Cisco has reported sales up 2% to $13.2bn for the first quarter, although its guidance for the second quarter is a sales slump of between 3% and 5% year-over-year.
For the period ended 26th October 2019, GAAP net income tumbled 18% to $2.9bn. "We delivered a solid quarter against a challenging macro environment," claimed Chuck Robbins, chairman and CEO of Cisco. "We're focused on continuing to drive innovation, transform our business and exceed our customers' expectations."
Kelly Kramer, CFO of Cisco, said the firm was continuing to make good progress in generating recurring revenue.
She said: "With software subscriptions now at 71% of our software revenue, we are making good progress in transforming our business model. We continue to invest in our innovation pipeline to generate long-term profitable growth and deliver value for shareholders."
Of total revenue, product revenue was up 1% and service revenue rose 4%. Revenue by geographic segment was Americas up 4%, EMEA up 4% and APJC down 8%.Product revenue was led by growth in Security, up 22% and Applications, up 6%. Infrastructure Platforms was down 1%.
On a GAAP basis, total gross margin, product gross margin and service gross margin were each 64.3%, as compared with 62.3%, 61.6%, and 64.6%, respectively, last time round.
Total gross margins by geographic segment were 66.6% for the Americas, 66.% for EMEA and 62.9% for APJC. On a GAAP basis, operating expenses were $4.9bn - up 13%. GAAP operating income was $3.6bn, down 6%.