Cisco Raises Full-Year Outlook as AI Networking Lifts Quarterly Revenue 24%

The company now expects fiscal 2027 revenue of $74.8 billion to $75.8 billion and adjusted earnings of $5.47 to $5.53 a share, it said in its earnings release. For the second quarter it guided to revenue of $18.0 billion to $18.2 billion and adjusted earnings of $1.34 to $1.36 a share, a forecast Bloomberg said was above Wall Street estimates.

The results matter beyond Cisco because they came on a day when AI stocks were shaken by the resignation of Nvidia chief executive Jensen Huang. Cisco's numbers point to continued spending by the largest cloud operators on the switches and optics that connect AI chips, a part of the build-out that has become a growing business for the company.

Cisco said it now expects about $9 billion of AI infrastructure revenue from hyperscalers in fiscal 2027, roughly double what it took in from those customers in fiscal 2026. The release did not give AI orders or AI revenue for the quarter itself.

"We are in the very early stages of a multi-year networking supercycle," chair and chief executive Chuck Robbins said in the release. Chief financial officer Mark Patterson called it "another record quarter for Cisco".

Networking carried the quarter. Revenue in the division rose 43% to $11.1 billion, while security grew 7% to $2.1 billion, collaboration 8% to $1.1 billion and observability 2% to $279 million. Product revenue climbed 32%, but services revenue rose only 1%. By region, sales grew 28% in the Americas, 18% in Europe, the Middle East and Africa, and 21% in Asia-Pacific, Japan and China.

Profit rose faster than sales. Net income under generally accepted accounting principles increased 59% to $4.6 billion, or $1.14 a share, and adjusted net income rose 39% to $5.6 billion, or $1.40 a share. The adjusted operating margin was 37.8%.

Cisco returned $3.7 billion to shareholders in the quarter, which ended on October 24, including $2.0 billion spent buying back about 18 million shares at an average price of $112.38. It has $6.1 billion left under its repurchase authorisation and declared a quarterly dividend of 42 cents a share, payable on January 20, 2027.

The shares were up about 1.5% in after-hours trading shortly after the release, according to StockTitan.