Cisco Systems, Inc.

FY26 performance was record-setting (good) - Revenue $63.3B (+12% YoY); Q4 revenue $17.3B (+18% YoY) and product revenue +24% YoY. - Non-GAAP EPS $4.33 (+14% YoY) for FY26; non-GAAP EPS +23% YoY in Q4 (bottom line growing faster than revenue → operating leverage). - Operating/financial efficiency: FY26 non-GAAP operating margin ~34.8% (up 40 bps). - Cash flow: Q4 operating cash flow $5.4B (+27% YoY).

AI/network “super cycle” momentum is the core opportunity (good + surprising) - Management argues they’re early in a multi-year networking super cycle driven by Agentic AI and increased AI traffic, threat/security demands, and modernization needs. - Hyperscalers: - FY26 AI infrastructure orders $9.3B (~4.5x FY25); Q4 hyperscale orders triple-digit growth. - AI infrastructure revenue outlook: management projects FY27 hyperscaler AI infrastructure revenue to $7.5B (not orders). - Mix: ~60% Silicon One systems / ~40% optics. - Cisco’s Acacia optics had another strong quarter (>$1B Q4 orders) and total shipped coherents 850k (400G) / 75k (800G). - Design wins: 3 new hyperscaler design wins in Q4 (total 3 scale-out design wins for P200), plus line of sight to additional design wins over the next ~6 months. - Telco/Service provider + enterprise: - Q4 total product orders +35% YoY; service provider/cloud orders +95% YoY; hyperscale AI infrastructure growth remains extremely strong. - Enterprise data center networking orders +35% YoY+; campus networking product orders +20% YoY with Wi‑Fi 7 >50% of wireless orders.

Security and observability are improving (good) - Whole security portfolio (incl. Splunk) grew double digits in Q4; Splunk strength cited as a driver. - Q4 security growth: +14% YoY (and management expects security to move back toward a steadier trajectory next quarters). - Investors should note management’s framing: security “turned the corner,” but Q4 included on-prem Splunk deals that may create some mix/shape volatility.