Cisco Systems Q2 Earnings & Revenue Beat Estimates

Cisco Systems (CSCO - Free Report) delivered second-quarter fiscal 2019 non-GAAP earnings of 73 cents per share which beat the Zacks Consensus Estimate by a penny. Further, the figure rose 15.9% from the year-ago quarter.

Revenues increased 7% year over year (excluding SPVSS business) to $12.446 billion and marginally surpassed the Zacks Consensus Estimate of $12.401 billion. Acquisitions contributed 140 basis points (bps) to revenue growth in the reported quarter.

Strength witnessed in the company’s Security and Applications segments drove year-over-year growth. Order strength and improving traction of the subscription-based model were other tailwinds.

Notably, during the second quarter of fiscal 2019, the company completed the divestiture of its Service Provider Video Software Solutions (“SPVSS”) business.

Cisco Systems, Inc. Revenue (TTM)

Cisco Systems, Inc. Revenue (TTM) | Cisco Systems, Inc. Quote

Top-line Details

Products (74.5% of total revenues) advanced 9% to $9.27 billion.

Services (25.5%) increased 1% to $3.17 billion. This was driven by growth in software and solutions services.

Revenues from subscriptions represent 65% of the company’s software revenues, up 10 points year over year.

Deferred product revenues were $6 billion, down 23.1% from the year-ago quarter. Deferred service revenues were $11.2 billion, up 2.6% from the year-ago quarter.

Geographically, Americas, EMEA, and APJC reported revenue growth of 7%, 8% and 5% on a year-over-year basis, respectively. Total emerging markets grew 6% and the BRICs plus Mexico climbed 2%.

In terms of customer segments, enterprise increased 11%, while the service provider was down 1%. Further, commercial and public sector rose 7% and 18%, respectively.

Total product orders increased by 8%. Cisco has realigned Product segments into four distinct categories — infrastructure platform, applications, security, and other.

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