CSCO · Forward model · Security · Bull case
What has to happen in Security
Model as of
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Security
Basis quarter$2.23B
Final quarter$3.48B
Implied CAGR+9%
Final revenue mix13%
The Splunk line. $2,226M in the basis quarter, +14% year over year, but only +2% for FY2026 at $8,232M once the acquisition anniversary washed through. Cisco publishes no security ARR, no seats and no Splunk-versus-legacy split, so this is a reported-category growth line and not a subscription model.
Last four quarters
2026 Q1
$1.98B
Reported
2026 Q2
$2.02B
Reported
2026 Q3
$2.01B
Reported
2026 Q4
$2.23B
Reported
Splunk security analytics and SIEMNetwork security, zero trust and SASENon-human identity security (Astrix, acquired FY2026 Q4)
Sequential growth
+1.5%/qtr
decaying toward +1.5%
1.5% a quarter, about 6% a year: better than the 2% FY2026 print, well short of the +14% Q4.
Security
Latest: $3.48B (2031Q4E)
| Period | Value |
|---|---|
| 2024Q1 | $1.01B |
| 2024Q2 | $973M |
| 2024Q3 | $1.30B |
| 2024Q4 | $1.79B |
| 2025Q1 | $2.02B |
| 2025Q2 | $2.11B |
| 2025Q3 | $2.01B |
| 2025Q4 | $1.95B |
| 2026Q1 | $1.98B |
| 2026Q2 | $2.02B |
| 2026Q3 | $2.01B |
| 2026Q4 | $2.23B |
| 2027Q1E | $2.28B |
| 2027Q2E | $2.33B |
| 2027Q3E | $2.38B |
| 2027Q4E | $2.43B |
| 2028Q1E | $2.49B |
| 2028Q2E | $2.55B |
| 2028Q3E | $2.60B |
| 2028Q4E | $2.66B |
| 2029Q1E | $2.72B |
| 2029Q2E | $2.78B |
| 2029Q3E | $2.85B |
| 2029Q4E | $2.91B |
| 2030Q1E | $2.98B |
| 2030Q2E | $3.04B |
| 2030Q3E | $3.11B |
| 2030Q4E | $3.18B |
| 2031Q1E | $3.26B |
| 2031Q2E | $3.33B |
| 2031Q3E | $3.40B |
| 2031Q4E | $3.48B |
Assumptions & reasoning
- FY2026 grew 2%; strip the Q4 +14% and the line is flat. The model takes the middle of those two facts rather than extrapolating the quarter, because Cisco publishes nothing that would show whether Splunk is compounding.
- Margin 25% is assumed and is the lowest of the four product lines: this line carries the heaviest purchased-intangible amortisation and the Splunk cost base. The terminal 28% assumes that integration cost is absorbed, not that it disappears.
- 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.