Cisco expects AI infrastructure revenue from hyperscalers to reach approximately $7.5 billion in fiscal 2027 after securing $9.3 billion of orders during fiscal 2026, highlighting the growing importance of artificial intelligence infrastructure to the networking company’s business.
Hyperscaler AI infrastructure orders reached $4 billion in Q4 alone, bringing the fiscal-year total to $9.3 billion. Cisco generated approximately $4 billion of AI infrastructure revenue during fiscal 2026 and expects that figure to climb approximately 88% to $7.5 billion in fiscal 2027.
The AI momentum is occurring alongside what Cisco describes as a broader networking supercycle. Q4 networking product orders increased 40% year-over-year, marking the eighth consecutive quarter of double-digit growth. Total product orders increased 35%, or 25% when excluding hyperscalers, with double-digit order growth across every geography and customer market.
Q4 revenue increased 18% to a record $17.3 billion from $14.7 billion. Product revenue increased 24%, led by 28% growth in Networking, 14% growth in Security, 12% growth in Collaboration and 6% growth in Observability.
GAAP operating income increased 38% to $4.3 billion, with operating margin reaching 24.7%. Non-GAAP operating income increased 23% to $6.2 billion and represented a 35.9% margin.
GAAP net income increased 51% to $3.9 billion, while GAAP diluted EPS increased 52% to $0.97. Non-GAAP net income and EPS both increased 23%, reaching $4.9 billion and $1.22, respectively. Operating cash flow increased 27% to $5.4 billion.
For the full fiscal year, Cisco generated $63.3 billion of revenue, up 12%, while GAAP net income increased 30% to $13.3 billion. Non-GAAP operating margin reached 34.8%. Management said fiscal 2026 produced Cisco’s highest productivity metrics in 30 years when measured by revenue, non-GAAP operating margin and earnings per employee.
Cisco ended fiscal 2026 with $46.7 billion of remaining performance obligations, up 7%, including 9% growth in product RPO and 6% growth in services RPO. Deferred revenue reached $29.8 billion.
The company returned another $3.2 billion to shareholders during Q4 through dividends and share repurchases. Cisco repurchased approximately 13 million shares for $1.5 billion at an average price of $111.53 and had another $8.1 billion remaining under its repurchase authorization.
Cisco also closed acquisitions of observability company Galileo Technologies and Astrix Securities, which focuses on Non-Human Identity security, during Q4.
For fiscal 2027, Cisco expects revenue of $72.2 billion to $73.4 billion and non-GAAP EPS of $5.05 to $5.11. Q1 revenue is expected between $18 billion and $18.2 billion, with a non-GAAP operating margin of 35.5% to 36.5%.
KEY QUOTES:
“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.”
“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.”
Chuck Robbins, Chair And CEO Of Cisco
“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.”
“In fiscal 2026, Cisco achieved its highest productivity metrics in 30 years measured by revenue, non-GAAP operating margin, and earnings per employee.”
Mark Patterson, Chief Financial Officer Of Cisco
