CSCO · 10-K · 2026A · Full report

Operating Expense Trends

CISCO SYSTEMS, INC. · 2026-09-02 · Importance 42 · Surprise 14

R&D expense increased 3% to $9.563 billion, driven by higher AI-related headcount, discretionary spending, and share-based compensation, partially offset by lower acquisition-related and contracted-services costs. Sales and marketing expense increased 5% to $11.559 billion because of higher headcount, share-based compensation, and contracted-services spending. G&A expense declined 8% to $2.761 billion, primarily because of lower acquisition-related and headcount costs. Combined R&D, sales and marketing, and G&A expense declined to 37.7% of revenue from 41.1%, while foreign-currency movements increased those expenses by approximately $195 million.

Key facts

• Operating income in fiscal 2026 was $15,368 million and operating income as a percentage of revenue was 24.3%. source
• Amortization of purchased intangible assets total decreased to $1,863 million in fiscal 2026 from $2,202 million in fiscal 2025. source
• Diluted earnings per share increased 31% in fiscal 2026. source
• As a percentage of revenue, R&D, sales and marketing, and G&A expenses collectively decreased by 3.4 percentage points in fiscal 2026. source
• Operating income as a percentage of revenue increased by 3.5 percentage points in fiscal 2026. source