Cisco stock rising after beating Q1 estimates
What’s happening:-
Shares of Cisco Systems rose sharply in after-hours trading on Wednesday, following the release of the company’s results for the first quarter of fiscal 2026.
What happened:-
The networking equipment maker posted better-than-expected sales and earnings for the latest quarter.Cisco also raised its guidance for fiscal 2026, with the company continuing to benefit from robust demand for its networking equipment.
How were the results:-
The San Jose, California-based company reported single-digit sales growth for its first quarter. Revenues rose 8% year-over-year to $14.88 billion, topping consensus estimates of $14.77 billion. Adjusted earnings came in at $1.00 per share, beating Wall Street expectations of 98 cents per share.
Cisco shares rise
Why it matters:-
Cisco said it is seeing strong demand for its networking equipment due to datacentre expansion amid the ongoing AI boom.Revenue growth in the latest quarter was driven by a 10% surge in product sales, while services revenue grew by 2%.Product revenues were driven by 15% growth in Networking and 6% in Observability. Security product revenues contracted by 2%, while Collaboration revenues declined 3%.Cisco reported AI infrastructure orders from hyperscalers at $1.3 billion for the recent quarter. CEO Chuck Robbins said these revenues could reach $3 billion in fiscal 2026. The company secured AI orders of over $2 billion, mostly all from hyperscalers, during fiscal 2025.The company’s board declared a quarterly dividend of 41 cents per share, payable on January 21.“We had a solid start to fiscal 2026, and Cisco is on track to deliver our strongest year yet,” Robbins said.Management guided to revenues of $15-$15.2 billion for the fiscal second quarter, higher than market estimates of $14.63 billion. The company projected adjusted earnings of $1.01-$1.03 per share, above Street estimates of 99 cents per share.Cisco raised its revenue guidance for fiscal 2026 to $60.2-$61 billion, up its previous outlook of $59-$60 billion. The company also lifted its projection for adjusted earnings to $4.08-$4.14 per share, from the previous $4.00-$4.06 per share.
Cisco shares rise
How shares responded:-
Cisco’s shares surged 7.5% to $79.48 in the extended trading hours on Wednesday following the release of quarterly results. The stock has added around 20% over the past six months.
Cisco shares
What to watch:-
Investors will continue monitoring the AI boom, which is expected to result in continued strong demand for Cisco’s networking equipment.