Cisco Systems, Inc. is a well-known technology company that designs and manufactures networking equipment, software, and security tools. It was founded in 1984 and became famous for its routers, which enable computers to communicate. Over time, Cisco has expanded into areas like cybersecurity, cloud computing, and online collaboration tools such as Webex. The company is based in San Jose, California, and supports businesses, governments, and service providers worldwide.
Cisco is always working on new technology, including artificial intelligence, network security, and the Internet of Things (IoT). It stays ahead by buying other companies and investing in research. Also, Cisco cares about sustainability, working to reduce its environmental impact and promote digital access for people around the world.
Cisco Fiscal Q2 2026
Cisco (CSCO) reported second‑quarter revenue of $15.3 billion, exceeding forecasts. Also, GAAP net income of $3.2 billion, or $0.80 per share, was above expectations.
The company additionally posted non‑GAAP net income of $4.1 billion, or $1.04 per share.
Highlights:
- Total Q2 FY 2026 revenue was $15.3 billion, up 10%, with product revenue rising 14% and services declining 1%.
- Revenue grew 8% in the Americas, 15% in EMEA, and 8% in APJC; Networking rose 21%, Collaboration 6%, Security fell 4%, and Observability was flat.
- GAAP gross margin was 65%, while non‑GAAP gross margin was 67.5%.
- GAAP operating expenses were $6.2 billion (up 3%), and non‑GAAP operating expenses were $5.0 billion (up 6%).
- GAAP operating income increased 21% to $3.8 billion, and non‑GAAP operating income rose 9% to $5.3 billion.
- The GAAP tax rate was 12.9%, and the non‑GAAP tax rate was 19%.
- GAAP net income grew 31% to $3.2 billion (EPS $0.80), while non‑GAAP net income rose 10% to $4.1 billion (EPS $1.04).
- Operating cash flow was $1.8 billion, down 19% from the prior year.
- Cash, cash equivalents, and investments totaled $15.8 billion at quarter‑end.
- Remaining performance obligations reached $43.4 billion, up 5%, with product RPO up 8% and services RPO up 2%.
- Deferred revenue increased 2% to $28.4 billion.
- Cisco returned $3 billion to shareholders through dividends and share repurchases, including a $0.41 dividend per share and the repurchase of 18 million shares.
- The company completed acquisitions of NeuralFabric Corp. and EzDubs, Inc. during the quarter.
Outlook
For the third quarter of fiscal year 2026, the company expects revenue between $15.4 billion and $15.6 billion, with earnings per share ranging from $0.73 to $0.77 on a GAAP basis and $1.02 to $1.04 on a non‑GAAP basis.
For the full fiscal year 2026, projected revenue is between $61.2 billion and $61.7 billion, while expected earnings per share are $3.00 to $3.08 on a GAAP basis and $4.13 to $4.17 on a non‑GAAP basis.
Boards Statements
Chuck Robbins, Chair and CEO of Cisco, the company has more than four decades of customer trust, global scale, and commitment to innovation. Cisco is uniquely well-suited to deliver the secure, reliable infrastructure required to support the AI era.
CFO Mark Patterson reported that the company’s financial performance in Q2 reflected double‑digit growth in both revenue and earnings, surpassing the high end of its guidance and setting Cisco on course for what could become its strongest revenue year in fiscal 2026.
Also, he noted that operating margin exceeded expectations, driven by disciplined financial management. He emphasized that Cisco continues to see strong, broad‑based demand for its technology solutions and remains focused on capturing the significant opportunities ahead.
Impact on the Stock Market
Cisco’s stock fell more than 7% in pre‑market trading mainly because its outlook for the next quarter disappointed investors, even though the company beat expectations on revenue and earnings.
The company reported strong Q2 results, but its forecast for upcoming revenue and profit only matched Wall Street estimates instead of exceeding them, which investors took as a sign that growth may be slowing.
This “in‑line” guidance triggered the initial drop; investors had expected a stronger outlook given Cisco’s recent AI announcements and solid networking growth. The cautious forecast ultimately pushed the stock down.
