Cisco Systems, Inc. (NASDAQ:CSCO) Q1 F2018 earnings results were released after closing bell tonight. The company posted non-GAAP earnings of 61 cents per share on $12.14 billion in revenue, while Wall Street had been expecting 60 cents per share on $12.11 billion in revenue. In the year-ago quarter, Cisco reported $12.4 billion in sales.

By Cisco [Public domain], via Wikimedia Commons

Cisco Systems Q1 F2018 earnings

On a GAAP basis, Cisco Systems Q1 F2018 earnings per share amounted to 48 cents, compared to 46 cents a year ago. Net income ticked upward to $2.4 billion from $2.3 billion. Infrastructure Platforms revenues fell 4% year over year to $7 billion, while Applications revenues rose 6% to $1.2 billion. Security revenues increased 8% to $585 million, while Other Products revenues fell 16% to $296 million. Services revenues rose 1% to $3.1 billion.

The company said recurring revenue was 32% of its total revenue, representing a more-than three-point increase year over year. Deferred revenue rose 10% year over year to $18.6 billion. Deferred product gross margin rose 16% on the back of subscription-based and software offers while deferred service revenue grew 5%.

The GAAP total gross margin was 61.2%, while the GAAP product gross margin fell to 60.1%. The non-GAAP total gross margin was 63.7%, while the non-GAAP product gross margin was 63%. The GAAP service gross margin was 64.5%, while the non-GAAP service gross margin was 65.6%.

Sales in the Americas declined 1% year over year, while revenues from Europe, the Middle East and Africa fell 3%. Asia Pacific, Japan and China sales fell 1%.

Cisco Systems releases strong guidance

The company guided for non-GAAP earnings for its second fiscal quarter to be between 58 cents and 60 cents per share, which is strong versus the consensus estimate of 58 cents per share. It looks for GAAP earnings of 46 cents to 51 cents per share and a 1% to 3% increase in revenue year over year. Cisco Systems expects a non-GAAP gross margin of 62.5% to 63.5%.