CSCO · 10-Q · 2026Q2 · Full report

R&D Investment in AI

CISCO SYSTEMS, INC. · 2026-05-19 · Importance 63 · Surprise 50

Third-quarter R&D expense increased to $2.377 billion from $2.335 billion, despite falling to 15.0% of revenue from 16.5%. Nine-month R&D expense increased to $7.132 billion from $6.920 billion while declining to 15.5% of revenue from 16.5%. The quarterly increase reflected higher discretionary spending and headcount-related expenses tied to AI investments. Nine-month growth also reflected higher share-based compensation, partly offset by lower acquisition-related costs and contracted-services spending.

Key facts

• R&D expenses increased in the three months ended April 25, 2026 primarily due to higher discretionary spending and higher headcount-related expenses reflecting investments in AI. source
• R&D expenses increased in the nine months ended April 25, 2026 primarily due to higher share-based compensation expense, higher discretionary spending and higher headcount-related expenses reflecting investments in AI. source