Cisco closes FY2025 strong with 8% Q4 revenue growth, robust AI infrastructure orders and margin expansion

Overview

Cisco Systems, Inc., a global technology leader in networking, security, collaboration, and observability solutions, ended fiscal year 2025 with strong top-line results at the high end of guidance, driven by broad-based demand and record AI infrastructure orders from webscale customers. The company continued to deliver profitability improvements, strong cash flow, and disciplined capital returns while investing in innovation and the AI-driven network transformation.

“We delivered a strong close to fiscal 2025, driven by our accelerated innovation and solid execution. 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”, said Chuck Robbins, chair and CEO of Cisco.

Q4 FY2025 vs. Q4 FY2024:

Revenue totaled $14.7bn (+8% YoY), with product revenue +10% YoY and services revenue flat YoY, driven by broad demand across geographies and strong growth in Networking (+12%) and Security (+9%).
- Geographic performance reflected Americas +9% YoY, EMEA +4% YoY and APJC +7% YoY, with robust enterprise and cloud demand, particularly in the Americas, alongside steady growth in international markets.
GAAP gross margin recorded a value of 65.7% (vs. 64.4% a year ago), while non-GAAP gross margin 68.4% was (vs. 67.9% in Q4 FY2024), led by favorable product mix and operational efficiencies.
GAAP net income was $2.8bn (+31% YoY), with GAAP EPS of $0.71 (+31% YoY), driven by revenue growth, higher margins, and controlled operating expenses.
Non-GAAP net income rose to $4.0bn (+12% YoY), with non-GAAP EPS of $0.99 (+14% YoY), reflecting operating leverage and improved profitability despite flat services revenue.
GAAP operating income increased to $3.4bn (+32% YoY), with GAAP operating margin of 23.5%, while non-GAAP operating income also grew to $5.0bn (+13% YoY), with a margin of 34.3%.
Cash flow from operations was $4.2bn (+14% YoY), with strong collections and operating efficiency improvements.
AI infrastructure orders were over $800m in Q4 FY2025, totaled $2bn for FY2025, more than double the original $1bn target, driven by surge in demand from webscale customers investing in AI networking capabilities.
The company returned $2.9bn to shareholders through dividends and share repurchases in the last quarter of the fiscal year.

For Q1 FY2026, Cisco expects revenue between $14.65bn – $14.85bn, non-GAAP EPS of $0.97 – $0.99 (GAAP: $0.63 – $0.68), and non-GAAP gross margin of 67.5% – 68.5%. For FY2026, the company projects revenue of $59.0bn – $60.0bn and non-GAAP EPS of $4.00 – $4.06 (GAAP: $2.79 – $2.91). Management emphasized the continued growth opportunity in AI-driven infrastructure, focus on strategic innovation, and commitment to delivering durable, profitable growth while returning value to shareholders.

Ahead of its Q4 FY2025 earnings release, Cisco Systems’ stock saw a mild pullback, closing down approximately -1.4%. Post-results, the reaction was relatively muted, with shares edging up by about +0.5% despite the company delivering headline figures that exceeded Wall Street estimates. Technically, the price remains comfortably above both the 50-day SMA ($67.75) and the 200-day SMA ($61.82), reflecting an intact bullish structure. The RSI (14) stands at 58.10, still below overbought levels, suggesting room for further upside should buying momentum persist. Combined with the recent investor optimism, this could allow the stock to push toward new all-time highs. Year-to-date, Cisco shares are up nearly +19%, reinforcing the underlying positive trend.