11% to 13% growth year over year in revenue and GAAP EPS of $0.74 to $0.79 and non-GAAP EPS of $0.96 to $0.98. The company’s guidance for FY 2023 is 9% to 10.5% growth year over year in revenue and GAAP EPS of $2.85 to $2.96 and non-GAAP EPS of $3.73 to $3.78.
Cisco, a networking technology giant, has been facing challenges with its financial performance in recent years. The company’s revenue growth has been slow, and its financials appear stale and lusterless. Cisco has been struggling to find new growth drivers as its core business of selling networking hardware has become increasingly commoditized, leading to lower margins and intense competition.
The company has been undergoing a business model transformation to shift its focus towards recurring revenue streams and software offerings, but progress has been slow. Cisco’s lack of growth has led to increased pressure from investors to show results, and there have been calls for the company to make more significant strategic changes, such as divesting non-core businesses or pursuing acquisitions to boost growth.
Overall, Cisco’s financials suggest that the company has been struggling to find new avenues of growth, and its investors are looking for signs of a turnaround.