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What has to happen in Collaboration

Model as of

This page changes Collaboration inside the complete CSCO model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

CSCO forward model
Horizon
Consolidated fair value $48.48 all other verticals held in this portfolio case
Final-quarter revenue $1.05B 6% of company revenue
Explicit segment contribution $4.14B EBITDA less segment capex, before corporate items

The supercycle is a hyperscaler pull-forward and the margin tells on it. Networking decays back toward low single digits once the current build lands, Services stays flat, Security stays at 2%, and the multiple reverts toward Cisco's own pre-AI history at 3x sales. FY2027 comes in a shade under the guided floor. What this case does NOT assume is an AI revenue decline: the guided $7.5bn is still delivered. It assumes Cisco is worth what it was worth the last time it grew like this.

Collaboration

Basis quarter$1.17B
Final quarter$1.05B
Implied CAGR−2%
Final revenue mix6%

Webex meetings, calling, contact centre and collaboration devices. $1,167M in the basis quarter, +12% year over year, $4,300M and +4% for FY2026. A mature category that stopped shrinking against Teams and Zoom. No seats and no ARPU are published, so growth on the reported line is the only defensible driver.

Last four quarters
2026 Q1 $1.05B Reported
2026 Q2 $1.05B Reported
2026 Q3 $1.02B Reported
2026 Q4 $1.17B Reported
Webex meetings, calling and contact centreCollaboration devices and endpoints
Sequential growth +0.5%/qtr decaying toward +0.5% 0.5% a quarter, roughly the 2% a year this line has actually delivered across three fiscal years.
Collaboration

Latest: $1.05B (2031Q4E)

Period Value
2024Q1 $1.12B
2024Q2 $989M
2024Q3 $987M
2024Q4 $1.02B
2025Q1 $1.08B
2025Q2 $996M
2025Q3 $1.03B
2025Q4 $1.04B
2026Q1 $1.05B
2026Q2 $1.05B
2026Q3 $1.02B
2026Q4 $1.17B
2027Q1E $1.16B
2027Q2E $1.16B
2027Q3E $1.15B
2027Q4E $1.14B
2028Q1E $1.14B
2028Q2E $1.13B
2028Q3E $1.13B
2028Q4E $1.12B
2029Q1E $1.12B
2029Q2E $1.11B
2029Q3E $1.10B
2029Q4E $1.10B
2030Q1E $1.09B
2030Q2E $1.09B
2030Q3E $1.08B
2030Q4E $1.08B
2031Q1E $1.07B
2031Q2E $1.07B
2031Q3E $1.06B
2031Q4E $1.05B

Assumptions & reasoning

  • Quarterly revenue has sat between $987M and $1,167M for twelve straight quarters, so a flat sequential path is the honest projection; the Q4 +12% is read as a device quarter rather than as a new trend.
  • Margin 30% is assumed, fading to 28%, on a mature software-and-device mix whose price is capped by competitors that bundle the same functionality into a suite. Cisco discloses no profitability for this category.
  • Every vertical margin here is assumed. Cisco discloses gross margin by geography (Americas 64.5%, EMEA 70.1%, APJC 67.3% in the basis quarter) and product-versus-services gross margin, and never operating profit, capex or headcount by product category.
  • The two July quarters are derived, not printed: FY2024 Q4 and FY2025 Q4 are the fiscal-year column of the 10-K less the nine-month column of that year's Q3 10-Q, and both reconcile to the quarterly totals Cisco printed later, so they carry estimated: true.
  • Capex intensity is the consolidated rate applied to every line: FY2026 property and equipment $1,410M on $63,325M of revenue is 2.2%, and Cisco publishes no capex by product category to split it with.
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