Key Highlights

● Quarterly Revenue rose by just under a fifth, with networking orders up 40%.

● Record annual revenue was about $63 billion, up 12%.

● Management expects AI infrastructure revenue near $7.5 billion next year.

● Two acquisitions closed and a quarterly Dividend of $0.42 was declared.

Cisco Systems (NASDAQ:CSCO) closed its latest fiscal year with a set of results that put networking gear for artificial intelligence data centers at the center of the story. In the report covering the fourth quarter and full year ended in late July, the company described a record year, with quarterly revenue rising by just under a fifth and product orders growing faster still.

The company said orders from large cloud operators for AI infrastructure reached roughly $4 billion in the quarter and a little over $9 billion for the year. Management also said it delivered about $4 billion of AI infrastructure revenue during the year and expects that figure to climb to about $7.5 billion in the new fiscal year.

Chair and chief executive Chuck Robbins said Cisco is well positioned to support customers however or wherever they decide to deploy AI. With the next Quarterly Report approaching on the company's usual calendar, the August release remains the most recent full set of figures and guidance that readers can compare against.

What did Cisco report for the fourth quarter?

Cisco reported quarterly revenue of about $17.33 billion, an increase of 18% from the same period a year earlier. Product revenue grew by about a quarter, while services revenue was roughly flat, so nearly all of the growth came from hardware and the software bundled with it.

Net Earnings on a standard accounting basis rose by about half, and on an adjusted basis by close to a quarter. Earnings Per Share on the adjusted basis were a little over $1.20. Operating Cash Flow for the quarter climbed by more than a quarter to about $5.5 billion.

The company also highlighted what its chief financial officer, Mark Patterson, called the highest productivity metrics in 30 years, a reference to how much revenue and earnings the company generated relative to its expense base. Operating expenses on an adjusted basis grew far more slowly than revenue.

How did the full fiscal year compare?

For the full year, Cisco reported revenue of about $63 billion, up 12%. Product revenue rose 16% while services were flat. By region, the Americas, Europe and the Asia Pacific group all grew, with the Americas and Europe each expanding at about the same pace as the company overall.

Adjusted earnings per share for the year were a little over $4.30, up 14%, while the standard accounting figure rose faster at 31%. Operating cash flow for the year was roughly unchanged at about $14 billion, which the company attributed in part to timing and working-capital movements.

Taken together, the figures show a company whose growth accelerated through the year. The fourth quarter grew faster than the full-year average, which is the pattern management pointed to when explaining why its guidance for the new year is higher than the year just ended.

Where did the growth come from by product category?

Networking was the clear leader. Quarterly networking revenue rose by more than a quarter to nearly $10 billion, and for the full year it grew by about a fifth to more than $34 billion. Cisco said networking orders rose 40%, the eighth consecutive quarter of double-digit growth.

Security revenue grew in the low double digits for the quarter but only slightly for the year. Collaboration grew by about an eighth in the quarter, and observability, the category that includes monitoring tools, grew in the mid single digits. Observability remains the smallest of the four reported groups.

The mix matters because switches, routers and optical products are the parts most closely tied to Data Center build-outs, while security and collaboration are subscription-heavy and tend to move more steadily. A larger networking share changes the shape of the whole company's results.

What is the AI infrastructure story?

Cisco has spent the past two years supplying switching, silicon and optical products to the largest cloud operators, which build vast clusters of accelerators that need fast internal networks. The company said hyperscaler AI infrastructure orders were about $4 billion in the fourth quarter alone.

Excluding those large customers, total product orders still grew by about a quarter, which management used to argue that Demand is broader than a few giant customers for equipment. Enterprise customers, service providers and public-sector organizations are all upgrading networks to handle heavier workloads.

The company said it delivered roughly $4 billion of AI infrastructure revenue in the year and expects about $7.5 billion in the new year. Those are management expectations rather than reported results, and they depend on customer timing, component Supply and the pace of data center construction.

What guidance did Cisco give for the first quarter and the new year?

For the first quarter of the new fiscal year, Cisco guided to revenue between $18 billion and $18.2 billion, with an adjusted gross Margin in the mid-sixties and an adjusted Operating Margin of about 36%. Adjusted earnings per share were guided to a range of a little over $1.30.

For the full new year, the company guided to revenue between roughly $72 billion and $73.5 billion, with adjusted earnings per share just above $5. The standard accounting earnings per share guidance was about a dollar lower, reflecting acquisition-related and restructuring items.

Guidance ranges are management's own estimates and can change. They are useful mainly as a yardstick: when the next report arrives, readers can compare actual results with these ranges to see whether the company met, exceeded or fell short of its own plan.

How did margins move?

Gross margin on the standard accounting basis improved to about 64% from just over 63% a year earlier, while the adjusted gross margin fell to about 66% from just over 68%. Cisco's report showed product margins at the lower end of that range, since networking hardware for large cloud customers tends to carry thinner margins than software.

Adjusted operating margin was close to 36%, an improvement from a year earlier even as gross margin slipped. That outcome came from restrained spending: adjusted operating expenses grew at a low single-digit pace compared with revenue growth near a fifth.

The tension between a richer hardware mix and a stable overall margin is one of the details management is likely to be asked about. The company's quarterly guidance for adjusted gross margin gives a reference point for the coming report.

What did Cisco say about its Balance Sheet and dividend?

Cisco ended the year with cash and short-term balances of about $16 billion, slightly lower than at the end of the third quarter but a little higher than a year earlier. Remaining performance obligations, which measure contracted work not yet recognized as revenue, were about $47 billion, up 7%.

The board declared a quarterly Cash Dividend of $0.42 per share, with a Record Date in early October and payment later that month. The company noted that later dividends remain subject to board approval. During the quarter it paid out about $1.67 billion in dividends and spent a further amount retiring shares, leaving a remaining authorization of about $8 billion.

Deferred revenue was close to $30 billion, up 3%. These contracted balances matter to a company with a large subscription and services component, because they provide visibility into revenue that has been billed or committed but not yet recognized.

Which acquisitions closed during the quarter?

Cisco said two acquisitions closed in the quarter. Galileo Technologies is an observability company, and Astrix Security is focused on non-human identity security, the discipline of protecting the service accounts and software credentials that machines use to talk to one another.

Both fit themes the company has stressed in recent product launches. Earlier this year it introduced an agentic platform for operating and defending critical information technology infrastructure, and it has marketed security tools designed for the growth of AI agents inside corporate networks.

Acquisitions of this size are typically small relative to the company's revenue, so their near-term effect on results is limited. Their importance is more about filling product gaps in observability and identity at a time when customers are connecting more automated software to sensitive systems.

How does Cisco's performance fit the wider technology sector?

Networking suppliers, chip designers and cloud operators are all tied together by AI spending. Readers following Technology Stocks will recognize that a boom in data center construction lifts different companies at different times, with chip and server makers often reporting first and network equipment makers following.

Cisco's shares trade on the Nasdaq exchange, and the company is often grouped with other large names in the Nasdaq 100 when market commentators compare technology performance. Its dividend and long operating history also make it a different kind of technology company from newer, faster-growing software and chip names.

Rivals in networking and optics, as well as white-box suppliers that supply directly to cloud operators, compete for the same orders. The extent to which Cisco can keep winning them is one of the central questions its management addresses on each earnings call.

What should readers look for in the next report?

The first item is whether quarterly revenue lands within the guided range. A second is whether AI infrastructure orders from large cloud operators keep pace with the $4 billion reported in the latest quarter, and whether orders outside that group keep growing.

Margin commentary will also draw attention, along with any update to the expected AI infrastructure revenue for the year. Changes in memory and component costs, which have affected hardware makers broadly, could influence margin guidance.

How did the regions perform?

The Americas contributed the largest share of revenue, at about $10.33 billion in the quarter, an increase of 18%. Europe, the Middle East and Africa produced about $4.33 billion, up 19%, while the Asia Pacific, Japan and China group produced about $2.5 billion, up 14%.

The spread between the regions was narrow for a company of this scale, which indicates that the demand for network upgrades was not confined to one market. Large cloud operators are concentrated in North America, but sovereign AI projects and enterprise refreshes are spreading elsewhere.

For the full year, the Americas rose 12%, Europe 12% and the Asia Pacific group 9%. That slower pace in Asia is a reminder that regional differences persist, and the company's commentary on export rules and local competition is worth reading in the full transcript.

What does the contracted Backlog reveal?

Remaining performance obligations of about $47 billion represent contracted revenue that the company has yet to recognize. Product-related obligations rose by 9% and service-related ones by 6%, so the backlog is growing but at a slower pace than quarterly revenue.

A backlog that grows more slowly than sales can mean that a rising share of revenue comes from products that ship soon after orders, such as switches for data centers, rather than multi-year software subscriptions. It can also reflect timing differences in how large contracts are booked.

Deferred revenue, which is the billed portion of that backlog, rose modestly. Taken together with the order growth reported for networking, the figures point to a Business in which near-term hardware demand is the main driver of the growth rate.

What did earlier product announcements add to the picture?

During the year Cisco introduced an agentic platform for operating and defending critical information technology infrastructure, a product line meant to let automated software agents help run networks and respond to security events under human supervision. Trade press covered the launch as part of the company's annual customer event.

The company has also launched new silicon, switching systems and optics for AI clusters, and a revamped partner program. Those announcements matter because most of Cisco's sales move through channel partners, whose incentives affect how quickly new products reach customers.

None of those launches is separately quantified in the earnings release. Their effect will appear gradually in order growth, software subscription counts and the share of revenue that recurs.

The company's own materials state that product plans can change and that statements about expected demand carry uncertainty. Readers comparing announcements with reported numbers should therefore wait for the filed quarterly documents, which contain the fuller detail and the formal discussion of known uncertainties facing the business.