AI boom is a blessing for Cisco, but shipping hardware is costly

Cisco closed FY2026 with $63.3 billion in revenue, up 12% from FY2025, its best results in 30 years, driven by a 4.5x increase in hyperscaler orders, but shares fell about 6% in pre-market trading as non-GAAP gross margin shrank from 68.7% to 66.9% and CFO Mark Patterson guided Q1 margin to 65-66%. CEO Chuck Robbins said, "We believe we're in the early stages of a networking super cycle, presenting a massive opportunity.

Cisco /tag/cisco/ The trickle-down effect of the AI infrastructure build-out continues to be a boon for Cisco, with the networking firm celebrating better-than-expected results Wednesday, but rising costs appeared to spook investors. The US company closed out the 2026 financial year with its best results in 30 years, recording $63.3 billion in revenue https://s21.q4cdn.com/812015656/files/doc earnings/2026/q4/presentation/Q4FY26-Cisco-Earnings-Slides.pdf?ref=thestack.technology , up 12% on FY2025, after a 4.5x increase in the value of its hyperscaler orders. CEO Chuck Robbins told an earnings call, “We believe we’re in the early stages of a networking super cycle, presenting a massive opportunity”, citing high demand from hyperscalers, telcos, and enterprise customers. But it was continued pressure on its non-GAAP gross profit margins that analysts questioned. CFO Mark Patterson said he expected its gross margin to hover around 65-66% in Q1 after it shrank from 68.7% in FY25 to 66.9% in FY26. The company’s shares dropped around 6% in pre-market trading at the time of publication. Data centres need networking Get the full story: Subscribe for free Join peers managing over $100 billion in annual IT spend and subscribe to unlock full access to The Stack’s analysis and events. Subscribe now https://www.thestack.technology/membership/ Already a member? Sign in https://www.thestack.technology/signin/