Key Takeaways

  • Cisco CFO Scott Herren will retire at the end of July after nearly five years in the role, the company announced Wednesday.
  • Herren will be succeeded by Mark Patterson, 55, who currently serves as Cisco's chief strategy officer. Patterson's new position takes effect July 27, according to a securities filing.
  • "Recently, Mark has led our corporate strategy, development, and incubation organization, focusing on connecting long-term strategy and investments with our near-term growth opportunities," Cisco CEO Chuck Robbins said in a blog post Wednesday. "His extensive experience, combined with his deep understanding of Cisco and our customers, partners, and investor community, makes him uniquely positioned to accelerate Cisco's growth in this new role."

Deep Dive

Cisco Systems, which provides computer networking equipment and software to businesses, announced the finance leadership change alongside better-than-expected quarterly results.

In the fiscal third quarter ended April 26, total revenue was $14.1 billion, up 11% from the same period last year. Net income rose 32% year over year to $2.5 billion.

AI infrastructure orders from webscale customers exceeded $600 million, completing the company's $1 billion goal a quarter early, according to a press release. Cybersecurity sales jumped 54%, partly helped by products from Splunk, which Cisco acquired last year for $28 billion.

"We delivered another solid quarter, with revenue and profit performance exceeding expectations, driven by strong order growth and margins," Herren said on Wednesday's earnings call.

For the fourth quarter, the tech giant expects total revenue between $14.5 billion and $14.7 billion. Herren said the guidance assumes the Trump administration's current tariffs and exemptions remain in place throughout the quarter.

"We will continue to leverage our world-class supply chain team, using the flexibility and agility we've built into our operations over the past few years, to help mitigate impacts where appropriate," he said. "The scale and size of our supply chain gives us a unique advantage in supporting our customers globally."

In the blog post, Robbins praised Herren for helping the company navigate "many external dynamics as we successfully pivoted our business toward more software and recurring revenue to improve predictability and customer and shareholder value."

"Over the next several months, Scott and Mark will work closely together 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 previously holding other leadership roles at the company, including chief of staff to the CEO and senior vice president of global sales and marketing strategy, planning, and operations.

Herren will remain employed by Cisco as an executive advisor until May 1, 2026, according to the company's securities filing.

Morningstar senior equity analyst William Kerwin said in a client note Thursday that Herren did an "excellent job" improving Cisco's profitability and generating strong cash flow.

"We suspect Patterson played 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 change comes as Cisco focuses heavily on AI investments.

In August 2024, the company said it would cut 7% of its global workforce as part of a restructuring plan that would allow it to invest in key growth areas like AI while improving operational efficiency.