Cisco Systems Delivers Record Q1 Results, Raises FY27 Outlook

Cisco Systems CSCO) delivered record fiscal first-quarter results after the closing bell on Thursday, fueled by accelerating demand for AI infrastructure and networking solutions.

The technology giant also raised its full-year guidance, reinforcing confidence in its growth trajectory as the AI infrastructure buildout accelerates.

Shares rose 1% in today’s trading session and are up another 1% in after-hours trading, extending a +30% year-to-date gain.

Cisco's Record Q1 Results

Cisco reported record quarterly adjusted earnings of $1.40 per share, soaring 40% year over year and topping the Zacks EPS Consensus of $1.33 by 5%.

Revenue surged 24% to an all-time quarterly high of $18.52 billion, exceeding expectations of $18.13 billion by 2%.

Most exhilarating was that this marked Cisco's strongest revenue and adjusted earnings growth in more than 15 years.

Notably, Networking revenue jumped 43% to $11.13 billion, reflecting robust AI infrastructure demand. Adjusted operating margin also reached a record 37.8%, highlighting improved operational efficiency.

Cisco Raises FY27 Guidance on AI Demand

Looking ahead, Cisco raised its current fiscal 2027 revenue guidance to $74.8-$75.8 billion, up from its previous forecast of $72.2-$73.4 billion and ahead of Wall Street’s expectations of $73.34 billion or roughly 16% growth.

Adjusted EPS guidance was also increased to $5.47-$5.53, compared with $5.05-$5.11 previously and ahead of consensus forecast of $5.17 or 19% growth.

Most encouragingly, Cisco raised its FY27 hyperscaler AI infrastructure revenue outlook to $9 billion, more than double FY26 levels.

For Q2, management projects revenue of $18-$18.2 billion and adjusted EPS of $1.34-$1.36, also ahead of the Street’s forecast and signaling sustained momentum.

Cisco's Dividend & Shareholder Returns

Cisco maintained its generous quarterly dividend at $0.42 per share, or $1.68 annually, returning $3.7 billion to shareholders through dividends and share repurchases during Q1.

Bottom Line

Sporting a Zacks Rank #2 (Buy), Cisco Systems remains an attractive way to capitalize on the AI infrastructure buildout while benefiting from steady dividend income.

Record quarterly results, expanding operating margins, and higher full-year guidance reinforce Cisco's improving growth prospects, while its reasonable 19X forward earnings multiple adds to the stock's investment appeal.

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This article originally published on Zacks Investment Research (zacks.com).

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