Cisco stock (ticker: CSCO) was initially down 2% in late trading after the report, but rebounded after the company made positive comments about its orders during a call with investors. Shares were up about 2% as of 6 p.m. ET.

For the Fiscal Fourth Quarter ended July 29, Cisco posted revenue of $15.2 billion, up 16% from a year ago, ahead of the Wall Street consensus of $15.1 billion and at the high end of the company’s forecast for growth of 14% to 16%. On an adjusted basis, the company earned $1.14 a share, ahead of the company’s forecast of $1.05 to $1.07 a share.

Under generally accepted accounting principles, Cisco earned 97 cents a share. The company said operating cash flow was $6 billion, up 62% from the year-ago quarter. Gross margin improved by 2.6 percentage points to 65.9%.

The company’s largest unit, “secure, agile networks,” had revenue of $8.1 billion, up 33%. Cisco’s collaboration unit, which includes WebEx, was down 12%.

Cisco said it repurchased $1.3 billion of stock in the quarter, boosting the full fiscal year total to $4.3 billion.

For the full year, revenue was $57 billion, up 11%, while non-GAAP profit was $3.89 a share.

For the fiscal first quarter, Cisco forecast revenue of $14.5 billion to $14.7 billion. At the midpoint, that’s up 7% from a year ago, and in line with the Wall Street consensus. Cisco sees non-GAAP profits of $1.02 to $1.04 a share, which is a little above consensus of $1. The company sees GAAP profit for the quarter of 79 to 84 cents a share.

For the full year, Cisco is projecting revenue of $57 billion to $58.2 billion, which at the middle of the range would be a 1% increase from a year ago and below the Street consensus at $58.3 billion. Cisco sees full-year adjusted profits of $4.01 to $4.08 a share, which, at the midpoint, is about in line with consensus of $4.04 a share.

CEO Chuck Robbins noted on the earnings call that product orders in the quarter were up by 30% sequentially, with double-digit increases in all customer markets. Robbins said that was above historical order trends of 18% to 20% sequential order growth. Robbins said that while the service provider market was weak, the company saw improving order trends for enterprise customers (large companies) and commercial customers (smaller companies), with the public sector “steady.” Orders were down 14% on a year-over-year basis.

Robbins noted on the call that the company has had a cumulative $500 million of orders to date—not specifically in the latest quarter—for orders related to networking hardware used for generative artificial intelligence applications, most of that from the large cloud players. CFO Scott Herren added in an interview with Barron’s that AI-related business will meaningfully show up in the company’s financial results by the end of fiscal 2024.

“There are encouraging signs in AI,” Herren said. “We see a multi-year opportunity ahead, and we are well positioned to win in that space.”

Cisco said it finished the year with twice its normal backlog, but added that the the company expects to work that down to normal levels in the new year, with most of that worked down in the fiscal first quarter.

Cisco faced considerable demand crosswinds heading into the quarter. Last month, shares of both

Nokia

(NOK) and

Ericsson

(ERIC) slumped after the companies warned that the spending outlook for U.S. carriers looked weak for the second half. Nokia blamed both “the macroeconomic environment and customers’ inventory digestion.”

A few weeks after that,

Juniper Networks

(JNPR) shares slumped after the company warned that it was seeing weak bookings activity, in particular from cloud customers. Juniper blamed the same factors that Nokia cited: economic issues and high inventories at customers.

The situation was better at

Arista Networks

(ANET), which posted strong June quarter results, though Arista warned that it was seeing “a return to shorter lead times and reduced visibility.”

Evercore ISI analyst Amit Daryanani wrote in a note previewing the quarter that Cisco faced a volatile environment, “with peers pointing to a digestion period for telecoms and cloud customers,” offset by strong demand from other large businesses. 

Write to Eric J. Savitz at [email protected]