Cisco Systems (CSCO) 13 Feb 192019 Q2 Earnings call transcript

Welcome to Cisco’s Second Quarter Fiscal Year 2019 Financial Results Conference Call. At the request of Cisco, today’s conference is being recorded.

If you have any objections, you may disconnect.

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

Michelle. 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 will throughout on otherwise. All made stated unless call a basis comparisons made be year-over-year this be XXXX. guidance the third The today matters we quarter for we of providing will will statements include the forward-looking including fiscal discussing be and are in risks They contained reports we our could those which most XX-K the SEC, on to forward-looking to in the identifies filed recent statements. Forms discuss results factors materially and differ detail subject with cause that risk specifically in from XX-Q the the uncertainties important that actual documents respect that With and please for the further press see accompany slides guidance, to also release details. call this

done Cisco an explicit comment a during on is not unless will it through As the public reminder, its financial quarter guidance disclosure.

we of completed reminder, XXXX. business or sale QX SPVSS that XX, a and on no the in October accordingly revenue from As expense in QX, business our had fiscal

business normalized we non-GAAP, to orders results. is will discussing of from all revenue, historical the information such, product our As exclude the SPVSS be and

call historical accompany for website the slides provided understand in these this business the have SPVSS on information help to our that impacts. financial and We

provided to the the we QX will call been today's has way. the call our same Chuck. turn call normalized a reminder, over in earnings and guidance I during As now

everyone. Marilyn good and you, Thank afternoon,

that firing have growth we engine demonstrated we quarter built that resilient is cylinders. multiple on again This a

secure our a of like share securely transform core continued cloud, continued sustainable strategy Our expansion the cash delivered per that are in the devices increasing enhance navigate never innovation unprecedented our facing customers simplify, ever delivering strong value investing our earnings we've and our and and revenue dynamic and generation. and capabilities shareholders. the We're by Cisco's growth geographies is environment complex for users architecture markets With non-GAAP double-digit most our them to intent-based growth, before. margins, We complexity helps networking for connectivity automate, IT their solid to experiences building and the infrastructure. while expanding our across seen. new all businesses, portfolio, the to them and of customers’ enterprises, need customers and digital enabling their technologies this

can enabler the longer We at the customers agility, their the sits our any center wide applications, of an to most customer can view devices, multi intent-based and redefining center require and on at on transformations. domain any just area device for importantly, user networking the the efficiency, network data intersection the and that Cisco architecture those operational as delivering Simply deliver the of connect network securely of and any data strategies. are application. that every campus any put, strategies is of no digital build users, the the cloud, to today Cisco security domain our to accelerate customers Only to our to from a

of with Now, highlights let's review growth some in our infrastructure platforms. key Starting the strategic areas.

are domain up the of clear connect enterprise investments made business our reinventing every been from ground off. to last networking in that we've and core the Over we've extended XX the months, the it's paying

our in portfolio growth our well, infrastructure SD-WAN We XXXX our strong of continued customer and offerings. and Catalyst switches of uptake are family executing with

are extending platforms, and connecting IoT intent-based security with devices to control. edge networking throughout unparalleled new capabilities our unprecedented industry-leading scale, and now flexibility, We the enterprise

that see networking applications will new offers the ACI to as innovations center and across center a environments, innovations continue you wherever data portfolio the every forward, the Anywhere, ago, our domain. with to architecture as private data with to data subscription-based applications a to multi-cloud announced edge. our our the extend architecture intent-based extend their well everywhere access enterprises securely across all enable to HyperFlex customers to enabling running We we're Two consistent Anywhere, across us leadership that Going introduced center, data cloud public weeks cloud several capabilities. from extends adopt we new In will exists their a digital anywhere. and and

to are three to of next fold and service an high-speed the centers, their continue provider, well are generation To across over increase XXX our expected the for five take We beyond. also of networks. we gig facing innovate need performance, industry's upgrade and demand customers XXX networks drive XXX global and With to gig advantage transition traffic next Internet positioned exponential data speed enterprise to capacity. and cycles scale web years, address for to gig

the capability build acquisition customers networks. our augment optics, and silicon Our to efficient will and around Luxtera existing of fastest further most our enabling

into growth security leading continues With security the reflecting to market our are is delivered redefining only architecture. the our intent-based our with we double-digit leading how surface installed industry network the strong the demand cloud and to the customers approach generated our solutions intelligence, threat for the increasing. increasing successful, is And grow. comprehensive moving endpoint us. multi-domain business, in been place from Now integrating attack to of The trust security we our base our has our architecture to as

great we're leader For to helps Increasingly, the helping and Duo visibility customers’ market environments. Security’s example, with is user, most Identity integrated SD-WAN and this as This example both our solutions. provides zero operation, SD-WAN simplify access device and cloud cloud trust. remote with deployment, trust enterprises and management security. the and based together a delivered footprint of Cisco their our customers’ expands which security, distributed robust application our bringing significantly and secure of cloud to platform, platform secure and in security A in Access

We their strong are in strengthening cloud-based scaling capabilities seeing while progress Duo subscription good and our with traction portfolio.

Turning to applications, and evolve a to as enterprise collaboration, cloud-based to communications move we world. continue digital

a comprehensive our resulting another intuitive, future quarter a team calling, collaboration intelligent have We of are the for are key subscription to of solutions. and solutions is portfolio market provides defining with suite reason of collaboration growth. exceptional approach that adopting meeting, care, why with collaboration in and platforms generation work and next on-premise This leading cloud-based customers flexible, is customer full offerings designed for collaboration flexible our Cisco SMBs as infrastructure, APM analytics core providing network, AppDynamics well integrate integration to customers. solid globally. into our across market calling with capabilities, easily vendor the With we driving the for of now are enterprises and care compelling momentum cloud-based BroadSoft and as a with the leader real-time applications, deep solutions solutions workflows. insights with largest and

in monitoring the visibility We several and capabilities application the delivering broadest new platform world. in have been investing

application In monitoring and summary, business with environment. as we customer quarter pleased AIOps, performance. customers mission enable improved real-time leveraging Our complex are face offerings machine our growing recently our operations, first a they and analytics experiences IT automate and performance. critical we automation AI launched greater their learning To half very for simplify strong and to are and

model are they're of aggressively work to teams our innovation, software the transitioning and well, Our proud pace doing. incredibly executing a and of accelerating I'm

has believe given simplify, we I'll to to and we've you. customers teams is helping automate, had more IT be they role about us architecture Our future. an with the innovation well multi-domain computing, have are very them as intent-based been positioned our now turn environments confident The the And complex transformation. edge facing. over strongest play multi-cloud, I time a even that secure now and it our embrace digital strategic more Kelly, I driving and our long to couldn't portfolio are

followed quarter Total of business. had X%. was well X%. up across the financial the and operating orders, I'll guidance revenue strong cash product grew and executed XX.X Thanks, EPS, the results a orders continued flow. momentum was for We our gross with start summary QX billion, margin, for solid Chuck. revenue, which a QX. quarter, with by We

non-GAAP Our X.X margin income XX.X%, XX%. up billion, $X.XX, rate was EPS non-GAAP was was net non-GAAP up operating X%, and

the of Meraki. provide service Infrastructure some more was had revenue ramp QX to also with detail continued strength me on grew platform another the revenue. great Wireless the Let declined by offerings Cat billion. had and Total Wave product double-digit X.X in our our provider. XXXX. in X% weakness X due growth driven of double-digit Switching Routing to campus quarter with growth, X%. up

saw the Security up strength threat. by offset growth We decline is strong X% also solution unified and servers XX%, all telepresence, Applications identity revenue threat, driven by partially advanced was support. communications, with in We software Service up in growth across AppDynamics. and was with unified center data and performance in access, strong hyperconverged. saw up in XX% businesses.

delivering to and subscriptions. continue business transform the more We offerings software more driving

XX% on We over positive growing up XX results QX with total we X%. of product year were revenue. in our points strong look subscriptions Software software future point of over total revenue, impact year, impact basis was year XXX acquisitions there the momentum at saw year. When on orders

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

approximately X%. cash, was also QX In perspective, QX X dividend. From XX.X We was X.X bottom payment, closing a billion. cuts shareholders Today, to equivalents, billion jobs up the to for dividend first billion XX%. Normalized perspective, was quarter related and with income cash $X.XX. was a during that was flow payment cash price. represents billion to GAAP share XXX share, We today's the act. X% and of of million up allocation flow and our $X.XX down tax operating on X.X line QX transition of that we from This year. $X.XX billion terms quarterly yield X.X we repurchases the based X% EPS returned per of tax of for to total X.X quarterly capital operating announced ended billion, a over increase tax for a paid net investments year comprised the the cash and

billion share commitment shareholders This to and flows. repurchase reinforces to XX returning share our additional $XX share approximately the a our authorization to our ongoing billion. repurchase of and announced of stability remaining also confidence the increase our strength and raises We in to This dividend the authorization authorization increase capital repurchase program. the cash

pipeline. innovation our in inorganically and organically invest to continue We

During announced on top-line we profitability. the a we We're silicon on February great which shareholder long-term the seeing and we and returns QX, and photonics, more focused subscriptions shift the growth of growth the driving driving Luxtera, To the on with closed a quarter, X. we’re executed acquisition value. in to investments making innovation software summarize, company strong and had well

Let on again, our that we me of ‘XX. October guidance reiterate that which QX third to of ‘XX, business SPVSS forward-looking of This to guidance fiscal type information XXXX. we fiscal have quarter the of divested normalized for quarter our Note Marilyn the third referred exclude guidance XX the for includes earlier.

historical provided call. in the SPVSS the We for accompany this slides have that business financial information

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

Thanks, question. the let's Kelly. open for Michelle ahead line go and

you, ask Michelle As get I'll that have it of to that queuing to turn to we of you. you only, question to a all over start reminder, all process. time the one now so enough I to limit yourself

Markets, Thank from you Jim may ahead. go Citi you. Global Suva

forecast tariffs, Thank you should the think for government on items, built the how couple in? played US, out we very any those much. your we even your how results of maybe thoughts a and And product it or and be the shutdown, they shipping what's about weather around dynamics, whole installation When around look at congratulations outlook. and whether of

with great quarter, we've first Chuck. we all a first certainly well. the throughout day We of of Jim, seen been this the environment the dynamics tell today. saw of very is pretty all, ahead the more day quite while the to in by there's zero last have quarter you -- quarter I be looking parts. proud we've demand complex execution difference. I of think that the is the But would accomplished. Look, that the look navigate teams. think it We're teams from steady far, macro different saw one of to geopolitical saw at the they out we exist -- the our we And, honest, as just the pretty I what at to and guide, all able we're And, different when conditions so moving

Next question please.

Deutsche Vijay you sir. Bhagavath Bank, may from ahead, go

have to refresh portfolio like like sales results. starting get Congratulations, Chuck business, mostly are these your solid are like their in to AppDynamics, core know, growing Meraki, they're new Kelly, secular you assets the you you. or Viptela, growth Chuck these Thank afternoon, drive new Kelly. and are question into, I Good My thoughts cetera, for around would and perhaps et respective areas? standalone product opportunities, these Duo, the

let impact thanks just Vijay say the been integration Thanks, BroadSoft portfolio, pick on different done would like and a the positive nice at you total enhances clearly and -- look business. and me a the overall collaboration has at with If the acquisitions, the architecture, the that has I comment. if I look few for

When deploy it a gives to is model might bring to customers customers a our As and as want on seen traditional ability which like with so are outlets customers in of architecture you the think Cisco acquisition buildings branches, have. those we that and see strategies fastest security about areas, I an we've can look their like benefit that's technology between you in that clearly is core security like you many that's small they tighter together overarching hybrid in things might positive. Meraki retail in and both many classic each the think Meraki portfolio from their the growth as the headquarters side, XX% and part like our out integration Cisco buying portfolio of portfolio at of Duo, the automation continue years. rate into we in the an They clearly or the Meraki which do very growth

them forward that are on an associated acquisition, depends but with. So, are I think most the it of architecture pulling they

also And we in at of look embedding just right at of Stealthwatch, the Cat you to products. our can with add part like I products think, what or acquired we're now we it when Umbrella being and it's part in announced doing what XXXX other we're

think of both. I a it's combination So,

Those Meraki technologies with a together with security differentiators bringing together I I are create some taking technologies, bringing have of us. moving to obviously this thinking new like that of like the capability into portfolio. mean that's SD-WAN malware at secure mean the them Yeah, ISR and look Viptela for unique traditional about the only offering, and we some key advanced Umbrella

next please. Vijay, Thanks question

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

for improved wanted start I the the you public of guys. with I to lot question. week. yet, to Thanks order and the a XX%. sitting trajectory here US things all know, guess side we're expecting off be to sector Fed there And Hi,

big a So, then the US if sort up. on and of we're follow and then why comment seeing a quarter, there Fed order you impact could have current such I I the on wonder acceleration

only the impacted. I you of the Yeah, shutdown about all, I government of really, important of agencies would think it to were was say we that experienced, XX% -- it's first dynamics the understand know,

do some them when of got orders actually they some down shut and And groups might sense we the ahead the coming, a with had them pulled be system. of some business in of that

we business which So, will Federal the saw digits, relationships the even tell I with testament shutdown impact, you and a think our to that I minimal our in team double US the execution. is grew

just across resonating public business you world. that growth to at think sector And vertical, you obviously, about public around the in -- in world. is XX% in in that's When at for sure. business mean, so look world same that and when team oriented, obviously, It's of the I the talked lot our at technologies I mean, there, our EMEA. around the a the Europe, our sector the we growth -- XX% We saw, look the

wanted a to XX%. then little And just rate. the It's quarter. I to -- decelerated follow on up I XX% was on enterprise mean, last order that the think, of bit I

thing a a seeing of you if to expect just you're you've mean, strong on that continue? there. a last Just I that's and talked before we year being quarter one kind comment know what or would year such curious just trajectory about is

that are last wireless the within of that to still and deploying looking end several portfolio all to this we've you deployed very talked fits be are that our know, in Cat think simplify as operating you the -- at they the are enterprise looking into they're really front drive portfolio just that know, up very enterprise over early think help collaboration look we You our really this customers automation our -- the customers now going and calls and at core or with they're at all the whether integrated do reduce I SD-WAN are to for. the how Rod, And retail the the line analytics we're them that our at these are The now, looking architecture and in architecture you architecture. and a I how looking that know, networking right solutions, technology. and solutions or the on about our strategies driving we're what innings expenses about -- outlets SD-WAN still early customers we've phases their in space, location of can XXXX, revenue

good we we feel that, well know, continue where that we ahead portfolio, are you we our I benefits to that the continue are to customer assuming to enterprise technology we in us should we have that of execute So, run pretty and such about successful think assuming a that on accounts and the think execute.

question please. Next

Paul ahead Silverstein Co., from sir. go & Cowen you may

two my price questions; got customary what's erosion connection rate related with your I've that. in one of

talk did the XX% drivers did if all you you in cash And looking of tax not margins million item. cash is, forward. could by record normal? connection to that $XXX exclude you I If is that, about the over one-time items The flow your what strongest number? that flow right, quarter. a math of billion other related XXX million X.X if historically that That's new question operating extraordinary gross a in were is there or Or

had there's on in job besides paid charges on It XXX was good you that, that. right. or Remember, extraordinary That it tax. impact a be nothing out we that. paying price extraordinary from the we’ll a question there's next no, a quarter. But that cash, transition and just $XXX of in that. the the years, extraordinary. margin. but QX no just this part So in there's know, on gross risk, that -- did to nothing was your million again, that later Paul QX, payout escalates besides And those years in the we Teams eight one the point that's, on

had went earnings seeing last component another the been you'll has tailwind QX and in go right, up a for here I same like DRAM you our like drivers, so we guide because expected into back the costs. And headwinds range. last in and last And we're as turns and the the definitely margin in point QX. a QX negative from about call, if what that's talked the look to notice that half guide quarter we it forward, gross still in that quarter DRAM then But, I drivers,

the So, the that's in why margin. you see that guide gross tick up on

portfolio then we're the the for Cat So component the for around we QX bit drivers impact, still little continue deferral on XXXX executing have that we headwinds just, to a of that ramp costs are the rate we and as had our again, the really you a well. drag otherwise, in turns know, but being

go over I software I’ll Kelly, and you. have benefit a shift trust will time?

mean, I headwinds what’s stuff, that’s and yeah, right. on Oh, seeing component a we're them, the of offsetting these lot

continue, will that in why yeah, [indiscernible]. to again, is, which see So, them continue you

a of bunch to So, headwind when DRAM benefit us, significant the been continue has know, last quarters, that for see the of. which you we'll

Operator. Paul. may Kidron Ittai you question. Thank & from Michelle, next you. go Oppenheimer Co., ahead Thanks, sir.

to have be Thanks let fantastic kind Rod trying I me world. of and was to execution question. dig Chuck, I into what before. a seems add congrats, very crazy asking two my a congrats, part a in Maybe guess, what

product it we multiple customer of running but in embrace kind mid product about your entire all cycles have the customers to that? me cycle, in of portfolio, You're adoption and put what cycle, this across of early we the areas, multiple you new are help together are of if base, phase think

you. Ittai, here's understand. the Look, thank thing it's I important think

our We of on we're to customers. with breed for working the about building what have been we domains talk technology calling best what over -- relative years

So, center the campus we've best building portfolio. portfolio, best wireless switching campus been the the portfolio, best data switching

Over a is three we've built architecture we domain. within what last years, automation the an done

the automates we're control in a we're center we've those security to platform we got SD-WAN security branch, beginning a data now that is bring in so built what Okay, we've center, actually in doing architecture. the campus, we the together. built ACI DNA And got

of when domains. to the So, all over more And few giving multi hear the extended domain, the automation it announcements extending we're means it IoT about those relative see to that. drive us into you months to you're across We that architecture. talk ability our going customers next even

requires certain our And customers that domains. that excited deployed the running the So, really those the gets across data running a are policy think that all think I about or application that's that's an about. either in in cloud center thing

we -- of I buying of customers lot in this this where say the then were that's base new would of early. and are that this if infrastructure, you at sweating architecture. We're we? move look sort we're a So, I still back still of years transition the to now, number mean, the actually into us have early that ahead mean, I innings.

So, it's that those still I areas described. very all just would across early say I

great. -- stand just you one the Was how you give can on where and there comment. envision do that's impact XXX a up, you And center there didn't That's making data wise? us there, or color follow I then as catch switch a its timeline some

Yeah, double Kelly what -- a switching I said, we switching digits. our up think. business I think you gave was broader gave overall number, We

a big So, business. I mean, it's pretty

So, we were pleased with that.

And on the XXX-gig [indiscernible].

And there. the XXX as portfolio we networking on of we that's portfolio a trials this in with gig, early we've We're work you on of of going the well our you, happy center some that. some broad-based know, yeah, I'll -- work in both tell data year see lot where with have field a got switching that sometime deployments. will going middle to our as believe begin in And we're

The of a we silicon for examinations at the to we're them. and for do dynamically. the look power intent-based we to our a including with us will differentiators, let more well, the I there's architecture and real-time is packet own our think silicon, lot us packet the advantages We of Luxtera ability and that There's to of consumption lot out the Ittai. of as customers bring them to flows a optics able differentiators go we key acquisition optics, couple to going instead be for build us, having for integrate think tightly whole going procure have. into us have

think if that of begin year comes spot. see we’ll fruition, this to but teams middle are all the So, of to in good I sort

Thanks Chuck, next question.

sir. Chatterjee Samik may JPMorgan, from go ahead, you

India, seeing countries? believe a solid in them you Chuck, you us check those I terms wanted countries can help had catch in seeing of -- momentum of like of terms dollar is, up are to appetite momentum quarter, if how IT just emerging with last at you the you to with what spent I in very all are that? stronger terms you in in their what

number, emerging orders. Up We the X% gave that markets? on right,

X%. was up BRIC And

up was BRIC And X%.

the what I in heard what well. X% And, of And we've slight Kelly, challenges light you around I if you it rates headwind So, interest from for press as probably us is US rising, others know, currency think countries. was she’d space. we've emerging creates when the start in that a in seen historically, you tell think

think had outs India. the to doing the teams So, I some are build relevance we of We’ve what and well speaks big it built. in

for us bit but little a slowed positive. still quite India So,

I same it a Mexico positive. that for quarter. have we from It are are to slightly teams volume complexities the given well. perspective, pleased I’m and organizations was roughly was the And geopolitically think a negative. both that really portfolio the and China again, ground is I emerging think from teams overall, last the themselves they our speaks portfolio executed that facing performing think is and But Russia currency I on a it of the engineering well our now built more flat perspective. was story, countries right a

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

and questions follow question two one up. have I one or

you're The lot is you're exposed first one hand, spending. areas We and one a not areas spending. just On about very, exposed, hear cloud weakness other about in certain not. in very

opportunity other Can you. your hand, spending cloud discuss for On any on weakness on have and then in participation I comments cloud and a follow vendors? a up growth big your it's you in the the Chinese

it I very progress our much have still to we're there. guess, making happy this think, quarter with But, is I as a helps where not we're exposure.

hard I space. We're those who months XX be still -- actually ago. insert going Some to to XXX-gig, than the get a working gotten opportunities we've a doing ourselves it's to and for haven't color could doing. make that don't described journey it's a who that be I that. or we've long XX that position us said talking for to different be of going we're plugging give things we're probably a say along to I these have pretty are more we the than what you significant XXX-gig, all we But any position the we're heard you same would exposure big well still to to from and about, think try what told to -- are that to those to already that you've But there. in long continue going substantial we transitions progress and

with versus gains do but in is – US. with globally. on What in light certain is and Huawei being But what compete this your going have hyper vendors Huawei, how and So have weeks about do companies. of the months you on share, a But cloud last what And with your you gain can market trends difference And you you follow exposure the versus up were talk don't I don't similar the just where ZTE call of you I smaller you morning, when the have big they on issues? them with one despite don't question with maybe the companies compete maybe Huawei with when in the smaller in carriers issues. these I had discuss few ask I saying experiences all wanted and this if you And scale, view, few the see exposure Huawei. to you kind versus see know hosted again, compete them you China to cloud I ZTE. that. versus things -- a position have, your things, your share portfolio larger the at But to asked they're discuss you repeatedly do is think actually between you Huawei’s and with portfolio want of and -- is hyperscalers you with competition and and or they

good a it's question. Yeah,

market So of the of China opportunity first overall in skews global the share the market all, numbers. magnitude

if gain you're then across it's looking to in you're in it if not just difficult So when very at participating a material world. way broadly the share, -- China,

just in hit are think the it with we're So What market innovation against this our tell generation my that China, are with the the we’ve from space portfolio there packet the world year, I the China anybody SP would to work to prepared think these at the now. put said is the innovation without our at doing comments platforms look around XG work our that to begun teams in else's as and perspective, this particularly I now doing an you would beginning, right right of and I up I look, how core see doing. the I we're innovation, and that, next some and in going

and our you over last positive of I and holding SP quarter, growth if last in quarters, our would in EMEA the tell winning at in we're but we're think will that suggest an those performance we competing and I few both that saw APJC regions. you look not only own,

and not now. right we're And very but confident that are only so we I compete, winning we that feel can

I'll Chinese share could of And you they're the so to market world, in size of the the from them and we're related well that but now. math parts doing tell other be the comment the works, right confident really

sir. go you from UBS, Venkatesh Tejas ahead, may

john. on I’m for

whether how be in layer and to starting You Campus Campus, up talked is Cat on? revenue. start digits to full about double unreasonable products digit it's quarter really XK trying to ago a contribute you to Catalyst growth as XK double that are for a go in new at introduced to could to think there year get products the about just Campus newer more the much I’m

I And When start? of that a install sales just base the the early replaces, XXXX. did just the Well, versus are at look XK XK the very in that we you when we that products think, launched cycle.

ago. A quarter

shipping quarter. Just this started

A quarter ago.

this shipping started Just quarter.

look we we versus you early. that at XXXX it's started products where announced base to that. the middle products the revenue. just are through very are of that XXXX clearly replace, the But if The these So install in contributing flowing again,

then time perhaps? accelerated follow comment healthy, is business could if for wonder allocation, on core that the growing it is I you a very now up capital M&A on And M&A, quick

a and acquisition to that the I'll strategy. make of Kelly I on can Well, add it. comment the our overarching don't core fundamentally changes think growth

expansions I to portfolio, size core from think continued we not add get expanding that's our an is our our of portfolio. strategy that's adjacent our I our early growth the and can but strategy driving given working. only that really so back that acquisition What markets, to core, both, to to we've creating innovation had portfolio into on of alluded that our

the overall because don't but the I of Kelly? of think success strategy core, our that M&A changes So

invest we I to growth is, think the we're to business changed, no our business of And then then have two cash of the dividend, has increases environment M&A, going just been. And strategy mean, the you saw been never course well in I to clear, has and authorization. announced matter committed and we're another we our for the commitment have the and the of dividend again always buyback the to what we're faith in as there, M&A, the do looking flows and share as another It Yeah. first. going have just we right? we're think showing we just smart always like share buyback, I increase the latter again,

to it's It’s of is how core doing. I'd overall So independent the our strategy. just critical say part a business

Street you Pierre Ferragu ahead. from New Research, go may

how for clearly it's you’ve relative come about on is like bellwether, question. overall, question heard very in with used China, performance holding is like how sale really made macro a you take about is your guys that emerging to going there. currencies, market very, I flat to have and are to developments. taking when I'd my comments thank your happy conversations on Chuck that now Cisco the account feeling in, there insight market, but with are well, Hey, to What's like China a and true back ask so is would you into emerging good your you at great outlook, the enterprises having especially clients very like be I you what you’re into you

What's this minutes, -- in take? had your you've conversations XXXX what's three the macro the clients all from last perspective? your with So

in I lot in it’s geopolitical What trade amazed the shutdown world the we've environment that Italy, political it's for thanks the whether several a a Pierre, seen Brexit said I've unrest countries. light optional or up mean, view an now strategy. view come of seen. certain with. core focus, that is they enterprise enabler that emerging technology they tell technology times in you resilience dynamics, their stress we've They of a it’s is it's or strategy given or as What don't been it's question. will interviews a amazing the anymore all as our around it's the macro this in the or China US the really and at that they've the I've I that part of of customers, -- of resilience

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right. That's exactly. Yes,

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we indicator could you giving percentage that comfortable little that a And then of get of a are like revenues, bit something an from?

No, we don't that. disclose

ahead. go may you Research, Wolfe from Milunovich Steve

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Yeah. Yeah.

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from Faucette you Stanley, go Morgan ahead. James may

do? and just focus might couple to Chuck, hybrid will implementations ago, have and I how well we work interesting your people you can cloud it’s years value on I real seeing how wanted end is think ask Cisco to to given formed talk to that evolve, up about are can in hybrid hybrid or deliver where customers the the yet you, missionary you starting me of that especially a guess understand can still you thought much And are. they they

Yeah. Thanks, find James. in. themselves Look, a our here's customers situation

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irony. that's So the

of If that you I about piece talked is just only there's technology all across think one about that is that network. and the of things described, just consistent those I what

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you all thank make for you. closing I want a comments. today. last Thanks the to question. few I'll of for Thank joining us

in well very First have that complicated of geopolitical think, all, a and of find I executed we in. ourselves teams light our macro environment incredibly

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

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

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

you would entirety, like to call in the XXX-XXX-XXXX. listen its you If to may call

US, the outside please today's from concludes dialing participants call. For This XXX-XXX-XXXX. dial

disconnect this may You time. at