Cisco Systems (CSCO) just gave investors a lot to be happy about. The networking giant reported fiscal third-quarter earnings after the bell Wednesday that beat expectations on both the top and bottom lines, and the stock shot up more than 14% in after-hours trading.
Here's the quick math: Revenue came in at $15.84 billion, ahead of the $15.56 billion analysts were looking for. Adjusted earnings per share were $1.06, versus estimates of $1.03. Not bad for a company that some had written off as a boring old networking hardware play.
Total revenue grew 12% year-over-year, with product revenue up 17% and services revenue down 1%. The star of the show was Networking, which jumped 25%. Observability grew 3%, while Collaboration dipped 1% and Security was flat.
“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.”
The company generated $3.8 billion in cash flow from operations during the quarter, down 7% from a year ago. It ended the period with $16.6 billion in cash, cash equivalents and investments.
But the real fireworks came in the guidance. Cisco expects fiscal fourth-quarter revenue between $16.7 billion and $16.9 billion, well above the $15.82 billion consensus. Adjusted EPS for Q4 is seen at $1.16 to $1.18, versus estimates of $1.07.
For the full year, Cisco raised its revenue guidance from a prior range of $61.2 billion to $61.7 billion to a new range of $62.8 billion to $63 billion. Analysts had been expecting $61.6 billion. Adjusted EPS guidance was lifted to $4.27-$4.29, up from $4.13-$4.17 and ahead of the $4.16 consensus.
Perhaps most telling: Cisco said it has already received $5.3 billion of orders year-to-date and now expects total orders of $9 billion in fiscal 2026, up from prior guidance of $5 billion. That's a massive upgrade and suggests customers are betting big on Cisco's AI networking story.
Cisco shares were up 14.32% in after-hours trading Wednesday, trading at $116.46 at the time of publication. The stock is approaching key resistance levels as investors reassess the company's growth trajectory in the AI era.
Cisco's management team will discuss the quarter further on an earnings call with investors and analysts at 4:30 p.m. ET.
