Cisco Systems posted first-quarter results that surpassed Wall Street expectations and raised its fiscal 2027 outlook, citing robust demand for networking equipment tied to artificial intelligence infrastructure. The company delivered its strongest revenue and adjusted earnings growth rates in more than 15 years during the period ended October 24, 2026.

Revenue reached $18.5 billion, a 24 percent increase from $14.88 billion a year earlier and ahead of the roughly $18.1 billion consensus. Adjusted earnings per share came in at $1.40, exceeding the $1.33 estimate. On a GAAP basis, net income rose to $4.6 billion, or $1.14 per share, from $2.9 billion, or 72 cents, in the prior-year quarter.

AI Infrastructure Outlook Raised by $1.5 Billion

Cisco increased its fiscal 2027 target for AI infrastructure revenue from hyperscaler customers to $9 billion, up from the $7.5 billion forecast issued in August. The new figure is more than double the approximately $4 billion generated in fiscal 2026. Management attributed the increase to continued customer demand and improved visibility into the year.

Product revenue advanced 32 percent, while networking revenue jumped 43 percent to about $11.1 billion and accounted for roughly 60 percent of total sales. Services revenue rose 1 percent. Remaining performance obligations stood at $46.2 billion at quarter-end. Operating cash flow climbed 36 percent to $4.4 billion, and the company exited the period with $15.8 billion in cash, cash equivalents and investments.

Total product orders grew 21 percent year over year. Networking product orders increased 28 percent. The company secured three new AI design wins in the quarter, bringing the total to 18 over the past five quarters.

Full-Year and Second-Quarter Guidance Raised

Cisco raised its fiscal 2027 revenue guidance to a range of $74.8 billion to $75.8 billion, up from the prior range of $72.2 billion to $73.4 billion. Adjusted earnings guidance moved higher to $5.47 to $5.53 per share from $5.05 to $5.11. Of the $2.5 billion increase in the revenue outlook, roughly $1.5 billion was linked to hyperscalers and $1 billion to the broader business.

For the second quarter, the company projected revenue of $18 billion to $18.2 billion and adjusted earnings of $1.34 to $1.36 per share. Both ranges sit above consensus estimates of about $17.88 billion to $17.89 billion in revenue and $1.23 in adjusted earnings.

Share Reaction and Margin Considerations

Shares gained about 1.85 percent in after-hours trading following the results, reaching approximately $103.90. In premarket trading the next session, the stock declined roughly 2 percent as attention turned to hardware margins. Adjusted gross margin declined 250 basis points to 65.6 percent, with management pointing to a higher hardware mix and memory costs as headwinds, partially offset by pricing actions and productivity gains.

Analyst commentary noted the 21 percent product order growth and potential for operating margin expansion toward 36 percent in fiscal 2027, while also flagging moderating orders outside hyperscalers, slower campus growth and tougher comparisons ahead.

Cisco returned $3.7 billion to shareholders through buybacks and dividends during the quarter and completed the acquisition of WideField Security. The board declared a quarterly dividend of $0.42 per share.