Cisco Q2 FY2026 Results – Strong AI Demand Drives Growth, Margins Under Pressure

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Cisco Systems (NASDAQ: CSCO) reported its fiscal second-quarter (Q2 FY2026) earnings, delivering strong revenue and profit growth driven by rising demand for AI networking and data center infrastructure.

Key Financial Highlights

  • Revenue: $15.3 billion (↑ 10% YoY)
  • Adjusted EPS: $1.04 (↑ 11% YoY)
  • Net Income: $4.14 billion
  • Gross Margin: 67.5%
  • Operating Margin: 34.6%

AI Infrastructure Fuels Growth

Cisco recorded $2.1 billion in AI infrastructure orders, supported by strong hyperscaler demand. The launch of the Silicon One G300 AI chip and growing data center upgrades helped networking revenue surge 21% year-over-year to $8.29 billion.

Margin Pressure

Gross margins declined due to rising memory chip costs. Cisco expects margins of 65.5%–66.5% next quarter but raised full-year revenue guidance to $61.2–$61.7 billion.

Q3 FY2026 Guidance

  • Revenue: $15.4B – $15.6B
  • Adjusted EPS: $1.02 – $1.04

Shareholder Returns

Cisco increased its dividend to $0.42 per share and returned $3.0 billion to shareholders during the quarter.

Conclusion

Cisco’s strong AI-driven momentum positions it well for long-term growth, despite short-term margin pressures from rising component costs.

Disclaimer:
This data is AI-generated and compiled from publicly available financial reports and estimates. Figures may not be exact. This content is provided for informational purposes only and does NOT constitute financial or investment advice. Always verify data from official company filings and consult a qualified financial advisor before making investment decisions.

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