Cisco Exceeds Q3 Fiscal 2025 Expectations with Record-Breaking AI Orders and Strong Revenue Growth
On May 14th, Cisco reported its third-quarter fiscal year 2025 financial results, exceeding expectations in several key areas. The company's strong performance was driven by accelerated product innovation and solid execution by its teams, resulting in sustained demand for its technologies.
Total product orders grew 20% year-over-year or 9% on an organic basis, excluding Splunk, demonstrating the valuable outcomes Cisco is delivering for customers in the era of AI. This growth was driven by double-digit increases in enterprise and web-scale infrastructure orders, with three of the top six web scalers experiencing triple-digit growth.
In particular, the company's AI-powered cloud-managed Meraki solution for government networking achieved FedRAMP authorization from the U.S. government, further solidifying its position as a trusted technology partner to governments worldwide.
Cisco's overall revenue grew above the high end of its guidance ranges, with strong margins and earnings per share also exceeding expectations. The company generated solid growth in annualized recurring revenue, remaining performance obligations, and subscription revenue, all supporting its future performance.
One of the most notable highlights from the quarter was Cisco's record-breaking AI infrastructure orders, which exceeded $600 million in Q3 alone and pushed the year-to-date total to over $1 billion. This achievement surpassed the company's original fiscal year '25 AI order target by a full quarter early.
The performance of Cisco's core business continues to produce strong cash flows, underpinning its commitment to deliver consistent capital returns. In Q3, the company returned $3.1 billion in capital to its shareholders through share repurchases and dividends, with a total of $9.6 billion in value returned year-to-date.
Cisco's Chief Executive Officer, Chuck Robbins, attributed the company's strong performance to its teams' accelerated product innovation and solid execution. Despite an uncertain macro environment, this demonstrates the valuable outcomes Cisco is delivering for customers in the era of AI.
The company also received praise from Gartner, which recently ranked Cisco as a market leader in the Magic Quadrant for data center switching. This testament to its ability to address the full range of data center switching use cases and simplify operations while enhancing security.
