Cisco Systems (NASDAQ:CSCO) Announces Earnings Results, Beats Expectations By $0.07 EPS

Cisco Systems (NASDAQ:CSCO) posted its earnings results on Thursday. The network equipment provider reported $1.40 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $1.33 by $0.07, FiscalAI reports. Cisco Systems had a return on equity of 30.16% and a net margin of 20.95%. The business had revenue of $18.52 billion during the quarter, compared to analysts’ expectations of $18.12 billion. During the same period in the prior year, the business earned $1.00 EPS. Cisco Systems updated its Q2 2027 guidance to 1.340-1.360 EPS and its FY 2027 guidance to 5.470-5.530 EPS.

Here are the key takeaways from Cisco Systems’ conference call:

• Cisco reported record Q1 revenue of $18.5 billion, up 24% year over year, and non-GAAP EPS of $1.40, up 40%. It raised FY2027 guidance to $74.8–$75.8 billion in revenue and $5.47–$5.53 in non-GAAP EPS.
• Product orders rose 21%, including 14% growth excluding hyperscalers, while networking orders increased 28%. Cisco projected AI hyperscale revenue of $9 billion for FY2027—more than double FY2026—and management described AI-driven networking demand as an early-stage, multi-year opportunity.
• Non-GAAP gross margin was 65.6%, down 250 basis points year over year, as hardware growth increased the product mix and higher memory costs weighed on margins. Cisco expects full-year gross margin just below 65%.
• Operating cash flow increased 36% to $4.4 billion, and Cisco returned $3.7 billion to shareholders through dividends and repurchases, equal to 95% of free cash flow.

Cisco Systems Stock Down 5.9%

CSCO traded down $5.99 during trading on Friday, reaching $96.02. 11,607,836 shares of the stock were exchanged, compared to its average volume of 21,999,137. The company has a debt-to-equity ratio of 0.39, a quick ratio of 0.79 and a current ratio of 0.93. The stock’s 50 day moving average price is $108.02 and its two-hundred day moving average price is $102.13. Cisco Systems has a twelve month low of $72.80 and a twelve month high of $130.37. The stock has a market cap of $378.56 billion, a P/E ratio of 28.74, a price-to-earnings-growth ratio of 2.07 and a beta of 1.01.

Cisco Systems Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Wednesday, January 20th. Investors of record on Monday, January 4th will be issued a dividend of $0.42 per share. This represents a $1.68 dividend on an annualized basis and a yield of 1.7%. The ex-dividend date is Monday, January 4th. Cisco Systems’s payout ratio is presently 50.30%.

Insiders Place Their Bets

In other Cisco Systems news, EVP Thimaya Subaiya sold 312 shares of the stock in a transaction on Monday, September 14th. The shares were sold at an average price of $110.18, for a total value of $34,376.16. Following the completion of the sale, the executive vice president owned 127,661 shares in the company, valued at $14,065,688.98. This trade represents a 0.24% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Oliver Tuszik sold 680 shares of Cisco Systems stock in a transaction dated Monday, September 14th. The shares were sold at an average price of $110.18, for a total transaction of $74,922.40. Following the completion of the transaction, the executive vice president directly owned 163,337 shares of the company’s stock, valued at approximately $17,996,470.66. This trade represents a 0.41% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders sold 6,824 shares of company stock valued at $759,392. Corporate insiders own 0.01% of the company’s stock.

Cisco Systems News Summary

These are some of the CSCO news items that stood out recently:

• Positive Sentiment: Fiscal Q1 revenue of $18.5 billion and adjusted EPS of $1.40 exceeded analyst expectations. Cisco also raised its fiscal 2027 revenue and earnings forecasts above consensus, supporting the growth outlook. Reuters article
• Positive Sentiment: Management lifted its fiscal 2027 AI revenue target to $9 billion, citing accelerating hyperscaler deployments and networking demand. The opportunity suggests AI infrastructure spending is becoming a meaningful growth driver for Cisco. The Motley Fool article
• Neutral Sentiment: Analyst views are mixed: Truist and Rosenblatt kept Buy ratings despite lowering their price targets, while Goldman Sachs maintained Hold. The revisions may temper enthusiasm even as the firms’ targets remain above the current share price. TipRanks article

Wall Street Analysts Forecast Growth

CSCO has been the subject of a number of analyst reports. UBS Group raised their target price on shares of Cisco Systems from $132.00 to $138.00 and gave the company a “buy” rating in a research report on Thursday, August 13th. Sanford C. Bernstein started coverage on shares of Cisco Systems in a research report on Wednesday, September 30th. They set a “market perform” rating and a $110.00 price target on the stock. Wells Fargo & Company increased their price objective on shares of Cisco Systems from $130.00 to $150.00 and gave the stock an “overweight” rating in a research note on Thursday, August 13th. Truist Financial decreased their price objective on Cisco Systems from $140.00 to $127.00 and set a “buy” rating for the company in a report on Friday. Finally, Deutsche Bank started coverage on Cisco Systems in a research report on Tuesday, September 1st. They issued a “buy” rating and a $135.00 target price on the stock. Three analysts have rated the stock with a Strong Buy rating, fourteen have given a Buy rating and eight have assigned a Hold rating to the company. According to data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and an average target price of $126.18.

About Cisco Systems

Cisco Systems, Inc. develops networking, cybersecurity, collaboration and observability technologies for businesses, governments and other organizations. Its products include routers, switches, wireless systems and data center infrastructure, along with security software and services that help organizations connect and protect their networks. The company also provides collaboration tools through its Webex platform and observability capabilities through its software offerings, including technology from Splunk, which Cisco acquired in 2024.