Cisco beats earnings as AI revenue outlook doubles to $9 billion
Cisco reported record quarterly revenue of $18.5 billion and raised its full-year outlook, expecting AI infrastructure revenue to more than double.
Record quarter, raised outlook
Cisco reported record revenue of $18.5 billion for its fiscal first quarter, up 24% from a year earlier, beating the $18.1 billion analysts expected, according to LSEG. Adjusted earnings came in at $1.40 per share, above the $1.33 expected, while GAAP earnings per share rose 58% to $1.14.
Net income on a GAAP basis reached $4.6 billion, or $1.14 per share, against $2.9 billion a year earlier. Cisco called it the strongest revenue and non-GAAP earnings per share growth in more than 15 years.
AI networking is the engine
Networking revenue rose 43%, driving product revenue up 32% while services revenue rose 1%. The growth came as cloud giants bought switches and routers to build AI data centers, and Cisco raised its expectation for AI infrastructure revenue from hyperscalers to $9 billion for fiscal 2027, more than double the fiscal 2026 total.
Chief executive Chuck Robbins described demand as a "multi-year networking supercycle" in the early stages. The company had previously expected about $7.5 billion of AI infrastructure revenue for the year.
- Q1 revenue$18.5 billion
- Adjusted EPS$1.40
- AI revenue, fiscal 2027$9 billion
- Full-year revenue outlook$74.8 billion to $75.8 billion
- Networking growthUp 43%
Guidance raised across the board
For the second quarter, Cisco expects revenue of $18.0 billion to $18.2 billion and adjusted earnings of $1.34 to $1.36 per share, above the $1.23 analysts expected. For fiscal 2027 as a whole, it raised revenue guidance to $74.8 billion to $75.8 billion, from $72.2 billion to $73.4 billion.
Adjusted earnings per share for the year are now expected at $5.47 to $5.53, up from $5.05 to $5.11, and GAAP earnings per share at $4.38 to $4.44. The company also raised its full-year revenue and non-GAAP earnings guidance after the quarter came in above the high end of its ranges.
What to watch next
Growth was broad. Revenue rose 28% in the Americas, 18% in Europe, the Middle East and Africa, and 21% in Asia Pacific, Japan and China. Security revenue rose 7%, Collaboration rose 8% and Observability rose 2%.
The open question is whether hyperscaler spending on AI networking stays strong through the year. Cisco's raised outlook assumes it does, and the second-quarter guidance gives investors the first checkpoint.
