Cisco Systems, Inc. (CSCO) Stock: Sink After Hours Despite Record Q4 Earnings and $4 Billion AI Orders 

TLDR

• Cisco stock drops 4.66% after hours despite record Q4 revenue and earnings.
• Cisco Q4 revenue jumps 18% to $17.3 billion as networking demand strengthens.
• AI infrastructure orders hit $4 billion in Q4 and $9.3 billion for fiscal 2026.
• Cisco expects AI infrastructure revenue to reach $7.5 billion in fiscal 2027.
• Cisco forecasts fiscal 2027 revenue between $72.2 billion and $73.4 billion.

Cisco Systems (CSCO) stock fell 4.66% after hours to $118.11 despite record fourth-quarter revenue and strong annual growth. The decline reversed gains from the regular session, when shares closed at $123.88 up 2.46%. Cisco also reported $4 billion in quarterly AI infrastructure orders from hyperscale customers.

Cisco Systems, Inc., CSCO

Cisco Posts Record Q4 Revenue and Earnings Growth

Cisco reported fourth-quarter revenue of $17.3 billion, representing an 18% increase from the same period last year. Product revenue increased 24%, while services revenue remained unchanged from the prior-year quarter. Networking revenue led product growth with a 28% increase during the period.

GAAP net income reached $3.9 billion, while diluted earnings increased 52% to $0.97 per share. Meanwhile, non-GAAP net income rose 23% to $4.9 billion during the fourth quarter. Non-GAAP earnings also increased 23% to $1.22 per share.

Cisco generated $5.4 billion in operating cash flow during Q4, representing a 27% annual increase. GAAP operating income rose 38% to $4.3 billion, supported by stronger revenue and operating efficiency. Non-GAAP operating income increased 23% to $6.2 billion, while its operating margin reached 35.9%.

AI Orders and Networking Demand Strengthen Cisco’s Growth

Cisco recorded $4 billion in AI infrastructure orders from hyperscale customers during the fourth quarter. Consequently, total AI infrastructure orders reached $9.3 billion across fiscal 2026. Cisco generated approximately $4 billion in AI infrastructure revenue during the full fiscal year.

The company expects AI infrastructure revenue to reach about $7.5 billion during fiscal 2027. Meanwhile, total product orders jumped 35% year over year during the fourth quarter. Orders still increased 25% after excluding hyperscale customers from the quarterly comparison.

Networking product orders climbed 40%, marking an eighth consecutive quarter of double-digit growth. Demand also expanded across every geographic region and customer market during the quarter. These gains supported Cisco’s view that networking demand remains in a strong replacement and expansion cycle.

Cisco Issues Strong FY 2027 Revenue Guidance

Cisco reported full-year fiscal 2026 revenue of $63.3 billion, representing annual growth of 12%. GAAP net income increased 30% to $13.3 billion, while annual GAAP earnings reached $3.33 per share. Non-GAAP earnings increased 14% to $4.33 per share during the year.

For fiscal 2027, Cisco expects revenue between $72.2 billion and $73.4 billion. The company forecasts GAAP earnings between $4.00 and $4.06 per share for the year. Cisco also expects non-GAAP earnings between $5.05 and $5.11 per share.

Cisco projects first-quarter fiscal 2027 revenue between $18 billion and $18.2 billion. The company expects first-quarter non-GAAP earnings between $1.32 and $1.34 per share. However, the strong outlook failed to prevent CSCO stock from falling sharply after the earnings release.

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