Cisco capitalizes on AI demand, shares slip as FY26 outlook lands in line with estimates

Cisco Systems (NASDAQ:CSCO) released its fourth quarter fiscal 2025 financial results and outlook, which matched or surpassed estimates across the board as demand for artificial intelligence infrastructure helped propel growth.

Cisco shares declined 2% during early post-market trading on Wednesday.

For the quarter ended June 30, Cisco reported adjusted earnings per share of $0.99 which was just above the consensus estimate of $0.98. GAAP EPS was $0.71, which was also more than the consensus of $0.66.

Revenue totaled $14.7B, which was a year-over-year increase of 8% and more than the estimate of $14.62B. On a segment basis, product revenue increased 10% year over year and accounted for $10.78B. Networking accounted for the majority of this at $7.34B versus the estimate of $7.34B. Service revenue accounted for $3.79B.

Cisco reported an adjusted gross margin of 68.4%, which was just above the estimate of 68.2%.

“The AI infrastructure orders we received from webscale customers in fiscal 2025 were more than double our original target, indicating a massive opportunity ahead as we lead the required architectural shift and build the critical infrastructure needed for the AI era,” said Cisco CEO Chuck Robbins.

Loking ahead to fiscal 2026, Cisco projects its full-year adjusted EPS to range from $4 to $4.06, which is exactly in line with the estimate of $4.03. The San Jose-based company expects revenue for the year to range from $59B to $60B, which is also in line with the estimate of $59.49B.

For the first quarter of fiscal 2026, Cisco forecasts revenue ranging from $14.65B to $14.85B, with a midpoint of $14.75B more than the estimate of $14.65B. Adjusted EPS is projected to range from $0.97 to $0.99 versus the estimate of $0.97.

“Long-term investors should be pleased with Cisco’s results, with the company hitting the mark on key metrics and lifting 2026 revenue guidance to a fair bit above the street consensus,” said Ian Bezek, Investing Group Leader for Ian’s Inside Corner. “Cisco had rallied sharply into the report, and we might see profit-taking on this good, not great, set of numbers. But any correction would be a buying opportunity.”