Cisco has reported first quarter results for the period ended October 28, 2017. Revenue stands at USD 12.1 billion, net income on a generally accepted accounting principles (GAAP) basis of USD 2.4 billion or USD 0.48 per share, and non-GAAP net income of USD 3.0 billion or USD 0.61 per share.
Total revenue of USD 12.1 billion was down 2 percent; with product revenue down 3 percent and service revenue up 1 percent. Recurring offers contributed to 32 percent of the total revenue, up over 3 percentage points from the first quarter of fiscal 2017. Revenue by geographic segment was: Americas down 1 percent, EMEA down 3 percent, and APJC down 1 percent. Product revenue performance was led by security and applications, which increased by 8 percent and 6 percent, respectively. Infrastructure platforms revenue decreased by 4 percent.
On a GAAP basis, total gross margin and product gross margin were 61.2 percent and 60.1 percent, respectively. The decrease in the product gross margin compared with 63.4 percent in the first quarter of fiscal 2017 was primarily due to pricing, legal and indemnification settlements, and lower productivity benefits. Non-GAAP total gross margin and product gross margin were 63.7 percent and 63.0 percent, respectively. The decrease in non-GAAP product gross margin compared with 64.8 percent in the first quarter of fiscal 2017 was primarily due to pricing and lower productivity benefits. While productivity was positive, the benefit was lower than in the prior year as productivity improvements continued to be adversely impacted by an increase in the cost of certain memory components, consistent with our expectations. GAAP service gross margin was 64.5 percent and non-GAAP service gross margin was 65.6 percent. Total gross margin by geographic segment was: 64.2 percent for the Americas, 63.2 percent for EMEA, and 62.1 percent for APJC.
“Our results in 1Q demonstrate the continued progress we are making on our strategy. The network has never been more critical to business success. Cisco is delivering more insights and intelligence as we help our customers build highly secure, intelligent platforms for digital business.”