Cisco CEO: AI infrastructure, campus refresh opportunities will propel networking giant toward ‘strongest fiscal year’ yet

“It’s a multi-year, multibillion-dollar opportunity for us [and] I have a high degree of confidence that we’re going to deliver our strongest fiscal year,” said Chuck Robbins on the campus refresh

Cisco Systems had a strong first half of its fiscal 2026 thanks to blossoming AI buildouts from the likes of hyperscalers and enterprises alike, as well as a major multi-year, multibillion-dollar campus networking refresh cycle that’s underway right now, according to Cisco execs.

“The beginning of this campus refresh feels like the top of the first inning.

“It’s a multi-year, multibillion-dollar opportunity for us [and] I have a high degree of confidence that we’re going to deliver our strongest fiscal year,” CEO Chuck Robbins told investors during the tech giant’s Q2 2026 earnings call Wednesday.

The reason for the refresh is that legacy networking infrastructure was not designed for the present and future needs of AI.

That’s where Cisco’s core networking portfolio is coming in, Robbins said.

Cisco’s networking segment includes the core switching and routing businesses, as well as the company’s telecommunications, cloud, and optical networking products.

The networking segment climbed 21 per cent with revenues of $8.3bn (£6.1bn) compared to Q2 2025’s result, which the company said was driven by revenue from AI infrastructure and network refresh opportunities.

Q2 2026 marked the sixth consecutive quarter of double-digit growth in networking product orders, Cisco said.

“We are seeing strong demand for our next-generation switching, routing and wireless products, which continue to ramp faster than prior product launches,” Robbins said,

“We are delivering AI-native capabilities across these products, including weaving security into the fabric of the network and modernising the operational stack of campus networks.

“These new capabilities, combined with an installed base representing tens of billions of dollars across early Catalyst generations nearing end of support, underpin the multi-year multibillion-dollar refresh opportunity for Cisco.”

The company is seeing ramping demand for its campus, wireless and edge devices specifically, Robbins said.

AI Infrastructure orders taken from hyperscalers totalled $2.1bn during the quarter, reflecting what Cisco called a “significant acceleration in growth.”

“We now expect to take AI orders in excess of $5bn and to recognise over $3bn in AI infrastructure revenue from hyperscalers in FY26,” Robbins said.

Outside of hyperscalers, however, Robbins said there was a separate opportunity among neocloud and enterprise customers.

“We took $350m in AI orders from these customers in Q2 and have a growing pipeline in excess of $2.5bn for our high-performance AI infrastructure portfolio,” he added.

Cisco Q2 2026 financial results

Cisco’s security segment declined four per cent year-on-year with revenue of $2bn, which was attributed to demand for Cisco’s secure access solutions offset by declines in Cisco’s prior-generation security portfolio, as well as lagging premise-based deals with a move toward cloud subscriptions, the company said.

“While this shift [toward cloud] is creating a drag on revenue growth, which we expect to continue in H2 FY26, cloud subscriptions enable greater adoption expansion and faster delivery of innovation to customers. We are pleased with this transition,” Robbins explained.

The observability segment stayed flat year-on-year at $277m.

At the same time, Splunk won over customers in Q2 with 500 new logos during the first half of the year, the company said.

Cisco’s collaboration segment sales recovered during the quarter with six per cent year-on-year growth to $1.05bn compared to Q2 2025, driven by growth in devices, Webex, and cloud contact centre, said Cisco CFO Mark Patterson.

The company’s product revenue, which is led by the networking business, increased 14 per cent and service revenue declined 1 per cent during Q2 2026.

Subscription revenue made up 51 per cent of Cisco’s total revenue in the second fiscal quarter.

For Cisco’s fiscal Q2 2026, which ended January 24, revenue was up ten per cent to $15.3bn (£11.2bn) compared to the same period a year ago.

Cisco posted non-GAAP earnings per share of $1.04, an 11 per cent increase compared to a year ago and non-GAAP net income of $4.1bn in the second fiscal quarter of the year, which was up ten per cent year-on-year.

Cisco’s stock fell more than six per cent on Wednesday to $79.65 in after-hours trading.

This article originally appeared on CRN UK sister website CRN.