AI Takeaway
Cisco delivered strong Q3 FY2026 results with revenue surging 12.0% YoY to $15.8B and net income jumping 35.4% YoY to $3.4B, driven by robust operating leverage even as gross margin compressed slightly.
Revenue
$15.84B
++11.96% YoY
EPS (Basic)
$0.85
++34.92% YoY
Gross Margin
63.6%
-1.94% YoY
Operating Income
$3.96B
++23.67% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Revenue grew 12.0% YoY to $15.84B in Q3 FY2026 (vs. $14.15B in Q3 FY2025), reflecting broad-based demand acceleration. This marks a significant rebound and suggests Cisco's product and services portfolio is gaining traction in the market.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
Operating income rose 23.7% YoY to $3.96B, outpacing revenue growth and pushing operating margin up approximately 2.4 percentage points to 25.0%. This indicates Cisco is effectively managing operating expenses relative to its revenue base, with R&D expense growing only modestly at 1.8% YoY to $2.38B.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
Gross margin declined approximately 1.9 percentage points YoY to 63.6%, as cost of revenue grew 18.3% YoY — significantly faster than revenue growth of 12.0%. This suggests a mix shift toward lower-margin products or higher input costs that partially offset the top-line strength.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
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Upgrade to unlockCisco's gross margin declined ~1.9 percentage points YoY to 63.6% as cost of revenue grew 18.3% versus revenue growth of 12.0%. If this trend continues, it could signal a structural mix shift toward lower-margin hardware or services, or sustained cost pressures that may erode profitability over time.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
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Upgrade to unlockReported EPS of $1.06 versus the $1.06 analyst consensus — a +0.4% beat for Q3 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $15.84B | $14.15B | +11.96% |
Cost of Revenue | $5.76B | $4.87B | +18.27% |
Gross Profit | $10.08B | $9.28B | +8.64% |
Operating Income | $3.96B | $3.2B | +23.67% |
Net Income | $3.37B | $2.49B | +35.41% |
EPS (Basic) | $0.85 | $0.63 | +34.92% |
EPS (Diluted) | $0.85 | $0.62 | +37.10% |
R&D Expense | $2.38B | $2.33B | +1.80% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $125.55B | $119.78B | +4.81% |
Current Assets | $36.56B | $32.82B | +11.41% |
Total Liabilities | $76.69B | $73.85B | +3.84% |
Current Liabilities | $39.54B | $34.49B | +14.63% |
Stockholders' Equity | $48.86B | $45.94B | +6.37% |
Cash & Equivalents | $7.08B | $8.16B | -13.21% |
Long-Term Debt | $22.87B | $25.11B | -8.91% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash FlowYTD | $8.79B | $9.96B | -11.73% |
Investing Cash FlowYTD | $-3.22B | $2.01B | -260.52% |
Financing Cash FlowYTD | $-7.34B | $-11.87B | +38.13% |
Dividends PaidYTD | $4.89B | $4.81B | +1.70% |
Share BuybacksYTD | $4.61B | $4.75B | -3.01% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 63.6% | 65.6% | -1.94% |
Operating Margin | 25.0% | 22.6% | +2.37% |
Net Margin | 21.3% | — | — |
ROE | 6.9% | — | — |
ROA | 2.7% | — | — |
Current Ratio | $0.925 | — | — |
Debt to Equity | $1.569 | — | — |
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Based on the filing data, Cisco reported diluted EPS of $0.85 in Q3 FY2026, up 37.1% YoY from $0.62, and revenue of $15.84B, up 12.0% YoY. Whether these figures beat Wall Street consensus estimates would require comparison to analyst forecasts, which are not included in the 10-Q filing itself.
Cisco's revenue grew 12.0% YoY to $15.84B in Q3 FY2026, compared to $14.15B in Q3 FY2025. This strong acceleration reflects broad-based demand for Cisco's networking, security, and collaboration solutions.
The key takeaways from Cisco's Q3 FY2026 results are: revenue grew 12% YoY to $15.8B, net income surged 35.4% to $3.4B, and diluted EPS rose 37.1% to $0.85. However, gross margin compressed ~1.9 percentage points to 63.6% as cost of revenue grew faster than revenue, and the current ratio dipped below 1.0 to 0.92.
Based on the financial data, key risks include gross margin compression (down ~1.9 ppts YoY to 63.6%), a current ratio below 1.0 (0.92) indicating short-term liabilities exceed short-term assets, and a significant swing in investing cash flows to -$3.22B YTD from +$2.01B in the prior year. No filing text was available to identify additional management-disclosed risks.
Cisco shows strong profitability with a 25% operating margin and $3.4B in net income for Q3 FY2026, and it continues to generate substantial operating cash flow ($8.79B YTD). However, the current ratio of 0.92 and debt-to-equity of 1.57 indicate moderate leverage and a slightly stretched short-term liquidity position that investors should monitor.