Cisco Beats Earnings, Stock Slips on Outlook

Cisco Beats Earnings but Stock Slides on Modest Forward Guidance

Cisco

Business Honor
21 February, 2026

Networking revenue surges 21 percent as AI infrastructure orders accelerate despite investor disappointment.

Cisco posted Q2 results that strongly beat expectations, but guidance for Q3 disappointed the market, and shares fell by 7% after hours. Cisco had adjusted EPS of $1.04 vs. the consensus of $1.02. Tony's revenue came in at $15.35 billion vs. $15.12 billion, beating analyst expectations. Business revenue increased about 10% from the prior year ($14B), while net income rose from $2.43 billion to $3.18 billion (80 cents/share to 61 cents/share).

Guidance for its current quarter was not well received and disappointed the market with what were weak upside surprises; adjusted EPS guidance between $1.02-$1.04 and revenue guidance of $15.4B-$15.6B matched analyst expectations but had very limited upside. LSEG Consensus expected $1.03 EPS and $15.18B in revenue. Core networking revenue continued to outperform with 21% growth at $8.3B, which was higher than the $7.9B included in StreetAccount. AI infrastructure orders from hyperscalers have been strong at $2.1B during the quarter, indicating accelerating demand from cloud providers investing heavily in AI capacity.

CEO Chuck Robbins pointed out how strategic partners help grow Cisco’s AI efforts. He discussed the company’s announcement of providing products for a Saudi Arabian AI infrastructure project with Advanced Micro Devices and the recently introduced networking switch featuring a chip from Nvidia. He also mentioned that revenue from neoclouds (younger cloud providers that compete with older providers like Amazon and Microsoft) will begin to increase during the latter half of fiscal year 2026, and will be evident by fiscal year 2027.

He characterized sovereign AI as “a pure upside” from current guidance. Cisco's fiscal year 2026 targets adjusted EPS of $4.13-$4.17 and revenue of $61.2-$61.7 billion — representing approximately 8.5% growth in fiscal year 2026. The consensus forecast from LSEG is for Cisco to achieve an adjusted EPS of $4.12 and revenue of $60.74 billion.