Cisco Systems Stock Earnings Reports

Cisco reported a strong Q2 FY2026 with record revenue of $15.3B, up 10% year-over-year, and non-GAAP EPS of $1.04, up 11%. Product revenue grew 14% (networking +21%), driven by robust demand for AI infrastructure (hyperscaler orders accelerating), campus/network refresh, data center switching, wireless and industrial IoT. Cisco now expects AI orders in excess of $5B and to recognize over $3B of AI infrastructure revenue from hyperscalers in FY26. The company highlighted continued momentum for its Silicon One chips and new high-performance G300 systems and 800G/1.6T pluggable optics; Acacia optics bookings grew triple digits. Services revenue was down 1%; security revenue declined 4% as Splunk shifts from on-prem licenses to cloud subscriptions (short-term revenue headwind but viewed as strategic for long-term adoption and expansion). Total RPO was $43.4B (+5%), ARR $31B (+3%), and subscription revenue 51% of total. Non-GAAP gross margin was 67.5% (down ~120 bps) with memory-price increases and mix cited as primary headwinds; management is taking price increases, adjusting terms with partners/customers, and leveraging supply chain scale. Cisco returned $3B of capital in the quarter, raised the quarterly dividend by $0.01 to $0.42, and reiterated a commitment to return at least 50% of free cash flow annually. Q3 revenue guidance: $15.4B–$15.6B; FY26 revenue guide: $61.2B–$61.7B and non-GAAP EPS $4.13–$4.17. Management emphasized they see multiyear tailwinds from hyperscaler AI builds, sovereign/neocloud opportunities, and a multiyear campus refresh, while noting some lumpy hyperscaler timing risk and near-term margin pressure from memory costs.