01—Abstract
Summary
Summary of the 8-K filed November 12, 2025. Cited figures are marked; the original filing is the authoritative source.
Cisco reported fiscal first quarter 2026 (ended October 25, 2025) results that exceeded the high end of its guidance ranges on both top and bottom lines.
Revenue rose 8% year over year to $14.9 billiona, with product revenue up 10% and services up 2%. Networking was the standout, growing 15%, and total product orders rose 13%, with double-digit Networking order growth for a fifth consecutive quarter. Management cited an early ramp of a multi-year, multi-billion-dollar campus networking refresh and $1.3 billion of AI infrastructure orders from hyperscaler customers.
Profitability showed operating leverage. GAAP EPS was $0.72b (up 6%) and non-GAAP EPS was $1.00 (up 10%). Non-GAAP operating margin reached 34.4% and non-GAAP gross margin was 68.1%, though non-GAAP gross margin declined about 120 basis points year over year.
GAAP operating income rose 43% to $3.4 billionc, helped by lower restructuring charges than the prior year. Operating cash flow fell 12% to $3.2 billion, and Security (down 2%) and Collaboration (down 3%) remained soft. Cisco returned $3.6 billion to shareholders in the quarter through buybacks and dividends, declared a $0.41 quarterly dividend, and guided fiscal Q2 2026 revenue to $15.0-15.2 billion with non-GAAP EPS of $1.01-$1.03.
Full-year FY2026 guidance calls for $60.2d-61.0 billion in revenue and non-GAAP EPS of $4.08-$4.14. Management noted that margin and EPS guidance includes the estimated impact of current tariffs.
02—Key points
Key Highlights
- Revenue of $14.9B, up 8% YoY; product revenue up 10% and services up 2%
- Non-GAAP EPS of $1.00 (up 10% YoY) and GAAP EPS of $0.72 (up 6% YoY), both above the high end of guidance
- Product orders up 13% YoY; Networking revenue up 15%, with double-digit Networking order growth for five consecutive quarters
- $1.3B in AI infrastructure orders from hyperscale customers, with a multi-year, multi-billion-dollar campus refresh cycle starting to ramp
- Non-GAAP operating margin of 34.4% and non-GAAP gross margin of 68.1%, down about 120 bps YoY on gross margin
- FY2026 guidance: revenue of $60.2-61.0B and non-GAAP EPS of $4.08-$4.14, including estimated tariff impact
- Remaining performance obligations of $42.9B (up 7%), with long-term product RPO up 13% to $11.8B; $3.6B returned to shareholders
03—Questions
Frequently Asked Questions
How did Cisco perform relative to its own guidance this quarter?
Cisco said revenue, GAAP and non-GAAP EPS, and GAAP and non-GAAP operating margins all came in above the high end of its guidance ranges for the quarter.
Why is GAAP EPS growing more slowly than non-GAAP EPS?
GAAP results include share-based compensation of roughly $0.26 per share, amortization of acquisition intangibles, and acquisition-related costs, which Cisco excludes from non-GAAP results. Share-based compensation rose sharply to $1,055 million in the quarter from $827 million a year earlier, which weighs more heavily on GAAP EPS growth.
What is driving the growth in orders and what does the campus refresh mean?
Product orders rose 13%, with Networking leading. Management said all campus networking technologies (switching, routing, wireless, and IoT) saw accelerated order growth, and that next-generation products such as smart switches, secure routers, and WiFi 7 are ramping faster than prior launches. The multi-year, multi-billion-dollar campus refresh is only beginning to contribute revenue.
Are there any areas of concern in the results?
Security revenue fell 2% and Collaboration fell 3%. Operating cash flow declined 12% to $3.2 billion, and accounts receivable and deferred revenue movements contributed to the drop. Non-GAAP gross margin also declined year over year, and cash and investments fell to $15.7B from $16.1B at fiscal year-end. Management's guidance also reflects the estimated impact of tariffs.
How is Cisco returning capital to shareholders?
In the quarter Cisco returned $3.6 billion through $1.6 billion in dividends and about $2.0 billion in buybacks of roughly 29 million shares at an average price of $68.28. It declared a quarterly dividend of $0.41 per share payable January 21, 2026, and has $12.2 billion remaining under its buyback authorization.
04—Continue