On Wednesday, Cisco released financial fourth-quarter results that exceeded analysts’ expectations and offered a more optimistic outlook for the following year. Extended trading saw a 4.5% increase in the stock.

Here is how the business fared:

Adjusted earnings per share were 83 cents compared to analysts’ expectations of 82 cents, according to Refinitiv.

Refinitiv reports that revenue was $13.10 billion as opposed to analysts’ expectations of $12.79 billion.

According to a statement, revenue decreased slightly in the quarter that concluded on July 30. As the company’s adjusted gross margin shrank to 63.3% from 65.3% in the prior quarter, net income fell by 6% to $2.82 billion. Analysts’ predictions were 64.7%.

Cisco forecasted sales growth of 4% to 6% and adjusted earnings per share of $3.49 to $3.56 for the fiscal year 2023. Refinitiv’s survey of analysts predicted adjusted earnings of $3.53 per share on $52.79 billion in revenue, or growth of 2.3%. Revenue increased by 3.4% in the fiscal year 2022.

Although Cisco’s results largely exceeded expectations, the business is still having trouble expanding as the technology industry quickly moves away from purchasing physical devices and toward cloud computing and subscription software. While the Nasdaq has declined 17% this year, the company’s stock price is down 24%.

Data-center networking switches are a part of Cisco’s biggest business sector, Secure, Agile Networks, which generated 46% of the company’s overall sales at $6.09 billion, up 1% from a year earlier but above the $5.86 billion consensus estimate of analysts surveyed by StreetAccount.

The company’s second-largest division, Internet for the Future, which includes the routed optical networking hardware it acquired when it acquired Acacia Communications in 2021, generated $1.26 billion in revenue, a 10% decline and less than the $1.36 billion StreetAccount average.

Revenue from the Collaboration segment, which included Webex, totaled $1.16 billion, up 2% from the StreetAccount expectation of $1.10 billion. Cisco released a brand-new video desk phone and expanded the availability of background noise elimination software for its Webex video-calling service during the quarter.