Image Source: TradingView
By Brian Nelson, CFA
On August 13, Cisco Systems (CSCO) reported better than expected fiscal fourth quarter results, with both revenue and non-GAAP earnings per share coming in ahead of consensus. Fiscal fourth quarter revenue was up 8% year-over-year, to $14.7 billion, while fiscal fourth quarter product orders advanced 7% year-over-year, with expansion across all geographies. Non-GAAP gross margin came in at 68.4% at the high end of its guidance range, while non-GAAP earnings per share of $0.99 was up 14% year-over-year, above the high end of its guidance range.
Management had the following to say about the results and outlook:
We delivered a strong close to fiscal 2025, driven by our accelerated innovation and solid execution. The AI infrastructure orders we received from webscale customers in fiscal 2025 were more than double our original target, indicating a massive opportunity ahead as we lead the required architectural shift and build the critical infrastructure needed for the AI era.
In Q4, revenue, gross margin and operating margin were at the high end of our guidance ranges, earnings per share was above the guidance range and we delivered solid operating cash flow. As we enter fiscal 2026, we remain focused on making strategic investments in innovation, driving durable, profitable growth and delivering shareholder value.
Orders for AI Infrastructure taken from webscale customers exceeded $800 million in the fiscal fourth quarter, bringing the total to over $2 billion for fiscal 2025. Cash flow from operating activities at Cisco came in at $4.2 billion for the fiscal fourth quarter, an increase of 14% compared with last year’s quarter. Looking to fiscal 2026, Cisco is targeting revenue in the range of $14.65-$14.85 billion for the fiscal first quarter and non-GAAP earnings per share in the range of $0.97-$0.99, the midpoint above consensus estimates.
For all of fiscal 2026, Cisco is targeting revenue in the range of $59-$60 billion, and non-GAAP earnings per share of $4.00-$4.06, in-line with consensus. Cisco ended the quarter with $16.1 billion of cash and investments on its books and $28.1 billion in short- and long-term debt. We continue to like Cisco and the momentum behind its AI Infrastructure orders. The company remains a holding in the newsletter portfolios. Shares yield 2.5% at the time of this writing.
—–
Brian Nelson owns shares in SPY, SCHG, QQQ, QQQM, DIA, VOT, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, QQQM, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, RSP, SCHG, QQQ, QQQM, and VOO. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.
Valuentum members have access to our 16-page stock reports, Valuentum Buying Index ratings, Dividend Cushion ratios, fair value estimates and ranges, dividend reports and more. Not a member? Subscribe today. The first 14 days are free.