Double-digit top and bottom-line growth exceeding the high end of our guidance
Record revenue of $15.8 billion, up 12% year over year; GAAP EPS of $0.85, up 37% year over year; and non-GAAP EPS of $1.06, up 10% year over year
GAAP gross margin of 63.6% and non-GAAP gross margin of 66.0%; GAAP operating margin of 25.0% and non-GAAP operating margin of 34.2%, demonstrating strong execution and operational efficiencies
Broad-based, record high demand for Cisco technology
Total product orders up 35% year over year; up 19% excluding hyperscalers
Growth in networking product orders accelerated to more than 50% year over year
Significant momentum and raised expectations for AI infrastructure from hyperscalers
$5.3 billion of orders taken year to date; raising expected FY26 orders to $9 billion, up from $5 billion
Raising expected FY26 revenue to $4 billion, up from $3 billion
Major multi-year, multi-billion-dollar campus networking refresh cycle underway
Campus networking orders grew greater than 25% year over year, with the next-generation portfolio ramping faster than prior product launches
Data center switching orders grew greater than 40% year over year
Q3 FY 2026 Results:
Revenue: $15.8 billion
Increase of 12% year over year
Earnings per Share: GAAP: $0.85; Non-GAAP: $1.06
GAAP EPS increased 37% year over year
Non-GAAP EPS increased 10% year over year
Q4 FY 2026 Guidance (1):
Revenue: $16.7 billion to $16.9 billion
Earnings per Share: GAAP: $0.80 to $0.85; Non-GAAP: $1.16 to $1.18
FY 2026 Guidance (1):
Revenue: $62.8 billion to $63.0 billion
Earnings per Share: GAAP: $3.16 to $3.21; Non-GAAP: $4.27 to $4.29
(1) EPS guidance includes the estimated impact of tariffs based on current trade policy.
Cisco (NASDAQ: CSCO) today reported third quarter results for the period ended April 25, 2026. Cisco reported third quarter revenue of $15.8 billion, net income on a generally accepted accounting principles (GAAP) basis of $3.4 billion or $0.85 per share, and non-GAAP net income of $4.2 billion or $1.06 per share.
“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,” said Chuck Robbins, chair and CEO of Cisco. “Cisco is well-positioned as the critical infrastructure for the AI era, building on our technology leadership and customer trust, while innovating at the speed and scale that our dynamic world demands.”
“In Q3, we once again delivered double-digit growth on both the top and bottom lines which exceeded the high end of our guidance, coupled with record non-GAAP operating income,” said Mark Patterson, CFO of Cisco. “Our record results demonstrate great execution and financial discipline by our teams, enabling us to deliver shareholder value while we pursue the significant opportunities we see ahead.”
GAAP Results
Q3 FY 2026
Q3 FY 2025
vs. Q3 FY 2025
Revenue
$
15.8 billion
$
14.1 billion
12 %
Net Income
$
3.4 billion
$
2.5 billion
35 %
Diluted Earnings per Share (EPS)
$
0.85
$
0.62
37 %
Non-GAAP Results
Q3 FY 2026
Q3 FY 2025
vs. Q3 FY 2025
Net Income
$
4.2 billion
$
3.8 billion
10 %
EPS
$
1.06
$
0.96
10 %
Reconciliations between net income, EPS, and other measures on a GAAP and non-GAAP basis are provided in the tables located in the section entitled “Reconciliations of GAAP to non-GAAP Measures.”
Cisco Declares Quarterly Dividend
Cisco has declared a quarterly dividend of $0.42 per common share to be paid on July 22, 2026, to all stockholders of record as of the close of business on July 6, 2026. Future dividends will be subject to Board approval.
Financial Summary
All comparative percentages are on a year-over-year basis unless otherwise noted.
Q3 FY 2026 Highlights
Revenue — Total revenue was $15.8 billion, up 12%, with product revenue up 17% and services revenue down 1%.
Revenue by geographic segment was: Americas up 14%, EMEA up 9%, and APJC up 9%. Product revenue performance reflected growth in Networking, up 25% and Observability up 3%. Collaboration was down 1%. Security was flat.
Gross Margin — On a GAAP basis, total gross margin, product gross margin, and services gross margin were 63.6%, 61.9%, and 69.2%, respectively, as compared with 65.6%, 64.4%, and 68.7%, respectively, in the third quarter of fiscal 2025.
On a non-GAAP basis, total gross margin, product gross margin, and services gross margin were 66.0%, 64.3%, and 71.6%, respectively, as compared with 68.6%, 67.6%, and 71.3%, respectively, in the third quarter of fiscal 2025.
Total gross margins by geographic segment were: 63.7% for the Americas, 71.3% for EMEA and 66.1% for APJC.
Operating Expenses — On a GAAP basis, operating expenses were $6.1 billion, up 1% year over year, and were 38.6% of revenue. Non-GAAP operating expenses were $5.0 billion, up 5%, and were 31.9% of revenue.
Operating Income — GAAP operating income was $4.0 billion, up 24%, with GAAP operating margin of 25.0%. Non-GAAP operating income was $5.4 billion, up 11%, with non-GAAP operating margin at 34.2%.
Provision for Income Taxes — The GAAP tax provision rate was 16.5%. The non-GAAP tax provision rate was 19.0%.
Net Income and EPS — On a GAAP basis, net income was $3.4 billion, an increase of 35%, and EPS was $0.85, an increase of 37%. On a non-GAAP basis, net income was $4.2 billion, an increase of 10%, and EPS was $1.06, an increase of 10%.
Cash Flow from Operating Activities — $3.8 billion for the third quarter of fiscal 2026, a decrease of 7%, compared with $4.1 billion for the third quarter of fiscal 2025.
Balance Sheet and Other Financial Highlights
Cash and Cash Equivalents and Investments — $16.6 billion at the end of the third quarter of fiscal 2026, compared with $16.1 billion at the end of fiscal 2025.
Remaining Performance Obligations (RPO) — $43.5 billion, up 4% in total. Product RPO was up 6%, of which long-term RPO was $11.7 billion, up 6%. Services RPO was up 2%.
Deferred Revenue — $28.6 billion, up 2% in total, with deferred product revenue up 2% and deferred services revenue up 2%.
Capital Allocation — In the third quarter of fiscal 2026, we returned $2.9 billion to stockholders through share buybacks and dividends. We declared and paid a cash dividend of $0.42 per common share, or $1.7 billion, and repurchased approximately 16 million shares of common stock under our stock repurchase program at an average price of $80.28 per share for an aggregate purchase price of $1.3 billion. The remaining authorized amount for stock repurchases under the program is $9.6 billion with no termination date.
Guidance
Cisco expects to achieve the following results for the fourth quarter of fiscal 2026:
Q4 FY 2026
Revenue
$16.7 billion – $16.9 billion
Non-GAAP gross margin
65.5% – 66.5%
Non-GAAP operating margin
34% – 35%
Non-GAAP EPS
$1.16 – $1.18
Cisco estimates that GAAP EPS will be $0.80 to $0.85 for the fourth quarter of fiscal 2026.
Cisco expects to achieve the following results for fiscal 2026:
FY 2026
Revenue
$62.8 billion – $63.0 billion
Non-GAAP EPS
$4.27 – $4.29
Cisco estimates that GAAP EPS will be $3.16 to $3.21 for fiscal 2026.
Margin and EPS guidance includes the estimated impact of tariffs based on current trade policy.
Our Q4 FY 2026 guidance assumes an effective tax provision rate of approximately 16% for GAAP and approximately 19% for non-GAAP results. Our FY 2026 guidance assumes an effective tax provision rate of approximately 15% for GAAP and approximately 19% for non-GAAP results.
A reconciliation between the guidance on a GAAP and non-GAAP basis is provided in the tables entitled “GAAP to non-GAAP Guidance” located in the section entitled “Reconciliations of GAAP to non-GAAP Measures.”
Editor’s Notes:
Q3 fiscal year 2026 conference call to discuss Cisco’s results along with its guidance will be held on Wednesday, May 13, 2026 at 1:30 p.m. Pacific Time. Conference call number is 1-888-848-6507 (United States) or 1-212-519-0847 (international).
Conference call replay will be available from 4:00 p.m. Pacific Time, May 13, 2026 to 10:00 p.m. Pacific Time, May 19, 2026 at 1-800-839-2232 (United States) or 1-203-369-3662 (international). The replay will also be available via webcast on the Cisco Investor Relations website at https://investor.cisco.com.
Additional information regarding Cisco’s financials, as well as a webcast of the conference call with visuals designed to guide participants through the call, will be available at 1:30 p.m. Pacific Time, May 13, 2026. The conference call will also be livestreamed on YouTube at https://www.youtube.com/live/oihjxLboqdk & LinkedIn at https://www.linkedin.com/events/7455725440733798400. Text of the conference call’s prepared remarks will be available within 24 hours of completion of the call. The webcast and livestreaming will include both the prepared remarks and the question-and-answer session. This information, along with the GAAP to non-GAAP reconciliation information, will be available on the Cisco Investor Relations website at https://investor.cisco.com.
CISCO SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per-share amounts)
(Unaudited)
Three Months Ended
Nine Months Ended
April 25,
2026
April 26,
2025
April 25,
2026
April 26,
2025
REVENUE:
Product
$ 12,117
$ 10,374
$ 34,836
$ 30,722
Services
3,724
3,775
11,237
11,259
Total revenue
15,841
14,149
46,073
41,981
COST OF SALES:
Product
4,613
3,688
12,752
10,927
Services
1,148
1,183
3,524
3,544
Total cost of sales
5,761
4,871
16,276
14,471
GROSS MARGIN
10,080
9,278
29,797
27,510
OPERATING EXPENSES:
Research and development
2,377
2,335
7,132
6,920
Sales and marketing
2,855
2,724
8,607
8,148
General and administrative
661
739
2,082
2,286
Amortization of purchased intangible assets
228
244
690
774
Restructuring and other charges
(1)
34
182
709
Total operating expenses
6,120
6,076
18,693
18,837
OPERATING INCOME
3,960
3,202
11,104
8,673
Interest income
214
250
646
774
Interest expense
(377)
(403)
(1,097)
(1,225)
Other income (loss), net
242
(102)
423
(121)
Interest and other income (loss), net
79
(255)
(28)
(572)
INCOME BEFORE PROVISION FOR INCOME TAXES
4,039
2,947
11,076
8,101
Provision for income taxes
666
456
1,668
471
NET INCOME
$ 3,373
$ 2,491
$ 9,408
$ 7,630
Net income per share:
Basic
$ 0.85
$ 0.63
$ 2.38
$ 1.92
Diluted
$ 0.85
$ 0.62
$ 2.36
$ 1.91
Shares used in per-share calculation:
Basic
3,952
3,972
3,954
3,981
Diluted
3,982
4,002
3,987
4,004
CISCO SYSTEMS, INC.
REVENUE BY SEGMENT
(In millions, except percentages)
April 25, 2026
Three Months Ended
Nine Months Ended
Amount
Y/Y %
Amount
Y/Y %
Revenue:
Americas
$ 9,569
14 %
$ 27,403
10 %
EMEA
4,054
9 %
12,262
10 %
APJC
2,218
9 %
6,409
7 %
Total
$ 15,841
12 %
$ 46,073
10 %
Amounts may not sum and percentages may not recalculate due to rounding.
CISCO SYSTEMS, INC.
GROSS MARGIN PERCENTAGE BY SEGMENT
(In percentages)
April 25, 2026
Three Months Ended
Nine Months Ended
Gross Margin Percentage:
Americas
63.7 %
65.4 %
EMEA
71.3 %
71.7 %
APJC
66.1 %
66.3 %
CISCO SYSTEMS, INC.
REVENUE FOR GROUPS OF SIMILAR PRODUCTS AND SERVICES
(In millions, except percentages)
April 25, 2026
Three Months Ended
Nine Months Ended
Amount
Y/Y %
Amount
Y/Y %
Revenue:
Networking
$ 8,815
25 %
$ 24,877
20 %
Security
2,008
— %
6,006
(2) %
Collaboration
1,024
(1) %
3,133
1 %
Observability
269
3 %
820
3 %
Total Product
12,117
17 %
34,836
13 %
Services
3,724
(1) %
11,237
— %
Total
$ 15,841
12 %
$ 46,073
10 %
Amounts may not sum and percentages may not recalculate due to rounding.
CISCO SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
April 25, 2026
July 26, 2025
ASSETS
Current assets:
Cash and cash equivalents
$ 7,083
$ 8,346
Investments
9,557
7,764
Accounts receivable, net of allowance of $73 at April 25, 2026 and $69 at July 26, 2025
6,480
6,701
Inventories
4,708
3,164
Financing receivables, net
2,936
3,061
Other current assets
5,795
5,950
Total current assets
36,559
34,986
Property and equipment, net
2,577
2,113
Financing receivables, net
3,642
3,466
Goodwill
59,292
59,136
Purchased intangible assets, net
7,850
9,175
Deferred tax assets
7,558
7,356
Other assets
8,068
6,059
TOTAL ASSETS
$ 125,546
$ 122,291
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt
$ 11,932
$ 5,232
Accounts payable
2,970
2,528
Income taxes payable
173
1,857
Accrued compensation
3,290
3,611
Deferred revenue
16,446
16,416
Other current liabilities
4,730
5,420
Total current liabilities
39,541
35,064
Long-term debt
19,371
22,861
Income taxes payable
2,304
2,165
Deferred revenue
12,153
12,363
Other long-term liabilities
3,316
2,995
Total liabilities
76,685
75,448
Total equity
48,861
46,843
TOTAL LIABILITIES AND EQUITY
$ 125,546
$ 122,291
CISCO SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Three Months Ended
Nine Months Ended
April 25,
2026
April 26,
2025
April 25,
2026
April 26,
2025
Cash flows from operating activities:
Net income
$ 3,373
$ 2,491
$ 9,408
$ 7,630
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation, amortization, and other
637
626
1,902
2,176
Share-based compensation expense
914
945
2,903
2,693
Provision for receivables
2
10
11
17
Deferred income taxes
(153)
(410)
(217)
(792)
(Gains) losses on divestitures, investments and other, net
(263)
57
(500)
52
Change in operating assets and liabilities, net of effects of acquisitions
and divestitures:
Accounts receivable
133
437
187
1,406
Inventories
(788)
100
(1,549)
541
Financing receivables
86
175
(34)
505
Other assets
40
(89)
(602)
(516)
Accounts payable
208
349
444
(10)
Income taxes, net
161
283
(2,342)
(2,002)
Accrued compensation
(212)
(138)
(332)
(431)
Deferred revenue
149
31
(141)
(524)
Other liabilities
(530)
(810)
(347)
(786)
Net cash provided by operating activities
3,757
4,057
8,791
9,959
Cash flows from investing activities:
Purchases of investments
(3,139)
(805)
(7,367)
(3,066)
Proceeds from sales of investments
439
437
1,884
2,228
Proceeds from maturities of investments
1,508
1,282
3,811
3,985
Acquisitions, net of cash and cash equivalents acquired and divestitures
—
(34)
(46)
(291)
Purchases of non-marketable equity securities
(634)
(128)
(699)
(265)
Return of investments in non-marketable equity securities
168
14
223
108
Acquisition of property and equipment
(414)
(261)
(1,020)
(688)
Other
2
—
(6)
(5)
Net cash provided by (used in) investing activities
(2,070)
505
(3,220)
2,006
Cash flows from financing activities:
Issuances of common stock
—
—
354
320
Repurchases of common stock – repurchase program
(1,250)
(1,505)
(4,605)
(4,748)
Shares repurchased for tax withholdings on vesting of restricted stock units
(294)
(255)
(1,362)
(910)
Short-term borrowings, original maturities of 90 days or less, net
(338)
(1,491)
412
(479)
Issuances of debt
6,399
6,982
10,640
17,388
Repayments of debt
(4,862)
(7,163)
(7,854)
(18,545)
Dividends paid
(1,660)
(1,627)
(4,894)
(4,812)
Other
(34)
(78)
(32)
(80)
Net cash used in financing activities
(2,039)
(5,137)
(7,341)
(11,866)
Effect of foreign currency exchange rate changes on cash, cash equivalents,
restricted cash and restricted cash equivalents
(24)
(15)
(57)
(23)
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted
cash equivalents
(376)
(590)
(1,827)
76
Cash, cash equivalents, restricted cash and restricted cash equivalents,
beginning of period
7,459
9,508
8,910
8,842
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of
period
$ 7,083
$ 8,918
$ 7,083
$ 8,918
Supplemental cash flow information:
Cash paid for interest
$ 604
$ 601
$ 1,305
$ 1,370
Cash paid for income taxes, net
$ 659
$ 583
$ 4,228
$ 3,265
CISCO SYSTEMS, INC.
REMAINING PERFORMANCE OBLIGATIONS
(In millions, except percentages)
April 25, 2026
January 24, 2026
April 26, 2025
Amount
Y/Y%
Amount
Y/Y%
Amount
Y/Y%
Product (1)
$ 22,058
6 %
$ 21,977
8 %
$ 20,752
10 %
Services
21,404
2 %
21,429
2 %
20,915
5 %
Total
$ 43,462
4 %
$ 43,406
5 %
$ 41,667
7 %
(1)
As of the end of the third quarter of fiscal 2026, long-term product RPO was $11.7 billion, up 6% year over year.
CISCO SYSTEMS, INC.
DEFERRED REVENUE
(In millions)
April 25,
2026
January 24,
2026
April 26,
2025
Deferred revenue:
Product
$ 13,461
$ 13,371
$ 13,170
Services
15,138
15,032
14,821
Total
$ 28,599
$ 28,403
$ 27,991
Reported as:
Current
$ 16,446
$ 16,199
$ 16,081
Noncurrent
12,153
12,204
11,910
Total
$ 28,599
$ 28,403
$ 27,991
CISCO SYSTEMS, INC.
DIVIDENDS PAID AND REPURCHASES OF COMMON STOCK
(In millions, except per-share amounts)
DIVIDENDS
STOCK REPURCHASE PROGRAM
TOTAL
Quarter Ended
Per Share
Amount
Shares
Weighted-
Average Price
per Share
Amount
Amount
Fiscal 2026
April 25, 2026
$ 0.42
$ 1,660
16
$ 80.28
$ 1,252
$ 2,912
January 24, 2026
$ 0.41
$ 1,617
18
$ 76.29
$ 1,351
$ 2,968
October 25, 2025
$ 0.41
$ 1,617
29
$ 68.28
$ 2,001
$ 3,618
Fiscal 2025
July 26, 2025
$ 0.41
$ 1,625
19
$ 64.65
$ 1,252
$ 2,877
April 26, 2025
$ 0.41
$ 1,627
25
$ 59.78
$ 1,504
$ 3,131
January 25, 2025
$ 0.40
$ 1,593
21
$ 58.58
$ 1,236
$ 2,829
October 26, 2024
$ 0.40
$ 1,592
40
$ 49.56
$ 2,003
$ 3,595
CISCO SYSTEMS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES
GAAP TO NON-GAAP NET INCOME
(In millions)
Three Months Ended
Nine Months Ended
April 25,
2026
April 26,
2025
April 25,
2026
April 26,
2025
GAAP net income
$ 3,373
$ 2,491
$ 9,408
$ 7,630
Adjustments to cost of sales:
Share-based compensation expense
150
152
451
434
Amortization of acquisition-related intangible assets
221
263
682
917
Acquisition/divestiture-related costs
7
17
21
53
Supplier component remediation charge (adjustment)
—
(7)
—
(7)
Total adjustments to GAAP cost of sales
378
425
1,154
1,397
Adjustments to operating expenses:
Share-based compensation expense
764
778
2,430
2,222
Amortization of acquisition-related intangible assets
228
244
690
774
Acquisition/divestiture-related costs
83
197
282
687
Significant asset impairments and restructurings
(1)
34
182
709
Total adjustments to GAAP operating expenses
1,074
1,253
3,584
4,392
Adjustments to interest and other income (loss), net:
(Gains) and losses on investments
(273)
19
(529)
(72)
Total adjustments to GAAP interest and other income (loss), net
(273)
19
(529)
(72)
Total adjustments to GAAP income before provision for income
taxes
1,179
1,697
4,209
5,717
Income tax effect of non-GAAP adjustments
(325)
(357)
(1,104)
(1,256)
Significant tax matters
—
—
(132)
(829)
Total adjustments to GAAP provision for income taxes
(325)
(357)
(1,236)
(2,085)
Non-GAAP net income
$ 4,227
$ 3,831
$ 12,381
$ 11,262
CISCO SYSTEMS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES
GAAP TO NON-GAAP EPS
Three Months Ended
Nine Months Ended
April 25,
2026
April 26,
2025
April 25,
2026
April 26,
2025
GAAP EPS
$ 0.85
$ 0.62
$ 2.36
$ 1.91
Adjustments to GAAP:
Share-based compensation expense
0.23
0.23
0.72
0.66
Amortization of acquisition-related intangible assets
0.11
0.13
0.34
0.42
Acquisition/divestiture-related costs
0.02
0.05
0.08
0.18
Significant asset impairments and restructurings
—
0.01
0.05
0.18
(Gains) and losses on investments
(0.07)
—
(0.13)
(0.02)
Income tax effect of non-GAAP adjustments
(0.08)
(0.09)
(0.28)
(0.31)
Significant tax matters
—
—
(0.03)
(0.21)
Non-GAAP EPS
$ 1.06
$ 0.96
$ 3.11
$ 2.81
Amounts may not sum due to rounding.
CISCO SYSTEMS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES
GROSS MARGINS, OPERATING EXPENSES, OPERATING MARGINS, INTEREST AND OTHER INCOME (LOSS), NET, AND NET INCOME
(In millions, except percentages)
Three Months Ended
April 25, 2026
Product
Gross
Margin
Services
Gross
Margin
Total
Gross
Margin
Operating
Expenses
Y/Y
Operating
Income
Y/Y
Interest
and
other
income
(loss),
net
Net
Income
Y/Y
GAAP amount
$ 7,504
$ 2,576
$ 10,080
$ 6,120
1 %
$ 3,960
24 %
$ 79
$ 3,373
35 %
% of revenue
61.9 %
69.2 %
63.6 %
38.6 %
25.0 %
0.5 %
21.3 %
Adjustments to GAAP amounts:
Share-based compensation expense
64
86
150
764
914
—
914
Amortization of acquisition-related intangible assets
221
—
221
228
449
—
449
Acquisition/divestiture-related costs
2
5
7
83
90
—
90
Significant asset impairments and restructurings
—
—
—
(1)
(1)
—
(1)
(Gains) and losses on investments
—
—
—
—
—
(273)
(273)
Income tax effect/significant tax matters
—
—
—
—
—
—
(325)
Non-GAAP amount
$ 7,791
$ 2,667
$ 10,458
$ 5,046
5 %
$ 5,412
11 %
$ (194)
$ 4,227
10 %
% of revenue
64.3 %
71.6 %
66.0 %
31.9 %
34.2 %
(1.2) %
26.7 %
Three Months Ended
April 26, 2025
Product
Gross
Margin
Services
Gross
Margin
Total
Gross
Margin
Operating
Expenses
Operating
Income
Interest
and other
income
(loss), net
Net
Income
GAAP amount
$ 6,686
$ 2,592
$ 9,278
$ 6,076
$ 3,202
$ (255)
$ 2,491
% of revenue
64.4 %
68.7 %
65.6 %
42.9 %
22.6 %
(1.8) %
17.6 %
Adjustments to GAAP amounts:
Share-based compensation expense
67
85
152
778
930
—
930
Amortization of acquisition-related intangible assets
263
—
263
244
507
—
507
Acquisition/divestiture-related costs
4
13
17
197
214
—
214
Supplier component remediation charge (adjustment)
(7)
—
(7)
—
(7)
—
(7)
Significant asset impairments and restructurings
—
—
—
34
34
—
34
(Gains) and losses on investments
—
—
—
—
—
19
19
Income tax effect/significant tax matters
—
—
—
—
—
—
(357)
Non-GAAP amount
$ 7,013
$ 2,690
$ 9,703
$ 4,823
$ 4,880
$ (236)
$ 3,831
% of revenue
67.6 %
71.3 %
68.6 %
34.1 %
34.5 %
(1.7) %
27.1 %
Amounts may not sum and percentages may not recalculate due to rounding.
CISCO SYSTEMS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES
GROSS MARGINS, OPERATING EXPENSES, OPERATING MARGINS, INTEREST AND OTHER INCOME (LOSS), NET, AND NET INCOME
(In millions, except percentages)
Nine Months Ended
April 25, 2026
Product
Gross
Margin
Services
Gross
Margin
Total
Gross
Margin
Operating
Expenses
Y/Y
Operating
Income
Y/Y
Interest
and
other
income
(loss),
net
Net
Income
Y/Y
GAAP amount
$ 22,084
$ 7,713
$ 29,797
$ 18,693
(1) %
$ 11,104
28 %
$ (28)
$ 9,408
23 %
% of revenue
63.4 %
68.6 %
64.7 %
40.6 %
24.1 %
(0.1) %
20.4 %
Adjustments to GAAP amounts:
Share-based compensation expense
195
256
451
2,430
2,881
—
2,881
Amortization of acquisition-related intangible assets
682
—
682
690
1,372
—
1,372
Acquisition/divestiture-related costs
6
15
21
282
303
—
303
Significant asset impairments and restructurings
—
—
—
182
182
—
182
(Gains) and losses on investments
—
—
—
—
—
(529)
(529)
Income tax effect/significant tax matters
—
—
—
—
—
—
(1,236)
Non-GAAP amount
$ 22,967
$ 7,984
$ 30,951
$ 15,109
5 %
$ 15,842
10 %
$ (557)
$ 12,381
10 %
% of revenue
65.9 %
71.1 %
67.2 %
32.8 %
34.4 %
(1.2) %
26.9 %
Nine Months Ended
April 26, 2025
Product
Gross
Margin
Services
Gross
Margin
Total
Gross
Margin
Operating
Expenses
Operating
Income
Interest
and other
income
(loss), net
Net
Income
GAAP amount
$ 19,795
$ 7,715
$ 27,510
$ 18,837
$ 8,673
$ (572)
$ 7,630
% of revenue
64.4 %
68.5 %
65.5 %
44.9 %
20.7 %
(1.4) %
18.2 %
Adjustments to GAAP amounts:
Share-based compensation expense
189
245
434
2,222
2,656
—
2,656
Amortization of acquisition-related intangible assets
917
—
917
774
1,691
—
1,691
Acquisition/divestiture-related costs
12
41
53
687
740
—
740
Supplier component remediation charge (adjustment)
(7)
—
(7)
—
(7)
—
(7)
Significant asset impairments and restructurings
—
—
—
709
709
—
709
(Gains) and losses on investments
—
—
—
—
—
(72)
(72)
Income tax effect/significant tax matters
—
—
—
—
—
—
(2,085)
Non-GAAP amount
$ 20,906
$ 8,001
$ 28,907
$ 14,445
$ 14,462
$ (644)
$ 11,262
% of revenue
68.0 %
71.1 %
68.9 %
34.4 %
34.4 %
(1.5) %
26.8 %
Amounts may not sum and percentages may not recalculate due to rounding.
CISCO SYSTEMS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES
EFFECTIVE TAX RATE
(In percentages)
Three Months Ended
Nine Months Ended
April 25,
2026
April 26,
2025
April 25,
2026
April 26,
2025
GAAP effective tax rate
16.5 %
15.5 %
15.1 %
5.8 %
Total adjustments to GAAP provision for income taxes
2.5 %
2.0 %
3.9 %
12.7 %
Non-GAAP effective tax rate
19.0 %
17.5 %
19.0 %
18.5 %
GAAP TO NON-GAAP GUIDANCE
Q4 FY 2026
Gross Margin
Rate
Operating Margin
Rate
Earnings per
Share (1)
GAAP
63.5% – 64.5%
23% – 24%
$0.80 – $0.85
Estimated adjustments for:
Share-based compensation expense
1.0 %
5.0 %
$0.14 – $0.15
Amortization of acquisition-related intangible assets and acquisition/divestiture-related costs
1.0 %
3.0 %
$0.10 – $0.11
Significant asset impairments and restructurings (2)
—
3.0 %
$0.09 – $0.10
Non-GAAP
65.5% – 66.5%
34% – 35%
$1.16 – $1.18
FY 2026
Earnings per
Share (1)
GAAP
$3.16 – $3.21
Estimated adjustments for:
Share-based compensation expense
$0.67 – $0.68
Amortization of acquisition-related intangible assets and acquisition/divestiture-related costs
$0.43 – $0.44
Significant asset impairments and restructurings (2)
$0.12 – $0.13
(Gains) and losses on investments
($0.11)
Significant tax matters
($0.03)
Non-GAAP
$4.27 – $4.29
(1) Estimated adjustments to GAAP earnings per share are shown after income tax effects.
(2) On May 13, 2026, Cisco announced a restructuring plan in order to allow it to invest in key growth opportunities including silicon, optics, security and AI. In connection with this restructuring plan, Cisco currently estimates that it will recognize pre-tax charges of up to $1 billion consisting of severance and other one-time termination benefits, and other costs. Cisco expects to recognize approximately $450 million of these charges in the fourth quarter of fiscal 2026 with the remaining amount expected to be recognized during fiscal 2027.
Margin and EPS guidance includes the estimated impact of tariffs based on current trade policy.
Except as noted above, this guidance does not include the effects of any future acquisitions/divestitures, significant asset impairments and restructurings, significant litigation settlements and other contingencies, gains and losses on investments, significant tax matters, or other items, which may or may not be significant.
Forward Looking Statements, Non-GAAP Information and Additional Information
This release may be deemed to contain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other things, statements regarding future events (such as being well positioned for the AI era, the significant momentum and raised expectations of AI infrastructure from hyperscalers, the major multi-year, multi-billion-dollar campus networking refresh, the speed and scale of our innovation, the significant opportunities that lie ahead, and the timing and size of the restructuring) and the future financial performance of Cisco (including the guidance for Q4 FY 2026 and full year FY 2026) that involve risks and uncertainties, such as the actual impact of tariffs on our guidance for Q4 FY 2026 and full year FY 2026. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including: business and economic conditions and growth trends in the networking industry, our customer markets and various geographic regions; global economic conditions and uncertainties in the geopolitical environment; our development and use of artificial intelligence; overall information technology spending; the growth and evolution of the Internet and levels of capital spending on Internet-based systems; variations in customer demand for products and services, including sales to the service provider market, cloud, enterprise and other customer markets; the return on our investments in certain key priority areas, and in certain geographical locations, as well as maintaining leadership in Networking and services; the timing of orders and manufacturing and customer lead times; supply constraints; changes in customer order patterns or customer mix; insufficient, excess or obsolete inventory; variability of component costs; variations in sales channels, product costs or mix of products sold; our ability to successfully acquire businesses and technologies and to successfully integrate and operate these acquired businesses and technologies; our ability to achieve expected benefits of our partnerships; increased competition in our product and services markets, including the data center market; dependence on the introduction and market acceptance of new product offerings and standards; rapid technological and market change; manufacturing and sourcing risks; product defects and returns; litigation involving patents, other intellectual property, antitrust, stockholder and other matters, and governmental investigations; our ability to achieve the benefits of restructurings and possible changes in the size and timing of related charges; cyber attacks, data breaches or other incidents; vulnerabilities and critical security defects; our ability to protect personal data; evolving regulatory uncertainty; terrorism; natural catastrophic events (including as a result of global climate change); any pandemic or epidemic; our ability to achieve the benefits anticipated from our investments in sales, engineering, service, marketing and manufacturing activities; our ability to recruit and retain key personnel; our ability to manage financial risk, and to manage expenses during economic downturns; risks related to the global nature of our operations, including our operations in emerging markets; currency fluctuations and other international factors; changes in provision for income taxes, including changes in tax laws and regulations or adverse outcomes resulting from examinations of our income tax returns; potential volatility in operating results; and other factors listed in Cisco’s most recent reports on Forms 10-Q and 10-K filed on February 17, 2026 and September 3, 2025, respectively. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in Cisco’s most recent reports on Forms 10-Q and 10-K as each may be amended from time to time. Cisco’s results of operations for the three and nine months ended April 25, 2026 are not necessarily indicative of Cisco’s operating results for any future periods. Any projections in this release are based on limited information currently available to Cisco, which is subject to change. Although any such projections and the factors influencing them will likely change, Cisco will not necessarily update the information, since Cisco will only provide guidance at certain points during the year. Such information speaks only as of the date of this release.
This release includes non-GAAP net income, non-GAAP gross margins, non-GAAP operating expenses, non-GAAP operating income and margin, non-GAAP effective tax rates, non-GAAP interest and other income (loss), net, and non-GAAP net income per share data for the periods presented. It also includes future estimated ranges for gross margin, operating margin, tax provision rate and EPS on a non-GAAP basis.
These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles (GAAP) and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Cisco believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Cisco’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Cisco’s results of operations in conjunction with the corresponding GAAP measures.
Cisco believes that the presentation of non-GAAP measures when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and its historical and projected results of operations.
For its internal budgeting process, Cisco’s management uses financial statements that do not include, when applicable, share-based compensation expense, amortization of acquisition-related intangible assets, acquisition/divestiture-related costs, significant asset impairments and restructurings, significant litigation settlements and other contingencies, gains and losses on investments, the income tax effects of the foregoing and significant tax matters. Cisco’s management also uses the foregoing non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Cisco. In prior periods, Cisco has excluded other items that it no longer excludes for purposes of its non-GAAP financial measures. From time to time in the future there may be other items that Cisco may exclude for purposes of its internal budgeting process and in reviewing its financial results. For additional information on the items excluded by Cisco from one or more of its non-GAAP financial measures, refer to the Form 8-K regarding this release furnished today to the Securities and Exchange Commission.