Cisco Surprises with Earnings Beat, Stock Falls on Margins Drop

Cisco Systems Inc.'s earnings and revenue beat expectations in its fourth-quarter report, but its stock fell more than 4% in after-hours trading.

The company reported earnings before certain costs of $1.22 per share, surpassing the analyst consensus estimate of $1.17 per share. Revenue for the period came to $17.25 billion, up 18% from a year earlier and ahead of Wall Street's forecast of $16.82 billion.

Cisco's biggest business, its networking segment, saw revenue grow significantly due to increased sales of equipment used in AI data centers. The unit generated revenue of $9.79 billion, up 28% from a year ago and surpassing the Street's forecast of $9.66 billion.

Chief Executive Chuck Robbins hailed the company's strong finish to fiscal 2026, saying the growth is a testament to both its innovation and execution. Cisco also issued bullish guidance for the current quarter and full-year targets, but investors seemed spooked by a sharp drop in gross margins.