- Boosting Cisco's (NASDAQ:CSCO) FQ3 EPS: Non-GAAP gross margin was 65.2%, up 100 bps Q/Q and 60 bps Y/Y, and above guidance of 62.5%-63.5%. FQ4 GM guidance is at 63%-64%.
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Top-line performance: Product revenue rose 1% Y/Y to $8.9B. Services revenue (lifted by Cisco's efforts to drive a mix shift towards services) rose 11% to $3.1B. Americas revenue +4%, EMEA -2%, Asia-Pac +10%.
Switching product revenue -3% to $3.4B, routing -5% to $1.9B, collaboration +10% to $1.1B, data center (UCS server) +1% to $811M, wireless (Wi-Fi-driven) +1% to $615M, service provider video (excludes the divested set-top unit) +18% to $468M, security (lifted by both M&A and organic growth) +17% to $482M.
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Financials: Operating expenses rose 4% Y/Y to $4.2B (35.2% of revenue). $649M was spent to buy back 27M shares at an average price of $24.08. the deferred revenue balance (lifted by software subscriptions and service contracts) rose 8% to $15.3B. Cisco ended FQ3 with $63.5B in cash/investments ($6.3B in the U.S.) and $28.6B in debt.
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CSCO +5.2% after hours to $28.10. The 52-week high is $29.85.
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Cisco's results/guidance, earnings release