Cisco Systems Inc. reported better-than-expected earnings for Q3 FY2024, despite experiencing its steepest revenue drop in 15 years. The company posted GAAP earnings per share (EPS) of $0.46 and non-GAAP EPS of $0.88, with revenue totaling $12.7 billion, down 13% year over year. Net income also fell by 41% to $1.89 billion. Despite these declines, Cisco's stock rose by 7% in after-hours trading as the company provided a solid sales and profit forecast for the current quarter. The company highlighted that customer demand is stabilizing, and its outlook for network demand is no longer weakening. Cisco also noted that its software and services segments now account for 65% of its revenue. The company’s guidance for FY2024 revenue exceeded estimates, driven in part by its recent acquisition of Splunk, which added 70 basis points to product gross margins. The prior guide did not include the Splunk acquisition, and the organic business performed at the high end of expectations for Q3.