Cisco delivered the strongest growth it has seen in more than 15 years on Thursday, reporting record first-quarter revenue of $18.5 billion and raising its outlook for the full fiscal year, as demand for the networking gear that connects artificial intelligence data centers continued to climb.
The results, for the quarter ended October 24, 2026, came in ahead of Wall Street expectations. Revenue rose 24 percent from $14.9 billion a year earlier, topping the $18.14 billion average analyst estimate compiled by LSEG, according to Reuters. Net income on a GAAP basis rose 59 percent to $4.6 billion, or $1.14 per share, while non-GAAP earnings reached $1.40 per share, up 40 percent and above the $1.33 analysts had expected.
Networking was the engine of the quarter. Product revenue rose 32 percent overall, led by a 43 percent jump in networking revenue to about $11.1 billion. Security revenue grew 7 percent, collaboration rose 8 percent, and observability added 2 percent, while services revenue edged up 1 percent. Growth was broad geographically as well, with revenue up 28 percent in the Americas, 18 percent in Europe, the Middle East and Africa, and 21 percent in Asia Pacific, Japan and China.
The clearest sign of where the momentum is coming from was the company's artificial intelligence forecast. Cisco raised its expectation for AI infrastructure revenue from hyperscale customers to $9 billion for fiscal 2027, up from a previous expectation of $7.5 billion reported by Reuters, and more than double the total it recorded in fiscal 2026. In other words, the largest cloud operators are spending heavily not only on chips and servers, but also on the high-speed networks that tie thousands of those machines together.
"In Q1, we delivered the strongest revenue and non-GAAP earnings per share growth rates for Cisco in over 15 years," said Chuck Robbins, Cisco's chair and chief executive. He said organizations are turning to Cisco to help them scale, secure and optimize their environments for what he called the agentic AI era, and described the company as being in the very early stages of a multi-year networking supercycle.
Profitability improved alongside the top line. GAAP operating income rose 66 percent to $5.6 billion, for an operating margin of 30.2 percent, while non-GAAP operating margin reached a record 37.8 percent. Cash flow from operations rose 36 percent to $4.4 billion, and remaining performance obligations, a measure of contracted future revenue, grew 8 percent to $46.2 billion. Cisco returned $3.7 billion to shareholders during the quarter through dividends and share buybacks, and it declared a quarterly dividend of $0.42 per share, payable on January 20, 2027.
The strong quarter gave management room to raise guidance. Cisco now expects fiscal 2027 revenue of $74.8 billion to $75.8 billion, up from its previous range of $72.2 billion to $73.4 billion, with non-GAAP earnings of $5.47 to $5.53 per share. For the current second quarter, the company guided to revenue of $18.0 billion to $18.2 billion.
Cisco also closed its acquisition of WideField Security, a privately held security company, during the quarter. Taken together, the results suggest the AI buildout is broadening: after years in which accelerators captured most of the attention and the spending, the networking layer that moves data between them is now growing just as urgently, and Cisco is positioning itself as one of its principal suppliers.
Photo: Cisco Systems Building 2 at the company's San Jose, California main campus. Photograph by Coolcaesar, via Wikimedia Commons, licensed under CC BY-SA 3.0.