Shares of Cisco Systems Inc. traded higher after-hours today after the networking giant posted strong quarterly results and expressed optimism about the role it can play in a growing artificial intelligence industry.

“We are seeing solid customer demand, gaining market share and innovating in key areas like AI, security and cloud,” Cisco Chief Executive Chuck Robbins (pictured) said in a statement. “This momentum gives us confidence in our ability to capture the many opportunities ahead.”

The company reported fiscal fourth-quarter net income of $4 billion, up 37% from a year ago, with earnings before certain costs such as stock compensation of $1.14 per share. Revenue for the period rose 16%, to $15.2 billion. The results were better than expectations, with analysts forecasting earnings of $1.06 per share on $15.05 billion.

Cisco also reported full-year revenue of $57 billion, up 11% from the year before, and the highest it has reported in more than a decade.

In an interview with MarketWatch, Cisco Chief Financial Officer Scott Herren said the company broke numerous records during the quarter. “It was a record quarter in so many ways: revenue, net income, EPS, free cash flow,” he said.

Cisco’s main business segments, Product and Services, saw revenue increase by 20% and 4%, respectively. The Product business, which accounts for the routers, Ethernet switches and other networking gear it sells, delivered $11.65 billion in sales, while Services, which covers network management and security, generated $3.55 billion.

Cisco has been able to grow its revenue at a time when many other technology companies are struggling as it’s fulfilling a spike in demand that was fueled by COVID-19 pandemic supply shortages. The company had been saddled with a massive backlog of unfulfilled orders for many months as a result of its inability to get its hands on the components it needed. Now those parts have become available, Cisco has been able to ship out more hardware than it could in previous quarters, and sell the associated software for that equipment too.

In a conference call, Robbins admitted that the company has almost caught up with its order backlog, so growth is now decelerating. However, he said the company is heading towards a future where revenue will be much more consistent thanks to its subscription-based business model and its new focus on AI.

Longtime industry analyst Dave Vellante, co-host of SiliconANGLE Media’s mobile livestreaming studio theCUBE, hailed Cisco’s strong performance throughout the fiscal year:

Pretty remarkable year from @Cisco 16% growth this quarter on $15B revenue qtr. Stock was down after hours on the Barron’s headline which totally missed the boat. Analyst I think are realizing how strong the company’s performance is – waiting for CFO guidance & Q&A – Stock… pic.twitter.com/9gHYfbGVxu

— Dave Vellante (@dvellante) August 16, 2023

AI was a major topic of discussion during the call, with Cisco officials highlighting how the company will play a key role in helping cloud services providers build the infrastructure to handle generative AI services such as ChatGPT and Google Bard. Robbins said AI can be a highly lucrative market for the company, and highlighted how it has already seen orders for AI products from hyperscale cloud customers totaling more than $500 million.

“Cisco is committed to helping our customers navigate this transition in a trusted and responsible way to deliver on the full promise of this technology, and we are well-positioned to win,” Robbins told analysts.

Holger Mueller of Constellation Research Inc. said Cisco picked up a reputation as Silicon Valley’s “sick man” during the pandemic, when it struggled more than most with supply chain issues. But he believes it has clearly turned things around.

“All KPIs are looking good and it seems Cisco is also getting its supply chains in order,” Mueller said. “If Robbins is right that cloud vendors are looking to Cisco to build out their generative AI networks, it might have finally found a promising growth path.”

In terms of guidance, Cisco officials said the company is looking for first quarter earnings of between $1.02 and $1.04 per share on revenue of $14.5 billion to $14.7 billion. The numbers were mixed, with Wall Street forecasting lower earnings of $1 per share and slightly higher revenue of $14.64 billion.

Cisco’s full-year forecast was also somewhat cautious, with executives saying the company sees earnings of between $4.01 and $4.08 per share on sales of $57 billion to $58.2 billion. That compares with Wall Street’s targets of $4.05 per share in earnings and $58.4 billion in revenue.

It’s notable, however, that Cisco has traditionally been somewhat conservative in its full-year projections, and the company could revise its forecast by the end of the current quarter.

Still, the outlook and the optimism over AI were good enough to reassure investors that Cisco has a bright future. After the stock initially declined in late trading, shares rallied for an after-hours gain of more than 2%.

“The robust enthusiasm around generative AI underscores why shareholders responded favorably to Robbins’ positive comments concerning those market opportunities,” said Pund-IT Inc. analyst Charles King. “Overall, it seems reasonable to assume that Cisco’s performance is likely to improve as existing markets return to normal and emerging markets evolve.”

Prior to today’s slight increase, Cisco’s stock had risen 11% so far this year, just below the broader S&P 500 Index, which is up 15% for the year.

During the quarter, Cisco held its annual user conference, Cisco Live 2023, where it outlined its vision for a future of multicloud networks and security. The company said one of its main goals is to unify its network and security offerings to enable more developers to build on its platforms and infrastructure.

Photo: Fortune GLOBAL FORUM/Flickr