Cisco Sees Massive Opportunity in AI Infrastructure Orders, Reports Beat in Q4

Cisco Systems Inc reported a better-than-expected fourth quarter, driven by strong margins and product orders, with Chief Executive Chuck Robbins highlighting the growing demand for AI infrastructure. The company's webscale customers placed AI order exceeding USD800 million in the quarter, more than double the original target, and bringing the full year 2025 total to over USD2 billion. Robbins emphasized the company's position as a leader in the AI era, citing a survey that found 97% of businesses believe they need to upgrade their networks to successfully deploy AI. The company's financial performance was strong, with revenue increasing 7.6% to USD14.67 billion and net income jumping 31% to USD2.82 billion in the fourth quarter.

Key Takeaways:

• Cisco reported a strong close to financial 2025, with revenue and gross margin at the high-end of guidance, delivering a 7.6% increase in revenue to USD14.67 billion and a 31% jump in net income to USD2.82 billion.
• AI orders taken from webscale customers exceeded USD800 million in the fourth quarter, more than double the original target, and bringing the full year 2025 total to over USD2 billion.
• A Cisco survey found 97% of businesses believe they need to upgrade their networks to successfully deploy AI.
• The company's total product revenue was up 10%, services revenue was flat year-over-year, networking was up 12%, security was up 9%, collaboration was up 2%, and observability was up 4%.
• Remaining performance obligations (RPO) totaled USD43.5 billion, up 6% in total, with 50% of this amount expected to be recognized as revenue over the next 12 months.
• For the financial year to July 26, Cisco reported revenue of USD56.65 billion up from USD53.80 billion a year prior, and net income rose to USD10.45 billion from USD10.32 billion.
• Cisco guided to first quarter revenue of USD14.65 billion to USD14.85 billion and non-GAAP EPS of USD0.97 to USD0.99 compared to USD14.6 billion and USD0.97 consensus.

Statistics:

• Revenue: USD14.67 billion (Q4 2025), USD56.65 billion (FY 2025)
• Net income: USD2.82 billion (Q4 2025), USD10.45 billion (FY 2025)
• AI orders: USD800 million (Q4 2025), over USD2 billion (FY 2025)
• Remaining performance obligations (RPO): USD43.5 billion (Q4 2025)
• Product RPO: up 8%
• Services RPO: up 5%
• Gross margin: 65.7% (GAAP), 68.4% (non-GAAP)
• Net income growth: 31%
• Revenue growth: 7.6%

Sources:

• (2024) Cisco Systems Inc. - Q4 2025 earnings call transcript
• (2024) Cisco Systems Inc. - Q4 2025 press release
• (2024) Jeremy Cutler, Alliance News reporter - Cisco Sees Massive Opportunity in AI Infrastructure Orders, Reports Beat in Q4
• (2024) Alliance News Ltd. - Copyright 2024. All Rights Reserved.