Earnings Recap — Q4 FY2026
CY Q3 2026 · Reported August 12, 2026 · Beat 7 of last 7 quarters
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Cisco's record AI infrastructure orders and revenue guidance underscore the accelerating buildout of AI networking, particularly for scale-across connectivity between data centers. The company's expansion into hyperscaler and enterprise AI networking positions it as a key supplier in the AI infrastructure ecosystem, with potential to drive demand for optical components, silicon, and networking equipment across the supply chain.
Cisco delivered record Q4 revenue of $17.3B, up 18% YoY, with product revenue up 24% and non-GAAP EPS up 23% to $1.22. Total product orders grew 35% YoY, with hyperscaler orders up triple digits and AI infrastructure orders of $4B in Q4, bringing FY26 total to $9.3B. Networking orders grew 40% YoY, marking the eighth consecutive quarter of double-digit growth, and the company won 3 new hyperscaler design wins, including a P200-powered scale-across system. Security revenue grew 14% YoY, with Splunk and core security both seeing double-digit order growth. The company returned $3.2B to shareholders in Q4 and $12.7B for the full year, representing 99% of free cash flow.
Management framed FY27 as a year of continued acceleration, guiding revenue to $72.2–$73.4B (up ~15% YoY at midpoint) and non-GAAP EPS to $5.05–$5.11 (up ~17% YoY). They expect AI infrastructure revenue from hyperscalers to grow to $7.5B in FY27, with orders expected to be 'meaningfully higher' than FY26. Core business (ex-AI) is expected to grow ~10%, well above the prior 4–6% long-term model. Security and observability are expected to accelerate from low single-digit to high single-digit growth, with services turning positive. Gross margin will face headwinds from higher hardware mix and memory costs, but operating margin is guided to ~35% for the year, a high watermark. Management reiterated confidence in a multiyear networking super cycle driven by AI, enterprise modernization, and Mythos-related refresh, with no significant supply constraints.
“I believe the accelerating adoption of Agentic AI is fueling a networking super cycle.”
on Networking super cycle
“We took $4 billion in orders in Q4, bringing the total for FY 26 to $9.3 billion, approximately 4.5x our fiscal year 25 total.”
on AI infrastructure orders
“We are in the early stages of a networking super cycle presenting a massive opportunity for our business.”
on Super cycle outlook
Your FY27 guide implies 15% revenue growth, and even ex-AI it's ~10% vs your long-term 4-6% model. What's driving the ex-AI growth and how durable is it? Also, can you double-click on the scale-across opportunity?
Chuck Robbins attributed the growth to the networking super cycle, citing hyperscaler AI buildouts, telco infrastructure readiness for scale-across (traffic 14x traditional DCI), enterprise network modernization, and upcoming Mythos and quantum refresh cycles. He highlighted 3 P200 scale-across design wins with separate hyperscalers, with orders already received, and noted the massive opportunity in scale-across.
How should we think about gross margins given the guide implies contraction? And is the networking revenue guidance conservative given order strength?
Mark Patterson explained that gross margin headwinds come from higher hardware mix and memory costs, but operating margin is a better indicator, guiding to ~35% for FY27, a high watermark. He noted that Q2-Q4 implied growth of ~13% reflects tougher comps from the second half of FY26, and Q1 revenue is about 25% of the year, in line with historical linearity.
Security revenue picked up to 14% — is that anniversarying Splunk headwinds or something else? And how are enterprise conversations evolving around on-prem vs cloud?
Mark Patterson said the 14% included some sizable on-prem Splunk deals with longer duration, but the trend line is improving, with security expected to be high single-digit growth in FY27. Chuck Robbins noted that enterprises are making decisions based on tokenomics, data sovereignty, and agent security, and regardless of on-prem or cloud deployment, Cisco benefits from increased networking and security investment.