Cisco's recent financial results reveal a mixed bag of outcomes for the tech giant. For the fourth quarter of fiscal year 2024, the company reported a total revenue of $13.6 billion, marking a 10% decrease compared to the same period last year. This decline came amid significant changes across its product segments, as reported by Cisco's investor site.

A closer look at Cisco's product revenue highlights shifts within its core areas. The networking segment saw its product revenue drop by 28%, attributed mainly to decreased sales in campus and data center switching, as well as wireless products. However, on a brighter note, the security segment experienced an impressive 81% increase in product revenue. This surge was primarily fueled by Cisco's acquisition of Splunk, which contributed about $960 million in the fourth quarter alone. CRN.com noted that even without Splunk's contributions, security product revenue still grew by 6%. Additionally, Cisco's observability category saw product revenue rise by 41%, with Splunk also playing a key role in this growth.

The acquisition of Splunk has been a strategic move for Cisco, bolstering its presence in both security and observability. This strategy not only boosted revenues but also helped achieve a gross margin of 67.5% in Q4 FY 2024, the highest in two decades. Looking forward, Cisco anticipates revenue for Q1 FY 2025 to fall between $13.65 billion and $13.85 billion, with non-GAAP earnings per share expected to range from $0.86 to $0.88. These strategic efforts underscore Cisco's focus on robust segments, paving the way for sustained success in these critical areas.