Cisco (CSCO +13.38%), a global leader in networking hardware and software, reported its earnings for the fiscal fourth quarter ended July 26, 2025, on August 13, 2025. The company posted revenue of $14.7 billion, up 8% from the prior year period, surpassing consensus non-GAAP revenue estimates of $14.6 billion. Non-GAAP earnings per share reached $0.99, slightly above the non-GAAP expectation of $0.98. These results reflected continued demand for advanced network and artificial intelligence (AI) infrastructure. The quarter showed resilient margins (GAAP and non-GAAP) and robust order growth, but also highlighted concerns over flat services revenue and the ongoing impact of tariffs on future profitability.
| Metric | Fiscal Q4 2025(ended July 26, 2025) | Q4 Estimate | Fiscal Q4 2024(ended July 27, 2024) | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.99 | $0.98 | $0.87 | 14% |
| Revenue (GAAP) | $14.7 billion | $14.6 billion | $13.6 billion | 8.1% |
| Gross Margin (Non-GAAP) | 68.4% | 67.9% | 0.5 pp | |
| Operating Income (Non-GAAP) | $5.0 billion | $4.4 billion | 13% | |
| Net Income (Non-GAAP) | $4.0 billion | $3.5 billion | 12% | |
| Cash Flow from Operating Activities | $4.2 billion | $3.7 billion | 13% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in the fiscal third quarter 2025 earnings report.
Company business overview and strategic focus
Cisco designs and sells networking equipment, security software, collaboration tools, and observability products. Its business centers on providing network connectivity, cyber protection, and data insights, delivered as hardware, software, or by subscription. The company serves telecommunications providers, large enterprises, and the public sector worldwide.
Recently, Cisco has focused on five areas: integrating artificial intelligence across all product lines, maintaining a strong global presence, enhancing cybersecurity, deploying data and AI infrastructure, and providing customer-focused advisory services. Success depends on continual innovation, adapting to regional market needs, advancing security solutions, enabling AI data processing, and strengthening customer engagement through flexible models and technical support.
Quarter highlights and financial drivers
GAAP revenue climbed 8% compared to the same period last year, and non-GAAP EPS beat expectations. Product revenue led growth, up 10%, while services revenue remained flat. Product orders rose 7% year over year, with especially strong demand from webscale customers—large technology firms building out AI infrastructure—pushing AI-specific orders above $800 million. AI orders topped $2 billion, doubling the original $1 billion target set at the start of the year.
Networking products, which include routers and switches that move data through large networks, delivered $7.6 billion in revenue, up 12% year over year (non-GAAP). Security products—software and systems that defend against cyber threats—increased 9% to $1.95 billion. Observability products, which help monitor and analyze complex IT environments, grew 4%, while collaboration product revenue was up 2%. The company cited 9% growth in the Americas, while Europe, Middle East, and Africa (EMEA) saw moderate growth, with revenue up 4%.
Profitability rose, with non-GAAP gross margin at 68.4%, up from 67.9% in the prior-year quarter. Non-GAAP operating income increased 13% to $5.0 billion, and non-GAAP net income grew 12% to $4.0 billion. Operating cash flow reached $4.2 billion—a 14% jump from the prior year—supporting continued capital returns. Cisco returned $2.9 billion to shareholders through a mix of dividends and share buybacks. The quarterly dividend was raised 2.5% from the prior-year quarter, to $0.41 per share.
The company indicated strength in its innovation pipeline, notably in releasing the WiFi 7 wireless networking platform and introducing the Silicon One chip, a processor designed for high-speed, efficient AI workloads. Integration of the Splunk acquisition helped expand security and observability offerings. Over 370 customers adopted newly launched security products during the quarter, and Cisco landed a record deal for Splunk’s security and monitoring platform in financial services.
Forward outlook and areas to watch
Cisco projects revenue between $14.65 billion and $14.85 billion for the fiscal first quarter of 2026 and expects non-GAAP earnings per share of $0.97 to $0.99. The non-GAAP gross margin is forecast at 67.5% to 68.5%, reflecting the impact of recently enacted tariffs, which the company warns could weigh on profitability in coming quarters. Revenue guidance is set at $59.0 billion to $60.0 billion for fiscal 2026, up about 4% to 6% from fiscal 2025, with non-GAAP EPS expected between $4.00 and $4.06. Management notes that margin pressure from tariffs and the uneven pacing of AI order conversion to revenue are key watchpoints.
Looking ahead, investors should watch order momentum in AI infrastructure and the pace at which large AI deals flow into actual revenue. Continued strength in networking and security products is essential. Cisco’s focus on innovation, new AI partnerships in the Middle East, and evolving security solutions position it for opportunity, but execution risks and tariff headwinds remain in play.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
