Slides
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Q1 Fiscal Year 2026 Conference Call November 12, 2025
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© 2025 Cisco and/or its affiliates. All rights reserved. Forward-Looking Statements This presentation contains projections and other forward-looking statements regarding future events or the future financial performance of Cisco, including future operating results. These projections and statements are only predictions. Actual events or results may differ materially from those in the projections or other forward-looking statements. Please see Cisco’s filings with the SEC, including its most recent filing on Form 10-K, for a discussion of important risk factors that could cause actual events or results to differ materially from those in the projections or other forward-looking statements. GAAP Reconciliation During this presentation references to financial measures of Cisco will include references to non-GAAP financial measures. Cisco provides a reconciliation between GAAP and non-GAAP financial information on the Cisco Investor Relations website https://investor.cisco.com/financial-information/financial-results/default.aspx
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Business Momentum & Key Trends
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© 2025 Cisco and/or its affiliates. All rights reserved. Q1 FY 2026 Key Takeaways Accelerating AI Momentum $1.3B AI orders taken in Q1 from hyperscalers; approx. $3B revenues expected in FY26 $200M+ of AI orders taken in Q1 from neocloud, sovereign, and enterprise customers Accelerating Campus Refresh All campus networking technologies saw accelerated order growth in Q1 All next-gen solutions ramping faster than prior product launches Strong Financial Performance Q1 revenue, operating margin, and EPS exceeded the high end of our guidance ranges Raising FY26 guidance on robust outlook
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© 2025 Cisco and/or its affiliates. All rights reserved. Q1 FY 2026 Summary • Strong top and bottom-line growth, strong profitability, and continued operating leverage • $14.9B in revenue, up 8% y/y, Non-GAAP EPS of $1.00 up 10% y/y, above high end of guide and demonstrating operating leverage • Non-GAAP gross margin of 68.1%, above mid point of guide; Non-GAAP operating margin of 34.4%, above high end of guide • Strong demand for Cisco’s technologies as we provide the critical infrastructure for the AI era • Product orders up 13% y/y with growth across all geographies and customer markets • $1.3B of AI infrastructure orders taken from hyperscale customers in Q1, balanced between Cisco Silicon One systems and optics • Networking product orders up in the high teens, marking the fifth consecutive quarter of double-digit growth • Growing pipeline of AI opportunities of more than $2B across neocloud, sovereign and enterprise customers • Major multi-year, multi-billion-dollar campus networking refresh cycle underway • All technologies within campus networking (switching, routing, wireless and IoT) saw accelerated growth in Q1 • All next-generation solutions, including smart switches, secure routers and WiFi 7 products, ramping faster than prior product launches • Pre-Cat9K install base in the tens of billions of dollars, nearing end of support and requiring upgrades • Powerful innovation for AI use cases spanning from core to edge • New 8K router powered by Cisco Silicon One P200 chip, offering unmatched power efficiency, programmability and scalability • N9100 data center switch based on NVIDIA Spectrum-X silicon providing operational consistency and flexibility to cloud customers • Cisco Data Fabric, using Splunk to operationalize machine data, and Cisco Unified Edge enabling real-time inferencing at the edge • Continued growth in recurring metrics, supporting future performance • Total RPO up 7% y/y to $42.9B, with product RPO up 10% y/y; Total ARR up 5% y/y to $31.4B, with product ARR up 7% y/y • Commitment to returning capital to shareholders • Returned $3.6B in Q1, representing 125% of free cash flow, including $2.0B of shares repurchased
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© 2025 Cisco and/or its affiliates. All rights reserved. Cisco Accelerating AI Adoption Hyperscaler AI Infrastructure Accelerated momentum with four new design wins at four different hyperscalers in the quarter. Results are demonstrating continued execution and innovation as hyperscalers ramp back-end and front-end networking infrastructure for AI. Orders: • $1.3B of AI orders taken in Q1 FY26, reflecting a significant acceleration in growth and marking the fifth consecutive quarter of robust order growth with hyperscalers (now lapping triple-digit compares versus Q1 FY25). • Seeing balanced growth with four hyperscalers each growing triple-digits y/y. • As expected, the product mix of these orders was balanced across Silicon One based networking systems and optics. • In our optics business, Acacia results were very strong in Q1, reflecting the transition to coherent pluggables which offer significant cost and power savings. Platforms: Series 8K, Silicon One, and Optics & Optical Outlook: Continued momentum with hyperscalers forecasted, expecting $3B+ of AI infrastructure revenues in FY26. Hyperscale demand for optics accelerating at a faster rate than Q4FY25. AI Connectivity Software Platforms: Fusing AI Into Our Products Agentic AI capabilities are being rolled out across the product portfolio, including new innovations like AI Canvas Services: Leveraging AI to Maximize Customer Value and Boost Productivity Multiple AI Agents being deployed across Adoption, Renewals and Customer Support, enabling our teams and creating more value for customers Accelerated momentum company-wide for AI networking solutions, with neocloud, sovereign, and enterprise customers starting their ramp and results and pipeline highlighting significant opportunities ahead. Orders: • Company-wide networking product order growth accelerated to high teens in Q1 FY26, marking the fifth consecutive quarter of double-digit order growth, indicating customers are bolstering their networks ahead of incoming AI workloads. • Campus networking solutions order growth accelerated in Q1, with all next- gen solutions ramping faster than in prior product launches (Cat-9K orders also grew in Q1 while campus Smart Switch orders ramped sharply). • DC Switching orders continued to grow, lapping double-digit compares versus Q1 FY25. • In Q1, Cisco took AI orders of $200M+ from neocloud, sovereign and enterprise customers (separate from the $1.3B taken with hyperscalers). Platforms: Switching, Routing, Wireless, and Security (including Splunk) Outlook: Growing pipeline of $2B+ in FY26 with neocloud, sovereign, and enterprise customers.
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© 2025 Cisco and/or its affiliates. All rights reserved. A New Level of Inferencing Demand on Secure Networking As Agentic AI workloads rapidly expand, with AI agents being trained in data centers, deployed across application environments, and engaging continuously with end-users, network traffic will not only exceed today’s chatbot levels, but agents will keep it consistently high through their ongoing interactions. This fundamental shift will require networks to be upgraded, with security embedded deeply into the fabric of the network to safeguard every interaction. Cisco is uniquely positioned, with technology solutions spanning smart switches, advanced security, silicon, and software, to provide the critical infrastructure needed for the AI era. This graphic is for illustrative purposes only. It is not based on customer network data but depicts how Cisco believes netwo rk traffic levels will increase as inference demand further increases and proliferates within enterprise and end-user networking environments. High Low Inference Demand (Network Traffic) Chatbot Interaction Model Agentic AI Interaction Model
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© 2025 Cisco and/or its affiliates. All rights reserved. Cisco Silicon One - Unifying, Securing, and Scaling Networks Enterprise Switch Campus & Data Center Services Router Provider Edge & Enterprise Core Integrated Access Campus & Provider Access Scale-Out and Scale-Up AI Cluster & Cloud Scale-Across WAN & AI Inter-Data Center Cisco 8223-64EH 51.2Tbps. 3RU, Fixed system Silicon One Highlights P200 announced in Q1 FY26 for AI scale-across Five product lines moved to production in FY25 AI momentum ramping: systems, whitebox and silicon-direct Expect to ship 1-millionth Silicon One chip by Q2 FY26 Comprehensive Cisco-wide adoption of Silicon One architecture for high performance networking systems by FY29 Data Center Interconnect / AI “Scale-Across” Bandwidth
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Financial Overview
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© 2025 Cisco and/or its affiliates. All rights reserved. Q1 FY 2026 Revenue and Total Gross Margin Revenue Total Gross Margin % Q1 FY’25 Q4 FY’25 Q1 FY’26 Q1 FY’25 Q4 FY’25 Q1 FY’26 Americas $8,252 $8,822 $8,989 69.6% 68.0% 66.8% EMEA 3,588 3,645 3,784 70.3% 71.7% 71.9% APJC 2,001 2,206 2,111 66.4% 64.2% 66.9% Geographic Total $13,841 $14,673 $14,883 69.3% 68.4% 68.1% Amounts may not sum and percentages may not recalculate due to rounding. $M (except percentages)
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© 2025 Cisco and/or its affiliates. All rights reserved. Q1 FY 2026 Revenue Highlights Category $M Y/Y Networking $7,768 15% Security 1,980 (2%) Collaboration 1,055 (3%) Observability 274 6% Services 3,806 2% Total Cisco $14,883 8% Amounts may not sum and percentages may not recalculate due to rounding.
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© 2025 Cisco and/or its affiliates. All rights reserved. Q1 FY 2026 RPO and ARR Q1 FY 2025 Q4 FY 2025 Q1 FY 2026 Remaining Performance Obligations (RPO): $40.0 $43.5 $42.9 Year/Year Change 15% 6% 7% Product RPO (1) $19.9 $21.6 $21.9 Year/Year Change 24% 8% 10% Services RPO $20.1 $22.0 $21.0 Year/Year Change 7% 5% 4% Annualized Recurring Revenue (ARR) (2): $29.9 $31.1 $31.4 Year/Year Change 22% 5% 5% Product ARR $16.1 $17.0 $17.3 Year/Year Change 42% 8% 7% Services ARR $13.8 $14.1 $14.1 Year/Year Change 4% 2% 2% $B (except percentages) Amounts may not sum and percentages may not recalculate due to rounding. (1) As of the end of Q1 FY 2026, Long Term Product RPO was $11.8B, up 13% year over year. (2) Annualized Recurring Revenue (“ARR”) represents the annualized revenue run-rate of active subscriptions, term licenses, operating leases and maintenance contracts at the end of a reporting period, net of rebates to customers and partners as well as certain other revenue adjustments. Includes both revenue recognized ratably as well as upfront on an annualized basis. ARR should be viewed independently of revenue, deferred revenue and remaining performance obligation as ARR is a management operational performance metric and is not intended as a substitute for any of these items.
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© 2025 Cisco and/or its affiliates. All rights reserved. Q1 FY 2026 Product Orders Customer Market Y/Y Enterprise 4% Public Sector 12% Service Provider & Cloud 45% Total Product Orders: 13% Y/Y Geographic Segment Y/Y Americas 16% EMEA 8% APJC 13%
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© 2025 Cisco and/or its affiliates. All rights reserved. Q1 FY 2026 GAAP Income Statement Highlights Q1 FY 2025 Q4 FY 2025 Q1 FY 2026 Revenue $13,841 $14,673 $14,883 Year/Year Change Product Services (6%) $10,114 $3,727 8% $10,886 $3,787 8% $11,077 $3,806 Gross Margin 65.9% 63.2% 65.5% Product Gross Margin Services Gross Margin 65.1% 68.0% 61.5% 68.3% 64.5% 68.4% Operating Expenses $6,763 $6,193 $6,382 OPEX (% of Revenue) Operating Income (% of Revenue) 48.9% 17.0% 42.2% 21.0% 42.9% 22.6% Net Income $2,711 $2,550 $2,860 Year/Year Change (25%) 18% 5% Earnings per Share (diluted) $0.68 $0.64 $0.72 Year/Year Change (24%) 19% 6% $M (except per-share amounts and percentages)
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© 2025 Cisco and/or its affiliates. All rights reserved. Q1 FY 2026 Non-GAAP Income Statement Highlights Q1 FY 2025 Q4 FY 2025 Q1 FY 2026 Revenue $13,841 $14,673 $14,883 Year/Year Change Product Services (6%) $10,114 $3,727 8% $10,886 $3,787 8% $11,077 $3,806 Gross Margin 69.3% 68.4% 68.1% Product Gross Margin Services Gross Margin 68.9% 70.3% 67.5% 70.8% 67.2% 70.7% Operating Expenses $4,869 $5,002 $5,017 OPEX (% of Revenue) Operating Income (% of Revenue) 35.2% 34.1% 34.1% 34.3% 33.7% 34.4% Net Income $3,671 $3,951 $4,011 Year/Year Change (19%) 12% 9% Earnings per Share (diluted) $0.91 $0.99 $1.00 Year/Year Change (18%) 14% 10% $M (except per-share amounts and percentages)
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© 2025 Cisco and/or its affiliates. All rights reserved. Q1 FY 2026 Key Financial Measures Q1 FY 2025 Q4 FY 2025 Q1 FY 2026 Cash, Cash Equivalents and Investments $18,671 $16,110 $15,736 Operating Cash Flow $3,661 $4,234 $3,212 Inventory $3,143 $3,164 $3,395 Inventory Purchase Commitments $5,321 $7,599 $8,321 Deferred Revenue: $27,502 $28,779 $27,969 Product Deferred Revenue $12,941 $13,490 $13,252 Services Deferred Revenue $14,561 $15,289 $14,717 Software Revenue $5,497 $5,593 $5,670 Subscription Revenue: $7,844 $7,904 $8,000 Product Subscription Revenue $4,419 $4,449 $4,500 Services Subscription Revenue $3,425 $3,455 $3,500 $M
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© 2025 Cisco and/or its affiliates. All rights reserved. Q1 FY 2026 Capital Allocation Total Capital Allocation Q1 FY 2026 Share Repurchases ($M) $2,001 Dividends Paid ($M) 1,617 Total ($M) $3,618 Dividend per Share $0.41 Share Repurchases Q1 FY 2026 Amount Purchased ($M) $2,001 Number of Shares (M) 29 Avg. Price per Share $68.28 Approximately $12.2B remaining authorized funds in repurchase program as of the end of Q1 FY 2026.
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Guidance
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Key Q2 & FY 2026 Guidance Assumptions Current tariffs and exemptions remain in place through FY26. These include: • China at 20% (10% fentanyl; 10% reciprocal) partially offset by an exemption for semiconductors and certain electronic components • Mexico at 25% and Canada at 35% for the components and products that are not eligible for the current USMCA exemptions • Other countries reverted to country specific reciprocal rates, but largely offset by an exemption for semiconductors and certain electronic components • Tariffs on copper, steel and aluminum, and retaliatory tariffs (small impact)
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© 2025 Cisco and/or its affiliates. All rights reserved. Guidance for Q2 FY 2026 Cisco expects to achieve the following results for the second quarter of fiscal 2026: • Margin and EPS guidance includes the estimated impact of tariffs based on current trade policy. • Cisco estimates that GAAP EPS will be $0.69 to $0.74 for the second quarter of fiscal 2026. • Q2 FY 2026 guidance assumes an effective tax provision rate of approximately 16% for GAAP and approximately 19% for non-GAAP results. • A reconciliation between the Guidance for Q2 FY 2026 on a GAAP and non-GAAP basis is provided in the slide entitled "GAAP to Non-GAAP Guidance for Q2 FY 2026" under the Supplemental Materials. Q2 FY 2026 Guidance Revenue $15.0B – $15.2B Non-GAAP Gross Margin 67.5% – 68.5% Non-GAAP Operating Margin 33.5% – 34.5% Non-GAAP EPS $1.01 – $1.03
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© 2025 Cisco and/or its affiliates. All rights reserved. Guidance for FY 2026 Cisco expects to achieve the following results for fiscal 2026: • Margin and EPS guidance includes the estimated impact of tariffs based on current trade policy. • Cisco estimates that GAAP EPS will be $2.87 to $2.98 for fiscal 2026. • FY 2026 guidance assumes an effective tax provision rate of approximately 17% for GAAP and approximately 19% for non-GAAP results. • A reconciliation between the Guidance for FY 2026 on a GAAP and non-GAAP basis is provided in the slide entitled "GAAP to Non-GAAP Guidance for FY 2026" under the Supplemental Materials. FY 2026 Guidance Revenue $60.2B – $61.0B Non-GAAP EPS $4.08 – $4.14
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Q&A
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© 2025 Cisco and/or its affiliates. All rights reserved. Forward-Looking Statements These presentation slides and the related conference call 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 the widespread demand for our technologies highlighting the critical role of secure networking and the value of our portfolio as customers move quickly to unlock the potential of AI, our campus refresh opportunity, and our continued focus on profitable growth, capital returns, and strategic investments to capture the significant opportunities ahead) and the future financial performance of Cisco (including the guidance for Q2 FY 2026 and full year FY 2026) that involve risks and uncertainties, such as the actual impact of tariffs on our guidance for Q2 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 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 service 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 report on Form10-K filed on September 3, 2025. The financial information contained in these presentation slides and the related conference call should be read in conjunction with the consolidated financial statements and notes thereto included in Cisco’s most recent report on Form 10-K as it may be amended from time to time. Cisco’s results of operations for the three months ended October 25, 2025 are not necessarily indicative of Cisco’s operating results for any future periods. Any projections in these presentation slides and the related conference call 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 these presentation slides and the related conference call.
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Supplemental Materials
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© 2025 Cisco and/or its affiliates. All rights reserved. GAAP to Non-GAAP Guidance for Q2 FY 2026 Q2 FY 2026 Gross margin Operating margin Earnings per share (1) GAAP 65% - 66% 22.5% - 23.5% $0.69 - $0.74 Estimated adjustments for: Share-based compensation expense 1.0% 7.0% $0.18 - $0.19 Amortization of acquisition-related intangible assets and other acquisition/divestiture-related costs 1.5% 3.5% $0.11 - $0.12 Restructuring and other charges ─ 0.5% $0.00 - $0.01 Non-GAAP 67.5% - 68.5% 33.5% - 34.5% $1.01 - $1.03 (1) Estimated adjustments to GAAP earnings per share are shown after income tax effects. 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.
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© 2025 Cisco and/or its affiliates. All rights reserved. GAAP to Non-GAAP Guidance for FY 2026 FY 2026 Earnings per share (1) GAAP $2.87 - $2.98 Estimated adjustments for: Share-based compensation expense $0.75 - $0.77 Amortization of acquisition-related intangible assets and other acquisition/divestiture- related costs $0.43 - $0.45 Restructuring and other charges $0.03 - $0.04 (Gains) and losses on investments ($0.03) Significant tax matters ($0.02) Non-GAAP $4.08 - $4.14 (1) Estimated adjustments to GAAP earnings per share are shown after income tax effects. 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.