Financial Data and Key Metrics Changes - In Q2, total revenue grew by 10% year-over-year, reaching $15.3 billion, with product revenue up 14% at $11.6 billion and services revenue down 1% at $3.7 billion [5][20][21] - Non-GAAP net income was $4.1 billion, up 10%, and non-GAAP earnings per share (EPS) was $1.04, up 11%, indicating operating leverage with EPS growth outpacing revenue growth [5][20] - Total remaining performance obligations (RPO) increased to $43.4 billion, up 5%, while total annual recurring revenue (ARR) reached $31 billion, a 3% increase [22][24] Business Line Data and Key Metrics Changes - Networking revenue grew by 21%, driven by AI infrastructure and campus refresh, with double-digit growth across campus switching, data center switching, wireless, and service provider routing [21][22] - Security revenue declined by 4%, impacted by the transition from on-premise to cloud subscriptions, but new and refreshed products saw significant growth with over 1,000 new customers [15][21][80] - Collaboration revenue grew by 6%, led by double-digit growth in devices and cloud contact center solutions [21] Market Data and Key Metrics Changes - Product orders increased by 18% year-over-year, with service provider and cloud orders up 65%, public sector orders up 11%, and enterprise orders up 8% [8][23] - Orders from hyperscalers reached $2.1 billion in Q2, marking a significant acceleration compared to previous quarters [11][12] - Product orders from the Americas grew by 23%, EMEA by 11%, and APJC by 15% [23] Company Strategy and Development Direction - Cisco is focused on capitalizing on the AI infrastructure opportunity, with a target of over $5 billion in AI orders for fiscal 2026, excluding new product launches [12][30] - The company is committed to returning value to shareholders, increasing its dividend, and maintaining a disciplined approach to capital allocation [5][24] - Cisco aims to enhance its position in the AI era by leveraging its networking portfolio and partnerships, including a joint venture with AMD and HUMAIN for AI infrastructure [14][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating challenges such as rising memory prices through strategic pricing adjustments and supply chain management [8][31] - The company anticipates continued strong demand for its solutions across all customer markets and geographies, positioning itself for its strongest year yet [18][19] - Management highlighted the importance of innovation and customer trust as key drivers for future growth [19] Other Important Information - Cisco's total cash, cash equivalents, and investments stood at $15.8 billion at the end of Q2 [24] - The company returned $3 billion to shareholders in Q2, with $10.8 billion remaining under its share repurchase program [24] Q&A Session Summary Question: AI orders and product mix - Analyst inquired about the mix between Silicon One and optics in AI orders and whether new products would open incremental markets or deepen existing relationships [28] - Management clarified that the $5 billion target does not include recently announced products and that the mix has been consistent at 60% systems and 40% optics [30] Question: Gross margin decline - Analyst asked about the reasons behind the gross margin decline and whether it was solely related to memory prices [28] - Management acknowledged that both mix and memory prices impacted margins and emphasized their focus on controlling costs and improving profitability [31] Question: Networking revenue growth - Analyst requested details on the revenue growth within networking segments and the sources of outperformance [34] - Management confirmed strong growth across all networking segments, with data center switching and campus networking showing significant momentum [36] Question: AI infrastructure and customer engagement - Analyst sought insights on the enterprise appetite for AI investments and the impact of price increases on demand [53] - Management noted positive feedback from customers regarding AI investments and indicated that pricing adjustments were understood and accepted [59] Question: Security portfolio performance - Analyst inquired about the order rates and demand for the security portfolio amid the transition to SaaS [79] - Management reported strong adoption of new security products and expected organic growth in the security portfolio as they exit the year [80]

Financial Data and Key Metrics Changes - In Q2, total revenue grew by 10% year-over-year, reaching $15.3 billion, with product revenue up 14% at $11.6 billion, while services revenue decreased by 1% to $3.7 billion [5][20] - Non-GAAP net income was $4.1 billion, up 10%, and non-GAAP earnings per share (EPS) was $1.04, up 11%, indicating operating leverage with EPS growth outpacing revenue growth [20][24] - Total remaining performance obligations (RPO) increased by 5% to $43.4 billion, with product RPO growing by 8% [22] Business Line Data and Key Metrics Changes - Networking revenue grew by 21%, driven by AI infrastructure and campus refresh, with double-digit growth across campus switching, data center switching, wireless, service provider routing, and enterprise routing [20][21] - Security revenue declined by 4%, impacted by the transition of Splunk from on-premise to cloud subscriptions, although new and refreshed products showed growth [22][82] - Collaboration revenue increased by 6%, led by growth in devices and cloud contact center solutions [22] Market Data and Key Metrics Changes - Product orders grew by 18% year-over-year, with service provider and cloud orders up 65%, public sector orders up 11%, and enterprise orders up 8% [8][23] - Orders from hyperscalers totaled $2.1 billion in Q2, marking significant growth compared to previous quarters [11] - Geographic product orders saw the Americas up 23%, EMEA up 11%, and APJC up 15% [23] Company Strategy and Development Direction - Cisco is focused on capitalizing on the AI infrastructure opportunity, with a target of over $5 billion in AI orders for fiscal 2026, emphasizing the importance of its Silicon One architecture [12][14] - The company is committed to returning value to shareholders, increasing its dividend to $0.42 per quarter, and returning $3 billion in capital during the quarter [6][24] - Cisco is enhancing its security portfolio with new products and has seen significant customer adoption, indicating a strategic pivot towards AI-driven solutions [15][82] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating industry-wide challenges, including rising memory prices, by implementing price increases and adjusting contractual terms [8][32] - The company anticipates continued strong demand for its solutions across all customer markets and geographies, positioning itself as a critical player in the AI transition [18][19] - Guidance for Q3 expects revenue between $15.4 billion and $15.6 billion, with a full-year revenue forecast of $61.2 billion to $61.7 billion [26] Other Important Information - Cisco's operating cash flow was $1.8 billion, down 19% due to tax payments and investments in AI infrastructure [24] - The company shipped its 1 millionth Silicon One chip and introduced new high-performance systems at Cisco Live Amsterdam [11][12] Q&A Session Summary Question: AI momentum and product mix - The company clarified that the $5 billion AI target does not include recently announced products like P200 and G300, with a consistent mix of 60% systems and 40% optics [29][31] Question: Gross margin decline - Management acknowledged that the gross margin decline was primarily due to product mix and memory prices, with plans to manage these through price adjustments and contractual revisions [32][33] Question: Networking revenue growth - Networking growth was attributed to strong performance across all segments, with double-digit growth in data center switching and campus networking [38][40] Question: Order rates and seasonality - The company noted that typical seasonality shows mid-single-digit declines in Q2 product revenue, but they experienced a 5% increase, indicating strong performance [40] Question: AI orders and revenue recognition - Management indicated that AI orders are nonlinear and subject to variability, with revenue recognition expected to ramp up in fiscal 2027 [66][70] Question: Security portfolio performance - The company reported strong adoption of new security products, with significant customer growth, despite short-term revenue headwinds from the Splunk transition [82][84]

Financial Data and Key Metrics Changes - Cisco reported record revenue of $15.3 billion for Q2 2026, representing a 10% year-over-year increase. Non-GAAP net income was $4.1 billion, also up 10%, with non-GAAP earnings per share (EPS) at $1.04, reflecting an 11% increase [4][18]. - Total product revenue reached $11.6 billion, up 14%, while services revenue decreased by 1% to $3.7 billion year-over-year [18]. - Non-GAAP gross margin was 67.5%, down 120 basis points year-over-year, with product gross margin at 66.4%, down 130 basis points due to mix and higher memory costs [20][21]. Business Line Data and Key Metrics Changes - Networking revenue grew by 21%, driven by AI infrastructure and campus refresh initiatives, with double-digit growth in campus switching, data center switching, wireless, service provider routing, and enterprise routing [18][19]. - Security revenue declined by 4%, impacted by the transition from on-premise to cloud subscriptions in the Splunk business, although new and refreshed products showed growth [19][80]. - Collaboration revenue increased by 6%, led by growth in devices and cloud contact center solutions [19]. Market Data and Key Metrics Changes - Total product orders grew by 18% year-over-year, with service provider and cloud orders up 65%, public sector orders up 11%, and enterprise orders up 8% [6][20]. - Orders from hyperscalers for AI infrastructure reached $2.1 billion in Q2, marking significant growth compared to previous quarters [10][12]. - Product orders excluding hyperscalers increased by 10% year-over-year, indicating broad-based demand across global markets [6][7]. Company Strategy and Development Direction - Cisco is focused on capitalizing on the AI infrastructure opportunity, with a target of over $5 billion in AI orders for fiscal 2026, emphasizing the importance of its Silicon One architecture and AI-native security solutions [12][17]. - The company is committed to returning value to shareholders, as demonstrated by a $3 billion capital return in Q2 and a dividend increase [4][22]. - Cisco is enhancing its supply chain strategies to manage rising memory costs and is proactively adjusting pricing and contractual terms with partners [6][30]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in Cisco's ability to navigate industry-wide challenges, including rising memory prices, and highlighted strong demand for its technology amid a significant transition to AI [5][6][17]. - The company anticipates continued growth in AI infrastructure and expects to recognize over $3 billion in AI-related revenue from hyperscalers in FY26 [12][67]. - Cisco's guidance for Q3 2026 includes expected revenue between $15.4 billion and $15.6 billion, with non-GAAP EPS projected between $1.02 and $1.04 [24]. Other Important Information - Cisco's total remaining performance obligations (RPO) were $43.4 billion, up 5%, with total annual recurring revenue (ARR) at $31 billion, an increase of 3% [19][21]. - The company is seeing strong interest in its Sovereign critical infrastructure portfolio, which is designed for secure data management in air-gapped environments [12][13]. Q&A Session Summary Question: AI orders and product mix - The $5 billion AI target does not include recently announced products like the P200 and G300. The mix is approximately 60% systems and 40% optics [26][28]. Question: Gross margin decline - The decline is attributed to product mix and memory prices. Cisco is implementing price increases and adjusting terms with partners to manage these costs [30][31]. Question: Networking revenue growth - Networking growth is strong across all segments, with double-digit growth in data center switching and campus networking. Seasonality is expected to follow typical patterns [34][35]. Question: Security portfolio performance - New security products are gaining traction, with significant growth in new customer acquisitions. The transition to cloud subscriptions is impacting short-term revenue [78][80]. Question: AI infrastructure and customer engagement - Engagements with NVIDIA have increased significantly, and Cisco is seeing early success in the enterprise AI market [50][51].

Cisco CEO Chuck Robbins appears at the World Economic Forum in Davos, Switzerland, on Jan. 21, 2026.Cisco reported better-than-expected quarterly results on Wednesday, but the stock dropped about 7% in extended trading as earnings guidance for the current period only met estimates. Here's how the company did in comparison with LSEG consensus:Earnings per share: $1.04 adjusted vs. $1.02 expected Revenue: $15.35 billion vs. $15.12 billion expectedCisco's revenue grew about 10% from $14 billion a year earlier, ...

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

The company posted a second-quarter profit of $3.18 billion, up from $2.43 billion a year earlier. ...

Q2 Fiscal Year 2026 © 2026 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Business Momentum & Key Trends Conference Call February 11, 2026 Forward-Looking Statements This presentation contains projections and other forward-looking statements regarding future events or the future financial performance of Cisco, including future operating results. These projections and statements are only predictions. Actual events or results may differ materially from those in the projections or other f ...

Core Viewpoint - Cisco Systems reported strong fiscal second-quarter results, beating analyst estimates for both revenue and earnings per share, indicating robust performance and growth potential in a competitive landscape [2][3]. Financial Performance - Cisco's fiscal second-quarter revenue reached $15.35 billion, surpassing analyst expectations of $15.12 billion [2]. - Adjusted earnings for the second quarter were $1.04 per share, exceeding the forecast of $1.02 per share [2]. - Total revenue increased by 10% year-over-year, driven by a 14% rise in product revenue, while services revenue saw a slight decline of 1% [3]. - Networking product revenue surged by 21%, and Collaboration product revenue grew by 6%, although Security product revenue fell by 4% year-over-year [3]. - Cash flow from operations was $1.8 billion, down 19% year-over-year, with the company holding $15.8 billion in cash, cash equivalents, and investments at the end of the quarter [3]. Future Outlook - For the third quarter, Cisco projects revenue between $15.4 billion and $15.6 billion, compared to estimates of $15.18 billion [5]. - Adjusted earnings for the third quarter are expected to be between $1.02 and $1.04 per share, slightly below the estimate of $1.03 per share [5]. - Cisco raised its fiscal 2026 revenue guidance to a range of $61.20 billion to $61.7 billion, up from the previous guidance of $60.20 billion to $61 billion [5]. - The company also increased its full-year adjusted earnings guidance to a range of $4.13 to $4.17 per share, from a prior range of $4.08 to $4.14 per share [6]. Market Reaction - Following the earnings report, Cisco shares experienced a decline of 4.35% in after-hours trading, settling at $81.82 [7].

By Juby Babu Feb 11 (Reuters) - Cisco Systems (CSCO) posted quarterly adjusted gross margin below market estimates on Wednesday, as the networking equipment provider grapples with the ‌fallout of a global memory price increase, sending its shares down 7% in ‌premarket trading on Thursday. The rapid build-out of artificial intelligence infrastructure by U.S. tech firms such as OpenAI, Alphabet and Microsoft has ​absorbed much of the world's memory chip supply, which has lifted prices as manufacturers prio ...

Cisco raises annual resulsts forecast fueled by AI demand | ReutersSkip to main content[Exclusive news, data and analytics for financial market professionalsLearn more aboutRefinitiv]The logo of networking gear maker Cisco Systems Inc is seen during GSMA's 2022 Mobile World Congress (MWC) in Barcelona, Spain February 28, 2022. REUTERS/Nacho Doce [Purchase Licensing Rights, opens new tab]Feb 11 (Reuters) - Cisco Systems [(CSCO.O), opens new tab] raised its full-year revenue and adjusted profit forecasts on W ...