Cisco just reported Q1 results. The stock is slipping.

Cisco Systems (NASDAQ:CSCO) shares fell 0.9% in late trading on Wednesday, even as the networking giant reported fiscal first-quarter results and guidance for the coming quarter that were better-than-expected.

For the period ending October 26, the Chuck Robbins-led company said it earned $0.91 per share on an adjusted basis, as revenue fell 5.6% year-over-year to come in at $13.84B. Service revenue came in at $3.73B, up 6% year-over-year, while product revenue fell 9.2% from a year-ago to come in at $10.11B for the period. Adjusted gross margin came in at 69.3%. Cisco said it ended the period with $40B in remaining performance obligations.

Analysts were expecting adjusted earnings of $0.87 per share and $13.77B in revenue.

Rob Isbitts, Investing Group Leader for Sungarden YARP Portfolio, said the slight beat and “modest” initial reaction in the stock is indicative of what Cisco has turned into: “a boring, but still-competitive business” with a near 3% dividend yield.

Guidance

Looking ahead, Cisco now sees full-year 2025 sales between $55.3B and $56.3B, up from a previous view of $55B to $56.2B amid continued investment in infrastructure to support artificial intelligence. Analysts were expecting $55.88B in full-year sales.

The company also sees fiscal 2025 earnings between $3.60 and $3.66 per share, excluding one-time items, above its previous range between $3.52 and $3.58 per share and above the $3.57 per share estimate.

“Cisco is off to a strong start to fiscal 2025,” said Robbins, chair and CEO of Cisco. “Our customers are investing in critical infrastructure to prepare for AI, and with the breadth of our portfolio, we are uniquely positioned to capitalize on this opportunity.”

Looking to the second-quarter, Cisco forecast sales between $13.75B and $13.95B, above the $13.74B analysts were expecting. Adjusted earnings are forecast to be between $0.89 and $0.91 per share, above the $0.87 per share estimate. Adjusted gross margins are forecast to be between 68% and 69%, above the 67.6% estimate.

Following Cisco’s results, competitors Juniper Networks (JNPR) and Arista Networks (ANET) fell in sympathy.

(This story has been updated to include analyst commentary.)