Cisco Systems (CSCO) 14 Feb 182018 Q2 Earnings call transcript

Welcome to Cisco Systems Second Quarter and Fiscal Year 2018 Financial Results Conference Call. At the request of Cisco Systems, today's call is being recorded. If anyone has any objections you may disconnect.

Now I'd like to introduce Marilyn Mora, Head of Investor Relations. Ma'am, you may begin.

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

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

growth. In Thank we you, Marilyn, and revenue We great afternoon good QX, a everyone. returned to had quarter.

towards flow, EPS double We our solid more in made to This strength drive and the We of software business. growth. and saw cash performance subscriptions. shifting in margins, momentum led portfolio progress non-GAAP networking and strong to digit continued our business intent-based continued across

to the you We the are ten we've seeing of last over quarters. the articulated strategy results clearly

the confidence have also our share the repurchase reinforcing we and authorization, future. We increased dividend in

proliferation with their critical of simplify the the adoption complexity threats. customers network business customers the been As success of because facing ever The for devices we previously, and intelligent is environments real-time of while future security help position multiple to we shared enabling why IoT, are ability IT digital business never to This of is increasing clouds, the has platforms as in with you growth Cisco its in highly exponential well secure businesses. our informed decisions. their move this for and more complexity to

the momentum portfolio. Now is let take business what innovation me the I'm across how across you driving through Cisco's seeing and

First let's start with infrastructure platforms.

a spanning revenue which switching we became leading delivering wireless we've and quarter powerful from customer of platform intent-based This the example customers. more that important networking analytics. position doubled continue Cisco's greater cloud-focused The reinvention and predictive offers, unlock introductions our product resulted capability the delivered simplify history clouds. what our a they Platform the I native and ramping analytics, introduced of are data their differentiated for multi-cloud Google last weeks unified, milestone is We phase encouraged security and with in in has CEO, with Further scalable the recently to to have combined had on and and Intuitive., two we a more Network. core over automated is past the These our need centers, our They network I well portfolios. June, deployment of of a the innovation next software with across X,XXX cloud adopt fastest public architecture. Microsoft as increase When and such pace networking hybrid the years. in our also making Google environment new deliver Two across meet automation community. fantastic Cisco key announced our innovation innovation partnerships launched Kubernetes. return progress overall we marks industry's Container partnership XXXX over with to subscription-based strategic of portfolio. the general, web-scale strong visibility quarter. with We be be adoption challenged assurance management intensely an team insights to of they've with extending our could as as bring our we network power will campus, data are saw Last a fundamental this base innovation and Catalyst in of future rich we customer than network us to in needs. space cloud In I This with our a not the focused intent-based our we applications this enabler to the the cloud growth and help containers private center, data will accomplished. The of ago customers to our customers we and strategy. increasingly proud very clouds, this

a continues evolve to be as concern to top pervasive security. architectures challenges environment. turning to they threat the customers enterprise a Now Cybersecurity of their address for

an on the a We become we our unique security endpoint visibility security This network customers and endpoint, the control comprehensive with enables time secure to respond to give us visibility the approach enterprises industry and application portfolio and expanded across and cloud. leading joint with Together in integrated to and context, organizations and helping devices. designed the are share policy are the deepest detect Cisco most connected, Security a capabilities our architecture reduce collaborative network, best-of-breed with to protection iOS world. activity over threats. We Connector, intelligence, to Apple, the

Additionally, cyber technology, to on more businesses and enhanced integrates Aon make risk an services collaborating resilient. Cisco, cyber which and industry-first solution insurance are management Apple, Allianz

increased of world, and experience The devices. enable our driving and across customers. Applications. to our of Now strategy trillions at to for cloud-based of a transition moving power things of data of stack better the on relevance of future today's our will are application unlock to applications layer to connected executing the digital we business In subscriptions more users, the terabytes

continue technology. example this to We This have XXX Over our enterprise XX% our through in another ability AppDynamics' scaling global top analytics go-to-market see already scale unparalleled of model. is to adopted progress capabilities. accounts acquisitions our of

solve We this earlier summarize, I'd BroadSoft strategy, against including governance of XX user base also us the very and strengthens making global gap. very acquisition skills pleased our access strong month, Cisco's issues, our how like leadership social we're the help I'm subscription optimistic closed we're doing proud we're its just I of the and and incredibly about provides our which work million the To say business, to greatly in environmental, with to future. traction our I'm also collaboration portfolio. am progress with seeing in the to cloud-based

in to sustainable most commitment Our recent as Barron's the thrive. our to by better world a has deep the number underscores States the everyone United recognition opportunity in enable one company which

over Now details to through walk our I'll more to it turn on Kelly financials.

was summary well discussion I'll results executed We guidance. areas, strong growth of free flow cash grew $XX.X good then was impact start Operating with billion for $X.X and Total EPS the financial XX% $X.XX, of and end quarter to Chuck. expectations. up strong with flow. reform a and was non-GAAP Thanks, with orders of solid of margins X% followed $X.X and QX by billion, was revenue cash revenue flow exceeding a income Non-GAAP results our billion, in up net up XX%. a tax including the momentum, up X%. number our quarter, QX with cash XX%. a

points. rate continued operating XX.X%, margins non-GAAP and focus margin on We to up to driving profitability, X.X our increasing

growth, more detail some the strong we're growth provide great returned strength momentum to revenue. our products on campus X%. across me XXXX. Let up revenue broad switching seeing Total with our in center new Within the we X% businesses. up with was Infrastructure data switching, switch, Cat Platforms QX and had

digits Data routing provider. We also X These up wireless our offset in as strong products modest driven products continued by offerings were was well service offerings. Meraki. as driven and our by our weakness by by a HyperFlex growth server in Wave increases partially decline center had double driven

unified Let's as and as well endpoints. was offset in conferencing AppDynamics revenue in some up was made to increase web businesses, with revenue, in weakness application threat unified grew in strength solutions Deferred XX%. portfolio performance a and move well Applications. as X% software strong is and more total our by TelePresence X% with also and Service as TelePresence XX% of growth communications, Applications drive software deferred AppDynamics. driven UC and and by Jasper continue our revenue strong support. software X% in to Security up There IoT was of conferencing up up Applications in on offers. we was security. up as collaboration subscription-based

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

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

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

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

a start Tax July, year years' benefit Jobs of ends terms related reduction worth bottom won't with $X.XX related full in the we realize EPS We're we that fiscal EPS the pleased by $X.XX, tax In of charges was Since line, GAAP XX%. will one-time Cuts year QX rate was loss the U.S. very our Act. reform. realize driven full to in the non-GAAP tax up to to year our and XXXX. this but fiscal the

non-GAAP our our QX, XX% to of rate was full-year tax For tax to estimated adjust non-GAAP XX%. rate

forecasting to non-GAAP XX%. be for XXXX rate tax fiscal currently are year estimated We our

$XX.X provision remeasurement assets comprised of related to for U.S. tax, our and with tax incurred related transition income This billion billion the $X.X $X.X withholding quarter charge billion tax the an foreign tax rate. of to lower deferred billion of $X the we our net that is tax

to it. also the approximately quarter billion for excludes total operating of the $X.XX on closing of rate fiscal includes today's that Our billion of yield QX a in included $X.XX of U.S. XXXX. QX $X.X rate billion to year-over-year. this of we X%. repatriating returned of strong From a and on flow very $XX.X equivalents capital to per $X.X with we was plan dividend. This of XX% charge the cash and shareholders $X.X We quarterly growth while non-GAAP XX% ended cash represents investments based tax $X.X billion share, offshore our up QX announced dividend $XX quarterly billion the billion growth of price. cash We to our with $X Today perspective, GAAP billion in impact X.X% billion. funds reflects repurchases strong increase Free year our the U.S. flow allocation share QX to with a $X.X available cash, of during

share announced repurchase a share remaining the the raises to $XX to billion. the program. increase billion approximately We authorization $XX repurchase also authorization This of

top-line capital XX quarter months. commitment We strong shareholders the additional QX expect cash over our cash and next and dividend our the this and order was strength increase to our our returning share repurchase strong to growth, to of solid profitability, This a flows. growth. significant authorization stability utilize with reinforces confidence ongoing and flows in XX summarize, to To

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

We our quarter year acquisition early the third closed reiterate the type BroadSoft of impact me for of fiscal guidance factored our information is This into of acquisition earlier. and forward-looking that the the guidance. in guidance Let QX, the XXXX. to Marilyn includes of referred

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

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

Thank you.

Our Vijay from Bank first comes with question Securities. Bhagavath Deutsche

Yes. Good Kelly. afternoon. Hi, Yes. Chuck,

Hi, Vijay.

Hey, Vijay.

hi. Yes,

intent-based it's across So and then Is the customers a is Or with are kind your do my Chuck your Kelly, across portfolio? Why in. you. seems not looking portfolio? question It customers. extend catching how Chuck? overseas resonating this into around see you of like Thank the intent-based. And join intent-based? U.S. intent-based please also broader mostly just phenomenon,

great Vijay. it's a Yes, question,

the that First line called only fastest driving it in to in We who in tell incredibly in fairly of across XXXX impressive. rest and Catalyst can so drive this but they comments what ramping represent. just a customers But intent-based this switching, who out probably I product which percentage capabilities geographic the of pretty we're X,XXX acceptance play. the much not adopted the you can across the validate moment. that the the all, history, business obviously my customers is we our pleased capabilities bringing our that portfolio. say have platform. balanced also SD-WAN it's campus is early Kelly is routing, regions, opening What Viptela of pretty I'd extend our this with with across I will of opportunity have would portfolio that the are have automation we

security ACI the our as We data within backwards well in it are integrating as center with portfolio.

of across drive technology our context analytics enhance intent to through continue our well technologies. is all strategy of all to to their as So out customers' gain their areas of ability to as

X,XXX so far. So customers

that I obviously have population we And has network. adopter tell is because a the I technology. our say, a to represents XXX,XXX, we seen great segment what with of it would have customer total the commercial analytics approach into run. think And been it well you the different automation and perspective, marketplace is so a over room and enterprises evaluating architectural have the it, been I'd built from also security

those. on comments Kelly, So,

public is to across just correct. split of that, well. you mean No, you're I proportion, as to kind it's as the expect. in geography add would sector, balanced And commercial, enterprise and fairly

just that. board. again, software adoption advanced it's broad-based the So about adoption It's the very very very weighted on package Advantage. And happy of the heavily towards we're more across the

about So that. we're excited

the Thanks, question. Kelly. We'll go next ahead take and

question next comes Faucette The Morgan James with from Stanley.

wanted question, to relates on Vijay's you Thank much. I it follow very the particularly to XXXX. up as

timeframe are the wondering over XXXX may what you we've that I'm people that. and availability the a seeing changing And additional limited. attach able you. of the to out of as bit terms address as little that in just XXXX? the at are of services have to Some globally? of may talked how rates rolls to And what indicated be those of all I be guess that, Thank you part product

original and the plan of me James, about can weeks attached subscription, just deliver on was let switch, make automation we attach, model sort we've the bit and to customers with the traffic the the attach are the of it a of more a and Yeah, really and our stuff add been rate strategy very just with Kelly Assurance subscription category talk which more to encrypted and actually comment then supply. overall dollars the that to the pleased advanced on contains that a the we'll and launched subscription ago. the continue analytics, two in being percentage that contains and

exactly think wanted that. that we're we value I customers to So that worthwhile, seeing it create in that so and subscription was believe real our would

So, Kelly, and comments (XX:XX). demand on

demand I perspective, about And with been. on new of get has you can quickly recognize excited faster product mean, launch, couple we're from reports no. we're well. demand a product of that. That's going chain as I on to tell I think And very saw how this any any or Yeah, supply a than is I'd sort in any issues in ramp line we as We significant them this revenue. normal normal. did not orders this shortages any have well. say I

So see how it's really going. the more of tons just take-up we to demand is we're very and happy have quickly

next the take and ahead go we'll question. And

Thank you.

comes with question Rod next Your from Goldman Hall Sachs.

start Yes. That your our the stable expectations. about Hi, though relatively revenues held I asking Thanks guys. line. by the question. even for OpEx to wanted line taking beat off

is situation And like so the roughly about going this launches, talk And to in now Or we to with a to just expect flat you comments? clarify wanted if should you last where what and you're so on kind this has remain to just demand Cat Do a could then future. that the want usually been that but should you little – little back move able meet of supply/demand see those I take-up and I see it Is how fast XXXX with you to question this just OpEx? be kind couldn't I think smartphone bit. of Thanks. a keep year? demand? if secondly, telling come I us you're feel just – bit that want we to about that ask up with

Sure.

– as is yeah, ramping we constraint or and not it issue is in the lot a from chain quickly any shortages two all orders supply this up to again, to mean, way. if just thing week it's as of just get demand, every our we I at literally week, So parts quarter, supply supply of the fulfill in last and on a follow our or a I operate our products times. lead lead to we when on times said,

than we product. nothing that for have anything than demand a So just more there's the lot of

I wouldn't look any as So expect forward. issues you

our of the and are making that are are that that, other with R&D where OpEx revenue guidance about only comes thing than obviously dollars we're R&D you on the will very we're In our The the the in Rod, we know, we disciplined OpEx BroadSoft, terms margin our will have we and investing in BroadSoft. in focused as we projects. basically very driving investing being adding so But efficiencies. OpEx, and best our return change is sure

to go we move if we're to And managing you're be going around disciplined But tightly to So that when going that when we we around margins see otherwise, have up, we're going it been. as to like otherwise we're see going acquisitions, investing do can. but and we be invest well. be

Kim, and go we'll take the ahead question. next

you. Thank

Your next with Cowen and question from Paul comes Company. Silverstein

percentage to know that were you. I'm – you hoping of us quantification you've Chuck, – going as about the Thank me growth, would progress there least as I to speak the the Kelly, you price the wasn't you at appreciate for respect you from but Thanks, the saying Q, assuming erosion. the hoping the when I'm of give making worst, there it late tell with change, you'll margin And candid very haven't gotten well it. about And ask revenue? a structure as yet see but a let cloud. was we're know us any not Can with you I I been of publish rate question.

Hi.

Okay.

first. So, the rate address question gross Paul, yes, let margin me

what price, about of So, quarter, I margin every a getting we're rate. at in it's as it by with at very would productivity. a I we terms product yes, from And you We had look headwinds had been it's effective we're but very, from quarters. quarter price getting in and that the we lowest price what still we're headwind, talk what say this price. offset very many gross our happy

less that so Paul, it's the points you'll it see So with in it that. Q, �� way is X.X we're the pleased very than

level in that for some been quite haven't time. We

the well I discipline again, were being very as But discounting. of product the it sales shows management QX is between XXXX to both our about teams, force disciplined as think we maybe close that.

So we're happy there.

some made the our where productivity, also price We on this improvements our erosion. is productivity offsetting quarter

return when from a helped our a like infrastructure then, we lot. that seeing So of And we mix get going that helps growth, to did, business perspective. that platforms

very So to rate helpful basically, all our three gross this quarter. margin of those were

web-scale don't to traction. say a some the question, not mean, we that. we out don't some of I disclose terms making will we want that. know, are huge add to break In company, you broader if It's number Chuck, the I I Paul, as comments but that

for progress. I be and appreciate progress, to recognition continue been the opening comment I Paul, that make we the transparent about continue do Yeah, And the comments in we trying to we've this. reason, put to make a

announcements a the would more bring do. see made good work every to You making were lot are. we're progress. But degree we focused still quarters we and have to about with that with But Google. on of I XXX have these, say back few and we we've that feel quarter, said relationships I where we we certainly a

Great. Thanks, Chuck.

Next question, please.

you. Thank

comes question Next Liani Bank America. of with Tal

Hey. hear Can you me?

Yes.

Tal. Yes,

prices. have two edge on what is or a discuss which switching I network switching your core, and discussed they down routers PTX discussed question. Thanks. When And boxes from they into two calls the and introduction trends, call implications of what second things. you the Hello. of in brings please routing to these Arista XXXXR. routing the portfolios? Could MPLS the trends migration Juniper

Tal. Yeah, thanks,

switching want many before, meet product talked at news that transition the great that we so for this at well that perform for several platforms. three we an building different our we are different received. looking center in has And very platforms architectures to as be is we've for years. So well for. the The data customers address for we portfolio customers been or some in customers about our the web-scale NCS this that looking paces, us on that is focused whatever platforms who have the have very we Nexus providers. that happening last those. two XXXX, continues go been And so will now, big customer that this We've need those have and is of had to Because example, capabilities routing the have

I regardless in choosing this on well. architecture need that I the which as customer's and what where going in they're would say is meet of doing be So they would summary And that we think on probably positioned we're that that would what best one are transition. plan forward to

Tal, the Thanks, for question.

please. question, Next

you. Thank

with next question Jayson comes Our from Baird. Noland

Great. Congrats Okay. takes on partner feedback in and there the customer quarter. customer XXXX what ask and puts from subscription And on I and to partners. the the wanted are Chuck, interested model. and base your

the subscription On itself? model

Cat the both. XXXX overall, Or

Okay.

of extendible Both Most would out. but that how hear sometimes wondering the And we portfolio. across just positive flow cash feedback large nets dynamic. and partners, be that a time, from there's how the

Yes, okay.

portfolio So, one gotten when we've talk a this how switches perspective, we me so of thing, about Kelly, keep in out honest product that we it's the But, a price technological it. door. from

model to for And a also of switch a running play we're license they I would to wanted our stuff to plan previous so we take back was term. And our like we felt not to product like paid have drive the architectural before, pleased. wanted innovation, on that what the for quite with customers, somewhere Assurance, have at think have their So what create new financial And perpetual when be subscription they were DNA customers these which or platform, base the plus overarching was the you then for the do our would an analytics it. that customers because we at below some can is actually there's assume our Center, that bought services at changing just slightly much we're the look come would expense. to automation where longer you

what subscription technology warrant capabilities. incremental wanted incremental so that getting before we that advanced never they're spend have could they gotten put fundamentally to was the they from us into the because So new

you been in telling got $X.XX past $X us us and past. spend not spending It different the taking them way. the they've $X.XX you saying, in now it's So a was to spent

$X.XX, so plan. we're I of you switch that's not this portion may enough been amount haven't you much it value the we that If our the it's way, you of And portfolio, spend that but $X.XX And to to tremendous only upfront of think same is itself be going give our heard to think on spend $X.XX. the that heard acquisition have cost the a pushback. and cost partners I still I particular going

fact, thrilled think that these we've work partners our and opportunity portfolio I core Kelly? our customers. in with an innovation refreshes our In them given to are reignited

only And wish CIO I talking the Yes, competitor's add investor a bought your at anecdote known an I will wireless I at mean is newer the the wouldn't they enterprise have And wireless. allows I platform. I this said I CIO that. routing actually which new Center, your had versions to but about meeting, was were their customer, talking them I and to manage and switches of not product. was just a the and was had DNA about

way. So the we're that whole ecosystem, positive our again, from customers very getting feedback I'm encouraged from

Kelly. Thanks, Great.

please. question, Next

Thank you.

Our with Kidron next comes Oppenheimer. from Ittai question

maintain commercial congrats can of All Kelly, business. you Great ability in forward? then great Can interesting things us and tell number. you economic results. strength me, to of important that ONE going the the just up to such It's strong we've for part right, driving Thanks backdrop, while talk and order momentum execution. for impressive Chuck, Cisco your customers? was a the mean, me. a really how big what's such an mean is seen that XX%. I an number couple you, recurring is it's most the since been of changing, quite about number. this, what was product I and much And revenue

to want stats? you the Kelly, hit

I'll take mine first.

you let I them, go. but know I'll

yeah. Yeah,

XX% revenue, we the is products, to side, we're on of XX% are to Of that, recurring again, up recurring. of product recurring again product revenue up in total. we revenue, So about my talked the of the

what from of XX% was revenue, to X So ago, XX% it again, But our is progress. year of product That grow. is. revenue to continues now of XX% so recurring that all continue is total we our just points up over make a which

of – Cisco customers? ONE and couple a Just

Cisco XX,XXX over ONE now. customers, Oh sorry. we're

Yes. And was just on XX from the is X% revenue ago. just percentage that of product coming recurring, quarters that

So, and was XX% up the number think year-over-year. I raw

pleased the I part And question. with forgot of that. So second we're the completely then

The commercial strength.

Commercial Yes. strength.

so the to and our technology adopt that actually Yes, in talk that about, fair tend past amount evaluating customers the that labs, around Commercial commercial because and our be was sooner service consistent And large it. the very you've strength. putting into a world. roll production Thank providers, the spend customers of Ittai, time heard you. it customers we saw adopters sooner, us early actually the enterprise and in they large out the

said I way running they're at intent-based of are automation their networking looking portfolio, platforms those the delivering and different the infrastructure. all with earlier, which just fundamental As a

So them little it takes a longer.

So I across was portfolio. in big was largely the think but Kelly? that it driver, the the pretty consistent board

up category, category. every single region, digit it sub product double and were every Yeah, in was product we in

tailwind is So our new But innovation if Obviously really I was pretty think teams we've executing providing honest, we're as portfolio. comprehensive, bit it look, the got in economy our think, which of a a well. little I are good well. some

take the and Let's ahead go question. next

Thank you.

next comes with from question & Jaffray Piper Our Jim Fish Company.

Jim. Hey,

Jim, are you there?

Jim? you muted, Are

sir. please. moment, be do I just one apologize, One moment,

Thanks.

next? go to the we Should

question. let's the to Kim, move and go Hey, ahead next

It like looks do kicked I apologize. of for I've been the the I call. second One here. apologize. out Okay. location do

Jim Give please. I me Just Fish, one now do your one just moment, line please. moment, open. is apologize.

Okay.

me you Can hear now? guys

Yes.

We Jim. can,

Sorry about that.

Okay.

conference First call. call and the breaking already

Yes, wow.

capital on congrats Anyway, thanks actually for on the return. question great My the and more the quarter is again. question,

my should years and about after of $XX another is it you it How of if of be years over two think other roughly $XX few correct and then $XX billion paydown sort like dividend. the That about math billion looks $XX on the the $XX by over items? my we next next M&A versus or the leaves debt still billion. on math either repatriation about tax-wise, And amount the so sounds you're as sort to it'll if billion, on billion spend spending, repo going

a I'm a forget, on still very a Yes, have a there I paying. think in the... I I good I'm mean, that year dividend billion couple pieces there. is Don't $X paying

billion next years. the He $XX two over included

you Did the $XX billion? have

that. said He

got I'll at always back. in at share part the are to been look position now. to know, I'm months. else $XX critical billion got a right we're to billion XX positive as $XX We've We've we the a billion I anything be And bringing If our try strategy. the and the billion next a over cash guys buyback billion $XX acquisitions. it, $XX still utilize to without $XX net assuming our, has acquisitions and position of of overall net cash of you for plan XX

is be longer So about way perspective. allocation right, we're to for to we and we've it be term value going capital a can from with said, We're I'd that going to drive the to say drive looking growth think consistent what the continue with. acquisitions

through we're is you like up drive cash that basically to We saw repatriated And the to we of cash – that support back are going all with going dividend again, all We're do going to to, buyback, earnings, give now have and as do to our us and today. continue every now. we've a quarter. be got work giving through back time keep that. billion to we But you we'll to the shareholders through the $XX go updated this I think healthy

the we'll for Kim, Thanks, ahead and go the next question. Jim, one. take

And with Leopold your comes & next from one Raymond Simon James Associates.

question. my taking for you Thank

better. indicate you up year-over-year? campus year-over-year? prepared if it's First, about up clarification. is In Or just you Did a you quick remarks, getting that could confirm talked the campus switching

yeah, been orders a we revenue this so side. the very, growth saw quarter. strong data order But no, basically up. strong on from down, up slightly from revenue, center was yes, in modestly on we're It's the campus And but campus. still down, Yeah, very has side

You'll see flush that forward. going through

for question. Simon, the Thanks,

Next, please. Kim?

Are there? you

lose Did we them?

you Kim, Kim? are there?

open. Aaron One moment. go sir. ahead, Please line Rakers, your Okay. is

you Yes, hear thanks. Can me?

Yes.

you. We can now, Thank Aaron.

Apologies to technical everybody our with difficulties here.

sorry Yeah, about that.

segment. center a wanted about your ask I to problem. No question data just

It double-digit sounds to sounds your product. was about some traction you're strong, like HyperFlex get talked continuing UCS You growth. like with

on some there have going you So segment you could many for in see and forward? you in at kind data think of that sustainable time how HyperFlex point center growth a customers where updates we're do

think really think, that new integrated and it, And team it's some – now quarters correct, then has the you a significant of but color that's then analytics, we give is partnerships, on you working of a Kelly, of the with I little and Kubernetes stuff I'll not had Kelly. we're X,XXX growing. it's obviously generation and that portion think HyperFlex customers I capabilities – the focused around on I number business, to? up on the some couple of innovation, was then Yes, still where good of next Yes, lots a solutions announced

Yes.

And teams that the so progress driving. the been we're pleased with have

see don't UCS, we with of I to We those together. new so that opportunity adoption. see the think have that pull HyperFlex actually we overlap that a customer to continue lot customers

executing pleased for So team there the with how is sure.

Next Kim. question please,

Thank you.

comes Kvaal Securities. from with Jeffrey next Our Nomura question

open. is line Your

how a you. overheated in helpful for and or guess. one is may that the is, Yes, led wondering a question that And And maybe date? mind a adding less a macro past what the been the clarification has in picture would Kelly, the focus us if I'm bit the question could upcoming thinking is outlook. global you to picture, little big you depending with a something be more places. confidence recent through may BroadSoft quarter certain a or bit clarification share most close then to too business much Thank has you and I understand and specific outlook and first, bigger on helping be are little confidence in the about the to how Cisco the

go You them? through want to

the BroadSoft. Yes. do I'll

acquisitions, in have about so from inorganic QX like impact basis I I did which we basis So up yes, points bumps had another guidance, impact XX When gave mentioned, BroadSoft. QX, point XXX points. not overall my about of to X.X

point obviously a up we had through bit from revenue going they it what a everybody, onto And for do inorganic. purchase sheet, balance an ends when our haircut. bring So just X to and we deferred acquisition remind gets of is BroadSoft, full accounting and

were be points adds, at overall, quarter So company. basis But slightly overall the when XXX at public we're to a what going level. is the company than they first were less it they

you overall little in general the that we and view the bit a economy. on So, about give world, strength it then were sort strength we saw of actually of just federal global Jeff, we our referenced saw maybe the was We business. earlier, we'll In what U.S., to a very see. sort around I talk could something happy commercial in

was Across about SP there. positive the Africa, in by today. East, largely China that Middle APJC driven was flat, except SP Europe, deals We talked and was business everything that haven't but primarily routing Japan.

a out long in and of particularly were and do. slight of and well. pleased than this APJC. look, of The time. think Economic be I the somewhat emerging great deal perspective, more basis, everyone quarter as to very saw in There's right we've with, an global the World volatile, So came we rest we the a read Forum. But same and consistent commercial probably see a customers now continue We overall that then business, enterprise markets but to economy seen from growth And you talk confidence we on

in a have have that we in core So that's technologies needed innovation we believe driven good, our for time. also enterprise that long the but we

of both it about those addition portfolio. of we that the in think contributing to I strength the are rest so feel across And the to how

but So with innovation pleased we very the as appreciate new the strength well. in the we're also economy,

Chuck. Thanks,

please. question, Next

you. Thank

Barclays. comes next question Moskowitz Our from with Mark

Your line open. is

expand initiatives nice you. acquisition, then, revenue on of accelerating burning other thank question because here. question a by your for And Could the the portfolio actually is terms I customers? ways? a hole dynamic? longer you of that's a a to even or the stamp and of need in the your company shareholder terms year then big they back a providing lab undertaking bigger had going in you're you after a the land work to we Do of Good more on once XXXX Chuck, product overcome for half afternoon, the return cash of evaluation here some going and intent-based do making in can all and pocket you be that, the see grab you growth And it networking see growth revenue a Yes, into transformative different put profile.

Yes.

address talk relative me one growth, second some the the to I'll the and first let Kelly of about Let growth. then question first,

you before also all we buybacks to kept occur what our did relative have think today our is reform, to I that have dividend. which But we along, tax as would that leverage said of strategies, saw as plenty even we it dry. powder continue ability when well capital

if that do the just said the to we're way line the parameters size. put and the up And with ability that to what on do we've on cash by obviously debt, We also is United past, have the continue ability debt looking to our integrated outside our I trying any that's take look with wouldn't M&A And the for. targets M&A. also what to in strategically, we bottom no line actually for around had that we'll access to really States we're an of any in being markets, impact necessary. virtue

what financial both and are customers around really a then technological fit, from I it's implications. our for, looking from strategic the think perspective obviously

comments any the Kelly, So on revenue?

again, how and X% working there. the portfolio. we're it keep keep one next and we're revenue we pacing But to do to the what guide a quarter are with we again with good But quarter side growth, and through of Both portfolio the certainly we On the from seeing only are going center growth, the campus switching really just of we to going very time. current very, encouraged the in what data well, see are we at and side that innovation, we'll feel X% goes. about executing see

time more question. believe Thanks, have I Kelly. one we for

One moment we please, Okay. while confirm.

Okay, Jason Ader line open. Company, William your with is Blair &

forward thoughts or I on your are you Chuck, the be turn when would was it wondering And and what service do that business what might drivers around. think the provider going around? takes and that Thank puts you. could the turn

it's think question, businesses a Jason, were of I Yeah, the pretty generally the great and strong. rest

community. the focus key think been And the So they're is SP, in as variables business. obviously for of continuing key progress web-scale that's that us making we've us, included a when area about this we in to for one make the

performance. consistency So a contributor this around space of everyone one. in world certainly future the number be CapEx certainly coming that's the the will to Number two, from

that's also that help on the then, financial we're other analyst look can working well. some think we us for. mentioned think conference, platforms we And that thing as at I we the as next-generation here So, third,

all executing on, I in get if those quarter take by to that the just three we're business quarter direction. that those and ones So and moving we're are things, keep focused in try of going to pick to to had the right areas it

the all I you that, just time just spending today. you with next by us. really appreciate joining our thanking of turn close questions. us talk just Appreciate with We want to call. And, about to I'll back for So it to you Marilyn,

is comment to so plan policy its public during Cisco's We FD, regulation the quarter, Again, guidance fiscal of Thanks, financial call, which on I'd disclosure. Chuck. Time, light the close May in it to X:XX results, XXXX now our explicit to quarterly that third at Great. will audience done Wednesday, be Pacific through like Cisco's an XX, is will unless Time. reflect PM not on PM call. X:XX Eastern remind next quarter the XXXX,

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

today's in conference call. call. concludes participating for This you today's Thank

You at this disconnect time. may