CSCO Q4 2026 - Preliminary Earnings Alert
Verdict
- Revenue beat: $17.25bn against $16.84bn consensus, +2.5%, up 18% year over year and above the guided range.
- EPS beat: non-GAAP $1.22 against $1.17 consensus, +4.3%, up 23%.
- Guidance raised well above the run-rate: Q1 FY2027 revenue $18.0–18.2bn and non-GAAP EPS $1.32–1.34; FY2027 revenue $72.2–73.4bn and non-GAAP EPS $5.05–5.11, implying roughly 14% growth on top of a 12% year.
- The one thing that matters: the beat is a mix shift, not just a bigger quarter. Product revenue grew 24% while services were flat, Networking grew 28% and everything else grew single-to-low-double digits — and non-GAAP gross margin fell 210bp to 66.3% as a result. Cisco is buying growth with margin, and Q1 guidance of 65–66% says that trade continues.
Consensus scorecard
| Metric / basis | Quartr actual | API Ninjas consensus | Beat/Miss | Beat/Miss % |
|---|---|---|---|---|
| Revenue (total revenue) | $17,252m | $16,836m | Beat +$416m | +2.5% |
| EPS (non-GAAP diluted) | $1.22 | $1.17 | Beat +$0.05 | +4.3% |
Key metrics
| Metric | Reported | Prior year | Change |
|---|---|---|---|
| Total revenue | $17,252m | $14,673m | +18% |
| Product revenue | $13,459m | $10,886m | +24% |
| Services revenue | $3,793m | $3,787m | flat |
| Non-GAAP gross margin | 66.3% | 68.4% | -210bp |
| Non-GAAP operating income | $6.2bn | — | +23% |
| Remaining performance obligations | $46.7bn | — | +7% |
Total Q4 product orders rose 35%, or 25% excluding hyperscalers; AI infrastructure orders were $4bn in the quarter and $9.3bn for FY2026, against roughly $4bn of AI revenue recognised in FY2026 and $7.5bn expected in FY2027.
Guidance changes
| Metric | New guidance | Prior guidance | Change |
|---|---|---|---|
| Q1 FY2027 revenue | $18.0bn – $18.2bn | Not previously given | New |
| Q1 FY2027 non-GAAP EPS | $1.32 – $1.34 | Not previously given | New |
| Q1 FY2027 non-GAAP gross margin | 65% – 66% | Not previously given | New |
| FY2027 revenue | $72.2bn – $73.4bn | Not previously given | New |
| FY2027 non-GAAP EPS | $5.05 – $5.11 | Not previously given | New |
Quality of earnings
- Part of the GAAP EPS surge is below the line. GAAP EPS rose 52% to $0.97 against non-GAAP up 23%. Of the $1,934m increase in pre-tax income, $757m came from interest and other income net swinging to +$669m from -$88m, and GAAP operating income absorbed a $511m restructuring charge against $35m. Non-GAAP $1.22 is the cleaner read.
- All of the operating margin gain is expense control, none of it is gross margin. Non-GAAP gross margin fell to 66.3% from 68.4%, while non-GAAP operating expenses grew 5% on 18% revenue growth, falling to 30.4% of revenue.
- Cash did not follow earnings for the year. FY2026 operating cash flow was $14.2bn, flat against FY2025, while GAAP net income rose 30% to $13.3bn.
Gotchas & watch items
- Q1 FY2027 non-GAAP gross margin is guided to 65–66%, below the 66.3% just delivered and 68.4% a year ago — the margin give-back is guided to widen, not stabilise.
- Order growth of 35% falls to 25% excluding hyperscalers, so roughly ten points of it sits with a small number of customers whose AI capex plans are not Cisco's to control.
- Outside Networking, the portfolio is soft: FY2026 Security revenue grew 2%, Collaboration 4% and Observability 4%, against Networking at 22%.
- RPO grew 7% against 18% revenue growth, and deferred revenue 3% — the forward book is growing far slower than the recognised quarter.
Event: https://web.quartr.com/companies/4639/events/668273/overview Retrieved: 2026-08-12T20:15:00Z Comparison mode: maximal · Scorecard contract: v1 The Q4 call had not yet been held when this was written; guidance figures are from the release only.