Cisco Systems (CSCO) 16 May 182018 Q1 Earnings call transcript

Welcome to Cisco Third Quarter Fiscal Year 2018 Financial Results Conference Call. At the request of Cisco Systems, today’s conference is being recorded.

If you have any objections, you may disconnect.

Now, I’d like to introduce Marilyn Mora, Head of Investor Relations. Thank you.

begin. may You

Chairman geographic, everyone, our earnings Welcome, on will of website third fiscal webcast you including Robbins, following quarter Relations, call. our other slides Kelly section cash Thanks, found and product forward-looking release By financial with most respect recent press to risk this non-GAAP contained Form be the Income referencing section for CFO. call. today can to GAAP press guidance, discuss be in of Relations Throughout non-GAAP quarter made All reconciliation uncertainties release, will statements. This be the call will for The our quarterly sheets, financial discussing customer now, and on we full of our Chuck by conference I’m factors have the risks results this we Head results cause detail orders statements in year-over-year information CEO; be the Investor forward-looking with also balance fiscal to Relations throughout reports could is XXXX be of comparisons website. further available unless and see both of to flow will this and from Kramer, the They differ stated will accompany seen actual and Michelle. should otherwise. joined Cisco’s in GAAP information and in earnings Marilyn that specifically supplemental the Investor corresponding Investor matters and our Mora, in documents results in discuss terms the also financial conference on to and statements, our will unless revenue XXXX. information, product call, stated and statements and information the we a results With be those basis slides guidance please SEC, otherwise. fourth identify that a the we XX-Q, subject filed include in including call that XX-K made details. materially terms which providing and the are important the

will comment during the it it now an disclosure. guidance As explicit With quarter over on not its I’ll that public reminder, through done to turn a Cisco is Chuck. unless financial

Marilyn. you, everyone. great Good quarter. another afternoon, Thank had We

We put well are place years executing strategy against the we in ago. three

our been has transform innovation Our accelerating quarter stronger way our we delivered of another record and X%, the never EPS margins growth reflect to revenue consume of pipeline XX%. business solid technology. continue and customers non-GAAP want to We to of

was value our for continuing Our the the by of and performance driven acceleration intent-based of the solutions, demand innovative increasing portfolio, strong network. networking our customer

business products steady We also more software geographies. broad-based and strength subscriptions. in and of toward resulted progress This across in shifting our made our

network that with amounts the multiple helping talk their I in They’re massive of environments. pervasive devices, generating new As these clear are providers, is world, of applications, complex cloud network the customers it manage across them is increasingly data which is the consuming playing an around from of multiple billions role and services connecting SaaS environments. critical all

evolving been multi-cloud customers complexity our visibility across on-premise, security simplicity, portfolio our have We provide hybrid and to deal unprecedented with environments. this and help and

driving momentum some our we’re like across portfolio. Now, innovations the our areas across I’d to review share priority and of key

First, let’s start with Infrastructure Platforms.

branch, network the edge. and the across campus, center to leading industry’s data We intent-based the are networking transformation

industry-leading that delivers customers the intent-based assurance, networking and paving way security, the an are Always and managed We to segmentation. offers automation portfolio policy-based simplify Cisco network. end-to-end help

X,XXX last over subscriptions, scale of which The This introduction introduced up high offer Center, and X,XXX intent-based subscription example software-defined automation another This We platform. ramping, software We’ve now WAN advanced and quarter includes in our capabilities our networking expand continue strong of of enterprise into see our DNA fastest is to has XXXX, networking solutions very a analytics additional Catalyst and we’ve uptake adoption platform. subscription our product customers, the onto also to from history. the Catalyst new model. excellent of how any new our quarter. business recently innovations. begun an routing include access These XXXX

future We in extending With portfolio. such deployments secure center providing center our we switching cloud our are SDN differentiated and growth gig infrastructure, in data solution. by leadership and data well-positioned especially XXX offerings ACI remain and growing highly cloud for intent-based with as

momentum SaaS Whether flexible new announced a new for are increasingly also turning and enterprise strong with to workload multi-side platform environment, platform. cloud customers models UCS, hyper-converged benefit multi-cloud offering simplicity architectural our or to hybrid to cloud including and HyperFlex, leading This delivery our titration support scalability strategies. compete approach. our from hybrid in is customers applications their Cisco’s solutions consumption deploying management as management and We unique with ACI containers

everything we to foundational is which security, to do. turning Now,

the advantage. highly to delivers to unique security ability architecture networking bring us endpoint, gives This huge network from the a cloud. security competitive effective scale to Our and together the at

enterprise the working. saw quarter is the we that integrated it With best-of-breed combined in with by architecture driven and clear strength base security, is The customer largest products. our is our strategy

to billion of block learning We’re intelligence platform example XX day. intelligence every leveraging A is threats also time artificial Talos remediation. this on to reduce great and our we where machine detection

any complex in seamlessly multi-cloud customers security to centers. environments. We comprehensive, our across continue a as designed and data to that integrated security workload their center in innovate introduced such address rapidly is modern anywhere key center the areas of of for to data protect architecture physical by security We following concern data

applications. Now, to moving

portfolio robust and relationship with week. portfolio a to We with and last introduced completed collaboration Meetings and acquisition the platform WebEx Spark machine-learning AI the We this platforms innovations acquisition and across team intelligence with across combined applications. our quarter, a improve new the Cisco’s our of capabilities intelligence our WebEx we collaboration insights company, meeting experiences. WebEx with enhanced convergence and Teams This new of further

consistent we to the ago. made pleased on strategy years we’ve deliver are in with progress put nearly place We three the

We have solid business momentum.

And and for in We commitment confident record we is pipeline demonstrated that driving delivered quarter. our This capital are as our to opportunities. fact strong shareholders our of this value returns as growth the ever. clearly by remains future innovation

for very It to our within of shareholders, are our company through part business we to a only innovation impact not focused responsibility do communities commitment key As drive engagement. our on also right success. as the and a active to but requirement long-term thing is

efforts disaster achievements. relief could I hunger committed of and deeply are to key and such be proud our our issues homelessness. sustainability, We as around long-standing other well as education as not

impact going forward. have about excited the we more will We’re

turn to on through I’ll Kelly, it to more over Now, detail walk our financials.

guidance momentum, billion, start Thanks, executed X% Chuck. with for up EPS performance orders the of financial business. very followed growth with was in with margins. QX. up $X.XX, with broad Total QX I’ll quarter, We We was well the good and our the strength non-GAAP pleased solid the were XX%. and summary strong financial by for across the $XX.X revenue results revenue

continue with on profitability We margin to of focus operating driving margins rate non-GAAP the and XX.X%. strong

up XX% well up as Infrastructure our in new had in wireless with in strong up our Security web security. growth, saw X and HyperFlex. X%, growth with strength We both routing. our as weakness product declined our portfolio. detail and revenue Routing provider. was unified QX switch, Infrastructure and across we grew total strength businesses revenue some to more solid services Service of threat, with Applications the X% in X% very driven as was in with as provide growth continue growth broad in revenue with XX% in up growth Switching the advanced CatXK. software exception data in performance We the drive was by revenue Total grew a more advanced servers businesses. offerings. the strong Deferred solid continued the of all driven with growth well demonstrating returned double and center and solution by Meraki Data campus. strength me digit was support. largely with by in saw endpoints, on strength very XX% software Campus subscription-based offers. Wave UC AppDynamics. revenue. driven platforms growth was TelePresence center to Let threat service as

offerings services was QX $X.X good up in and in product revenue total. billion, revenue, which momentum of up with recurring X%. in strong orders, saw drove and software more We In of revenue driving continue points from X QX, business, a total XX% subscriptions delivering Revenue an revenue. to recurring up up more XX% product our revenues. we Deferred from and total ago. XX%. software generated offers of deferred year We and subscriptions software our in from X% transform subscription was our from product growing XX% increase our recurring offers, was We X% growth

Total was and Looking X.X service with was XX%. service down perspective, sector X.X margin margin X%; was and enterprise points From customer non-GAAP gross XX%, a margin up QX XX.X%, emerging up down X%. Product down X.X declined commercial points. markets provider In at was up was the was segment, total X% was Mexico X%; public X% profitability was grew gross X%. up XX.X%, geographies, up points. gross XX.X%, our and APJC BRICs X%, our Americas grew EMEA plus up

the to impacted be which negatively near-term. calls, continue pricing several in we memory discussed expect continue higher past We the have we the over by to

year-over-year, at there’s the When impact on Our XXX non-GAAP basis-point been on operating and positive margin results of was acquisitions our revenue $X.XX XX.X%. a strong our look impact on EPS. year-over-year impact at negative we

and income X% billion XX% was the net the of cash EPS billion taxes $X.X delivered Software XX%. for Jobs Provider line, in Operating $X.X equivalents recently funds and U.S. operating In bottom included of an XX% related announced QX We to with dividend. billion We terms with cash cash, $X.X returned We ended agreement capital From a to shareholders and of of cash down non-GAAP quarterly allocation We was Tax for $X.XX, Cuts foreign our $X was U.S. normalized while our perspective, income the we and available billion while billion grew billion, $XX.X $X.X GAAP during increased these that GAAP billion. $X.X EPS $XX repatriated Video during offshore $X.X the tax non-GAAP of investments billion We one-time business. Service the $X.XX. billion to of to payments. $XX.X billion quarter repurchases of quarter net our Act. flow paid to the sell share Solutions total flow

to regulatory QX approvals conditions. and closing ‘XX any year transaction subject fiscal this customary expect to in We close

We our strong and are to summarize, top-line good profitability quarter solid portfolio. To continually looking order a was growth, optimize with growth. QX

long-term We progress strategic drive solid continue key our priorities, growth. to to investments our on making make

year fourth Marilyn fiscal Let referred type This reiterate guidance information earlier. forward-looking quarter me includes that ‘XX. our for the of to guidance the of

of tax range in be XX% X% of X% XX.X%, the range We rate is year-over-year. move turn expected XX.X% in in we $X.XX. Q&A. range expected margin back it and anticipate growth earnings XX%. the to expect I’ll non-GAAP non-GAAP revenue margin operating the gross non-GAAP The be on XX%. to expected $X.XX to Marilyn to is into Non-GAAP We provision from to to rate to be to now the rate of range the share the per to is can be so to

let’s Kelly. like ahead plenty one go to to in is we time just questions. that Michelle ask a line remind ask Michelle, and for audience doing audience have for others the open question I’d And so the of question. the Thanks, to that, while

Michelle. you, So that, to with it turn I’ll

Research, Thank you. Faucette may go James Investment Stanley Morgan ahead, from you sir.

it very continues Kelly, looking -- subscriptions, continued key I one growth Thank ask, in wanted et of much. that you and is deferred things to to seems as the are you I at and grow the nicely. investors guess, like cetera Great. Chuck

that we in good seeing One are for levels? key tying to seen a XK back at products have on to levels terms maintaining attach for Just that what color or as and stages to questions the to get more early the the strategy the traditional continue Thank you. is, how is are Are distribution that new you you? normalize working starting little rates of of trying they demand for you’d subscriptions that to of expense, well though Catalyst show product? they new launch you

of if had very it’s would then we quarters, we over her Yes. I add put James, year, anything, will and been month four I think the well. last that as marketplace let wants thanks comment, activity. I to it QX for the message. the consistent in say, fiscal I’ll of one last since do in Kelly think

So, been it’s consistent. incredibly

over think in with if you that XX that. about X,XXX we customers pleased acquired think really the this We’re Catalyst That product, means acceptance of per I the added more adding time. the a quarter, customers XXXX advanced opinion requires. that architecture generation for of belief my acquisition the announcing, is that with which the product platform the next subscription we’re clear automation in is model the in first And what the day

And uptake that that’s in think the continued on so, the we I subscription. Kelly? advanced reflected high see

is Yes. and features is, No, Vast it. other I sector then, seeing the across the profile. the higher and demand the spread is And would the of think commercial public evenly advantage very we’re margin add which terms majority in the that advanced covers all I has business. enterprise thing and only where it

Sachs, go may you sir. Rod Hall ahead, from Goldman

is bit provider Thanks weak guys. to wanted question. orders a the Hi, for with guidance. weak it that. under covers in the try Obviously, just are and Yes. the routing dig sounds service little I to line like on revenue

Kelly, Provider that could, kind any that the routing down? and you are what that of affecting guide, maybe us you follow-up. drag guide a to is are assuming routing then, if you much Just I Video give idea within growth there, assuming have Service continues how also wondering And

Yes.

general, any improvement is the in So, other on bucket trends either of we’re think, Video assuming Service and I consistent, been in Provider both, and those. the not which routing have in

what So, very not we but I guide two we of rest -- see would good are improving. those there, about includes trends say, the growth feel actually portfolio, we really and good our see

I what basically that’s included. So, have

am was if And you moving little color around then, Kelly, And the I maybe picking you could what’s it up and It’s in to OpEx QX? also give in any wondering implied. comment us could a guide Okay. for OpEx on bit sales?

it’s mainly in, OpEx, the On brought sure. increase driven -- specifically Yes, mainly by we driven is the by AppDynamics. acquisitions

we know, in when As very we’re AppDynamics, early with you bought heavy them. phase stage, investment

part it. that’s of So,

-- points X has was and on I up you it’s If well line of as a just at impact. than then have little look I purely acquisitions It’s in consolidated less of mentioned if that’s OpEx X%, which the that mainly high the line. OpEx that acquisitions. as top And OpEx out growth BroadSoft is the impact for the hurting alone my EPS. also my we As now fairly back quarter,

So what’s that’s that. driving

rest We of managing are the being very disciplined so the the business, within portfolio.

that’s So, I kind continue range will as the look in underlying driver. it QX. kind of we that of think to forward But

sir. may Kidron Ittai & you. Company, Oppenheimer Thank from you go ahead,

I on couple had congrats and Thanks of a questions. good quarter, Chuck. a

because percent to relevant but First the on think, it’s us maybe help Catalyst XX like like really not sounds fast. progress, it the XK, from is customers do day whether you’re a moving too lot, how Catalyst to, your hard Cisco, a company understand enough. CatXK but or it’s base gauge too big good a install of customer standpoint? slow is you What fast

about bit So, there potentially have a not you question do your help Arista driving had on then seeing Clearly, China. What somewhat side into about and throughout second you me the there optimistic you’ve understand little outlook good question, now recently. out are country how on with take that a base, more do last coming year. think you the marketplace? your And the of over commentary? especially that to been I that been install relations And how

of deliver XK, I available On customers roughly a this think list us very still that And to long have say there XXX,XXX I customers. that is would we the are -- to that platform.

in and and a old if you the If XXXX, our XK old XK new then products low in we have are have you the we of family platforms portfolio replaced. in that the those you Catalyst stack and are Catalyst you the say very Catalyst sort switch kind XXXX, current -- at of have family look like put that market the

So, tail still customers. there is of a very long

customers The their standard is, are XK and other to these will the remember balance and networks. have become refresh you the of then thing many it buying they’ll platform of the

that we XK the I to part point with I’ll XK while commercial the to a we thing, business one that. the we other in impact segment, on take and did that of would the was said enterprise the the improve segment enterprise back flag is see The [ph] out calls think of expect

good So, a there architecture future within about this And it. us. of I fit think, has is portfolio we still products that a And for feel long it.

we’re of we’re buying entire new and fit if success. number that’s Ethernet because, automation honest, to a think, who long-term XK, of that’s it’s the they’re this what portfolio I I think we’re really will which into strategy making customers, So, decision over would the the fantastic on what And banking because to time. say, banking really the a necessarily wow, are switch, I upgrade on not it’s

at there So, I segments. uncertainty stability the and actually countries the two and doing actually, optimistic China And economy have I in But, the optimistic you And some in trade well. is look that I issues the China largest think the been in world committed. obviously we’ll overall, in And commercial remain saw quarter, to there. be we get I pretty our believe still to closure question, going both I on remain we and It’s still in we’re strength enterprise coming we if business that switching the it. And and come this think decade. there. believe will

with. in around of the China, If you it it we’re world. look at elements like the other portfolio SP pleased be much continues But stressed the routing business to is very

Securities. from Bhagavath Deutsche Vijay Bank

You may go ahead.

you SP Are bigger your see sees trend question you OpEx in attach in Kelly is so OpEx we sold a question help quarter for business. sales kind for Chuck impact Because actually, and to that seeing example as that software video the A line? Thank is, your that you. tactical subscription already wasn’t start And would rate us helps down? quick business sold approximately sales the with to to could [Ph] which quick July picture strength, run-rate if the terms question you, as of a inflate your Permira? just of guidance, it what then, this it well,

the Let we see me questions model around the color let how and side for I’ll those financial sales give some answer you. of evolving Kelly then

we’re Martinez, will see software all us traditional a responsibility customer say, on the that for what where But traditional, take the functions model you’re we a have of space, will at a software offers to window. actually success particularly organization a time that think, is a a I’ll expansion over in time which of multi-year company, renew time, going I lot renewal more to these whole renewal allow the the adoption, and over renewing it’s much building over Experience out Maria is more Chief would of may long R&D that the either build in give of the reasons now other software leverage several to who one sale, cost Officer, ability or it us operating suggest our more or that the who in that we in helping give companies. But us invest who that that that’s areas. obviously experience of I key capability is brought may a some Customer doing us model, that’s has

a that rates right renewal ability structure that forward. also but So, our to do the at much and efforts to going of our underway not have only of now is major one different Kelly? cost that we increase

on SPVSS just business. And the

the business closes. deal We -- of is we guidance now, what’s because will it this is going bucket, other Vijay. run obviously until -- we’re to It in continue the to in right my majority

we you history, it’s the we’ll and adjust can from go there. we But, give close once business, the transaction, that. set-top-box of divested bulk like when models so we we the the the forward all So, did

transaction. the through once close So, you’ll all way the we have P&L complete the visibility

Research. question Pierre Ferragu you. you may your Street ask from New Thank

thanks. Okay,

gross So, margin. on the

you wondering is -- DRAM So, the you it like are or in has compared suffer prices. we’ve that had you how this quarter? time some Has market. going from on like still the if expect pressure your And to reflect -- last And then, for now should we these increased the pricing And share I sequentially pricing these was and improved to I fast see on to margin, the lastly, assume that gross and to you that like start increasing cost software in then, strategy of your extra when subscription very your client? in services passing revenue.

positive So, it a have gross impact should on margin.

great. on you you. Thank If that well be as comment can that would

Sure.

So, take I’ll that.

So, first the on memory.

still bad more of it which XX gross is margin quarter, memory hurt before then. were the yes, it than year-over-year. quarter less it was a in bad marginally year-over-year, than us tune us was product So, hurting so basis less It was is to It points year-over-year. down about what my than we last marginally

of increases are So, the getting still it’s the less year-over-year. slope increasing though

servers last price another So, would of our have but continues could where being like memory, at areas I the DRAM it’s take price about on well pricing, lot our as very quarter part cost elasticity. been managers that why quarter, the over price passing other of for for and good is XX years was like been We been we the of at parts continues. elasticity we’ve and price. very as been of erosion terms basis advantage had and well surgically very, through we in that have our a our as the portfolio last you some looking in price points. as about say And that peers always erosion, that on of have three seen we what have very end product of low have reason increases disciplined price we looking selectively have we really saw of increases

I your where now price in of subscription, deferred quarter, feel a this that Catalyst impact portion that offset, know ramping say a is and to really we’re a it’s last then the And as will rate Xk our good portion point, a has on on I because it quarter. quickly the so that you is negative software line gets true, our as was So, being getting that of a well. benefit. though where with much third about That was index

for now was XX just basis rate. in impact CatXK contribution on revenue alone, our up bigger points the it becoming So, alone and the quarter, this

points only strong the and as memory, and our CatXK server So, again, impact, basis pretty of The bit price then favorable from through very will the XX had we mix make, basis things software. points three are XX had some business strong other on on coming that UCS, mix quarter negative last point very, us well. had little for our I on and a a we

& Paul Silverstein Cowen you go you. Thank ahead. may from Company,

Guys, either and you about which Thanks. against of risk? going open better or whether you for about Chuck I’m terms excited or judgment, ask is to you margin, of upside of my you both wide question, opportunity, most are and revenue what Kelly. most in What downside are in terms concerned

and I say on that I start, we SP I years that done when our the our half. stabilized, portfolio in when which Listen, routing thank number the the particularly look to you was the tell And about model franchises and teams business continue enterprise the the evolution, for on which CEO but I became right there’s goes our even the optimistic Obviously, got where will acquisition that’s one you remain great and brought priority -- -- three switching for routing about hard that I’ll as the have you about So, as portfolio. quarter you’ve optimistic the space. lot I in with and will And good number right teams Kelly, talked optimistic about many to I’m pleased uncertainty, last am long and one you most I enterprise we’re forward dollar us we I to that we’re have issue. about execution working on, into emerging going over year, the you’ve spoke when get lots tell you bring one now have will really routing is wait the and integration I just be job. most at opportunity. the of business feel in very of routing of to future. which was innovation concerned overall the business, with to our if the even on the I the months, the then are team about teams coming mean, is optimistic overall And security the what enterprise enterprise sort And and macro enterprise into I’m I intent-based But, renewed what portfolio, the continue obviously had ago it’s things Paul, but been think there. a see. the routing, said countries with were actually core about and/or our I’m risk. would while road some portfolio And then, rising if that the a I guess, portfolio networking going and priority our particularly had we bring rising within years. innovation that along Viptela next the very obviously and is how how that to executing in got but obviously with pleased a another The comments? macro on I quarters the now. any dollar leave discussions, and Kelly, I good Good. of geopolitical what that’s trade we’re I’d we general, it.

International, may Jeff Kvaal ahead, from Nomura Securities you go sir.

Yes. much. Thanks very

data web general You -- center us, understand web going market would just are outside helpful I’m in of of scale us how Thank you. side in scale data enterprise spoke the to in data how progressing relationships about could in center things if your be you things. progress and center or the market the your switching are help wondering data center switching.

Jeff. Thanks,

doing the what teams in with our center So, general. are switching in data very I’m happy market

we’re growth center and transition, pleased that the from switching gig perspective. XXX the I in think both data the to the campus a with, return

to side, remain, continue continues the story the progress. as I web we would On scale make I’ve articulated, say to

Google, You’ve seen continue made solutions them. the details we with obviously announcement to on execute with the work those and announced we we of that

You’ll out later us there. from this year coming see more

discussions. some they’re favorable and take now progress all cloud a out these customers We have architectural literally are And as again, facing while. thing SaaS We’ve they or I’ve deeply But right XXX point with now. with our now repeatedly, But, or XX, had find of move years said with these are public several XX, consuming I’d other the and players. multi-year simpler that I providers thought have ago pleased environment of continued to and public engage these themselves are a continued they a think continue were and decisions we to is optimistic of five three they that they where with -- that They to four are this I’m them four IT going world, providers. much cloud services right where enterprise from. the

to still beginning see They their away. real this gone devices edge. explosion at private have not data IoT have centers, We’re those the of

of got customers and You’ve the all and suppliers. mobility

And so, that know work. really all center. is network to well relationships making so broad build as data to these the providers well, just which the that the enabled has that scale us fundamental And extend web beyond

go. pleased long way are we So, to a with we’re have we where still and

you Thank you. ahead. Jefferies, go Notter George may from

to Hi, call. conversation circle back a guys. Thanks very much. to I earnings wanted from prior

quarter an that if more Kelly, revenue talked you a oriented subscription move had Thanks. how forward? still guys there. can And models. us with update this I’m Is the see do to headwind give that headwind about the wondering, going associated You you progressing and

have because offers that as balance the the number very Thanks. on well as sure. are increasing we Yes, we we’re the that still is dollars the sheet. putting revenue much headwind there of Yes,

the past, is as is increasing. we So, increasing. now talked headwind starting portfolio And CatXK that the had headwind the hit the in to revenue, with enterprise is just

X.X. in said continue X more we we past, that. It now we’ll to the more X as is approaching to see And ramp was to portfolio, definitely the X.X and of points. So, it

may from Srini go Pajjuri Macquarie Capital, you ahead.

my recurring dipped on guess, question a I to is the revenue little bit XX%.

that products to if or you volume fiscal some your color that? primarily need a could goal? function wondering exceeding If that. could is to long-term also, any contribute in products achieve And expand XX% And to think target give subscription the ramping I’m the ‘XX. other CatXK you also, that of other model on that Is I to in

Yes.

thanks for question. the So,

recurring at continues revenue. XX% digits. product overall, basically If the revenue on grow is it product growing recurring over revenue, And yes, the I it’s our look again our recurring of double So, to to the revenue, XX% total again, over rounds. in total in

and bit now the revenue how XX from we Yes. that’s feel it’s we of growing of progressing. much services, XX. around faster so just really So, mix math to product little than math great it’s of pure the kind about have But the a that driving

of fiscal ‘XX. analyst as on The go only I’ll you we track If products our on is goes some the are financial when that into projected of the of fiscal what we’re revenue ‘XX, to included year go our you which some to year out implications, conference, feel give caveat standard, that will have we this. that we we have adopt new right in

executing we’re track traction, So, one of if impacted we the about slightly plan guys on to great feel adapt not through financial conference. when talked ahead have and we at will we overall, then we’re our clarity But what be give go where very a call we well that ‘XX. you we expected that that can analyst day of to anticipated the area we’ll year more fiscal and

Just if one need this last comment of we parts we your extent to I would on of our you portfolio. will. mean, two asked, question what the part

my enterprise software software our many at business we’re of If made routing, the that of solution. you space, I extending look opening in and the routing some was the in subscription those new are comments

headwind to is it’s the technology, for customers evolve. long-term Kelly it’s we’ll said, frankly, great. by thing to absolutely right as will our the it consume the want which create continue driven short-term but think business, do. So, to we And how And

Markets, may Citigroup go from ahead, Suva you Global sir. James

we the there How we should kind question that? think do anything have did efforts of financial buyback things should Arista much. more got those for need long-term the we this time do announcement. then outlook of of than quarter tax sales brief But you I one. clarification Chuck, and look I a at should the campus you isn’t step-up for But outlook a a any all into CFO with your more or on Chuck, an know Kelly competitors making about yet the cadence, wasn’t How announcement. Q&A Thanks. mention competition think stock side And going then, about think how your changes. -- you at new. to you and stock normal Is that. think so lot question. law, your sort about Thank new about with now about XX% Kelly, How through the you’ve to metrics? least

I launched customers campus, And architecture that excited me been Relative what to first it. June. last look, of one. we hit say I have incredibly is would this the think our let the So, about the competition

network, we automate we to the products, compatible did the routing to DNA at the that our an then a of And They center things of the the look architecture to incredibly network we least our don’t we data platform a generation that at of cetera. to automation want think those datacenter and platform and a deliver. think unique the have integrate is Center our minimum is the campus, our platform customers campus and that I et backwards want be wireless the is that handles the ability One products looking switching our products, an security with and can automation all enterprise enterprise one we architecture in the frankly, wireless the taking to switching. architecture. at you’ll as And important automation because very routing, handles important, from overtime at products that that made

And CatXK comfortable are customers. We see the very transition. we’re with now. in incredible right where acceleration this adoption we We by of and our are leading

$XX we good overseas. authorization. we like last so terms back about announced -- buyback where in we as quarter’s we on again, said call, in stand that. And feel earnings, brought our tax in big we from We -- we billion And to said, of question, really the increase we the a share

$XX basically we to share XX And that our in buyback. months. XX using remaining we in next the anticipate have billion So,

be very we cash we would our had back. we’re stated got there, aggressive once we like So, being

well. going that’s So,

as the fiscal year of go far when -- the benefit fiscal As that the ‘XX in the it to ‘XX the to tax and U.S. tax XX% rate, U.S. rate get we QX federal we to we rate. be for new in XX% year down our we full in also expect expect stated

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may from Thank you. ahead. you Liani go Tal America, of Bank

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go Capital, you you. Moskowitz Mark from may Barclays ahead. Thank

you. Thank afternoon. Good

fourth inflection try Kelly understand some think goal with X% slightly to cycle to into selling of more quarter question Is the cycle? subscription better quarters? a about respect selling me. our [indiscernible] point more, any how revenue receptive, the you revenue your as the to for guidance become go more of should do year-over-year? course checks one there the they heard longer calendar in relative ‘XX and of as X% that or half second Thank Chuck, we We’ve post Just terms you the it revenue in growth see accelerated to the actually October, could is just element, customers you. X% January of

Mark. Hey,

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for your answer on So opportunity to next And, the We everybody us kick to I the questions. for spending call. time with I’ll details us, joining you just thank Marilyn, back today. to want appreciate the appreciate you it

XXXX, Great. X:XX policy Time, quarter Cisco’s not Thanks, Again, is next unless our disclosure. Chuck. I’d financial public audience like year will regulation done reflect that Wednesday, fourth comment call guidance earnings Eastern FD, pm to to pm through Cisco’s it the Pacific remind results Time. in on its August is quarterly explicit full an and light during of the on X:XX will XXth annual be which at quarter

We’re to now call. close the planning

Investor department. the questions, you feel any today. free for we joining If further to have call contact the Relations much Cisco you And very thank

And thank you participating on call. for conference today’s

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