Editor’s note: On Wednesday, Cisco continued its recent acquisition binge, buying energy management company JouleX in a deal valued at $107 million cash. Cisco, the biggest provider of networking equipment, said that Atlanta-based JouleX is a complementary to Cisco’s offerings. JouleX manages energy use for enterprise customers and data centers. The deal follows closely on the heels of Cisco’s recent earnings report for the first quarter, which Scott Dennehy of Technology Business Research demonstrated the firm’s staying power. Cisco operates its second largest corporate campus in Research Triangle Park, N.C.
HAMPTON, N.H. - Cisco (Nasdaq: CSCO) continues to outperform its competitors, delivering a solid financial performance in 1Q13.
While many of its competitors are struggling to grow revenues and margins, Cisco’s consistent execution on its strategic objectives enabled the company to once again deliver highly profitable growth in 1Q13, with top-line revenue increasing 5.4% and operating margin growing 400 basis points year-to-year to 24.1%.
The company’s revenue growth in 1Q13 was driven primarily by the Americas region, which grew in the double digits year-to-year (10.2%) for the first time since 3Q10, as the company achieved balanced growth across its service provider, enterprise, commercial and even public sector segments in the U.S.
Cisco’s revenue mix in 1Q13 shifted further away from traditional routing and switching products toward next-generation segments, particularly Service Provider Video, Wireless, Data Center and Services. These segments accounted for 53% of Cisco’s total revenue in 1Q13, up from 50% in 1Q12. TBR believes this trend will continue throughout 2013, as the company continues to successfully capitalize on customer demand for cloud, mobility and video-based technologies.
Cisco Capitalizing on Market Trends Around Mobility
Service providers and enterprises continue to shift spending from fixed networks to wireless, leveraging mobility as a way to increase revenues and productivity. Cisco is reaping the benefits of this trend, with revenue in the company’s Wireless segment growing by more than 20% year-to-year for the sixth straight quarter in 1Q13.
Cisco is building particularly strong momentum in service provider Wi-Fi (more than 100% revenue growth year-to-year in 1Q13), as service providers increasingly leverage Wi-Fi networks as a way to offload data traffic from the cellular network. Cisco will continue to capitalize on this trend throughout 2013, leveraging its 1Q13 acquisitions of Intucell and Ubiquisys to enable service providers to deploy more intelligent and flexible wireless networks, as well as investing in its analytics capabilities to enable service providers to track and analyze customer movements and deliver more personalized services, leading to improved monetization of their wireless networks.
(C) TBR
