Cisco Systems (CSCO) Q4 2026 earnings summary

Executive summary

• Achieved record annual revenue of $63.3 billion (up 12% y/y) and record Q4 revenue of $17.3 billion (up 18% y/y), both exceeding guidance ranges.

• Delivered highest operating margin and earnings per employee in 30 years, with strong execution and productivity gains across all geographies and customer markets.

• Networking product orders surged 40% year-over-year in Q4, marking eight consecutive quarters of double-digit growth.

• AI infrastructure and networking demand drove a multi-year super cycle, with $9.3B in hyperscaler AI orders in FY26 (4.5x y/y) and $4B in AI revenue; FY27 AI revenue expected at $7.5B.

• Returned $12.7 billion to shareholders in FY 2026, representing 99% of free cash flow.

Financial highlights

• Q4 non-GAAP net income was $4.9 billion and non-GAAP EPS was $1.22, both up 23% year-over-year; GAAP net income was $3.9B, up 51%, and GAAP EPS was $0.97, up 52%.

• Full-year non-GAAP net income was $17.2 billion, up 13%, and non-GAAP EPS was $4.33, up 14%; GAAP net income was $13.3B, up 30%, and GAAP EPS was $3.33, up 31%.

• Q4 product revenue grew 24% to $13.5 billion; services revenue was flat at $3.8 billion.

• Non-GAAP gross margin for Q4 was 66.3%, down 210 bps year-over-year; operating margin was 35.9%.

• Operating cash flow in Q4 was $5.4 billion, up 27% year-over-year; cash and investments at Q4 end: $15.9B.

Outlook and guidance

• FY 2027 revenue expected between $72.2 billion and $73.4 billion; non-GAAP EPS between $5.05 and $5.11; GAAP EPS: $4.00–$4.06.

• Q1 FY 2027 revenue guidance is $18.0–$18.2 billion, with non-GAAP EPS of $1.32–$1.34; GAAP EPS: $1.08–$1.10.

• AI infrastructure revenue projected to reach $7.5 billion in FY 2027.

• Core business (excluding AI) expected to grow ~10% in FY 2027.

• Q1 FY 2027 non-GAAP gross margin expected at 65%–66%; non-GAAP operating margin at 35.5%–36.5%.