Overview
- Cisco reported adjusted EPS of $1.04 on revenue of $15.35 billion, topping estimates and rising about 10% year over year.
- AI momentum accelerated with $2.1 billion in hyperscaler orders, and management now expects fiscal 2026 AI orders above $5 billion and over $3 billion in AI revenue from hyperscalers.
- Adjusted gross margin was 67.5%, below expectations, with Q3 margin guided to 65.5%–66.5% as memory costs rise; Cisco is raising prices and revising contracts to offset component inflation.
- Guidance calls for Q3 revenue of $15.4–$15.6 billion and full-year revenue of $61.2–$61.7 billion with EPS of $4.13–$4.17, which trailed some consensus revenue targets and sent shares down roughly 7%–8% after hours.
- Core networking revenue jumped about 21% to roughly $8.3 billion as security declined, and Cisco rolled out new AI networking gear including its Silicon One G300 chip and a switch featuring an Nvidia processor, with sovereign AI projects like Saudi Arabia framed as longer-term.