Analyst(s): Fernando Montenegro
Publication Date: August 15, 2025
Cisco’s Q4 FY 2025 earnings reflect strong momentum in AI infrastructure demand and steady networking growth, capping off a solid year. Robust order activity across service provider, cloud, and enterprise segments highlights the company’s positioning for sustained growth as AI adoption accelerates and the networking refresh cycle gains traction.
What is Covered in this Article:
- Cisco’s Q4 FY 2025 financial results
- Surge in AI infrastructure orders from global webscale customers
- Networking growth driven by service providers, cloud, and enterprise demand
- Security and observability expansion with new offerings and Splunk synergies
- FY 2026 guidance and growth drivers across AI, networking, and security
The News: Cisco Systems (NASDAQ: CSCO) reported its Q4 FY 2025 financial results with revenue of $14.7 billion, up 8% year over year (YoY) and at par with consensus expectations. Product revenue rose 10% YoY to $10.9 billion, while services revenue was flat at $3.8 billion. Non-GAAP operating income increased 13% YoY to $5.0 billion, with a non-GAAP operating margin of 34.3% (Q4 FY 2024: 35.4%). Non-GAAP net income grew 12% YoY to $4.0 billion, and non-GAAP diluted earnings per share (EPS) rose 14% YoY to $0.99, which was in line with street expectations of $0.98. Remaining performance obligations (RPO) rose 6% YoY to $43.53 billion. For FY 2025, revenue grew 5% YoY to $56.7 billion, non-GAAP operating margin was 34.4% (FY 2024: 34.2%), and non-GAAP EPS increased 2% YoY to $3.81.
“We delivered a strong close to FY 2025, driven by our accelerated innovation and solid execution”, said the CEO of Cisco. “The AI infrastructure orders we received from webscale customers in FY 2025 were more than double our original target, indicating a massive opportunity ahead as we lead the required architectural shift and build the critical infrastructure needed for the AI era.”
Cisco Q4 FY 2025 Delivers Solid Growth With AI and Networking Tailwinds
Analyst Take: Cisco ended FY 2025 on a high note, hitting the top end of its guidance in Q4 and setting up nicely for continued growth in FY 2026. AI infrastructure orders from webscale customers blew past the company’s original full-year target, showing strong demand in a space where Cisco has carved out a key role as a core systems player. Strong networking performance, growing momentum in security and observability, and the early stages of a campus switching refresh are all expected to fuel growth in the coming quarters.
AI Infrastructure Momentum and Market Positioning
AI infrastructure demand stood out in Q4 FY 2025, with webscale orders topping $800 million for the quarter and more than $2 billion for the year – over double Cisco’s initial target. Most of those orders were for systems, with the rest in optics. Cisco’s lineup – including Silicon One-based networking, optics, and built-in security – is now used by five of the biggest webscale players, and it’s gaining ground with neocloud and sovereign cloud clients. Deals in the Middle East with HUMAIN, G42, and Stargate UAE are moving forward and should scale up in H2 FY 2026. Cisco also advanced integrations with NVIDIA’s Spectrum-X architecture and continued development of the Secure AI Factory with NVIDIA to support enterprise AI-ready data centers moving forward. This broad strategy puts Cisco in a good spot to support AI training, inference, and network connectivity as customers grow their deployments.
Networking Growth and Product Refresh Cycle
Networking saw 12% YoY revenue growth in Q4 FY 2025, helped by ongoing strength in webscale infrastructure, enterprise routing, and switching. Orders from Service Provider and Cloud customers jumped 49% YoY, with four of the top six webscale clients showing triple-digit growth and two placing orders over $1 billion for FY 2025. The updated Catalyst 9000 smart switches, now powered by Silicon One, mark the beginning of a large, multi-year refresh cycle across Cisco’s wide base of customers. Demand for industrial IoT products stayed strong, with five straight quarters of double-digit growth. Wi-Fi 7 products also saw triple-digit growth, adding to the momentum from the broader networking refresh. With all these updates, Cisco has a strong path ahead going into FY 2026, with the refresh cycle expected to be a significant revenue booster for years to come.
Security and Observability Expansion
Security saw mid-single-digit order growth in Q4 FY 2025, led by uptake of newer offerings like Secure Access, XDR, Hypershield, and AI Defense. These tools added 750 new customers this quarter alone, with Hypershield often bundled with Cisco’s N9300 Smart Switch to build security directly into the network. Taking out U.S. federal, security orders were up double digits, pointing to good momentum outside the soft federal market. Splunk saw a 14% rise in new customers in Q4, thanks to cross-selling and integration wins, with over 300 new clients signed in Q3 and Q4. Observability revenue also climbed, driven by Splunk and ThousandEyes, with ARR, subscription revenue, and software revenue all seeing solid growth. As AI picks up speed, Cisco’s approach of embedding security right into the network gives it an edge in addressing the next wave of security needs, particularly if those are expressed as part of a broader AI-centric network transformation initiative.
Guidance and Final Thoughts
For Q1 FY 2026, Cisco is guiding revenue between $14.65-$14.85 billion and non-GAAP EPS between $0.97-$0.99, with gross margins of 67.5-68.5%. Full-year guidance for FY 2026 is $59.0-$60.0 billion in revenue and non-GAAP EPS of $4.00-$4.06, factoring in the current tariff impact. Management said the outlook reflects tough YoY comparisons and a conservative stance on IT spending – not a shift in demand. In addition, Federal spending is expected to bounce back in FY 2026. With a solid order book, growing partnerships, and refreshed products, Cisco heads into FY 2026 positioned to tap into several growth drivers while working hard at keeping execution tight.
See the full press release on Cisco’s Q4 FY 2025 financial results on the Cisco website.
Disclosure: Futurum is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum as a whole.
Other insights from Futurum:
Cisco Q3 FY 2025 Sees 20% Order Growth, AI Demand Hits Key Milestone
Strengthening the Digital Resilience Journey with Cisco and Splunk – Six Five On The Road
RSAC 2025: Cisco Raises the AI Security Stakes
Author Information
Fernando Montenegro serves as the Vice President & Practice Lead for Cybersecurity & Resilience at The Futurum Group. In this role, he leads the development and execution of the Cybersecurity research agenda, working closely with the team to drive the practice's growth. His research focuses on addressing critical topics in modern cybersecurity. These include the multifaceted role of AI in cybersecurity, strategies for managing an ever-expanding attack surface, and the evolution of cybersecurity architectures toward more platform-oriented solutions.
Before joining The Futurum Group, Fernando held senior industry analyst roles at Omdia, S&P Global, and 451 Research. His career also includes diverse roles in customer support, security, IT operations, professional services, and sales engineering. He has worked with pioneering Internet Service Providers, established security vendors, and startups across North and South America.
Fernando holds a Bachelor’s degree in Computer Science from Universidade Federal do Rio Grande do Sul in Brazil and various industry certifications. Although he is originally from Brazil, he has been based in Toronto, Canada, for many years.
