CSCO · Forward model · Services
What has to happen in Services
Model as of
This page changes Services inside the complete CSCO model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.
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Services
Basis quarter$3.79B
Final quarter$4.63B
Implied CAGR+4%
Final revenue mix20%
Technical support, software maintenance and advanced services: $3,793M in the basis quarter and $15,030M for FY2026, against $15,046M in FY2025 — exactly flat while the company grew 12%. Services RPO is $23,298M, +6%, so the book is growing faster than recognised revenue. There is no ARR and no renewal rate, so this is a growth line anchored to a backlog observation rather than a subscription driver.
Last four quarters
2026 Q1
$3.81B
Reported
2026 Q2
$3.71B
Reported
2026 Q3
$3.72B
Reported
2026 Q4
$3.79B
Reported
Technical support and software maintenanceAdvanced and professional servicesSplunk support
Sequential growth
+1.0%/qtr
decaying toward +1.0%
1.0% a quarter, about 4% a year: below the +6% services RPO, above the 0% Cisco just delivered.
Services
Latest: $4.63B (2031Q4E)
| Period | Value |
|---|---|
| 2024Q1 | $3.53B |
| 2024Q2 | $3.56B |
| 2024Q3 | $3.68B |
| 2024Q4 | $3.78B |
| 2025Q1 | $3.73B |
| 2025Q2 | $3.76B |
| 2025Q3 | $3.77B |
| 2025Q4 | $3.79B |
| 2026Q1 | $3.81B |
| 2026Q2 | $3.71B |
| 2026Q3 | $3.72B |
| 2026Q4 | $3.79B |
| 2027Q1E | $3.83B |
| 2027Q2E | $3.87B |
| 2027Q3E | $3.91B |
| 2027Q4E | $3.95B |
| 2028Q1E | $3.99B |
| 2028Q2E | $4.03B |
| 2028Q3E | $4.07B |
| 2028Q4E | $4.11B |
| 2029Q1E | $4.15B |
| 2029Q2E | $4.19B |
| 2029Q3E | $4.23B |
| 2029Q4E | $4.27B |
| 2030Q1E | $4.32B |
| 2030Q2E | $4.36B |
| 2030Q3E | $4.40B |
| 2030Q4E | $4.45B |
| 2031Q1E | $4.49B |
| 2031Q2E | $4.54B |
| 2031Q3E | $4.58B |
| 2031Q4E | $4.63B |
Assumptions & reasoning
- The single largest judgement in this model. Services was flat to the dollar in FY2026 while its RPO grew 6%, and the release does not say whether that is recognition timing or price erosion in support renewals. The base takes a partial catch-up at 4% a year; the bear case takes none.
- Half of the recurring base sits here and it contributed nothing to a +12% year, which is why hardware mix, not services, is what moves the margin line in every scenario below.
- Margin 40% flat is assumed from non-GAAP services gross margin of 71.2% less consolidated operating expense. It is the most stable line Cisco has and no visible margin lever attaches to it.
- 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.