Cisco has published his results for the second quarter of its fiscal year 2022, characterized by exceeding, albeit narrowly, expectations in terms of revenue and earnings per share. So the company entered 12,700 million dollars (6% more) compared to the expected 12,650 million dollars. It is 6% more than the income in the same period of its fiscal year 2021. In addition, the company earned $0.84 per share during the period, compared to the expected $0.81.
These figures are mainly due to a strong increase in sales and orders for the company’s products, as well as a fairly extensive backlog of orders. In total, the increase in orders during the quarter was 33% year-on-year, making the reported quarter the third in a row with an increase in orders equal to or greater than 30%. Business orders were up 37%. Cisco had in the period the record of accumulated periods in its history: 14,000 million dollars, a figure that represents a 150% year-on-year increase. Within this amount, software backlogs almost doubled, to over $2 billion.
Revenue from one product has increased by 9%. The divisions that grew the most in this regard were Internet for the Future (42%), Optimized Application Experiences (12), End-to-End Security (7%) and Agile Networks (7%). As for the falls in income, that of the Hybrid Work area has been 9%.
Cisco’s annualized recurring revenue for the quarter was $21.9 billion, an improvement of 11% year over year, reflecting Cisco’s transformation to a software and subscription-based business. Thus, software revenues in the quarter were 3,800 million dollars, of which 80%, 4% more, corresponded to subscriptions. Cisco subscription revenue in the reporting period totaled $5.5 billion, 44% of the company’s total quarterly revenue.
As for the company’s forecasts for the current quarter, Cisco expects revenue growth of between 3% and 5% year-on-year, and a rise in its shares of between 0.85 and 0.87 dollars. For Cisco’s fiscal year 2022, its managers expect revenue growth compared to its fiscal year 2021 of between 5.5% and 6.5%, with its shares rising between 3.41 and 3 .46 dollars.
The Cisco CEO Chuck Robbinshas indicated that the company continues «with very strong demand across its portfolio, underscoring how critical and relevant Cisco innovation is. Our strength in orders, record backlogs and double-digit growth in annual recurring revenue positions us well to deliver growth. Our very strong demand continues to outstrip supply, expanding our backlog of products, software and services. Our supply chain team continues to take aggressive action through strong inventory positions, deepening supplier relationships, qualifying alternative components, and increased use of improved transportation. There are still significant difficulties with semiconductors, which are holding us back from completing manufacturing of some of our products, which continues to be an obstacle to revenue growth despite very strong demand«.
