Cisco published its first quarter financial results on Thursday, beating market expectations and issuing strong guidance for the current quarter. The networking giant posted non-GAAP earnings of 76 cents per share on revenue of $11.9 billion, a decline of 9% year over year.
Analysts were expecting earnings of 70 cents per share on revenue of $11.85 billion.
Breaking revenue out by segment, product revenue was down 13% to $8.58 billion, and service revenue was up 2% to $3.34 billion. Product revenue sales from infrastructure platforms, which includes Cisco's networking and router portfolios, was down 16% to $6.34 billion. Sales of security products grew 6% to $861 million, and sales of applications fell 8% to $1.38 billion for the quarter.
"Our Q1 results reflect good execution with strong margins in a challenging environment," said Kelly Kramer, CFO of Cisco. "We continued to transform our business through more software offerings and subscriptions, driving 10% year over year growth in remaining performance obligations. We delivered strong growth in operating cash flow and returned $2.3 billion to shareholders."
In a separate announcement, Cisco revealed that Kramer will retire as CFO in December. Her replacement is Scott Herren, who most recently served as the chief finance officer for Autodesk.
For the second quarter, the company is predicting non-GAAP earnings between 74 cents and 76 cents with revenue ranging from flat to a decline of 2% year-over-year. Wall Street is looking for non-GAAP earnings of 73 cents per share with $11.63 billion in revenue.
Shares of Cisco were up over 8% after hours.