Cisco Systems reports record quarter as AI-driven networking and hyperscaler demand fuels multi-year refresh

Cisco leans into AI-driven networking demand

Cisco Systems Inc. reports accelerating product and AI infrastructure demand that executives say positions the company at the centre of a multi‑year networking refresh. The San Jose hardware and software group posts record results for its fiscal second quarter, driven by strength in networking product orders and large hyperscaler AI buys.

Cisco positions networking at centre of AI infrastructure surge

Cisco reports revenue of $15.3 billion, up 10% year on year, with GAAP net income of $3.2 billion and GAAP EPS of $0.80, while non‑GAAP EPS comes in at $1.04. Product orders accelerate 18% year on year and networking product orders rise more than 20%, the company says. Orders for AI infrastructure from hyperscalers total $2.1 billion, signalling strong demand for compute, switching and related campus refresh projects as customers prepare for large‑scale AI deployments.

Chief Executive Chuck Robbins frames the results as evidence of Cisco’s portfolio relevance in the AI era, saying the company is capturing demand across geographies and customer markets. Cisco describes the momentum as broad‑based, with cloud and enterprise customers driving an uptick in campus and data‑centre networking refresh cycles that executives expect to persist over multiple years. Management highlights that revenue strength is complemented by disciplined execution on product delivery and customer engagements tied to AI infrastructure needs.

Financial discipline underpins the outlook even as Cisco boosts shareholder returns and maintains guidance. GAAP gross margin is 65.0% and GAAP operating margin is 24.6%, both above guidance, and non‑GAAP operating margin reaches 34.6%. The company raises its quarterly dividend by 2% to $0.42 per share and reiterates fiscal 2026 revenue guidance of $61.2 billion to $61.7 billion, noting its EPS outlook reflects estimated tariff impacts under current trade policy.

Broader market context affecting tech firms

The company’s results arrive as market watchers flag heightened sensitivity to AI developments and economic data, with producers warning that upcoming US payrolls and wage surprises could increase short‑term volatility for technology names dependent on AI demand.

Analysts and investors are monitoring Cisco’s next‑quarter guidance and the pace of hyperscaler deployments as indicators of whether the current networking refresh will sustain multi‑year growth across the industry. Cisco says strong product order trends underpin its confidence in achieving its strongest revenue year yet while maintaining margin discipline.