Cisco took in $18.5 billion in revenue in its first quarter, a record for the company and 24% more than a year earlier, and raised its full-year outlook on Thursday as demand for AI networking equipment kept growing.
Earnings per share were $1.14 on a GAAP basis, up 58%, with net income of $4.6 billion, the company said in its earnings release. On a non-GAAP basis, earnings were $1.40 a share, up 40%, on net income of $5.6 billion. Revenue also topped the $18.14 billion average estimate of analysts compiled by LSEG, according to Reuters.
“In Q1, we delivered the strongest revenue and non-GAAP earnings per share growth rates for Cisco in over 15 years,” said Chuck Robbins, Cisco’s chair and CEO. “Organizations are turning to Cisco for our trusted, market-defining technology and our expertise to help them scale, secure and optimize their environments for the agentic AI era.”
Product revenue rose 32% to $14.7 billion, and services revenue rose 1% to $3.9 billion. Networking, the largest piece, jumped 43% to $11.1 billion. Security revenue grew 7%, Collaboration 8% and Observability 2%.
Every region grew at a double-digit pace. Revenue was up 28% in the Americas, 18% in EMEA and 21% in APJC.
Profits grow faster than sales
Operating income rose 66% on a GAAP basis, to $5.6 billion, for a margin of 30.2%. Non-GAAP operating income rose 37% to $7.0 billion, and the 37.8% non-GAAP operating margin was a record, Cisco said.
“Q1 FY27 was another record quarter for Cisco, with revenue, non-GAAP operating margin, and non-GAAP EPS all exceeding the high end of our guidance ranges,” said Mark Patterson, Cisco’s CFO. “The strength of our Q1 performance gives us confidence to raise our revenue and non-GAAP EPS guidance for FY27.”
A higher bar for the year
Cisco now expects fiscal 2027 revenue of $74.8 billion to $75.8 billion, with non-GAAP earnings of $5.47 to $5.53 a share and GAAP earnings of $4.38 to $4.44 a share. The previous revenue range was $72.2 billion to $73.4 billion, according to Reuters.
The company also raised its expected AI infrastructure revenue from hyperscalers to $9 billion in fiscal 2027, more than double the total for fiscal 2026. Reuters reported the earlier expectation was $7.5 billion.
For the second quarter, Cisco guided revenue to $18.0 billion to $18.2 billion, with non-GAAP earnings of $1.34 to $1.36 a share and GAAP earnings of $1.07 to $1.09 a share.
Remaining performance obligations rose 8% to $46.2 billion, and deferred revenue rose 7% to $30.1 billion. Cash from operations was $4.4 billion, up 36%.
Cisco returned $3.7 billion to stockholders in the quarter, paying a $0.42-a-share dividend totaling $1.7 billion and spending $2.0 billion buying back about 18 million shares. It declared the next quarterly dividend of $0.42 a share, payable Jan. 20, 2027, to stockholders of record on Jan. 4, 2027.