Cisco raises full-year revenue forecast as AI networking demand lifts quarterly sales 24%
Cisco Systems on Thursday, 12 November, reported first-quarter revenue of $18.5 billion, up 24% from a year earlier, and raised its fiscal 2027 revenue forecast to $74.8 billion to $75.8 billion.
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Cisco Systems raised its revenue forecast for the year on Thursday, 12 November 2026, after reporting first-quarter results that beat analysts' expectations on demand for networking equipment used in artificial intelligence data centres.
The quarter
For the quarter ended 24 October, Cisco reported revenue of $18.5 billion, up 24% from a year earlier, according to the company's earnings release. Product revenue rose 32%, led by a 43% increase in networking, while services revenue rose 1%.
Net income was $4.6 billion on a GAAP basis and $5.6 billion on an adjusted (non-GAAP) basis, the company said. GAAP earnings per share were $1.14, up 58%, and adjusted earnings per share were $1.40, up 40%.
Reuters reported that analysts had on average expected revenue of $18.14 billion and adjusted earnings of $1.33 per share, according to LSEG data. Reuters also reported that Cisco's adjusted gross margin was 65.6%, down from 68.1% a year earlier.
Guidance
Cisco raised its fiscal 2027 forecast to revenue of $74.8 billion to $75.8 billion and adjusted earnings of $5.47 to $5.53 per share, according to the release. Reuters reported that the previous revenue forecast was $72.2 billion to $73.4 billion.
For the second quarter, Cisco forecast revenue of $18.0 billion to $18.2 billion and adjusted earnings of $1.34 to $1.36 per share.
Reuters reported that Cisco raised its forecast for AI infrastructure revenue from large cloud operators, known as hyperscalers, in fiscal 2027 to $9 billion from $7.5 billion. Reuters said the segment had generated $4 billion a year earlier.
What the company said
Chief executive Chuck Robbins said in the release: "In Q1, we delivered the strongest revenue and non-GAAP earnings per share growth rates for Cisco in over 15 years." Reuters reported that Mr Robbins also said: "We are in the very early stages of a multi-year networking supercycle."
Chief financial officer Mark Patterson said in the release that the strength of the quarter gave the company "confidence to raise our revenue and non-GAAP EPS guidance for FY27".
Market reaction
Reuters reported that Cisco shares were flat in volatile extended trading after the results, having risen about 32% this year through Thursday's close. Reuters noted that a shortage of memory chips has been raising hardware component costs; Bob O'Donnell of TECHnalysis Research told Reuters that a small dip in gross margin was not a major concern given those costs.
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