Cisco Systems 2026 Q1 Earnings Net Income Grows 5.5% to $2.86 Billion

Cisco Systems (CSCO) reported robust Q1 2026 earnings, exceeding revenue and EPS expectations while maintaining strong net income growth. The stock showed mixed short-term price action, with insider selling activity and strategic buybacks driving investor scrutiny.

Revenue

Cisco’s total revenue rose 7.5% year-over-year to $14.88 billion in Q1 2026, driven by strong performance across core segments. Product sales led with $11.08 billion, while networking revenue reached $7.77 billion. Security and services segments contributed $1.98 billion and $3.81 billion, respectively, underscoring the company’s diversified revenue base. Smaller segments like Collaboration ($1.05 billion) and Observability ($274 million) also demonstrated steady contributions, reflecting balanced growth across its business portfolio.

Earnings/Net Income

Earnings per share (EPS) increased 5.9% to $0.72, while net income expanded 5.5% to $2.86 billion, highlighting improved profitability. The company’s ability to grow both top-line and bottom-line metrics signals effective cost management and operational efficiency.

Price Action

Post-earnings, CSCO’s stock saw a 0.23% decline in the latest trading day but gained 7.89% for the week and 10.32% month-to-date. The mixed performance reflects investor caution amid insider selling and optimism over earnings strength.

Post-Earnings Price Action Review

The strategy of buying CSCO during revenue misses and holding for 30 days has historically shown positive outcomes. Recent price action, including a rise to $77.97 on November 18, 2025, suggests resilience despite no revenue miss. However, significant insider sales—such as CEO Chuck Robbins’ $46.97 million transaction and CFO Mark Patterson’s planned sale of 68,916 shares—raised questions about internal confidence. Market sentiment remains cautiously optimistic, supported by positive earnings and strategic buyback commitments.

CEO Commentary

CEO Chuck Robbins emphasized Cisco’s focus on AI-driven networking, cybersecurity, and infrastructure upgrades during the Wells Fargo TMT Summit. Key priorities include targeting $4 billion in AI-related orders and $3 billion in revenue for FY2026, alongside expanding government contracts and accelerating Splunk integration for cybersecurity growth. Robbins noted challenges in component supply dynamics but expressed confidence in long-term AI and cloud opportunities.

Guidance

Cisco reaffirmed its commitment to returning $1 billion quarterly to shareholders via buybacks. While no specific revenue or EPS guidance was provided for Q2, the company highlighted a multi-year campus upgrade cycle and robust public sector demand as growth drivers.

Additional News

1. M&A Activity: The pending Splunk acquisition is expected to bolster cybersecurity capabilities, with product recurring revenue growing at double-digit rates.

2. Insider Sales: CEO Chuck Robbins sold $47 million worth of shares, while President Jeetendra Patel disposed of $12.8 million in CSCO stock under prearranged plans.

3. Buyback Program: Cisco announced $1 billion in quarterly buybacks, underscoring its focus on shareholder returns amid strong cash flow.

4. Government Growth: U.S. Federal business and international public sector orders expanded, driven by aging infrastructure and security modernization needs.