Cisco | 10-K: FY2026 Revenue Beats Estimate at USD 63.33 B

Revenue: As of FY2026, the actual value is USD 63.33 B, beating the estimate of USD 62.91 B.

EPS: As of FY2026, the actual value is USD 3.33, beating the estimate of USD 3.2506.

EBIT: As of FY2026, the actual value is USD 16.01 B.

Overall Financial Summary

Revenue

• Total Revenue for Cisco Systems, Inc. was $63,325 million in fiscal 2026, an increase of 12% compared to $56,654 million in fiscal 2025.
• Product revenue increased by 16%, while services revenue was flat in fiscal 2026 compared to fiscal 2025.
• Total software revenue was $23,200 million in fiscal 2026, an increase of 4%, and total subscription revenue increased by 1%.

Operational Metrics

• Gross Margin Percentage was 64.5% in fiscal 2026, a decrease of 0.4 percentage points from 64.9% in fiscal 2025.
• Research and Development (R&D) expenses were $9,563 million in fiscal 2026, a 3% increase from $9,300 million in fiscal 2025.
• Sales and Marketing expenses increased by 5% to $11,559 million in fiscal 2026 from $10,966 million in fiscal 2025.
• General and Administrative (G&A) expenses decreased by -8% to $2,761 million in fiscal 2026 from $2,992 million in fiscal 2025.
• Total R&D, Sales and Marketing, and G&A expenses amounted to $23,883 million in fiscal 2026, a 3% increase from $23,258 million in fiscal 2025.
• These total expenses represented 37.7% of revenue in fiscal 2026, a decrease of -3.4 percentage points from 41.1% in fiscal 2025.
• Restructuring and Other Charges included in Operating Expenses were $693 million in fiscal 2026, a decrease of -7% from $744 million in fiscal 2025.
• Operating Income as a Percentage of Revenue was 24.3% in fiscal 2026, an increase of 3.5 percentage points from 20.8% in fiscal 2025.
• Net Income was $13,267 million in fiscal 2026, a 30% increase from $10,180 million in fiscal 2025.
• Net Income as a Percentage of Revenue was 21.0% in fiscal 2026, an increase of 3.0 percentage points from 18.0% in fiscal 2025.

Revenue by Segment

• Americas Revenue was $37,799 million in fiscal 2026, an increase of 12% compared to $33,656 million in fiscal 2025.
• EMEA Revenue reached $16,613 million in fiscal 2026, an increase of 12% compared to $14,824 million in fiscal 2025.
• APJC Revenue totaled $8,914 million in fiscal 2026, an increase of 9% compared to $8,174 million in fiscal 2025.

Product Revenue by Segment

• Americas Product Revenue was $28,900 million in fiscal 2026, a 17% increase from $24,637 million in fiscal 2025, primarily driven by the Service Provider and Cloud customer market, specifically AI Infrastructure solutions.
• EMEA Product Revenue was $12,806 million in fiscal 2026, a 15% increase from $11,122 million in fiscal 2025.
• APJC Product Revenue was $6,588 million in fiscal 2026, a 13% increase from $5,849 million in fiscal 2025.

Product Revenue by Category

• Networking revenue was $34,668 million in fiscal 2026, a 22% increase from $28,304 million in fiscal 2025, driven primarily by AI Infrastructure solutions (Cisco Silicon One based systems and optics).
• Security revenue was $8,232 million in fiscal 2026, a 2% increase from $8,094 million in fiscal 2025, primarily from SASE and Network Security offerings.
• Collaboration revenue was $4,300 million in fiscal 2026, a 4% increase from $4,154 million in fiscal 2025.
• Observability revenue was $1,095 million in fiscal 2026, a 4% increase from $1,055 million in fiscal 2025, primarily due to network assurance offerings.

Services Revenue by Segment

• Americas Services Revenue was $8,899 million in fiscal 2026, a decrease of -1% compared to $9,019 million in fiscal 2025.
• EMEA Services Revenue was $3,806 million in fiscal 2026, a 3% increase compared to $3,702 million in fiscal 2025.
• APJC Services Revenue was $2,326 million in fiscal 2026, flat compared to $2,325 million in fiscal 2025.

Gross Margin Breakdown

• Product Gross Margin Percentage was 63.2% in fiscal 2026 compared to 63.7% in fiscal 2025, impacted by product mix and higher memory costs, partially offset by productivity improvements and pricing.
• Services Gross Margin Percentage was 68.8% in fiscal 2026 compared to 68.5% in fiscal 2025, primarily due to cost efficiencies.
• Americas Gross Margin Percentage was 65.1% in fiscal 2026 compared to 68.2% in fiscal 2025, driven by negative product mix impacts, partially offset by productivity improvements.
• EMEA Gross Margin Percentage was 71.2% in fiscal 2026 compared to 71.1% in fiscal 2025, due to productivity improvements and pricing, partially offset by product mix.
• APJC Gross Margin Percentage was 66.6% in fiscal 2026 compared to 66.4% in fiscal 2025, driven by productivity improvements, favorable services gross margin, and pricing, partially offset by product mix.

Cash Flow

• Net Cash Provided by Operating Activities was $14,177 million in fiscal 2026, flat compared to $14,193 million in fiscal 2025.
• Free Cash Flow was $12,767 million in fiscal 2026, compared to $13,288 million in fiscal 2025.

Other Key Financial Measures

• Cash and Cash Equivalents and Investments were $15,918 million as of July 25, 2026, compared to $16,110 million as of July 26, 2025.
• Remaining Performance Obligations (RPO) were $46,734 million as of July 25, 2026, a 7% increase from $43,533 million as of July 26, 2025.
• Product RPO increased by 9%, and services RPO increased by 6%.
• Repurchases of Common Stock under the Stock Repurchase Program totaled $6,106 million in fiscal 2026, compared to $5,995 million in fiscal 2025.
• Dividends Paid amounted to $6,553 million in fiscal 2026, compared to $6,437 million in fiscal 2025.
• Inventories were $5,694 million as of July 25, 2026, an 80% increase from $3,164 million as of July 26, 2025.
• Total Debt was $29,533 million as of July 25, 2026, compared to $28,093 million as of July 26, 2025.
• Inventory Purchase Commitments were $17,165 million as of July 25, 2026, a 126% increase from $7,599 million as of July 26, 2025.
• Inventory Deposits and Prepayments were $1,104 million as of July 25, 2026, compared to $825 million as of July 26, 2025.
• Financing Receivables, Net were $8,332 million as of July 25, 2026, a 28% increase from $6,527 million as of July 26, 2025.

Outlook

Cisco Systems, Inc. expects demand for AI infrastructure from hyperscaler customers to be a significant driver of results in fiscal 2027. The company anticipates continuing to enter into additional purchase commitments to secure supply and pricing for memory and certain components in future periods. Furthermore, Cisco Systems, Inc. expects its inventory balances may increase in future quarters as it works to fulfill demand.