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Press Contact:Investor Relations Contact:
Robyn BlumSami Badri
CiscoCisco
1 (408) 930-85481 (469) 420-4834
rojenkin@cisco.comsambadri@cisco.com
CISCO REPORTS SECOND QUARTER EARNINGS

News Summary:
•Double-digit top and bottom-line growth exceeding our guidance, with EPS growing faster than revenue
◦Record revenue of $15.3 billion, up 10% year over year; GAAP EPS of $0.80, up 31% year over year; and Non-GAAP EPS of $1.04, up 11% year over year
◦GAAP gross margin of 65.0% and Non-GAAP gross margin of 67.5%; GAAP operating margin of 24.6% and Non-GAAP operating margin of 34.6%, both above the high end of our guidance range
•Accelerating, double-digit growth in product orders across all geographies and robust growth across all customer markets
◦Product orders up 18% year over year with networking product orders accelerating to more than 20% year over year
•AI Infrastructure orders taken from hyperscalers totaled $2.1 billion, reflecting a significant acceleration in growth
•Major multi-year, multi-billion-dollar campus networking refresh cycle underway
•Dividend increased by 2% to $0.42 per share
•Q2 FY 2026 Results:
◦Revenue: $15.3 billion
▪Increase of 10% year over year
◦Earnings per Share: GAAP: $0.80; Non-GAAP: $1.04
▪GAAP EPS increased 31% year over year
▪Non-GAAP EPS increased 11% year over year
•Q3 FY 2026 Guidance (1):
◦Revenue: $15.4 billion to $15.6 billion
◦Earnings per Share: GAAP: $0.73 to $0.77; Non-GAAP: $1.02 to $1.04
•FY 2026 Guidance (1):
◦Revenue: $61.2 billion to $61.7 billion
◦Earnings per Share: GAAP: $3.00 to $3.08; Non-GAAP: $4.13 to $4.17
(1) EPS guidance includes the estimated impact of tariffs based on current trade policy.

SAN JOSE, Calif. -- February 11, 2026 -- Cisco (NASDAQ: CSCO) today reported second quarter results for the period ended January 24, 2026. Cisco reported second quarter revenue of $15.3 billion, net income on a generally accepted accounting principles (GAAP) basis of $3.2 billion or $0.80 per share, and non-GAAP net income of $4.1 billion or $1.04 per share.
“Cisco's strong second quarter and first half of fiscal 2026 demonstrate both the power of our portfolio and the fundamental role we continue to play in connecting and protecting customers in a rapidly evolving landscape,” said Chuck Robbins, chair and CEO of Cisco. “With over 40 years of customer trust, global scale, and a relentless focus on innovation, we believe Cisco is uniquely positioned to deliver the trusted infrastructure needed to securely and confidently power the AI-era.”
“In Q2, we delivered double-digit growth on both the top and bottom lines which exceeded the high end of our guidance and puts us on track to deliver our strongest revenue year yet in fiscal 2026,” said Mark Patterson, CFO of Cisco. “Operating margin was also above the high end of guidance, as we continue to drive profitability by exercising financial discipline. We see strong, broad-based demand for our technology solutions and remain focused on capturing the significant opportunities we see ahead.”

1


GAAP Results
Q2 FY 2026Q2 FY 2025vs. Q2 FY 2025
Revenue$15.3  billion$14.0  billion10%
Net Income$3.2  billion$2.4  billion31%
Diluted Earnings per Share (EPS)$0.80 $0.61 31%

Non-GAAP Results
Q2 FY 2026Q2 FY 2025vs. Q2 FY 2025
Net Income$4.1   billion$3.8   billion10%
EPS$1.04 $0.94 11%
Reconciliations between net income, EPS, and other measures on a GAAP and non-GAAP basis are provided in the tables located in the section entitled "Reconciliations of GAAP to non-GAAP Measures."
Cisco Increases Quarterly Dividend
Cisco has declared a quarterly dividend of $0.42 per common share, a 1-cent increase or up 2% over the previous quarter's dividend, to be paid on April 22, 2026, to all stockholders of record as of the close of business on April 2, 2026. Future dividends will be subject to Board approval.
2

Financial Summary
All comparative percentages are on a year-over-year basis unless otherwise noted.
Q2 FY 2026 Highlights
Revenue -- Total revenue was $15.3 billion, up 10%, with product revenue up 14% and services revenue down 1%.
Revenue by geographic segment was: Americas up 8%, EMEA up 15%, and APJC up 8%. Product revenue performance reflected growth in Networking, up 21%, and Collaboration, up 6%. Security was down 4%. Observability was flat.
Gross Margin -- On a GAAP basis, total gross margin, product gross margin, and services gross margin were 65.0%, 63.9%, and 68.4%, respectively, as compared with 65.1%, 63.7%, and 68.9%, respectively, in the second quarter of fiscal 2025.
On a non-GAAP basis, total gross margin, product gross margin, and services gross margin were 67.5%, 66.4%, and 70.9%, respectively, as compared with 68.7%, 67.7%, and 71.6%, respectively, in the second quarter of fiscal 2025.
Total gross margins by geographic segment were: 65.8% for the Americas, 71.7% for EMEA and 65.8% for APJC.
Operating Expenses -- On a GAAP basis, operating expenses were $6.2 billion, up 3% year over year, and were 40.3% of revenue. Non-GAAP operating expenses were $5.0 billion, up 6%, and were 32.9% of revenue.
Operating Income -- GAAP operating income was $3.8 billion, up 21%, with GAAP operating margin of 24.6%. Non-GAAP operating income was $5.3 billion, up 9%, with non-GAAP operating margin at 34.6%.
Provision for Income Taxes -- The GAAP tax provision rate was 12.9%. The non-GAAP tax provision rate was 19.0%.
Net Income and EPS -- On a GAAP basis, net income was $3.2 billion, an increase of 31%, and EPS was $0.80, an increase of 31%. On a non-GAAP basis, net income was $4.1 billion, an increase of 10%, and EPS was $1.04, an increase of 11%.
Cash Flow from Operating Activities -- $1.8 billion for the second quarter of fiscal 2026, a decrease of 19%, compared with $2.2 billion for the second quarter of fiscal 2025.
Balance Sheet and Other Financial Highlights
Cash and Cash Equivalents and Investments -- $15.8 billion at the end of the second quarter of fiscal 2026, compared with $16.1 billion at the end of fiscal 2025.
Remaining Performance Obligations (RPO) -- $43.4 billion, up 5% in total. Product RPO was up 8%, of which long-term RPO was $11.8 billion, up 11%. Services RPO was up 2%.
Deferred Revenue -- $28.4 billion, up 2% in total, with deferred product revenue up 3% and deferred services revenue up 2%.
Capital Allocation -- In the second quarter of fiscal 2026, we returned $3.0 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 18 million shares of common stock under our stock repurchase program at an average price of $76.29 per share for an aggregate purchase price of $1.4 billion. The remaining authorized amount for stock repurchases under the program is $10.8 billion with no termination date.
Acquisitions
In the second quarter of fiscal 2026, we closed the following acquisitions:
•NeuralFabric Corp., a privately held enterprise AI platform company
•EzDubs, Inc., a privately held AI software company


3

Guidance
Cisco estimates the following results for the third quarter of fiscal 2026:
Q3 FY 2026
Revenue $15.4 billion - $15.6 billion
Non-GAAP gross margin65.5% - 66.5%
Non-GAAP operating margin33.5% - 34.5%
Non-GAAP EPS $1.02 - $1.04
Cisco estimates that GAAP EPS will be $0.73 to $0.77 for the third quarter of fiscal 2026.
Cisco estimates the following results for fiscal 2026:
FY 2026
Revenue $61.2 billion - $61.7 billion
Non-GAAP EPS $4.13 - $4.17
Cisco estimates that GAAP EPS will be $3.00 to $3.08 for fiscal 2026.
Margin and EPS guidance includes the estimated impact of tariffs based on current trade policy.
Our Q3 FY 2026 guidance assumes an effective tax provision rate of approximately 17% for GAAP and approximately 19% for non-GAAP results. Our FY 2026 guidance assumes an effective tax provision rate of approximately 16% for GAAP and approximately 19% for non-GAAP results.
A reconciliation between the guidance on a GAAP and non-GAAP basis is provided in the tables entitled "GAAP to non-GAAP Guidance" located in the section entitled "Reconciliations of GAAP to non-GAAP Measures."
Editor's Notes:
•Q2 fiscal year 2026 conference call to discuss Cisco's results along with its guidance will be held on Wednesday, February 11, 2026 at 1:30 p.m. Pacific Time. Conference call number is 1-888-848-6507 (United States) or 1-212-519-0847 (international).
•Conference call replay will be available from 4:00 p.m. Pacific Time, February 11, 2026 to 10:00 p.m. Pacific Time, February 17, 2026 at 1-800-839-2232 (United States) or 1-203-369-3662 (international). The replay will also be available via webcast on the Cisco Investor Relations website at https://investor.cisco.com.
•Additional information regarding Cisco's financials, as well as a webcast of the conference call with visuals designed to guide participants through the call, will be available at 1:30 p.m. Pacific Time, February 11, 2026. Text of the conference call's prepared remarks will be available within 24 hours of completion of the call. The webcast will include both the prepared remarks and the question-and-answer session. This information, along with the GAAP to non-GAAP reconciliation information, will be available on the Cisco Investor Relations website at https://investor.cisco.com.






4

CISCO SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per-share amounts)
(Unaudited) 
Three Months EndedSix Months Ended
January 24, 2026January 25, 2025January 24, 2026January 25, 2025
REVENUE:
Product$11,642 $10,234 $22,719 $20,348 
Services3,707 3,757 7,513 7,484 
Total revenue15,349 13,991 30,232 27,832 
COST OF SALES:
Product4,205 3,713 8,139 7,239 
Services1,172 1,167 2,376 2,361 
Total cost of sales5,377 4,880 10,515 9,600 
GROSS MARGIN9,972 9,111 19,717 18,232 
OPERATING EXPENSES:
Research and development2,355 2,299 4,755 4,585 
Sales and marketing2,881 2,672 5,752 5,424 
General and administrative688 752 1,421 1,547 
Amortization of purchased intangible assets231 265 462 530 
Restructuring and other charges36 10 183 675 
Total operating expenses6,191 5,998 12,573 12,761 
OPERATING INCOME3,781 3,113 7,144 5,471 
Interest income210 238 432 524 
Interest expense(370)(404)(720)(822)
Other income (loss), net25 (60)181 (19)
Interest and other income (loss), net(135)(226)(107)(317)
INCOME BEFORE PROVISION FOR INCOME TAXES3,646 2,887 7,037 5,154 
Provision for income taxes471 459 1,002 15 
NET INCOME$3,175 $2,428 $6,035 $5,139 
Net income per share:
Basic$0.80 $0.61 $1.53 $1.29 
Diluted$0.80 $0.61 $1.51 $1.28 
Shares used in per-share calculation:
Basic3,955 3,981 3,955 3,986 
Diluted3,984 4,005 3,987 4,008 


5

CISCO SYSTEMS, INC.
REVENUE BY SEGMENT
(In millions, except percentages)
January 24, 2026
Three Months EndedSix Months Ended
AmountY/Y %AmountY/Y %
Revenue:
Americas$8,845 8%$17,834 8%
EMEA4,425 15%8,208 10%
APJC2,080 8%4,191 7%
Total$15,349 10%$30,232 9%
Amounts may not sum and percentages may not recalculate due to rounding.

CISCO SYSTEMS, INC.
GROSS MARGIN PERCENTAGE BY SEGMENT
(In percentages)
January 24, 2026
Three Months EndedSix Months Ended
Gross Margin Percentage:
Americas65.8%66.3%
EMEA71.7%71.8%
APJC65.8%66.4%


CISCO SYSTEMS, INC.
REVENUE FOR GROUPS OF SIMILAR PRODUCTS AND SERVICES
(In millions, except percentages)
January 24, 2026
Three Months EndedSix Months Ended
AmountY/Y %AmountY/Y %
Revenue:
Networking$8,294 21%$16,061 18%
Security2,018 (4)%3,998 (3)%
Collaboration1,054 6%2,109 1%
Observability277 —%550 3%
Total Product11,642 14%22,719 12%
Services3,707 (1)%7,513 —%
Total$15,349 10%$30,232 9%
Amounts may not sum and percentages may not recalculate due to rounding.

6

CISCO SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
January 24, 2026July 26, 2025
ASSETS
Current assets:
Cash and cash equivalents$7,458 $8,346 
Investments8,319 7,764 
Accounts receivable, net of allowance of $76 at January 24, 2026 and $69 at July 26, 2025
6,606 6,701 
Inventories3,920 3,164 
Financing receivables, net2,944 3,061 
Other current assets5,884 5,950 
Total current assets35,131 34,986 
Property and equipment, net2,351 2,113 
Financing receivables, net3,698 3,466 
Goodwill59,234 59,136 
Purchased intangible assets, net8,307 9,175 
Deferred tax assets7,399 7,356 
Other assets7,251 6,059 
TOTAL ASSETS$123,371 $122,291 
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt$8,719 $5,232 
Accounts payable2,762 2,528 
Income taxes payable195 1,857 
Accrued compensation3,494 3,611 
Deferred revenue16,199 16,416 
Other current liabilities5,417 5,420 
Total current liabilities36,786 35,064 
Long-term debt21,367 22,861 
Income taxes payable2,124 2,165 
Deferred revenue12,204 12,363 
Other long-term liabilities3,167 2,995 
Total liabilities75,648 75,448 
Total equity47,723 46,843 
TOTAL LIABILITIES AND EQUITY$123,371 $122,291 



7

CISCO SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Three Months EndedSix Months Ended
January 24,
2026		January 25,
2025		January 24,
2026		January 25,
2025
Cash flows from operating activities:
Net income$3,175 $2,428 $6,035 $5,139 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, and other659 761 1,265 1,550 
Share-based compensation expense934 921 1,989 1,748 
Provision for receivables12 8 9 7 
Deferred income taxes(89)(101)(64)(382)
(Gains) losses on divestitures, investments and other, net(59)55 (237)(5)
Change in operating assets and liabilities, net of effects of acquisitions and divestitures:
Accounts receivable(1,803)(1,258)54 969 
Inventories(527)212 (761)441 
Financing receivables192 157 (120)330 
Other assets(50)(237)(642)(427)
Accounts payable344 (90)236 (359)
Income taxes, net(2,375)(1,479)(2,503)(2,285)
Accrued compensation419 461 (120)(293)
Deferred revenue433 416 (290)(555)
Other liabilities557 (13)183 24 
Net cash provided by operating activities1,822 2,241 5,034 5,902 
Cash flows from investing activities:
Purchases of investments(2,244)(486)(4,228)(2,261)
Proceeds from sales of investments176 301 1,445 1,791 
Proceeds from maturities of investments1,081 1,539 2,303 2,703 
Acquisitions, net of cash and cash equivalents acquired and divestitures(39)(40)(46)(257)
Purchases of investments in privately held companies(47)(95)(65)(137)
Return of investments in privately held companies36 17 55 94 
Acquisition of property and equipment(283)(210)(606)(427)
Other14 (4)(8)(5)
Net cash provided by (used in) investing activities(1,306)1,022 (1,150)1,501 
Cash flows from financing activities:
Issuances of common stock354 320 354 320 
Repurchases of common stock - repurchase program(1,363)(1,240)(3,355)(3,243)
Shares repurchased for tax withholdings on vesting of restricted stock units(784)(490)(1,068)(655)
Short-term borrowings, original maturities of 90 days or less, net(510)944 750 1,012 
Issuances of debt2,682 4,674 4,241 10,406 
Repayments of debt(204)(6,561)(2,992)(11,382)
Dividends paid(1,617)(1,593)(3,234)(3,185)
Other3 1 2 (2)
Net cash used in financing activities(1,439)(3,945)(5,302)(6,729)
Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents(19)(18)(33)(8)
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents(942)(700)(1,451)666 
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period8,401 10,208 8,910 8,842 
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period$7,459 $9,508 $7,459 $9,508 
Supplemental cash flow information:
Cash paid for interest$85 $224 $701 $769 
Cash paid for income taxes, net$2,935 $2,039 $3,569 $2,682 

8

CISCO SYSTEMS, INC.
REMAINING PERFORMANCE OBLIGATIONS
(In millions, except percentages)
January 24, 2026October 25, 2025January 25, 2025
AmountY/Y%AmountY/Y%AmountY/Y%
Product (1)
$21,977 8 %$21,904 10 %$20,321 25 %
Services21,429 2 %20,969 4 %20,947 8 %
Total$43,406 5 %$42,873 7 %$41,268 16 %
(1) As of the end of the second quarter of fiscal 2026, long-term product RPO was $11.8 billion, up 11% year over year.

CISCO SYSTEMS, INC.
DEFERRED REVENUE
(In millions)
January 24, 2026October 25, 2025January 25, 2025
Deferred revenue:
Product$13,371 $13,252 $13,033 
Services15,032 14,717 14,762 
Total$28,403 $27,969 $27,795 
Reported as:
Current$16,199 $15,801 $15,999 
Noncurrent12,204 12,168 11,796 
Total$28,403 $27,969 $27,795 


CISCO SYSTEMS, INC.
DIVIDENDS PAID AND REPURCHASES OF COMMON STOCK
(In millions, except per-share amounts)
DIVIDENDSSTOCK REPURCHASE PROGRAMTOTAL
Quarter EndedPer ShareAmountSharesWeighted-Average Price per ShareAmountAmount
Fiscal 2026
January 24, 2026$0.41 $1,617 18 $76.29 $1,351 $2,968 
October 25, 2025$0.41 $1,617 29 $68.28 $2,001 $3,618 
Fiscal 2025
July 26, 2025$0.41 $1,625 19 $64.65 $1,252 $2,877 
April 26, 2025$0.41 $1,627 25 $59.78 $1,504 $3,131 
January 25, 2025$0.40 $1,593 21 $58.58 $1,236 $2,829 
October 26, 2024$0.40 $1,592 40 $49.56 $2,003 $3,595 



9

CISCO SYSTEMS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

GAAP TO NON-GAAP NET INCOME
(In millions)
 Three Months EndedSix Months Ended
 January 24,
2026		January 25,
2025		January 24,
2026		January 25,
2025
GAAP net income$3,175 $2,428 $6,035 $5,139 
Adjustments to cost of sales:
Share-based compensation expense151 151 301 282 
Amortization of acquisition-related intangible assets228 335 461 654 
Acquisition/divestiture-related costs6 17 14 36 
Total adjustments to GAAP cost of sales385 503 776 972 
Adjustments to operating expenses:
Share-based compensation expense782 765 1,666 1,444 
Amortization of acquisition-related intangible assets231 265 462 530 
Acquisition/divestiture-related costs96 205 199 490 
Significant asset impairments and restructurings 36 10 183 675 
Total adjustments to GAAP operating expenses1,145 1,245 2,510 3,139 
Adjustments to interest and other income (loss), net:
(Gains) and losses on investments(61)7 (256)(91)
Total adjustments to GAAP interest and other income (loss), net(61)7 (256)(91)
Total adjustments to GAAP income before provision for income taxes1,469 1,755 3,030 4,020 
Income tax effect of non-GAAP adjustments(442)(423)(779)(899)
Significant tax matters(59)— (132)(829)
Total adjustments to GAAP provision for income taxes(501)(423)(911)(1,728)
Non-GAAP net income$4,143 $3,760 $8,154 $7,431 
  

10

CISCO SYSTEMS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

GAAP TO NON-GAAP EPS
 Three Months EndedSix Months Ended
 January 24,
2026		January 25,
2025		January 24,
2026		January 25,
2025
GAAP EPS$0.80 $0.61 $1.51 $1.28 
Adjustments to GAAP:
Share-based compensation expense0.23 0.23 0.49 0.43 
Amortization of acquisition-related intangible assets0.12 0.15 0.23 0.30 
Acquisition/divestiture-related costs0.03 0.06 0.05 0.13 
Significant asset impairments and restructurings0.01 — 0.05 0.17 
(Gains) and losses on investments(0.02)— (0.06)(0.02)
Income tax effect of non-GAAP adjustments(0.11)(0.11)(0.20)(0.22)
Significant tax matters(0.01)— (0.03)(0.21)
Non-GAAP EPS$1.04 $0.94 $2.05 $1.85 
Amounts may not sum due to rounding.


11

CISCO SYSTEMS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

GROSS MARGINS, OPERATING EXPENSES, OPERATING MARGINS, INTEREST AND OTHER INCOME (LOSS), NET, AND NET INCOME
(In millions, except percentages)
Three Months Ended
January 24, 2026
Product Gross MarginServices Gross MarginTotal Gross MarginOperating ExpensesY/YOperating IncomeY/YInterest and other income (loss), netNet IncomeY/Y
GAAP amount$7,437 $2,535 $9,972 $6,191 3%$3,781 21%$(135)$3,175 31%
% of revenue63.9 %68.4 %65.0 %40.3 %24.6 %(0.9)%20.7 %
Adjustments to GAAP amounts:
Share-based compensation expense63 88 151 782 933 — 933 
Amortization of acquisition-related intangible assets228 — 228 231 459 — 459 
Acquisition/divestiture-related costs2 4 6 96 102 — 102 
Significant asset impairments and restructurings— — — 36 36 — 36 
(Gains) and losses on investments— — — — — (61)(61)
Income tax effect/significant tax matters— — — — — — (501)
Non-GAAP amount$7,730 $2,627 $10,357 $5,046 6%$5,311 9%$(196)$4,143 10%
% of revenue66.4 %70.9 %67.5 %32.9 %34.6 %(1.3)%27.0 %
    
Three Months Ended
January 25, 2025
Product Gross MarginServices Gross MarginTotal Gross MarginOperating ExpensesOperating
Income		Interest and other income (loss), netNet
Income
GAAP amount$6,521 $2,590 $9,111 $5,998 $3,113 $(226)$2,428 
% of revenue63.7 %68.9 %65.1 %42.9 %22.3 %(1.6)%17.4 %
Adjustments to GAAP amounts:
Share-based compensation expense65 86 151 765 916 — 916 
Amortization of acquisition-related intangible assets335 — 335 265 600 — 600 
Acquisition/divestiture-related costs3 14 17 205 222 — 222 
Significant asset impairments and restructurings— — — 10 10 — 10 
(Gains) and losses on investments— — — — — 7 7 
Income tax effect/significant tax matters— — — — — — (423)
Non-GAAP amount$6,924 $2,690 $9,614 $4,753 $4,861 $(219)$3,760 
% of revenue67.7 %71.6 %68.7 %34.0 %34.7 %(1.6)%26.9 %
Amounts may not sum and percentages may not recalculate due to rounding.
12

CISCO SYSTEMS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

GROSS MARGINS, OPERATING EXPENSES, OPERATING MARGINS, INTEREST AND OTHER INCOME (LOSS), NET, AND NET INCOME
(In millions, except percentages)
Six Months Ended
January 24, 2026
Product Gross MarginServices Gross MarginTotal Gross MarginOperating ExpensesY/YOperating IncomeY/YInterest and other income (loss), netNet IncomeY/Y
GAAP amount$14,580 $5,137 $19,717 $12,573 (1)%$7,144 31%$(107)$6,035 17%
% of revenue64.2 %68.4 %65.2 %41.6 %23.6 %(0.4)%20.0 %
Adjustments to GAAP amounts:
Share-based compensation expense131 170 301 1,666 1,967 — 1,967 
Amortization of acquisition-related intangible assets461 — 461 462 923 — 923 
Acquisition/divestiture-related costs4 10 14 199 213 — 213 
Significant asset impairments and restructurings— — — 183 183 — 183 
(Gains) and losses on investments— — — — — (256)(256)
Income tax effect/significant tax matters— — — — — — (911)
Non-GAAP amount$15,176 $5,317 $20,493 $10,063 5%$10,430 9%$(363)$8,154 10%
% of revenue66.8 %70.8 %67.8 %33.3 %34.5 %(1.2)%27.0 %
    
Six Months Ended
January 25, 2025
Product Gross MarginServices Gross MarginTotal Gross MarginOperating ExpensesOperating
Income		Interest and other income (loss), netNet
Income
GAAP amount$13,109 $5,123 $18,232 $12,761 $5,471 $(317)$5,139 
% of revenue64.4 %68.5 %65.5 %45.9 %19.7 %(1.1)%18.5 %
Adjustments to GAAP amounts:
Share-based compensation expense122 160 282 1,444 1,726 — 1,726 
Amortization of acquisition-related intangible assets654 — 654 530 1,184 — 1,184 
Acquisition/divestiture-related costs8 28 36 490 526 — 526 
Significant asset impairments and restructurings— — — 675 675 — 675 
(Gains) and losses on investments— — — — — (91)(91)
Income tax effect/significant tax matters— — — — — — (1,728)
Non-GAAP amount$13,893 $5,311 $19,204 $9,622 $9,582 $(408)$7,431 
% of revenue68.3 %71.0 %69.0 %34.6 %34.4 %(1.5)%26.7 %
Amounts may not sum and percentages may not recalculate due to rounding.




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CISCO SYSTEMS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

EFFECTIVE TAX RATE
(In percentages)
Three Months EndedSix Months Ended
January 24,
2026		January 25,
2025		January 24,
2026		January 25,
2025
GAAP effective tax rate12.9 %15.9 %14.2 %0.3 %
Total adjustments to GAAP provision for income taxes6.1 %3.1 %4.8 %18.7 %
Non-GAAP effective tax rate19.0 %19.0 %19.0 %19.0 %





GAAP TO NON-GAAP GUIDANCE
Q3 FY 2026Gross Margin RateOperating Margin Rate
Earnings per Share (1)
GAAP 63% - 64%24% - 25%$0.73 - $0.77
Estimated adjustments for:
Share-based compensation expense1.0%6.0%$0.17 - $0.18
Amortization of acquisition-related intangible assets and acquisition/divestiture-related costs1.5%3.5%$0.10 - $0.11
Non-GAAP65.5% - 66.5%33.5% - 34.5%$1.02 - $1.04
FY 2026
Earnings per Share (1)
GAAP $3.00 - $3.08
Estimated adjustments for:
Share-based compensation expense$0.70 - $0.72
Amortization of acquisition-related intangible assets and acquisition/divestiture-related costs$0.43 - $0.45
Significant asset impairments and restructurings$0.04
(Gains) and losses on investments($0.05)
Significant tax matters($0.03)
Non-GAAP$4.13 - $4.17
(1) Estimated adjustments to GAAP earnings per share are shown after income tax effects.
Margin and EPS guidance includes the estimated impact of tariffs based on current trade policy.
Except as noted above, this guidance does not include the effects of any future acquisitions/divestitures, significant asset impairments and restructurings, significant litigation settlements and other contingencies, gains and losses on investments, significant tax matters, or other items, which may or may not be significant.
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Forward Looking Statements, Non-GAAP Information and Additional Information
This release may be deemed to contain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other things, statements regarding future events (such as our belief in our unique position to deliver the trusted infrastructure needed to securely and confidently power the AI-era, continuing to drive profitability by exercising financial discipline, and the strong, broad-based demand for our technology solutions as we remain focused on capturing the significant opportunities ahead) and the future financial performance of Cisco (including the guidance for Q3 FY 2026 and full year FY 2026) that involve risks and uncertainties, such as the actual impact of tariffs on our guidance for Q3 FY 2026 and full year FY 2026. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including: business and economic conditions and growth trends in the networking industry, our customer markets and various geographic regions; global economic conditions and uncertainties in the geopolitical environment; our development and use of artificial intelligence; overall information technology spending; the growth and evolution of the Internet and levels of capital spending on Internet-based systems; variations in customer demand for products and services, including sales to the service provider market, cloud, enterprise and other customer markets; the return on our investments in certain key priority areas, and in certain geographical locations, as well as maintaining leadership in Networking and services; the timing of orders and manufacturing and customer lead times; supply constraints; changes in customer order patterns or customer mix; insufficient, excess or obsolete inventory; variability of component costs; variations in sales channels, product costs or mix of products sold; our ability to successfully acquire businesses and technologies and to successfully integrate and operate these acquired businesses and technologies; our ability to achieve expected benefits of our partnerships; increased competition in our product and services markets, including the data center market; dependence on the introduction and market acceptance of new product offerings and standards; rapid technological and market change; manufacturing and sourcing risks; product defects and returns; litigation involving patents, other intellectual property, antitrust, stockholder and other matters, and governmental investigations; our ability to achieve the benefits of restructurings and possible changes in the size and timing of related charges; cyber attacks, data breaches or other incidents; vulnerabilities and critical security defects; our ability to protect personal data; evolving regulatory uncertainty; terrorism; natural catastrophic events (including as a result of global climate change); any pandemic or epidemic; our ability to achieve the benefits anticipated from our investments in sales, engineering, service, marketing and manufacturing activities; our ability to recruit and retain key personnel; our ability to manage financial risk, and to manage expenses during economic downturns; risks related to the global nature of our operations, including our operations in emerging markets; currency fluctuations and other international factors; changes in provision for income taxes, including changes in tax laws and regulations or adverse outcomes resulting from examinations of our income tax returns; potential volatility in operating results; and other factors listed in Cisco's most recent reports on Forms 10-Q and 10-K filed on November 18, 2025 and September 3, 2025, respectively. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in Cisco's most recent reports on Forms 10-Q and 10-K as each may be amended from time to time. Cisco's results of operations for the three and six months ended January 24, 2026 are not necessarily indicative of Cisco's operating results for any future periods. Any projections in this release are based on limited information currently available to Cisco, which is subject to change. Although any such projections and the factors influencing them will likely change, Cisco will not necessarily update the information, since Cisco will only provide guidance at certain points during the year. Such information speaks only as of the date of this release.
This release includes non-GAAP net income, non-GAAP gross margins, non-GAAP operating expenses, non-GAAP operating income and margin, non-GAAP effective tax rates, non-GAAP interest and other income (loss), net, and non-GAAP net income per share data for the periods presented. It also includes future estimated ranges for gross margin, operating margin, tax provision rate and EPS on a non-GAAP basis.
These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles (GAAP) and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Cisco believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Cisco's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Cisco's results of operations in conjunction with the corresponding GAAP measures.
Cisco believes that the presentation of non-GAAP measures when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and its historical and projected results of operations.
For its internal budgeting process, Cisco's management uses financial statements that do not include, when applicable, share-based compensation expense, amortization of acquisition-related intangible assets, acquisition/divestiture-related costs, significant asset impairments and restructurings, significant litigation settlements and other contingencies, gains and losses on investments, the income tax effects of the foregoing and significant tax matters. Cisco's management also uses the foregoing non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Cisco. In prior
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periods, Cisco has excluded other items that it no longer excludes for purposes of its non-GAAP financial measures. From time to time in the future there may be other items that Cisco may exclude for purposes of its internal budgeting process and in reviewing its financial results. For additional information on the items excluded by Cisco from one or more of its non-GAAP financial measures, refer to the Form 8-K regarding this release furnished today to the Securities and Exchange Commission.
About Cisco
Cisco (NASDAQ: CSCO) is the worldwide technology leader that is revolutionizing the way organizations connect and protect in the AI era. For more than 40 years, Cisco has securely connected the world. With its industry leading AI-powered solutions and services, Cisco enables its customers, partners and communities to unlock innovation, enhance productivity and strengthen digital resilience. With purpose at its core, Cisco remains committed to creating a more connected and inclusive future for all. Discover more on The Newsroom and follow us on X at @Cisco.
Copyright © 2026 Cisco and/or its affiliates. All rights reserved. Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S. and other countries. To view a list of Cisco trademarks, go to: www.cisco.com/go/trademarks. Third-party trademarks mentioned in this document are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company. This document is Cisco Public Information.
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