Cisco Systems, Inc.
CSCO · Nasdaq
Next quarter
Expected to report Nov 11, 2026 — estimated from last year’s reporting date.
Consensus is $1.14 EPS for Oct 2026 across 7 estimates, ranging $1.07 to $1.19.
CSCO Jul 2026
- 9.09%
- -8.40%
- $0.99
- $1.08
- —
- —
Highlights
- Record close: Q4 FY2026 revenue was $17.3 billion, up 18% year over year and 8.9% from Q3's $15.84 billion; GAAP net income was $3.9 billion and GAAP EPS was $0.97, versus $2.6 billion and $0.64 a year ago.
- Consensus beat: The supplied comparison records EPS of $1.08 versus the $0.99 consensus, a 9.09% surprise.
- AI infrastructure: Cisco booked $4.0 billion of hyperscaler AI-infrastructure orders in Q4, taking FY2026 orders to $9.3 billion; it expects roughly $7.5 billion of related revenue in FY2027 after delivering approximately $4.0 billion in FY2026.
- Networking momentum: Networking revenue rose 28% to $9.8 billion, while networking product orders increased 40% year over year for an eighth consecutive quarter of double-digit growth.
- Broad demand: Total product orders increased 35% year over year, or 25% excluding hyperscalers, with double-digit growth across every geography and customer market; product revenue rose 24% while services revenue was flat.
- Operating leverage: Q4 non-GAAP operating margin was 35.9%, up from 34.1% a year ago, and non-GAAP EPS rose 23% to $1.22; GAAP operating margin was 24.7%, up from 21.0%.
- FY2027 outlook: Cisco guided to FY2027 revenue of $72.2 billion-$73.4 billion and non-GAAP EPS of $5.05-$5.11, implying revenue growth of roughly 14%-16% from FY2026's $63.3 billion.
- Cash returns: Cisco returned $3.2 billion to stockholders in Q4 through a $1.7 billion dividend and $1.5 billion of buybacks, and declared a quarterly dividend of $0.42 per share.
Analysis
Cisco's Q4 FY2026 was a clear acceleration quarter: revenue of $17.3 billion rose 18% year over year from $14.67 billion and 8.9% sequentially from $15.84 billion in Q3. GAAP operating income increased 38% year over year to $4.3 billion, while net income rose 51% to $3.9 billion and diluted EPS rose 52% to $0.97 from $0.64. The supplied analyst comparison records EPS of $1.08 against $0.99 consensus, a 9.09% beat, although the release reports $0.97 of GAAP EPS and $1.22 on a non-GAAP basis.
The print was defined by an unusually broad product cycle, led by networking and AI infrastructure. Product revenue increased 24%, networking revenue rose 28% to $9.8 billion, and hyperscaler AI-infrastructure orders reached $4.0 billion in the quarter. Cisco also delivered stronger profitability: Q4 non-GAAP operating margin expanded to 35.9% from 34.1% a year ago, despite non-GAAP gross margin declining to 66.3% from 68.4%. Management entered FY2027 with revenue guidance of $72.2 billion-$73.4 billion and non-GAAP EPS guidance of $5.05-$5.11, alongside $7.5 billion of expected AI-infrastructure revenue.
AI infrastructure demand
Hyperscaler demand was the quarter's most important growth catalyst. Cisco booked $4.0 billion of AI-infrastructure orders in Q4, lifting the fiscal-year total to $9.3 billion. The company delivered approximately $4.0 billion of related revenue in FY2026 and expects about $7.5 billion in FY2027, implying roughly 88% growth. The order trajectory provides a substantial step-up in the expected contribution from AI networking infrastructure.
- Order acceleration: Q4 AI-infrastructure orders of $4.0 billion were nearly 43% of the $9.3 billion FY2026 total.
- Broader base: Total product orders rose 35% year over year, or 25% excluding hyperscalers, with double-digit growth across all geographies and customer markets.
- Forward visibility: Total remaining performance obligations reached $46.7 billion, up 7% year over year, with product RPO up 9%.
Networking-led product growth
Cisco's product portfolio moved together, but networking was decisively stronger than the other categories. Product revenue rose 24% to $13.5 billion, while services revenue was flat at $3.8 billion. Networking revenue increased 28% to $9.8 billion and represented about 73% of product revenue. Security, collaboration and observability also grew, but at lower rates.
- Networking: Revenue increased 28% to $9.8 billion; product orders grew 40% year over year, extending the double-digit order-growth streak to eight quarters.
- Security: Revenue rose 14% to $2.2 billion.
- Collaboration and observability: Revenue increased 12% to $1.2 billion and 6% to $275 million, respectively.
- Geographies: Americas revenue rose 18% to $10.4 billion, EMEA increased 19% to $4.4 billion, and APJC grew 14% to $2.5 billion.
Margin and earnings expansion
The revenue mix and cost discipline produced strong operating leverage. GAAP operating income rose 38% to $4.3 billion, taking the GAAP operating margin to 24.7% from 21.0% a year ago. Non-GAAP operating income increased 23% to $6.2 billion, with margin expanding to 35.9% from 34.1%, as non-GAAP operating expenses grew only 5% to $5.2 billion against 18% revenue growth.
- Gross margin mix: GAAP gross margin improved to 64.1% from 63.2%, helped by services gross margin rising to 69.4% from 68.3%; non-GAAP gross margin fell to 66.3% from 68.4% as product gross margin declined to 64.8% from 67.5%.
- Non-GAAP earnings: EPS increased 23% to $1.22 from $0.99, while non-GAAP net income rose to $4.9 billion from $4.0 billion.
- Fiscal performance: FY2026 revenue rose 12% to $63.3 billion, GAAP operating margin was 24.3% versus 20.8% in FY2025, and non-GAAP EPS increased 14% to $4.33.
FY2027 guidance
Cisco's initial FY2027 outlook assumes that the networking cycle and AI-infrastructure ramp continue. Revenue guidance of $72.2 billion-$73.4 billion compares with $63.3 billion in FY2026, while non-GAAP EPS guidance of $5.05-$5.11 compares with $4.33. Q1 guidance calls for revenue of $18.0 billion-$18.2 billion and non-GAAP EPS of $1.32-$1.34, with non-GAAP operating margin of 35.5%-36.5%.
- Revenue trajectory: FY2027 guidance implies approximately 14%-16% year-over-year revenue growth.
- Earnings trajectory: The non-GAAP EPS range implies approximately 17%-18% growth from FY2026's $4.33.
- GAAP bridge: FY2027 GAAP EPS is expected at $4.00-$4.06, including estimated per-share adjustments of $0.60 for stock compensation, $0.34 for amortization and acquisition-related costs, and $0.11 for restructuring.
Cash flow and capital returns
Quarterly cash generation improved, although full-year operating cash flow was essentially unchanged. Q4 operating cash flow was $5.4 billion, up 27% from $4.2 billion a year ago, while FY2026 operating cash flow was $14.2 billion versus $14.2 billion in FY2025. Cisco returned $3.2 billion in Q4 and ended the period with $15.9 billion of cash and investments, down from $16.6 billion at the end of Q3.
- Buybacks: Cisco repurchased approximately 13 million shares for $1.5 billion at an average price of $111.53; $8.1 billion remained authorized.
- Dividend: The company paid $1.7 billion, or $0.42 per share, and declared the same $0.42 quarterly dividend for payment on October 21, 2026.
- Working capital: Inventories rose to $5.7 billion from $3.2 billion a year earlier, while financing receivables increased to $8.3 billion from $6.5 billion.
