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Cisco (CSCO) · Q2 2026 results and valuation

Share price: $100.76 · 2026-11-11

Cisco designs and sells hardware, software, and AI-powered digital infrastructure for networking, security, collaboration, and observability. The company provides these technologies and related services to businesses, public institutions, governments, and service providers globally. Source: 10-K annual report (2026-09-02)

Results Q2 2026 vs Q1 2026 · previous quarter · fiscal Q4 2026 · published 12 Aug 2026 and 13 May 2026

Net income up 14.4% on the previous quarter. Management sounded cautious, though noticeably more positive answering analysts.

1 · Numbers

+14.4%

Net income vs Q1 2026

Outlook given

Net income 3.86B vs 3.37B

Revenue +8.9%

Against the same quarter last year (Q2 2025) it is +51.3%, so it is not just seasonal.

Why Against the same quarter last year (+51.3%), net income rose primarily due to strong revenue growth, operating leverage, and a higher hardware mix, which were partially offset by higher memory costs but supported by productivity improvements and price increases.

2 · How management spoke

Cautious

Among the least upbeat of all company calls

Answers to analysts: very upbeat, and more positive than the script.

Similar to last call.

3 · What stood out

Cisco projects its hyperscale business AI infrastructure revenue to reach $7.5 billion in fiscal year 2027 due to demand growth and market share gains.

Valuation

Is Cisco undervalued?

Reverse DCF. Free cash flow from the last full fiscal year (2026-07-25), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.

At 3.6% growth a year (3-year revenue growth), the model's fair value is $43.49 a share — the stock trades 132% above it. Today's price assumes 14.3% growth a year.

Current price

$100.76

close of 2026-11-11

Market implies growth of i

+14.3% for 10 yrs

Fair value / share

$43.49

Buy below

$32.62

Price vs fair value

Overvalued 132%

Price vs buy-below price

Overvalued >200%

FCF growth / yr i Discount rate i Terminal growth i Margin of safety i

Official channels

The company's own website and social media accounts.

Read between the lines

Guidance

Cisco expects revenue to be between $18 billion and $18.2 billion with a non-GAAP gross margin of 65% to 66% for the upcoming period.
Figure

Networking product revenue grew 28% year-over-year, driven by triple-digit growth in AI infrastructure and double-digit growth in data center switching.

Source quote
“Product revenue growth was led by networking, with growth accelerating to 28% year-over-year. Driven by triple-digit growth in AI infrastructure, double digit growth in data center switching, and continued growth in campus networking.”
Guidance

Cisco announced a shift to a more traditional revenue target of $7.5 billion for fiscal year 2027.
Guidance

Cisco delivered its highest revenue operating margin and earnings per employee in 30 years during fiscal year 2026.
Figure

AI infrastructure revenue for the hyperscale business is projected to reach $7.5 billion in fiscal year 27 due to demand growth and market share gains.

Source quote
“Overall, our hyperscale business continues to show great momentum with AI infrastructure revenue projected to grow to $7.5 billion in fiscal year 27 supported by demand growth and market share gains.”

4 more

Figure

Total revenue reached a record $17.3 billion, up 18% year over year, which highlights the company's growth since the previous year.

Source quote
“For the quarter, total revenue was a record $17.3 billion, up 18% year over year.”
Guidance

The company guided for an operating margin of about 35% for full year FY 27, which represents a high watermark for the company's profitability.
Figure

Operating margins as a percentage of revenue increased from 34.3% to 35.9% because a 3.7% reduction in OpEx offset a 2.1% year-over-year decrease in gross margins.

Source quote
“Gross margins on a year over year basis were down 2.1%. But OpEx was also down 3.7% as a percentage of revenue which then, allowed us to move from operating margins or op inc as a percentage of revenue from 34.3% to 35.9%.”
Figure

Data center networking orders grew more than 35% year-over-year in Q4, reflecting growth in the company's data center networking segment.

Source quote
“In Q4, overall data center networking orders grew more than 35% year-over-year.”

Tone

How upbeat the language was, compared with other companiesi. Dot: Q2 2026. Ring: Q1 2026.

Prepared remarks Cautious (was cautious)

Answers to analysts Very upbeat (was very upbeat)

Management was more positive answering analysts than in its script — usually a sign it was comfortable with the details it was asked about.

Sentences that drove the tone

“Public sector order growth also accelerated to 30% year-over-year, with continued momentum in EMEA and APJC, and accelerated growth in The Americas, driven by US Federal.”

“This success is a direct result of our accelerated pace of innovation across our portfolio, our strong order momentum, and disciplined expense management.”

“As you as you look at last year, the first half, being in, you know, top line growth of single digit growth and as you got into the second half...”

Full figures

USD · SEC EDGAR XBRL (10-Q, period end 2026-07-25)

Metric	Q2 2026period end 2026-07-25	Q1 2026period end 2026-04-25	Change	Q2 2025	YoY
Revenue	17.25B	15.84B	+8.9%	14.67B	+17.6%
Gross profit	11.06B	10.08B	+9.8%	9.28B	+19.2%
Operating income	4.26B	3.96B	+7.7%	3.09B	+38.1%
Net income	3.86B	3.37B	+14.4%	2.55B	+51.3%
EPS	0.97	0.85	+14.1%	0.64	+51.6%
P/E today 28.2	34.3	29.7	+4.6	26.9	+7.4

Topics

Most discussed now

Cisco really do not have any significant lead time issues.
It will be high single digits is what Cisco expects for f y 2027.
Cisco feels it has got adequate supply to meet not only the guide for f y 27, but if demand...
This demonstrates strong operating leverage with the bottom line growing faster than the top line for both the quarter and...
Demonstrating excellent execution from Cisco's teams and the increasingly critical role its technology has in the AI era.

Faded since Q1 2026

Fading Just in addition to that, in the first week or two of this quarter, Cisco won a third hyperscaler's P200...
Fading Remember, the long-term model that Cisco gave you initially, that included all the AI hyperscale opportunity as well.
Fading Enterprise product orders were up 18% year-over-year in Q3 with strength across Cisco's entire networking portfolio.
Fading Excluding hyperscaler orders, which grew triple digits, product orders were up 19% year-over-year, demonstrating the continued broad-based…

Latest announcements

Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.

2026-10-09 Director or officer change · SEC 8-K
Cisco Systems, Inc. appointed Girish D. Rishi as an independent director on October 9, 2026, with a pro rata portion of a $105,000 annual cash retainer and a $270,000 equity award.
2026-08-12 Results of operations · SEC 8-K
Cisco Systems, Inc. reported its results of operations for the fiscal fourth quarter and fiscal year 2026 ended July 25, 2026.
2026-05-13 Results of operations; Restructuring costs · SEC 8-K
Cisco Systems, Inc. reported its results of operations for the fiscal third quarter 2026 ended April 25, 2026, including non-GAAP measures and future estimates.
2026-05-01 Director or officer change · SEC 8-K
Cisco appointed Nichlas A. Fink as Senior Vice President and Chief Accounting Officer effective May 20, 2026, to succeed M. Victoria Wong, with a restricted stock unit award valued at $500,000.
2026-04-06 Director or officer change · SEC 8-K
Daniel H. Schulman resigned from the Board on May 21, 2026, and Peter A. Shimer was appointed as a director and Audit Committee member on April 6, 2026.
2026-02-11 Results of operations · SEC 8-K
Cisco Systems, Inc. reported its results of operations for the fiscal second quarter 2026 ended January 24, 2026.
2025-12-17 Director or officer change; Shareholder vote results · SEC 8-K
Cisco stockholders approved the amendment and restatement of the 2005 Stock Incentive Plan, increasing the number of shares authorized for issuance by 57,490,000.
2025-11-12 Results of operations · SEC 8-K
Cisco reported first-quarter revenue of $14.9 billion, up 8% year over year, with GAAP EPS of $0.72, up 6% year over year, and Non-GAAP EPS of $1.00, up 10% year over year.

Catalyst calendar

management-stated targets — from the latest earnings call; plans, not promises.

next 6 months

multiple AI design wins expected across g 300, g 200, and p 200 Silicon One chip designs as well as for optics

Source quote
“Additionally, we have line of sight to multiple AI design wins expected over the next 6 months across our g 300, g 200, and p 200 Silicon One chip designs as well as for optics.”
fiscal year 29

roll out Silicon One comprehensively across our high performance networking systems

Source quote
“Notably, we plan to roll out Silicon One comprehensively across our high performance networking systems by fiscal year 29 which gives us greater control over our supply chain and innovation pipeline”
fiscal Q1

revenue to be in the range of $18 billion to $18.2 billion

Source quote
“For fiscal Q1, our guidance is as follows: We expect revenue to be in the range of $18 billion to $18.2 billion”
fiscal Q1

non GAAP gross margin to be in the range of 65% to 66%

Source quote
“We anticipate non GAAP gross margin to be in the range of 65% to 66%.”
fiscal Q1

Non GAAP operating margin is expected to be in the range of 35.5% to 36.5%

Source quote
“Non GAAP operating margin is expected to be in the range of 35.5% to 36.5%.”