Total software revenue increased by 24% to $5.5 billion, primarily driven by the contribution of Splunk. Total subscription revenue increased 21%, also primarily driven by Splunk.

The company experienced product revenue declines across all of its customer markets. Networking revenue decreased by 23%, while Collaboration revenue decreased by 3%. These declines were partially offset by product revenue growth in Security of 100% and Observability of 36%, each driven in large part by the contribution of Splunk.

The company announced a restructuring plan to invest in key growth opportunities and drive efficiencies, impacting approximately 7% of the global workforce with estimated pre-tax charges of up to $1 billion. Charges of $665 million were incurred in the first quarter of fiscal 2025.

Operating expenses, as a percentage of revenue, increased by 7.4 percentage points, primarily driven by incremental operating expenses from Splunk, higher restructuring and other charges, and higher amortization of purchased intangible assets.

The company continues to invest in R&D in order to bring a broad range of products to market in a timely fashion. R&D expenses increased by 19% year-over-year.

Management remains focused on delivering innovation across its technologies to assist customers in executing digital transformations and accelerating innovation across the portfolio.

The company notes that the global macroeconomic environment remains challenging and inconsistent, and that geopolitical tensions may continue to put pressure on global economic conditions, impacting the company's business.

The company acknowledges that supply chain issues and component shortages remain a concern and could lead to material excess and obsolete inventory charges or other negative impacts to product gross margin.

The company states that it anticipates continuing to be subject to cyber attacks and that despite active implementation of security measures, its solutions and IT environment remain vulnerable to cyber attacks, incidents, data breaches, malware, and other threats.

The company acknowledges intense competition across all of its markets, characterized by rapid change, converging technologies, and a migration to networking and communications solutions that offer relative advantages.

The company notes increased competition in the development and sale of enterprise data center technologies, including competition from entities that are among its long-term strategic alliance partners.

The company states that it has experienced price-focused competition from competitors in Asia, especially from China, and anticipates this will continue.

The company announced a restructuring plan to allow it to invest in key growth opportunities and drive more efficiencies in its business, with estimated pre-tax charges of up to $1 billion.

The company notes that its efforts to improve manufacturing lead-time performance may result in more variability and less predictability in its revenue and operating results.

The company states that it is focused on managing its costs and expenses, while also investing in personnel and other resources related to engineering, sales, service and marketing functions.

The company is integrating artificial intelligence (AI) into its product portfolios across networking, security, collaboration and observability to simplify how its technology is delivered, managed and optimized.

The company continues to invest in R&D in order to bring a broad range of products to market in a timely fashion. R&D expenses increased by 19% year-over-year.

Management remains focused on delivering innovation across its technologies to assist customers in executing on their digital transformations and on accelerating innovation across its portfolio.

The company targets to return a minimum of 50% of its free cash flow annually to stockholders through cash dividends and repurchases of common stock.

The company repurchased $2 billion of common stock during the first quarter of fiscal 2025, as part of its ongoing stock repurchase program.

The company paid $1.6 billion in dividends to stockholders during the first quarter of fiscal 2025.

The company communicates certain ESG-related initiatives, goals, and/or commitments regarding environmental matters, diversity and inclusion, responsible sourcing and social investments, and other matters, in its annual Purpose Report, on its website, in its filings with the SEC, and elsewhere.

The company has announced a goal to achieve net zero across all scopes of greenhouse gas emissions by 2040, the achievement of which relies, in large part, on the accuracy of its estimates and assumptions around the enhanced power efficiency of its products, the adoption of renewable energy at customer and supplier sites, and the adoption of certain of its products and services by its customers.

The company acknowledges that its ESG-related initiatives, goals, or commitments involve risks and uncertainties and could be difficult to achieve and costly to implement.

The company notes that the global macroeconomic environment remains challenging and inconsistent, and that geopolitical tensions may continue to put pressure on global economic conditions.

The company states that it has experienced price-focused competition from competitors in Asia, especially from China, and anticipates this will continue.

The company notes that it is subject to evolving legal and regulatory landscape, which could entail significant costs or limit its ability to incorporate certain AI capabilities into its offerings.