01—Abstract
Summary
Summary of the 8-K filed August 12, 2026. Cited figures are marked; the original filing is the authoritative source.
Cisco reported fiscal Q4 and full-year 2026 results (quarter ended July 25, 2026) that exceeded the high end of its guidance ranges.
Q4 revenue rose 18% year over year to $17.3 billiona, with product revenue up 24% and Networking up 28%. Management attributes the strength to a broad-based AI infrastructure build-out, citing $4 billion of Q4 AI infrastructure orders from hyperscalers, $9.3 billion of such orders for FY 2026, and expected FY 2027 AI infrastructure revenue of $7.5 billion. Q4 non-GAAP operating margin was 35.9% and non-GAAP EPS was $1.22, up 23%.
GAAP EPS was $0.97b, up 52%, helped by $869 million of investment gains that were excluded from non-GAAP results. For full-year FY 2026, revenue reached $63.3 billion (up 12%), non-GAAP EPS was $4.33 (up 14%), and GAAP EPS was $3.33 (up 31%). Operating cash flow was flat at $14.2 billion.
Gross margin pressure is visible: Q4 non-GAAP gross margin fell to 66.3% from 68.4%, and inventories rose to $5.7 billionc from $3.2 billion, while short-term debt climbed to $10.2 billion from $5.2 billion. For FY 2027, Cisco guided revenue to $72.2–73.4 billion and non-GAAP EPS to $5.05–5.11, against GAAP EPS of $4.00–4.06.
Q1 FY 2027 guidance calls for revenue of $18.0d–18.2 billion and non-GAAP EPS of $1.32–1.34. The board declared a quarterly dividend of $0.42 per share, and the company repurchased about 13 million shares in Q4 for $1.5 billion, with $8.1 billion remaining under the authorization.
02—Key points
Key Highlights
- Q4 FY2026 revenue of $17.3B, up 18% YoY, with product revenue up 24% and Networking up 28%; total product orders rose 35% (25% excluding hyperscalers)
- AI infrastructure momentum: $4B of hyperscaler orders in Q4 and $9.3B for FY2026, with FY2027 AI infrastructure revenue expected at $7.5B
- Q4 non-GAAP operating margin of 35.9% and non-GAAP EPS of $1.22 (up 23%); GAAP EPS of $0.97 (up 52%) was boosted by $869M of investment gains excluded from non-GAAP
- Gross margin pressure: Q4 non-GAAP gross margin fell to 66.3% from 68.4%, and GAAP product gross margin declined to 62.6% from 61.5%, partly offset by services margin gains
- FY2027 guidance: revenue of $72.2–73.4B and non-GAAP EPS of $5.05–5.11, against Q1 FY2027 non-GAAP EPS guidance of $1.32–1.34
- Balance sheet shifts: inventories up to $5.7B from $3.2B and short-term debt up to $10.2B from $5.2B; cash and investments of $15.9B; FY2026 operating cash flow flat at $14.2B
- Shareholder returns: $0.42 quarterly dividend declared, $3.2B returned in Q4 through buybacks and dividends, and $8.1B remaining under the repurchase authorization
03—Questions
Frequently Asked Questions
How did Cisco perform in fiscal Q4 2026 compared with guidance?
Cisco reported record Q4 revenue of $17.3B, record non-GAAP operating income of $6.2B, and record non-GAAP EPS of $1.22. Management said all three exceeded the high end of its guidance ranges.
What is driving the AI infrastructure opportunity, and how large is it?
Cisco booked $4B of AI infrastructure orders from hyperscalers in Q4 and $9.3B for FY2026. It recognized about $4B of revenue from these orders in FY2026 and expects $7.5B in FY2027. Total product orders rose 35%, or 25% excluding hyperscalers, which suggests demand is broader than the hyperscaler segment alone.
Why does GAAP EPS ($0.97) differ so much from non-GAAP EPS ($1.22)?
The gap is mainly share-based compensation ($0.22 per share), amortization of acquisition intangibles ($0.12), and restructuring charges ($0.13). Those costs are partly offset by $869M of investment gains ($0.22 per share), which are excluded from non-GAAP results. Investors should weigh the excluded items, since restructuring and share-based compensation recur.
Are there concerns about margins or the balance sheet?
Non-GAAP gross margin fell 2.1 points year over year to 66.3%, and Q1 FY2027 guidance calls for 65–66%, so margin pressure may continue. Inventories rose to $5.7B from $3.2B, and short-term debt rose to $10.2B from $5.2B, while long-term debt fell to $19.4B. Q4 operating cash flow was up 27%, but full-year operating cash flow was flat at $14.2B.
What is the outlook for fiscal 2027 and how is capital being returned?
FY2027 guidance is revenue of $72.2–73.4B and non-GAAP EPS of $5.05–5.11, with a non-GAAP tax rate of about 18.5%. Cisco declared a $0.42 quarterly dividend payable October 21, 2026, and repurchased about 13 million shares for $1.5B in Q4 at an average price of $111.53. It has $8.1B left under its buyback authorization.
04—Continue