Cisco closed its fiscal year on 12 August with a figure that reframes it as an AI infrastructure supplier: $9.3bn of AI infrastructure orders from hyperscalers, roughly 4.5 times the prior year.
The order book
$4bn of that landed in the fourth quarter alone. Total product orders rose 35% year on year — Americas up 44%, EMEA 25%, APJC 19% — and service provider and cloud orders climbed 95%. Fourth-quarter revenue was $17.3bn (up 18%) on non-GAAP EPS of $1.22 (up 23%), both above guidance. The full year came in at $63.3bn and $4.33.
Orders are not revenue
The distinction matters here. Cisco delivered about $4bn of AI revenue in fiscal 2026 and expects roughly $7.5bn in fiscal 2027 — the $9.3bn is what has been booked, not shipped. Guidance for fiscal 2027 is $72.2-73.4bn of revenue and $5.05-5.11 of non-GAAP EPS.
Why the stock dropped
Shares fell about 4.6% to $118.18 after hours. Non-GAAP gross margin was 66.3% and operating margin 35.9%, up from 34.3% — but AI infrastructure sold to hyperscalers is hardware-heavy and dilutive to a company whose valuation rests on software and subscriptions. Growth of this kind arrives at a lower margin than the growth it replaces.
The strategic read
Chief executive Chuck Robbins framed it as positioning "to support our customers however or wherever they decide to deploy AI". Networking has become a bottleneck as clusters scale past what a single rack row can hold, which is the demand Cisco is capturing.
What to watch next
Record non-GAAP net income of $4.9bn alongside a falling share price is the tension in one line. If AI orders keep compounding at this rate, mix pressure on gross margin becomes structural rather than a quarter's noise — and that, not the order number, is what fiscal 2027 will be judged on.