Cisco Systems (NASDAQ:CSCO) Releases Earnings Results, Beats Estimates By $0.02 EPS

Key Points

• Cisco beat quarterly expectations, reporting adjusted EPS of $1.06 versus the $1.04 consensus and revenue of $15.84 billion versus $15.56 billion expected. Management also said the company is on track for its strongest year ever.
• AI infrastructure demand is surging, with hyperscaler AI orders reaching $1.9 billion in Q3 and $5.3 billion year to date. Cisco now expects about $9 billion in hyperscaler AI infrastructure orders for FY2026 and roughly $4 billion in related revenue.
• The company raised its outlook, lifting FY2026 EPS guidance to $4.27-$4.29 and Q4 2026 EPS guidance to $1.16-$1.18. Cisco also announced a restructuring to shift investment toward silicon, optics, security, and AI, though it could incur up to $1 billion in charges.

Cisco Systems (NASDAQ:CSCO - Get Free Report) issued its quarterly earnings results on Wednesday. The network equipment provider reported $1.06 EPS for the quarter, topping analysts' consensus estimates of $1.04 by $0.02, FiscalAI reports. The business had revenue of $15.84 billion for the quarter, compared to analyst estimates of $15.56 billion. Cisco Systems had a return on equity of 27.88% and a net margin of 19.22%. Cisco Systems updated its Q4 2026 guidance to 1.160-1.180 EPS and its FY 2026 guidance to 4.270-4.290 EPS.

Here are the key takeaways from Cisco Systems' conference call:

• Cisco delivered a record Q3 with revenue of $15.8 billion, up 12% year over year, and non-GAAP EPS of $1.06, up 10%, both above the high end of guidance. Management said the company is on track for its strongest year ever.
• AI infrastructure demand accelerated sharply, with hyperscaler AI orders totaling $1.9 billion in Q3 and year-to-date orders reaching $5.3 billion, already above prior full-year expectations. Cisco now expects about $9 billion of hyperscaler AI infrastructure orders in FY2026 and roughly $4 billion of related revenue.
• Broad-based order growth remained very strong, with total product orders up 35% year over year and ex-hyperscaler orders up 19%. Enterprise, public sector, service provider/cloud, and telco customers all showed healthy demand, especially across networking.
• Margins were pressured by product mix and memory costs, as non-GAAP gross margin fell to 66% from 68.6% a year ago. Management said pricing actions, memory-reduction programs, and supply-chain controls are helping stabilize margins, but gross margin remains under some pressure.
• Cisco announced a restructuring to reallocate resources toward silicon, optics, security, and AI, with up to $1 billion of pre-tax charges expected over FY2026-FY2027. The company said the move is aimed at shifting investment to faster-growing areas rather than driving near-term savings.

Cisco Systems Stock Performance

NASDAQ:CSCO traded up $2.58 during trading hours on Wednesday, reaching $101.87. The stock had a trading volume of 43,126,254 shares, compared to its average volume of 22,598,432. The company has a debt-to-equity ratio of 0.45, a quick ratio of 0.85 and a current ratio of 0.96. The stock has a 50 day simple moving average of $83.48 and a 200 day simple moving average of $79.14. Cisco Systems has a 12-month low of $60.85 and a 12-month high of $102.01. The stock has a market cap of $402.38 billion, a P/E ratio of 35.74, a price-to-earnings-growth ratio of 3.70 and a beta of 0.92.

Wall Street Analyst Weigh In

A number of analysts recently commented on CSCO shares. Zacks Research lowered Cisco Systems from a "strong-buy" rating to a "hold" rating in a report on Monday, April 13th. CICC Research lifted their price target on Cisco Systems from $84.00 to $96.00 and gave the stock an "outperform" rating in a report on Friday, February 13th. Citigroup lifted their price target on Cisco Systems from $85.00 to $90.00 and gave the stock a "buy" rating in a report on Thursday, February 12th. BNP Paribas Exane lifted their price target on Cisco Systems from $86.00 to $87.00 and gave the stock an "outperform" rating in a report on Thursday, February 12th. Finally, HSBC lifted their price target on Cisco Systems from $74.00 to $77.00 and gave the stock a "hold" rating in a report on Friday, February 13th. Three analysts have rated the stock with a Strong Buy rating, fourteen have given a Buy rating and eight have given a Hold rating to the company. According to MarketBeat.com, the company has an average rating of "Moderate Buy" and an average price target of $90.29.

Insiders Place Their Bets

In other Cisco Systems news, EVP Thimaya K. Subaiya sold 1,744 shares of the firm's stock in a transaction on Thursday, March 12th. The stock was sold at an average price of $77.07, for a total value of $134,410.08. Following the completion of the sale, the executive vice president directly owned 156,693 shares of the company's stock, valued at $12,076,329.51. This trade represents a 1.10% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available through this link. Also, EVP Deborah L. Stahlkopf sold 7,981 shares of the firm's stock in a transaction on Tuesday, March 17th. The stock was sold at an average price of $79.50, for a total value of $634,489.50. Following the completion of the sale, the executive vice president directly owned 187,097 shares of the company's stock, valued at $14,874,211.50. This represents a 4.09% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last ninety days, insiders sold 46,431 shares of company stock valued at $3,574,820. Company insiders own 0.01% of the company's stock.

Institutional Trading of Cisco Systems

A number of large investors have recently bought and sold shares of the company. Brighton Jones LLC grew its position in shares of Cisco Systems by 49.5% in the fourth quarter. Brighton Jones LLC now owns 74,187 shares of the network equipment provider's stock valued at $4,392,000 after purchasing an additional 24,562 shares in the last quarter. Revolve Wealth Partners LLC grew its position in shares of Cisco Systems by 37.0% in the fourth quarter. Revolve Wealth Partners LLC now owns 9,156 shares of the network equipment provider's stock valued at $542,000 after purchasing an additional 2,474 shares in the last quarter. Sivia Capital Partners LLC grew its position in shares of Cisco Systems by 7.5% in the second quarter. Sivia Capital Partners LLC now owns 10,178 shares of the network equipment provider's stock valued at $706,000 after purchasing an additional 712 shares in the last quarter. Schnieders Capital Management LLC. grew its position in shares of Cisco Systems by 3.9% in the second quarter. Schnieders Capital Management LLC. now owns 13,974 shares of the network equipment provider's stock valued at $969,000 after purchasing an additional 519 shares in the last quarter. Finally, Optimist Retirement Group LLC purchased a new position in shares of Cisco Systems in the second quarter valued at $202,000. 73.33% of the stock is owned by hedge funds and other institutional investors.

Key Stories Impacting Cisco Systems

Here are the key news stories impacting Cisco Systems this week:

• Positive Sentiment: Cisco delivered a “beat and raise” quarter, with revenue of $15.8 billion, above expectations, and non-GAAP EPS of $1.06, also ahead of consensus. CISCO REPORTS THIRD QUARTER EARNINGS
• Positive Sentiment: The company raised its outlook, guiding FY 2026 EPS to $4.27-$4.29 and revenue to $62.8 billion-$63.0 billion, both above analyst estimates. CISCO REPORTS THIRD QUARTER EARNINGS
• Positive Sentiment: Management said demand was broad-based and tied to accelerating AI infrastructure spending, which investors are viewing as a sign Cisco is benefiting from the AI build-out and improving enterprise networking trends. Cisco stock pops as Q3 earnings defy memory headwinds
• Neutral Sentiment: Cisco also announced a restructuring plan to shift spending toward AI growth, but the move comes with up to $1 billion in related costs, which may weigh on near-term margins even as it supports longer-term growth. Cisco to Cut Jobs in Shift to Capture More AI Demand

About Cisco Systems

Cisco Systems, Inc is a global technology company that designs, manufactures and sells networking hardware, software and telecommunications equipment. Its core business focuses on enabling enterprise and service-provider networks through products such as routers, switches, network security appliances and wireless systems. Over time Cisco has broadened its portfolio to emphasize software-defined networking, cybersecurity, cloud infrastructure and edge computing solutions that help organizations build and manage modern IT environments.

In addition to hardware, Cisco offers a growing range of software platforms and subscription services for network management, security, analytics and collaboration.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.