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SAN JOSE , Calif . , Feb. 9 , 2021 / PRNewswire / -- News Summary : • Total product order growth of 1 % year over year • Product revenue strength across Catalyst 9000 , Data Center Switching , Security , Wireless and Webex portfolios Great progress on business transformation to more software and subscription , with 76 % of software revenue sold as a subscription Dividend increased 3 % Q2 Results : Revenue : $ 12.0 billion Flat year over year • Earnings per Share : GAAP : $ 0.60 ; Non - GAAP : $ 0.79 • GAAP EPS decreased ( 12 ) % year over year • Non - GAAP EPS increased 3 % year over year Q3 Guidance : Cisco Reports Second Quarter Earnings • Revenue : 3.5 % to 5.5 % growth year over year • Earnings per Share : GAAP : $ 0.64 to $ 0.69 ; Non - GAAP : $ 0.80 to $ 0.82 Cisco today reported second quarter results for the period ended January 23 , 2021. Cisco reported second quarter revenue of $ 12.0 billion , net income on a generally accepted accounting principles ( GAAP ) basis of $ 2.5 billion or $ 0.60 per share , and non - GAAP net income of $ 3.4 billion or $ 0.79 per share . " We are seeing encouraging signs of strength across our business showing how our technology will be a powerful engine for recovery and growth , " said Chuck Robbins , chairman and CEO of Cisco . " Our team delivered a strong performance as we partnered with customers on accelerating their digital transformation and driving secure , remote work . " " Cisco executed well in Q2 , delivering growth in orders , strong margins , and growth in non - GAAP EPS , while continuing to grow deferred revenue in double - digits through the shift to more software and subscriptions , " said Scott Herren , CFO of Cisco . GAAP Results Revenue Net Income Diluted Earnings per Share ( EPS ) Net Income EPS S S S S Q2 FY 2021 12.0 2.5 0.60 billion billion Non - GAAP Results Q2 FY 2021 3.4 0.79 billion S S S Q2 FY 2020 12.0 2.9 0.68 billion billion Q2 FY 2020 S 3.3 S 0.77 billion Vs. Q2 FY 2020 - % ( 12 ) % ( 12 ) % Vs. Q2 FY 2020 2 % 3 % Reconciliations between net income , EPS , and other measures on a GAAP and non - GAAP basis are provided in the tables located in the section entitled " Reconciliations of GAAP to non - GAAP Measures . " All comparative percentages are on a year - over - year basis unless otherwise noted . Q2 FY 2021 Highlights Cisco Increases Quarterly Cash Dividend Cisco declared a quarterly dividend of $ 0.37 per common share , a $ 0.01 increase or up 3 % over the previous quarter's dividend , to be paid on April 28 , 2021 to all stockholders of record as of the close of business on April 6 , 2021. Future dividends will be subject to Board approval . Financial Summary Revenue - Total revenue was flat at $ 12.0 billion , with product revenue down 1 % and service revenue up 2 % . Revenue by geographic segment was : Americas down 1 % , EMEA up 2 % , and APJC down 4 % . Product revenue was led by growth in Security , up 10 % . Infrastructure Platforms was down 3 % and Applications was flat . Gross Margin - On a GAAP basis , total gross margin , product gross margin , and service gross margin were 65.1 % , 64.5 % , and 66.6 % , respectively , as compared with 64.7 % , 63.9 % , and 66.6 % , respectively , in the second quarter of fiscal 2020 . On a non - GAAP basis , total gross margin , product gross margin , and service gross margin were 66.9 % , 66.6 % , and 67.9 % , respectively , as compared with 66.4 % , 65.9 % , and 67.7 % , respectively , in the second quarter of fiscal 2020 . Total gross margins by geographic segment were : 67.5 % for the Americas , 66.9 % for EMEA and 64.8 % for APJC . Operating Expenses -- On a GAAP basis , operating expenses were $ 4.6 billion , up 4 % , and were 38.1 % of revenue . Non - GAAP operating expenses were $ 3.9 billion , down 1 % , and were 32.6 % of revenue . Operating Income --GAAP operating income was $ 3.2 billion , down 5 % , with GAAP operating margin of 26.9 % . Non - GAAP operating income was $ 4.1 billion , up 2 % , with non - GAAP operating margin at 34.4 % . Provision for Income Taxes - The GAAP tax provision rate was 21.8 % . The non - GAAP tax provision rate was 19.0 % . Net Income and EPS -- On a GAAP basis , net income was $ 2.5 billion , a decrease of 12 % , and EPS was $ 0.60 , a decrease of 12 % . On a non - GAAP basis , net income was $ 3.4 billion , an increase of 2 % , and EPS was $ 0.79 , an increase of 3 % . Cash Flow from Operating Activities - $ 3.0 billion for the second quarter of fiscal 2021 , a decrease of 22 % compared with $ 3.8 billion for the second quarter of fiscal 2020 . Balance Sheet and Other Financial Highlights Cash and Cash Equivalents and Investments - $ 30.6 billion at the end of the second quarter of fiscal 2021 , compared with $ 29.4 billion at the end of fiscal 2020 . Deferred Revenue - $ 20.8 billion , up 12 % in total , with deferred product revenue up 16 % . Deferred service revenue was up 9 % . Remaining Performance Obligations - $ 28.2 billion at the end of the second quarter of fiscal 2021 , up 13 % . Capital Allocation - In the second quarter of fiscal 2021 , we returned $ 2.3 billion to shareholders through share buybacks and dividends . We declared and paid a cash dividend of $ 0.36 per common share , or $ 1.5 billion , and repurchased approximately 19 million shares of common stock under our stock repurchase program at an average price of $ 42.82 per share for an aggregate purchase price of $ 801 million . The remaining authorized amount for stock repurchases under the program is $ 9.2 billion with no termination date . Acquisitions In the second quarter of fiscal 2021 , we closed the acquisition of Portshift , a privately held applications security solutions company , and the acquisition of assets and the team of Banzai Cloud Zrt . , a company that specializes in deploying cloud - native applications . In the second quarter of fiscal 2021 , we announced an amendment to the definitive merger agreement under which we previously agreed to acquire Acacia Communications , Inc. , a public fabless semiconductor company that develops , manufactures and sells high - speed coherent optical interconnect products that are designed to transform communications networks through improvements in performance , capacity and cost . Under the terms of the amended agreement , Cisco would acquire Acacia for $ 115 per share in cash , or for approximately $ 4.5 billion on a fully diluted basis , net of cash and marketable securities . The acquisition is expected to close during the third quarter of fiscal 2021 , subject to closing conditions , including Acacia stockholder approval . All require regulatory approvals have been received . We announced our intent to acquire IMImobile PLC , a United Kingdom publicly - traded cloud communications software and services company . The acquisition is expected to close during the third quarter of fiscal 2021 , subject to certain regulatory approvals and IMImobile shareholder approval .