The networking giant raised its full-year AI infrastructure order forecast to $9 billion as it shifts investment toward silicon, optics, and security
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Cisco $CSCO posted record quarterly revenue of $15.84 billion in its fiscal third quarter, a 12% increase from a year earlier, driven by a surge in AI-related infrastructure orders. Alongside the earnings report, Cisco disclosed plans to eliminate nearly 4,000 positions — a figure that amounts to under 5% of its global headcount — as part of a broader effort to funnel resources into AI and adjacent growth businesses.
On a GAAP basis, quarterly profit climbed to $3.37 billion, equivalent to $0.85 per diluted share, compared with $2.49 billion, or $0.62 per share, in the same period twelve months prior. Adjusted earnings per share of $1.06 cleared the $1.04 consensus estimate, while the top-line result of $15.84 billion surpassed the $15.56 billion that analysts surveyed by LSEG had forecast, according to CNBC.
Networking revenue rose 25% to $8.82 billion. Total product orders grew 35% year over year, with networking product orders up more than 50% and data center switching orders up more than 40%. Cumulative AI infrastructure orders from hyperscalers reached $5.3 billion through the first three quarters of the fiscal year, prompting Cisco to revise its full-year order target upward to $9 billion — nearly double the $5 billion figure it had projected previously. Its forecast for AI-related revenue in fiscal 2026 was also revised higher, moving from $3 billion to $4 billion.
Looking ahead to the fiscal fourth quarter, Cisco projected revenue between $16.7 billion and $16.9 billion, with adjusted earnings expected in a range of $1.16 to $1.18 per share. For the full fiscal year, the company now expects revenue of $62.8 billion to $63 billion. Both guidance ranges account for the estimated impact of tariffs under current trade policy, the company said.
Scheduled to roll out during the current quarter, the layoffs are tied to a restructuring that carries a price tag of as much as $1 billion in pre-tax charges; roughly $450 million of that total is slated to hit the books before fiscal year-end, with the balance pushed into fiscal 2027, according to Reuters. Most notifications to affected employees are set to begin May 14.
CEO Chuck Robbins framed the reductions as a deliberate shift in resources. "The companies that will win in the AI era will be those with focus, urgency, and the discipline to continuously shift investment toward the areas where demand and long-term value creation are strongest," Robbins wrote in a message to employees. Capital is being directed toward silicon, optics, and security, as well as toward embedding AI into how employees work — even as positions in other parts of the organization are being eliminated.
Cisco said it will offer impacted employees pro-rated fiscal 2026 bonuses, access to internal and external placement services, and one year of access to Cisco U courses and certifications covering AI, security, and networking.
Cisco stock rose more than 16% in extended trading Wednesday after the results were released.
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