Cisco SystemsCSCO

Cisco reports its quarterly results today. Analysts expect the company to earn about $1.17 per share on revenue of roughly $16.84 billion. While Cisco has a long track record of meeting or exceeding these targets, the numbers themselves are only part of the story for long-term owners.

The most important details will be how well the company is selling its new AI-focused hardware and whether its subscription revenue continues to grow. Cisco is trying to move away from just selling physical boxes and toward selling software that customers pay for every year. We will be looking for proof that the massive acquisition of Splunk, a data-analysis firm, is helping Cisco win more of those predictable software contracts.

See the full quarter, and how our tracked metrics did

Cisco is scheduled to report its latest quarterly results on August 12. Analysts expect the company to bring in about 16.8 billion dollars in revenue. The company has a consistent track record of meeting or exceeding these targets, having beaten analyst expectations in each of the last eight quarters.

This report will be an important check on how well Cisco is selling its new AI-focused networking gear to large cloud providers. We will also be looking for updates on the integration of Splunk, the data-analytics firm Cisco recently bought for 28 billion dollars, to see if it is helping drive more predictable software subscription revenue.

See the full quarter, and how our tracked metrics did

Key highlights

• Artificial intelligence outlook raised: Management significantly increased its full year forecast for AI infrastructure orders to $9 billion, up from a prior target of $5 billion, as large cloud providers, known as hyperscalers, rush to build out their networks. The company also raised its expected revenue from these AI projects to $4 billion for the year, which is $1 billion more than it had previously anticipated.
• Networking demand accelerating: Orders for networking equipment grew 50% this quarter, driven by a major multiyear refresh cycle in corporate offices and data centers. This surge helped overall product revenue grow 17% to $12.1 billion, a sharp recovery from the slight 1% decline seen just one quarter ago.
• Restructuring to fund growth: Cisco announced a plan to cut costs and lay off staff that will result in up to $1 billion in charges for things like severance and office closures. These moves are intended to free up cash so the company can shift its focus and investment toward faster-growing areas like AI, security, and next-generation optics.
• Security growth stalls: Revenue from security products was flat at $2.0 billion compared to the same period last year, marking a slowdown from the 4% growth reported in the previous quarter. This is a key area for the company as it tries to move more of its business toward steady, high-margin software subscriptions.
• Full year guidance increased: The company raised its full year revenue target to a range of $62.8 billion to $63.0 billion, up from the $15.8 billion it recorded this quarter. Management also expects full year adjusted earnings to reach $4.27 to $4.29 per share, signaling confidence that the current momentum in networking and AI will continue through the end of the year.

Our take: A very strong quarter that shows Cisco is finally capturing the AI wave. The massive jump in projected AI orders to $9 billion suggests the company has moved past its recent slump and is now a critical supplier for the data center buildout. This performance reinforces the long-term case for the stock as it transitions into an AI-driven infrastructure powerhouse.