Cisco Systems (CSCO) CSCO Q2 Financial Results Summary
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Cisco (CSCO) Q2 2026 Financial Results Summary
Cisco (NASDAQ: CSCO) released its second-quarter financial results for the period ending January 24, 2026, on February 11, 2026. The report demonstrated strong growth across key metrics, highlighting the company’s performance in challenging market conditions.
Key Financial Highlights
- Revenue:
- Total revenue of $15.3 billion, representing a 10% increase year-over-year from $14.0 billion in Q2 FY 2025.
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Product revenue increased by 14%, while services revenue had a slight decline of 1%.
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Earnings per Share (EPS):
- GAAP EPS of $0.80, up 31% compared to $0.61 in Q2 FY 2025.
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Non-GAAP EPS of $1.04, up 11% from $0.94 in the same quarter last year.
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Gross Margins:
- GAAP gross margin at 65.0%, slightly decreasing from 65.1% in Q2 FY 2025.
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Non-GAAP gross margin was 67.5%, down from 68.7% year-over-year.
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Operating Income:
- GAAP operating income of $3.8 billion, which is a 21% increase over the previous year’s $3.1 billion.
- Non-GAAP operating income of $5.3 billion, reflecting a 9% year-over-year increase.
Revenue Breakdown
- Geographic Revenue:
- Americas: Up 8%
- EMEA: Increased by 15%
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APJC: Gained 8%
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Product Categories:
- Networking: Up 21%
- Security: Decreased by 4%
- Collaboration: Grew by 6%
- Observability: Remained flat
Operating Expenses
- GAAP operating expenses totaled $6.2 billion, a 3% increase from $5.998 billion in Q2 FY 2025.
- Non-GAAP operating expenses increased by 6% to $5.0 billion.
Cash Flow and Shareholder Returns
- Cash Flow from Operating Activities: $1.8 billion, a 19% decrease from $2.2 billion in Q2 FY 2025.
- Quarterly Dividend: Declared a dividend of $0.42 per share, a 2% increase from the previous quarter’s $0.41.
- Share Repurchase Program: Repurchased approximately 18 million shares at an average price of $76.29 per share for around $1.4 billion.
Future Guidance
- Q3 FY 2026 Guidance:
- Revenue expected between $15.4 billion and $15.6 billion.
- GAAP EPS predicted at $0.73 to $0.77.
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Non-GAAP EPS forecasted in the range of $1.02 to $1.04.
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FY 2026 Guidance:
- Revenue expected to be between $61.2 billion and $61.7 billion.
- GAAP EPS forecasted at $3.00 to $3.08.
- Non-GAAP EPS projected between $4.13 and $4.17.
Balance Sheet and Other Financial Highlights
- Cash and Cash Equivalents: $15.8 billion, down from $16.1 billion at the end of FY 2025.
- Remaining Performance Obligations (RPO): Total RPO stood at $43.4 billion, reflecting a 5% increase.
- Deferred Revenue: Increased by 2% to $28.4 billion.
Summary
Cisco’s Q2 financial results reflect substantial performance growth across key operational metrics, demonstrating resilience in a dynamic market. The announcement of a higher dividend and a robust share repurchase commitment underscores the company’s focus on returning value to shareholders.
| Three Months Ended | January 24, 2026 | January 25, 2025 | Six Months Ended | January 24, 2026 | January 25, 2025 | |
|---|---|---|---|---|---|---|
| REVENUE: | ||||||
| Product | $ 11,642 | $ 10,234 | $ 22,719 | $ 20,348 | ||
| Services | $ 3,707 | $ 3,757 | $ 7,513 | $ 7,484 | ||
| Total revenue | $ 15,349 | $ 13,991 | $ 30,232 | $ 27,832 | ||
| COST OF SALES: | ||||||
| Product | $ 4,205 | $ 3,713 | $ 8,139 | $ 7,239 | ||
| Services | $ 1,172 | $ 1,167 | $ 2,376 | $ 2,361 | ||
| Total cost of sales | $ 5,377 | $ 4,880 | $ 10,515 | $ 9,600 | ||
| GROSS MARGIN | $ 9,972 | $ 9,111 | $ 19,717 | $ 18,232 | ||
| OPERATING EXPENSES: | ||||||
| Research and development | $ 2,355 | $ 2,299 | $ 4,755 | $ 4,585 | ||
| Sales and marketing | $ 2,881 | $ 2,672 | $ 5,752 | $ 5,424 | ||
| General and administrative | $ 688 | $ 752 | $ 1,421 | $ 1,547 | ||
| Amortization of purchased intangible assets | $ 231 | $ 265 | $ 462 | $ 530 | ||
| Restructuring and other charges | $ 36 | $ 10 | $ 183 | $ 675 | ||
| Total operating expenses | $ 6,191 | $ 5,998 | $ 12,573 | $ 12,761 | ||
| OPERATING INCOME | $ 3,781 | $ 3,113 | $ 7,144 | $ 5,471 | ||
| Interest income | $ 210 | $ 238 | $ 432 | $ 524 | ||
| Interest expense | $ -370 | $ -404 | $ -720 | $ -822 | ||
| Other income (loss), net | $ 25 | $ -60 | $ 181 | $ -19 | ||
| Interest and other income (loss), net | $ -135 | $ -226 | $ -107 | $ -317 | ||
| INCOME BEFORE PROVISION FOR INCOME TAXES | $ 3,646 | $ 2,887 | $ 7,037 | $ 5,154 | ||
| Provision for income taxes | $ 471 | $ 459 | $ 1,002 | $ 15 | ||
| NET INCOME | $ 3,175 | $ 2,428 | $ 6,035 | $ 5,139 | ||
| Net income per share: | ||||||
| Basic | $ 0.80 | $ 0.61 | $ 1.53 | $ 1.29 | ||
| Diluted | $ 0.80 | $ 0.61 | $ 1.51 | $ 1.28 | ||
| Shares used in per-share calculation: | ||||||
| Basic | 3,955 | 3,981 | 3,955 | 3,986 | ||
| Diluted | 3,984 | 4,005 | 3,987 | 4,008 |
| January 24, 2026 | July 26, 2025 | |
|---|---|---|
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 7,458 | $ 8,346 |
| Investments | $ 8,319 | $ 7,764 |
| Accounts receivable, net of allowance of $76 at January 24, 2026 and $69 at July 26, 2025 | $ 6,606 | $ 6,701 |
| Inventories | $ 3,920 | $ 3,164 |
| Financing receivables, net | $ 2,944 | $ 3,061 |
| Other current assets | $ 5,884 | $ 5,950 |
| Total current assets | $ 35,131 | $ 34,986 |
| Property and equipment, net | $ 2,351 | $ 2,113 |
| Financing receivables, net | $ 3,698 | $ 3,466 |
| Goodwill | $ 59,234 | $ 59,136 |
| Purchased intangible assets, net | $ 8,307 | $ 9,175 |
| Deferred tax assets | $ 7,399 | $ 7,356 |
| Other assets | $ 7,251 | $ 6,059 |
| TOTAL ASSETS | $ 123,371 | $ 122,291 |
| LIABILITIES AND EQUITY | ||
| Current liabilities: | ||
| Short-term debt | $ 8,719 | $ 5,232 |
| Accounts payable | $ 2,762 | $ 2,528 |
| Income taxes payable | $ 195 | $ 1,857 |
| Accrued compensation | $ 3,494 | $ 3,611 |
| Deferred revenue | $ 16,199 | $ 16,416 |
| Other current liabilities | $ 5,417 | $ 5,420 |
| Total current liabilities | $ 36,786 | $ 35,064 |
| Long-term debt | $ 21,367 | $ 22,861 |
| Income taxes payable | $ 2,124 | $ 2,165 |
| Deferred revenue | $ 12,204 | $ 12,363 |
| Other long-term liabilities | $ 3,167 | $ 2,995 |
| Total liabilities | $ 75,648 | $ 75,448 |
| Total equity | $ 47,723 | $ 46,843 |
| TOTAL LIABILITIES AND EQUITY | $ 123,371 | $ 122,291 |