Cisco’s second quarter was shaped by strong demand for AI infrastructure and a refreshed networking product lineup, driving solid revenue and margin results. Despite meeting Wall Street’s expectations on key metrics, a modestly negative market reaction followed. Management attributed the performance to growth in webscale and enterprise orders, alongside continued adoption of advanced security products. CEO Charles Robbins noted, “We are innovating faster than ever before, making AI foundational in our designs and fusing security deep into our networking products.” The company also highlighted sequential improvements in order growth across most geographies, though softness persisted in public sector demand.
Is now the time to buy CSCO? Find out in our full research report (it’s free).
Cisco (CSCO) Q2 CY2025 Highlights:
- Revenue: $14.67 billion vs analyst estimates of $14.64 billion (7.6% year-on-year growth, in line)
- Adjusted EPS: $0.99 vs analyst estimates of $0.98 (1.3% beat)
- Adjusted EBITDA: $5.66 billion vs analyst estimates of $5.51 billion (38.6% margin, 2.7% beat)
- Revenue Guidance for Q3 CY2025 is $14.75 billion at the midpoint, above analyst estimates of $14.63 billion
- Adjusted EPS guidance for the upcoming financial year 2026 is $4.03 at the midpoint, in line with analyst estimates
- Operating Margin: 23.5%, up from 19.2% in the same quarter last year
- Annual Recurring Revenue: $31.1 billion vs analyst estimates of $31.64 billion (5.2% year-on-year growth, 1.7% miss)
- Billings: $15.45 billion at quarter end, up 5.5% year on year
- Market Capitalization: $264.4 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Cisco’s Q2 Earnings Call
-
Aaron Rakers (Wells Fargo) pressed on the apparent revenue growth deceleration implied in guidance; CEO Charles Robbins clarified it was due to year-over-year comparisons, not deteriorating demand.
-
Meta Marshall (Morgan Stanley) asked about security growth and new CFO priorities; Robbins highlighted accelerating adoption of new security products, while CFO Mark Patterson emphasized a focus on profitable growth and funding for success.
-
Simon Leopold (Raymond James) questioned the risk of order pull-forwards tied to tariff concerns; Patterson and Robbins both noted no evidence of pervasive early ordering and detailed metrics tracked to monitor such behavior.
-
Amit Daryanani (Evercore ISI) probed the enterprise AI opportunity and timing; Robbins described a ramping pipeline and anticipated broader deployments as pilots convert in the second half of the year.
-
Tal Liani (Bank of America) inquired about services revenue trends and sustainability of cloud and networking growth; Patterson expects services to improve alongside product momentum, and Robbins remains confident in ongoing AI-driven demand.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be closely monitoring (1) the conversion of enterprise AI pilots into full-scale deployments and their impact on order growth, (2) the pace of adoption for Cisco’s new networking and security products—particularly within the large installed base, and (3) signs of stabilization or improvement in public sector and services revenue. Execution on partnerships and the ability to manage external risks such as tariffs will also be important signposts.
Cisco currently trades at $66.85, down from $70.28 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
Our Favorite Stocks Right Now
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
