Cisco Q4 revenue up 9.7% to $15.35B; shares slide on margin outlook
Cisco reported Q4 CY2025 revenue of $15.35 billion, up 9.7% year-on-year, beating estimates by 1.5%, and non-GAAP EPS of $1.04 topped forecasts by 1.7%. It guided Q1 revenue to $15.5 billion at midpoint and 66% adjusted gross margin, but mixed margin outlook sent shares lower.
1. Q4 CY2025 Results
Cisco delivered Q4 CY2025 revenue of $15.35 billion, marking 9.7% year-on-year growth and a 1.5% beat on consensus, while non-GAAP EPS of $1.04 exceeded estimates by 1.7%. Operating margin rose to 24.6%, driven by efficiency gains despite broader cost pressures.
2. Demand Drivers
Growth was fueled by accelerated spending from AI hyperscaler customers, which drove stronger bookings in data center routing and switching products and contributed to robust service revenue expansion.
3. Q1 Guidance
Management projects Q1 revenue of $15.5 billion at the midpoint—2.2% ahead of consensus—and set adjusted gross margin guidance at 66%, slightly below street expectations, with EPS forecast of $1.03.
4. Market Reaction
Despite the top-line and EPS beats, shares declined as investors focused on softer margin guidance, a drop in free cash flow margin to 10%, and cautious commentary on expense leverage.