Cisco has reported a record backlog of orders it can’t fulfill – worth $14 billion – and can’t say when supply chain issues will ease enough to allow it to deliver a kit networking for which some customers have waited many months.

Speaking on the company’s second quarter fiscal 2022 earnings call, Chairman and CEO Chuck Robbins said Cisco’s supply chain situation in the quarter “doesn’t get any better.” is not materially worsened and has not really materially improved”.

“I wouldn’t say we have a good timeline…as to when things start to improve.”

CFO Scott Herren also weighed in on the matter, believing that supply chain constraints will not ease noticeably in the near future.

“I don’t believe it’s unfolding in a lumpy way,” he said. “That will dissipate as supply and demand balance out. And I think that will happen gradually over the next few quarters.”

Cisco previously suggested that the third and fourth quarters of 2022 would see an improvement in supply chain conditions and help it eliminate its backlog. The unleashed variant of Omicron COVID-19 ended that prediction, with Robbins citing “people sick and unable to show up at factories and some of the well-documented logistical issues” as issues Cisco had to contend with.

The networking giant therefore has $14 billion worth of orders on its books, and few ideas when it will honor them.

It hurts in two ways. One is that $2 billion of the backlog is software — a product line that Cisco has identified as a critical growth area as it strives to tie its hardware to cloud services and migrate customers to subscriptions rather than large-scale hardware purchases.

The other is that Cisco pays large advances to guarantee the supply of the components it needs. Those payments saw the company’s operating cash flow for the quarter fall 17% year-over-year to $2.5 billion.

Overall, Robbins and Herren were pleased with the company’s progress.

Revenue was $12.7 billion, up 6% year-over-year. Net income of $3 billion represents a 17% improvement over the second quarter of 2021.

Sales of hybrid work products — think video meetings and collaboration — fell 9% thanks to “the decline in our collaboration devices and meeting offerings.” Collaboration services have increased to compensate for this decline. Cisco will rename the hybrid work segment to “collaboration” to reflect the change.

Robbins sees better days ahead, as demand is currently strong for many Cisco products. The CEO mentioned hyperscale kit, Wi-Fi, 5G, 400 Gigabit Ethernet, Wi-Fi 6, hybrid cloud, hybrid work, and edge computing as areas customers are clamoring for.

Once the backlogs subside and Cisco can meet this demand, it will be able to not only recognize revenue that it cannot currently record, but also benefit from sales at inflated prices by various factors related to the pandemic. The company therefore expects a slight increase in future gross margins and revenue growth of 5.5-6.5% year-over-year. ®