Cisco forecasts growth from software shift, but chip prices pressure profits

Cisco Systems Inc forecast that within four years, about half its revenue will come from software and other recurring sales, but its chief financial officer told Reuters high chip prices in its hardware business will keep pressuring overall profits.

Cisco is the biggest maker of networking gear for data centers and corporate campuses, but it is shifting toward selling recurring subscriptions for software such as its WebEx collaboration service and cybersecurity services.

At an event with Wall Street analysts, Cisco said it believes the portion of its revenue coming from subscriptions will rise from 44% notched for its fiscal 2021 ended July 31 to 50% by fiscal 2025.