Cisco Systems is capitalizing on the artificial intelligence boom, with the networking equipment giant reporting significant growth in AI infrastructure orders that have prompted it to raise its financial outlook for fiscal 2025.
In its third-quarter earnings report released on May 14, Cisco revealed it received AI infrastructure orders worth over $600 million from web-scale customers in the quarter, bringing its year-to-date total to more than $1 billion. This strong performance has enabled the company to surpass its fiscal year target for AI infrastructure orders ahead of schedule.
"Cisco has improved its position in the market for switches targeted at cloud data centers," said David Heger, technology analyst at Edward Jones. The company's products, including ethernet switches and routers, have benefited from increased data center investments as technology giants ramp up capital expenditure to support the computing power needed for generative AI applications.
The company now expects revenue between $56.5 billion and $56.7 billion for fiscal 2025, up from its previous forecast of $56 billion to $56.5 billion. Cisco also raised its adjusted earnings per share guidance to between $3.77 and $3.79, compared to its earlier projection of $3.68 to $3.74 per share.
In a significant leadership change, Cisco announced that Chief Financial Officer Scott Herren will retire in July after guiding the company through recent financial growth. Mark Patterson, who currently serves as Cisco's chief strategy officer, will take over as CFO on July 27. Patterson is a 23-year Cisco veteran who previously led corporate planning and cross-company initiatives as CEO Chuck Robbins' chief of staff.
The company's third-quarter revenue came in at $14.15 billion, exceeding analyst estimates of $14.08 billion, while its shares rose 2% in extended trading following the announcement. Looking ahead to the fourth quarter, Cisco projects revenue between $14.5 billion and $14.7 billion, maintaining its momentum in the growing AI infrastructure market.