Cisco delivers strong Q1, raises outlook for fiscal 2027

Cisco's first quarter earnings results handily topped expectations and the company raised its fiscal 2027 outlook on strong demand for networking and AI infrastructure.

The company reported first quarter earnings of $1.14 a share on revenue of $18.5 billion, up 24% from a year ago. Non-GAAP earnings for the first quarter were $1.40 a share. The results were 7 cents a share ahead of Wall Street estimates.

As for the outlook, Cisco projected second quarter non-GAAP earnings of $1.34 a share to $1.36 a share on revenue of $18 billion to $18.2 billion. Wall Street was looking for second quarter non-GAAP earnings of $1.23 a share on revenue of $17.91 billion.

Cisco projected fiscal 2027 revenue of $74.8 billion to $75.8 billion, ahead of the $73.22 billion Wall Street estimate. Non-GAAP earnings for fiscal 2027 are projected to be $5.47 a share to $5.53 a share, well ahead of the $5.15 a share estimate.

According to CEO Chuck Robbins the company is "in the very early stages of a multi-year networking supercycle, and we're confident in our ability to continue capturing the multi-billion-dollar opportunity it represents." Robbins added that AI agent adoption is driving demand for AI infrastructure.

CFO Mark Patterson said Cisco is unlocking "significant operating leverage" and enabling the company to grow earnings "much faster" than revenue.

By the numbers:

• Product revenue in the first quarter was up 32%.
• Americas revenue paced geographic gains with growth of 28%. Asia Pacific and Japan had growth of 21% with EMEA up 18%.
• Networking revenue growth in the first quarter was up 43% with security up 7% from a year ago and collaboration up 8%. Observability was up 2% in the first quarter compared to a year ago.