Cisco Systems (CSCO) Earnings Date & Reports

Key Takeaways

• Cisco reported record fourth-quarter revenue of $17.3 billion, up 18% year over year, topping the consensus estimate of roughly $16.84 billion.
• Non-GAAP (adjusted) earnings per share came in at $1.22, beating analyst expectations of $1.17, while GAAP (generally accepted accounting principles) EPS rose 52% to $0.97.
• Product revenue climbed 24% to $13.5 billion, led by a 28% jump in networking, while services revenue was flat at $3.8 billion.
• AI-related demand surged, with hyperscaler customers placing $4 billion in orders during the quarter and $9.3 billion for all of fiscal 2026.
• Despite the top-and-bottom-line beat, Cisco shares slipped in after-hours trading following the report.

Earnings Context and Why It Matters

Cisco's fiscal fourth quarter, ended July 25, 2026, capped a transformative year for the networking giant as it pivoted toward artificial intelligence infrastructure. The company closed fiscal 2026 with record annual revenue of $63.3 billion, up 12%, driven by a networking "supercycle" and accelerating demand from hyperscalers — the large cloud and internet platforms building out AI data centers. For investors, this report offered a critical read on whether Cisco can sustain double-digit growth, protect margins amid rising memory costs, and convert a swelling AI order backlog into recurring revenue. The results also set the baseline for the company's fiscal 2027 outlook.

Reported Results

For the fourth quarter of fiscal 2026, Cisco reported total revenue of $17.3 billion, an 18% increase from $14.7 billion a year earlier and above the $16.84 billion Wall Street consensus. Product revenue rose 24% to $13.5 billion, while services revenue was essentially flat at $3.8 billion.

On the bottom line, GAAP net income reached $3.9 billion, or $0.97 per share, up 51% and 52%, respectively. Non-GAAP net income was $4.9 billion, or $1.22 per share, up 23% and exceeding the $1.17 consensus estimate by $0.05. Non-GAAP gross margin was 66.3%, down 210 basis points year over year, while non-GAAP operating margin came in at 35.9%.

By product category, networking revenue grew 28%, security rose 14%, collaboration increased 12%, and observability advanced 6%. Total product orders surged 35% year over year, marking the eighth consecutive quarter of double-digit growth in networking orders. Remaining performance obligations (RPO), a measure of contracted future revenue, rose 7% to $46.7 billion.

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Market Reaction and Investor Sentiment

Despite delivering a record quarter that beat both revenue and earnings expectations, Cisco shares declined in after-hours trading following the August 12 announcement. The muted-to-negative reaction reflected investor concerns about margin pressure — non-GAAP gross margin fell 210 basis points year over year, partly due to a heavier hardware mix and rising memory costs — as well as cautious positioning after a strong run-up in the stock. The discrepancy between strong AI-driven order momentum and softer services growth also prompted scrutiny. Sentiment remained constructive on the long-term AI infrastructure opportunity, but the market's initial response highlighted that expectations heading into the print were already elevated.

Forward Outlook and Key Factors to Monitor

For the first quarter of fiscal 2027, Cisco guided to revenue of $18.0 billion to $18.2 billion and non-GAAP EPS of $1.32 to $1.34. For the full fiscal year, management expects revenue of $72.2 billion to $73.4 billion and non-GAAP EPS of $5.05 to $5.11.

A central theme to watch is the conversion of Cisco's growing AI backlog into realized revenue. The company projects AI infrastructure revenue will climb from roughly $4 billion in fiscal 2026 to about $7.5 billion in fiscal 2027. Investors will monitor whether this mix shift continues to pressure gross margins, given the higher hardware component and memory costs.

Beyond AI, key indicators include the trajectory of product order growth, the pace of recurring revenue expansion, and whether services growth reaccelerates. Capital returns also remain a focus: Cisco returned $3.2 billion to shareholders in the quarter through buybacks and dividends. Together, these factors will shape how the market assesses Cisco's ability to sustain durable growth and profitability into fiscal 2027.

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