Cisco reported revenue of $14.7 billion for the first quarter of its fiscal 2024, up 8% year over year;.GAAP EPS was$0.89, up 37% year over year, and Non-GAAP EPS was $1.11, up 29% year over year.
The financial performance, which marked the strongest first quarter results in Cisco’s history in terms of revenue and profitability, however, was short of market expectations. In addition, the company noted “a slowdown of new product orders in the first quarter of fiscal 2024 and believes the primary reason is that customers are currently focused on installing and implementing products in their environments following exceptionally strong product delivery over the past three quarters. “
Cisco estimates there are one to two quarters of shipped product orders still waiting to be implemented by its customers.
“We had a solid start to fiscal 2024 with the strongest Q1 results in our history on both revenue and profitability,” said Chuck Robbins, chair and CEO of Cisco. “We are confident in the foundational strength of our business and future growth opportunities fueled by AI, Security, Cloud, and Observability.”
“In Q1, we delivered revenue and EPS at the high end or above our guidance range, generating strong operating leverage,” said Scott Herren, CFO of Cisco. “We also saw double-digit year-over-year growth in software revenue, product ARR and total RPO. After customers implement large amounts of recently shipped product, we expect to see product order growth rates accelerate in the second half of the year. We are committed to delivering operating leverage and increasing capital returns to our shareholders.”
Total revenue was $14.7 billion, up 8%, with product revenue up 9% and service revenue up 4%.
Revenue by geographic segment was: Americas up 14%, EMEA flat, and APJC was down 3%.
Product revenue performance reflected growth in Networking up 10%, Security up 4%, Observability up 21% and Collaboration up 3%.
Total software revenue up 13% year over year and software subscription revenue up 13% year over year
Total annualized recurring revenue (ARR) at $24.5 billion, up 5% year over year and product ARR up 10% year over year
Remaining performance obligations (RPO) at $34.8 billion, up 12% year over year and product RPO up 14% year over year
During the quarter, Cisco completed the acquisions of Accedian (network performance monitoring); Working Group Two (a cloud native mobile services platform); Oort (identity threat detection and response technology); SamKnows (broadband network monitoring company); Code BGP (border gateway protocol monitoring company).