Earnings
Cisco Revenue Jumps 24% to $18.5 Billion as Networking Sales Surge 43%, and It Lifts Full-Year Outlook
The network equipment maker raised fiscal 2027 guidance after a quarter in which networking revenue rose far faster than the rest of the business.
HedgeWeekly News Desk ·
Cisco Systems reported revenue of $18.5 billion for the quarter ended October 24, up 24% from $14.9 billion a year earlier. Non-GAAP earnings per share rose 40% to $1.40 from $1.00, and GAAP net income climbed 59% to $4.55 billion. Both revenue and non-GAAP EPS finished above the top of the company's own guidance range, according to its chief financial officer.
Networking drove the result. Networking revenue rose 43% to $11.13 billion, while security grew 7% to $2.12 billion and collaboration 8% to $1.14 billion. Product revenue rose 32%, against a 1% gain in services. Non-GAAP gross margin slipped to 65.6% from 68.1% a year ago, though non-GAAP operating margin reached 37.8%.
Cisco raised its fiscal 2027 outlook to revenue of $74.8 billion to $75.8 billion and non-GAAP EPS of $5.47 to $5.53. It now expects hyperscaler revenue of about $9 billion this fiscal year, more than double the fiscal 2026 total. For the current quarter it guided to revenue of $18.0 billion to $18.2 billion, slightly below the quarter just reported, and non-GAAP EPS of $1.34 to $1.36. The company also bought back about $2.0 billion of stock and declared a $0.42 quarterly dividend.
For funds and allocators, the report ties a large networking company directly to AI data-centre spending through its hyperscaler revenue target. Watch two items: whether the 43% networking growth carries into the second quarter, given the guide for flat-to-lower revenue, and whether gross margin, which fell about 2.5 percentage points, stabilises as the mix shifts toward hyperscaler customers.