Cisco Systems-Here's What Key Metrics Tell Us About Cisco (CSCO) Q3 Earnings

Core Insights - Cisco Systems reported revenue of $14.15 billion for the quarter ended April 2025, reflecting an 11.4% increase year-over-year and a surprise of +0.65% over the Zacks Consensus Estimate of$ 14.06 billion [1] - The earnings per share (EPS) was $0.96, up from$ 0.88 in the same quarter last year, with a surprise of +5.49% compared to the consensus estimate of $0.91 [1] Revenue Breakdown - Product revenue reached$ 10.37 billion, exceeding the six-analyst average estimate of $10.08 billion, marking a year-over-year increase of +15% [4] - Service revenue was reported at$ 3.78 billion, slightly below the $3.82 billion average estimate, with a year-over-year change of +2.6% [4] - Security product revenue was$ 2.01 billion, lower than the estimated $2.21 billion, but showed a significant year-over-year increase of +54.4% [4] - Observability product revenue was$ 261 million, compared to the average estimate of $276.09 million [4] - Networking product revenue was$ 7.07 billion, surpassing the estimated $6.76 billion, with a year-over-year increase of +8.4% [4] - Collaboration product revenue was$ 1.03 billion, exceeding the five-analyst average estimate of $1 billion, representing a year-over-year change of +4.5% [4] Gross Margin Performance - Non-GAAP gross margin for services was$ 2.69 billion, slightly below the estimated $2.72 billion [4] - Non-GAAP gross margin for products was$ 7.01 billion, exceeding the estimated $6.66 billion [4] Stock Performance - Cisco shares have returned +8% over the past month, compared to the Zacks S&P 500 composite's +9.9% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]