Cisco Systems (CSCO) 15 Nov 232024 Q1 Earnings call transcript

Welcome to Cisco's First Quarter Fiscal Year 2024 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 Sami Badri, Head of Investor Relations. Sir, you may begin.

First Year Cisco's Call. Quarterly to everyone, Quarter 'XX Fiscal Conference Welcome, CEO; our is Head Chuck joined and new Badri, Robbins, Scott Investor Chair This Cisco's I'm of Sami CFO. Relations, and our and Herren, by Having press I I to be years, for you couldn't new to forward have on release. engaging followed our company, all more should and role. By in the my Cisco the side XX sell join look excited earnings with seen you now, including supplemental website slides, will be Relations A following our with corresponding information, available on in section webcast Investor the the call.

to and reminder, both of Relations GAAP results the simplified the And product quarter, of we we're As are on forward-looking providing collaboration, report call, our the the orders detail matters will QX, X Form quarter we the amounts slides differ and subject year report full made a and forward-looking prior customer this Investor accompany terms filed that we be made They and categories: in respect the that and the provider period's information, flow to we cash and are to in XX-K, documents revenue security, product X factors the which the conform can service statements, identify and those the we risk sheets, financial to balance important comparisons be and second customer results, from the With to otherwise. on this specifically website. Throughout public also geographic discussing of most have Income markets this XXXX. statements terms enterprise, services. be materially is and it following now be product risks will recent stated we'll financial revenue cause revenue and conference in All discuss reconciliation actual unless this guidance, referencing have uncertainties non-GAAP in GAAP see please and discuss financial section press through and release basis. The cloud. Also, sector contained include service to non-GAAP with reporting our of Information throughout be an Starting we the Cisco results categories: in presentation. its in found comment fiscal over will that to full not results could Financial also details. information on will disclosure. I SEC, statements. during quarter call call in we we as customary including guidance to guidance other for markets. will today current period statements, for it in done and Chuck. turn in following year-over-year certain further reclassifications customer networking, how is unless observability a public explicit will reporting

Thanks, hope and history results Sami. We us fiscal revenue Welcome thanks profitability. and XXXX to the quarter everyone is doing well, in delivered in a to of Cisco. start I joining first terms Cisco's with solid strongest today. for

end driven upper leverage. strong EPS high our of in of our end by the exceeded Our at guidance in operating guided and QX margins revenue was resulting control, gross range, expense strength the

our record non-GAAP management our and margin. model years tailwinds in and business transformation gross in expense disciplined the Our margin XX from resulted non-GAAP over operating highest

our via QX commitments We cash our on shareholders. and return share dividends repurchases, capital delivering also to returned $X.X billion in

driving remain committed more As accelerated to innovation, our we operating towards fueled continue recurring shareholder business to and returns. streams and leverage we revenue transform by software

our unprecedented shifted installing are partners. levels we in chain customers supply implementing Now now delivery, implementation bottleneck previously these and now focused The turning environment. X products. the saw product to by exceptionally demand has of of After that the customers and strong on quarters downstream our to

order lead returned and backlog levels. Our largely to normal times have

track customers taking product As this inventory our also steadily deliveries deploy declined Simply time. these distributors now during heightened we time are deliveries. at to the rose, put, channel onboard and

to discussed is slowdown has we in shortly. believe the temporary Scott of our outlook be in consequences our believe is challenges customers, there our for this customers' exist, near-term macro next for of still shipped X most mostly We quarters, was the phase we revenue larger discuss still the worth this deployed. which phase service reason implementation to provider estimate for have primary quarters' we will and new hands orders it on it saw X analysis, This enterprise, an and October. Based in additional and and is the waiting couple cloud While with orders. pronounced

does not confidence. longer-term change it our However,

rates growth half increase of order year. the second the fiscal product expect We to in

also of to win all and very we market our pressing most foundational gained testaments the to aligns business portfolio growth opportunities levels, have customers' future needs. below it strength We cancellation our the our remain are Overall, share, our rates criticality in which strength the technologies. how remain our and and of return given rates prepandemic confident of are of and stable,

As with create innovative in Together, also higher-growth to outcomes directly of The Cisco bring trusted and platform levels areas, solutions. security Splunk of to leadership that go-to-market we software capabilities world-class outstanding of Splunk and ARR. and products our supports acquire engine and innovation growth, combination of our The culture customers we and digital end-to-end their around our observability. 'XX, strategic we to look AI, objectives higher complementary Cisco our will help will a technology our capabilities and with announced driving enhance first an combination quarter fiscal resiliency Splunk. enhance and will customers' in our the intent in capabilities data achieve

Now on our comment quarterly performance. me let

strong security investments mentioned, in driven previously our delivered across we was customers' and broad-based portfolio As AI, in full-stack QX, I revenues by observability. cloud and generative our which product

and in Internet gain AI scale, web calendar largest continued X we X expected, our gains campus LAN another of to AI the hyperscale year-over-year networking SP X with As recording our momentum the fabric. routing. In share of of see market the top we continued markets: customers results, of with in release wireless switching, deploying QX quarter

line $XX compute, We Group, AI orders to opportunity open switching services in software a a help to believe major edge commitment of validated for and to GPU networking, market innovations infrastructure a XXX to architectures sight storage 'XX. To and exceed cloud including in support solutions, AI, with is year XXXX. forecasted with GPU, infrastructure partners also have over providers and $X is AI we core from we networking the to technologies, key AI. set billion for there joint-tested for Collectively, broad advance and are in AI in fiscal create the already working of and Ethernet great GU-enabled billion infrastructure. According to reference

the clusters, capabilities are in of on with a us One, for and proven strong Our laser-focused scalable for fabric needed in Cisco position winning to this build we put infrastructure AI, AI power-saving Silicon out coupled space. the

to Security. Moving

we X across continue this against Cisco map to ransomware giving first our Secure at we response We sign Since and summer, became have security Cisco Access multi-cloud already security snapshot $XXX solution business-critical customers. pipeline defense, their have road our over the added With execute attack. a data our in to offers recovery unified ability XDR, over available million new X,XXX the restore the product around XDR strengthen of and and our to platform. the teams process,

Cisco new quarter. our launched also firewall security solution this We

Webex WebexOne all sales capabilities and coming engaged game-changing range as our in spanning portfolio, meaningful the We AI competitive are well introduced suite we of a expect event. actively results positive new products our for with quarters. In reimagined in see at Collaboration entire as devices these to workspaces recently truly the

Before I to turn let Scott, it key me takeaways. briefly summarize over X

First, deploy are heightened time primary with demand product as onboard and we're today, at we issue deliveries. consider where that to is customers taking the

we is macro, continued us While and stronger continue this the not is and our temporary we key we our as to share are markets. immune than that ever, in tell to partners to see believe have gains customers portfolio

our opportunity, truly security what increasing Second, criticality is believe confident multibillion-dollar our observability we do incremental for together with Splunk and customers future remain infrastructure the and AI exciting. of Cisco and can we in the

committed you to the turn it more and can provide on Scott expense quarter take management. I'll regardless and count outlook. environment. always allocation the Lastly, disciplined operating on capital We our to to over now to a approach detail remain us of leverage,

delivered results chain supply in the We QX mitigate constraints. the to took Chuck. we driven Thanks, solid actions by prior strategic

net the quarter, up range. $XX.X a was For revenue reported billion, income growth XX%, our up EPS billion, the Non-GAAP high record of end high and $X.XX, strong at Total margin. our we was $X.X up And non-GAAP was range. non-GAAP guidance revenue guidance year-over-year, end the exceeding of X% XX%. operating

our Networking, center X%. with and were up Within data up product Looking on strength largest was revenue offerings. the was in Collaboration by by and double-digit QX Catalyst growth of was by drove $X.X in detail. category, where the billion, at switching, Nexus up our XX% digits Total was billion, and X%. double the campus revenue revenue our And service driven XXXX product growth. networking, both threat the offerings. meetings. including Zero driven X% and AppDynamics. driven was and partially calling was Trust our increase more center, and detection contact Observability XXXX portfolio, by by by a decline ThousandEyes X% driven partially growth wireless. Security was decline This in offset a offset in growth growth XX% response up intelligence, up up across $XX.X in

XX% solid saw our $XX.X $X.X XX% in X RPO over of transformation and RPO was was represents billion, of software service Product recurring more ARR Total performance increase revenue, billion, Cisco's revenue of percentage in XX%. increased total, increased revenue billion. software up of progress year-over-year. make was billion, In short-term up subscription-based. also to of RPO revenue an which XX%. which our product continue Total increased software year. total XX%. billion, a last XX% X% subscription with our RPO offerings up and subscription point to X% XX% XX% revenue to $XX.X revenue-based $X.X was XX% increased to ARR growth with We increase $X.X

XX% up was guidance pricing In margin enterprise with XX%, improvements non-GAAP was points slightly. APJC mix product lower and up EMEA was XXX margin cloud Americas product XX.X%, above basis came XXX logistics our provider Favorable up by the in Product high slightly with primarily and range. sector geographic basis to down public down our component XX% and The basis positive gross was our X%. improvement. Services markets, XX%. customer productivity up points. driven was and and by and at non-GAAP also end at declined down down XX% Year-over-year, contributed segment. XX.X%, gross margin freight, increase year-over-year service XX%, the costs. Looking XXX the year-over-year overall of points gross Total XX%, was orders orders at down

leverage improved margin $XX.X the XXX high This the margin associated our with XX.X%, in operating IRS gross was cash We non-GAAP the end sheet. California prior to disciplined equivalents by cash billion. operating exceeding to was $X.X came both at relief driven $X.X of non-GAAP ongoing with and total balance ended quarters, up and of cash, related to Our quarter billion, primarily cost had flow floods. payment guidance We our investments which strong management. Shifting points due the for basis down of tax QX due XX% the to billion the tax and range.

dividend. repurchases our quarter, are maintaining returned higher shareholder Consistent and quarterly strategy, level greater share share billion comprised leverage, returns through our we of our of annual billion increasing This and to committed to we $X.X capital dividend growing a billion with cash $X.X shareholders of for operating $X.X repurchases. allocation

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

targeted to our and our position to line solid and observability quarter, internal delivered by highlighted expect M&A. To QX, in the share. XXXX closing During approvals which third close end and In to quarter in customary our in stronger-than-anticipated a intent increased acquisitions, earnings conditions, highly line of are shareholders. with of summarize, QX, cloud, we all and per we growth we to we resulted Splunk, top strategic to strategy Splunk complementary acquire year operating the which strengthen leverage by subject also security, several approval closed regulatory announced calendar with including our R&D by AI that of

progress remain on expense growth focused our strategic the recurring shift investments We without capitalize We to management on in more of necessary revenue. opportunities. continue business innovate to make to model losing disciplined and sight

financial Turning our to guidance.

supply levels. now previously Chuck levels. from the customers high by customers normal backlog that our declined bottleneck now are to largest returned largely are have backlog and times orders to elevated product Most XX% has outlined, partners. orders and in implementation the both downstream the of QX implementing our prior behind as chain lead of As we supply levels historically we us, product our quarters constraints and shifted chain shipment delivered as from shipments saw

to awaiting shipped we worth quarters by X of Chuck customers. orders believe As implementation our mentioned, are X there

of and assumes more we of typical of the expected We is share QX, then X Our non-GAAP billion a rates. billion. the expect in for XX.X%. to lower Consequently, quarters gross to of the X XX.X% range $X.XX sequential be XX% to the to be revenue $XX.X guidance in anticipate from return $XX.X expected range revenue growth earnings to margin to range to to in per XX%. range operating to margin be non-GAAP Non-GAAP $X.XX. And to is revenue

is year fiscal guidance updated For XXXX, follows. our as

non-GAAP for our effective in confident in range capitalize teams to $XX so of the execution full of to of range our of and ability per billion. the business growth we're key the In the move rate we to strength on Non-GAAP their We and billion earnings be turn can QX expected the expect revenue guidance, Sami, the XX%. I'd now $XX.X it share tax to back thank our We like year in focus this $X.XX. to into ahead. I'll a opportunities $X.XX remain to quarter. and both to be assuming Q&A. is

Thanks, up and Scott. for ahead let's questions. go queue Michelle,

America. Liani, of Tal Bank

your back than expect you seasonality? years? assumption growth normal the on do of seasonality seasonality previous the your different to we next assumptions Are after is What quarter? Or kind in

question. Yes, Tal, great it's a

But growth in greatest been X about QX. order look that's As sequentially But impact QX the when of and as I in a at not the we year, the we see return in said do inventory. when the in of you order second installed, X product to I to our we half be get growth, year-on-year basically customers -- that's there. and talked expect to yet at shipped both quarters

XQ the expect of So you expect to my be to the sequentials, it expect in revenue than XQ that to you recognition, previous as to previous seasonality? question. seasonality? be -- weaker you was terms XQ XQ do Do Or same

No. revenue increase sequential we From revenue see from guide QX QX. standpoint, to don't standpoint, a do a Tal. bookings, I But

Meta Marshall Research. with Morgan Investment Stanley

a categories then areas a much you stay and and of seen of that free orders in will investments see back. to just the of see the really investment if guess the kind center come come prioritization changing, over is I change data you have as on investment same seen Maybe been of you've couple I'm year maybe we've last we when the this the and Or catch-up kind orders how of digestion get like them just campus just then question trying customers? quarters. with will and of the sense back and inventory investment categories a investment

thanks for Meta, Yes, the question.

big probably think the don't is to truth. closest I latter a the anticipate comment We difference. your

going think of that continue think update to see general, there. we've Although through that's portfolio But I the once to improvements the couple we think seen should we continue with years. Security, a driver that's it out look get next in will the we'll normal We more over our opportunity I be AI accelerate. you in in Obviously, on Security this. to

Evercore. with Daryanani Amit

I've of demand-centric guess, conviction is a been you this implementation an to weakness. have is the one I Chuck, that the falcon or things pause struggle and macro- not understand

getting X-quarter to about enterprise convinced So so front Anything to I'd part. would can I weaker. want clarify talk that's helpful. is this then whether demand a love that implementation understand just why to than rather X- this just be and you're And you on pause just

number AI that orders. last at Is $X gave Xx folks in the correct? you That's You time. billion

Amit, you. thank

I'll we with this patient think inventory sitting an some and that's a So customers. context give data issue you why few if be is around points me, our with you'll

issue, our shifted the our space First prior, service days last this We customers service big in enterprise sales enterprise very of the particularly been with all, organizations the and providers and the large our a it our that with that and about have clear -- providers. way. large XX but over our talked into us is

began thing with so I of about actually surprised conversations by was Summit. sales that have had this talked Summit Partner and partners, which I some customers our very about hear talked it. their it issue, unsolicited, consistently our talking teams knew our other me last is it largest the to The we Partner candidly, had and at week about

of that's So some things then sort the subjective we've view. And done I'd analysis, there's point X out. and

historically can a back from The until frame that our shipment the -- see these can X-quarter of the we connect Meraki like the long first you to actually cloud Meraki. to when to we the is would in cloud, connect of certain product shipped, product delay what the for what begins activated to to time X- it parts them how portfolio, is seen be versus takes to a And get and we've products Cloud. see

that's So first piece. the

strong from Federal is The quarter second we had very U.S. perspective. a -- an in orders federal

into a reality we Defense have during the that clauses issue. And so special Defense, most of like with status we big that their favored the chain we're is making U.S. Department government nation And the them shipment certainly, And contracts prioritized the decisions. not same is, looked would Department customer crisis. when the give them in they supply have why actually of

never a numbers had products of a which look flow very They big order had steady explains across, influx. fairly So why they normal. their

in the almost forecast third advanced serious implementation point transactional a uptick which again. to the I'd and where loosely our is XX%, services, is digits services, that The is noticed grew double almost in say QX that QX translated we for

and point, days hired tell us implementing solely about one that help their this people AI in I'll focused that then asking give have they had clear We on literally XXX last XX I'll big for technology done. And the them data get subjective to one stuff. come customers it's the customers. final partner us So you are talk

So I That's pretty surprised we about we might traditional been didn't talked some to elongated materially it and -- we about the need have prior, right service there provider extra but learned say feel was that cycle. We've it we've XX so think why that this quarter. just been have are me think it's remained. get we've a remain. Candidly, sales way. last the cases, the good for make as macro. Clearly, worse many over comment macro. things which easier us, has I talked discussed days. don't for is now. I'll pretty it in We've remains normal. the But the, in tough, They it see signatures, about But

so of And all wanted and this is issue -- that be I'm all of long I believe that what consumption for led to sorry answer, our customers. is really the a to -- us with thorough that but

going your I'm AI there. And I'm last to to we to question. going So What orders was answer pause gave time date. then

that pretty which underneath -- we said we is orders broad seen sight to $X of million AI designed going line when occur 'XX, we I'll today billion-plus believe of we're of for say, orders AI have about is And set that have build-out been would that numbers our fiscal We that GPUs moment. The get it already little players. support a in teams to the talk to forward-looking we already. we've and/or taken in gave feel infrastructure inside a year cloud $XXX Ethernet over a good we numbers the for in GPUs, more have networks, bit that

of that 'XX, for quickly. cover identified set So orders sort we've a okay? I of fiscal also that's just will just real forward-looking

hyperscalers -- major now the -- are States. in fabric United the We have deployed GPUs X in of underneath hyperscalers X now Ethernet our we

create between build to And AMD, and to including and have to over Jensen integrated see we take tested opportunity Ethernet NVIDIA we X us, solutions this some reference came even together the very -- also executives spent X of say We solutions, yesterday, from architectures. And minutes technology working to jointly actually will XX are GPU-enabled with our I and believe my technology his and X their enterprise. to executive team. week, validated a technologies, and NVIDIA closely his actually or infrastructure great Intel with of we

of to see case, partnership beginning be with our NVIDIA we cases and in the think go-to-market, winning enterprise And evolve. use a will we're the technology think that strength So in that with our combination. we a underlying

working we're as on So well. that

in on there's So AI lot space. a the going

Simon Leopold with Raymond James.

pretty maybe get trends. worse little really, segment see a wanted new networking. a declining. us if of bit that. at be segmentation, center data a transition unpack its more trying I the better, in you maybe a this during whereas hopefully, networking doing to to sort give and you'd us of to what I to to terms And doing could suspect bit I'm is within willing campus what's And is understand what's weaker in sounds little the bit color good,

bigger say that the because times to would for inventory at we're It's bit of out right happened. this thanks a that's Simon, we of little mean, the point. happen the seeing, And normalized time in would in obviously, signal now, the first that. I variance tough is half. have field. now We demand knew that I lead amount the

level. data the points. than between, product that's little campus difference is times start what where down what getting to shipped of shift. center or from seeing, team wireless lead at of our of our are But a slightly inventory just the out not prepandemic. And were point, our moved has unpack the a within level this what's done bottleneck to door. customers' product job they slower we've the a to when amount the and networking. supply backlog That's That's more What in kind terrific we're rest networking. you out huge of back The networking, Our been for field-based we've has chain seeing access because are seen we example, seen been on

Research. with Ben Reitzes Melius

I Stock hit here. share about get your repurchase ask cadence. wanted could to obviously

so billion talking been year. $X about the in We for or buybacks have

that's to Some dilution. of offset

be second deal repo dynamics the more current are coming? about If half guys the Splunk aggressive this that quarter? is year you in you share how given in upcoming are with there confident you thinking pickup, would And any the potential

be outside forward. be Ben, the Splunk from we to it's transaction, transactional to cost, on it's flow-positive said as Yes, the going of cash going the -- first year

any So share transaction return, the buybacks. the is an in through capital having way, either through the dividend -- on effect through not, our or Splunk

continue our higher show increases level to to expect in and higher level dividend. at of We share continue consistent and buybacks to

obviously also going obviously at opportunity I'm at opportunistic look to don't is but that at. the this buyback. -- a we'll moment, to look the the chance will We share be something to commit not that take on at I that

Samik Chatterjee with JPMorgan.

I guess if I can just clarify one thing first.

I prepared think, remarks, autos did say the pronounced on the Chuck, of you your impact in the in month more you saw October.

What what you side? say. or more your facing you you're first problem. of SMBs are of implying this you inventory of pause sort sort the in, of that's thinking headwinds temporary longer quarters mean the a are are confidence it's of and of itself. that going issue? improvement face gives autos think customers installation than mention partners the that bit to revenue I baking are I ones curious, on next heard an I did in weeks that's sort large color couple couple you in Or of And part see that November just your sort did sort maybe you that customers. And smaller the also a being really not of of similar a then you that about in that terms from of

Samik. Thanks,

the back had the of of go that you amount last one is if call of the we the that the which about quarter, a fair end was as QX, October with momentum point talked we we on to exited my And reasons weeks think of sales I moving X process the that getting we and went fiscal we of the didn't to year-end this. we our had through. territories sales around expect accounts start-up see around say, in sort which happens normal first, year, moving

that materialize into is come what quarter we look middle quarter, So and -- expect the consumption see the it primarily that's for -- in when we then that the really about to and everything ones and to -- the didn't. together, comment they -- October of having because the clear just what is to of it they're we going was kind have And the was tend inventory. this situation. Relative [indiscernible], the to really was most October it are the to be was who that us actual issue

we confidence how will have, not asked what we -- You it's SMB.

at we was within fine. the better look fact, a their order within the for And smaller quarter provider, look orders, the cetera, customer and at you service we If in and SMB et us the had, now performance subsegmentation was. enterprise in

just it consumption issue it. that was followed customers the midsized to the trend and small So feel didn't the upmarket

Vogt David UBS. with

Scott, at maybe unpack comments the remarks, you in this and want to to said back one you. the just for is But that I I backlog maybe know prepared is orders. of think normal made, levels guide don't you I of you your at end the quarter.

just third the suggest know sequentially positive year-over-year fourth the and third quarter order not quarter. just include make guide going and think, but rest then that know about if sequentially of color But revenue be half, revenue? And helpful. into and to your year-over-year. the for a I the orders. orders I in accelerating you the some a comment backlog conversion quarter So are like comps, guide steep quarter case, I that's specifically acceleration XQ Doesn't an doesn't to did that year second it's trajectory the to be there to acceleration, is order easy assume that the in in more and up, but would comment in the we significant pretty don't the you fourth

this, in David, year, And normalized QX don't expect. we I orders did in expecting first and QX. you'd in both this we say half. at and are but is point. happen the Yes, improvement that. that knew both guide We -- sequential as yes. do in of would the we -- and in Backlog both again, the revenue, half second

great think the team getting the we've now them, hands orders the I our customers. job implement in did supply got of those hands the a of orders our but We in to chain them customers. need

booking on a reverse see you sequential So compare or noted, half easier we is the Obviously, as from standpoint true the said, second points. increases. And do revenue. you order has standpoint, as

to revenue difficult half have will second The points compare very last year.

Matt Niknam Bank. Deutsche with

on follow-up Maybe one another to one the just just I have margins. dovetail prior to question.

prior on customer at the Just second just does a the quarter. to sets one, X- income in on is margins that X-quarter all X for the on this the different margins, expectation XX.X% so half outlined? And you a then vary digestion, across op improvement

guide should Or that basis sheer the or point to on sequentially? the margin a dip. OI either gross consider are Is think just to implies the decline I line? XXX items there revenue we cost XXX due margin other

Yes. To the through on -- flowing it second year. revenues second based question, the half just your is the are of the how

I settle we've somewhere in said will to gross XX% in XX% think range. margins, this

it this think will that closer it for of same of range I like to the end the higher year. part at be point, the looks

year I first was the what So see way that's the the part question? of Matt, out. flowing your Remind me,

Just around enterprise X sets? X second provider, does half installation. service quarters' the and Or to customer across vary the broad orders, federal? across improvement X in expectation it for of worth that Is

right. Yes,

service of which telco provider, service I to market the of Within second half going expect think to got both continue -- I set on. and cable, through we've we has would one provider dynamics expect the certainly year. be difficult

space. I think a difficult continue will to be that

the other the see web have do And On scale. side, orders. we we scale web

in sight the their see to also line the work to way half again they've inventory their through, orders beginning of second them we year. got to While increase do of

So continue mixed but I bag, probably the SP of it have to think bit a will is greater impact. a

Jefferies. with Notter George

versus for I'm now. that on around continuing question. been this why curious, I is companies excess have dealing last Just inventories evident And ago? And is typically don't quarters a really with enterprises that more guess space, few also, to more the If infrastructure. think becoming you Cisco We mentioned X just I look at now inventorying enterprises. the as spreading then about issue quarters

And so Or the more has I something is insight Any you inventory? distribution would for changed is, great. channel be this guess there? question

Yes. Thanks, George.

to -- would relevant we it's what that the our now become because customers it X the during I unloaded of that mean mean ship than we think last I in I period. dollars really more time is months. backlog and was billions normally reason --

-- and So cloud to they had been have for your know players. with the all doing -- been very that sequenced I along, example, think it buying point. purchasing providers, cycles an as those And had and sure, it's they we we ahead just

So start when next they're we orders. placing kind to their know going of

These the they rollout. partner a could backed some could to switches of on talking sitting be infrastructure, who the point, the they we're may and their customers example partner customers, try XXX, a done. XXX your cases, be or with a branch in right? they're who's the to have up get doing think I or the staging refresh them as order be with might And an big doing top XXX doing staging, about enterprise, are actually -- the it they to if resources may

varies, -- it it those either be but of So a combination could one or both. a of

And George, just that. but to data, you this And have I'll data it. to put repeat some

go QX, back was But was announcing in X%. growth Our XX%. if revenue product was product growth, you now, revenue the to QX, quarter revenue it XX%. And growth obviously, we're

obviously, a or we out door. in we a get and last as much X So the of the Chuck It and you sense pushed get said complete has gives can when X just it quarters. shipment been revenue how out

Ng with Goldman Sachs. Michael

just X. have I

data the then wired a within question slowdown. just order LAN on these ago? second selling orders, campus Is customers on silicon First, the improving Was with more What's just to years it more for few fashion it in follow-up a $X concentrated feedback the with relative enterprise billion. desire diversification? And the on a that wireless One? or the Is center both, position specifically? from the and disaggregated or Silicon a as AI hyperscalers in your with

Thanks, Michael.

understanding the new been cloud designed on, that it's as think relative the willingness question -- that to AI our regained think players, with I consumption. footing we're use wanted wanted flexibility to there in. early them And lower disaggregate can't think we we're do alone, look, I over remember, use so. if was I in we showed the but listened It's And even -- to feedback lower and the performing, of One. web cases XX and savings we the power reason On think us flexibility I our they because and that I they we the across last long had I quarter to players. like And where -- we numerous so large now power as our think got cases added and -- products, power I the what the they like we massively -- massive in. And listening they disaggregation back think Silicon is a scale

you have want broad-based they like via And that can Ethernet of infrastructure the sure. silicon primarily sources. InfiniBand, to then AI currently a at look like being do actually as move for to they that's standard supported diversity they technology think just more multiple I

just what them think tell and And what's now to take that we're second? on do And the driving executing so to we want and it's going we do. Scott, about now. you that's performing delivering

I think as earlier touched -- Yes. I came question the Michael, in on this up. the

it on about that backlog, we've way wireless more more enormous and because an bit -- to was amount industry, where -- of access difficult they're have. But trend saw between campus networking more of on all, wireless. and between to impact shipped the an differentiation more I looking and little a see think we've is, across center the because that, be less points trying because think, our you're did a of if cleared big others that installed. we I see to We generalize We sitting think first little are than did customers just of hand may it's out. get infrastructure a our inventory significantly broadly take networking data the faster it

and all Michael, you, right. Thank right. All

for you, ahead it to we'll closing over and turn So Chuck, remarks. some go

opportunities of confident time, for very QX. temporary. At quarter very we We what's encouraged we're Listen, with Yes. position and this confident we're also same try the We're the and that We're very performance to the the demand team welcome the transparent solid we it's encouraged in do that our very the going AI with will that proud Thank you, acquisition. you on. exception feel We're and And share what Sami, opportunity. you it, security, Splunk on the Obviously, in improving come with top in again. term. always We'll by issue with observability. know we're in seeing. we're exactly our of a of about. by be long talked opportunities

you -- night, think of U.S. period excited expired, the that feedback the that the last our Summit delivering I right United expenses Hart-Scott-Rodino portfolio capital pass as was see right for time. period our about that. At antitrust our And to meaning challenges probably as Monday leverage, operating States. Partner been Act many to last want we when I know in obviously waiting in just now it's the times reiterate with and week, you effectively on good allocation commitment review We're also on like our shareholders and now. the the value managing in a long in we've review or we night under to the our have

you back and thank So Sami. for over I'll today, joining us turn to it

at will next Wednesday, and p.m. call. XX, Eastern which on February Pacific be results, concludes our Time, X:XX fiscal reflect second quarter X:XX Time. This call, today's quarterly will Cisco's year XXXX XXXX p.m.

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