Cisco Tops Revenue Estimates at $18.5 Billion as Networking Sales Jump 43%

Cisco Systems (Nasdaq: CSCO) reported fiscal first-quarter 2027 revenue of $18.5 billion, above the $18.13 billion analysts expected, and adjusted earnings per share of $1.40 against the $1.33 consensus estimate, in an 8-K filed Thursday. Revenue rose 24% from a year earlier. GAAP earnings per share were $1.14, up 58%.

Networking leads growth

Product revenue rose 32%, while services revenue rose 1%. Networking revenue climbed 43% to $11.1 billion, Security rose 7%, Collaboration rose 8% and Observability rose 2%.

By region, Americas revenue grew 28%, EMEA rose 18% and APJC rose 21%.

Non-GAAP operating income was $7.0 billion, up 37%, with a non-GAAP operating margin of 37.8%. The GAAP operating margin was 30.2%. Non-GAAP gross margin was 65.6%, down from 68.1% a year earlier.

Guidance raised

For the second quarter, Cisco expects revenue of $18.0 billion to $18.2 billion and non-GAAP EPS of $1.34 to $1.36. The consensus estimate for the quarter ending January 2027 is $17.91 billion in revenue and $1.23 in EPS.

For fiscal 2027, Cisco guided to revenue of $74.8 billion to $75.8 billion and non-GAAP EPS of $5.47 to $5.53. Analysts expected full-year revenue of $73.22 billion and EPS of $5.15. The company said it expects hyperscaler AI infrastructure revenue of $9 billion in fiscal 2027, more than double the fiscal 2026 total.

Capital returns

Cisco returned $3.7 billion to stockholders in the quarter through buybacks and dividends. It repurchased about 18 million shares at an average price of $112.38, for $2.0 billion. The remaining buyback authorization is $6.1 billion.

The board declared a quarterly dividend of $0.42 per share, payable Jan. 20, 2027, to holders of record on Jan. 4, 2027. Cash from operating activities was $4.4 billion, up 36%.