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The company, which sells routers, switches, security services and software products, has been heavily investing in its cloud offerings to keep up with the pandemic-fueled surge in demand for its videoconferencing platform Webex, virtual private network and cybersecurity products.
“We’re seeing progress as we drive the continued shift to more software and subscription revenue delivering growth,” Chief Financial Officer Scott Herren told analysts.
The company, however, warned that pandemic-induced supply challenges, which have added to costs, would persist in the second half of its fiscal year.
Cisco (NASDAQ:CSCO) is reportedly making a $20 billion bid for Splunk (NASDAQ:SPLK) Inc, which makes software for searching and monitoring big data gathered from websites, applications and devices.
“(The buyback) perhaps signals that Splunk is not going to happen because if they’re giving $15 billion back, I would think they’re not going to spend $20 billion on a company,” said Scott Raynovich, principal analyst at Futuriom.
Executives on the call declined to comment to an analyst’s question on the deal and said the company was “constantly evaluating potential opportunities.”
Cisco forecast fiscal 2022 adjusted earnings between $3.41 and $3.46 per share, compared with prior projection of $3.38-$3.45. Revenue is expected to grow between 5.5% and 6.5% versus prior forecast of 5% to 7%.
Second-quarter revenue rose about 6% to $12.72 billion, above estimates of $12.65 billion, according to IBES data Refinitiv. On an adjusted basis, Cisco earned 84 cents per share, 3 cents above estimates.
