Cisco Systems Inc. – CISCO REPORTS FOURTH QUARTER AND FISCAL YEAR 2026 EARNINGS

Summarize Analysis:
SAN JOSE, Calif., Aug. 12, 2026 /PRNewswire/ —

News Summary: Record top and bottom-line performance with double-digit growth in Q4 and FY 2026, exceeding the high end of guidance rangesExceptional FY 2026 operating margin results, demonstrating strong execution and operating efficiencyBroad-based, record high demand for Cisco technology with a networking supercycle underwayQ4 total product orders up 35% year over year; up 25% excluding hyperscalers, with double-digit growth across every geography and customer marketNetworking product orders grew 40% year over year in Q4, marking the eighth consecutive quarter of double-digit growthSignificant momentum and raised expectations for AI infrastructure from hyperscalers$4 billion of orders taken in Q4, bringing the total for FY 2026 to $9.3 billionDelivered approximately $4 billion of revenue in FY 2026; $7.5 billion expected in FY 2027Q4 FY 2026 Results:Revenue: $17.3 billionIncrease of 18% year over yearOperating Margin: GAAP: 24.7%; Non-GAAP: 35.9%Earnings per Share: GAAP: $0.97; Non-GAAP: $1.22GAAP EPS increased 52% year over yearNon-GAAP EPS increased 23% year over yearFY 2026 Results:Revenue: $63.3 billion Increase of 12% year over yearOperating Margin: GAAP: 24.3%; Non-GAAP: 34.8%Earnings per Share: GAAP: $3.33; Non-GAAP: $4.33GAAP EPS increased 31% year over yearNon-GAAP EPS increased 14% year over yearQ1 FY 2027 Guidance: Revenue: $18.0 billion to $18.2 billionEarnings per Share: GAAP: $1.08 to $1.10; Non-GAAP: $1.32 to $1.34FY 2027 Guidance: Revenue: $72.2 billion to $73.4 billionEarnings per Share: GAAP: $4.00 to $4.06; Non-GAAP: $5.05 to $5.11Cisco (NASDAQ: CSCO) today reported fourth quarter and fiscal year results for the period ended July 25, 2026. Cisco reported fourth quarter revenue of $17.3 billion, net income on a generally accepted accounting principles (GAAP) basis of $3.9 billion or $0.97 per share, and non-GAAP net income of $4.9 billion or $1.22 per share.”We delivered a very strong close to fiscal 2026, marking another record year for Cisco. Our record performance is a testament to the accelerated pace of innovation and the excellent execution by our teams,” said Chuck Robbins, Chair and CEO of Cisco. “With the breadth and depth of our portfolio and our competitive differentiation in secure networking, Cisco is well positioned to support our customers however or wherever they decide to deploy AI.””In Q4, we delivered record revenue, non-GAAP operating income and EPS, all exceeding the high end of our guidance ranges and demonstrating strong financial discipline and operating leverage,” said Mark Patterson, CFO of Cisco. “In fiscal 2026, Cisco achieved its highest productivity metrics in 30 years measured by revenue, non-GAAP operating margin, and earnings per employee. As we enter fiscal 2027, we remain focused on delivering durable growth, consistent profitability and continued capital returns as we make the strategic investments to capitalize on the significant growth opportunities we see ahead.” Q4 GAAP ResultsQ4 FY 2026Q4 FY 2025Vs. Q4 FY 2025Revenue$  17.3   billion$   14.7   billion18 %Net Income$    3.9   billion$     2.6   billion51 %Diluted Earnings per Share (EPS)$            0.97$             0.6452 %Q4 Non-GAAP ResultsQ4 FY 2026Q4 FY 2025Vs. Q4 FY 2025Net Income$    4.9   billion$    4.0   billion23 %EPS$            1.22$            0.9923 %Fiscal Year GAAP ResultsFY 2026FY 2025Vs. FY 2025Revenue$   63.3   billion$  56.7   billion12 %Net Income$   13.3   billion$  10.2   billion30 %EPS$             3.33$            2.5531 %Fiscal Year Non-GAAP ResultsFY 2026FY 2025Vs. FY 2025Net Income$  17.2   billion$  15.2   billion13 %EPS$            4.33$            3.8114 %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 DividendCisco has declared a quarterly dividend of $0.42 per common share to be paid on October 21, 2026, to all stockholders of record as of the close of business on October 2, 2026. Future dividends will be subject to Board approval.Financial SummaryAll comparative percentages are on a year-over-year basis unless otherwise noted.Q4 FY 2026 Highlights Revenue — Total revenue was $17.3 billion, up 18%, with product revenue up 24% and services revenue was flat.Revenue by geographic segment was: Americas up 18%, EMEA up 19%, and APJC up 14%. Product revenue performance reflected growth in Networking up 28%, Security up 14%, Collaboration up 12%, and Observability up 6%.Gross Margin — On a GAAP basis, total gross margin, product gross margin, and services gross margin were 64.1%, 62.6%, and 69.4%, respectively, as compared with 63.2%, 61.5%, and 68.3%, respectively, in the fourth quarter of fiscal 2025.Total gross margins by geographic segment were: 64.5% for the Americas, 70.1% for EMEA and 67.3% for APJC.On a non-GAAP basis, total gross margin, product gross margin, and services gross margin were 66.3%, 64.8%, and 71.6%, respectively, as compared with 68.4%, 67.5%, and 70.8%, respectively, in the fourth quarter of fiscal 2025.Operating Expenses — On a GAAP basis, operating expenses were $6.8 billion, up 10% year over year, and were 39.4% of revenue. Non-GAAP operating expenses were $5.2 billion, up 5%, and were 30.4% of revenue.Operating Income — GAAP operating income was $4.3 billion, up 38%, with GAAP operating margin of 24.7%. Non-GAAP operating income was $6.2 billion, up 23%, with non-GAAP operating margin at 35.9%.Provision for Income Taxes — The GAAP tax provision rate was 21.8%. The non-GAAP tax provision rate was 18.8%.Net Income and EPS — On a GAAP basis, net income was $3.9 billion, an increase of 51%, and EPS was $0.97, an increase of 52%. On a non-GAAP basis, net income was $4.9 billion, an increase of 23%, and EPS was $1.22, an increase of 23%. Cash Flow from Operating Activities — $5.4 billion for the fourth quarter of fiscal 2026, an increase of 27% compared with $4.2 billion for the fourth quarter of fiscal 2025.FY 2026 HighlightsRevenue — Total revenue was $63.3 billion, an increase of 12%.Operating Income — GAAP operating income was $15.4 billion, up 31%, with GAAP operating margin of 24.3%. Non-GAAP operating income was $22.0 billion, up 13%, with non-GAAP operating margin at 34.8%.Net Income and EPS — On a GAAP basis, net income was $13.3 billion, an increase of 30%, and EPS was $3.33, an increase of 31%. On a non-GAAP basis, net income was $17.2 billion, an increase of 13%, and EPS was $4.33, an increase of 14%.Cash Flow from Operating Activities — $14.2 billion for fiscal 2026, flat compared with fiscal 2025.Balance Sheet and Other Financial HighlightsCash and Cash Equivalents and Investments — $15.9 billion at the end of the fourth quarter of fiscal 2026, compared with $16.6 billion at the end of the third quarter of fiscal 2026, and compared with $16.1 billion at the end of fiscal 2025.Remaining Performance Obligations (RPO) — $46.7 billion, up 7% in total. Product RPO was up 9% and services RPO was up 6%.Deferred Revenue — $29.8 billion, up 3% in total, with deferred product revenue up 2%. Deferred services revenue up 4%. Capital Allocation — In the fourth quarter of fiscal 2026, we returned $3.2 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 13 million shares of common stock under our stock repurchase program at an average price of $111.53 per share for an aggregate purchase price of $1.5 billion. The remaining authorized amount for stock repurchases under the program is $8.1 billion with no termination date.AcquisitionsIn the fourth quarter of fiscal 2026, we closed the following acquisitions:Galileo Technologies, Inc., a privately held observability companyAstrix Securities Ltd., a privately held security company focused on Non-Human Identity (NHI) SecurityGuidanceCisco expects to achieve the following results for the first quarter of fiscal 2027:Q1 FY 2027Revenue$18.0 billion – $18.2 billionNon-GAAP gross margin65% – 66%Non-GAAP operating margin35.5% – 36.5%Non-GAAP EPS $1.32 – $1.34Cisco estimates that GAAP EPS will be $1.08 to $1.10 for the first quarter of fiscal 2027.Cisco expects to achieve the following results for fiscal 2027:FY 2027Revenue$72.2 billion – $73.4 billionNon-GAAP EPS $5.05 – $5.11Cisco estimates that GAAP EPS will be $4.00 to $4.06 for fiscal 2027.Our Q1 FY 2027 guidance assumes an effective tax provision rate of approximately 15% for GAAP and approximately 18.5% for non-GAAP results. Our FY 2027 guidance assumes an effective tax provision rate of approximately 14.5% for GAAP and approximately 18.5% for non-GAAP results.A reconciliation between the guidance on a GAAP and non-GAAP basis is provided in the tables entitled “GAAP to non-GAAP Guidance” located in the section entitled “Reconciliations of GAAP to non-GAAP Measures.”Editor’s Notes: Q4 fiscal year 2026 conference call to discuss Cisco’s results along with its guidance will be held on Wednesday, August 12, 2026 at 1:30 p.m. Pacific Time. Conference call number is 1-888-848-6507 (United States) or 1-212-519-0847 (international).Conference call replay will be available from 4:00 p.m. Pacific Time, August 12, 2026 to 10:00 p.m. Pacific Time, August 18, 2026 at 1-800-839-2232 (United States) or 1-203-369-3662 (international). The replay will also be available via webcast on the Cisco Investor Relations website at https://investor.cisco.com. Additional information regarding Cisco’s financials, as well as a webcast of the conference call with visuals designed to guide participants through the call, will be available at 1:30 p.m. Pacific Time, August 12, 2026. The conference call will also be livestreamed on YouTube at LinkedIn at & X at Text of the conference call’s prepared remarks will be available within 24 hours of completion of the call. The webcast and livestreaming will include both the prepared remarks and the question-and-answer session. This information, along with the GAAP to non-GAAP reconciliation information, will be available on the Cisco Investor Relations website at https://investor.cisco.com. CISCO SYSTEMS, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(In millions, except per-share amounts) (Unaudited) Three Months EndedFiscal Year EndedJuly 25,2026July 26,2025July 25,2026July 26,2025REVENUE:Product$      13,459$      10,886$      48,295$      41,608Services3,7933,78715,03015,046Total revenue17,25214,67363,32556,654COST OF SALES:Product5,0294,19417,78115,121Services1,1601,1994,6844,743Total cost of sales6,1895,39322,46519,864GROSS MARGIN11,0639,28040,86036,790OPERATING EXPENSES:Research and development2,4312,3809,5639,300Sales and marketing2,9522,81811,55910,966General and administrative6797062,7612,992Amortization of purchased intangible assets2262549161,028Restructuring and other charges51135693744Total operating expenses6,7996,19325,49225,030OPERATING INCOME4,2643,08715,36811,760Interest income2202278661,001Interest expense(373)(368)(1,470)(1,593)Other income (loss), net822531,245(68)Interest and other income (loss), net669(88)641(660)INCOME BEFORE PROVISION FOR INCOME TAXES4,9332,99916,00911,100Provision for income taxes1,0744492,742920NET INCOME$        3,859$         2,550$      13,267$      10,180Net income per share:Basic$          0.98$           0.64$          3.36$           2.56Diluted$          0.97$           0.64$          3.33$           2.55Shares used in per-share calculation:Basic3,9493,9603,9533,976Diluted3,9843,9923,9873,998 CISCO SYSTEMS, INC.REVENUE BY SEGMENT(In millions, except percentages)July 25, 2026Three Months EndedFiscal Year EndedAmountY/Y%AmountY/Y%Revenue:Americas$      10,39618 %$      37,79912 %EMEA4,35019 %16,61312 %APJC2,50614 %8,9149 %Total$      17,25218 %$      63,32512 %Amounts may not sum and percentages may not recalculate due to rounding. CISCO SYSTEMS, INC.GROSS MARGIN PERCENTAGE BY SEGMENT (In percentages)July 25, 2026Three Months EndedFiscal Year EndedGross Margin Percentage:Americas64.5 %65.1 %EMEA70.1 %71.2 %APJC67.3 %66.6 % CISCO SYSTEMS, INC.REVENUE FOR GROUPS OF SIMILAR PRODUCTS AND SERVICES(In millions, except percentages)July 25, 2026Three Months EndedFiscal Year EndedAmountY/Y %AmountY/Y %Revenue:Networking$         9,79128 %$      34,66822 %Security2,22614 %8,2322 %Collaboration1,16712 %4,3004 %Observability2756 %1,0954 %Total Product13,45924 %48,29516 %Services3,793— %15,030— %Total$      17,25218 %$      63,32512 %Amounts may not sum and percentages may not recalculate due to rounding. CISCO SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS(In millions) (Unaudited)July 25,2026July 26,2025ASSETSCurrent assets:Cash and cash equivalents$           7,218$           8,346Investments8,7007,764Accounts receivable, net of allowanceof $78 at July 25, 2026 and $69 at July 26, 20257,4706,701Inventories5,6943,164Financing receivables, net3,3923,061Other current assets6,1915,950Total current assets38,66534,986Property and equipment, net2,7602,113Financing receivables, net4,9403,466Goodwill59,47759,136Purchased intangible assets, net7,5579,175Deferred tax assets7,1097,356Other assets9,1296,059TOTAL ASSETS$       129,637$       122,291LIABILITIES AND EQUITYCurrent liabilities:Short-term debt$         10,161$           5,232Accounts payable3,3662,528Income taxes payable1901,857Accrued compensation4,0573,611Deferred revenue16,98816,416Other current liabilities6,7635,420Total current liabilities41,52535,064Long-term debt19,37222,861Income taxes payable2,3392,165Deferred revenue12,79312,363Other long-term liabilities3,3232,995Total liabilities79,35275,448Total equity50,28546,843TOTAL LIABILITIES AND EQUITY$       129,637$       122,291 CISCO SYSTEMS, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(In millions) (Unaudited)Three Months EndedFiscal Year EndedJuly 25,2026July 26,2025July 25,2026July 26,2025Cash flows from operating activities:Net income$       3,859$       2,550$      13,267$      10,180Adjustments to reconcile net income to net cash provided by operating activities:Depreciation, amortization, and other6386352,5402,811Share-based compensation expense9279483,8303,641Provision for receivables1272324Deferred income taxes443(341)226(1,133)(Gains) losses on divestitures, investments and other, net(858)(90)(1,358)(38)Change in operating assets and liabilities, net of effects of acquisitions and divestitures:Accounts receivable(1,019)(1,428)(832)(22)Inventories(992)(332)(2,541)209Financing receivables(1,801)(291)(1,835)214Other assets(430)17(1,032)(499)Accounts payable398267842257Income taxes, net38163(2,304)(1,839)Accrued compensation789378457(53)Deferred revenue1,2667721,125248Other liabilities2,1169791,769193Net cash provided by operating activities5,3864,23414,17714,193Cash flows from investing activities:Purchases of investments(1,607)(1,523)(8,974)(4,589)Proceeds from sales of investments1294152,0132,643Proceeds from maturities of investments2,2949586,1054,943Acquisitions, net of cash and cash equivalents acquired and divestitures(470)—(516)(291)Purchases of non-marketable equity securities(247)(118)(946)(383)Return of investments in non-marketable equity securities47198270306Acquisition of property and equipment(390)(217)(1,410)(905)Other(20)14(26)9Net cash provided by (used in) investing activities(264)(273)(3,484)1,733Cash flows from financing activities:Issuances of common stock451416805736Repurchases of common stock – repurchase program(1,501)(1,252)(6,106)(6,000)Shares repurchased for tax withholdings on vesting of restricted stock units(511)(312)(1,873)(1,222)Short-term borrowings, original maturities of 90 days or less, net204448616(31)Issuances of debt2,4081,90413,04819,292Repayments of debt(4,397)(3,528)(12,251)(22,073)Dividends paid(1,659)(1,625)(6,553)(6,437)Other(1)—(33)(80)Net cash used in financing activities(5,006)(3,949)(12,347)(15,815)Effect of foreign currency exchange rate changes on cash, cash equivalents, restrictedcash and restricted cash equivalents28(20)(29)(43)Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cashequivalents144(8)(1,683)68Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period7,0838,9188,9108,842Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period$       7,227$       8,910$       7,227$       8,910Supplemental cash flow information:Cash paid for interest$          116$          130$       1,421$       1,500Cash paid for income taxes, net$          593$          627$       4,821$       3,892 CISCO SYSTEMS, INC.REMAINING PERFORMANCE OBLIGATIONS(In millions, except percentages)July 25, 2026April 25, 2026July 26, 2025AmountY/Y %AmountY/Y %AmountY/Y %Product$    23,4369 %$    22,0586 %$    21,5728 %Services23,2986 %21,4042 %21,9615 %Total$    46,7347 %$    43,4624 %$    43,5336 % CISCO SYSTEMS, INC.DEFERRED REVENUE(In millions)July 25,2026April 25,2026July 26,2025Deferred revenue:Product$      13,817$      13,461$      13,490Services15,96415,13815,289Total$      29,781$      28,599$      28,779Reported as:Current$      16,988$      16,446$      16,416Noncurrent12,79312,15312,363Total$      29,781$      28,599$      28,779 CISCO SYSTEMS, INC.DIVIDENDS PAID AND REPURCHASES OF COMMON STOCK (In millions, except per-share amounts)DIVIDENDSSTOCK REPURCHASE PROGRAMTOTALQuarter EndedPer ShareAmountSharesWeighted-Average Priceper ShareAmountAmountFiscal 2026July 25, 2026$            0.42$          1,65913$        111.53$          1,502$          3,161April 25, 2026$            0.42$          1,66016$          80.28$          1,252$          2,912January 24, 2026$            0.41$          1,61718$          76.29$          1,351$          2,968October 25, 2025$            0.41$          1,61729$          68.28$          2,001$          3,618Fiscal 2025July 26, 2025$            0.41$          1,62519$          64.65$          1,252$          2,877April 26, 2025$            0.41$          1,62725$          59.78$          1,504$          3,131January 25, 2025$            0.40$          1,59321$          58.58$          1,236$          2,829October 26, 2024$            0.40$          1,59240$          49.56$          2,003$          3,595 CISCO SYSTEMS, INC.RECONCILIATIONS OF GAAP TO NON-GAAP MEASURESGAAP TO NON-GAAP NET INCOME(In millions)Three Months EndedFiscal Year EndedJuly 25,2026July 26,2025July 25,2026July 26,2025GAAP net income$        3,859$        2,550$      13,267$      10,180Adjustments to cost of sales:Share-based compensation expense138150589584Amortization of acquisition-related intangible assets2362339181,150Acquisition/divestiture-related costs4132566Legal and indemnification settlements/charges—355—355Supplier component remediation charge (adjustment)———(7)Total adjustments to GAAP cost of sales3787511,5322,148Adjustments to operating expenses:Share-based compensation expense7517973,1813,019Amortization of acquisition-related intangible assets2262559161,029Acquisition/divestiture-related costs68104350791Significant asset impairments and restructurings51135693744Total adjustments to GAAP operating expenses1,5561,1915,1405,583Adjustments to interest and other income (loss), net:(Gains) and losses on investments(869)(115)(1,398)(187)Total adjustments to GAAP interest and other income (loss), net(869)(115)(1,398)(187)Total adjustments to GAAP income before provision for income taxes1,0651,8275,2747,544Income tax effect of non-GAAP adjustments(386)(426)(1,490)(1,682)Significant tax matters330—198(829)Total adjustments to GAAP provision for income taxes(56)(426)(1,292)(2,511)Non-GAAP net income$        4,868$        3,951$      17,249$      15,213 CISCO SYSTEMS, INC.RECONCILIATIONS OF GAAP TO NON-GAAP MEASURESGAAP TO NON-GAAP EPSThree Months EndedFiscal Year EndedJuly 25,2026July 26,2025July 25,2026July 26,2025GAAP EPS$          0.97$           0.64$           3.33$           2.55Adjustments to GAAP:Share-based compensation expense0.220.240.950.90Amortization of acquisition-related intangible assets0.120.120.460.55Acquisition/divestiture-related costs0.020.030.090.21Legal and indemnification settlements/charges—0.09—0.09Significant asset impairments and restructurings0.130.010.170.19(Gains) and losses on investments(0.22)(0.03)(0.35)(0.05)Income tax effect of non-GAAP adjustments(0.10)(0.11)(0.37)(0.42)Significant tax matters0.08—0.05(0.21)Non-GAAP EPS$          1.22$           0.99$           4.33$           3.81Amounts may not sum due to rounding. CISCO SYSTEMS, INC.RECONCILIATIONS OF GAAP TO NON-GAAP MEASURESGROSS MARGINS, OPERATING EXPENSES, OPERATING MARGINS, INTEREST AND OTHER INCOME (LOSS), NET, AND NET INCOME(In millions, except percentages)Three Months EndedJuly 25, 2026Product Gross MarginServices GrossMarginTotal Gross MarginOperating ExpensesY/YOperatingIncomeY/YInterestandother income (loss),netNetIncomeY/YGAAP amount$ 8,430$ 2,633$ 11,063$ 6,79910 %$ 4,26438 %$ 669$ 3,85951 %% of revenue62.6 %69.4 %64.1 %39.4 %24.7 %3.9 %22.4 %Adjustments to GAAP amounts:Share-based compensation expense5979138751889—889Amortization of acquisition-related intangible assets236—236226462—462Acquisition/divestiture-related costs1346872—72Significant asset impairments and restructurings———511511—511(Gains) and losses on investments—————(869)(869)Income tax effect/significant tax matters——————(56)Non-GAAP amount$ 8,726$ 2,715$ 11,441$ 5,2435 %$ 6,19823 %$  (200)$ 4,86823 %% of revenue64.8 %71.6 %66.3 %30.4 %35.9 %(1.2) %28.2 % Three Months EndedJuly 26, 2025ProductGross MarginServicesGrossMarginTotal GrossMarginOperatingExpensesOperatingIncomeInterest and otherincome (loss), netNetIncomeGAAP amount$ 6,692$ 2,588$ 9,280$ 6,193$ 3,087$ (88)$ 2,550% of revenue61.5 %68.3 %63.2 %42.2 %21.0 %(0.6) %17.4 %Adjustments to GAAP amounts:Share-based compensation expense6684150797947—947Amortization of acquisition-related intangible assets233—233255488—488Acquisition/divestiture-related costs21113104117—117Legal and indemnification settlements/charges355—355—355—355Significant asset impairments and restructurings———3535—35(Gains) and losses on investments—————(115)(115)Income tax effect/significant tax matters——————(426)Non-GAAP amount$ 7,348$ 2,683$ 10,031$ 5,002$ 5,029$  (203)$ 3,951% of revenue67.5 %70.8 %68.4 %34.1 %34.3 %(1.4) %26.9 %Amounts may not sum and percentages may not recalculate due to rounding. CISCO SYSTEMS, INC.RECONCILIATIONS OF GAAP TO NON-GAAP MEASURESGROSS MARGINS, OPERATING EXPENSES, OPERATING MARGINS, INTEREST AND OTHER INCOME (LOSS), NET, AND NET INCOME(In millions, except percentages)Fiscal Year EndedJuly 25, 2026Product Gross MarginServices Gross MarginTotal Gross MarginOperatingExpensesY/YOperating IncomeY/YInterestand other income (loss), netNetIncomeY/YGAAP amount$ 30,514$ 10,346$ 40,860$ 25,4922 %$ 15,36831 %$ 641$ 13,26730 %% of revenue63.2 %68.8 %64.5 %40.3 %24.3 %1.0 %21.0 %Adjustments to GAAP amounts:Share-based compensation expense2543355893,1813,770—3,770Amortization of acquisition-related intangible assets918—9189161,834—1,834Acquisition/divestiture-related costs71825350375—375Significant asset impairments and restructurings———693693—693(Gains) and losses on investments—————(1,398)(1,398)Income tax effect/significant tax matters——————(1,292)Non-GAAP amount$ 31,693$ 10,699$ 42,392$ 20,3525 %$ 22,04013 %$  (757)$ 17,24913 %% of revenue65.6 %71.2 %66.9 %32.1 %34.8 %(1.2) %27.2 % Fiscal Year EndedJuly 26, 2025Product Gross MarginServices GrossMarginTotal Gross MarginOperatingExpensesOperatingIncomeInterest and otherincome (loss), netNetIncomeGAAP amount$ 26,487$ 10,303$ 36,790$ 25,030$ 11,760$  (660)$ 10,180% of revenue63.7 %68.5 %64.9 %44.2 %20.8 %(1.2) %18.0 %Adjustments to GAAP amounts:Share-based compensation expense2553295843,0193,603—3,603Amortization of acquisition-related intangible assets1,150—1,1501,0292,179—2,179Acquisition/divestiture-related costs145266791857—857Legal and indemnification settlements/charges355—355—355—355Supplier component remediation charge (adjustment)(7)—(7)—(7)—(7)Significant asset impairments and restructurings———744744—744(Gains) and losses on investments—————(187)(187)Income tax effect/significant tax matters——————(2,511)Non-GAAP amount$ 28,254$ 10,684$ 38,938$ 19,447$ 19,491$  (847)$ 15,213% of revenue67.9 %71.0 %68.7 %34.3 %34.4 %(1.5) %26.9 %Amounts may not sum and percentages may not recalculate due to rounding. CISCO SYSTEMS, INC.RECONCILIATIONS OF GAAP TO NON-GAAP MEASURESEFFECTIVE TAX RATE(In percentages)Three Months EndedFiscal Year EndedJuly 25, 2026July 26, 2025July 25, 2026July 26, 2025GAAP effective tax rate21.8 %15.0 %17.1 %8.3 %Total adjustments to GAAP provision for income taxes(3.0) %3.1 %1.9 %10.1 %Non-GAAP effective tax rate18.8 %18.1 %19.0 %18.4 % GAAP TO NON-GAAP GUIDANCEQ1 FY 2027Gross MarginOperating MarginEarnings perShare(1)GAAP63% – 64%28% – 29%$1.08 – $1.10Estimated adjustments for:Share-based compensation expense1.0 %4.5 %$0.14Amortization of acquisition-related intangible assets and acquisition/divestiture-related costs1.0 %2.5 %$0.09Significant asset impairments and restructurings(2)—0.5 %$0.01Non-GAAP65% – 66%35.5% – 36.5%$1.32 – $1.34 FY 2027Earnings per Share(1)GAAP $4.00 – $4.06Estimated adjustments for:Share-based compensation expense$0.60Amortization of acquisition-related intangible assets and acquisition/divestiture-related costs$0.34Significant asset impairments and restructurings (2)$0.11Non-GAAP$5.05 – $5.11(1) Estimated adjustments to GAAP earnings per share are shown after income tax effects.(2) Reflects charges related to a restructuring plan announced on May 13, 2026. We expect this plan to be substantially completed by the end of fiscal 2027.Except as noted above, this guidance does not include the effects of any future acquisitions/divestitures, significant asset impairments and restructurings, significant litigation settlements and other contingencies, gains and losses on investments, significant tax matters, or other items, which may or may not be significant.Forward Looking Statements, Non-GAAP Information and Additional InformationThis release may be deemed to contain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other things, statements regarding future events (such as being well positioned to support our customers however or wherever they decide to deploy AI, the significant momentum and raised expectations of AI infrastructure from hyperscalers, the broad-based high demand for Cisco technology, and the significant growth opportunities ahead) and the future financial performance of Cisco (including the guidance for Q1 FY 2027 and full year FY 2027) that involve risks and uncertainties, such as the actual impact of tariffs on our guidance for Q1 FY 2027 and full year FY 2027. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including: business and economic conditions and growth trends in the networking industry, our customer markets and various geographic regions; global economic conditions and uncertainties in the geopolitical environment; our development and use of artificial intelligence; overall information technology spending; the growth and evolution of the Internet and levels of capital spending on Internet-based systems; variations in customer demand for products and services, including sales to the service provider market, cloud, enterprise and other customer markets; the return on our investments in certain key priority areas, and in certain geographical locations, as well as maintaining leadership in Networking and services; the timing of orders and manufacturing and customer lead times; supply constraints; changes in customer order patterns or customer mix; insufficient, excess or obsolete inventory; variability of component costs; variations in sales channels, product costs or mix of products sold; our ability to successfully acquire businesses and technologies and to successfully integrate and operate these acquired businesses and technologies; our ability to achieve expected benefits of our partnerships; increased competition in our product and services markets, including the data center market; dependence on the introduction and market acceptance of new product offerings and standards; rapid technological and market change; manufacturing and sourcing risks; product defects and returns; litigation involving patents, other intellectual property, antitrust, stockholder and other matters, and governmental investigations; our ability to achieve the benefits of restructurings and possible changes in the size and timing of related charges; cyber attacks, data breaches or other incidents; vulnerabilities and critical security defects; our ability to protect personal data; evolving regulatory uncertainty; terrorism; natural catastrophic events (including as a result of global climate change); any pandemic or epidemic; our ability to achieve the benefits anticipated from our investments in sales, engineering, service, marketing and manufacturing activities; our ability to recruit and retain key personnel; our ability to manage financial risk, and to manage expenses during economic downturns; risks related to the global nature of our operations, including our operations in emerging markets; currency fluctuations and other international factors; changes in provision for income taxes, including changes in tax laws and regulations or adverse outcomes resulting from examinations of our income tax returns; potential volatility in results of operations; and other factors listed in Cisco’s most recent reports on Forms 10-Q and 10-K filed on May 19, 2026 and September 3, 2025, respectively. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in Cisco’s most recent reports on Forms 10-Q and 10-K as each may be amended from time to time. Cisco’s results of operations for the three months and the year ended July 25, 2026 are not necessarily indicative of Cisco’s results of operations for any future periods. Any projections in this release are based on limited information currently available to Cisco, which is subject to change. Although any such projections and the factors influencing them will likely change, Cisco will not necessarily update the information, since Cisco will only provide guidance at certain points during the year. Such information speaks only as of the date of this release.This release includes non-GAAP net income, non-GAAP gross margins, non-GAAP operating expenses, non-GAAP operating income and margin, non-GAAP effective tax rates, non-GAAP interest and other income (loss), net, and non-GAAP net income per share data for the periods presented. It also includes future estimated ranges for gross margin, operating margin, tax provision rate and EPS on a non-GAAP basis.These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles (GAAP) and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Cisco believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Cisco’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Cisco’s results of operations in conjunction with the corresponding GAAP measures.Cisco believes that the presentation of non-GAAP measures when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and its historical and projected results of operations.For its internal budgeting process, Cisco’s management uses financial statements that do not include, when applicable, share-based compensation expense, amortization of acquisition-related intangible assets, acquisition/divestiture-related costs, significant asset impairments and restructurings, significant litigation settlements and other contingencies, gains and losses on investments, the income tax effects of the foregoing and significant tax matters. Cisco’s management also uses the foregoing non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Cisco. In prior periods, Cisco has excluded other items that it no longer excludes for purposes of its non-GAAP financial measures. From time to time in the future there may be other items that Cisco may exclude for purposes of its internal budgeting process and in reviewing its financial results. For additional information on the items excluded by Cisco from one or more of its non-GAAP financial measures, refer to the Form 8-K regarding this release furnished today to the Securities and Exchange Commission.About CiscoCisco (NASDAQ: CSCO) is the worldwide technology leader that is revolutionizing the way organizations connect and protect in the AI era. For more than 40 years, Cisco has securely connected the world. With its industry leading AI-powered solutions and services, Cisco enables its customers, partners and communities to unlock innovation, enhance productivity and strengthen digital resilience. With purpose at its core, Cisco remains committed to creating a more connected and inclusive future for all. Discover more on The Newsroom and follow us on X at @Cisco.Copyright © 2026 Cisco and/or its affiliates. All rights reserved. Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S. and other countries. To view a list of Cisco trademarks, go to: www.cisco.com/go/trademarks. Third-party trademarks mentioned in this document are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company. This document is Cisco Public Information.RSS Feed for Cisco: 

View original content to download multimedia:https://www.prnewswire.com/news-releases/cisco-reports-fourth-quarter-and-fiscal-year-2026-earnings-302850096.htmlSOURCE Cisco Systems, Inc.


Source link