Cisco's stock drops despite earnings, revenue beat
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Cisco reported Q4 adjusted EPS of $1.22 versus the $1.17 expected and revenue of $17.25 billion versus $16.82 billion expected, per LSEG, and guided current-quarter revenue to $18 billion–$18.2 billion — above the $16.8 billion consensus.
- Cisco shares dropped in extended trading despite the beats and the raised outlook, after entering the report up more than 60% for the quarter and roughly 8% for the month on AI-optimism positioning.
- Hyperscalers placed $4 billion of infrastructure orders with Cisco in the quarter, lifting fiscal-year AI infrastructure orders to $9.3 billion, and Cisco expects hyperscaler revenue to nearly double to $7.5 billion in fiscal 2027 from about $4 billion in fiscal 2026.
- Cisco's total revenue rose 18% year-over-year to $17.25 billion from $14.7 billion, while net income climbed 51% to $3.9 billion ($0.97 per share) from $2.6 billion ($0.64 per share) a year earlier.
- Cisco also issued current-quarter earnings guidance and full-year guidance that exceeded expectations, according to the report, reinforcing management's pitch that AI infrastructure is starting to flow through the networking business.
Why it matters: Cisco delivered the numbers — a clear EPS, revenue, and guidance beat alongside 18% top-line growth and accelerating hyperscaler AI orders — but the stock still sold off because it had run up more than 60% in the quarter heading into the print. For investors, the data shows Cisco is converting AI capex into real backlog ($9.3 billion in fiscal-year infrastructure orders from the largest cloud buyers), but expectations had already priced that narrative in.
Ask SkimNews
