Cisco Earnings Preview: Splunk Acquisition Impact on Q4 Results | Investing.com

Cisco Methods Inc (NASDAQ:) studies their fiscal This autumn ’25 after the closing bell on Wednesday night time, August 13, 2025.

Analyst consensus is anticipating $0.98 in earnings per share on $14.6 billion in income in addition to 4.97 billion in working earnings, for anticipated year-over-year (y-o-y) progress of 13%, 7% and 14% respectively.

With fiscal Q3 ’25 outcomes (reported in Could ’25), Cisco raised and income steerage for the fiscal 4th quarter. Cisco’s non-GAAP working margin additionally got here in about 150 bp’s higher than anticipated, all three components resulting in a pleasant bump in ahead EPS and income estimates.

Fiscal Q1 ’26, which presumably Cisco will information for on Wednesday night time, is anticipating $14.6 billion in income, $4.9 billion in working earnings, and $0.97 in earnings per share, for anticipated y-o-y progress of 6%, 4% and seven% respectively, so – not less than when it comes to the numbers and y-o-y progress – Q1 ’26 or the quarter ended October ’25, is predicted proper now to be somewhat slower than the final fiscal quarter of ’25.

Cisco’s final massive acquisition, Splunk (NASDAQ:), will now be in Cisco’s natural numbers with fiscal This autumn ’25, versus Cisco reporting metrics ex-Splunk, which they did in fiscal Q3 ’25, when product orders rose 9% y-o-y ex-Splunk.

When it comes to AI, Cisco seems to have a comparatively small AI providing for now, simply $1 billion versus the $56 – $59 billion in annual income, however the AI income did look to have overwhelmed expectations in fiscal Q3 ’25.

Valuation

Up 21% YTD as of Monday night time’s shut, Cisco is buying and selling at 17x anticipated fiscal ’26 earnings, with an anticipated 6% progress price in EPS subsequent 12 months. Cisco’s valuation stays cheap, significantly given the 4% – 5% free-cash-flow yield the inventory nonetheless sports activities.

It’s been such a slow-growing tech inventory it’s virtually been forgotten about.

Simply averaging the final 5 years EPS progress of 4%, the analyst consensus for ’26 – ’28 is a mean 8%, which is double the outdated price, and doubtless incorporates some enthusiasm relating to Splunk and the safety / cyber-security market.

Cisco income progress has averaged 2% the final 5 years, whereas the ahead 3 12 months estimates are anticipated to common 5%.

The sell-side neighborhood is anticipating Cisco’s progress charges to enhance.

The primary signal can be to see how fiscal ’26 appears like on Wednesday night time, August thirteenth.

Abstract/Conclusion

If you’re shopping for Cisco, you’re shopping for one of many flagship progress shares of the 1990’s bull market that has had a really troublesome time transitioning to any sort of significant income progress the final 25 years. In actual fact Cisco has averaged simply 3% income progress per 12 months since 2010. Cisco EPS progress has averaged simply 3% since 2001, and seven% since 2010.

That being mentioned, every know-how evolution brings new alternatives. Cisco’s acquisitions over the past 25 years haven’t been very efficient in including to income progress, though Splunk might be an efficient addition to Cisco’s cybersecurity providing inside the safety phase.

Cisco’s safety phase was solely 4% of complete income and was simply simply rising at 3% – 4% for years, however Splunk would possibly change that for Cisco. (Analysts and traders will get a greater have a look at the safety phase’s natural progress now that Splunk can be a part of the outcomes for a 12 months.)

Even a return to high-single-digit EPS and income progress can be a plus for Cisco, which is just simply now traded again inside $10 of it’s April, 2000 excessive of $82 per share.

From a portfolio development standpoint, Cisco is a basic, “non-correlated” identify (i.e. non-correlated to the Magazine 7, Magazine 10, , and so forth.) so it’s an ideal inventory for a longer-term, affected person investor.

Thanks for studying.

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