Cisco Raises Quarterly Dividend to $0.42, Forecasts $5B+ AI Infrastructure Orders
Cisco raised its quarterly dividend by $0.01 to $0.42 and returned $3 billion to shareholders as revenue jumped 10% YoY to $15.3 billion and EPS rose 11% to $1.04. The company now forecasts fiscal 2026 AI infrastructure orders above $5 billion after $2.1 billion in Q2 hyperscaler bookings.
1. Dividend Increase and Capital Returns
Cisco raised its quarterly dividend by $0.01 to $0.42 per share and committed to return at least 50% of free cash flow, distributing $3 billion in Q2 through dividends and buybacks with $10.8 billion remaining in share repurchase authorization.
2. Q2 Financial Performance
Second quarter revenue rose 10% year over year to $15.3 billion while earnings per share increased 11% to $1.04, marking record quarterly results and underpinning fiscal 2026 guidance as its strongest year to date.
3. AI Infrastructure Order Surge
Hyperscalers placed $2.1 billion in AI networking and optics orders during Q2—matching the entire fiscal 2025 total—prompting Cisco to boost its fiscal 2026 AI infrastructure order forecast from roughly $4 billion to over $5 billion.
4. Market Reaction and Margins
Despite beating consensus earnings estimates, Cisco stock dropped nearly 12% after Q2 results due to gross margin pressure and guidance that met only current-quarter projections, highlighting investor concerns over profitability trends.