A month has gone by since the last earnings report for Cisco Systems (CSCO Quick QuoteCSCO - Free Report) . Shares have lost about 2.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Cisco due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Cisco Systems, Inc. before we dive into how investors and analysts have reacted as of late.

Cisco Q4 Earnings Top Estimates, Revenues Up Y/Y

Cisco Systems 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%.

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. 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.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in fresh estimates.

VGM Scores

At this time, Cisco has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Cisco has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Cisco belongs to the Zacks Computer - Networking industry. Another stock from the same industry, NETGEAR, Inc. (NTGR Quick QuoteNTGR - Free Report) , has gained 18.7% over the past month. More than a month has passed since the company reported results for the quarter ended June 2025.

NETGEAR reported revenues of $170.53 million in the last reported quarter, representing a year-over-year change of +18.5%. EPS of $0.06 for the same period compares with -$0.74 a year ago.

For the current quarter, NETGEAR is expected to post a loss of $0.10 per share, indicating a change of -158.8% from the year-ago quarter. The Zacks Consensus Estimate has changed -18.4% over the last 30 days.

NETGEAR has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.