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Cisco Systems Inc Earnings
Cisco Systems, Inc., a global technology leader, reported impressive earnings for the first quarter of fiscal year 2026. The company managed to exceed its own guidance benchmarks, showcasing strong performance metrics that highlight significant growth and demand in their business segments.
Cisco Systems Inc Results
Below is a table summarizing the key financial metrics for Cisco Systems Inc for Q1 FY 2026:
| Metric | Q1 FY 2026 | Year-over-Year Change |
|---|---|---|
| Total Revenue | $14.9 billion | Up 8% |
| GAAP EPS | $0.72 | Up 6% |
| Non-GAAP EPS | $1.00 | Up 10% |
| GAAP Gross Margin | 65.5% | - |
| Non-GAAP Gross Margin | 68.1% | - |
| GAAP Operating Margin | 22.6% | - |
| Non-GAAP Operating Margin | 34.4% | - |
This quarter demonstrated Cisco's continued strength, with GAAP EPS of $0.72 and Non-GAAP EPS of $1.00, exceeding the high end of their guidance ranges and reflecting their robust operational leverage. The operational margins demonstrated both product and geographic segment strengths.
Revenue Breakdown
Here’s a breakdown of Cisco’s Q1 FY 2026 revenue across its major segments:
| Segment | Revenue Growth |
|---|---|
| Product Revenue | Up 10% |
| Services Revenue | Up 2% |
| Networking | Up 15% |
| Observability | Up 6% |
| Security | Down 2% |
| Collaboration | Down 3% |
In terms of geographic performance, all regions contributed to the revenue increase: the Americas saw a 9% rise in revenue, while the EMEA and APJC regions both grew by 5%. Particularly, the Networking segment saw a remarkable 15% growth, marking a pronounced rebounding in demand across the company’s array of network solutions.
Key Developments
Cisco’s first quarter of fiscal 2026 was underscored by several noteworthy developments. The company experienced a significant surge in product orders, which were up 13% year over year, driven by double-digit growth in Networking product orders for the fifth consecutive quarter. AI infrastructure orders also reflected strong momentum, totaling $1.3 billion from hyperscaler customers.
Moreover, Cisco is at the forefront of a major multi-year, multi-billion-dollar campus networking refresh cycle. This initiative is expected to bolster Cisco's leadership in the networking fields, with technologies within campus networking — comprising switching, routing, wireless, and IoT solutions — showing accelerated growth. Cisco’s new generation smart switches, secure routers, and WiFi 7 products are ramping up faster than previous launches, setting a promising trajectory for market share expansion.
Comments from Company Officers
Chuck Robbins, Cisco's Chair and CEO, stated, "We had a solid start to fiscal 2026, and Cisco is on track to deliver our strongest year yet. The widespread demand for our technologies highlights the critical role of secure networking and the value of our portfolio as customers move quickly to unlock the potential of AI."
Additionally, Mark Patterson, CFO of Cisco, remarked, "We delivered a strong quarter, with top and bottom-line performance exceeding our guidance, as well as solid margins and operating cash flow. Our relevance in AI continues to build and we have a multi-year, multi-billion-dollar campus refresh opportunity starting to ramp, with strong demand for our refreshed networking products."
Dividends and Share Repurchases
Cisco declared a quarterly dividend of $0.41 per share to be paid in January 2026, demonstrating the company’s commitment to returning capital to shareholders. Additionally, Cisco repurchased 29 million shares of common stock for a total of $2.0 billion during the quarter. This aggressive buyback program, with a remaining authorization of $12.2 billion, underscores the company's confidence in its continued financial health and future performance.
Cisco Systems Inc Stock Forecast
Taking into account Cisco's outstanding Q1 performance and optimistic outlook, the stock valuation seems poised for upward momentum. Given the company's strong financial health, sustainable growth in key segments, and ongoing innovations, projections for the company's stock price by the end of 2026 are optimistic.
High Forecast: Considering continued double-digit growth in Networking and a successful campus networking refresh, as well as positive market sentiments towards tech stocks, Cisco’s share price could potentially reach upwards of $75 per share within the next year.
Low Forecast: With potential economic uncertainties and sector volatility in mind, a more conservative projection would place Cisco’s stock around $60 per share. This projection nonetheless reflects the financial and operational strengths Cisco has demonstrated consistently over the quarters.
In conclusion, Cisco Systems Inc has begun its fiscal year 2026 with impressive top and bottom-line growth that exceeds initial forecasts. The company’s robust performance, strategic positioning within the AI and networking markets, and commitment to shareholder returns through dividends and buybacks position it well for continued success and market leadership.
