Though many still think of Cisco (NASDAQ:CSCO) as solely a network solutions provider, CEO John Chambers and team have made it clear: the future lies with executing on its cloud, mobile, and the Internet of Things (IoT) initiatives. After a strong performance for much of 2014, based on its relatively anemic stock price year-to-date, investors appear to be taking a wait-and-see approach with Cisco. Which is good news for long-term investors in search of growth and income.

Cisco's shift to IoT, or the Internet of Everything (IoE) as per Chambers, took hold last quarter and was cited as a driving force behind its record-breaking results. While consensus analyst estimates suggest Cisco's stock price doesn't have a ton of upside-$30 a share is the average price target – positive Q2 earnings, particularly in its IoE, cloud, and mobile units, would push that target price higher. Fortunately for shareholders, that's exactly what Cisco delivered.

Just the facts
For the quarter, the Street expected Cisco to generate $0.51 a share in earnings on $11.8 billion in revenue, which would have been impressive performances on both fronts for what has historically been one of its weakest quarters. Apparently, impressive wasn't good enough Cisco, as it handily beat both estimates. For the quarter, Cisco generated $11.94 billion in sales and $0.53 a share on a non-GAAP (less one-time items).

When you include all overhead costs, including one-time charges and expenses, Cisco still generated a whopping $0.46 a share. To put that in perspective, in 2014's fiscal second quarter Cisco announced $0.27 in GAAP per-share earnings on $11.2 billion in sales.

Additionally, the bump in Cisco's topline didn't come at the expense of gross margin, which totaled $7.09 billion in Q3-including shaving nearly $500 million off in sales costs-compared to $5.95 billion in the year-ago period. Over $700 million more in revenues this quarter, all while reducing sales costs? It's no wonder margins improved, and operating income skyrocketed by nearly $1 billion compared to a year-ago.

Cisco also further strengthened its balance sheet over last year. Despite paying what was a $0.19 a share dividend, Cisco's cash and equivalent's grew to $67.9 billion. Unlike some other cash-hoarding tech behemoths, Cisco plans on sharing its good fortune with shareholders, announcing another bump in its dividend to $0.21 a share.

Not surprisingly, within 30 minutes of releasing its second quarter financial data at 1:30 pm PST, Cisco was trading up over 4.5%. Whether that initial share price pop has legs time will tell, but clearly analyst and traders liked what they heard from Cisco, as they should.

From here
One of the primary reasons Cisco finished 2014 strong was its impressive performance from its server division. With the fast-growing cloud and IoE markets becoming crucial aspects of the technology landscape, the security, storage, and management of data has become critical; and Cisco has jumped into these new opportunities with both feet.

Though 2014 Q4 data hasn't been released as yet, technology research firm Gartner believes Cisco easily outpaced industry leaders like Hewlett-Packard and IBM (NYSE:IBM) as measured by server revenue growth rates , jumping nearly 31% year-over-year. Along those same business lines, Cisco is partnering with IBM on a combined infrastructure and secure data storage solution. The two longtime competitors are in much the same boat, as each is in the midst of their respective business transformations. And with Cisco's and IBM's commitment to cloud-related data and security suite of products, their new partnership could be a winner for both parties.

Cisco's IoE efforts continued to take shape after announcing it had signed yet another international metropolis, in this case Santiago, Chile, to turn it into a "smart city." The deal with the city of Santiago comes on the heels of similar agreements with Berlin, Hamburg, and a host of others. Smart cities are expected to become a $1.5 trillion industry over the next 10 years, offering almost unlimited opportunities; and Cisco is leading the way.

Nearly across the board, Cisco delivered. Higher revenues, more efficiently run operations, and continued growth in Cisco's newly defined direction should have both shareholders and long-term investors ecstatic.