Cisco Systems, Inc. Shs -CAD hedged- Canadian Depositary Receipt Repr Shs Reg S

Q3 performance: strong beat vs guidance; AI-driven growth - Revenue: $15.8B, +12% YoY (record), coming in above the high end of guidance. - EPS: non-GAAP $1.06, +10% YoY, also above guidance. - Product revenue: $12.1B, +17% YoY; services revenue: $3.7B, -1% YoY (timing of service contract start dates). - Non-GAAP gross margin: 66% (-260 bps YoY); operating margin (non-GAAP): 34.2%.

Demand/order picture: broad-based acceleration; non-AI also strong (but investors worry about pull-forward) - Total product orders: +35% YoY; ex-hyperscaler: +19% YoY (key “durability” question). - Enterprise orders: +18% YoY; Public sector: +27% YoY; Telco & cloud/service provider orders: +105% YoY (5 hyperscalers each in triple digits), telco alone +9% YoY. - Networking orders: growing >50% YoY, with repeated momentum (7th consecutive quarter of double-digit networking growth). - Management response to “pull-forward” concerns: said any pull-ahead into Q3 was likely modest, citing that ex-webscale accelerated from ~10% (Q2) to ~19% (Q3), half explained by price increases, plus healthy pipeline.

AI infrastructure forecast: hyperscaler order intake ramps sharply and is a core driver of FY’26 - AI infrastructure orders from hyperscalers: - Q3: $1.9B vs $600M prior year. - Year-to-date: $5.3B, already exceeding prior FY’26 expectation ($5B) with a quarter left. - FY’26 now expected: ~$9B orders from hyperscalers (≈ 4.5x FY’25 total). - FY’26 AI infrastructure revenue expectation: ~$4B from hyperscalers. - Mix/demand signals: strong momentum in Silicon One systems and Acacia Optics (Acacia Q3: > $1B orders, on track for >200% YoY growth in FY’26). - Management emphasized AI orders are nonlinear (timing-dependent), and Q4 was expected to accelerate.