Cisco has reported flat sales growth for the second quarter, reaching the same $12bn in revenue as last year for the three months ended 23 January. Net income also slumped 12% annually to $2.5bn from $2.9bn.
On the sales front, the company expects to return to growth in the third quarter, predicting between 3.5% and 5.5% in extra sales annually - but helped by an extra week of trading in the quarter. “We are seeing encouraging signs of strength across our business showing how our technology will be a powerful engine for recovery and growth,” claimed Chuck Robbins (pictured), chairman and CEO of Cisco. “Our team delivered a strong performance as we partnered with customers on accelerating their digital transformation and driving secure, remote work.”
Scott Herren, CFO of Cisco, added: “We executed well in Q2, delivering growth in orders and strong margins, while continuing to grow deferred revenue in double-digits through the shift to more software and subscriptions.”
As a whole, total product revenue was down 1% and service revenue rose 2%. Americas turnover was down 1%, EMEA was up 2% and APJC slumped 4%.
Product revenue was led by growth in Security, up 10%. Infrastructure Platforms was down 3% and Applications was flat. Operating expenses were $4.6bn, up 4% and 38.1% of revenue. Operating income was $3.2bn - down 5%. In the second quarter Cisco closed the acquisition of Portshift, a privately held application security solutions company, and the acquisition of assets and the team of Banzai Cloud, a company that specialises in deploying cloud-native applications.
It also announced its intent to acquire IMImobile PLC, a UK cloud communications software and services company. The acquisition is expected to close during the third quarter.
