Cisco warns supply chain delays could persist until this time next year

Current issues aren't stopping it from growing fast – or 400Gbit Ethernet sales booming


Cisco has wrapped its 2021 financial year with better-than-expected revenue, and a warning that supply chain constraints could persist until this time next year.

In prepared remarks [PDF] intoned by CEO Chuck Robbins at the start of the company's earnings call, he said Cisco is "continuing to manage through the components shortage challenges that nearly every company is experiencing" and expects "supply challenges and cost impacts to continue through at least the first half of our fiscal year and potentially into the second half."

Robbins said customers haven't seen the need to order in advance as a de facto way of reserving kit, so Cisco's not seeing shortages create an unusually fat sales pipeline.

Not that Cisco needs it: Q4 revenue came in at $13.1 billion — an eight per cent year-on-year increase that outpaced full year growth of one per cent to reach $49.8 billion of revenue. GAAP net income was $3.0 billion – a 14 per cent year-on-year jump. Full year net income of $10.6 billion was down six per cent year-on-year.

Robbins forecast year-over-year growth in a range of 7.5 to 9.5 per cent for FY 2022, but CFO Scott Herren warned that work to secure supplies is adding to Cisco's costs and therefore forecast margins to dip a point or two.

An aside: The Register has recently received approaches from upstart pure-play software-defined networking vendors suggesting we write that their approach will deliver new networks, faster, than will be possible if buyers wait for Cisco's supply chain to deliver. We mention this as Cisco's supply chain challenges aren't just a financial consideration – competitors are using them to differentiate their own wares.

If Cisco has noticed such digs, it's not saying so.

It is saying that it booked $4 billion of software revenue in Q4 21, a figure CFO Herren said makes it one of the world's top ten software vendors.

Robbins attributed Q4's good results to newer products starting to sell fast. He singled out WiFi6 and 5G as obvious growth areas and noted that 400Gbit Ethernet is "taking off in … a meaningful way".

"In Q4, 400-gig ports, our orders were up 668 per cent, and for the year, 400-gig port orders were up 831 per cent. We have over 400 customers that have deployed, and we've taken orders for almost 180,000 ports total."

That kind of enthusiasm is driven by what Robbins said are "transformation projects for customers' networks.

Yet data centre sales were the company's only segment not to grow in the quarter, despite what Herren described as "solid growth" for the Nexus 9000 switching portfolio. ®

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