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Cisco’s latest verifiable results show that AI infrastructure demand is becoming financially meaningful—and that order growth extends beyond hyperscalers. For the quarter ended April 25, 2026, Cisco reported record revenue of $15.8 billion, up 12% year over year. It also reported more than 50% growth in networking-product orders and $5.3 billion in year-to-date AI infrastructure orders from hyperscalers. Those figures point to two sources of demand, but orders are not revenue, and lower gross margins remain an important counterweight.
The latest verified results available for this article are Cisco’s Q3 FY2026 results, released May 13, 2026. They support a cautiously positive reading: AI and networking demand are rising, but durability depends on converting orders into profitable sales.
What Cisco reported in Q3 FY2026
Cisco’s fiscal quarters do not align exactly with calendar quarters. Q3 FY2026 covered the period ended April 25, 2026. The company’s release reported record quarterly revenue and raised its full-year expectations for AI infrastructure orders and revenue.
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|---|---|
| Revenue | $15.8 billion, up 12% year over year |
| GAAP earnings per share (EPS) | $0.85, up 37% |
| Non-GAAP EPS | $1.06, up 10% |
| Q4 FY2026 revenue guidance | $16.7 billion–$16.9 billion |
| FY2026 revenue guidance | $62.8 billion–$63.0 billion |
| FY2026 non-GAAP EPS guidance | $4.27–$4.29 |
| AI infrastructure orders from hyperscalers, year to date | $5.3 billion |
| FY2026 AI infrastructure order expectation | Approximately $9 billion |
| FY2026 AI infrastructure revenue expectation | Approximately $4 billion |
These figures are from Cisco’s Q3 FY2026 earnings release. GAAP and non-GAAP results use different accounting treatments, so EPS growth rates should not be compared as if they were the same measure.
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AI demand is real, but orders are not sales
Cisco’s $5.3 billion of year-to-date AI infrastructure orders from hyperscalers is evidence of substantial demand from large cloud and data-center operators. The company raised its expected FY2026 AI order total to about $9 billion, from an earlier expectation of $5 billion. It also raised expected AI infrastructure revenue to about $4 billion, from $3 billion.
The distinction is essential:
- Orders represent booked demand or purchase commitments. They may be delivered and recognized as revenue over time rather than in the quarter when they are placed.
- Revenue is recognized when accounting requirements are met, such as delivery of products or performance of services.
- Pipeline is potential business that has not yet become an order.
So Cisco’s expectation of about $9 billion in AI orders is not a forecast of $9 billion in FY2026 AI revenue. The company’s own revenue estimate is about $4 billion. Delivery schedules, contract terms, supply and customer deployment timing all affect when booked demand becomes reported sales.
The largest disclosed AI-order figures are tied to hyperscalers, which can place very large orders. Cisco’s investor presentation also identified about $900 million in year-to-date AI orders from neocloud, sovereign and enterprise customers. That suggests a broader set of buyers is emerging, but the available disclosure does not show enterprise AI revenue at a scale comparable to hyperscaler demand. Cisco’s Q3 investor presentation discusses these customer categories and the company’s AI-related products.
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Networking growth is broader than the AI order headline
Cisco reported Q3 networking-product orders up more than 50% year over year. Total product orders rose 35%; excluding hyperscalers, product orders increased 19%. That exclusion matters: it indicates order growth was not solely a product of the largest AI customers, though it does not prove that every customer group or product line is growing at the same pace.
Two distinct areas stood out:
- Campus networking: Orders grew more than 25%. Campus networks connect offices and other sites through switching, wireless access and related infrastructure. Cisco described a major, multiyear campus refresh cycle and said its next-generation portfolio was ramping faster than earlier launches. That is management’s characterization, not an independent measure of the whole market.
- Data-center switching: Orders grew more than 40%. These switches move data within data centers and are relevant both to conventional modernization and to the high-bandwidth connections needed for AI systems.
Campus refresh and AI data-center construction are related to a broader investment in network infrastructure, but they are not the same market. They involve different buyers, deployment schedules and competitive pressures. Cisco’s order figures show strength in both; they do not by themselves establish a uniform recovery across the entire enterprise technology sector.
How Cisco fits into AI infrastructure
Cisco’s AI opportunity is principally an infrastructure-connectivity opportunity—not a claim that the company is selling GPUs on the same basis as chipmakers. AI data centers require networks that can move large amounts of data between computing systems. High-speed switching, routing, optics and related connectivity can all play a role.
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Cisco has highlighted its Silicon One networking technology and Acacia optics in connection with AI deployments. These product disclosures help explain how Cisco is positioned, but the company has not supplied a complete AI-specific profit-and-loss statement or enough detail to attribute a particular share of Q3 revenue to those products. It is therefore safer to treat the order and revenue guidance as the measurable evidence of the opportunity, rather than infer product-level sales or margins.
Other potential sources of demand overlap with, but should not be confused with, the order data: campus refresh, conventional data-center modernization and customer interest in security and observability. Cisco combines networking with services, security and observability, including products associated with its Splunk acquisition. The Q3 figures cited here do not quantify how much those areas contributed to order growth.
Growth is strong; gross margins deserve equal attention
Revenue rose 12% and GAAP EPS rose 37%, while non-GAAP EPS rose 10%. Cisco also reported record non-GAAP operating income and $3.8 billion in operating cash flow for Q3. These results indicate that growth was accompanied by substantial earnings and cash generation, not just a rise in booked orders.
However, GAAP gross margin declined to 63.6% from 65.6% in the year-ago quarter. GAAP product gross margin fell to 61.9% from 64.4%. Cisco reported a Q3 non-GAAP gross margin of 66.0% and a non-GAAP operating margin of 34.2%, measures that exclude specified items under the company’s non-GAAP methodology. The year-over-year GAAP comparison remains a relevant warning: revenue growth does not automatically mean improving economics per dollar of sales.
Product mix, pricing, component costs, tariffs and the cost structure of large infrastructure deployments can all affect margins. Cisco said its FY2026 guidance incorporated estimated tariff impacts based on trade policy when the guidance was issued. That makes the forecast neither tariff-neutral nor a guarantee that the effect will remain unchanged if policy or supply conditions shift. The reported figures do not establish that AI orders caused the margin decline, but they do make margin trends a necessary test of the growth thesis. See Cisco’s quarterly-results materials for reported financial measures.
Backlog adds visibility, not certainty
At the end of Q3, Cisco reported $43.5 billion in remaining performance obligations (RPO), up 4% overall. Product RPO increased 6%, including $11.7 billion of long-term product RPO, also up 6%; services RPO rose 2%. Deferred revenue was $28.6 billion, up 2%. Cisco also reported $16.6 billion in cash, cash equivalents and investments.
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RPO represents contracted amounts for products and services that have not yet been recognized as revenue, subject to the applicable terms and timing. It can help indicate future work, but it is not a promise of near-term revenue growth at a particular rate. Delivery dates, renewals, contract mix and possible changes to customer plans affect the conversion. Cash and investments provide financial context; they do not eliminate execution or market risk.
The upside case and the risks
The upside case: AI infrastructure orders keep growing and convert into revenue on schedule; campus refresh activity develops into sustained replacement demand; data-center switching remains strong; and a wider mix of neocloud, sovereign and enterprise customers reduces reliance on a few large buyers. If Cisco maintains margins and cash conversion while growing, the opportunity would be more compelling than a bookings surge alone.
The risks: Hyperscalers could delay, resize or concentrate deployments, making orders lumpy. Large bookings could take longer than expected to convert into sales. Competitors—including Arista Networks, Juniper Networks, HPE, Dell Technologies, NVIDIA, Broadcom and specialist optics and networking vendors—compete across relevant parts of the infrastructure stack. Cisco itself identifies competitive pressure and risks involving customer order timing, supply constraints, product mix, rapid technology change and market acceptance of new offerings. Tariffs and component costs could weigh on profitability, while campus refresh orders could slow if customer budgets tighten.
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A related risk is that strong networking orders may not persist once a refresh wave or major data-center buildout passes. Cisco’s Q3 data is a positive signal, but one quarter of orders cannot establish the length of a cycle.
What to watch in the next results
- AI orders versus recognized AI revenue: Is the gap between bookings and sales narrowing, and are deployments converting on the expected schedule?
- Product orders excluding hyperscalers: Does growth persist without the largest customers’ contributions?
- Campus and data-center switching separately: Do both categories remain strong, or is demand concentrated in one?
- Gross margins: Are margins stabilizing, or do mix, tariffs, costs or pricing competition continue to pressure them?
- Customer breadth: Are neocloud, sovereign and enterprise customers contributing meaningful orders alongside hyperscalers?
- RPO and deferred revenue: Are contracted obligations strengthening, and what does the company say about their expected timing?
- Cash flow: Does operating cash flow keep pace with earnings, or do inventory and other working-capital needs absorb more cash?
The most recent figures cited here are Cisco’s Q3 FY2026 results released May 13, 2026. They show that AI demand is more than a strategic talking point: it is reflected in orders and in the company’s revenue expectations. They also show broader order strength in campus networking and data-center switching. But a durable financial case still depends on revenue conversion, sustained demand beyond hyperscalers and acceptable margins—not on order growth alone.
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