What drove Cisco's strong Q3 FY26 performance?

Growth was driven by networking, where product revenue rose 25% and orders grew more than 50%. Hyperscaler AI infrastructure demand and a multi-year campus networking refresh also contributed, with total product orders up 35% (19% excluding hyperscalers).

Why did Cisco announce a restructuring plan, and what does it cost?

Cisco is reallocating resources to key growth areas including silicon, optics, security and AI. It estimates up to $1 billion in pre-tax charges, mainly severance and other termination benefits, with about $450 million in Q4 FY26 and the remainder in FY27. Because these are GAAP charges, they are excluded from non-GAAP results but will reduce GAAP EPS.

How does Cisco's guidance compare to the prior outlook?

Cisco raised FY26 revenue guidance to $62.8-63.0 billion from the prior range and expects non-GAAP EPS of $4.27-4.29. For Q4, it expects revenue of $16.7-16.9 billion and non-GAAP EPS of $1.16-1.18, with GAAP EPS of $0.80-0.85. Guidance includes the estimated impact of tariffs under current trade policy.

Are there any concerns in the results investors should watch?

Operating cash flow fell 7% to $3.8 billion in the quarter, and short-term debt increased sharply to $11.9 billion from $5.2 billion at fiscal year-end. Services revenue declined 1%, and Collaboration fell 1%. The restructuring charges and tariff exposure also add near-term uncertainty to margins and earnings.

How is Cisco returning capital to shareholders?

In Q3 Cisco returned $2.9 billion through dividends and buybacks. It declared a quarterly dividend of $0.42 per share, payable July 22, 2026, and repurchased about 16 million shares for $1.3 billion at an average price of $80.28. It has $9.6 billion remaining under its repurchase authorization.

CSCO 8-K: Earnings & Results & Financial Events

01—Abstract

Summary

Summary of the 8-K filed May 13, 2026. Cited figures are marked; the original filing is the authoritative source.

Cisco reported fiscal third quarter 2026 results (quarter ended April 25, 2026) that beat the high end of its guidance, with record revenue of $15.8 billion^a, up 12% year over year.

GAAP EPS was $0.85^b, up 37%, and non-GAAP EPS was $1.06, up 10%. Growth was led by networking, where product revenue rose 25% and total product orders climbed 35% (19% excluding hyperscalers). Hyperscaler AI infrastructure orders reached $5.3 billion year to date, and management raised its FY26 AI orders expectation to $9 billion from $5 billion and its FY26 AI revenue expectation to $4 billion from $3 billion.

Profitability was strong, with non-GAAP operating margin of 34.2% and non-GAAP gross margin of 66.0%, though GAAP operating cash flow fell 7% to $3.8 billion^c. Cisco raised FY26 revenue guidance to $62.8-63.0 billion and set non-GAAP EPS guidance of $4.27-4.29. Q4 guidance calls for revenue of $16.7-16.9 billion and non-GAAP EPS of $1.16-1.18.

Guidance includes the estimated impact of tariffs. Cisco also announced a restructuring plan of up to $1 billion^d in pre-tax charges, mostly cash-based, to fund investment in silicon, optics, security and AI.

About $450 million will be recognized in Q4 FY26 and the remainder in FY27. Cisco declared a quarterly dividend of $0.42 per share and repurchased $1.3 billion of stock in the quarter, with $9.6 billion remaining under its authorization.

02—Key points

Key Highlights

Record Q3 FY26 revenue of $15.8 billion, up 12% year over year, with product revenue up 17% and services down 1%.
Networking product revenue rose 25% to $8.8 billion, and networking orders grew more than 50%, driven by a campus refresh cycle and data center switching.
Hyperscaler AI infrastructure outlook raised: FY26 orders expected at $9 billion (from $5 billion) and FY26 revenue at $4 billion (from $3 billion).
Non-GAAP gross margin of 66.0% and non-GAAP operating margin of 34.2%, with GAAP EPS up 37% to $0.85 and non-GAAP EPS up 10% to $1.06.
FY26 guidance raised to $62.8-63.0 billion revenue and $4.27-4.29 non-GAAP EPS; Q4 guidance of $16.7-16.9 billion revenue and $1.16-1.18 non-GAAP EPS.
New restructuring plan with up to $1 billion in pre-tax charges (about $450 million in Q4 FY26), mostly cash-based, to fund investment in silicon, optics, security and AI.
Operating cash flow fell 7% to $3.8 billion in the quarter, and short-term debt rose to $11.9 billion from $5.2 billion at fiscal year-end.

03—Questions

Frequently Asked Questions

What drove Cisco's strong Q3 FY26 performance?
Growth was driven by networking, where product revenue rose 25% and orders grew more than 50%. Hyperscaler AI infrastructure demand and a multi-year campus networking refresh also contributed, with total product orders up 35% (19% excluding hyperscalers).
Why did Cisco announce a restructuring plan, and what does it cost?
Cisco is reallocating resources to key growth areas including silicon, optics, security and AI. It estimates up to $1 billion in pre-tax charges, mainly severance and other termination benefits, with about $450 million in Q4 FY26 and the remainder in FY27. Because these are GAAP charges, they are excluded from non-GAAP results but will reduce GAAP EPS.
How does Cisco's guidance compare to the prior outlook?
Cisco raised FY26 revenue guidance to $62.8-63.0 billion from the prior range and expects non-GAAP EPS of $4.27-4.29. For Q4, it expects revenue of $16.7-16.9 billion and non-GAAP EPS of $1.16-1.18, with GAAP EPS of $0.80-0.85. Guidance includes the estimated impact of tariffs under current trade policy.
Are there any concerns in the results investors should watch?
Operating cash flow fell 7% to $3.8 billion in the quarter, and short-term debt increased sharply to $11.9 billion from $5.2 billion at fiscal year-end. Services revenue declined 1%, and Collaboration fell 1%. The restructuring charges and tariff exposure also add near-term uncertainty to margins and earnings.
How is Cisco returning capital to shareholders?
In Q3 Cisco returned $2.9 billion through dividends and buybacks. It declared a quarterly dividend of $0.42 per share, payable July 22, 2026, and repurchased about 16 million shares for $1.3 billion at an average price of $80.28. It has $9.6 billion remaining under its repurchase authorization.

04—Continue

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