Cisco kicked off its 2023 fiscal year with record quarterly revenues from its traditional business units that came in ahead of expectations, which along with a robust full-year forecast pushed the vendor’s stock higher in after-hours trading.

The networking and growing software giant reported $13.6 billion in product and service revenues for its first fiscal quarter of 2023. That was a 6% increase compared with the same quarter last year, and a 4% increase sequentially.

Product revenues surged 8% year over year, while service revenues were flat. Product revenues were driven by Cisco’s Secure, Agile Networks division, which includes its core networking, switching, enterprise routing, wireless, and compute products; its End-to-End Security division that includes its security offerings; and its Optimized Application Experience division, which includes its ThousandEyes and Intersight business.

Cisco’s Internet for the Future division, which includes its routed optical networking, public 5G, silicon, and optics businesses; and its Collaboration unit posted year-over-year revenue declines.

Expenses increased a more modest 4% year over year, which helped boost operating income by 3% for the latest quarter. However, a drop in “other” income and “interest” was enough to sink overall net income by 10% to $2.7 billion for the quarter.

Despite broader macroeconomic concerns, Cisco’s management expects full-year revenues to increase between 4.5% and 6.5% for the full fiscal year. That would outkick the 4% increase it posted in the fiscal year 2022.

CFO Scott Herren cited Cisco’s growing annualized recurring revenue stream tied to its software subscription services, “significant backlog, strong [remaining performance obligations], and easing supply situation” as reasons for its robust outlook.

Cisco’s management had been hedging their bets on future performance, noting supply chain concerns were clouding its forecasts. The vendor had been tapping into the volatile broker market to source some of its supplies, which had been driving up costs.

The vendor’s strong quarterly revenue growth and robust forecast were enough for investors, who sent Cisco’s stock up more than 3% in early after-hours trading.

Check back later for a deeper dive into Cisco’s latest earnings.