Cisco CEO: AI Infrastructure, Campus Refresh Opportunities Will Propel Networking Giant Toward ‘Strongest Fiscal Year’ Yet

“The beginning of this campus refresh… feels like the top of the first inning. It’s a multi-year, multibillion-dollar opportunity for us [and] I have a high degree of confidence that we’re going to deliver our strongest fiscal year,” said Cisco CEO Chuck Robbins.

Cisco Systems had a strong first half of its fiscal 2026 thanks to blossoming AI buildouts from the likes of hyperscalers and enterprises alike, as well as a major multi-year, multibillion-dollar campus networking refresh cycle that’s underway right now, according to Cisco executives.

The reason for the refresh is that legacy networking infrastructure was not designed for the present and future needs of AI. That’s where Cisco’s core networking portfolio is coming in, Robbins said.

Cisco’s networking segment includes the core switching and routing businesses, as well as the company’s telecommunications, cloud, and optical networking products. The Networking segment climbed 21 percent with revenues of $8.29 billion compared to Q2 2025’s result, which the company said was driven by revenue from AI infrastructure and network refresh opportunities. Q2 2026 marked the sixth consecutive quarter of double-digit growth in networking product orders, Cisco said.

“We are seeing strong demand for our next-generation switching, routing and wireless products, which continue to ramp faster than prior product launches. We are delivering AI-native capabilities across these products, including weaving security into the fabric of the network and modernizing the operational stack of campus networks. These new capabilities, combined with an installed base representing tens of billions of dollars across early Catalyst generations nearing end of support, underpin the multi-year multibillion-dollar refresh opportunity for Cisco,” Robbins said.

The company is seeing ramping demand for its campus, wireless and edge devices specifically, Robbins said.

AI Infrastructure orders taken from hyperscalers totaled $2.1 billion during the quarter, reflecting what Cisco called a “significant acceleration in growth.”

“We now expect to take AI orders in excess of $5 billion and to recognize over $3 billion in AI infrastructure revenue from hyperscalers in FY 26,” Robbins said.

Outside of hyperscalers, however, Robbins said there was a separate opportunity among neocloud and enterprise customers.

“We took $350 million in AI orders from these customers in Q2 and have a growing pipeline in excess of $2.5 billion for our high-performance AI infrastructure portfolio,” he added.

Cisco Q2 2026 Financial Results

Cisco’s security segment declined 4 percent year over year with revenue of $2.02 billion, which was attributed to demand for Cisco’s secure access solutions offset by declines in Cisco’s prior-generation security portfolio, as well as lagging premise-based deals with a move toward cloud subscriptions, the company said.

“While this shift [toward cloud] is creating a drag on revenue growth, which we expect to continue in the second half of fiscal year ‘26, cloud subscriptions enable greater adoption expansion and faster delivery of innovation to customers. So overall, we are pleased with this transition,” Robbins said.

The observability segment stayed flat year over year at $277 million. At the same time, Splunk won over customers in Q2 with 500 new logos during the first half of the year, the company said.

Cisco’s collaboration segment sales recovered during the quarter with 6 percent year-over-year growth to $1.05 billion compared to Q2 2025, driven by growth in devices, Webex, and cloud contact center, said Cisco CFO Mark Patterson.

The company’s product revenue, which is led by the networking business, increased 14 percent and service revenue declined 1 percent during Q2 2026.

Subscription revenue made up 51 percent of Cisco’s total revenue in the second fiscal quarter.

For Cisco’s fiscal Q2 2026, which ended January 24, revenue was up 10 percent to $15.3 billion compared to the same period a year ago. Cisco posted non-GAAP earnings per share of $1.04, an 11 percent increase compared to a year ago and non-GAAP net income of $4.1 billion in the second fiscal quarter of the year, which was up 10 percent year over year.

Cisco’s stock fell more than 6 percent on Wednesday to $79.65 in after-hours trading.