Cisco Systems

CSCO · NASDAQ

Technology Infrastructure · Networking Equipment & Software

Q4 FY2026 Earnings · Wednesday, August 12Next Earnings: Q1 FY27 · ~November 2026

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$109.35+ 0.68%

Since the Report − 9.2%

Close on Report DayAug 12

$120.43▼ 4.5%Report-Day Move

Market Cap(Today): ≈ $431 B
1Y Return(At Report): + 75%
P/E($3.33 · Trailing 12M): 32.8
Net Margin(Trailing 12M): 21.0%

83/ 100

VerdictBUY

Cisco closed fiscal 2026 with a record quarter: revenue rose 18% year over year to $17.3 billion, and AI infrastructure orders booked over the year reached $9.3 billion, topping even the company's raised target. Yet the stock slipped about 4.5% after hours; investors are wary of the hyperscaler mix mildly pressuring gross margin and of a valuation on a stock up 75% over the past year. What matters from here is how much of those orders converts into revenue while protecting profitability.

Avg. Analyst Target (15)$136.00▲ 13% Upside

Revenue (Q4)
$17.3B
▲ 18%
EPS (Non-GAAP)
$1.22
▲ 23%
Networking Revenue
$9.79B
▲ 28%
AI Orders (FY26)
$9.3B
Revenue ~$4B
Product Orders
▲ 35%
Ex-hyperscaler 25%
Gross Margin (Non-GAAP)
66.3%
Slight Pressure Ahead

Quarterly Revenue ($ Billion)

ReportedCompany Guidance

14.66
14.90
15.30
15.80
17.30
18.0–18.2

Q4 FY25
Q1 FY26
Q2 FY26
Q3 FY26
Q4 FY26
Q1 FY27E

Annual Revenue Growth: ▲ 18%
Networking Share: 57%Of Q4 Revenue
Remaining Obligations (RPO): $46.7B▲ 7%

Q1 FY27 Company Guidance

Guidance Range

Revenue (Q1 FY27)18.0 – 18.2 billion
Midpoint 18.1 · 14.9B a year agoStrong Growth ▲
Revenue (Full Year FY27)72.2 – 73.4 billion
FY26 actual 63.3BDouble-Digit Growth ▲
Gross Margin (Non-GAAP)65.5% – 66.5%
Last quarter actual 66.3%Slight Pressure ▼

The blue band is the company's low–high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. Axis is ±0.9% around the midpoint.

Q1 FY27 EPS (Non-GAAP): $1.32–1.34
FY27 AI Revenue Target: $7.5BFY26 ~$4B
Restructuring Charge: ~$450MQ1 FY27

From the CEOChuck RobbinsChair & CEO

“We delivered a very strong close to fiscal 2026, marking another record year for Cisco.”

Record AI infrastructure demand
Networking orders accelerated
Record fiscal 2026

Summary

Cisco reported $17.3 billion in revenue for its fiscal fourth quarter, an 18% year-over-year gain and above the high end of its guidance range. Non-GAAP earnings per share climbed 23% to $1.22, beating the market expectation of $1.17. Growth was carried by the networking segment, which reached $9.79 billion and grew 28%; security came in at $2.23 billion (+14%) and collaboration at $1.17 billion (+12%). Product orders rose 35% year over year (25% excluding hyperscalers). The company said it booked $9.3 billion in AI infrastructure orders across fiscal 2026 and converted roughly $4 billion of that into revenue. Full-year revenue reached $63.3 billion (+12%) and remaining performance obligations (RPO) hit $46.7 billion.

Despite the strong numbers, the stock fell about 4.5% after the results. Investor focus shifted from revenue to margins: the company guided next-period gross margin to 65.5–66.5%, slightly below the 66.3% delivered last quarter. The hyperscaler customers buying AI infrastructure operate at lower margins than enterprise products, and as orders grow, there is concern the mix will dilute margins. The stock had also run up 75% over the past year, stretching the valuation and feeding a 'sell the news' reaction. A $450 million restructuring charge added to the picture. In short, the market questioned not the quality of the quarter but the pace at which growth translates into profit.

The overall picture points to an operationally strong quarter, and the score reflects that. Cisco's shift toward AI infrastructure is tangible: orders are beating targets, networking is accelerating, and future revenue visibility is backed by RPO. The company guides fiscal 2027 to $72.2–73.4 billion in revenue (double-digit growth) and $5.05–5.11 in EPS. That guidance implies the momentum is not a one-quarter event. The key question from here is how much of the AI orders converts into revenue while protecting margins. If the margin curve holds, the quarter's strength could feed through to the price; if not, valuation pressure may persist.

Full Review

Claude

AI orders topped the annual target.

Cisco said it booked $9.3 billion in AI infrastructure orders across fiscal 2026 — above even its own target, which had been raised to ~$9 billion during the year. In the fourth quarter alone, hyperscaler orders came to roughly $3.7 billion, up about 4.5x year over year. Around $4 billion of these orders converted into revenue in FY26; the company expects to grow AI revenue to $7.5 billion in FY27. At the core of the demand are data-center networking investments from large cloud and model providers. Cisco's own Silicon One chip family and high-capacity switching products sit at the center of that demand. The order volume is rewriting a story long tagged as 'low growth.'

Networking is the growth engine.

The networking segment, about 57% of quarterly revenue, reached $9.79 billion and grew 28% year over year. Networking product orders rose 40% — a faster build than revenue, signaling demand that carries into coming quarters. The segment's drivers are data-center switching and AI connectivity products. Security ($2.23 billion, +14%) and collaboration ($1.17 billion, +12%) grew more modestly, while observability was the slowest at $275 million (+6%). Still, the entire portfolio is in the green, showing growth is not tied to a single line. The momentum in networking is the core of Cisco's thesis for capturing a share of the AI wave.

The one crack is in gross margin.

The weakest point of the quarter is on profitability. The company guided non-GAAP gross margin down to 65.5–66.5% from 66.3% the prior quarter. The reason is a rising share of lower-margin hyperscaler AI orders in the mix. In other words, as revenue accelerates, the profit on each dollar eases somewhat. A $450 million restructuring charge adds to this. The main reason the stock fell about 4.5% after the results was this margin sensitivity, plus the thin margin for error left by a valuation up 75% over the past year.

FY27 guidance says double-digit growth.

Cisco guided next quarter to $18.0–18.2 billion in revenue and $1.32–1.34 in non-GAAP EPS; the midpoint implies about 22% growth over the $14.9 billion a year earlier. For the full year (FY27), guidance is $72.2–73.4 billion in revenue and $5.05–5.11 in EPS — a double-digit growth rate over FY26's $63.3 billion. Guidance this far up signals the AI-driven demand is not a one-quarter jump. At the same time, the same guidance concedes margins will be under some pressure. For investors the equation is clear: growth is strong; the question is how well profitability keeps that pace.

Strengths

Revenue and EPS beat expectations, both above the high end of guidance
Annual AI infrastructure orders of $9.3 billion topped the raised target
Every segment grew; networking revenue up 28%
RPO of $46.7 billion — strong visibility into future revenue
FY27 guidance points to double-digit revenue growth

Risks

Hyperscaler/AI mix pressures gross margin (65.5–66.5% guide)
Stock up 75% over the past year; valuation narrowed the margin for error
$450 million restructuring charge weighs on profitability
Pace and durability of AI orders converting to revenue not yet proven
Data-center networking competition from Arista and Nvidia persists

What to Watch

Q1 FY27 earnings — ~November 2026
AI revenue conversion through the year (FY27 target $7.5 billion)
Margin impact of the restructuring program

Upcoming Earnings

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To Understand This

Earnings Reports: What to Read, HowThe book opens once a quarter — and the market really only reads three lines.P/E and the Valuation RatiosYou can't tell whether a stock is cheap or expensive by looking at its price.