Cisco (CSCO) Q1 2026 Earnings Release

Cisco reported a strong start to its fiscal year, exceeding expectations for both profit and revenue in its first quarter. The networking giant’s stock responded positively, gaining approximately 5% in after-hours trading.

Here’s a breakdown of Cisco’s Q1 2025 performance against LSEG consensus estimates:

• Earnings per share: $1 adjusted vs. $0.98 expected

• Revenue: $14.88 billion vs. $14.77 billion expected

Cisco’s total revenue increased by 8% year-over-year, climbing from $13.84 billion in the same period last year to $14.88 billion. Net income also saw a boost, rising to $2.86 billion, or 72 cents per share, compared to $2.71 billion, or 68 cents per share, in the prior year.

This marks the fourth consecutive quarter of revenue growth for Cisco, a welcome turnaround after a period of year-over-year declines attributed to economic headwinds and delays in government spending. The company appears to be successfully navigating a complex macroeconomic environment.

The networking segment, Cisco’s largest business unit, was a key driver of the positive results, with sales surging by 15% to $7.77 billion, surpassing analyst expectations of $7.47 billion, according to StreetAccount. This growth underscores the continued importance of network infrastructure in today’s digital landscape.

A significant portion of current data center investment is being directed toward artificial intelligence (AI) infrastructure. As companies aggressively build out AI capabilities, demand for high-performance servers and networking solutions is soaring. Cisco is strategically positioning itself to capitalize on this trend, demonstrated by its recent announcement of a new Ethernet switch powered by Nvidia silicon. This collaboration represents a significant push into the AI networking space.

Cisco reported that AI infrastructure orders from hyperscale customers reached $1.3 billion, describing it as a “significant acceleration in growth.” This suggests that Cisco is not only participating in the AI boom, but is becoming a critical partner for the largest cloud providers.

“Our relevance in AI continues to build,” stated CFO Mark Patterson in the earnings release. “We have a multi-year, multi-billion-dollar campus refresh opportunity starting to ramp, with strong demand for our refreshed networking products.” This statement is an indicator of Cisco anticipating continuous growth in the AI and networking sector, given existing opportunities and robust demand.

Looking ahead, Cisco anticipates revenue between $15 billion and $15.2 billion for its fiscal second quarter, exceeding the average estimate of $14.6 billion. Adjusted earnings are projected to be between $1.01 and $1.03 per share, also above the consensus estimate of 99 cents.

The company projects full fiscal year revenue to fall within the range of $60.2 billion to $61 billion, with earnings per share of $4.08 to $4.14. This forecast is more optimistic than current analyst expectations of $59.7 billion in sales and EPS of $4.04.

While the networking business thrived, Cisco’s security and collaboration segments experienced revenue declines and fell short of Wall Street expectations.

Security unit sales declined by 2% year-over-year to $1.98 billion, missing the average estimate of $2.16 billion, according to StreetAccount. Collaboration sales dropped 3% to $1.06 billion, trailing the $1.09 billion average estimate. These results highlight potential areas of concern for Cisco and suggest the need for strategic adjustments in these business units. The challenge for Cisco will be to revitalize these segments while sustaining momentum in the networking and AI domains.

As of Wednesday’s close, Cisco shares were up 25% year-to-date, outpacing the 21% gain for the Nasdaq. This performance reflects investor confidence in Cisco’s overall strategy and its ability to adapt to evolving market demands. The company’s focus on AI and its strong position in the networking market are likely to remain key drivers of shareholder value in the coming years.