Cisco makes up lost ground in Q4 as product orders hit decade-high growth rates

Product order growth up 31 per cent year on year

Cisco has ended its fiscal 2021 with its highest product order growth rates in more than a decade as the vendor displays recovery signs after a mixed financial year.

Revenues for the three months ending 31 July reached 13.1bn, an increase of eight per cent year on year. GAAP operating income meanwhile swelled by 10 per cent to $3.6bn.

The strong end to the year means that Cisco's sales for its full fiscal 2021 increased by one per cent to $49.8bn.

Cisco's EMEA business grew revenues by six per cent to $3.3bn for the quarter. Sales in the Americas grew by eight per cent to $7.73bn and by 13 per cent in to $2.1bn in APJC.

Product revenues grew by 10 per cent in Q4 to $9.71bn, while services enjoyed 2.6 per cent growth to $3.4bn.

Speaking to investors on an earnings call, Cisco CEO Chuck Robbins said that product order growth was the highest it has seen in more than a decade.

The vendor saw double-digit order growth across all customer markets and geographies, it claims, but product order growth jumped by 31 per cent year on year - its highest increase in more than 10 years.

Robbins said the quarter reaffirms "tremendous demand" for Cisco's technology.

"I believe we're at a pivotal moment in our company's history as we have a massive opportunity to transform what has been the traditional office and define the future of hybrid work," he said.

The CEO said that customer IT budgets continue to grow and business confidence is increasing. The Delta variant is not having an impact on customer spending, Robbins added.

Product orders were especially high among Cisco's enterprise customers, with 25 per cent growth year on year, while its commercial, service provider and public sector orders all grew by more than 20 per cent annually.

From a product standpoint, Cisco's campus switching, Catalyst 9000, high-end routing, wireless and Zero Trust solutions all saw double-digit revenue growth during the quarter.

Cisco's software revenue went past $4bn in sales during Q4 - an improvement of six per cent year over year, with subscription revenues growing by nine per cent.

The strong Q4 helped Cisco to recuperate from a weak first half of the year. Revenues fell by nine per cent in its Q1 ending 24 October 2020 and were flat in its second quarter ending 23 January 2021.

Robbins blamed the decline on a soft enterprise market as a result of the Covid pandemic.