Cisco CEO Chuck Robbins remains confident about the networking vendor’s future, despite another quarter of declining revenues.
Revenues dipped by four per cent year on year during the three months ending 25 January to $12 billion. GAAP operating income meanwhile grew by five per cent to $3.4 billion, representing an operating margin of 28.2 percent.
This is the second quarter revenue has declined for the US networking giant and will be the third quarter in a row in which it has given negative guidance for the quarter ahead.
Cisco expects revenues to decline by 1.5 to 3.5 percent in its upcoming third quarter.
Robbins told investors that macroeconomic pressures such as Brexit and the US-China trade dispute have led to continued sales declines in the UK and China due to a slowdown in orders as customers hold off decision making.
Product orders were down by six percent year on year, claims Cisco, with its Americas business down eight percent, EMEA down one percent and APJC down by four percent. Its emerging markets saw a seven percent drop in orders, while BRIC (Brazil, Russia, India, China) suffered a 20 percent decline.
Despite revenues declining across multiple business units, Robbins said Cisco is showing promising progress in shifting more business to a subscription-based model. He said 72 percent of Cisco software is now being sold as a subscription, adding that its Catalyst 9000 range is continuing to perform after its launch in 2017 in driving its subscription-based portfolio.
