Cisco Raises Full-Year AI Orders to $9B, Cuts 4,000 Jobs as Q3 Earnings Beat, Stock Surges 19.76%

On May 13, Cisco released fiscal 2026 third-quarter earnings, reporting revenue of $15.84 billion, up 12% year-over-year and exceeding analyst expectations of $15.56 billion. Non-GAAP net income reached $4.2 billion, up 10%, with diluted earnings per share of $1.06, beating the expected $1.04.

The company significantly raised its AI infrastructure outlook, boosting full-year orders guidance from $5 billion to $9 billion and increasing FY2026 revenue expectations in that segment to $4 billion from $3 billion. For Q4, Cisco guided revenue of $16.7–16.9 billion, well above consensus of $15.82 billion, and non-GAAP EPS of $1.16–1.18 versus expected $1.07. As part of a restructuring plan, Cisco will lay off nearly 4,000 employees, less than 5% of its workforce, to redirect investment toward AI and growth areas. The company expects severance costs of approximately $1 billion, with roughly $450 million hitting Q4. Following the announcement, Cisco stock surged 19.76% in after-hours trading.