Cisco Raises Annual Revenue Guidance, Boosting Shares in Premarket Trading

Cisco Systems has raised its annual revenue forecast following better-than-expected fiscal third-quarter results, driven by stronger margins that helped compensate for a decline in revenue.

In premarket trading, shares of the network equipment manufacturer saw an increase after the earnings announcement.

For the quarter ending April 27, Cisco reported adjusted earnings of $0.88 per diluted share, down from $1.00 a year earlier. Revenue experienced a 13% decrease compared to the same period last year, totaling $12.7 billion, which Chief Financial Officer Scott Herren attributed to an ongoing inventory backlog. This marks the second consecutive quarter of revenue decline for the company.

However, analysts at Goldman Sachs indicated that demand for orders is beginning to stabilize and is expected to return to normal seasonal patterns at the start of Cisco’s fiscal 2026.

Wall Street projections had anticipated adjusted earnings of $0.83 and revenue of $12.48 billion for Cisco’s fiscal third quarter.

Gross margin improved to 65.1%, up from 63.4% the previous year. This increase was supported by higher spending from enterprise clients and easing supply chain challenges. Additionally, the acquisition of Splunk contributed $413 million to Cisco’s revenue, enhancing its cybersecurity capabilities.

Looking forward, Cisco has updated its annual revenue forecast to between $53.6 billion and $53.8 billion, an increase from the earlier guidance of $51.5 billion to $52.5 billion. The full-year adjusted earnings per share are also expected to fall between $3.69 and $3.71, compared to the previous estimate of $3.68 to $3.74 made in February.

The report also included contributions from Yasin Ebrahim.