Cisco's R&D expenses did not spike in Q2 2025, as the data for these expenses in this quarter is not available1. However, Cisco's R&D expenses have been increasing due to several factors2:
- Inclusion of Splunk: The acquisition of Splunk has significantly contributed to the increase in R&D expenses. Splunk's products, such as software and subscription revenues, have risen by 33% and 23%, respectively. The company's observability product has seen a 47% increase in revenue, and security product revenue has grown by 117%.
- AI Infrastructure Orders: The surge in AI infrastructure orders, which exceeded $350 million, has led to a total of approximately $700 million in orders for the first half of FY 2025. This growth in AI-related orders has likely led to increased R&D expenses as Cisco develops new products and technologies to support AI adoption.
- Product Innovation: Cisco's focus on innovation, particularly in integrating security into networks at ASIC speed, has led to increased R&D expenses. The company has highlighted Hypershield, a platform for secure hardware-based networking, as a key innovation3.
In conclusion, Cisco's R&D expenses have spiked due to the inclusion of Splunk, AI infrastructure orders, and product innovation. These factors have driven the company's investment in new products and technologies, leading to a increase in R&D expenses.
3/29/2025 12:20am
