How did Cisco perform relative to its own guidance in Q4 FY2025?

Revenue, gross margin and operating margin came in at the high end of guidance ranges, and non-GAAP EPS of $0.99 was above the high end of the range, according to management.

Why is there a large gap between GAAP and non-GAAP EPS?

Non-GAAP results exclude share-based compensation (about $0.24 per share in Q4 and $0.90 for the year), amortization of acquisition-related intangibles (about $0.12 in Q4 and $0.55 for the year), and acquisition-related costs and other items. Share-based compensation is the largest contributor to the difference and is a real recurring cost to shareholders.

What drove the FY2025 GAAP net income change and what was the one-time benefit?

GAAP net income rose 1% to $10.5B, but the full-year GAAP tax rate of 8.7% was helped by a $720M benefit from an August 2024 U.S. Tax Court decision on deemed foreign dividends. Cisco excluded this significant tax matter from its non-GAAP results, so non-GAAP net income was flat at $15.2B.

What does the FY2026 outlook imply for investors?

Guidance calls for revenue growth of roughly 4-6% (to $59-$60B) and non-GAAP EPS of $4.00-$4.06, versus $3.81 in FY2025. Guidance includes estimated tariff impacts under current trade policy and assumes a roughly 19% non-GAAP tax rate.

How is Cisco returning capital to shareholders?

In Q4 FY2025 Cisco paid $1.6B in dividends and repurchased about 19 million shares for $1.3B at an average of $64.65. Roughly $14.2B remains under the buyback authorization, and the next quarterly dividend of $0.41 is payable October 22, 2025.

CSCO 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed August 13, 2025. Cited figures are marked; the original filing is the authoritative source.

Cisco reported fiscal Q4 and full-year 2025 results (quarter ended July 26, 2025) that landed at the high end of guidance on revenue, gross margin and operating margin, with non-GAAP EPS of $0.99^a ahead of the top of its range.

Q4 revenue rose 8% year over year to $14.7 billion^b, led by Networking (+12%) and Security (+9%), while Observability grew 4% and Collaboration 2%. Services revenue was flat. GAAP EPS rose 31% to $0.71 and non-GAAP EPS rose 14% to $0.99.

For the full fiscal year, revenue grew 5% to $56.7 billion^c, non-GAAP EPS rose 2% to $3.81, and operating cash flow climbed 30% to $14.2 billion. Management highlighted AI infrastructure orders from webscale customers exceeding $2 billion for FY2025, more than double the original $1 billion target. Total remaining performance obligations reached $43.5 billion (up 6%), and deferred revenue was $28.8 billion (up 1%).

Cisco returned $2.9 billion^d to shareholders in Q4 through dividends and buybacks, and declared a quarterly dividend of $0.41 per share. For fiscal 2026, Cisco guided revenue to $59.0-$60.0 billion and non-GAAP EPS to $4.00-$4.06, with GAAP EPS of $2.79-$2.91. Q1 FY2026 guidance calls for revenue of $14.65-$14.85 billion and non-GAAP EPS of $0.97-$0.99.

Management noted that margin and EPS guidance includes the estimated impact of current tariff policy. Non-GAAP results exclude share-based compensation and acquisition-related amortization, which together account for a large share of the gap between GAAP and non-GAAP EPS.

02—Key points

Key Highlights

Q4 FY2025 revenue of $14.7B, up 8% YoY; Networking +12%, Security +9%, Observability +4%, Collaboration +2%, services flat
Q4 non-GAAP EPS of $0.99 (up 14%) and GAAP EPS of $0.71 (up 31%), with non-GAAP gross margin of 68.4% and operating margin of 34.3%
FY2025 revenue of $56.7B (up 5%); non-GAAP EPS of $3.81 (up 2%); operating cash flow of $14.2B (up 30%)
AI infrastructure orders from webscale customers exceeded $2B in FY2025, more than double the original $1B target
FY2026 guidance: revenue of $59.0-$60.0B and non-GAAP EPS of $4.00-$4.06, with Q1 non-GAAP EPS of $0.97-$0.99
Remaining performance obligations of $43.5B (up 6%), with 50% expected to convert to revenue within 12 months
Quarterly dividend of $0.41 per share declared; $2.9B returned to shareholders in Q4; $14.2B remaining buyback authorization

03—Questions

Frequently Asked Questions

How did Cisco perform relative to its own guidance in Q4 FY2025?
Revenue, gross margin and operating margin came in at the high end of guidance ranges, and non-GAAP EPS of $0.99 was above the high end of the range, according to management.
Why is there a large gap between GAAP and non-GAAP EPS?
Non-GAAP results exclude share-based compensation (about $0.24 per share in Q4 and $0.90 for the year), amortization of acquisition-related intangibles (about $0.12 in Q4 and $0.55 for the year), and acquisition-related costs and other items. Share-based compensation is the largest contributor to the difference and is a real recurring cost to shareholders.
What drove the FY2025 GAAP net income change and what was the one-time benefit?
GAAP net income rose 1% to $10.5B, but the full-year GAAP tax rate of 8.7% was helped by a $720M benefit from an August 2024 U.S. Tax Court decision on deemed foreign dividends. Cisco excluded this significant tax matter from its non-GAAP results, so non-GAAP net income was flat at $15.2B.
What does the FY2026 outlook imply for investors?
Guidance calls for revenue growth of roughly 4-6% (to $59-$60B) and non-GAAP EPS of $4.00-$4.06, versus $3.81 in FY2025. Guidance includes estimated tariff impacts under current trade policy and assumes a roughly 19% non-GAAP tax rate.
How is Cisco returning capital to shareholders?
In Q4 FY2025 Cisco paid $1.6B in dividends and repurchased about 19 million shares for $1.3B at an average of $64.65. Roughly $14.2B remains under the buyback authorization, and the next quarterly dividend of $0.41 is payable October 22, 2025.

04—Continue

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