CSCO · Forward model · Networking · Bull case
What has to happen in Networking
Model as of
This page changes Networking inside the complete CSCO model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.
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Networking
Switching, routing, wireless and servers: $9,791M in the basis quarter, 56.8% of revenue and all of the growth. Q4 +28% year over year and FY2026 +22% after two down years, on networking product orders +40% and an eighth consecutive quarter of double-digit order growth. The hyperscaler AI infrastructure business lands here — about $4bn of FY2026 revenue against $9.3bn of FY2026 orders, guided to $7.5bn in FY2027. Cisco publishes no units, ports or capacity for this line, so sequential growth on the reported category is the only honest driver.
Latest: $15.53B (2031Q4E)
| Period | Value |
|---|---|
| 2024Q1 | $8.82B |
| 2024Q2 | $7.08B |
| 2024Q3 | $6.52B |
| 2024Q4 | $6.80B |
| 2025Q1 | $6.75B |
| 2025Q2 | $6.85B |
| 2025Q3 | $7.07B |
| 2025Q4 | $7.63B |
| 2026Q1 | $7.77B |
| 2026Q2 | $8.29B |
| 2026Q3 | $8.81B |
| 2026Q4 | $9.79B |
| 2027Q1E | $10.41B |
| 2027Q2E | $10.77B |
| 2027Q3E | $11.05B |
| 2027Q4E | $11.29B |
| 2028Q1E | $11.52B |
| 2028Q2E | $11.76B |
| 2028Q3E | $11.99B |
| 2028Q4E | $12.23B |
| 2029Q1E | $12.48B |
| 2029Q2E | $12.73B |
| 2029Q3E | $12.99B |
| 2029Q4E | $13.25B |
| 2030Q1E | $13.51B |
| 2030Q2E | $13.79B |
| 2030Q3E | $14.06B |
| 2030Q4E | $14.34B |
| 2031Q1E | $14.63B |
| 2031Q2E | $14.93B |
| 2031Q3E | $15.23B |
| 2031Q4E | $15.53B |
Assumptions & reasoning
- AI infrastructure is modelled inside this line and never as its own vertical. Cisco discloses AI revenue and AI orders once a year, so a quarterly AI series would be an invented sub-line that double-counts against Networking.
- The order book runs above recognised revenue: $9.3bn of FY2026 AI orders against about $4bn of AI revenue, and product RPO of $23,436M, +9%. Orders are visibility, not revenue, so they inform the growth path rather than set it.
- Opening 5.5% sequential puts FY2027 networking near $42.7bn, +23% on FY2026's $34,668M, which is the growth the consolidated $72.2-73.4bn guide needs given a flat Services line and a 2% Security year.
- Margin 37% is assumed: non-GAAP product gross margin less consolidated operating expense, with the terminal at 34% because the hardware mix that took Q4 non-GAAP gross margin from 68.4% to 66.3% is treated as permanent.
- 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.