Cisco Leverages AI for Hybrid Work Environments

Global networking solutions provider Cisco (Nasdaq: CSCO) announced its second quarter results that outpaced market expectations. Cisco is focusing on the hybrid workspace by adding AI capabilities into its existing offerings portfolio.

Cisco’s Financials
Cisco’s Q2 revenues grew 7% to $13.6 billion, ahead of the Street’s forecast by 1.18%. Adjusted EPS increased 5% to $0.88, and was also ahead of the market’s estimate of $0.86.

By segment, software revenues grew 10% to $10.15 billion and subscription revenues grew 15% to $9.35 billion. By region, revenues from the Americas increased 9%, EMEA grew 5%, and APJC grew 1%.

For the third quarter, Cisco forecast revenue increase of 11%-13% and a non GAAP EPS of $0.96-$0.98. The market was looking for revenues of $13.54 billion and an EPS of $0.89. For the year, Cisco expects revenues to grow by 9%-20.5% and an EPS of $3.73-$3.78. The market forecast revenues of $54.47 billion and an EPS of $3.54.

Cisco’s AI Focus

Cisco recently announced several AI-based innovations for its Webex platform. Webex’s innovations span three categories. First, it focuses on reimagining workspaces. With the growing presence of a hybrid work environment, Webex is expanding video-intelligence in its devices through conference room operating system Cisco Room OS. Users will get the most optimal views in any meeting, at any moment, in any space. The new capabilities will include cinematic meeting experiences on Cisco Collaboration devices as its cameras will follow individuals through voice and facial recognition and automatically switch views to capture the best angle of the active speaker. The meeting zones capability will allow IT admins to set virtual boundaries for any collaboration space in the office, turning it into a meeting zone.

Second, the solution will optimize collaboration by providing access to High-definition (HD) meetings that don’t require HD bandwidth, smart re-lighting to automatically improve poor lighting when it’s too dim or bright, and automatic “be right back” updates to blur the background and mute audio when a user steps away from a Webex meeting.

Finally, the focus on maximizing customer experience will be delivered by leveraging its technology required for Hybrid Work to fuel its Webex customer experience solutions. Cisco launched its vision of the self-learning contact center by introducing new AI capabilities for its customer experience solutions. The solution will provide topic analysis and actionable insights for improved CX in Webex Contact Center by highlighting key reasons customers are calling into the contact center. The solution will aggregate call transcript data from the contact center and models trends for business analysts, so they can proactively adapt to meet the needs of customers.

The self-learning capability will ensure that the solution delivers smarter customer interactions. It added Agent Answers as a real-time agent coach so that learnings from both self-service and automated customer interactions are fed back into the self-learning contact center to increase agent effectiveness. The solution will also feature automated AI-powered chat summaries for agents to eliminate the need for agents to read lengthy digital chat histories with customers to determine issues and resolutions already explored.

Recently, Cisco announced a partnership with Mercedes Benz that will have all Mercedes Benz Class E vehicles equipped with Webex, allowing drivers to conduct frictionless meetings and calls. Its audio intelligence technology also offers best-in-class noise cancellation, enhancing the experience for the driver and other passengers working in the vehicle. By singling out and boosting the clarity of an individual’s voice in addition to eliminating distracting background noise, passengers receive the flexibility to conduct meetings and calls from the vehicle.

Cisco’s stock is currently trading at $52.28 with a market capitalization of $214.25 billion. It hit a 52-week high of $56.12 in April last year and a 52-week low of $38.60 in October last year.

Disclosure: All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own research of product-market fit, channel execution, and other factors. My primary interest is in product strategy. While this may have bearing on stock movements, my writings tend to focus on long-term implications. The information presented is illustrative and educational, but should not be regarded as a complete analysis nor recommendation to buy or sell the securities mentioned herein. I am not a registered investment adviser and I am not receiving compensation for this article.

Photo Credit: Prayitno /Flickr