# Cisco (CSCO) Q3 FY2026 earnings

Results filed 2026-05-13 for the quarter ended 2026-04-25. Source page: https://earnings.opennash.com/companies/csco/2026-q3/
Press release and exhibits: https://www.sec.gov/Archives/edgar/data/858877/000085887726000075/0000858877-26-000075-index.htm
> 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

| Metric | Value | Change | Basis |
| --- | --- | --- | --- |
| Total revenue | $15.8 billion | up 12% from a year ago | GAAP |
| Net income | $3.4 billion | an increase of 35% | GAAP |
| Diluted EPS | $0.85 | an increase of 37% | GAAP |
| Non-GAAP EPS | $1.06 | an increase of 10% | non-GAAP |
| Total gross margin | 63.6% | compared with 65.6% in the third quarter of fiscal 2025 | GAAP |
| Total gross margin | 66.0% | compared with 68.6% in the third quarter of fiscal 2025 | non-GAAP |
| Operating income | $4.0 billion | up 24% | GAAP |
| Operating income | $5.4 billion | up 11% | non-GAAP |
| Operating margin | 25.0% |  | GAAP |
| Operating margin | 34.2% |  | non-GAAP |
| Cash flow from operating activities | $3.8 billion | a decrease of 7% | GAAP |

## Segments and operating metrics

| Name | Value | Change |
| --- | --- | --- |
| Networking | $8,815 | 25% |
| Security | 2,008 | —% |
| Collaboration | 1,024 | (1)% |
| Observability | 269 | 3% |
| Services | 3,724 | (1)% |
| Americas | $9,569 | 14% |
| EMEA | 4,054 | 9% |
| APJC | 2,218 | 9% |

## Outlook

| Metric | Period | Outlook |
| --- | --- | --- |
| Revenue | fourth quarter of fiscal 2026 | $16.7 billion - $16.9 billion |
| Non-GAAP gross margin | fourth quarter of fiscal 2026 | 65.5% - 66.5% |
| Non-GAAP operating margin | fourth quarter of fiscal 2026 | 34% - 35% |
| Non-GAAP EPS | fourth quarter of fiscal 2026 | $1.16 - $1.18 |
| GAAP EPS | fourth quarter of fiscal 2026 | $0.80 to $0.85 |
| Non-GAAP tax provision rate | fourth quarter of fiscal 2026 | approximately 19% |
| Revenue | fiscal 2026 | $62.8 billion - $63.0 billion |
| Non-GAAP EPS | fiscal 2026 | $4.27 - $4.29 |
| GAAP EPS | fiscal 2026 | $3.16 to $3.21 |
| Expected hyperscaler AI infrastructure orders | fiscal 2026 | $9 billion |
| Expected hyperscaler AI infrastructure revenue | fiscal 2026 | $4 billion |
| Restructuring pre-tax charges, up to | fourth 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.

## 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.