Cisco Systems, Inc. recently released its Quarterly Report on Form 10-Q, showcasing a robust performance in the first quarter of fiscal 2026. The company reported a revenue of $14.88 billion, marking an 8% increase from the same period in fiscal 2025. The gross margin percentage stood at 65.5%, slightly down by 0.4 percentage points from the previous year.
In terms of expenses, Cisco's research and development costs increased by 5% to $2.4 billion, while sales and marketing expenses rose by 4% to $2.87 billion. General and administrative costs decreased by 8% to $733 million. Collectively, these expenses accounted for 40.3% of the total revenue, marking a 1.8 percentage point decrease from the previous year.
Operating income as a percentage of revenue increased significantly by 5.6 percentage points to 22.6%. The company reported a net income of $2.86 billion, representing a 5% increase from the same quarter in fiscal 2025. Earnings per share also saw a growth of 6%, reaching $0.72.
Geographically, Cisco experienced revenue growth across all regions. Revenue from the Americas increased by $0.7 billion, EMEA revenue increased by $0.2 billion, and APJC revenue increased by $0.1 billion. The company also saw product revenue growth across all customer markets, with a 10% increase in product revenue driven by growth in Networking of 15% and Observability of 6%, partially offset by declines in Collaboration of 3% and Security of 2%.
The company's total software revenue was $5.7 billion, reflecting a 3% increase across all product areas and services, with total subscription revenue increasing by 2%.
In terms of financial measures, Cisco reported cash and cash equivalents and investments of $15.736 billion, remaining performance obligations of $42.873 billion, and total debt of $28.089 billion. The company also repurchased $2.001 billion of common stock under its stock repurchase program and paid $1.617 billion in dividends.
Cisco's performance is underpinned by its strategy to incorporate artificial intelligence (AI) into its product portfolios, simplify technology delivery, and maximize the business value of its technology investments. The company remains focused on driving profitable growth over the long term and delivering innovation across its technologies to assist customers in executing their digital transformations.
The report also highlights critical accounting estimates, including revenue recognition, inventory valuation, liability for purchase commitments with contract manufacturers and suppliers, and loss contingencies. These estimates are crucial in shaping the financial statements and disclosures in accordance with accounting principles generally accepted in the United States.
Today the company's shares have moved 1.44% to a price of $78.48. Check out the company's full 10-Q submission here.
