Dive Brief:
- Cisco CFO Scott Herren will retire in late July after nearly five years with the company, the tech giant said Wednesday.
- Herren will be replaced by Mark Patterson, 55, who currently serves as Cisco’s chief strategy officer, the company said. Patterson’s new role will become effective July 27, according to a securities filing.
- “Most recently, leading our Corporate Strategy, Development, and Incubation Organization, Mark’s focus has been on connecting our longer-term strategy and investments with our immediate and urgent growth opportunities,” Cisco CEO Chuck Robbins said in a Wednesday blog post. “The breadth of his experience, along with his deep knowledge of Cisco and our customers, partners, and investor community, uniquely position him to help accelerate Cisco’s growth in this new role.”
Dive Insight:
Cisco, which provides computer networking equipment and software for businesses, announced the finance leadership transition as it also released better-than-expected quarterly earnings results.
The company generated a total of $14.1 billion in revenues during its fiscal third quarter ended April 26, an increase of 11% compared with the year-earlier period. Its net income jumped 32% YOY to $2.5 billion.
Artificial intelligence infrastructure orders taken from webscale customers exceeded $600 million, surpassing the company’s $1 billion target one quarter early, according to a press release. Cybersecurity sales jumped 54%, driven in part by in offerings from Splunk, which Cisco acquired last year for $28 billion.
“We had another solid quarter with top and bottom-line performance exceeding our expectations, driven by strong order growth and margins,” Herren said during a Wednesday earnings call.
For the fourth quarter, the tech behemoth is projecting its total revenues to be in the range of $14.5 billion to $14.7 billion. The guidance assumes that current Trump administration tariffs and exemptions remain in place through the quarter, according to Herren.
“We'll continue to leverage our world-class supply chain team to help mitigate the impact where appropriate through the flexibility and agility we have built into our operations over the last few years,” he said. “The size and scale of our supply chain provides us some unique advantages as we support our customers globally.”
In his blog post, Robbins credited Herren with helping the company to navigate “many external dynamics as we successfully transitioned our business towards more software and recurring revenue to drive greater predictability as well as customer and shareholder value.”
“Over the course of the next few months, Scott and Mark will work closely to ensure a smooth transition, after which Scott will move into an advisory role through April 2026,” Robbins said.
Patterson became Cisco’s chief strategy officer in March 2024 after serving in other leadership roles at the company, including chief of staff to the CEO and senior vice president of strategy, planning, and operations for worldwide sales and marketing.
Herren will remain employed by Cisco as an executive advisor through May 1, 2026, according to the company’s securities filing.
Herren did a “tremendous job” improving Cisco's profitability and generating robust cash flow, Morningstar Senior Equity Analyst William Kerwin said in a Thursday client’s note.
“Patterson, we presume, had a significant role in capital allocation and the Splunk deal, and we expect Cisco to continue prioritizing cash flow and shareholder returns,” Kerwin wrote.
The finance leadership transition comes as Cisco has been heavily focused on AI investments.
In August 2024, the company said it was laying off 7% of its global workforce as part of a restructuring plan that would allow the company to invest in key growth areas such as AI while driving more efficiencies in its business.
