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what it is
Cisco sells the hardware, software, and services that move data, voice, and video across big company networks.
how it gets paid
Last year Cisco Systems made $56.7B in revenue. Networking was the main engine at $31.5B, or 56% of sales.
why it's growing
Revenue grew 5.3% last year. Networking grew 21% as AI infrastructure demand from giant cloud buyers picked up.
what just happened
Cisco's $1.00 EPS beat the $0.95 estimate while revenue landed at $15.3B.
At a glance
A+ balance sheet — rock-solid finances — built to survive anything
95/100 earnings predictability — you can trust these numbers
20.4x trailing p/e — priced about right
2.2% dividend yield — cash in your pocket every quarter
25.5% return on capital — every dollar works hard here
xvary composite: 80/100 — above average
What they do
Cisco sells the hardware, software, and services that move data, voice, and video across big company networks.
90,400 employees and 40.6% of 2025 revenue from outside the U.S. tell you Cisco already sits inside the world's biggest networks. Routers and switches are the boxes that move traffic, and replacing them means downtime, retraining, and a real chance your network breaks. Cisco wins when 21% networking growth outruns its 4.0% historical sales pace; if that gap closes, the edge gets smaller.
How they make money
$56.7B
annual revenue · their business grew +5.3% last year
Networking
$31.5B
+10.0%
Security
$8.0B
+7.0%
Collaboration
$5.5B
+3.0%
Observability
$4.2B
+6.0%
Services
$7.5B
+2.0%
The products that matter
enterprise networking hardware
Infrastructure Platforms
$33.2B · 58.5% of revenue
this is still the center of gravity. It generated $33.2B last year, but only grew 3.1%, which tells you Cisco is defending a massive installed base more than sprinting into a new market.
the core
software and security stack
Applications & Security
$15.8B · +8.2% growth
this $15.8B segment is growing faster than the rest of the business. If Cisco's valuation ever expands from here, this is probably why.
the growth case
support and recurring services
Services & Other
$7.7B · 13.6% of revenue
it is the smallest segment here, but a $7.7B services base matters because it smooths results in a company still tied to enterprise hardware budgets.
stability
Key numbers
$65B
FY2027 sales
That is a giant revenue base, not a sleepy little software name. Cisco still has a $65B top line in the forecast.
20.8%
op margin
Operating margin → profit after running the business → 20.8% means Cisco keeps about 21 cents from each sales dollar before taxes.
25.5%
return on capital
Return on capital → profit on the money tied up in the business → 25.5% says Cisco earns solid returns on the cash it deploys.
2.2%
dividend yield
Dividend yield → cash paid to shareholders versus the stock price → 2.2% gives you paid patience while the business keeps throwing off cash.
Financial health
A+
strength
- balance sheet grade A+ — near the highest rating possible
- risk rank 1 — safer than 95% of stocks
- price stability 90 / 100
- long-term debt $21.4B (7% of capital)
- net profit margin 28.4% — keeps 28 cents of every dollar in revenue
- return on equity 32% — $0.32 profit for every $1 investors have put in
A+ with balance sheet grade and risk rank standing out. your money faces less risk here than at most public companies.
Total return vs. market
You invested $10,000 in CSCO 3 years ago → it's now worth $17,210.
The index would have given you $13,880.
source: institutional data · total return
What just happened
beat estimates
Cisco's $1.00 EPS beat the $0.95 estimate while revenue landed at $15.3B.
Networking grew 21% as AI infrastructure demand from giant cloud buyers picked up. Cisco also said hyperscaler AI orders hit $2.1B in one quarter, which is absurd next to a full-year history of 2025-level demand.
$15.3B
revenue
$1.00
eps
65.2%
gross margin
AI orders
$2.1B of AI orders from giant cloud buyers matched all of fiscal 2025 in one quarter.
-
cisco systems’ january quarter delivered record revenue.
-
the top line reached $15.3 billion, up 10%, with networking the standout at 21% growth, as ai infrastructure demand from hyperscalers accelerated sharply.
-
hyperscaler ai orders totaled $2.1 billion for the quarter, matching all of fiscal 2025 in a single period, prompting management to raise its full-year ai order target above $5 billion.
-
that momentum drove cisco shares to multi-decade highs above $88 in early february.
-
the stock then fell 12% on february 12th as management flagged gross margin compression driven by soaring memory chip costs, pulling shares back to the $77 range.
source: company earnings report, 2026
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What could go wrong
the #1 risk is enterprise network upgrade slowdowns. Cisco still gets 58.5% of revenue from Infrastructure Platforms, so if customers pause spending, the biggest segment feels it first.
med
enterprise hardware budgets freeze
Infrastructure Platforms produced $33.2B last year. If large customers delay refresh cycles, the core business does not have a lot of hiding places.
A 10% hit to that segment alone would mean roughly $3.3B less revenue. That is why Cisco's "steady compounder" reputation depends on enterprise spending staying steady.
med
AI demand lifts orders but squeezes margins
The market liked the $2.1B quarterly AI order number. It liked the 12% stock drop a lot less once management flagged gross margin pressure from memory chip costs.
If AI hardware mix keeps rising without margin discipline, the bull case turns into more revenue with less profitability. For a stock trading at 20.4x trailing earnings, that matters.
med
the software transition stalls
Applications & Security is growing 8.2%, versus 3.1% for Infrastructure Platforms. That spread is the reason investors tolerate a mature hardware base.
If the faster-growing segment slows while the core stays dominant at 58.5% of revenue, Cisco looks less like a transition story and more like a bond proxy with a tech label.
med
large-account concentration bites
Top customers account for 16.4% of revenue. That is manageable, but it is still enough concentration to matter in a business built around big enterprise and hyperscaler relationships.
Losing even part of that wallet would hurt revenue and likely pressure the 39% operating margin, because high-margin enterprise gear does not replace itself overnight.
The combined risk picture is simple: Cisco has the margin cushion and balance sheet to absorb noise, but the stock needs enterprise demand to stay healthy and the software mix to keep improving.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
applications & security growth versus infrastructure
8.2% versus 3.1% is the spread that matters. If that gap narrows for the wrong reason, the transition story weakens fast.
risk
gross margin pressure from AI hardware costs
The stock already dropped 12% when memory costs became the headline. You want AI orders growing without every new dollar carrying lower profitability.
calendar
next earnings read on AI orders and enterprise budgets
The number that mattered last time was $2.1B in quarterly AI orders. Next report, you want to see whether that was a step-change or a one-quarter spike.
trend
institutional buying staying net positive
Three straight quarters of net buying is supportive. If that reverses while growth expectations stay muted, the stock loses an important stabilizer.
Analyst rankings
earnings predictability
95 / 100
management's guidance has been unusually reliable. in human-speak, analysts think Cisco is boring in the useful way.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 1,501 buyers vs. 1,332 sellers in 4q2025. total institutional holdings: 3.1B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$65
$112
$78
current price
$89
target midpoint · +14% from current · 3-5yr high: $120 (+55% · 13% ann'l return)
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