CSCO · Forward model · Observability · Supercycle case
What has to happen in Observability
Model as of
This page changes Observability inside the complete CSCO model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.
Shares this vertical and portfolio case. Slider and horizon edits stay in your browser.
Observability
Basis quarter$275M
Final quarter$350M
Implied CAGR+5%
Final revenue mix1%
The smallest disclosed line: $275M in the basis quarter, $1,095M and +4% for FY2026, +6% in Q4. ThousandEyes, AppDynamics and now Galileo Technologies. Subscale against Datadog and Dynatrace, and it matters to this model as an option rather than as a driver. No ARR and no customer count are published.
Last four quarters
2026 Q1
$274M
Reported
2026 Q2
$277M
Reported
2026 Q3
$269M
Reported
2026 Q4
$275M
Reported
ThousandEyes internet and network intelligenceAppDynamics application performance monitoringGalileo Technologies (acquired FY2026 Q4)
Sequential growth
+0.8%/qtr
decaying toward +1.5%
0.75% a quarter, about 3% a year, matching a line that has been flat around $270M for six quarters.
Observability
Latest: $350M (2031Q4E)
| Period | Value |
|---|---|
| 2024Q1 | $190M |
| 2024Q2 | $188M |
| 2024Q3 | $211M |
| 2024Q4 | $248M |
| 2025Q1 | $258M |
| 2025Q2 | $277M |
| 2025Q3 | $261M |
| 2025Q4 | $259M |
| 2026Q1 | $274M |
| 2026Q2 | $277M |
| 2026Q3 | $269M |
| 2026Q4 | $275M |
| 2027Q1E | $277M |
| 2027Q2E | $279M |
| 2027Q3E | $282M |
| 2027Q4E | $285M |
| 2028Q1E | $288M |
| 2028Q2E | $291M |
| 2028Q3E | $294M |
| 2028Q4E | $298M |
| 2029Q1E | $301M |
| 2029Q2E | $305M |
| 2029Q3E | $309M |
| 2029Q4E | $313M |
| 2030Q1E | $317M |
| 2030Q2E | $322M |
| 2030Q3E | $326M |
| 2030Q4E | $331M |
| 2031Q1E | $335M |
| 2031Q2E | $340M |
| 2031Q3E | $345M |
| 2031Q4E | $350M |
Assumptions & reasoning
- At 1.6% of revenue this line cannot move the valuation: even doubling its terminal growth changes fair value by cents. It is carried because Cisco reports it, not because it drives the answer.
- Margin 15% rising to 22% is assumed: a subscale software line still absorbing acquisitions, reaching software scale economics without a step-change in size. Nothing in the filings discloses this line's profitability.
- 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.