Cisco’s Q4 results (which align with the company’s fiscal Q2 2026, corresponding to the calendar fourth quarter of 2025) saw robust year-over-year revenue growth, led by strong demand for AI infrastructure and networking solutions. Management highlighted that product orders grew in the double digits across all geographies and customer segments, pointing to particularly high momentum from hyperscale cloud providers. CEO Charles Robbins credited the performance to a surge in AI infrastructure orders and broad-based uptake of next-generation networking hardware, stating, “Our strong first half demonstrates both the power of our portfolio and the fundamental role we play in this once-in-a-generation transition.” However, executives also acknowledged rising memory costs that pressured gross margins during the quarter.
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Cisco (CSCO) Q4 CY2025 Highlights:
- Revenue: $15.35 billion vs analyst estimates of $15.12 billion (9.7% year-on-year growth, 1.5% beat)
- Adjusted EPS: $1.04 vs analyst estimates of $1.02 (1.7% beat)
- Adjusted EBITDA: $5.97 billion vs analyst estimates of $5.81 billion (38.9% margin, 2.8% beat)
- The company lifted its revenue guidance for the full year to $61.45 billion at the midpoint from $60.6 billion, a 1.4% increase
- Management slightly raised its full-year Adjusted EPS guidance to $4.15 at the midpoint
- Operating Margin: 24.6%, up from 22.3% in the same quarter last year
- Annual Recurring Revenue: $31 billion vs analyst estimates of $31.63 billion (3% year-on-year growth, miss)
- Billings: $15.78 billion at quarter end, up 10.3% year on year
- Market Capitalization: $303.6 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Cisco’s Q4 Earnings Call
- Amit Daryanani (Evercore ISI) asked about the mix and growth trajectory of AI infrastructure products, including new chip launches. CEO Charles Robbins clarified that the $5 billion AI order target excludes recent product introductions and that the majority of current demand is split between systems and optics.
- Tal Liani (Bank of America Securities) questioned the concentration of Q4 growth in networking and the reasoning behind lower sequential guidance. CFO Mark Patterson cited broad-based strength across networking segments and noted that seasonality and hyperscaler order timing contribute to quarter-to-quarter fluctuations.
- Aaron Rakers (Wells Fargo) probed Cisco’s approach to scale-up AI networking and the evolving relationship with NVIDIA. Robbins stated that while scale-up offerings are planned, current growth is driven by scale-out architectures, with increasing collaboration and field engagement with NVIDIA.
- Samik Chatterjee (JPMorgan) inquired about new optics products and the campus networking upgrade cycle. Robbins highlighted strong customer interest in energy-efficient optics and noted that the current campus refresh is in its early stages, with rapid adoption of new platforms across enterprise customers.
- Karl Ackerman (BNP Paribas) sought clarity on the security segment’s outlook amid the Splunk transition. Robbins explained that while short-term revenue is impacted, new product traction is strong, and he expects the core security portfolio to return to near double-digit growth as transitions complete.
Catalysts in Upcoming Quarters
In the next few quarters, the StockStory team will be watching (1) the pace of AI infrastructure order conversion into recognized revenue, (2) evidence of sustained demand for next-generation campus networking solutions as customers upgrade legacy equipment, and (3) signs of stabilization or renewed growth in the security business as the Splunk cloud transition matures. Additionally, we will track Cisco’s ability to manage margin pressures from elevated component costs and the effectiveness of recent product launches in driving incremental growth.
Cisco currently trades at $76.71, down from $85.54 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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