OpenNashEarnings

Cisco (CSCO) · Networking

Cisco Q3 FY2026 earnings: summary, key numbers & outlook

Results filed 13 May 2026 · Quarter ended 25 Apr 2026

Press release ↗Investor relations ↗

Summaries and transcripts are machine-generated and can contain errors.

In brief

Cisco reported record third quarter revenue of $15.8 billion, up 12% year over year, with GAAP EPS of $0.85, up 37% year over year, and non-GAAP EPS of $1.06, up 10% year over year.

Cisco reported record third quarter revenue of $15.8 billion, up 12% from a year ago. Product revenue rose 17%, led by Networking, up 25%, while services revenue fell 1%. GAAP EPS was $0.85 and non-GAAP EPS was $1.06. Total product orders rose 35%, and Cisco has taken $5.3 billion of AI infrastructure orders from hyperscalers so far this fiscal year. Gross margin fell to 66.0% on a non-GAAP basis from 68.6%.

Cisco expects fourth quarter revenue of $16.7 billion to $16.9 billion and fiscal 2026 revenue of $62.8 billion to $63.0 billion. It also raised its expected FY26 hyperscaler AI orders to $9 billion. The main tension is margin. Product gross margin is under pressure, and Cisco announced a restructuring with pre-tax charges of up to $1 billion, about $450 million of them in the fourth quarter.

Key numbers

Total revenue · GAAP
$15.8 billion

up 12% from a year ago

Net income · GAAP
$3.4 billion

an increase of 35%

Diluted EPS · GAAP
$0.85

an increase of 37%

Non-GAAP EPS · non-GAAP
$1.06

an increase of 10%

Total gross margin · GAAP
63.6%

compared with 65.6% in the third quarter of fiscal 2025

Total gross margin · non-GAAP
66.0%

compared with 68.6% in the third quarter of fiscal 2025

Operating income · GAAP
$4.0 billion

up 24%

Operating income · non-GAAP
$5.4 billion

up 11%

Segment or metricValueChange
Networking$8.8B25%
Security$2.0B—%
Collaboration$1.0B(1)%
Observability$269.0M3%
Services$3.7B(1)%
Americas$9.6B14%
EMEA$4.1B9%
APJC$2.2B9%
Where each number comes from
  • Total revenue: “Total revenue was $15.8 billion, up 12%, with product revenue up 17% and services revenue down 1%.”
  • Net income: “On a GAAP basis, net income was $3.4 billion, an increase of 35%, and EPS was $0.85, an increase of 37%.”
  • Diluted EPS: “On a GAAP basis, net income was $3.4 billion, an increase of 35%, and EPS was $0.85, an increase of 37%.”
  • Non-GAAP EPS: “On a non-GAAP basis, net income was $4.2 billion, an increase of 10%, and EPS was $1.06, an increase of 10%.”
  • Total gross margin: “On a GAAP basis, total gross margin, product gross margin, and services gross margin were 63.6%, 61.9%, and 69.2%, respectively, as compared with 65.6%, 64.4%, and 68.7%”
  • Total gross margin: “On a non-GAAP basis, total gross margin, product gross margin, and services gross margin were 66.0%, 64.3%, and 71.6%, respectively, as compared with 68.6%, 67.6%, and 71.3%”
  • Operating income: “GAAP operating income was $4.0 billion, up 24%, with GAAP operating margin of 25.0%.”
  • Operating income: “Non-GAAP operating income was $5.4 billion, up 11%, with non-GAAP operating margin at 34.2%.”
  • Networking: “Networking | $8,815 | 25% | $24,877 | 20% Security | 2,008 | —% | 6,006 | (2)% Collaboration | 1,024 | (1)% | 3,133 | 1% Observability | 269 | 3% | 820 | 3%”
  • Security: “Networking | $8,815 | 25% | $24,877 | 20% Security | 2,008 | —% | 6,006 | (2)% Collaboration | 1,024 | (1)% | 3,133 | 1% Observability | 269 | 3% | 820 | 3%”
  • Collaboration: “Networking | $8,815 | 25% | $24,877 | 20% Security | 2,008 | —% | 6,006 | (2)% Collaboration | 1,024 | (1)% | 3,133 | 1% Observability | 269 | 3% | 820 | 3%”
  • Observability: “Networking | $8,815 | 25% | $24,877 | 20% Security | 2,008 | —% | 6,006 | (2)% Collaboration | 1,024 | (1)% | 3,133 | 1% Observability | 269 | 3% | 820 | 3%”
  • Services: “Observability | 269 | 3% | 820 | 3% Total Product | 12,117 | 17% | 34,836 | 13% Services | 3,724 | (1)% | 11,237 | —%”
  • Americas: “Americas | $9,569 | 14% | $27,403 | 10% EMEA | 4,054 | 9% | 12,262 | 10% APJC | 2,218 | 9% | 6,409 | 7%”
  • EMEA: “Americas | $9,569 | 14% | $27,403 | 10% EMEA | 4,054 | 9% | 12,262 | 10% APJC | 2,218 | 9% | 6,409 | 7%”
  • APJC: “Americas | $9,569 | 14% | $27,403 | 10% EMEA | 4,054 | 9% | 12,262 | 10% APJC | 2,218 | 9% | 6,409 | 7%”

Copied from the press release ↗ and other documents in the SEC filing ↗. A figure is published only if its sentence is in the filing.

From the filingQ3 FY2026vs year agovs last quarter
Revenue$15.8B+12.0%+3.2%
Operating income$4.0B+23.7%+4.7%
Net income$3.4B+35.4%+6.2%
Diluted EPS$0.85+37.1%+6.2%
Free cash flow$3.3B−11.9%+117.2%
Gross margin63.6%−2.0 pts−1.4 pts
Operating margin25.0%+2.4 pts+0.4 pts

Calculated by code from XBRL, not by the model.

Outlook

MetricPeriodOutlook
Revenuefourth quarter of fiscal 2026$16.7 billion - $16.9 billion
Non-GAAP gross marginfourth quarter of fiscal 202665.5% - 66.5%
Non-GAAP operating marginfourth quarter of fiscal 202634% - 35%
Non-GAAP EPSfourth quarter of fiscal 2026$1.16 - $1.18
GAAP EPSfourth quarter of fiscal 2026$0.80 to $0.85
Non-GAAP tax provision ratefourth quarter of fiscal 2026approximately 19%
Revenuefiscal 2026$62.8 billion - $63.0 billion
Non-GAAP EPSfiscal 2026$4.27 - $4.29
GAAP EPSfiscal 2026$3.16 to $3.21
Expected hyperscaler AI infrastructure ordersfiscal 2026$9 billion
Expected hyperscaler AI infrastructure revenuefiscal 2026$4 billion
Restructuring pre-tax charges, up tofourth quarter of fiscal 2026 and fiscal 2027$1 billion

Key takeaways

  1. Record revenue growth was driven by Networking

    Revenue was $15.8 billion, up 12%, with Networking revenue up 25% while Security was flat and Collaboration was down 1%. Product revenue rose 17% and services revenue fell 1%.

  2. Orders accelerated well beyond reported revenue

    Total product orders were up 35% year over year, and up 19% excluding hyperscalers. Networking product orders grew more than 50%.

  3. AI infrastructure targets for hyperscalers were raised

    Cisco has taken $5.3 billion of hyperscaler AI orders year to date and raised expected FY26 orders to $9 billion from $5 billion. Expected FY26 revenue from this business rose to $4 billion from $3 billion.

  4. Gross margin declined year over year

    Non-GAAP gross margin was 66.0% versus 68.6% a year earlier, and non-GAAP product gross margin was 64.3% versus 67.6%. Non-GAAP operating margin was 34.2% versus 34.5%.

  5. New restructuring plan accompanies higher guidance

    Cisco announced a restructuring with pre-tax charges of up to $1 billion, about $450 million in the fourth quarter. It guided Q4 revenue to $16.7 billion to $16.9 billion and FY 2026 revenue to $62.8 billion to $63.0 billion.

Charts

Revenue$15.8B+12.0% y/yQ3 FY26
Q1 FY25: $13.8BQ1 25$13.8BQ2 FY25: $14.0BQ2 25$14.0BQ3 FY25: $14.1BQ3 25$14.1BQ4 FY25: $14.7B (worked out from the annual figure)Q4 25$14.7BQ1 FY26: $14.9BQ1 26$14.9BQ2 FY26: $15.3BQ2 26$15.3BQ3 FY26: $15.8BQ3 26$15.8BQ4 FY26: $17.3B (worked out from the annual figure)Q4 26$17.3B

Fourth quarter worked out from the annual figure.

Data
Q1 FY25$13.8B
Q2 FY25$14.0B
Q3 FY25$14.1B
Q4 FY25$14.7B *
Q1 FY26$14.9B
Q2 FY26$15.3B
Q3 FY26$15.8B
Q4 FY26$17.3B *
Diluted EPS (GAAP)$0.85+37.1% y/yQ3 FY26
Q1 FY25: $0.68Q1 25$0.68Q2 FY25: $0.61Q2 25$0.61Q3 FY25: $0.62Q3 25$0.62Q1 FY26: $0.72Q1 26$0.72Q2 FY26: $0.80Q2 26$0.80Q3 FY26: $0.85Q3 26$0.85
Data
Q1 FY25$0.68
Q2 FY25$0.61
Q3 FY25$0.62
Q1 FY26$0.72
Q2 FY26$0.80
Q3 FY26$0.85

Fourth-quarter EPS appears once the press release is read; filings report it only for the full year.

Operating margin25.0%+2.4 pts y/yQ3 FY26
Q1 FY25: 17.0%Q1 2517.0%Q2 FY25: 22.3%Q2 2522.3%Q3 FY25: 22.6%Q3 2522.6%Q4 FY25: 21.0%Q4 2521.0%Q1 FY26: 22.6%Q1 2622.6%Q2 FY26: 24.6%Q2 2624.6%Q3 FY26: 25.0%Q3 2625.0%Q4 FY26: 24.7%Q4 2624.7%
Data
Q1 FY2517.0%
Q2 FY2522.3%
Q3 FY2522.6%
Q4 FY2521.0%
Q1 FY2622.6%
Q2 FY2624.6%
Q3 FY2625.0%
Q4 FY2624.7%
Free cash flow$3.3B−11.9% y/yQ3 FY26
Q1 FY25: $3.4BQ1 25$3.4BQ2 FY25: $2.0BQ2 25$2.0BQ3 FY25: $3.8BQ3 25$3.8BQ4 FY25: $4.0BQ4 25$4.0BQ1 FY26: $2.9BQ1 26$2.9BQ2 FY26: $1.5BQ2 26$1.5BQ3 FY26: $3.3BQ3 26$3.3BQ4 FY26: $5.0BQ4 26$5.0B
Data
Q1 FY25$3.4B
Q2 FY25$2.0B
Q3 FY25$3.8B
Q4 FY25$4.0B
Q1 FY26$2.9B
Q2 FY26$1.5B
Q3 FY26$3.3B
Q4 FY26$5.0B

Operating cash flow minus capital expenditure, from cash flow statements.

Questions

What were Cisco's Q3 FY2026 headline results?

Revenue was a record $15.8 billion, up 12% year over year. GAAP EPS was $0.85, up 37%, and non-GAAP EPS was $1.06, up 10%.

What is Cisco's guidance for the fourth quarter and full year?

For Q4 FY2026, Cisco expects revenue of $16.7 billion to $16.9 billion and non-GAAP EPS of $1.16 to $1.18. For FY2026, it expects revenue of $62.8 billion to $63.0 billion and non-GAAP EPS of $4.27 to $4.29.

How big is Cisco's AI infrastructure business with hyperscalers?

Cisco has taken $5.3 billion of hyperscaler AI infrastructure orders year to date. It raised expected FY26 orders to $9 billion from $5 billion and expected FY26 revenue to $4 billion from $3 billion.

Did Cisco's margins change from a year ago?

Margins fell on gross margin: non-GAAP gross margin was 66.0% versus 68.6% a year earlier. Non-GAAP operating margin was 34.2% versus 34.5%, and GAAP operating margin rose to 25.0% from 22.6%.

What restructuring did Cisco announce and how much will it cost?

On May 13, 2026, Cisco announced a restructuring plan to invest in silicon, optics, security and AI. It expects pre-tax charges of up to $1 billion, about $450 million of them in Q4 FY2026 and the rest in fiscal 2027.

Documents

SEC filing