Cisco Reports Fourth Quarter Earnings for FY25

SAN JOSE, Calif. -- News Summary:

• Strong topline performance at the high end of our guidance ranges:
  • Q4 revenue of $14.7 billion, up 8% year over year
  • FY 2025 revenue of $56.7 billion, up 5% year over year
• Q4 product orders up 7% year over year with growth across all geographies, demonstrating robust demand for Cisco's technologies
• AI Infrastructure orders taken from webscale customers exceeded $800 million, bringing the FY 2025 total to over $2 billion, more than double the original $1 billion target
• Strong profitability in Q4:
  • GAAP gross margin of 65.7% and non-GAAP gross margin of 68.4%, at the high end of our guidance range
  • GAAP EPS of $0.71 and non-GAAP EPS of $0.99, above the high end of our guidance range
• Q4 FY 2025 Results:
  • Revenue: $14.7 billion
    • Increase of 8% year over year
  • Earnings per Share: GAAP: $0.71; Non-GAAP: $0.99
    • GAAP EPS increased 31% year over year
    • Non-GAAP EPS increased 14% year over year
• FY 2025 Results:
  • Revenue: $56.7 billion 
    • Increase of 5% year over year
  • Earnings per Share: GAAP: $2.61; Non-GAAP: $3.81
    • GAAP EPS increased 3% year over year
    • Non-GAAP EPS increased 2% year over year
  • Q1 FY 2026 Guidance ⁽¹⁾ :
    • Revenue: $14.65 billion to $14.85 billion
    • Earnings per Share: GAAP: $0.63 to $0.68; Non-GAAP: $0.97 to $0.99
  • FY 2026 Guidance ⁽¹⁾ :
    • Revenue: $59.0 billion to $60.0 billion
    • Earnings per Share: GAAP: $2.79 to $2.91; Non-GAAP: $4.00 to $4.06

Cisco today reported fourth quarter and fiscal year results for the period ended July 26, 2025. Cisco reported fourth quarter revenue of $14.7 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.8 billion or $0.71 per share, and non-GAAP net income of $4.0 billion or $0.99 per share.

"We delivered a strong close to fiscal 2025, driven by our accelerated innovation and solid execution," said Chuck Robbins, chair and CEO of Cisco. "The AI infrastructure orders we received from webscale customers in fiscal 2025 were more than double our original target, indicating a massive opportunity ahead as we lead the required architectural shift and build the critical infrastructure needed for the AI era." 

"In Q4, revenue, gross margin and operating margin were at the high end of our guidance ranges, earnings per share was above the guidance range and we delivered solid operating cash flow," said Mark Patterson, CFO of Cisco.  "As we enter fiscal 2026, we remain focused on making strategic investments in innovation, driving durable, profitable growth and delivering shareholder value."

Financial Summary

All comparative percentages are on a year-over-year basis unless otherwise noted.

Q4 FY 2025 Highlights  

Revenue -- Total revenue was $14.7 billion, up 8%, with product revenue up 10% and services revenue flat.

Revenue by geographic segment was: Americas up 9%, EMEA up 4%, and APJC up 7%. Product revenue performance reflected growth in Networking up 12%, Security up 9%, Observability up 4%, and Collaboration up 2%.

Gross Margin --  On a GAAP basis, total gross margin, product gross margin, and services gross margin were 65.7%, 64.7%, and 68.3%, respectively, as compared with 64.4%, 63.0%, and 67.8%, respectively, in the fourth quarter of fiscal 2024.

On a non-GAAP basis, total gross margin, product gross margin, and services gross margin were 68.4%, 67.5%, and 70.8%, respectively, as compared with 67.9%, 67.0%, and 70.3%, respectively, in the fourth quarter of fiscal 2024.

Total gross margins by geographic segment were: 68.0% for the Americas, 71.7% for EMEA and 64.2% for APJC.

Operating Expenses --  On a GAAP basis, operating expenses were $6.2 billion, flat year over year, and were 42.2% of revenue. Non-GAAP operating expenses were $5.0 billion, up 4%, and were 34.1% of revenue.

Operating Income -- GAAP operating income was $3.4 billion, up 32%, with GAAP operating margin of 23.5%. Non-GAAP operating income was $5.0 billion, up 13%, with non-GAAP operating margin at 34.3%.

Provision for Income Taxes -- The GAAP tax provision rate was 15.8%. The non-GAAP tax provision rate was 18.1%.

Net Income and EPS -- On a GAAP basis, net income was $2.8 billion, an increase of 31%, and EPS was $0.71, an increase of 31%. On a non-GAAP basis, net income was $4.0 billion, an increase of 12%, and EPS was $0.99, an increase of 14%. 

Cash Flow from Operating Activities -- $4.2 billion for the fourth quarter of fiscal 2025, an increase of 14% compared with $3.7 billion for the fourth quarter of fiscal 2024.

FY 2025 Highlights

Revenue -- Total revenue was $56.7 billion, an increase of 5%.

Net Income and EPS -- On a GAAP basis, net income was $10.5 billion, an increase of 1%, and EPS was $2.61, an increase of 3%. On a non-GAAP basis, net income was $15.2 billion, flat compared to fiscal 2024, and EPS was $3.81, an increase of 2%.

Cash Flow from Operating Activities -- $14.2 billion for fiscal 2025, an increase of 30% compared with $10.9 billion for fiscal 2024.

Balance Sheet and Other Financial Highlights

Cash and Cash Equivalents and Investments -- $16.1 billion at the end of the fourth quarter of fiscal 2025, compared with $15.6 billion at the end of the third quarter of fiscal 2025, and compared with $17.9 billion at the end of fiscal 2024.

Remaining Performance Obligations (RPO) -- $43.5 billion, up 6% in total, with 50% of this amount expected to be recognized as revenue over the next 12 months. Product RPO was up 8% and services RPO was up 5%.

Deferred Revenue -- $28.8 billion, up 1% in total, with deferred product revenue up 2%. Deferred services revenue was flat. 

Capital Allocation -- In the fourth quarter of fiscal 2025, we returned $2.9 billion to stockholders through share buybacks and dividends. We declared and paid a cash dividend of $0.41 per common share, or $1.6 billion, and repurchased approximately 19 million shares of common stock under our stock repurchase program at an average price of $64.65 per share for an aggregate purchase price of $1.3 billion. The remaining authorized amount for stock repurchases under the program is $14.2 billion with no termination date.

Guidance

Cisco estimates the following results for the first quarter of fiscal 2026:

Margin and EPS guidance includes the estimated impact of tariffs based on current trade policy.

Cisco estimates that GAAP EPS will be $0.63 to $0.68 for the first quarter of fiscal 2026.

Cisco estimates the following results for fiscal 2026:

Margin and EPS guidance includes the estimated impact of tariffs based on current trade policy.

Cisco estimates that GAAP EPS will be $2.79 to $2.91 for fiscal 2026.

Our Q1 FY 2026 and FY 2026 guidance assumes an effective tax provision rate of approximately 18% for GAAP and approximately 19% for non-GAAP results.