More than two decades ago, business was surging at internet technology pioneer Cisco Systems Inc., as companies were deploying its routers and other products to grow in a new, digitally focused world of commerce.
Cisco’s 2022 fiscal year ended on July 31 with a relative whimper. The provider of internet gear and cloud technology products and software reported slack Q4 revenue of $13.1 billion. It also reported a modest 3% year-over-gain in full-year revenue to $51.6 billion.
But there are brighter days ahead, as Cisco records the gains from a surge in orders for internet technology products fueling its customers’ digital transformation, chairman and CEO Chuck Robbins says.
“Full-year product orders and backlog are both at record highs and reflect the strong demand we continue to see for our innovation and the overall value we bring to our customers as they accelerate their digital transformation,” he said last week.
The increasing demand is running across several product lines that support companies’ transitions to more digitally focused operations.
“There are currently more technology transitions occurring concurrently than I’ve seen in 20 years,” Robbins said on an earnings call, according to a transcript from The Motley Fool. He said “long-term megatrends” like cloud technology deployments and internet-of-things sensors used in digital supply chains and automated ecommerce operations “will likely provide tailwinds to our growth.”
‘Significant opportunity ahead’ for digital transformation
Robbins added that in Cisco’s web-scale business, “product orders were up more than 50% on a trailing four-quarter basis. We see significant opportunity ahead as these customers build out massively scalable cloud networks.” Cisco’s web-scale business supports customers’ deployment of large data centers and other digital transformation projects.
Cisco didn’t break out ecommerce revenue for the fiscal fourth quarter or year. But the company notes on its website that most customers place orders with Cisco’s technology deployment partners, who use the Cisco Commerce web portal to configure products, get quotes, check pricing and place orders. Cisco has said in the past that it processes about 60% of orders via the Cisco Commerce web portal. That would amount to about $31 billion in ecommerce orders for the 2022 fiscal year.
Robbins said Cisco had “record net income” for the year ended July 30 of $11.81 billion. That’s up 11.5% from the prior fiscal year. He attributed that increase to “our operating discipline despite external challenges, including supply chain and inflation.”
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