Cisco has turned the AI networking frenzy into record quarterly revenue, with hyperscalers chucking serious cash at its kit.
The networking outfit reported third-quarter revenue of $15.8 billion for the period ended 25 April 2026. That was up 12 per cent from a year earlier and above the top end of its own guidance.
GAAP net income hit $3.4 billion, or $0.85 a share, while non-GAAP net income came in at $4.2 billion, or $1.06 a share. GAAP earnings per share rose 37 per cent, while non-GAAP earnings per share climbed 10 per cent.
Cisco CEO Chuck Robbins said: “Cisco delivered record quarterly revenue in Q3 and we saw very strong, broad-based demand for our products, demonstrating the relevance of our technology for connecting and securing AI. Cisco is well-positioned as the critical infrastructure for the AI era, building on our technology leadership and customer trust, while innovating at the speed and scale that our dynamic world demands.”
Product orders were up 35 per cent year on year, excluding hyperscalers; product orders still rose 19 per cent. Networking product orders accelerated to more than 50 per cent year-on-year. Campus networking orders grew more than 25 per cent, while data centre switching orders climbed more than 40 per cent.
The AI infrastructure story is where Cisco wants everyone looking. The company said it has taken $5.3 billion of hyperscaler AI orders year to date.
Cisco has raised its expected fiscal 2026 AI infrastructure orders to $9 billion, up from $5 billion. It raised expected fiscal 2026 revenue from that business to $4 billion, up from $3 billion. GAAP gross margin was 63.6 per cent and non-GAAP gross margin was 66 per cent. GAAP operating margin hit 25 per cent, while non-GAAP operating margin reached 34.2 per cent.
Revenue growth was fairly broad. The Americas rose 14 per cent, while EMEA and APJC each grew nine per cent. Product revenue rose 17 per cent, helped by a 25 per cent increase in networking revenue. Observability crept up three per cent, collaboration fell one per cent, and security was flat.
Cisco CFO Mark Patterson said: “In Q3, we once again delivered double-digit growth on both the top and bottom lines, which exceeded the high end of our guidance, coupled with record non-GAAP operating income. “Our record results demonstrate great execution and financial discipline by our teams, enabling us to deliver shareholder value while we pursue the significant opportunities we see ahead.”
Cash flow from operating activities was $3.8 billion, down seven per cent from $4.1 billion a year earlier. That took some shine off the AI bunting, although Cisco still had $16.6 billion in cash, cash equivalents, and investments at quarter-end.
Remaining performance obligations were $43.5 billion, up four per cent. Deferred revenue reached $28.6 billion, up two per cent.
Cisco returned $2.9 billion to shareholders during the quarter through buybacks and dividends. It paid a quarterly dividend of $0.42 a share, worth $1.7 billion, and bought about 16 million shares at an average price of $80.28.
The board has declared another quarterly dividend of $0.42 a share, payable on 22 July 2026 to shareholders of record at the close of business on 6 July 2026.
For the fourth quarter of fiscal 2026, Cisco expects revenue between $16.7 billion and $16.9 billion. It expects GAAP earnings per share of $0.80 to $0.85 and non-GAAP earnings per share of $1.16 to $1.18.
For full-year fiscal 2026, Cisco expects revenue between $62.8 billion and $63 billion. GAAP earnings per share are forecast at $3.16 to $3.21, while non-GAAP earnings per share are expected at $4.27 to $4.29.
