In today’s latest breaking news, Cisco Systems Inc. posted revenues of $13.5 billion in Q2, surpassing analysts’ estimates of $13.42 billion. It is an increase of 7%. The company expects to record YoY growth of between 9% and 10.5% in the current FY.
Cisco, which reported better than expected results, assumes a bright position among other tech companies that are facing challenges from macroeconomic impacts and inflation. The company improved its bottom and top lines in Q2. In the aftermarket, its shares rose by over 6%.
Growth in recurring revenues improves guidance
Scott Herren, CFO of Cisco, said the upward guidance for this year is based on an increase in recurring revenues. The company also put in significant efforts to improve supply, clear backlogs, and meet performance obligations.
The results of Cisco are better than those of other tech companies, which have reported sluggish growth because of recession fears and tightening budgets. Most tech companies have implemented significant cuts in their workforces worldwide because of the bleak economic outlook.
Several tech companies that have posted improved performance in the COVID-19 period are issuing signals of slower growth ahead. In the last month, Microsoft recorded its slowest quarterly growth in over six years. Other cloud services companies and Salesforce Inc. have warned of an expected drop in sales.
Uber and Lyft Post Big Gains in Ad Revenues
In the latest world news, Lyft Inc. and Uber Technologies, the ride-hailing companies, reported a significant jump in their advertising businesses in the recent period. In 2022, Uber said it will allow brands to send targeted business ads to its app users. It shares the consumer data collected from their ride histories and specific destinations.
In 2019, Uber commenced the sale of ads on its UberEats app, a grocery delivery and restaurant app. Since that initiative, Uber has released innovative products like post-checkout ads during the Super Bowl event this year.
The ad businesses are also vital for the growth of ride-hailing rivals. According to Uber, it posted growth in its overall revenues because of an increase in ad revenues in the latest quarter. Dara Khosrowshahi, CEO of Uber, said the company passed an annual run rate of $500 million through ad sales.
According to a communiqué, businesses counting over 315,000 ran their ads on Uber apps in Q4. It is almost double that of the over 170,000 advertisers in the previous year. The company expects more growth in the future because, at present, only 25% of the businesses that sell their products via Uber Eats are purchasing ads on its platform. Uber expects to achieve ad revenues of $1 billion by 2024. Bernstein Research’s analyst, Nikhil Devnani, said sales of ads offer higher margins. Therefore, Uber is on track to reach its target in 2024.
In an email statement, Zach Greenberger, Chief Business Officer of Lyft, said the company’s revenues from ad sales exceeded the target. He further claimed the company reported a growth of 7% in ad revenues in Q4.
Walmart Inc. allows advertisers to send customized digital ads to its customers across the web using its data. Other companies like CVS Health Corp., Kroger Co., and DoorDash Inc. also allow advertisers to reach their customers using the retailer’s data.
