Cisco reported third-quarter revenue of $15.84 billion, beating analyst expectations of $15.56 billion, and the company's stock jumped 17% in extended trading Wednesday, according to CNBC.
Net income rose to $3.37 billion, or 85 cents per share, compared to $2.49 billion, or 62 cents per share, a year earlier. Adjusted earnings per share came in at $1.06, above the $1.04 consensus estimate from LSEG. Revenue was up 12% from $14.15 billion in the same quarter a year ago.
The results that drew the most attention from investors came from Cisco's AI infrastructure business. The company said it has received $5.3 billion in artificial intelligence infrastructure and hyperscaler orders so far this fiscal year, and raised its full-year order projection to $9 billion, up from a prior estimate of $5 billion. Cisco also raised its fiscal-year revenue expectation in that market to $4 billion, up from $3 billion.
For the fiscal fourth quarter, Cisco projected adjusted earnings per share of $1.16 to $1.18 on revenue of $16.7 billion to $16.9 billion. Analysts had been expecting $1.07 in adjusted earnings per share on $15.82 billion in revenue.
Networking revenue, Cisco's largest segment, increased 25% to $8.82 billion, exceeding the $8.47 billion consensus estimate among analysts polled by StreetAccount. Security revenue was essentially flat at about $2 billion.
If the after-hours gains hold through Thursday, it would mark Cisco's sharpest single-day rally since 2002. Cisco shares had already gained 33% this year before Wednesday's report, outpacing the Nasdaq's 14% advance. The stock hit a record late last year, finally surpassing its dot-com era high.
Alongside the earnings report, CEO Chuck Robbins said the company would cut fewer than 4,000 jobs, representing less than 5% of total employees, with the cuts beginning May 14. Cisco said in a filing that severance and other related costs will result in pre-tax charges of $1 billion, with about $450 million recognized in the fiscal fourth quarter.
"The companies that will win in the AI era will be those with focus, urgency, and the discipline to continuously shift investment toward the areas where demand and long-term value creation are strongest," Robbins said in a blog post Wednesday. "I'm confident Cisco will be one of those winners. This means making hard decisions — about where we invest, how we're organized, and how our cost structure reflects the opportunity in front of us."
During the quarter, Cisco also announced switches and routers using its next-generation processor and debuted a leaderboard for ranking generative AI models based on their robustness against cybersecurity attacks.
