#Cisco Reports Record Revenue in Q3 Fiscal 2026
Cisco Systems, Inc. (NASDAQ: CSCO) on May 13, 2026 reported third-quarter fiscal 2026 revenue of $15.8 billion, which the company described as a quarterly record, up 12% from $14.1 billion in the same period a year earlier. The San Jose-based networking and security vendor also raised its full-year fiscal 2026 outlook for orders from hyperscaler cloud customers to $9 billion, up from a prior expectation of $5 billion.
The results cover the quarter ended April 25, 2026. GAAP diluted earnings per share were $0.85, compared with $0.62 a year earlier. Non-GAAP diluted earnings per share were $1.06, compared with $0.96. Net income on a GAAP basis was $3.4 billion, against $2.5 billion in the prior-year quarter.
#Networking Revenue Drives Top-Line Growth
Product revenue rose 17% to $12.1 billion, while services revenue was $3.7 billion, down 1%. Within product categories, Networking revenue was $8.8 billion, up 25%. Observability revenue was $269 million, up 3%. Collaboration revenue was $1.0 billion, down 1%. Security revenue was $2.0 billion, flat versus the prior-year quarter.
By geography, Americas revenue rose 14% to $9.6 billion. Revenue in EMEA was $4.1 billion, up 9%. APJC revenue was $2.2 billion, also up 9%.
Cisco reported GAAP gross margin of 63.6% and non-GAAP gross margin of 66.0%, compared with 65.6% and 68.6% respectively in the third quarter of fiscal 2025. GAAP operating margin was 25.0%, and non-GAAP operating margin was 34.2%.
#Hyperscaler AI Order Outlook Raised to $9 Billion
The company said total product orders rose 35% year over year, or 19% excluding hyperscaler customers. Cisco said it has taken $5.3 billion in AI infrastructure orders from hyperscalers year to date in fiscal 2026, and now expects $9 billion in such orders for the full year, against a prior expectation of $5 billion. Cisco also raised expected revenue recognition from this category to $4 billion in fiscal 2026, from $3 billion previously.
Cisco said growth in networking product orders accelerated to more than 50% year over year. Campus networking orders grew more than 25%, and data center switching orders grew more than 40%, according to the company. Cisco described the campus refresh cycle as multi-year and multi-billion dollar in scope, with next-generation products ramping faster than prior launches.
"Cisco delivered record quarterly revenue in Q3 and we saw very strong, broad-based demand for our products, demonstrating the relevance of our technology for connecting and securing AI," Chuck Robbins, chair and CEO of Cisco, said in the earnings release.
#Restructuring Plan Announced Alongside Results
Concurrent with the earnings release, Cisco announced a restructuring plan that the company said is intended to redirect investment toward silicon, optics, security and AI. The company said it expects pre-tax charges of up to $1 billion under the plan, consisting of severance, other one-time termination benefits, and other costs. Cisco said it expects to recognize approximately $450 million of the charges in the fourth quarter of fiscal 2026, with the remainder in fiscal 2027.
Remaining performance obligations at the end of the quarter were $43.5 billion, up 4% year over year. Product RPO was up 6%, and services RPO was up 2%. Deferred revenue was $28.6 billion, up 2%. Cash, cash equivalents and investments totaled $16.6 billion at quarter-end, compared with $16.1 billion at the end of fiscal 2025.
Cisco returned $2.9 billion to shareholders during the quarter through buybacks and dividends. The company repurchased approximately 16 million shares at an average price of $80.28 per share, for an aggregate $1.3 billion. Cisco declared a quarterly dividend of $0.42 per common share, payable July 22, 2026. The remaining authorization under the buyback program is $9.6 billion.
Cisco faces competition across networking and data center infrastructure from vendors including Arista Networks, Juniper Networks, Hewlett Packard Enterprise and Huawei. In data center switching, the company is positioned as a leader in Gartner's most recent Magic Quadrant for that market, alongside Arista and Huawei.
#Fourth-Quarter Guidance
For the fourth quarter of fiscal 2026, Cisco guided to revenue of $16.7 billion to $16.9 billion, GAAP earnings per share of $0.80 to $0.85, and non-GAAP earnings per share of $1.16 to $1.18. For the full fiscal year, the company guided to revenue of $62.8 billion to $63.0 billion, GAAP earnings per share of $3.16 to $3.21, and non-GAAP earnings per share of $4.27 to $4.29.
Cisco said its margin and earnings-per-share guidance includes the estimated impact of tariffs based on current trade policy. The company cited supply constraints, component cost variability, competition in the data center market, tax law changes, and execution on its restructuring plan among risks to its forward-looking outlook.