Cisco Reports 2nd Consecutive Revenue Growth as AI, Global Partnerships Boost Demand

The gains are part of a significant turnaround in the company’s revenue performance after four straight quarters of declines.

The logo of U.S. networks giant Cisco Systems in front of their headquarters in Issy-les-Moulineaux near Paris on Aug. 6, 2022. Sarah Meyssonnier/Reuters

Cisco Systems’ revenue turnaround continued for a second consecutive quarter, as artificial intelligence and global partnerships boosted demand for its technology products. The company’s shares rallied in after-hours trading.

After the closing bell on May 14, the San Jose, California-based network products pioneer reported revenues of $14.1 billion for the third quarter of its fiscal year 2025, ending on April 26.

That amounts to an 11 percent increase from the same period in fiscal year 2024, surpassing the company’s earlier guidance and exceeding the 9 percent year-over-year growth reported in the second quarter.

The two consecutive quarters of growth represent a significant rebound in the company’s revenue performance, following four straight quarters of declines. The turnaround was driven by strong demand across all geographies and product lines, with AI infrastructure orders from webscale customers exceeding $600 million, surpassing the $1 billion target set just one quarter earlier.

The industrial Internet of Things portfolio, which includes ruggedized Catalyst products, grew 35 percent year over year, while data center switching orders rose by double digits.

Earnings per share were $0.62, up by 35 percent from a year earlier and above the company’s previous guidance.

“Cisco once again had strong quarterly results with clear demand for our technologies,” CEO Chuck Robbins said in a statement. “The momentum we are seeing with AI is fueled by the power of our secure networking portfolio, our trusted global partnerships, and the value we bring to our customers.”

To capitalize on the opportunities AI creates for its core businesses, Cisco Systems has been forging partnerships worldwide, including one announced this week with Saudi Arabia, to help build the world’s most open, scalable, resilient, and cost-efficient AI infrastructure.

In March, Cisco announced a collaboration with Nvidia that broke new ground in AI infrastructure and security, while accelerating and simplifying enterprise AI adoption. Together, the two companies are developing a Cisco Secure Factory that will simplify the deployment, management, and security of AI enterprise infrastructure at any scale.

In addition, Cisco has joined the AI infrastructure partnership alongside BlackRock Global Infrastructure Partners, MGX, Microsoft, NVIDIA, XAI, and Energy Partners GE Vernova and Nextera Energy, which supports AI workloads.

Building partnerships to foster growth is a radical departure from the old glory days when Cisco grew its revenues through acquisitions. From 1993 to 2000, the networking hardware company acquired 70 companies, including Crescendo Communications (1993), Newport Systems Solutions (1994), Network Translation (1995), Netsys Technologies (1996), Net Speed (1998), and Growth Networks (1999).

However, this growth strategy wasn’t sustainable, as Cisco overpaid for these young companies, mostly by issuing new shares that were dilutive to existing stockholders. That’s how Cisco ended up with 4 billion shares and has yet to get back to its peak performance on Wall Street.

Still, Robbins believes AI will pave the way for better days ahead.

“As we look ahead, I think the AI opportunity for us, we believe, is strong,” he said during the earnings conference call. “We think we’re well-positioned. We believe that because we—from a technology and a portfolio perspective—play across the whole stack. We have networking, we have security. We have Silicon, which I think are all very important. We have secure AI solutions that we’re delivering in the marketplace.”