Corporate spending boosts performance! Cisco (CSCO.US) surpasses Q2 earnings expectations, raises full-year revenue guidance.

Global leader in networking equipment Cisco (CSCO.US) reported better-than-expected quarterly results and gave an upbeat outlook, helped by increased investment in computing infrastructure by enterprise customers to take advantage of artificial intelligence (AI) technology. Shares of Cisco rose more than 6% as of the close of trading Wednesday.

Cisco's second-quarter fiscal 2025 revenue rose 9% year over year to $14 billion, topping analysts' average estimate of $13.9 billion, marking the first year-over-year growth in the company's revenue in a year. Adjusted earnings per share were $0.94, topping analysts' average estimate of $0.91. Deferred revenue, a proxy for future sales, was $27.8 billion, up 8% year over year.

Cisco's switches and routers are key devices that direct data traffic in and out of networks and the internet. The company has also moved further into the software and services space, with its acquisition of data processing company Splunk last year accelerating the shift. Data showed that Cisco's product orders in the second quarter rose 29% year over year. The company said product orders grew 11% year over year, excluding the contribution from Splunk.

Chuck Robbins, Cisco's chief executive, has been working to transform Cisco into a provider of networking services and software and reduce its reliance on one-time high-margin sales of hardware. Cisco has made progress in this regard, with products such as cloud-hosted security and remote management tools contributing billions of dollars in recurring revenue.

Upgrades to network systems by enterprise customers to accommodate AI needs partially offset a decline in orders due to delays in U.S. government projects. "As AI becomes more prevalent, we're well positioned to help our customers expand their network infrastructure, increase data capacity and deploy top-tier AI security solutions," Robbins said.

Looking ahead, Cisco expects third-quarter revenue to be between $13.9 billion and $14.1 billion, which is at the low end of analysts' average estimate; it expects fiscal 2025 revenue to be $56 billion, up $1 billion from its previous estimate, slightly above analysts' average estimate of $55.97 billion. In addition, Cisco's board of directors also approved a new $15 billion stock buyback program, bringing the total stock buyback to $17 billion.