Cisco Systems (CSCO) reported impressive fiscal third-quarter results, topping Wall Street expectations as enterprise and hyperscaler customers ramped up spending on AI-related networking equipment.
$CSCO Q3 EARNINGS HIGHLIGHTS
Revenue: $15.8B (Est $15.54B)
; +12% YoY
AI Infrastructure Orders: FY26 expected orders raised to $9B from $5B
FY26 Guide:
— Wall St Engine (@wallstengine) May 13, 2026
For the quarter ending April 26, the networking giant posted adjusted earnings of $1.06 per share alongside $15.8 billion in total revenue. The Street had anticipated earnings between $1.03 and $1.04 per share with revenue ranging from $15.56 billion to $15.6 billion. Following the announcement, CSCO stock surged nearly 16% in after-hours trading and climbed as high as 20% during Thursday’s premarket session.
Heading into the earnings release, CSCO had already gained 32% year-to-date and posted a 66% advance over the trailing twelve months.
During the earnings conference call, CEO Chuck Robbins put it simply: “Our technology is more relevant than ever in the AI era. As a result, we saw record high demand in Q3.”
The catalyst is clear. Tech giants like Meta Platforms are investing hundreds of billions into AI infrastructure, creating massive demand for the networking hardware that powers data center connectivity — a space where Cisco maintains significant market share.
Cisco’s networking division — the company’s largest revenue generator — delivered $8.82 billion, substantially exceeding the $8.44 billion analyst forecast. Product orders in the networking category jumped over 50% during the quarter, while data center switching orders climbed more than 40% compared to the same period last year.
The company has accumulated $5.3 billion in AI infrastructure orders during the current fiscal year and elevated its full-year projection to $9 billion, up from the previous $5 billion target.
Fourth-quarter projections also impressed investors. Cisco guided for earnings between $1.16 and $1.18 per share on revenue of $16.7 billion to $16.9 billion — considerably higher than the consensus estimates of $1.08 per share and $15.8 billion in revenue.
The single area of concern: profitability metrics. Cisco’s Q3 gross margin came in at 66%, slightly trailing the 66.2% estimate and showing compression from the 68.6% posted in the year-ago quarter. Elevated memory component costs are pressuring margins industry-wide, prompting Cisco to implement selective price increases.
Alongside the robust financial performance, Cisco disclosed intentions to reduce its global employee base by under 4,000 workers — representing less than 5% of total staff — through a restructuring program aimed at prioritizing AI and strategic growth initiatives.
Layoff notifications were scheduled to commence May 14, with implementation proceeding worldwide according to regional labor regulations. The restructuring carries an expected price tag of up to $1 billion, with approximately $450 million recognized in the fourth quarter and remaining costs flowing into fiscal 2027.
Robbins acknowledged the difficult nature of the decision: “This means making hard decisions.”
These reductions contribute to an ongoing pattern of technology sector workforce adjustments. Data from Layoffs.fyi indicates 103,571 tech industry employees have been laid off in 2026 to date — nearing the 124,201 full-year total recorded in 2025.
According to TipRanks, CSCO holds a consensus Strong Buy rating, with seven Buy recommendations and two Hold ratings issued over the past three months. The average analyst price target sits at $99.00.
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