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Cisco's Q4'FY15 legacy DC switching dropped -20% ($214 million) year-over-year

Breakdown of Cisco's switching business during H2 2014 & H2 2015:

Tallahassee, Florida:   Tue, 10/20/15 - 11:11am    View comments

CiscoWells FargoAccording to a new Wells Fargo research report:

"Over the last few weeks, we have spoken to a number of investors regarding Cisco's switching business, where concerns regarding the company's ability to navigate the transition away from the Nexus 7K and deliver growth in the face of more difficult comps remain a critical overhang on the stock, in our opinion.

"Nexus 9K/3K uptake should drive data center growth despite legacy declines. Cisco reported that its Nexus 9K/3K data center switches generated $438MM in sales during FQ4 2015 (+100% Y/Y, +50% Q/Q). Leveraging this data, along with Infonetics' estimates, suggests sales of Cisco's legacy data center switches likely generated $840MM in FQ4 sales (-20% Y/Y, -3% Q/Q). While the trajectory of these segments is up for debate, if we assume sales of Cisco's new data center switches were to grow 80% Y/Y off relatively small numbers and legacy platforms declined 20% Y/Y, the company's overall data center switch sales would rise just 4.3% Y/Y in F2016."

Breakdown of Cisco's switching business during H2 2014 & H2 2015:

Breakdown of Cisco's switching business during H2 2014 & H2 2015

Related story:

Increase in Cisco's Q4'FY15 data center sales took -40% dive year-over-year

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