I just caught up with Tuesday’s quarterly investor report from Cisco. The company runs on a fiscal year that ends in July, so January marked the end of their second quarter.
Cisco does not break out Webex costs and revenues as a separate line item. That software is part of their “Applications” business, making it distinct from “Infrastructure Platforms” (things like routers and networking solutions) and “Security.” So all we can do is look at the Applications segment as a lump sum and assume that Webex should have made up a healthy chunk of it.
For my purposes, I’m only interested in one financial figure… Gross Revenues. This indicates the top line amount brought in by sales and licenses of their applications software. With the pandemic raging last year and companies on global lockdown, conferencing software should have been a rising tide that lifted all boats in the industry. If a web conferencing company didn’t bring in more revenue than in the previous year, I really have to wonder why not.
That’s what makes the Q2 report so interesting:
I put a red circle around the segment of interest. Revenues from August 2020 through January 2021 were DOWN 4% from the similar period at the end of 2019. Why couldn’t Cisco get more revenue out of the part of the business that included Webex? Shouldn’t that have been the bright spot helping to cover for pandemic-affected losses in other areas?
I can only chalk it up to the rapid-fire ascendancy of Zoom. Obviously I don’t have any more insight or detail than this publicly-available consolidated figure. But it’s a figure that should be highly concerning for anybody wondering how strong Cisco’s conferencing business is.