Takeaways by Saasverse AI
- $14.9B Revenue (+8%) | $2.9B Net Income | EPS (GAAP: $0.72, +6%; Non-GAAP: $1.00, +10%)
- AI Infrastructure Revenue Hits $1.3B, Up from $800M Last Quarter | Core Network Business Revenue Up 15% to $7.77B | Product Orders Grow 13%, Led by Networking Solutions
- Stock Price Jumps 7% Post-Earnings | FY2026 Revenue Guidance Raised to $60.2B–$61.0B | New AI-Optimized Products Launched, Including Nvidia-Powered Switches
Cisco started its fiscal 2026 with a strong first quarter, surpassing market expectations on both revenue and profitability, driven by growing AI-related demand. For the quarter ending October 25, 2025, Cisco posted $14.9 billion in revenue, an 8% year-over-year increase, and a net income of $2.9 billion. The company’s AI infrastructure orders surged to $1.3 billion, a significant jump from $800 million in the previous quarter, underscoring its robust position in this emerging sector.
CEO Chuck Robbins emphasized that the demand for secure, AI-ready networks is fueling growth as customers accelerate their AI strategies. Cisco’s core network business—spanning switches, routers, and management software—remained a standout performer, generating $7.77 billion in revenue, up 15%. This growth was supported by a broader trend of enterprise upgrades, including next-gen technologies like intelligent switches, secure routers, and WiFi 7 solutions, which outpaced growth rates of legacy products. Meanwhile, product revenue climbed 10%, and service revenue increased by 2%.
The market has also responded positively to Cisco’s strategic moves in AI infrastructure. The company introduced the Cisco Unified Edge platform and the N9100 network switch, designed with Nvidia’s Spectrum ASIC for AI-heavy data center workloads. These developments reflect Cisco’s focus on optimizing its hardware and software to manage the increasing complexity of AI tasks in data centers.
However, not all segments delivered equally strong results. The security software division saw a 2% revenue decline to $1.98 billion, while the collaboration segment dropped 3% to $1.06 billion. Despite these setbacks, Cisco’s remaining performance obligations (RPO), a key indicator for future revenue, rose by 7% to $42.9 billion, showcasing healthy demand across its broader business portfolio.
Looking ahead, Cisco raised its full-year fiscal 2026 revenue guidance to $60.2–$61.0 billion, exceeding market expectations. The company also projected Q2 revenue in the range of $15.0–$15.2 billion. This optimistic outlook, coupled with extraordinary AI-driven growth, positions Cisco to deliver its strongest fiscal year yet. Following the earnings release, Cisco’s stock rose more than 7% in after-hours trading, reflecting investor confidence in its AI and networking strategy.
Saasverse Insights
Cisco’s performance highlights its successful pivot toward capturing enterprise AI infrastructure demand. Its continued investments in AI-optimized networking solutions, combined with strong execution in its core network business, are shaping a promising path forward. However, challenges in software security and collaboration tools could temper growth in non-core areas, leaving room for strategic adjustments.