Earnings
Cisco raises full-year outlook, citing a networking supercycle
Cisco lifted its fiscal 2027 revenue outlook after quarterly sales grew faster than analysts expected.
Quick Read
- Cisco's quarterly revenue and adjusted earnings per share came in above the average analyst forecast, led by product sales.
- The company raised its fiscal 2027 revenue and profit outlook.
- Shares fell in after-hours trading despite the raised outlook, after gaining during the regular session.
- Gross margin remains the open question as more of Cisco's sales come from AI networking hardware.
What did Cisco report?
Cisco (Nasdaq: CSCO) said after Thursday's close that revenue for its fiscal first quarter rose 24% from a year earlier to $18.52 billion. Product revenue, mostly networking equipment, climbed 32%.
Why it matters: Both sales and adjusted earnings per share came in above the average analyst forecast. Earnings per share is the company's profit divided by its share count.
By the numbers: The bigger news was guidance, the company's own forecast. Cisco now expects fiscal 2027 revenue of $74.8 billion to $75.8 billion, up from $72.2 billion to $73.4 billion. It also raised its full-year profit outlook and forecast current-quarter results above analyst estimates.
Why is Cisco more upbeat?
Chief executive Chuck Robbins said Cisco is in "the very early stages of a multi-year networking supercycle."
A supercycle here means a long upgrade wave. Big cloud companies are building data centers for artificial intelligence, and those sites need faster networks to link their computers. Cisco was already booking large AI infrastructure orders from those buyers before this report.
How did the stock react?
Cisco shares rose 1.2% in regular trading on Thursday, before the results came out, to close at $102.01. After the release, they fell 0.5% in after-hours trading, to $101.50.
After-hours trading takes place once the regular session ends. Fewer buyers and sellers take part, and moves there often shrink or reverse at the next open.
Even after Thursday's gain, the stock sat 21.5% below its 52-week high of $130.00, its highest price over the past year.
What questions does the outlook leave open?
Profit margins are the main open question. Before this report, Cisco had forecast a slightly lower gross margin, the share of sales left after production costs, as more of its sales come from AI networking hardware.
Friday's regular session may show how the full market weighs the raised outlook. Cisco's market value stood at $400 billion after Thursday's session added $4.9 billion.
For readers
What it could mean for you: If you own Cisco shares directly, the raised outlook reaches you in full, with no other holdings to soften it. The open question is whether faster sales come with thinner margins as AI hardware takes a bigger share of what Cisco sells. Cisco's later reports on gross margin and orders may show which way that goes. The stock could also swing at Friday's open, because after-hours prices rest on thin trading and often fade. Broad index fund holders get a far smaller slice of any move.
Questions and answers
Did Cisco beat earnings estimates?
Yes. Cisco said revenue and adjusted earnings per share for its fiscal first quarter both came in above the average analyst forecast, with product sales leading the growth.
Did Cisco raise its fiscal 2027 guidance?
Yes. The company lifted both its full-year revenue range and its adjusted profit outlook, and forecast current-quarter results above analyst estimates.
What does Cisco mean by a networking supercycle?
Chief executive Chuck Robbins used the term for a long upgrade wave in networking equipment.
How did Cisco stock move after earnings?
The shares fell in after-hours trading on Thursday after rising in the regular session before the release. After-hours moves rest on thin trading and can change once the full market opens.
The numbers
| Cisco Systems (CSCO) price | $102.01 |
|---|---|
| Cisco Systems (CSCO) change | +1.24% |
| Cisco Systems (CSCO) market value | $400 billion |
| Cisco Systems (CSCO) 52-week high | $130.00 |
| S&P 500 change | −0.35% |
| 10-year Treasury yield | 5.10% |
Thursday’s close
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