CSCOCisco Systems, Inc.

“AI infrastructure orders taken from hyperscalers totaled $1.9 billion in Q3 compared to $600 million in the year prior, with strong growth across our Silicon One systems and market-leading Acacia Optics. The year-to-date total of $5.3 billion in orders taken from hyperscalers already exceeds our prior expectations of $5 billion for FY '26 with a full quarter remaining. Given the strong demand, we now expect to take AI infrastructure orders of approximately $9 billion from hyperscalers in FY '26. 4.5x our FY '25 total. We expect to recognize approximately $4 billion in AI infrastructure revenue from hyperscalers in fiscal year '26.”

“Our Acacia business had its strongest quarter to date with more than $1 billion in orders in Q3 and is on track to grow over 200% year-over-year in fiscal year '26. Acacia is leading the coherent pluggable optics market, and we saw strong momentum across this business. To date, we have shipped over 750,000 400-gig and over 40,000 800-gig coherent pluggable optics, which we believe far exceeds the next largest supplier shipments for both speeds.”

“Separately, we took approximately $300 million in AI infrastructure orders from Neocloud, Sovereign and Enterprise customers in Q3. We have seen triple-digit year-over-year order growth in each quarter of fiscal year '26 with approximately $900 million in orders taken year-to-date, and we have a growing pipeline of approximately $3 billion for our high-performance AI infrastructure portfolio across these customers.”

“I think on the AI hyperscale side, it's probably reasonable to expect that we would recognize at least $6 billion of revenue in FY '27. Again, we'll have a more formal guide for you in 90 days.”

“Product orders from service provider and cloud customers accelerated in Q3, growing 105% year-over-year with 5 of the top hyperscalers each growing in triple digits.”

“during Q3, we were awarded by two different hyperscalers P200 design wins, which is our product -- our silicon that goes into our product that is used for scale across applications. So these were our first scale across wins. Just in addition to that, in the first week or two of this quarter, we won a third hyperscaler's P200 design win for scale across as well.”

“we see customers now preparing for inferencing and agentic applications. And in those cases, the network is incredibly important and moving the bits around with low latency is super important and customers are realizing that they have to modernize. That's why we saw our enterprise data center switching business up over 40% in orders for the quarter.”

“Circuit, our proprietary AI assistant, is now fully embedded in how Cisco operates with near universal adoption across our employee base and over 8 million total quarterly interactions. Circuit leverages a network of advanced third-party AI models, automatically choosing the best engine for every task or letting users make that choice.”

“Research conducted recently with around 3,500 technology leaders across global enterprises confirms increased urgency to modernize campus and branch networks. With traffic across these networks expected to increase 3x over the next 3 years because of AI, 93% of respondents are accelerating their network modernization plans.”

“Our Cisco Unified Edge solution is also gaining traction, and we've already booked a single enterprise deal for over 1,200 units. Unified Edge brings together compute, networking, security, storage and software to run AI applications at the edge where data is generated and decisions are made.”

“We had 5 new design wins with hyperscalers in Q3, 2 for optics, each with different hyperscalers and 3 for systems, including the first 2 wins for our Silicon One P200-powered system for major scale across use cases and a Silicon One G200 powered system for a scale-out use case.”

“over 1,000 new customers purchased our new products, including Secure Access, XDR, Hypershield and AI Defense in Q3, bringing the total of net new customers to approximately 5,000 since launch.”

“We believe the AI infrastructure opportunity in enterprise is continuing to ramp as Nexus switch orders tagged for AI deployments were up almost 50% sequentially in Q3.”

“Operating cash flow was $3.8 billion, down 7% due to continued investments to meet growing demand, especially from AI infrastructure.”

“on the inferencing front, I think you see customers actually doing exactly that. They're trying to build up their own infrastructure to support a combination of inferencing applications leading to agentic applications that they're using a combination of APIs into public models as well as information in their proprietary data sources using different protocols that are available today. So MCP connectivity, et cetera. So I think it's -- and I think that's part of what's driving the increase in our private data center business is customers just preparing for this.”

“DefenseClaw is an open source solution that helps customers safely deploy agents using common frameworks such as OpenClaw by enforcing guardrails and protecting against malicious behavior and attacks. To deliver an integrated Zero Trust solution for the agentic workforce, we introduced Zero Trust Access for AI agents and recently announced our intent to acquire Galileo and Astrix to expand our security and observability platform to include agentic identity, access management and behavior monitoring.”

“it allows us to put Cisco-based guardrails in place for what -- how we want these models to be used in addition to the guardrails that they provide. And then it allows us to combine both public model information with proprietary Cisco information and give our teams the ability to leverage AI on both public Internet data as well as our own proprietary data.”

“Cisco IQ, our unified AI-powered delivery engine for Cisco services, is now generally available with more than 250 customers already onboarded. Cisco IQ provides customers with a real-time benchmark view of Cisco assets and configurations in their environment, helping to future-proof it against emerging architectural threats.”

“In March, we announced a major expansion of our Secure AI factory with NVIDIA, giving customers a framework for deploying AI across their entire infrastructure from data centers to local sites, eliminating the need to stitch together disconnected systems and embedding security from the start.”

“As a founding design partner with OpenAI on Codex, our engineers have been using it from the beginning. And as of this week, we have made Codex available to our entire product organization to enable them to build tools and reimagine new products at unprecedented speed.”

“Cisco is a founding member of Project Glasswing and is participating in private testing of Anthropic's Claude Mythos preview model, specifically designed for proactive cybersecurity defense testing. We are also part of OpenAI's Trusted Access for Cyber program.”

“first and foremost, we're using it meaningfully to test our own code. And I think you're just going to see us accelerate patches and things of that nature out to our customers. So that's all positive. From a business implication perspective, which I think is the crux of your question, I think there will clearly be security implications for us, and I think it could -- there could be opportunities for us for sure.”

“we announced earlier this week that Cisco is open sourcing the Foundry Security Spec, a production-grade blueprint for building scalable agentic security evaluation systems using both available and new AI models. We are providing this blueprint to customers to accelerate their ability to take advantage of agentic AI and stay ahead of adversaries.”

“this was really not a savings-driven restructure. It's really -- things are moving incredibly fast right now. And this is more realigning from an already strong base as you're seeing in our financials, but really realigning resources around silicon, optics, security and AI.”

“We expect this demand to continue with the onshoring of manufacturing to the United States and as agentic and physical AI are expected to drive massive increases in network traffic.”

“AI is accelerating the pace of innovation for security defenders and adversaries, and we are innovating with speed and scale to help create an asymmetrical advantage for defenders.”

“we're also working on delivering independent agents for every employee in the company so that they can have agents that are working on their behalf.”