Cisco Systems raised its full-year earnings forecast on Wednesday, reporting that it expects benefits from the higher prices caused by the global chip shortage and the eventual decrease in logistics expenses as delays ease up.

In extended trading, the networking firm’s shares jumped almost 5% after announcing a $15 billion boost in its stock repurchase program and beating expectations with its quarterly earnings.

To keep up with the pandemic-fueled rise in demand for its videoconferencing platform Webex, virtual private network, and cybersecurity goods, the firm, which provides routers, switches, security services, and software products, has been substantially investing in its cloud offerings.

A possible Splunk Inc. buyout?

Chief Financial Officer Scott Herren spoke with analysts saying the company is seeing progress as it transitions to more software subscriptions for revenue growth.

Even with the good news, the company warned that the supply challenges caused by the pandemic have added to costs, a phenomenon that is expected to persist in the latter half of its fiscal year.

Cisco also reportedly made a $20 billion bid for Splunk, a company that makes software used to search and monitor big data gathered from apps, websites and devices.

No comment about a buyout

About the buyout, Scott Raynovich, principal analyst at Futorium, said that since the company is spending $15 billion on buybacks, it is not likely that they will pay $20 billion to buy a company.

Executives on the earnings call declined to comment on an analyst’s question regarding a possible Splunk deal and instead said the company is constantly evaluating potential opportunities.

Cisco expects adjusted profits of $3.41 to $3.46 per share in fiscal 2022, up from a previous expectation of $3.38-$3.45. Revenue is predicted to increase by 5.5% to 6.5%, compared to the previous prediction of 5% to 7%.