Cisco(CSCO -1.51%) reported fourth quarter fiscal 2025 results on Aug. 13, 2025, posting total revenue of $14.7 billion (up 8% YoY) and non-GAAP EPS of $0.99 (up 14% YoY), with product orders rising 7% year over year and full-year operating cash flow up 30% to $14.2 billion. Major AI infrastructure orders surpassed $2 billion, far exceeding initial targets, and management issued guidance projecting revenue of $59 billion to $60 billion for fiscal year ending July 26, 2026, and non-GAAP EPS of $4.00 to $4.06. Key analyst questions focused on AI order conversion, security growth trajectory, service revenue trends, and the company's strategic partnerships in the AI and silicon ecosystem.

AI infrastructure propels Cisco order growth

AI infrastructure orders from web scale customers reached a record $800 million in the fourth quarter and over $2 billion for the year, double the original $1 billion target. The AI opportunity encompasses web scale, enterprise, sovereign, and neo-cloud providers, with Cisco positioned through Silicon One, targeted security offerings, and the expanded NVIDIA partnership.

"These orders exceeded $800 million in the quarter, bringing the total for fiscal year 2025 to over $2 billion, more than double our original $1 billion target stated in Q4. This demonstrates the undeniable capability and relevance of our technology for multiple back-end use cases with some of the most technologically advanced customers. Overall, total product orders in Q4 grew 7% year over year, with solid growth across all geographies despite a complex environment, demonstrating the valuable outcomes we continue to deliver for customers worldwide."
-- Chuck Robbins, Chair and CEO

Surpassing the AI orders target validates Cisco’s competitive positioning in the evolving infrastructure market.

Cisco security posts double-digit growth ex-U.S. Federal

Security product orders benefited from the Splunk acquisition and new SASE (Secure Access Service Edge), XDR (Extended Detection and Response), HyperShield, and AI Defense products, with over 750 new customers added in the fourth quarter. Excluding the U.S. federal segment, security orders achieved double-digit growth in the fourth quarter, and cross-sell synergies delivered over 300 new Splunk customers for two consecutive quarters (Q3 and Q4).

"If you take out U.S. Federal, which had a tough year as we all know, rest of world security order growth in the fourth quarter was up double digits. So we're really seeing this ramp, and I think I said on the last call, it's happening slower than I had anticipated. A lot of it's because this stuff is ratable. But I feel good about where we are. We have 80 new HyperShield customers, you know, largely connected to this new smart switch, so that strategy is working. And I would say that we had 480 plus new SSE customers during the quarter. So that's, you know, our secure services edge is really getting good traction. What I would say is based on how we see this stuff evolving, I would see the growth rate continuing to improve as we get through the fiscal year this year."
-- Chuck Robbins, Chair and CEO

The accelerating demand for new and refreshed security offerings, combined with successful Splunk cross-sell, counters legacy product headwinds and lays groundwork for reaching long-term CAGR targets in security and observability.

Cisco delivers record shareholder returns on strong cash flow

Operating cash flow grew 30% to $14.2 billion, with $12.4 billion (94% of free cash flow) returned to shareholders via dividends and buybacks. The quarterly dividend was raised for the fourteenth consecutive year, and $14.2 billion remains authorized under the share repurchase program.

"In Q4, we returned $2.9 billion in capital to our shareholders through share repurchases and dividends, bringing the total return in fiscal 2025 to $12.4 billion in value or 94% of free cash flow, surpassing the $12.1 billion Cisco returned to shareholders in fiscal 2024. Overall, our fiscal 2025 performance has established a solid foundation as we turn our focus to delivering Cisco's strongest year yet in fiscal year 2026, as indicated in our guidance."
-- Chuck Robbins, Chair and CEO

The company’s disciplined capital allocation strategy, consistent dividend increases, and robust buybacks reinforce both short-term shareholder value and long-term investor confidence amid ongoing transformation toward software and recurring revenue.

Looking Ahead

For the first quarter of fiscal year ending July 26, 2026, Cisco expects revenue of $14.65 billion to $14.85 billion, non-GAAP gross margin of 67.5%-68.5%, non-GAAP operating margin of 33%-34%, and non-GAAP EPS of $0.97 to $0.99. For the full fiscal year ending July 26, 2026, management guides to revenue of $59 billion to $60 billion and non-GAAP EPS of $4.00 to $4.06. Management anticipates sustained AI infrastructure demand, initial sovereign AI order flows ramping by mid to late fiscal 2026, and improving security order growth as the refreshed portfolio increases in mix; federal public sector spend is projected to return to growth in fiscal year ending July 26, 2026, after a decline in fiscal year ending July 27, 2025.