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Cisco reported strong growth in Q3 FY25, with revenues of $14.1bn, an 11% increase yoy. Product revenue rose 15% to $10.4bn, while services revenue was up just 3% to $3.8bn. It has now been over a year since the acquisition of security and observability platform Splunk, with integration now largely complete and synergies between the two business already bearing fruit.
Breaking down the product categories, Cisco’s networking division posted 8% growth, fuelled by strong demand in switching and enterprise routing, though offset by a decline in servers. The security segment was a standout performer, up 54% yoy, largely due to contributions from Splunk and secure access service edge (SASE) solutions. Cisco is no longer splitting out the impact of last year’s Splunk acquisition on growth as the two businesses are increasingly integrated, but as per previous quarters it likely formed the bulk of the increase. Cisco also highlighted Splunk’s largest ever deal, a multiyear security deal with a major financial services firm. Collaboration grew 4%, while observability, supported by Splunk, rose 24%.
Customer demand remained strong across segments and geographies. Enterprise orders rose 22%, public sector by 8%, and service provider/cloud by 32%, driven by triple-digit growth from top web-scale customers. Orders in the Americas led with 27% growth, followed by APJC at 21% and EMEA at 4%.
AI remains a central theme, with Cisco securing over $600m in AI infrastructure orders during Q3 from web-scale customers, taking year-to-date orders to over $1bn, exceeding its full-year target a quarter early. Cisco also announced a Secure AI Factory in partnership with NVIDIA. The company is seeking to position itself as a core provider for emerging sovereign AI cloud environments.
In a nod to future technologies, Cisco revealed its Quantum Network Entanglement Chip last week, a prototype that could accelerate real-world quantum networking. This breakthrough is expected to drive innovation in fields like supply chain optimisation and drug discovery. The company also closed its acquisition of SnapAttack during Q3, enhancing its security capabilities alongside Splunk and helping to power the security operations centre of the future.
Lastly, Cisco announced changes to its leadership team, long-serving CFO Scott Herren will retire at the end of FY25. He will be succeeded by Mark Patterson, currently Chief Strategy Officer, who brings nearly 25 years of experience at Cisco spanning finance, operations and sales roles.
Posted by: Simon Baxter at 09:37
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