Cisco (CSCO) Fiscal Q4 2026 Earnings Call: AI Orders Surge, FY2027 Guidance Rises
Source Tradingkey
Key Takeaways
- Cisco reported record fiscal Q4 2026 revenue of $17.3 billion, up 18% year over year. Non-GAAP EPS rose 23% to a record $1.22.
- Product orders increased 35%, led by 95% growth from service provider and cloud customers. Hyperscale orders grew by triple digits, while enterprise and public sector orders rose 21% and 30%, respectively.
- AI infrastructure orders from hyperscalers reached $4 billion in Q4 and $9.3 billion for fiscal 2026, approximately 4.5 times the fiscal 2025 total. Cisco generated about $4 billion of related revenue in fiscal 2026.
- Management expects hyperscaler AI infrastructure revenue to reach $7.5 billion in fiscal 2027. Total fiscal 2027 revenue is guided to $72.2 billion-$73.4 billion, with non-GAAP EPS of $5.05-$5.11.
- Networking revenue grew 28% in Q4, supported by triple-digit AI infrastructure growth, double-digit data center switching growth and continued campus networking demand.
- Gross margin faced pressure from a higher hardware mix and memory costs. Management nevertheless expects fiscal 2027 non-GAAP operating margin of approximately 35%, supported by scale and expense discipline.
Core Financial Results
| Metric | Fiscal Q4 2026 | Year-over-year change | Commentary |
|---|---|---|---|
| Revenue | $17.3 billion | +18% | Record quarterly revenue |
| Product revenue | $13.5 billion | +24% | Led by networking and AI infrastructure |
| Services revenue | $3.8 billion | Flat | Management expects improvement in fiscal 2027 |
| Non-GAAP net income | $4.9 billion | +23% | Record quarterly result |
| Non-GAAP EPS | $1.22 | +23% | Record quarterly result |
| Non-GAAP gross margin | 66.3% | -210 bps | Higher hardware mix and memory costs |
| Non-GAAP operating margin | 35.9% | +160 bps | Operating leverage offset gross-margin pressure |
| Operating cash flow | $5.4 billion | +27% | Driven by revenue growth and operating leverage |
| Product orders | — | +35% | Double-digit growth across all regions |
| Total RPO | $46.7 billion | +7% | Product RPO increased 9% |
| Total ARR | $32.1 billion | +3% | Product ARR increased 5% |
| Software revenue | $6.2 billion | +11% | Subscription revenue was 48% of total revenue |
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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