Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
Cisco delivered a strong Q2 FY2026 with revenue of $15.35B (+9.7% YoY), net income surging 30.8% to $3.18B, and operating margin expanding 240 bps to 24.6%, reflecting robust demand and improving profitability.
Revenue
$15.35B
+9.71% YoY
EPS (Diluted)
$0.80
+31.15% YoY
Gross Margin
65.0%
-0.2 pts YoY
Operating Income
$3.78B
+21.46% YoY
Source: SEC XBRL
Cisco Systems (CSCO) reported Q2 FY2026 revenue of $15.35B, up 9.7% year over year. Operating margin was 24.6%, up 2.3 points from 22.3% a year earlier. CSCO's fiscal Q2 FY2026 corresponds to calendar Q1 2026.
Last 4 quarters: 2 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Sep 2026 | 1.22 | 1.19 | Beat +2.2% |
| Jun 2026 | 1.06 | 1.06 | Beat +0.4% |
| Mar 2026This filing | 1.04 | 1.04 | Miss -0.2% |
| Dec 2025 | 1.00 | 1.00 | Miss -0.1% |
Adjusted (non-GAAP) EPS of $1.04 versus the $1.04 analyst consensus — a -0.2% miss for Mar 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was $0.80.
Compiled by AI from this SEC filing
Revenue grew 9.7% YoY to $15.35B in Q2 FY2026, compared to $13.99B in Q2 FY2025, signaling a meaningful recovery in enterprise and service provider spending after a period of inventory digestion.
Source: 10-Q Income Statement
Operating income jumped 21.5% YoY to $3.78B, with operating margin expanding approximately 240 basis points to 24.6%, as revenue growth outpaced cost increases and operating expenses remained relatively controlled.
Source: 10-Q Income Statement
Net income rose 30.8% YoY to $3.18B and basic EPS increased 31.1% to $0.80, significantly outpacing revenue growth and indicating strong bottom-line leverage and potentially favorable tax or below-the-line items.
Source: 10-Q Income Statement
R&D expense was $2.36B in Q2 FY2026, up a modest 2.4% YoY, representing approximately 15.3% of revenue — a slight decline as a percentage of revenue — suggesting Cisco is maintaining innovation investment while benefiting from scale.
Source: 10-Q Income Statement
Cumulative fiscal year-to-date operating cash flow fell 14.7% YoY to $5.03B versus $5.90B in the prior-year period, suggesting working capital headwinds or timing differences that partially offset strong reported earnings.
Source: 10-Q Cash Flow Statement
Compiled by AI from this SEC filing · 0 high, 4 medium, 1 low
Cisco's current ratio stands at 0.955, meaning current liabilities of $36.79B exceed current assets of $35.13B. While this is common for large investment-grade companies with strong cash generation, it leaves limited buffer for unexpected short-term obligations. Cash and equivalents also declined 12.8% YoY to $7.46B.
Source: 10-Q Balance Sheet
Long-term debt rose 22.3% YoY to $24.62B, pushing the debt-to-equity ratio to 1.59. This elevated leverage could increase interest expense and reduce financial flexibility, particularly if interest rates remain high or revenue growth decelerates.
Source: 10-Q Balance Sheet
Fiscal year-to-date operating cash flow declined 14.7% YoY to $5.03B even as net income grew 30.8%, suggesting a disconnect between reported earnings and cash generation. This divergence may reflect working capital build, deferred revenue changes, or integration-related costs.
Source: 10-Q Cash Flow Statement
Gross margin edged down approximately 15 basis points YoY to 64.97% from 65.12%, as cost of revenue grew slightly faster (10.2%) than revenue (9.7%). Sustained cost pressures from supply chain, component costs, or product mix shifts could further compress margins.
Source: 10-Q Income Statement
Cisco returned approximately $6.59B to shareholders in the first half of FY2026 via dividends ($3.23B) and buybacks ($3.36B) on a YTD basis, while simultaneously increasing long-term debt. Sustaining this level of capital return while managing higher leverage could constrain strategic flexibility.
Source: 10-Q Cash Flow Statement
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 15.35 $B | 13.99 $B | +9.71% |
Cost of Revenue $B | 5.38 $B | 4.88 $B | +10.18% |
Gross Profit $B | 9.97 $B | 9.11 $B | +9.45% |
Operating Income $B | 3.78 $B | 3.11 $B | +21.46% |
Net Income $B | 3.18 $B | 2.43 $B | +30.77% |
EPS (Basic) $ | 0.80 $ | 0.61 $ | +31.15% |
EPS (Diluted) $ | 0.80 $ | 0.61 $ | +31.15% |
R&D Expense $B | 2.36 $B | 2.30 $B | +2.44% |
Answers draw on this SEC filing and the data on this page
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