Mirror Review
November 13, 2025
Cisco has quietly become one of the biggest winners of the AI boom.
In the Cisco Earnings Q1 2026 report, the company posted $14.9 billion in revenue, up 8% from last year, showing that the global shift to AI is fueling a major networking upgrade cycle.
At the heart of this growth is one simple truth: AI runs on networks. And Cisco builds the networks that carry the massive data loads AI systems need.
The report showed that networking revenue rose 15%, and AI infrastructure orders from hyperscale data centers reached $1.3 billion in a single quarter.
That means the world’s largest cloud and AI companies (the ones training enormous models) are increasingly relying on Cisco’s technology to move their data faster and more efficiently.
CEO Chuck Robbins summed it up best in the company’s announcement: “Our strategy is working. We are building the critical infrastructure for the AI era while delivering consistent profitability.”
Breaking Down the Cisco Earnings Q1 2026 Highlights
Here are the main takeaways from the Cisco Q1 FY2026 report:
| Metric | Q1 FY2026 | YoY Change |
| Total Revenue | $14.9B | +8% |
| Product Revenue | $11.1B | +10% |
| Service Revenue | $3.8B | +3% |
| Non-GAAP EPS | $1.00 | +10% |
| GAAP EPS | $0.72 | +6% |
| Gross Margin (Non-GAAP) | 68.1% | Up 0.4 pts |
| Operating Margin (Non-GAAP) | 34.4% | Up 0.8 pts |
| AI Infrastructure Orders | $1.3B | — |
| Remaining Performance Obligations (RPO) | $42.9B | +7% |
It returned $3.6 billion to shareholders this quarter ($2 billion in buybacks and $1.6 billion in dividends), all while maintaining healthy margins and strong cash flow.
Why AI Needs Cisco’s Networks
Artificial intelligence might be about data and algorithms, but it cannot function without powerful networks connecting the machines that run it.
Training large AI models requires thousands of GPUs working together.
These GPUs constantly exchange data like images, text, and computations across high-speed connections. If the network is slow or unstable, training times shoot up and costs multiply.
That’s where Cisco comes in. Its latest Quantum Entanglement Chip, Silicon One chips, AI-ready switches, and high-speed routers form the backbone of these large-scale AI systems.
So when hyperscalers like cloud and AI companies expand their AI clusters, Cisco’s networking gear becomes a critical part of that buildout.
That’s why the $1.3B in AI infrastructure orders is such a big signal. It shows that Cisco isn’t just selling to enterprises anymore; it’s now powering the AI data centers of the future.
A Two-Way Growth Story: AI and Enterprise Upgrades
Cisco’s 15% growth in networking revenue is not only because of hyperscalers. Enterprises across the world are also upgrading their systems for faster and smarter connectivity.
Here’s how:
- AI at Work: Companies are embedding AI into daily operations, from cybersecurity to customer service. This requires high-speed, low-latency networks that Cisco provides.
- Campus Refresh Cycle: Businesses are updating to Wi-Fi 7, smart switches, and hybrid-work infrastructure, which is driving new orders.
Chief Financial Officer Scott Herren said this upgrade cycle will likely continue through fiscal 2026: “Our customers are modernizing their infrastructure for AI workloads and connectivity at scale. We expect this refresh to continue well into fiscal 2026 and beyond.”
This dual momentum of hyperscalers investing in AI clusters and enterprises refreshing their networks explains why Cisco’s growth looks sustainable, not temporary.
Margins That Show Cisco’s Operational Discipline
Cisco’s profitability also stands out in the Cisco Earnings Q1 2026 report.
A non-GAAP gross margin of 68.1% and an operating margin of 34.4% both came in above expectations. These numbers show that Cisco is managing costs efficiently even while scaling production for AI hardware.
The company generated $3.2 billion in operating cash flow and still has a $12.2 billion share repurchase authorization, a sign of strong financial flexibility.
In simple terms: Cisco is making money, reinvesting in AI infrastructure, and rewarding shareholders all at the same time.
Cisco’s Long-Term Demand Looks Solid
Cisco’s Remaining Performance Obligations (RPO), which is the value of future contracts, grew to $42.9 billion, up 7% year over year.
Within that, $11.8 billion comes from long-term product RPO, showing that customers are locking into multi-year deals for both hardware and services.
This matters because it shows predictable, recurring revenue, something investors value highly.
It also means customers are not just buying equipment once; they’re committing to Cisco’s ecosystem for years, irrespective of the AI bubble.
Cisco’s Strategy: Build the Backbone of the AI Era
Instead of trying to build AI models or compete with chipmakers, Cisco is staying true to what it does best, building the infrastructure that makes AI possible.
Historically, Cisco has played this kind of role in every major tech shift:
- It powered the internet boom in the 1990s.
- It secured networks during the cloud computing era.
- Now, it’s connecting the AI revolution.
By focusing on AI networking, data center connectivity, and observability tools, Cisco is becoming the unseen force behind how AI systems talk to each other.
If AI is the new engine of innovation, Cisco is the company building the roads that engine runs on.
Challenges Ahead
Even with strong Cisco Earnings Q1 2026, Cisco has a few challenges to watch:
- Supply chain and tariff risks could affect margins if costs rise.
- Dependence on hyperscalers means some revenue could fluctuate with their spending cycles.
- Competition from Arista Networks and other players remains intense in high-speed data center networking.
However, Cisco’s size, cash reserves, and diversified business give it stability that few rivals can match.
What to Expect Next
Cisco expects full-year FY2026 revenue between $60.2B and $61.0B, as stated in the Q1 2026 Cisco Report.
Management believes AI infrastructure and enterprise upgrades will continue to drive growth for the rest of the year.
Robbins ended the quarter’s statement with confidence: “We are entering the next wave of growth where networks, data, and AI come together. Cisco is uniquely positioned to lead in this transition.”
Conclusion: Cisco Earnings Q1 2026 Prove Networks Power the AI Era
The Cisco Earnings Q1 2026 report is more than just another quarterly update. It’s evidence that Cisco has found its place in the new AI economy.
With $14.9 billion in revenue, strong profit margins, and $1.3 billion in AI orders, the company has shown that its networking technology is not just relevant, it’s essential.
As the world trains and deploys more AI systems, Cisco’s networks will keep those systems connected, secure, and fast.
In short, Cisco isn’t chasing AI headlines; it’s building the backbone that makes AI work.
