Cisco Systems 2025 Q4 Earnings Strong Performance as Net Income Surges 30.6%

Cisco Systems (CSCO), the 35th-largest company by market capitalization, reported its fiscal 2025 Q4 earnings on August 13, 2025. The results beat expectations with notable growth in revenue and earnings. The company raised its guidance for 2026, projecting continued momentum amid strategic investments in AI and networking innovations.

Cisco Systems delivered a strong performance in fiscal 2025 Q4, surpassing expectations with a 7.6% year-over-year revenue increase to $14.67 billion. The company's non-GAAP earnings per share rose 31.5% to $0.71, while net income surged by 30.6% to $2.82 billion. The results reflect the company's robust operating leverage and strategic focus on innovation and capital returns.

Revenue
The company's revenue expansion was driven by strong performances across key segments. Networking led the charge with $7.63 billion in sales, while Total Products contributed $10.89 billion. Security revenue reached $1.95 billion, and Collaboration posted $1.04 billion. Observability added $259 million to the total, and Services revenue totaled $3.79 billion, rounding out the $14.67 billion in total revenue.

Earnings/Net Income
The company’s earnings growth was equally impressive, with non-GAAP EPS rising to $0.71, a 31.5% increase from the prior year. Net income surged to $2.82 billion in Q4 2025, up 30.6% from $2.16 billion in the same period a year earlier. This marked a significant strengthening in profitability and underscored Cisco’s operational efficiency and pricing power.

Price Action
On the stock market, Cisco’s shares experienced mixed short-term performance. The stock declined 2.03% on the most recent trading day, but it rebounded with a 1.72% gain during the prior full trading week. Over the past month, shares climbed 3.80%, indicating some recovery and investor confidence.

Post-Earnings Price Action Review
Despite the strong earnings results, a strategy of buying Cisco shares 30 days after its earnings release underperformed over the past three years. The strategy yielded a total return of 0.19% and a CAGR of 0.06%, far below the 46.65% benchmark return. While the maximum drawdown was 0%, the Sharpe ratio of 0.01 reflected minimal risk-adjusted returns.

CEO Commentary
Charles H. Robbins, Chairman & CEO, emphasized Cisco’s strong Q4 performance, with revenue and gross margin hitting the high end of guidance and EPS exceeding expectations. He highlighted the company’s $800 million in AI infrastructure orders during the quarter and a total of $2 billion for the year—more than double the initial target. Robbins pointed to the company’s Silicon One-based networking systems and AI-native security solutions as key enablers for the AI era, while stressing the importance of cybersecurity in Agentic AI environments. He also mentioned the company’s innovation pipeline, including AI Canvas and AgenticOps, and expressed confidence in Cisco’s ability to deliver sustainable growth and value.

Guidance
For fiscal 2026, Cisco provided revenue guidance of $59 billion to $60 billion, with non-GAAP earnings per share expected to range between $4 and $4.06. Gross margin is projected to fall between 67.5% and 68.5%. The guidance assumes stable tariff conditions and includes continued investment in AI and networking technologies. Robbins reaffirmed the company’s commitment to disciplined financial management and capital returns, positioning Cisco for long-term success in AI and enterprise infrastructure.

Additional News
Amid Cisco’s strong earnings report, several significant non-financial news events unfolded in the week before and after the earnings release. In Nigeria, the Federal Government announced plans to unlock $150 billion in dormant land capital to boost economic growth. The US approved a $346 million Foreign Military Sale to Nigeria, including precision munitions and rockets. Meanwhile, the Lagos State House of Assembly introduced a new tenancy bill to reduce estate agent fees to 5%, aiming to protect tenants from exploitation. In education, the Federal Government announced the approval of nine new private universities. Additionally, the Nigerian government announced plans to temporarily close its border with Niger Republic ahead of a by-election in Jigawa State to ensure electoral integrity and prevent cross-border crimes.