Cisco reported strong revenues for its fiscal first quarter 2019, which ended October 27, 2018. The company reported first quarter revenue of $13.1 billion, up 8 percent from the same quarter the previous year. And it reported non-GAAP net income of $3.5 billion, or $0.75 per share, up 23 percent year over year.
The company also saw total product orders grow 8 percent during the quarter. And that growth was across all its geographies. In addition, all its customer segments grew: enterprise was up 15 percent, commercial grew 8 percent, public sector was up 8 percent, and service provider grew 2 percent.
Although its business grew in all geographies, Cisco CEO Chuck Robbins said the company had “incredible strength in India,” according to a Seeking Alpha transcript. “It was our second quarter of 50 percent-plus growth in India. So we have really done a great job there, and it’s not just the large service providers. We had a large public sector deal this quarter.”
As far as service provider deals, Cisco announced early last year that it had won a deal with Reliance Jio to help build its all-IP network in India. And Reliance Jio’s network build is huge. In March, Ayush Sharma, senior vice president of engineering and technology with Reliance Jio, said the company was erecting 6,000 wireless towers per day in its race to reach 400 million mobile subscribers by the end of 2018.
Analysts on Cisco’s call yesterday wanted to know how the tariffs on Chinese products and the resulting Cisco price increases were affecting sales.
Robbins said the tariffs were immaterial during its most recent quarter because the price increases went into effect late in the period. “But I can tell you that from a demand perspective, when we implemented the pricing changes we saw absolutely no demand change from the week before and the week after we did that,” he said.
Robbins said the company in general does not view the price increases as a “broad based issue.” And Cisco CFO Kelly Kramer added that the price increases “were very specific and surgical,” affecting only the products that were hit with tariffs.
Robbins has been bragging that his initiative to move the company toward more software and subscriptions is driving its success. And he seems to be validated. Yesterday he said, “When we set out to move to more of a software and subscription model, the real benefit for us is it gives us the opportunity to go in and monetize those licenses again in three years.”
He gave the example of selling a switch. Previously, the company would sell a switch with integrated software one time and perhaps five to seven years later it would go in and try to sell another switch. But now, the company can go in sooner to sell another subscription.
Busy Quarter for Cisco
The company made quite a bit of news in Q1, and the executives summarized some of that on the call.
Earlier this week, Cisco announced it was combining its SD-WAN and security technologies, and extending its Catalyst 9000 switches and its intent-based networking from big wired networks to wireless networks and branch deployments.
The company also launched the next additions to its Cat9K family, the 9200 and the 9800. “The Catalyst 9800 is our newest wireless controller,” Robbins said yesterday. “The 9800 gives our customers ultimate flexibility, running anywhere from on-premise and any cloud or embedded virtually on Catalyst 9000 switches.”
Last month, Cisco joined the 400 gigabit Ethernet party, announcing its 400G switches that target hyperscale cloud providers, large enterprise data centers, and telecommunications providers moving to 5G.
And finally, Cisco recently introduced the Cisco Hybrid Solution for Kubernetes on AWS. The software built for Amazon Web Services allows customers to deploy and monitor containerized applications across private data centers and in AWS.