Cisco Exceeds FY26 Targets, Driven by Surge in AI Infrastructure Orders

Cisco has reported Q4 results that topped expectations, driven by a surge in demand for AI infrastructure. Adjusted EPS was $0.99, beating the $0.98 forecast, while revenue rose 8% YoY to $14.7 billion. For FY26, Cisco is guiding for $59-60 billion in revenue and adjusted EPS of $4-4.06, in line with analyst calls.

Cisco Systems (CSCO) reported fiscal fourth-quarter earnings and revenue that surpassed market expectations, with adjusted earnings per share (EPS) of $0.99, exceeding the $0.98 forecast. The company's revenue climbed 8% year-over-year (YoY) to $14.7 billion, narrowly beating Wall Street's forecast of $14.62 billion [1, 2].

The surge in AI infrastructure orders was a significant driver of Cisco's growth. AI-related orders exceeded $800 million in the fourth quarter, bringing the total for fiscal year 2025 to an impressive $2 billion, more than double the initial target [3]. This growth was primarily driven by increased demand for Cisco's networking equipment from cloud customers, particularly in the artificial intelligence (AI) sector [1].

Cisco's CEO, Chuck Robbins, emphasized the importance of this trend, stating, "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" [2].

Looking ahead, Cisco has provided optimistic guidance for the first quarter of fiscal year 2026. The company expects revenue to be between $14.65 billion and $14.85 billion, surpassing the average analyst estimate of $14.62 billion. Adjusted earnings per share are projected to be between 97 cents and 99 cents [2].

For the full fiscal year 2026, Cisco forecasts revenue between $59 billion and $60 billion, with adjusted earnings per share ranging from $4.00 to $4.06. These projections align closely with analysts' expectations and suggest continued growth for the company [2].

Despite the overall positive results, Cisco faced some challenges. Sales from its security and observability segments missed projections [2]. Additionally, the company's stock fell 2% in after-hours trading following the earnings announcement, despite having gained nearly a fifth of its value throughout 2025 [2].

Cisco's strong performance in AI infrastructure orders underscores the company's strategic positioning in the rapidly evolving tech landscape. As businesses increasingly adopt AI technologies, the demand for robust networking solutions is expected to grow. Cisco appears well-positioned to capitalize on this trend, with CEO Chuck Robbins describing it as a "massive opportunity" for the company to lead the architectural shift required for the AI era [2].

The company's ability to exceed its AI infrastructure order targets demonstrates its capacity to adapt to changing market demands and leverage emerging technologies. As the AI boom continues, Cisco's role in providing the necessary networking infrastructure is likely to become increasingly significant, potentially driving further growth and innovation in the coming years.

References:
[1] https://www.investors.com/news/technology/cisco-stock-cisco-earnings-csco-stock-q22025/
[2] https://theoutpost.ai/news-story/cisco-surpasses-expectations-with-strong-q4-earnings-driven-by-ai-infrastructure-demand-19057/
[3] https://www.ainvest.com/news/cisco-appoints-cfo-ai-infrastructure-orders-hit-2-billion-2508/