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Cisco's Q4 Earnings Beat Estimates, Revenues Rise Y/Y, Shares Down
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Key Takeaways
Cisco's Q4 earnings rose 13.8% and revenue climbed 7.6%, both beating consensus estimates.
AI infrastructure revenues hit $2B in FY25, double the companys original expectation.
Networking revenues jumped 12% to $7.63B, while Security and Collaboration also saw year-over-year gains.
Cisco Systems (CSCO - Free Report) reported fourth-quarter fiscal 2025 non-GAAP earnings of 99 cents per share, beating the Zacks Consensus Estimate by 2.06%. The figure increased 13.8% year over year.
Revenues of $14.67 billion surpassed the Zacks Consensus Estimate by 0.47%. The top line increased 7.6% year over year. Total Annual Recurring Revenues (ARR) were $31.1 billion, up 5% with product ARR growth of 8%.
Cisco shares were down 0.63% at the time of writing this article. In the year-to-date (YTD) period, CSCO shares have appreciated 18.9%, outperforming the Zacks Computer & Technology sector’s return of 14.6% but underperforming peers, including Broadcom (AVGO - Free Report) and Arista Networks (ANET - Free Report) . YTD, Broadcom and Arista Networks have returned 32.9% and 24.8%, respectively.
Arista Networks reported strong second-quarter 2025 earnings of 73 cents per share, beating the Zacks Consensus Estimate by 12.3%. Broadcom is set to report third-quarter fiscal 2025 results on Sept. 4, with revenues expected to grow 21% year over year to $15.8 billion.
Cisco Systems, Inc. Price, Consensus and EPS Surprise
Revenues from Networking in the fourth quarter of fiscal 2025 were $7.63 billion, up 12% on a year-over-year basis. Security revenues were $1.95 billion, up 9% year over year. Collaboration revenues were $1.04 billion, up 2% year over year. Observability revenues were $259 million, up 4% year over year.
Total Product revenues in the fourth quarter of fiscal 2025 were $10.89 billion, comprising 74.2% of Cisco’s total revenues. On a year-over-year basis, product revenues increased 10%. Service Revenues were $3.79 billion, comprising 25.8% of Cisco’s total revenues and flat on a year-over-year basis.
Region-wise, the Americas’ revenues increased 9% year over year to $8.82 billion. EMEA (Europe, Middle East and Africa) revenues climbed 4% year over year to $3.65 billion. APJC (Asia Pacific Japan China) revenues climbed 7% year over year to $2.21 billion.
In the fourth quarter of fiscal 2025, AI Infrastructure orders from webscale customers exceeded $800 million, bringing the total revenues to $2 billion in fiscal 2025, double the management’s original expectation.
Cisco is benefiting from its partnership with NVIDIA (NVDA - Free Report) . Integration of Cisco Nexus switches with NVIDIA's Spectrum-X architecture is offering low latency, high-speed networking for AI clusters driving enterprise AI orders. The Cisco Secure AI factory with NVIDIA provides a trusted blueprint for building secure AI-ready data centers for enterprises, sovereign cloud providers and newly emerging Neocloud providers.
CSCO’s Q4 Operating Details
Fourth-quarter fiscal 2025 non-GAAP gross margin was 68.4%, which expanded 40 basis points (bps) year over year. On a non-GAAP basis, the product gross margin increased 160 bps on a year-over-year basis to 50.1%. Service gross margin decreased 120 bps to 18.3%.
In the fourth quarter of fiscal 2025, Cisco reported total non-GAAP operating expenses of $5 billion, up 3.6% year over year. As a percentage of revenues, operating expenses declined 130 bps.
Consequently, CSCO reported a non-GAAP operating income of $5.03 billion, up 13.3% year over year. Operating margin expanded 170 bps year over year to 34.3%.
CSCO’s Balance Sheet Details
As of July 26, 2025, cash and cash equivalents and investments totaled $16.1 billion, which increased from $15.6 billion as of April 26, 2025.
Total debt was $28.1 billion as of July 26, 2025, compared with $29.2 billion as of April 26, 2025.
The remaining performance obligations (RPO) at the end of the fourth quarter of fiscal 2025 were $43.5 billion, up 6%, with 50% of the amount to be recognized as revenues over the following 12 months. Product RPO was up 8%, and services RPO was up 5%.
In the fourth quarter of fiscal 2025, CSCO returned $2.9 billion to stockholders through share buybacks ($1.3 billion) and dividends ($1.6 billion).
CSCO Offers Positive Guidance
For the first quarter of fiscal 2026, Cisco expects non-GAAP earnings between 97 cents per share and 99 cents per share.
Revenues are expected to be in the range of $14.65 billion-$14.85 billion.
Non-GAAP gross margins are expected to be between 67.5% and 68.5%. Non-GAAP operating margin is anticipated to be between 33% and 34%.
Image: Bigstock
Cisco's Q4 Earnings Beat Estimates, Revenues Rise Y/Y, Shares Down
Key Takeaways
Cisco Systems (CSCO - Free Report) reported fourth-quarter fiscal 2025 non-GAAP earnings of 99 cents per share, beating the Zacks Consensus Estimate by 2.06%. The figure increased 13.8% year over year.
Revenues of $14.67 billion surpassed the Zacks Consensus Estimate by 0.47%. The top line increased 7.6% year over year. Total Annual Recurring Revenues (ARR) were $31.1 billion, up 5% with product ARR growth of 8%.
Cisco shares were down 0.63% at the time of writing this article. In the year-to-date (YTD) period, CSCO shares have appreciated 18.9%, outperforming the Zacks Computer & Technology sector’s return of 14.6% but underperforming peers, including Broadcom (AVGO - Free Report) and Arista Networks (ANET - Free Report) . YTD, Broadcom and Arista Networks have returned 32.9% and 24.8%, respectively.
Arista Networks reported strong second-quarter 2025 earnings of 73 cents per share, beating the Zacks Consensus Estimate by 12.3%. Broadcom is set to report third-quarter fiscal 2025 results on Sept. 4, with revenues expected to grow 21% year over year to $15.8 billion.
Cisco Systems, Inc. Price, Consensus and EPS Surprise
Cisco Systems, Inc. price-consensus-eps-surprise-chart | Cisco Systems, Inc. Quote
CSCO’s Q4 Top-Line Details
Revenues from Networking in the fourth quarter of fiscal 2025 were $7.63 billion, up 12% on a year-over-year basis. Security revenues were $1.95 billion, up 9% year over year. Collaboration revenues were $1.04 billion, up 2% year over year. Observability revenues were $259 million, up 4% year over year.
Total Product revenues in the fourth quarter of fiscal 2025 were $10.89 billion, comprising 74.2% of Cisco’s total revenues. On a year-over-year basis, product revenues increased 10%. Service Revenues were $3.79 billion, comprising 25.8% of Cisco’s total revenues and flat on a year-over-year basis.
Region-wise, the Americas’ revenues increased 9% year over year to $8.82 billion. EMEA (Europe, Middle East and Africa) revenues climbed 4% year over year to $3.65 billion. APJC (Asia Pacific Japan China) revenues climbed 7% year over year to $2.21 billion.
In the fourth quarter of fiscal 2025, AI Infrastructure orders from webscale customers exceeded $800 million, bringing the total revenues to $2 billion in fiscal 2025, double the management’s original expectation.
Cisco is benefiting from its partnership with NVIDIA (NVDA - Free Report) . Integration of Cisco Nexus switches with NVIDIA's Spectrum-X architecture is offering low latency, high-speed networking for AI clusters driving enterprise AI orders. The Cisco Secure AI factory with NVIDIA provides a trusted blueprint for building secure AI-ready data centers for enterprises, sovereign cloud providers and newly emerging Neocloud providers.
CSCO’s Q4 Operating Details
Fourth-quarter fiscal 2025 non-GAAP gross margin was 68.4%, which expanded 40 basis points (bps) year over year. On a non-GAAP basis, the product gross margin increased 160 bps on a year-over-year basis to 50.1%. Service gross margin decreased 120 bps to 18.3%.
In the fourth quarter of fiscal 2025, Cisco reported total non-GAAP operating expenses of $5 billion, up 3.6% year over year. As a percentage of revenues, operating expenses declined 130 bps.
Consequently, CSCO reported a non-GAAP operating income of $5.03 billion, up 13.3% year over year. Operating margin expanded 170 bps year over year to 34.3%.
CSCO’s Balance Sheet Details
As of July 26, 2025, cash and cash equivalents and investments totaled $16.1 billion, which increased from $15.6 billion as of April 26, 2025.
Total debt was $28.1 billion as of July 26, 2025, compared with $29.2 billion as of April 26, 2025.
The remaining performance obligations (RPO) at the end of the fourth quarter of fiscal 2025 were $43.5 billion, up 6%, with 50% of the amount to be recognized as revenues over the following 12 months. Product RPO was up 8%, and services RPO was up 5%.
In the fourth quarter of fiscal 2025, CSCO returned $2.9 billion to stockholders through share buybacks ($1.3 billion) and dividends ($1.6 billion).
CSCO Offers Positive Guidance
For the first quarter of fiscal 2026, Cisco expects non-GAAP earnings between 97 cents per share and 99 cents per share.
Revenues are expected to be in the range of $14.65 billion-$14.85 billion.
Non-GAAP gross margins are expected to be between 67.5% and 68.5%. Non-GAAP operating margin is anticipated to be between 33% and 34%.
For fiscal 2026, Cisco expects non-GAAP earnings between $4 per share and $4.06 per share. This Zacks Rank #2 (Buy) company expects revenues between $59 billion and $60 billion. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.