Why Is Cisco (CSCO) Up 2.4% Since Last Earnings Report?

Core Viewpoint - Cisco Systems reported strong first-quarter fiscal 2026 earnings, exceeding estimates and showing year-over-year growth in revenues and earnings per share, indicating positive momentum for the company [3][4][12]. Financial Performance - Non-GAAP earnings for Q1 fiscal 2026 were $1 per share, beating the Zacks Consensus Estimate by 2.04% and increasing 9.9% year over year [3]. - Revenues reached $14.88 billion, surpassing estimates by 0.71% and reflecting a 7.5% year-over-year increase [4]. - Total Annual Recurring Revenues (ARR) were $31.4 billion, up 5%, with product ARR growth of 7% [4]. Revenue Breakdown - Networking revenues were $7.77 billion, up 15% year over year [5]. - Security revenues decreased by 2% to $1.98 billion, while collaboration revenues fell by 3% to $1.06 billion [5]. - Total product revenues were $11.08 billion, comprising 74.4% of total revenues, with a 9.5% year-over-year increase [6]. Regional Performance - Americas revenues increased by 9% to $8.99 billion, EMEA revenues climbed 5% to $3.78 billion, and APJC revenues also rose by 5% to $2.11 billion [7]. Operating Metrics - Non-GAAP gross margin was 68.1%, expanding 120 basis points year over year [8]. - Non-GAAP operating income was $5.12 billion, up 8.4% year over year, with an operating margin of 34.4% [9]. Balance Sheet Highlights - Cash and cash equivalents totaled $15.7 billion, down from $16.1 billion [10]. - Total debt remained stable at $28.1 billion [10]. - Remaining performance obligations (RPO) increased by 7% to $42.9 billion [10]. Shareholder Returns - Cisco returned $3.6 billion to shareholders through share buybacks and dividends in Q1 fiscal 2026 [11]. Future Guidance - For Q2 fiscal 2026, Cisco expects non-GAAP earnings between $1.01 and $1.03 per share, with revenues projected between $15 billion and $15.2 billion [12]. - For the full fiscal 2026, the company anticipates non-GAAP earnings between $4.08 and $4.14 per share, with revenues expected between $60.2 billion and $61 billion [13]. Market Sentiment - Estimates for Cisco have trended upward over the past month, indicating positive market sentiment [14]. - Cisco holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [16].