Cisco posted strong earnings for the first quarter (Q1) of its fiscal 2027, continuing what has been a trend by the networking giant that is riding the continued wave of AI-related infrastructure expansion.

The latest financial boom was led by a 24% year-over-year surge in overall quarterly revenues that hit $18.5 billion in the quarter. CEO Chuck Robbins told investors during the earnings call that growth “demonstrates the criticality of networking and security together as agentic AI accelerates.”

“As customers look to manage increasing traffic, costs, and threats, they are turning to Cisco for our networking expertise, security, and observability solutions and services,” Robbins added. “They trust us to help scale, secure, and optimize their environments for the agentic AI era ahead. The depth and breadth of our portfolio enables us to support our customers however they choose to deploy AI, whether in the public cloud, through neoclouds, or sovereign clouds on-premises or at the edge.”

Robbins added that “we believe we are still early in the networking super cycle driven by AI deployments, with enterprise adoption just beginning.”

That belief led Cisco to raise its full-year outlook for hyperscaler AI-related revenues from $7.5 billion to $9 billion, an amount that is also double of what Cisco generated from that segment in fiscal 2026. Robbins touted recent segment wins that included a pair for its Silicon One P200-powered systems and interconnect, and scale-across use cases, with a third for its 1.6 Gb/s (1.6T) optics for a scale-out use case.

Robbins also continued to downplay concerns over long-term equipment supply and demand imbalances that could be impacted by data center construction changes.

“On the demand side, from a data center perspective, and especially as we get out to [2028] and beyond, I actually don't foresee,” Robbins said. “I think the geopolitical side of it is going to get worked out, and I think given the demand that we see today, these data centers are going to get built … we don't feel like there's much risk on the resources side and anything that would surprise us relative to the data center build out over the next two years.”

Robbins added that while there have been some instances of U.S. states enacting data center construction moratoriums, those can be worked around with the right strategy.

“Obviously you got to have the energy right in those states, but we've also seen … at least one of the governors has come out and said that they're open to data center builds. They just need to be done in the right way, with concern and commitments to the community, concerns and commitment to maintaining energy costs and things of that nature,” Robbins said. “And I think this is too important to our country, and it's too important to the industry. It'll get resolved, and I think that the last thing we want is for data centers to end up being built outside the United States.”

Slashed jobs + AI = profits

Cisco’s management also touted internal operating efficiencies that have allowed the vendor to generate more revenue per employee.

CFO Mark Patterson said that the vendor’s “headcount has declined by a low single-digit percentage, driving an expected revenue per employee increase of approximately 19%,” a claim that Robbins later bolstered by stating Cisco was “going to generate $19 billion in incremental revenue, and we're going to do that with less headcount than we had at the beginning two years ago.”

Cisco earlier this year announced plans to slash thousands of jobs as part of a new round of “strategic investments” in its workforce, cuts that Robbins at the time tied to an operating model that needs to adjust to AI use.

“The companies that will win in the AI era will be those with focus, urgency, and the discipline to continuously shift investment toward the areas where demand and long-term value creation are strongest,” Robbins wrote. “I’m confident Cisco will be one of those winners. This means making hard decisions – about where we invest, how we’re organized, and how our cost structure reflects the opportunity in front of us.”

The next part of that move was implemented during the most recent quarter, with Robbins stating Cisco “provided an agent for every employee,” highlighting the vendor’s ongoing push toward using agentic AI to drive employee productivity.

Cisco Chief Product Officer Jeetu Patel earlier this year told SDxCentral that the vendor expects approximately 70% of the networking giant’s product portfolio will be fully AI generated by the end of next year. Patel noted that the push was backed by 85% of Cisco engineers already using AI “on a regular” basis, highlighting what Patel said was a “massive proliferation of AI across the entire stack.”