CISCO SYSTEMS, INC. (CSCO): Results of Operations and Financial Condition
CISCO SYSTEMS, INC. (CSCO) filed an SEC Form 8-K — Results of Operations and Financial Condition. Press Contact: Investor Relations Contact: Robyn Blum Sami Badri Cisco Cisco 1 (408) 930-8548 1 (469) 420-4834 rojenkin@cisco.com sambadri@cisco.com CISCO REPORTS FOURTH QUARTER AND FISCAL YEAR 2026 EARNINGS News Summary : • Record top and bottom-line performance with double-digi
How this was made
The 30-second read
Why it matters
The filing provides fresh, decision-relevant datapoints: Q4 and FY results, Q1 FY2027 and FY2027 guidance ranges, and a declared quarterly dividend.
Market read
Traders can reprice CSCO based on the disclosed earnings beats, margin strength, and explicit forward guidance ranges.
What to watch
Services revenue was flat in Q4, and cash flow from operating activities was flat for FY2026, which could temper longer-duration multiple expansion.
Cisco reports Q4 FY 2026 revenue of $17.3 billion, up 18%, with GAAP EPS of $0.97 and non-GAAP EPS of $1.22.
Q4 revenue, GAAP and non-GAAP earnings, operating income, operating cash flow, product orders and networking product orders all grew year over year. Cisco also stated that revenue, non-GAAP operating income and EPS exceeded the high end of its guidance ranges, while issuing FY 2027 revenue guidance of $72.2 billion - $73.4 billion.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenueGAAP | $17.3 billion | – | 18% |
| Product revenueGAAP | $13,459 million | – | 24% |
| Services revenueGAAP | $3,793 million | – | flat |
| Total gross marginGAAP | 64.1% | – | – |
| Product gross marginGAAP | 62.6% | – | – |
| Services gross marginGAAP | 69.4% | – | – |
| Total gross marginnon-GAAP | 66.3% | – | – |
| Product gross marginnon-GAAP | 64.8% | – | – |
| Services gross marginnon-GAAP | 71.6% | – | – |
| Operating expensesGAAP | $6.8 billion | – | 10% |
| Operating expenses as a percentage of revenueGAAP | 39.4% | – | – |
| Operating expensesnon-GAAP | $5.2 billion | – | 5% |
| Operating expenses as a percentage of revenuenon-GAAP | 30.4% | – | – |
| Operating incomeGAAP | $4.3 billion | – | 38% |
| Operating marginGAAP | 24.7% | – | – |
| Operating incomenon-GAAP | $6.2 billion | – | 23% |
| Operating marginnon-GAAP | 35.9% | – | – |
| Provision for income taxes rateGAAP | 21.8% | – | – |
| Provision for income taxes ratenon-GAAP | 18.8% | – | – |
| Net incomeGAAP | $3.9 billion | – | 51% |
| Diluted earnings per shareGAAP | $0.97 | – | 52% |
| Net incomenon-GAAP | $4.9 billion | – | 23% |
| Earnings per sharenon-GAAP | $1.22 | – | 23% |
| Cash flow from operating activitiesGAAP | $5.4 billion | – | 27% |
| FY 2026 total revenueGAAP | $63.3 billion | – | 12% |
| FY 2026 operating incomeGAAP | $15.4 billion | – | 31% |
| FY 2026 operating marginGAAP | 24.3% | – | – |
| FY 2026 operating incomenon-GAAP | $22.0 billion | – | 13% |
| FY 2026 operating marginnon-GAAP | 34.8% | – | – |
| FY 2026 net incomeGAAP | $13.3 billion | – | 30% |
| FY 2026 earnings per shareGAAP | $3.33 | – | 31% |
| FY 2026 net incomenon-GAAP | $17.2 billion | – | 13% |
| FY 2026 earnings per sharenon-GAAP | $4.33 | – | 14% |
| FY 2026 cash flow from operating activitiesGAAP | $14.2 billion | – | flat |
| Cash and cash equivalents and investmentsother | $15.9 billion | – | – |
| Remaining performance obligationsother | $46.7 billion | – | 7% |
| Deferred revenueother | $29.8 billion | – | 3% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| ProductNetworking up 28%, Security up 14%, Collaboration up 12%, and Observability up 6%. | $13,459 million | – | 24% |
| ServicesServices revenue was flat. | $3,793 million | – | flat |
Q1 FY 2027 outlook
- Revenue$18.0 billion - $18.2 billion
- Gross margin65% - 66%
- Tax rateapproximately 15% for GAAP and approximately 18.5% for non-GAAP results
- NoteNon-GAAP operating margin 35.5% - 36.5%
- NoteGAAP EPS $1.08 to $1.10
- NoteNon-GAAP EPS $1.32 - $1.34
- NoteFY 2027 revenue $72.2 billion - $73.4 billion
- NoteFY 2027 GAAP EPS $4.00 to $4.06
- NoteFY 2027 non-GAAP EPS $5.05 - $5.11
- NoteFY 2027 effective tax provision rate of approximately 14.5% for GAAP and approximately 18.5% for non-GAAP results
Capital returns
- Returned $3.2 billion to stockholders through share buybacks and dividends in the fourth quarter of fiscal 2026.
- Declared and paid a cash dividend of $0.42 per common share, or $1.7 billion.
- Repurchased approximately 13 million shares of common stock at an average price of $111.53 per share for an aggregate purchase price of $1.5 billion.
- Remaining authorized amount for stock repurchases is $8.1 billion with no termination date.
- Declared a quarterly dividend of $0.42 per common share to be paid on October 21, 2026, to stockholders of record as of the close of business on October 2, 2026.
What drove it
- Q4 total product orders were up 35% year over year and up 25% excluding hyperscalers, with double-digit growth across every geography and customer market.
- Networking product orders grew 40% year over year in Q4, marking the eighth consecutive quarter of double-digit growth.
- Hyperscaler AI infrastructure orders were $4 billion in Q4, bringing the FY 2026 total to $9.3 billion.
- Cisco delivered approximately $4 billion of AI infrastructure revenue in FY 2026 and expects $7.5 billion in FY 2027.
- Geographic revenue growth was 18% in the Americas, 19% in EMEA and 14% in APJC.
Concerns
- Services revenue was flat year over year.
- Q4 non-GAAP total gross margin was 66.3%, compared with 68.4% in Q4 FY 2025. Non-GAAP product gross margin was 64.8%, compared with 67.5%.
- FY 2026 cash flow from operating activities was flat compared with FY 2025.
- Cash and cash equivalents and investments declined to $15.9 billion from $16.6 billion at the end of the third quarter of fiscal 2026.
What to watch
- Delivery of the $7.5 billion of AI infrastructure revenue Cisco expects in FY 2027.
- Whether total product-order growth and networking product-order growth continue after Q4 growth of 35% and 40%, respectively.
- Services revenue growth following a flat Q4 result.
- Q1 FY 2027 non-GAAP gross margin guidance of 65% - 66% and non-GAAP operating margin guidance of 35.5% - 36.5%.
- Progression of product and services RPO, which were up 9% and 6%, respectively.
Balance sheet and cash flow
- Cash and cash equivalents and investments were $15.9 billion at the end of the fourth quarter of fiscal 2026, compared with $16.6 billion at the end of the third quarter of fiscal 2026 and $16.1 billion at the end of fiscal 2025.
- Cash flow from operating activities was $5.4 billion for Q4 FY 2026, an increase of 27% compared with $4.2 billion for Q4 FY 2025.
- Cash flow from operating activities was $14.2 billion for FY 2026, flat compared with FY 2025.
- Remaining performance obligations were $46.7 billion, up 7% in total. Product RPO was up 9% and services RPO was up 6%.
- Deferred revenue was $29.8 billion, up 3% in total, with deferred product revenue up 2% and deferred services revenue up 4%.
Analysis
Cisco closed FY 2026 with Q4 revenue of $17.3 billion, up 18%, as product revenue increased 24% while services revenue was flat. Product demand was broad-based: total product orders rose 35%, or 25% excluding hyperscalers, and networking product orders increased 40%. Revenue grew across the Americas, EMEA and APJC, while Networking, Security, Collaboration and Observability each posted product-revenue growth.
The earnings profile strengthened faster than revenue on a GAAP basis. GAAP operating income increased 38% to $4.3 billion, GAAP net income increased 51% to $3.9 billion, and GAAP diluted EPS increased 52% to $0.97. Non-GAAP operating income grew 23% to $6.2 billion and non-GAAP EPS grew 23% to $1.22. GAAP total gross margin was 64.1%, compared with 63.2% in Q4 FY 2025, while non-GAAP total gross margin was 66.3%, compared with 68.4%.
AI infrastructure and hyperscaler activity were central demand drivers. Cisco reported $4 billion of AI infrastructure orders in Q4 and $9.3 billion in FY 2026, alongside approximately $4 billion of AI infrastructure revenue delivered during FY 2026. The company expects $7.5 billion of AI infrastructure revenue in FY 2027. Remaining performance obligations were $46.7 billion, up 7%, with product RPO up 9% and services RPO up 6%.
Capital allocation remained substantial. Cisco returned $3.2 billion to stockholders in Q4 through dividends and repurchases, including a $1.7 billion cash dividend and $1.5 billion of share repurchases. Operating cash flow was $5.4 billion in Q4, up 27%, but FY 2026 operating cash flow of $14.2 billion was flat compared with FY 2025. Cash and cash equivalents and investments ended Q4 at $15.9 billion.
The Q1 FY 2027 outlook calls for revenue of $18.0 billion - $18.2 billion, non-GAAP gross margin of 65% - 66%, non-GAAP operating margin of 35.5% - 36.5%, GAAP EPS of $1.08 to $1.10 and non-GAAP EPS of $1.32 - $1.34. For FY 2027, Cisco guided to revenue of $72.2 billion - $73.4 billion, GAAP EPS of $4.00 to $4.06 and non-GAAP EPS of $5.05 - $5.11. The release states that Q4 revenue, non-GAAP operating income and EPS exceeded the high end of guidance ranges, but the prior outlook itself was not provided for a line-by-line comparison.
Management, verbatim
We delivered a very strong close to fiscal 2026, marking another record year for Cisco. Our record performance is a testament to the accelerated pace of innovation and the excellent execution by our teams.
Chuck Robbins, Chair and CEO of Cisco
In Q4, we delivered record revenue, non-GAAP operating income and EPS, all exceeding the high end of our guidance ranges and demonstrating strong financial discipline and operating leverage.
Mark Patterson, CFO of Cisco
Not in the filing
stated, not guessed- Previous-quarter revenue, gross margin, operating expenses, operating income, net income, EPS and cash flow comparisons were not reported for the Q4 metrics.
- Free cash flow was not reported.
- Total debt or debt-balance figures were not reported.
- Q4 revenue amounts for Networking, Security, Collaboration, Observability and geographic segments were not reported.
- FY 2026 gross-margin and tax-rate figures were not reported.
- Q1 FY 2027 GAAP gross-margin, GAAP operating-margin and operating-expense guidance were not reported.
- FY 2027 gross-margin, operating-margin and operating-expense guidance were not reported.
- Prior-quarter outlook was not provided.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is Cisco’s SEC Form 8-K (Item 2.02) with its Q4 and fiscal year 2026 earnings release and guidance.
Ticker impact
Cisco reported Q4 FY2026 revenue of $17.3B (+18% YoY) and raised Q1 FY2027 guidance to $18.0B-$18.2B revenue.
Bullish bias into the next earnings cycle, with follow-through risk if AI order commentary fails to translate into sustained bookings.
The filing discloses specific quarterly and full-year results, GAAP and non-GAAP EPS, and explicit Q1 and FY2027 guidance ranges, which are direct inputs to valuation and positioning.
Market effects
Reinforces the networking equipment and secure infrastructure demand narrative tied to an AI infrastructure buildout.
Shows broad-based growth across Americas, EMEA, and APJC, supporting a less region-specific demand view.
AI networking demand signals can influence sentiment across large-cap enterprise networking peers and suppliers.
Counterpoint
AI infrastructure order momentum may be concentrated in hyperscaler capex cycles, which can reverse quickly if spending slows.
Key entities
- companyCisco Systems, Inc.
Reported Q4 and FY2026 results, declared a quarterly dividend, and issued Q1 FY2027 and FY2027 guidance.
- executiveChuck Robbins
CEO quote emphasizing AI deployment positioning and record performance.
- executiveMark Patterson
CFO quote highlighting operating leverage and productivity metrics.
