Cisco Security, WebEx see ‘record-breaking’ growth

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Cisco Security, WebEx see ‘record-breaking’ growth

For the first time since the start of the COVID-19 pandemic, Cisco Systems saw growth across all its businesses, including its Infrastructure segment, which bounced back as enterprises prioritized return to office transformations and hybrid work.

Cisco now has one of the largest software businesses in the industry with an annual run rate of north of US$14 billion in software revenue, said Cisco Chairman and CEO Chuck Robbins.

During Q3 2021, which ended May 1, the tech giant achieved US$3.8 billion in software revenue. Software subscriptions accounted for 81 percent of its total software revenue, up sequentially from Q2 2021’s result of 76 percent, as interest in subscription-based solutions grow, the company said.

In fact, Cisco saw a 10 percent uptick in product orders during the third quarter, the highest since Q1 2021 Robbins told investors during the company’s Q3 2021 earnings call on Wednesday.

“We remain focused on accelerating innovation while simplifying the adoption of our offerings, with network-wide automation, analytics, and flexible, as a service consumption models, all aimed at improving customers’ network performance capabilities, and security, which we believe will drive tremendous long-term opportunities for us,” Robbins said.

Cisco security, a bright spot in the tech giant’s financials throughout the pandemic, continued to see impressive fiscal results with “record-breaking” 13 percent growth during the third quarter of 2021 to US$876 million. The segment was led by strength in the company’s Duo and Umbrella offerings, said R. Scott Herren, Cisco’s CFO.

The company’s applications business segment, which includes AppDynamics and Cisco’s videoconferencing and collaboration portfolio, increased 5 percent year over year to US$1.42 billion in revenue in the third quarter of the year; a record-breaking quarter for the Applications segment, which was driven by double-digit Webex growth, Robbins said. Cisco has rolled out more than 400 Webex innovations and features since September aimed at boosting meeting productivity, regardless of the end users’ location.

Cisco’s Infrastructure segment, which includes the core switching and routing businesses as well as wireless and data center products, saw the most impact from COVID-19 as router and server revenue declines pulled the segment down for the last several quarters. The Infrastructure segment, however, rebounded during the third fiscal quarter with revenues of US$6.83 billion, up 6 percent compared to last year’s result of US$6.43 billion in Q3 2020. The segment’s growth was driven by service provider, cloud customers and double-digit growth for return to office products, such as Wi-Fi 6 and Cat 9k, Herren said.

The company announced plans to acquire Socio Labs, an events technology startup based in Indiana to bolster Cisco Webex Events to include large-scale, multi-session hybrid events and conferences. The company one day prior also revealed plans to buy Sedonasys Systems, also known as Sedona Systems, for its NetFusion platform, its Hierarchical Controller (HCO) for optimizing, simplifying and automating network control.

Despite growth across the business, Cisco, like many other companies, noted that it has been plagued with supply chain challenges due to the global chip shortage, which will most likely be with the company until the end of the year, Herren said. “While we do have supply chain headwinds, we do have some nice tailwinds coming in,” he said, referring to the company’s strength in security and software during the quarter and heading into Q4 2021.

Cisco closed three deals during the third fiscal quarter, including its acquisition of contact center as a service provider IMImobile, its Acacia Communications purchase, and its Dashbase acquisition.

Cisco earlier this month also announced that it closed its acquisition of audience interaction technology specialist Slido, a purchase that will give Webex the ability to measure enthusiasm and let users and meeting host receive immediate feedback, understand audience sentiment, and engage more with fellow meeting participants in real-time.

For the fiscal third quarter of 2021, Cisco’s revenue increased 7 percent to US$12.88 billion compared to the year-ago quarter. Cisco posted non-GAAP earnings per share of 83 cents, up 5 percent year over year, and net income of US$3.5 billion in Q3 2021, an increase of 4 percent compared to Q3 2020. Cisco’s services revenue rose 8 percent and product revenue climbed 6 percent year over year.

Cisco topped Wall Street’s revenue expectations of US$12.57 billion for the quarter.

Despite the positive earnings news, Cisco’s stock declined 5.62 percent in after-hours trading on Wednesday evening.

This article originally appeared at crn.com

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