What’s Behind Cisco’s Fifth Consecutive Quarterly Earnings Beat?

Cisco Systems has once again exceeded market expectations with its fourth-quarter earnings, posting $14.7 billion in revenue and non-GAAP earnings per share of $0.99. This marks the company's fifth consecutive quarterly earnings beat and demonstrates strong momentum heading into fiscal 2026.

The company’s robust financials extend beyond revenue, showing stable service revenues and impressive product growth that reflect Cisco’s solid foothold in the tech sector.

How did Cisco achieve its earnings success this quarter?

Cisco’s Q4 revenue increased 8% year-over-year, with product revenue rising by 10% while services revenue remained steady. Operating cash flow climbed 14%, reaching $4.2 billion, reinforcing the company’s healthy cash generation capacity.

Profitability was strong, with GAAP and non-GAAP gross margins at the higher end of guidance, signifying efficient cost management amid rising sales.

Did you know?
Cisco doubled its initial $1 billion AI infrastructure order target to over $2 billion in fiscal 2025.

What role did AI infrastructure orders play in Cisco's growth?

A major growth driver was Cisco's AI infrastructure business, where orders from webscale customers more than doubled the original $1 billion target, reaching over $2 billion in fiscal 2025.

In Q4 alone, over $800 million in AI infrastructure orders were recorded, a significant jump fueled by escalating demand from key clients. This AI momentum points to a strategic shift making AI a core part of Cisco’s growth trajectory.

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Cisco’s earnings performance surpasses forecasts

The company’s results beat analyst expectations not just on earnings but also on revenue, setting a strong tone for the upcoming fiscal year.

Guidance for Q1 fiscal 2026 projects revenue between $14.65 billion and $14.85 billion with non-GAAP EPS of $0.97 to $0.99, slightly above market forecasts. This outlook underlines confidence in continued growth and the ability to navigate trade policy challenges.

AI infrastructure drives a new growth chapter for Cisco

CEO Chuck Robbins highlighted the rapid acceleration in AI infrastructure demand, with three of Cisco's top six webscale customers showing triple-digit order growth.

This boom signals a new chapter where Cisco’s focus on AI is reshaping its business landscape, positioning it as a key player in the evolving technological ecosystem.

In fiscal 2026, Cisco intends to capitalize on this AI-driven momentum, targeting a revenue range of $59.0 billion to $60.0 billion and sustained earnings growth.