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Back of Napkin

Cisco Systems, Inc. CSCO

Three-pass checkedFresh as companies report

Cisco took $5.3B of artificial-intelligence infrastructure orders in nine months and raised its full-year expectation to $9B from $5B.

Its contracted backlog did not move at all, holding at $43.5B, because this hardware ships almost as fast as it is ordered.

CSCO · price with moving averages

Daily · 6MWeekly · 3Y
$39$61$84$106$128 Sep '23Apr '24Nov '24Jun '25Jan '26Aug '26 BID
EMAs82140

Source: market data.

The business

Cisco sells the switches and routers that move data inside and between data centres and offices, plus firewalls, the Webex collaboration product, and observability software built on Splunk. About 76% of revenue is product and the rest is service contracts on the installed base.

The company spent a decade being described as a mature business losing share to cheaper hardware. What changed is that connecting tens of thousands of accelerators together requires a great deal of very fast switching, and Cisco makes that.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05The shape of the payoff
  6. 06Closing thoughts
  7. 07Methodology

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