CISCO REPORTS FIRST QUARTER EARNINGS

News Summary:

• • Record revenue of $18.5 billion, up 24% year over year, record GAAP earnings per share of $1.14, up 58% year over year, and record non-GAAP earnings per share of $1.40, up 40% year over year – Cisco's strongest revenue and non-GAAP earnings per share growth rates in over 15 years
  • Record non-GAAP operating margin, reflecting focused execution and operating efficiency
  • Broad-based high demand for Cisco technology with double-digit growth across all geographies and customer markets
  • Raised FY27 revenue and non-GAAP EPS guidance
  • Raised expectation for AI infrastructure revenue from hyperscalers to $9B in FY27, more than double the total for FY26
• Q1 FY 2027 Results:
  • Revenue: $18.5 billion
    • Increase of 24% year over year
  • Operating Margin: GAAP: 30.2%; Non-GAAP: 37.8%
  • Earnings per Share: GAAP: $1.14; Non-GAAP: $1.40
    • GAAP EPS increased 58% year over year
    • Non-GAAP EPS increased 40% year over year
• Q2 FY 2027 Guidance:  
  • Revenue: $18.0 billion to $18.2 billion
  • Earnings per Share: GAAP: $1.07 to $1.09; Non-GAAP: $1.34 to $1.36
• FY 2027 Guidance:
  • Revenue: $74.8 billion to $75.8 billion
  • Earnings per Share: GAAP: $4.38 to $4.44; Non-GAAP: $5.47 to $5.53

Cisco (NASDAQ: CSCO) today reported first quarter results for the period ended October 24, 2026. Cisco reported first quarter revenue of $18.5 billion, net income on a generally accepted accounting principles (GAAP) basis of $4.6 billion or $1.14 per share, and non-GAAP net income of $5.6 billion or $1.40 per share.

"In Q1, we delivered the strongest revenue and non-GAAP earnings per share growth rates for Cisco in over 15 years," said Chuck Robbins, chair and CEO of Cisco. "Organizations are turning to Cisco for our trusted, market-defining technology and our expertise to help them scale, secure and optimize their environments for the agentic AI era. We are in the very early stages of a multi-year networking supercycle, and we're confident in our ability to continue capturing the multi-billion-dollar opportunity it represents for Cisco."

"Q1 FY27 was another record quarter for Cisco, with revenue, non-GAAP operating margin, and non-GAAP EPS all exceeding the high end of our guidance ranges. The strength of our Q1 performance gives us confidence to raise our revenue and non-GAAP EPS guidance for FY27," said Mark Patterson, CFO of Cisco. "As our business continues to scale, we are unlocking significant operating leverage which is enabling us to grow earnings much faster than revenue. Looking ahead, we remain focused on delivering durable growth and driving continued capital returns."

Reconciliations between net income, EPS, and other measures on a GAAP and non-GAAP basis are provided in the tables located in the section entitled "Reconciliations of GAAP to non-GAAP Measures."

Cisco Declares Quarterly Dividend

Cisco has declared a quarterly dividend of $0.42 per common share to be paid on January 20, 2027, to all stockholders of record as of the close of business on January 4, 2027. Future dividends will be subject to Board approval.

Financial Summary

All comparative percentages are on a year-over-year basis unless otherwise noted.

Q1 FY 2027 Highlights

Revenue -- Total revenue was $18.5 billion, up 24%, with product revenue up 32% and services revenue up 1%.

Revenue by geographic segment was: Americas up 28%, EMEA up 18%, and APJC up 21%. Product revenue performance reflected growth in Networking up 43%, Security up 7%, Collaboration up 8%, and Observability up 2%.

Gross Margin -- On a GAAP basis, total gross margin, product gross margin, and services gross margin were 63.7%, 61.8%, and 70.9%, respectively, as compared with 65.5%, 64.5%, and 68.4%, respectively, in the first quarter of fiscal 2026.

Total gross margins by geographic segment were: 64.1% for the Americas, 68.9% for EMEA and 66.5% for APJC.

On a non-GAAP basis, total gross margin, product gross margin, and services gross margin were 65.6%, 63.7%, and 72.9%, respectively, as compared with 68.1%, 67.2%, and 70.7%, respectively, in the first quarter of fiscal 2026.

Operating Expenses -- On a GAAP basis, operating expenses were $6.2 billion, down 3% year over year, and were 33.4% of revenue. Non-GAAP operating expenses were $5.1 billion, up 2%, and were 27.8% of revenue.

Operating Income -- GAAP operating income was $5.6 billion, up 66%, with GAAP operating margin of 30.2%. Non-GAAP operating income was $7.0 billion, up 37%, with non-GAAP operating margin at 37.8%.

Provision for Income Taxes -- The GAAP tax provision rate was 17.2%. The non-GAAP tax provision rate was 18.5%.

Net Income and EPS -- On a GAAP basis, net income was $4.6 billion, an increase of 59%, and EPS was $1.14, an increase of 58%. On a non-GAAP basis, net income was $5.6 billion, an increase of 39%, and EPS was $1.40, an increase of 40%.

Cash Flow from Operating Activities -- $4.4 billion for the first quarter of fiscal 2027, an increase of 36% compared with $3.2 billion for the first quarter of fiscal 2026.

Balance Sheet and Other Financial Highlights

Cash and Cash Equivalents and Investments -- $15.8 billion at the end of the first quarter of fiscal 2027, compared with $15.9 billion at the end of fiscal 2026.

Remaining Performance Obligations (RPO) -- $46.2 billion, up 8% in total. Product RPO was up 7% and services RPO was up 9%.

Deferred Revenue -- $30.1 billion, up 7% in total, with deferred product revenue up 6% and deferred services revenue up 9%.

Capital Allocation -- In the first quarter of fiscal 2027, we returned $3.7 billion to stockholders through share buybacks and dividends. We declared and paid a cash dividend of $0.42 per common share, or $1.7 billion, and repurchased approximately 18 million shares of common stock under our stock repurchase program at an average price of $112.38 per share for an aggregate purchase price of $2.0 billion. The remaining authorized amount for stock repurchases under the program is $6.1 billion with no termination date.

Acquisitions

In the first quarter of fiscal 2027, we closed the acquisition of WideField Security Inc., a privately held security company.

Guidance

Cisco expects to achieve the following results for the second quarter of fiscal 2027:

Cisco estimates that GAAP EPS will be $1.07 to $1.09 for the second quarter of fiscal 2027.

Cisco expects to achieve the following results for fiscal 2027:

Cisco estimates that GAAP EPS will be $4.38 to $4.44 for fiscal 2027.

Our Q2 FY 2027 guidance assumes an effective tax provision rate of approximately 14.5% for GAAP and approximately 18.5% for non-GAAP results. Our FY 2027 guidance assumes an effective tax provision rate of approximately 16% for GAAP and approximately 18.5% for non-GAAP results.

A reconciliation between the guidance on a GAAP and non-GAAP basis is provided in the tables entitled "GAAP to non-GAAP Guidance" located in the section entitled "Reconciliations of GAAP to non-GAAP Measures."

Editor's Notes:

• Q1 fiscal year 2027 conference call to discuss Cisco's results along with its guidance will be held on Thursday, November 12, 2026 at 1:30 p.m. Pacific Time. Conference call number is 1-888-848-6507 (United States) or 1-212-519-0847 (international).
• Conference call replay will be available from 4:00 p.m. Pacific Time, November 12, 2026 to 11:59 p.m. Pacific Time, November 18, 2026 at 1-800-839-2232 (United States) or 1-203-369-3662 (international). The replay will also be available via webcast on the Cisco Investor Relations website at https://investor.cisco.com. 
• Additional information regarding Cisco's financials, as well as a webcast of the conference call with visuals designed to guide participants through the call, will be available at 1:30 p.m. Pacific Time, November 12, 2026. The conference call will also be livestreamed on YouTube at https://www.youtube.com/live/MT97SiJhRPE, LinkedIn at https://www.linkedin.com/events/7521627114891243520/ & X at https://x.com/i/broadcasts/2lgklRKVJgKEdp. Text of the conference call's prepared remarks will be available within 24 hours of completion of the call. The webcast and livestreaming will include both the prepared remarks and the question-and-answer session. This information, along with the GAAP to non-GAAP reconciliation information, will be available on the Cisco Investor Relations website at https://investor.cisco.com.