Cisco Systems, Inc.

Strong Financial Performance: Cisco reported Q2 fiscal year 2025 total revenue of $14 billion, a 9% increase year-over-year. Non-GAAP earnings per share were $0.94, which exceeded the high end of guidance. Product revenue reached $10.2 billion, up 11%, driven primarily by growth in recurring revenue metrics: total Annual Recurring Revenue (ARR) ended at $30.1 billion, growing 22% year-over-year.

AI Infrastructure Growth: Cisco generated approximately $700 million in AI infrastructure orders year-to-date, with a robust pipeline expected to exceed $1 billion by the end of fiscal year 2025. Orders from webscale customers surged, with three of the top six growing over 100% year-over-year. This signals a significant opportunity for Cisco as enterprises prepare for AI deployments.

Challenges with Federal Segment: Cisco's exposure to the U.S. federal market is less than 10% of total business, with 75% coming from Defense Department contracts. Recent initiatives like the DOGE have created some uncertainty; however, the overall demand in the federal sector remains stable with no material changes expected for Q3 and Q4.