Preliminary 4FQ21 Results: In-line Revenue and a Penny EPS Beat; Full-Year 2022 Revenue Guidance Above Consensus While EPS is In-Line



KEY POINTS
  • Cisco’s 4FQ21 revenue of $13 billion, in-line with consensus, is up 8% YoY. Non-GAAP EPS of $0.84 beat consensus of $0.83 by a penny. The mix in the quarter helped gross margin come in above the company’s expectations. The company saw double-digit order growth across all markets and geographies.
  • CEO Chuck Robbins highlighted enterprises moving back to the office while Cisco itself saw 53% of revenue from software and services in F21. Robbins also noted that Cisco saw 4FQ21 experience the “highest product order growth in over a decade,” up 31% YoY.
  • Supply chain issues continued, with strong demand, similar to that experienced by nearly all communications equipment companies. The company raised prices on selected products that were impacted by component costs. Cisco sees supply chain issues continuing through the rest of C21 and possibly into C22.
  • The higher percentage of revenue from software and services is helping Cisco with visibility, particularly in a tough supply environment, allowing the company to give full-year guidance. Guidance for 1FQ22 for $12.8‑13.1 billion in revenue is slightly above consensus of $12.8 billion at the mid-point. Non-GAAP EPS guidance is $0.79‑0.81, slightly below consensus of $0.81 at the mid‑point.
  • The stock is trading at a forward P/S of 4.3x, near its two-year high P/S of 4.5x in July. On PE the stock is trading just below its two-year high at 15.1x. The stock traded down slightly, down 1.6%, in the aftermarket.
  • Cisco is planning a virtual investor day on September 15, 2021. Read our initiation and other reports on Cisco on our website.
COMPANY OVERVIEW

Headquartered in San Jose, Cisco Systems is the world's largest hardware and software supplier within the networking solutions sector and is a bellwether for the industry. The infrastructure platforms group (55% of sales) includes hardware and software products for switching, routing, data center, and wireless applications. Its applications portfolio (11%) contains collaboration, analytics, and Internet of Things products. The security segment (6%) contains Cisco's firewall and software-defined security products. Services (27%) are Cisco's technical support and advanced services offerings. The company’s array of hardware is complemented with solutions for software-defined networking, analytics, and intent-based networking. Cisco's is looking to increase subscriptions and recurring sales.

Cisco’s 4FQ21 revenue of $13 billion, in-line with consensus, is up 8% YoY. Non-GAAP EPS of $0.84 beat consensus of $0.83 by a penny. The mix in the quarter helped gross margin come in above the company’s expectations. The company saw double-digit order growth across all markets and geographies.

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