Cisco Systems, Inc.

Q3 performance beat expectations (growth + profitability): - Revenue: $15.8B, +12% YoY (record). - EPS (non-GAAP): $1.06, +10% YoY; both revenue and EPS came above the high end of guidance. - Product revenue: $12.1B, +17% YoY; Services revenue: $3.7B, -1% YoY (timing of service contract start dates). - Gross margin (non-GAAP): 66%, down 260 bps YoY (mainly mix + higher memory costs), but operating margin (non-GAAP): 34.2% with strong execution.

Demand strength is broad-based, led by AI infrastructure + campus refresh (and “non-AI” acceleration): - Total product orders: +35% YoY; ex-hyperscaler: +19% YoY (argues the strength isn’t only hyperscalers). - Networking orders: > +50% YoY, with service provider routing/compute triple-digit growth and data center + campus + wireless all showing strong growth; 7th consecutive quarter of double-digit networking growth. - Enterprise: +18% YoY product orders; Public sector: +27% YoY. - Service provider/cloud: +105% YoY product orders (hyperscalers also described as growing triple digits). - Surprising/important signal: Management pushed back on “pull-forward” fears, calling it modest in Q3 (they cite pipeline behavior and compare Q2 vs Q3 ex-hyperscaler order growth).

AI infrastructure outlook for FY26 meaningfully upgraded (hyperscaler orders): - AI infrastructure orders (hyperscalers): $1.9B in Q3 vs $0.6B prior year. - FY26 hyperscaler AI orders: now expected ~$9B, about 4.5x FY25 (and already $5.3B year-to-date, exceeding a prior $5B expectation with a full quarter left). - FY26 AI infrastructure revenue recognition expected: ~$4B from hyperscalers. - Non-hyperscaler AI orders: ~$300M in Q3; ~$900M year-to-date, with a ~$3B pipeline across “high-performance AI infrastructure” customers. - Order timing note: AI is described as nonlinear (expecting Q4 acceleration); they flagged scale-out order visibility ramping more into FY27.