By Trefis Team
Publication Date: 2026-08-17 18:54:00
The record quarter was carried by the product line and by price increases taken to cover memory costs, and a heavier hardware mix, together with those memory costs, is what pulled product margin down
Cisco Systems (CSCO) closed fiscal 2026 with a record quarter and an outlook that topped estimates, and the stock fell 8.4% on the first trading day after the report. Over the same span, the S&P 500 rose 0.7%, and peer Arista Networks (ANET) fell 3.3%. The question is what the growth was made of.
All Of The Growth Came Off The Product Line
Every headline line beat: revenue of $17.25 billion against a consensus estimate of $17.16 billion and non-GAAP earnings of $1.22 a share against $1.19, with fiscal 2027 revenue guidance of $72.2 billion to $73.4 billion set above the Street. Product revenue rose 24% year over year while services revenue was flat, so the step up came entirely from the product line. Non-GAAP product gross margin was 64.8%,…