The company forecast fiscal second quarter revenue would increase by 1 percent to 4 percent from a year earlier, or a rise of 2 percent to 5 percent compared with the first quarter. The average Wall Street estimate for the second quarter had implied a revenue decline of 1.3 percent year on year.
Chambers said the company was now looking to hire more workers as business picks up and it looks to gain market share against rivals like Juniper Networksand Alcatel-Lucent .
Cisco's board also authorized up to $10 billion in additional share repurchases.
Chambers, however, was wary of commenting beyond the current quarter, saying the economy was still volatile.
"So, we're more optimistic than most of our peers ... but our approach is, let's look at more data before we get too optimistic," he told Reuters in an interview.
Jefferies & Co analyst Bill Choi said the caution made sense.
"In the near term, we have a lot of visibility, but no one is going to stick their neck out for 2010. Corporate budgets are being set just as we speak, or just close to getting done," Choi said.
Chambers said that for now, he sees the market recovering, and that another quarter or two of improvement could help him gain confidence in making longer-term forecasts.
First-quarter net profit was $1.8 billion, or 30 cents a share, compared with $2.2 billion, or 37 cents a share, a year earlier. Excluding items, profit was 36 cents a share, higher than the average Wall Street forecast of 31 cents.
Cisco has recently stepped up its pace of acquisitions, aiming to expand further from its traditional focus on routers and switches to a broader range of products and services, including videoconferencing and business software.
Since October, Cisco has announced plans to buy Norwegian video conferencing company Tandberg ASAfor $3 billion, as well as a $2.9 billion deal for wireless equipment maker Starent Networks Corp .
It is unclear whether the Tandberg deal will close as some investors are demanding a higher offer, and Cisco said it was still negotiating with shareholders.
"I believe we will get this transaction closed," Chambers said, but added Cisco has walked away from deals before and that it was already offering a healthy premium.
"There's no acquisition that is a must have," he said.
Chambers said Cisco will step up investments in new and "adjacent markets" -- businesses those that are related to, and can bolster sales of, existing products. Videoconferencing, for example, can help drive sales of routers and switches as high-resolution Web videos require advanced network gear.
This aggressive M&A strategy has helped Cisco grow from a company with annual revenue of around $40 billion from slightly above $1 billion when Chambers became CEO in 1995.
Cisco shares rose to $24.15 in after-hours trading from their Nasdaq close of $23.29. The stock has risen more than 40 percent since the start of the year.