By Adam Levine

Cisco Systems beat third-quarter earnings expectations Wednesday afternoon. Its shares were rising in after-hours trading.

Adjusted earnings-per-share were strong at 96 cents versus Wall Street's consensus estimate of 92 cents, according to FactSet, and up from 88 cents last year. Revenue for the quarter reached $14.15 billion, above expectations of $14.05 billion, and up 11% on the year.

Guidance for the fourth quarter also beat Wall Street's consensus. The midpoint of its projected revenue is $14.6 billion, ahead of expectations for $14.5 billion. It would represent 7% growth on the year. Likewise, adjusted EPS guidance came above analyst estimates at 97 cents, up 11% from 2024.

Segment results were mixed. Revenue was boosted by strong results in Cisco's largest business, networking hardware, which makes up about half of sales. But analysts' eyes are on the network security segment, where Cisco is digesting its latest acquisition, Splunk. Sales were up a lot from the same quarter in 2024, most of which occurred before the deal closed, but came in at $2.01 billion versus analyst expectations of $2.17 billion.

Guidance for the fourth quarter also beat Wall Street's consensus. The midpoint of projected revenue is $14.6 billion, ahead of expectations of $14.5 billion, and up 7% on the year. Likewise, adjusted EPS guidance came above analyst estimates at 97 cents, up 11% from 2024.

Cisco stock was up 3.2% in late trading following the release.

This is breaking news. Read a preview of Cisco's earnings below and check back for more analysis soon.

Cisco Systems' earnings report Wednesday afternoon will give a investors a look into its efforts to diversify.

For the company's fiscal third quarter, analysts are expecting adjusted earnings of 92 cents a share, up 4% from last year, on revenue of $14.0 billion, up 11%.

Cisco was one of the biggest beneficiaries of the rise of networked systems and the internet, and its current networking portfolio spans from wi-fi base stations to high-speed switches in data centers. Network hardware still makes up over half its revenue.

Cisco has long been trying to diversify away from its core business. In addition to networking, it has WebEx collaboration tools, and network security, highlighted by its March 2024 acquisition of Splunk.

The new revenue from the Splunk acquisition will continue to make year-over-year comparisons tricky in the third quarter, but that effect will end in the current quarter. Cisco has been providing metrics on Splunk's effect on financials, and investors should expect the same on Wednesday.

Cisco stock was down around 1% in midday trading Wednesday ahead of its earnings announcement.

Write to Adam Levine at adam.levine@barrons.com

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May 14, 2025 16:36 ET (20:36 GMT)

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