Cisco Systems delivered strong fiscal third-quarter results that exceeded Wall Street expectations, showcasing the tech giant’s successful pivot toward artificial intelligence and security solutions in a challenging economic environment.

Listen to our chat about how Cisco smashed earnings expectations:

The networking equipment maker reported revenue of $14.15 billion for the quarter ended April 2025, representing an 11.4% increase compared to the same period last year. This performance surpassed analyst estimates of $10.16 billion by a significant margin.

Profit metrics were equally impressive, with non-GAAP net income reaching $3.8 billion, an 8% year-over-year increase. Earnings per share hit $0.96, a 9% improvement that beat the consensus estimate of $0.92.

“Our strong performance reflects the successful execution of our strategic initiatives and the growing demand for our AI-enabled networking solutions,” said Chuck Robbins, Cisco’s Chairman and CEO, in a statement released by the company. “We’re seeing particularly robust growth in our security portfolio and data center business as customers accelerate their digital transformation and AI deployment journeys.”

The company’s security segment was a standout performer, with revenue growing by 18% year-over-year, driven by increased demand for integrated security solutions amid rising cybersecurity threats. The data center business saw even more dramatic growth at 22%, fueled by enterprises upgrading their infrastructure to support AI workloads.

Following the earnings announcement, Cisco raised its full-year outlook, now projecting revenue growth between 10% and 12% for fiscal 2025, up from its previous forecast of 7% to 9%. The company also boosted its annual earnings guidance, citing continued momentum in its high-growth segments.

The positive results triggered a 4.7% rise in Cisco’s stock price in after-hours trading, according to Silicon Angle, extending gains from earlier in the day.

Industry analysts view Cisco’s performance as validation of its strategic shift toward software and subscription-based services. “Cisco has successfully transformed from a hardware-centric company to one that generates substantial recurring revenue from software and services,” noted Keith Bachman, an analyst at BMO Capital Markets, as reported by The Wall Street Journal.

In a notable leadership change announced during the earnings call, Cisco revealed a CFO transition plan. Current CFO Scott Herren will be stepping down later this year, with Prat Patel, currently Executive Vice President of Strategy and Incubation, set to assume the role. This leadership shift comes at a pivotal time as the company continues to navigate its ongoing business transformation.

“We’re positioning Cisco for the next phase of growth by strengthening our executive team while maintaining continuity in our strategic direction,” Robbins explained during the call, as reported by CRN.

The company’s performance reflects broader trends in the technology sector, where companies focused on AI infrastructure and cybersecurity have demonstrated resilience despite economic uncertainties. Cisco’s ability to capitalize on these trends through both organic growth and strategic acquisitions has resonated with investors.

Looking ahead, Cisco’s management emphasized continued investments in AI capabilities, cloud-based networking solutions, and expanding its security portfolio. The company also highlighted progress in its sustainability initiatives, including reduced carbon emissions from its operations and supply chain.

With its strong quarterly performance and raised guidance, Cisco appears well-positioned to capitalize on the growing demand for intelligent networking solutions in an increasingly digital and AI-driven business landscape.