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SAN JOSE , Calif . , May 19 , 2021 / PRNewswire / -- News Summary : • Overall performance : $ 12.8 billion in revenue , up 7 % year over year with broad - based strength across the business ; GAAP EPS $ 0.68 and Non - GAAP EPS $ 0.83 , each up 5 % year over year • 10 % year - over - year total product order growth representing the strongest demand in nearly a decade • Continued momentum in transforming business to software and subscriptions : 81 % of software revenue sold as a subscription , up from 76 % last quarter Q3 Results : • Revenue : $ 12.8 billion • Increase of 7 % year over year • Earnings per Share : GAAP : $ 0.68 ; Non - GAAP : $ 0.83 • GAAP EPS increased 5 % year over year a Non - GAAP EPS increased 5 % year over year Q4 Guidance : • Revenue : 6 % to 8 % growth year over year • Earnings per Share : GAAP : $ 0.64 to $ 0.69 ; Non - GAAP : $ 0.81 to $ 0.83 Cisco Reports Third Quarter Earnings Cisco today reported third quarter results for the period ended May 1 , 2021. Cisco reported third quarter revenue of $ 12.8 billion , net income on a generally accepted accounting principles ( GAAP ) basis of $ 2.9 billion or $ 0.68 per share , and non - GAAP net income of $ 3.5 billion or $ 0.83 per share . " Cisco had a great quarter with strong demand across the business , " said Chuck Robbins , chairman and CEO of Cisco . " We are confident in our strategy and our ability to lead the next phase of the recovery as our customers accelerate their adoption of hybrid work , digital transformation , cloud , and continued strong uptake of our subscription - based offerings . " " We executed well with strong product orders , and solid growth in revenue , net income , and EPS , " said Scott Herren , CFO of Cisco . " Our investments in innovation and accelerated shift to more software offerings and subscriptions led to double - digit growth in deferred revenue , remaining performance obligations and higher levels of recurring revenue . " GAAP Results Revenue Net Income Diluted Earnings per Share ( EPS ) Net Income EPS $ $ $ Q3 FY 2021 12.8 billion billion 2.9 0.68 Non - GAAP Results Q3 FY 2021 $ 3.5 $ 0.83 billion $ $ $ Q3 FY 2020 12.0 2.8 0.65 Q3 FY 2020 $ 3.4 $ 0.79 billion billion billion Vs. Q3 FY 2020 7 % 3 % 5 % All comparative percentages are on a year - over - year basis unless otherwise noted . Q3 FY 2021 Highlights Vs. Q3 FY 2020 4 % 5 % The third quarter of fiscal 2021 had 14 weeks compared with 13 weeks in the third quarter of fiscal 2020 . 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 . " Financial Summary Revenue -- Total revenue was up 7 % at $ 12.8 billion , with product revenue up 6 % and service revenue up 8 % . Revenue by geographic segment was : Americas up 2 % , EMEA up 11 % , and APJC up 19 % . Product revenue performance was broad - based with growth in Security , up 13 % , Infrastructure Platforms up 6 % , and Applications up 5 % . Gross Margin - On a GAAP basis , total gross margin , product gross margin , and service gross margin were 63.9 % , 62.6 % , and 67.4 % , respectively , as compared with 64.9 % , 63.7 % , and 67.7 % , respectively , in the third quarter of fiscal 2020 . On a non - GAAP basis , total gross margin , product gross margin , and service gross margin were 66.0 % , 64.9 % , and 68.7 % , respectively , as compared with 66.6 % , 65.8 % , and 68.9 % , respectively , in the third quarter of fiscal 2020 . Total gross margins by geographic segment were : 66.5 % for the Americas , 65.6 % for EMEA and 64.7 % for APJC . Operating Expenses - On a GAAP basis , operating expenses were $ 4.7 billion , up 8 % , and were 36.9 % of revenue . Non - GAAP operating expenses were $ 4.1 billion , up 9 % , and were 32.4 % of revenue . Operating Income -- GAAP operating income was $ 3.5 billion , up 1 % , with GAAP operating margin of 27.1 % . Non - GAAP operating income was $ 4.3 billion , up 3 % , with non - GAAP operating margin at 33.6 % . Provision for Income Taxes - The GAAP tax provision rate was 20.3 % . The non - GAAP tax provision rate was 19.0 % . Net Income and EPS- On a GAAP basis , net income was $ 2.9 billion , an increase of 3 % , and EPS was $ 0.68 , an increase of 5 % . On a non - GAAP basis , net income was $ 3.5 billion , an increase of 4 % , and EPS was $ 0.83 , an increase of 5 % . Cash Flow from Operating Activities - $ 3.9 billion for the third quarter of fiscal 2021 , a decrease of 8 % compared with $ 4.2 billion for the third quarter of fiscal 2020 . Balance Sheet and Other Financial Highlights Cash and Cash Equivalents and Investments -- $ 23.6 billion at the end of the third quarter of fiscal 2021 , compared with $ 29.4 billion at the end of fiscal 2020 . Deferred Revenue - $ 20.9 billion , up 12 % in total , with deferred product revenue up 20 % . Deferred service revenue was up 7 % . Remaining Performance Obligations - $ 28.1 billion at the end of the third quarter of fiscal 2021 , up 10 % . Capital Allocation -- In the third quarter of fiscal 2021 , we returned $ 2.1 billion to stockholders through share buybacks and dividends . We declared and paid a cash dividend of $ 0.37 per common share , or $ 1.6 billion , and repurchased approximately 10 million shares of common stock under our stock repurchase program at an average price of $ 48.71 per share for an aggregate purchase price of $ 510 million . The remaining authorized amount for stock repurchases under the program is $ 8.7 billion with no termination date . Acquisitions In the third quarter of fiscal 2021 , we closed the following acquisitions : • 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 . IMImobile PLC , a United Kingdom - based publicly - traded cloud communications software and services company . Dashbase , Inc. , an enterprise software company . In the fourth quarter of fiscal 2021 , we closed the acquisition of Slido s.r.o , a privately held company that provides an audience interaction platform .