Cisco Systems Inc. has commenced its fiscal year 2026 with a robust first-quarter performance, exceeding market predictions for both revenue and earnings. This strong showing is largely attributed to a broad-based demand for its innovative technologies, particularly in secure networking, and its pivotal role in enabling the expanding artificial intelligence ecosystem. The company's optimistic forecast for the remainder of the fiscal year further underscores its solid market position and strategic growth initiatives.
For the first fiscal quarter of 2026, Cisco reported a total revenue of $14.88 billion, comfortably surpassing the analyst consensus of $14.77 billion. The company's adjusted earnings per share reached $1.00, also outperforming the estimated 98 cents per share. This financial triumph represents an 8% increase in overall revenue compared to the previous year, driven primarily by a 10% surge in product revenue, while services revenue saw a modest 2% rise. A significant contributor to product revenue growth was the networking sector, which expanded by an impressive 15%, alongside a 6% increase in observability. However, security product revenue experienced a slight dip of 2%, and collaboration product revenue decreased by 3%.
Despite a 12% year-over-year decline in cash flow from operations, which stood at $3.2 billion, Cisco maintained a healthy financial position, concluding the quarter with $15.7 billion in cash, cash equivalents, and investments. CEO Chuck Robbins expressed satisfaction with the quarter's results, emphasizing that Cisco is poised for its most successful year yet. He highlighted the pervasive demand for the company's technologies, affirming the critical importance of secure networking and the value of Cisco's diverse portfolio in leveraging the potential of AI.
In a move reflecting its commitment to shareholder returns, Cisco's board of directors declared a quarterly dividend of 41 cents per share, slated for payment on January 21, 2026, to shareholders of record as of January 2, 2026. Furthermore, the company engaged in share repurchases totaling approximately 29 million shares for $2 billion during the quarter, with $12.2 billion remaining under its current share repurchase authorization.
Looking ahead, Cisco has provided an encouraging outlook for the second quarter, projecting revenue between $15 billion and $15.2 billion, exceeding analyst expectations of $14.63 billion. Adjusted earnings for the upcoming quarter are anticipated to be in the range of $1.01 to $1.03 per share, surpassing the estimated 99 cents per share. The company has also revised its fiscal year 2026 guidance upward, now forecasting full-year revenue of $60.2 billion to $61 billion, an increase from its previous guidance of $59 billion to $60 billion. Similarly, the full-year adjusted earnings guidance has been raised to $4.08 to $4.14 per share, up from the prior range of $4.00 to $4.06 per share, signaling strong confidence in its continued growth trajectory. Following these positive announcements, Cisco's shares experienced a significant boost, trading higher in after-hours activity.