CLAIM #17939 · Cisco Systems Inc (CSCO) · 2026Q3 earnings call · May 13, 2026

“And we do believe that gross margins have stabilized.”

Mark Patterson · CFO

How to check this claim

Look at: Total gross margin (GAAP or non-GAAP, as reported), quarterly

It came true if: Q4 gross margin approximately 66% (within 65.0%-67.0% range)

Where: Quarterly income statement / earnings release (Q4 FY2026 results)

Knowable after: 2026-08-20

In context

“those orders, just given concerns around supply chain that may not be as applicable to you, but kind of definitely apply along the chain. And then just on a second question, just any way to kind of split the gross margin headwind on product just between memory and product mix? Charles Robbins: Do you want to take those, Mark? Mark Patterson: Yes. Thanks, Meta. So I think just first, just to hit it right up front. I think in terms of duration, we're not really seeing anything. We've always said these orders are nonlinear and they plan well in advance and really nothing new there. On the gross margin side, I think the teams have done a fantastic job there. We saw gross margins in Q3 at 66%, which is right where we expected, right where we planned for and right at the midpoint of our guide. And we do believe that gross margins have stabilized. So if you look at that, it's reflected in our Q4 guide as well with the midpoint, again, right at 66%. As I mentioned, a few things in terms of the 20-plus programs that we have going on around memory utilization. The teams are doing a great job there. The DDR4 to DDR5 conversion. Also, there's a number of things that we talked about last quarter that we've also put into place, raising prices, obviously, that you mentioned, but also the adjusting terms and conditions and then really leaning in and leveraging our financial strength on the advanced purchase commitments. And you saw those go up about $6 billion in just the last 90 days. I might just also just mention that beyond gross margin, we're focused on driving operating leverage. And we're growing bottom line faster than the top line.”

Verify independently

SEC filings for CSCO ↗ · Quote is verbatim from the 2026Q3 earnings call.