Cisco Q1 fiscal 2027 earnings: record revenue on strongest growth in 15 years

The quarter in numbers

Cisco reported Q1 fiscal 2027 revenue of $18.5 billion, up 24% from $14.9 billion a year ago. GAAP net income rose 59% to $4.6 billion, and GAAP diluted earnings per share (EPS, or profit divided by the number of shares) came in at $1.14, up 58%. Non-GAAP EPS, which strips out items like stock compensation and acquisition costs, was $1.40, up 40%.

GAAP operating margin was 30.2% and non-GAAP operating margin reached a record 37.8%. Cash flow from operations, the cash the business generated before investments, was $4.4 billion, up 36% year over year.

Source: company filings via Alpha Finance. Quarters by period end.

What drove the results

Networking was the standout, growing 43% to $11.1 billion and accounting for the bulk of product revenue. Security grew 7% to $2.1 billion, Collaboration rose 8% to $1.1 billion, and Observability was up 2% to $279 million. Total product revenue grew 32% to $14.7 billion, while services revenue was essentially flat at $3.9 billion, up just 1%.

All three geographic regions grew at double-digit rates: Americas up 28%, EMEA up 18%, and APJC up 21%. GAAP operating income jumped 66% to $5.6 billion, growing faster than revenue because GAAP operating expenses fell 3% year over year. Cisco returned $3.7 billion to shareholders in the quarter, made up of $2.0 billion in buybacks and $1.7 billion in dividends.

One area to watch on the cost side: gross margin fell. GAAP total gross margin dropped to 63.7% from 65.5% a year ago, and non-GAAP gross margin declined to 65.6% from 68.1%, reflecting higher product costs. Remaining performance obligations (future contracted revenue not yet recognized) rose 8% to $46.2 billion, and deferred revenue grew 7% to $30.1 billion, both pointing to revenue already lined up ahead.

Guidance and outlook

For Q2 fiscal 2027, Cisco guided for revenue of $18.0 billion to $18.2 billion, non-GAAP EPS of $1.34 to $1.36, and GAAP EPS of $1.07 to $1.09. Non-GAAP gross margin is expected at 65% to 66% and non-GAAP operating margin at 36% to 37%.

For full-year fiscal 2027, Cisco raised its revenue guidance to $74.8 billion to $75.8 billion and lifted non-GAAP EPS guidance to $5.47 to $5.53. GAAP EPS for the full year is expected at $4.38 to $4.44. Management also raised its expectation for AI infrastructure revenue from hyperscalers to $9 billion in fiscal 2027, more than double the total for fiscal 2026.

CSCO at a glance Alpha Finance data, November 12, 2026

Share price	$102.01
Market value	$402.2 billion
P/E	29.8x (sector median 32.3x (Technology))
EV/EBITDA	23.2x
Free cash flow yield	3.2%
Alpha Score	59 / 100 strong
Intrinsic value	$60.88 -40.3% vs price
Analyst target	$135.79 33.1% vs price, 29 analysts

Management guidance From the earnings release

Q2 FY2027 Revenue	$18.0B to $18.2B
Q2 FY2027 Non-GAAP EPS	$1.34 to $1.36
Q2 FY2027 GAAP EPS	$1.07 to $1.09
FY2027 Revenue	$74.8B to $75.8B Raised from prior guidance
FY2027 Non-GAAP EPS	$5.47 to $5.53 Raised from prior guidance
FY2027 GAAP EPS	$4.38 to $4.44

How the stock looks now

According to Alpha Finance data, Cisco shares are trading at $102.01, with a market cap of $402.2 billion. The stock trades at a trailing price-to-earnings ratio (P/E, or price divided by annual profit) of 29.8x versus the Technology sector median of 32.3x, and a forward P/E of 18.3x. Its price-to-sales ratio is 6.4x, slightly above the sector median of 6.1x, while EV/EBITDA (enterprise value relative to operating earnings) is 23.2x compared with the sector median of 19.5x.

Alpha Finance's average intrinsic value estimate for Cisco is $60.88, roughly 40% below the current price, based on models including discounted cash flow and earnings-based approaches. The Alpha Score, Alpha Finance's composite rating, sits at 59 out of 100, rated STRONG. It scores well on profitability and quality (21.3 out of 25) but lower on valuation (10.3 out of 30), reflecting the gap between price and modeled value. According to Alpha Finance, the consensus analyst target price is $135.79, about 33% above the current share price, based on 29 analysts.

CSCO at a glance Alpha Finance data, November 12, 2026

Share price	$102.01
Market value	$402.2 billion
P/E	29.8x (sector median 32.3x (Technology))
EV/EBITDA	23.2x
Free cash flow yield	3.2%
Alpha Score	59 / 100 strong
Intrinsic value	$60.88 -40.3% vs price
Analyst target	$135.79 33.1% vs price, 29 analysts

What to watch next

The biggest factor shaping Cisco's near-term results is AI infrastructure spending from a small number of large cloud and hyperscaler customers. The release notes that large, concentrated purchases from this group create timing and demand risk, so any shift in their spending plans could move Cisco's numbers significantly.

Gross margin pressure is another item to track. Both GAAP and non-GAAP gross margins fell year over year, driven by higher product costs, and management's Q2 guidance calls for non-GAAP gross margin of 65% to 66%, still below the 68.1% posted a year ago.

The release also flags geopolitical uncertainty, tariffs, trade barriers, and currency fluctuations as ongoing risks that could affect future results, particularly given Cisco's global manufacturing and customer base.