Cisco Systems 2025 Q3 Earnings Strong Performance as Net Income Rises 32.1%

Cisco Systems (CSCO), ranking 40th by market capitalization, reported its fiscal 2025 Q3 earnings on May 14th, 2025. Cisco's results exceeded expectations, with revenue and earnings both surpassing analyst predictions. The company raised its guidance for the full fiscal year, signaling confidence in continued growth fueled by AI infrastructure demand. Cisco's strategic emphasis on innovation and partnerships positions it favorably for future opportunities, despite macroeconomic challenges.

Revenue
The total revenue of Cisco Systems increased by 11.4% to $14.15 billion in 2025 Q3, up from $12.70 billion in 2024 Q3.

Earnings/Net Income
Cisco Systems's EPS rose 34.0% to $0.63 in 2025 Q3 from $0.47 in 2024 Q3, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $2.49 billion in 2025 Q3, marking 32.1% growth from $1.89 billion in 2024 Q3. The EPS growth indicates robust financial health.

Price Action
The stock price of Cisco Systems has edged down 0.55% during the latest trading day, has edged up 2.89% during the most recent full trading week, and has climbed 6.91% month-to-date.

Post-Earnings Price Action Review
The strategy of buying CSCO when revenue beats and holding for 30 days yielded a 45.28% return, underperforming the benchmark by 41.85%. Despite the potential gains, the strategy exhibited a high risk profile with a maximum drawdown of -39.07% and a Sharpe ratio of 0.33. This indicates moderate returns could be overshadowed by significant losses. The approach suggests that while Cisco's financial performance offers opportunities, the volatility and associated risks require careful consideration by investors.

CEO Commentary
Chuck Robbins, Chair and Chief Executive Officer, remarked on Cisco's strong Q3 performance, highlighting revenue, margins, and earnings per share exceeding guidance. He noted, "Total product orders grew 20% year-over-year," driven by demand for AI infrastructure, particularly from web-scale customers. Robbins emphasized a commitment to continuous innovation and the importance of strategic partnerships, stating, "We are well-positioned to help connect and protect these capital-intensive investments." He expressed optimism about future opportunities in AI, asserting, "The AI opportunity for us, we believe, is a strong one," while also acknowledging the ongoing challenges in the macro environment.

Guidance
For fiscal Q4, Cisco expects revenue in the range of $14.5 billion to $14.7 billion and anticipates non-GAAP earnings per share between $0.96 and $0.98. For the full fiscal year 2025, the company guides revenue to be between $56.5 billion and $56.7 billion, with non-GAAP earnings per share projected to range from $3.77 to $3.79.

Additional News
Cisco Systems has been actively involved in strengthening its partnerships in AI infrastructure and expanding its technological capabilities. Recently, the company announced a collaboration with US Santa Barbara to develop a quantum chip designed to scale quantum networks, which could accelerate quantum computing applications significantly. Additionally, Cisco's AI infrastructure orders have seen impressive growth, with over $350 million in orders during the second quarter, reflecting strong market demand. The company's strategic moves in AI and quantum computing underline its commitment to innovation and maintaining a competitive edge in the technology sector.