Cisco's Revenue Growth Accelerates to 18% in Fourth Quarter
Fourth-quarter sales reached $17.3 billion, and the company guided first-quarter fiscal 2027 revenue to $18.0 billion to $18.2 billion.
Cisco Systems (CSCO) closed fiscal 2026 with a sharp pickup in the pace of sales growth, posting fourth-quarter revenue of $17.3 billion, up 18% from a year earlier, after 12% growth in the third quarter and 10% in the second.
The networking equipment maker said the results exceeded the high end of its guidance ranges and marked a record year. Product revenue was $13.5 billion, up 24%. Services revenue was $3.8 billion.
Networking product revenue was $9.8 billion. Security was $2.2 billion, Collaboration $1.2 billion, and Observability $275 million.
By geography, Americas revenue was $10.4 billion, EMEA $4.4 billion, and APJC $2.5 billion.
GAAP net income was $3.9 billion, or $0.97 a share, up 52% from a year earlier. Non-GAAP earnings were $1.22 a share. GAAP operating income was $4.3 billion, with a 24.7% operating margin. Non-GAAP operating income was $6.2 billion, and the non-GAAP operating margin was 35.9%.
Restructuring and other charges were $511 million in the quarter. GAAP operating expenses were $6.8 billion, or 39.4% of revenue. Non-GAAP operating expenses were $5.2 billion, or 30.4% of revenue. GAAP total gross margin was 64.1%.
Chief Executive Chuck Robbins said the company delivered a very strong close to fiscal 2026 and that Cisco is well positioned to support customers however or wherever they decide to deploy AI. Chief Financial Officer Mark Patterson said record revenue, non-GAAP operating income, and EPS all exceeded the high end of guidance.
The company said total product orders were up 35% year over year in the fourth quarter, and up 25% excluding hyperscalers, with double-digit growth across every geography and customer market. Networking product orders grew 40%, the eighth consecutive quarter of double-digit growth.
Hyperscaler AI-infrastructure orders were $4 billion in the quarter, bringing the fiscal 2026 total to $9.3 billion. Cisco delivered about $4 billion of that revenue in fiscal 2026 and expects $7.5 billion in fiscal 2027.
For the full year ended July 25, 2026, revenue was $63.3 billion, up 12%. GAAP operating margin was 24.3% and non-GAAP operating margin 34.8%. GAAP earnings were $3.33 a share and non-GAAP earnings $4.33 a share. Cash flow from operating activities was $14.2 billion.
Remaining performance obligations were $46.7 billion, up 7%, with product RPO up 9% and services RPO up 6%. Deferred revenue was $29.8 billion. Cash and cash equivalents and investments were $15.9 billion at July 25, 2026.
In the fourth quarter Cisco returned $3.2 billion to stockholders through a $0.42 dividend, or $1.7 billion, and $1.5 billion of buybacks of about 13 million shares at an average $111.53. Remaining buyback authorization is $8.1 billion. The company closed acquisitions of Galileo Technologies and Astrix Securities.
Cisco expects first-quarter fiscal 2027 revenue of $18.0 billion to $18.2 billion, GAAP EPS of $1.08 to $1.10, and non-GAAP EPS of $1.32 to $1.34. Non-GAAP gross margin is guided at 65% to 66% and non-GAAP operating margin at 35.5% to 36.5%.
For fiscal 2027, the company expects revenue of $72.2 billion to $73.4 billion, GAAP EPS of $4.00 to $4.06, and non-GAAP EPS of $5.05 to $5.11. Guidance assumes an effective tax provision rate of about 15% for GAAP and 18.5% for non-GAAP in the first quarter, and about 14.5% for GAAP and 18.5% for non-GAAP for the full year.
The company declared a quarterly dividend of $0.42 a share, payable October 21, 2026.