CSCO (CSCO)

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

“Cisco is positioned for its strongest year ever as indicated in our guidance for fiscal year '26, which is as follows: we expect revenue to be in the range of $62.8 billion to $63 billion.”

“Our Acacia business had its strongest quarter to date with more than $1 billion in orders in Q3 and is on track to grow over 200% year-over-year in fiscal year '26.”

“You'll start to see some of that benefit in Q4, which is good because that's really -- those are the actions that are helping us stabilize gross margins.”

“On the order side, I think that, that is a fair assumption that you would see a higher impact from price increases as the price increases are now sort of fully absorbed, if you will, as we get into Q4.”

“Non-GAAP earnings per share is expected to range from $4.27 to $4.29.”

“We are assuming a non-GAAP effective tax rate of approximately 19%.”

“Non-GAAP earnings per share is expected to be in the range from $1.16 to $1.18.”

“Non-GAAP operating margin is expected to be in the range of 34% to 35%.”

“We anticipate non-GAAP gross margin to be in the range of 65.5% to 66.5%.”

“For fiscal Q4, our guidance is as follows: we expect revenue to be in the range of $16.7 billion to $16.9 billion.”

“We expect the mix of cloud business to continue to grow in Q4, while we are on track to exceed our target of 1,000 new customer logos for Splunk in fiscal year '26.”

“We expect to recognize approximately $4 billion in AI infrastructure revenue from hyperscalers in fiscal year '26.”

“In terms of silicon, we've secured our supply through the calendar year '26 for the next 8 months anyway.”

“We would expect of those 5 design wins that we talked about, we'll begin to see some early orders in Q4 and -- but not at scale until we move into fiscal year '27.”

“We expect to recognize up to $1 billion of pretax charges with $450 million to be recognized in the Q4 FY '26 and the remainder during FY '27.”

“The rest of the portfolio, I think it's reasonable to assume it grows in line with our long-term model.”

“I think on the AI hyperscale side, it's probably reasonable to expect that we would recognize at least $6 billion of revenue in FY '27.”

“Given the confidence we have in our business and the strength of our ongoing cash flows, today, we announced that we are raising our dividend by $0.01 to $0.42 per quarter.”

“And we're focused on growing EPS faster than revenue. You saw that in Q1. You saw it in Q2. And it's also in our full year FY '26 guide.”

“This dividend increase demonstrates our commitment to returning a minimum of 50% of free cash flow annually to our shareholders.”

“So I think the demand is there, and we just need to continue to build capacity.”

“On the refreshed firewalls, we had our third consecutive quarter of double-digit unit growth, and we just launched our new high-end refresh firewalls in the last 120 days. So we expect that to continue.”

“Where that would lead us is as we exit Q4 this year, the organic Cisco security portfolio will be growing revenue close to double digits as we exit.”

“So we're starting to see some early, early success there, and I think it will only ramp from here.”

“On the enterprise, sovereign and neocloud space, the first thing I would say is that the sovereign side, there's really no real need nor expectation for meaningful impact in FY '26.”

“While this shift is creating a drag on revenue growth, which we expect to continue in the second half of fiscal year '26, cloud subscriptions enable greater adoption, expansion and faster delivery of innovation to customers.”

“As the adoption of AI tools grow and Agentic AI increases at the network edge, we expect to see continued momentum in our SASE business, including Secure Access and SD-WAN.”

“First, we have already announced price increases, and we'll continue to monitor market trends and make additional adjustments as necessary.”

“I think that you're seeing a continued ramp as we move through the year. And you're spot on in terms of giving us better visibility on some of the revenue rec that we would look at into '27 that will continue to follow on.”

“And then the neoclouds, I'd say, are generally the same. We expect the ramp to begin in the second half, but really be FY '27.”

“This joint venture expects to begin operations this calendar year with a plan to build out 100 megawatts in Saudi Arabia as Phase 1 of the project.”

“We plan to deploy our Silicon One architecture across our high-performance networking systems by fiscal year '29.”

“So do I think customers will try to buy ahead in some cases, perhaps, but I don't think it's going to be a big trend in the networking side of our business.”

“We haven't made any announcements on scale up. I think in the past, I've said we do plan to participate in it, and we expect in the future to have products and revenue from scale-up, but haven't announced anything.”

“But as we get into the second half of the year, we're seeing much much more difficult comps.”

“What we expect from an orders perspective this year is that we will we're expecting at least two times the orders that we received in fiscal year 2025 from that same set of customers.”

“We expect this demand to increase. Driven by onshoring of manufacturing to The United States, the increase of AI workloads at the network edge, and the emergence of physical AI.”

“I still remain very optimistic on SP. Probably secondly, enterprise and probably third public sector.”

“So we think that all of that leads us to feel very confident about maintaining the range that we provided at Analyst Day on core networking.”

“Our teams are forecasting a return to growth for federal during this fiscal year. Now it's not going to be the same -- it's not going to be as high of growth as we saw a decline. So we'll still be below FY '25 levels. But the good news is they're forecasting growth.”

“To answer your question directly, number one, I don't think we should change those ranges. Number two, do I believe we'll exit the year at it? I think we're going to exit the year either near it or on a path to get there pretty soon after that.”

“So we do expect that, that will improve as we go into FY '26.”

“So we think it will start to ramp. And then we think that you'll see AI applications ramp. And in the second half of the year, we think you're going to see Agentic proof-of-concepts become more, I'd say, pervasive”

“And what I would say is based on how we see this stuff evolving, I would see the growth rate continuing to improve as we get through the fiscal year this year.”

“we expect demand for these technologies from Neocloud providers and sovereign customers to increase in fiscal year '26.”

“I would lean towards looking for that even the order flow to be sort of middle year into the second half, and then revenue would follow.”

“we said we thought that would begin to convert to revenue in the second half of the year. And we saw that again, the first piece of that in Q3, and we expect to see a bit of it again in Q4.”

“And I think that's how I think about it. It's nonlinear orders. And as long -- if we can continue to increase the capacity, then we'll continue to see that business improve”

“we are on track to exceed $1 billion of AI infrastructure orders in fiscal year '25.”

“I think we'll continue to see that for some period of time.”

“I think we're going to move into that over the next two to three quarters where we'll see a full transition, both in the traditional on-prem access points and then also in the cloud managed.”

“I think you'll see as we get into the next couple of quarters, you're going to see more and more cross-selling sales incentives that the teams are putting in place that I think will continue to accelerate that.”

“We do expect to see this revenue begin to ramp in the second half of the year, and that's consistent with what we've said from the start.”

“We are assuming a non-GAAP effective tax rate of approximately 19%.”

“We expect this to continue as our 800 gig Nexus switches based on our 51.2 terabit Silicon One chip become available in April for AI cloud buildouts.”

“we expect our campus switching portfolio, as well as our WiFi 7 access points, to gain traction with increasing return-to-office policies.”

“There will be a tail of those now that we've got that process in place. It will be significantly less as we look at Q2, Q3 and Q4.”

“So, we think the refresh opportunity is real for some period of time and in large part will be driven by this AI wave.”

“We do see though this driving revenue consistent with what we've said in the past, Samik, driving revenue for us more in the second half of the year. The majority of the revenue that we get from that will be in the second half.”

“But this has been the same pattern we've seen for a few quarters now. And so, I think it's, to some extent, in preparation for it, but the last part of your first question, I would say that the majority of this build out is still way ahead of us on the enterprise side.”

“So, I do think we'll see. Those aren't lost transactions.”

“And that of course, will be a tailwind to op margin as well.”

“In both our Q2 and full year guidance, we're assuming a non-GAAP effective tax rate of approximately 19%.”

“For fiscal year '25, our guidance is: we expect revenue to be in the range of $55.3 billion to $56.3 billion;”

“In addition, HyperFabric, our fabric as a service solution, which is expected to be available in early calendar 2025, further simplifies infrastructure deployment and management while providing real-time visibility into network performance.”

“Our new AI server is expected to begin shipping next month.”

“We expect this momentum to continue as customers are showing significant interest in our 400 gig and 800 gig switches based on Silicon One.”

“But I will say that one of the absolute largest players in this space actually told us last week that they are releasing orders in one of those design wins. So one of those design wins will start to generate orders in the near future.”

“I said we should see the real momentum kick in '25.”

“As part of our announced restructuring plan, we expect to impact approximately 7% of our global workforce with total estimated pre-tax charges of up to $1 billion.”

“And we're assuming a non-GAAP effective tax rate of approximately 19%.”

“And in Q1, we're assuming a non-GAAP effective tax rate of approximately 19%.”

“We believe this will result in strong growth and profitability as we enter fiscal 2025.”

“If the enterprise picks up materially somewhere along the way, then that number could be higher.”

“We hope to see normal buying behavior in the hyperscalers over the coming quarters.”

“We expect these awards to yield orders in fiscal year '25, reinforcing our confidence in our line of sight to $1 billion of AI product orders in fiscal '25.”

“We think we work our way through that headwind mostly by the end of this quarter, our fourth fiscal quarter. That's a tailwind for next year.”

“Think of the normal seasonality in terms of year-on-year growth rates beginning much more in fiscal '26.”

“I think you will -- what you said, I think is spot on. We will see those revenue synergies begin to ramp in the second part of fiscal '25 as these are not short sales cycles.”

“I've always said on the security front even before Splunk that we had brought in a new team...I had always said that second half of '24, I expected you would see an improvement and then in '25, you'll see it get to where we really need it to be.”

“Given these points, we expect fiscal '25 operating margin to be in line with our Q4 guidance.”

“Third, we're working to quickly integrate Splunk into our product offerings, go-to-market engine and expect to invest in OpEx in fiscal '25 to drive those revenue synergies.”

“Second is the interest impact from the acquisition, which we expect to be a headwind of approximately $350 million per quarter, including both the foregone interest from cash off the balance sheet and the additional interest payments on debt.”

“We're assuming a non-GAAP effective tax rate of approximately 19%.”

“In Q4, we're assuming a non-GAAP effective tax rate of approximately 18%.”

“We anticipate the non-GAAP gross margin to be in the range of 66.5% to 67.5%.”

“We expect revenue to be in the range of $13.4 billion to $13.6 billion.”

“the first shipment is scheduled for August this year.”

“So I think all-in-all, I feel like it's kind of a down-the-middle view of fiscal '25 at this point.”

“And on your AI timing question in '25, my suspicion is that that's going to start low at the beginning of the year, and it will ramp as we get through the year. So I'll be thinking more back-half, but we'll have to see how these pilots go.”

“This dividend increase demonstrates our commitment to returning a minimum of 50% of free cash flow annually to our shareholders and our confidence in the strength of our ongoing cash flows.”

“after working our way through the restructuring that we discussed today, for the full year, we think they'll be modestly down.”

“So I think over the last few quarters, I've been pretty consistent that we thought the second half of this fiscal year, we would start to see an acceleration of security.”

“Over the next 6 months, you can expect more meaningful announcements across the portfolio through our accelerated organic innovation and inorganic investments.”

“to your question on where does this settle in? I think it settles in the range we're in right now in the 66% to 67% range through the end of the year.”

“But, Ben, our expectation is the majority of that $1 billion in orders will turn into revenue in our fiscal '25, just to be clear.”

“So on the order trajectory, I think what - we clearly don't guide bookings. But what I would tell you is that even as our teams modified their second half outlook, the second half will still be more favorable than the first half.”

“In both our Q3 and full year guidance, we're assuming a non-GAAP effective tax rate of 19%.”

“we plan to continue our share repurchases at the current quarterly level throughout fiscal 2024.”

“As part of our announced restructuring plan, we expect to impact approximately 5% of our global workforce with estimated pretax charges of approximately $800 million.”

“First, we have reset our expectations for the second half of the year given the cautious macro environment, our customers absorbing high levels of inventory and ongoing weakness in Service Provider.”

“We already have line of sight to over $1 billion in orders for AI infrastructure from major cloud providers in fiscal year '25.”

“We do see line of sight to them beginning to increase their orders again in the second half of the year.”

“I think gross margins, we've said will settle in somewhere in this 65% to 66% range. I think at this point, it looks like it will be closer to the higher end of that range for the second part of the year.”

“We expect to continue that higher level and consistent higher level of share buybacks, and to continue to show increases in our dividend.”

“We think that's going to continue to be a driver over the next couple of years.”

“Although, I think with the improvements that we've seen in our portfolio and security, we should see security accelerate.”

“I expect the impact to be greatest in Q2 and in Q3. But when you look at the order growth, we do see a return to order growth in the second-half of the year, both sequentially and year-on year as we get there.”

“In both our Q2 and full year guidance, we are assuming a non-GAAP effective tax rate of 19%.”

“We are actively engaged in competitive sales with all these products and expect to see meaningful positive results in the coming quarters.”

“We will also drive a high degree of consistency into our stock repurchase program and will maintain the quarterly levels in the range that we have over the past few quarters.”

“And maybe it's late '24, but I would suspect into '25 for sure.”

“And we expect that, that momentum will just continue over the next few years.”

“That drops down to a mid-single-digit OpEx growth number, so in line with expectations certainly given the environment of merit increases.”

“I think we'll have a clearer view, and I expect to see more normal ordering patterns. Of course, we don't guide orders, but I expect to see more normal ordering patterns in the second half of the year.”

“We have we expect this year to renew enterprise networking software at close to $1 billion.”

“In both our Q1 and full year guidance we're assuming a non-GAAP effective tax rate of 19%.”

“Consistent with what we said last quarter, we expect to build on our record results delivering modest revenue growth in fiscal year '24, with the bottom line growing faster than the top line demonstrating operating leverage.”

“Given our installed base of 300,000 Cisco security customers, we believe we have the opportunity to accelerate revenue growth in security over the next few quarters.”

“I think that's over the next – when you look out sort of the second half of next fiscal year, I think you'll see security really be accelerating into a growth driver for us.”

“and it's an area where we believe that we'll continue to gain market share.”

“And as we look ahead, it's a time to be prudent, and so we see that happening again in fiscal 2024.”

“If you move to the end of fiscal 2024 based on what we see today, we will be in that range from a CAGR perspective on a revenue perspective, and we'll be above that range from an EPS perspective during that same time period.”

“In both our Q4 and full-year guidance, we are assuming a non-GAAP effective tax rate of 19%.”

“Lastly, we expect to continue our stock buybacks at the higher levels you've seen over the last two quarters.”

“You can also expect us to grow earnings per share at a higher rate than revenue in Q4 fiscal year 2023 and full-year fiscal year 2024 reflecting improving gross margins and strong expense management.”

“In terms of our backlog, we continue to expect that we will end the fiscal year with roughly double our normal product backlog.”

“We also have $32 billion in remaining performance obligations, and we expect to see this momentum accelerate.”

“As we look ahead to fiscal year 2024, we expect to see modest revenue growth, even with the tough compare of double-digit growth in fiscal year 2023.”

“That said, I think we're about to the point where we're lapping some of the benefits of the price increases. So there may be a little more room in gross margin sequentially.”

“We expect those same factors to continue into fiscal year ‘24, giving us conviction in our ability to deliver on our commitments.”

“So, we think that you are probably going to start seeing the benefit of that three quarters or four quarters out.”

“The midpoint of the guide for the April quarter is about a 10 basis point improvement from the quarter we just announced.”

“And as we continue to deliver what we’ve just laid out as our guidance for the second half of this year, I think you’ll continue to see share gain grow for us.”

“In both our Q3 and full year guidance, we are assuming a non-GAAP effective tax rate of 19%.”

“We expect to pay these federal taxes by the end of the fiscal year.”

“While we continue to closely monitor the global macroeconomic conditions, the overall demand environment remains steady and on par with Q1 and our pipeline and win rates remains stable.”

“Like I shared last quarter, as supply constraints ease and lead times shorten, we expect orders would normalize from previously elevated levels as customers return to more typical buying patterns.”

“I think we’re several quarters away from really having anything to speak about relative to the size of that business, but we’re working hard on being able to deliver that.”

“So I think you’ll see gross margins potentially continue to expand from where they are, maybe as much as 50 basis points in Q4.”

“I think the whole market share discussion is reflected in our backlog. I mean, that's the issue. And as we ship it, you will see us -- I think, you'll see us over the next 12 months gain market share as we have an outsized backlog that we'll be delivering.”

“But we continue to see real strong demand in general from them.”

“I think it's going to be probably a little bit heavier in the second half of the year than it will be in the second quarter.”

“That will generate some savings, not much in fiscal '23. But longer term, that will generate some savings.”

“By the time we get to the end of the year, our expectation is we have about the same headcount that we had at the beginning of the year.”

“I think we made improvements in roughly half of the portfolio. Half of the product families improved during the last quarter, and we would expect to continue that progress as we move forward.”

“Not expecting it to be something that has a lasting impact on us.”

“On the software side, what I would say is that the 9K renewals are improving. They're still not material right now. I think next year, we'll see that occur.”

“Will it get back to 65%? I think there's -- for that to happen, we'll have to see either further cost reductions on the input side between freight and logistics, which we are beginning to see.”

“We think by December, we'll have better visibility to the 2023 budgets, which will be helpful.”

“I don't expect input costs, particularly around semis to come down.”

“Our guidance assumes that we continue to be supply constrained through the year. As I said, if we could get more supply, we would be growing more quickly in fiscal 2023. So we'll continue to be supply constrained.”

“With RPO of over $31 billion, almost $17 billion of which will be recognized as revenue over the next 12 months and a record backlog, we have great top line visibility.”

“I think as we continue to clear our backlog or work through it, not clear it, but as we work through our backlog, you'll see some share come out.”

“Over the longer term, as we mix more software in, that will be a tailwind at the gross margin line.”

“So I think we'll just continue to see improvement.”

“We feel good about that momentum. We think that those customers will continue to spend in all of the trends that we've talked about.”

“our current models would have us exiting fiscal 2023 with roughly the same backlog as we're entering FY 2023.”

“we have – and I think I said this on our last call, we've had hundreds of product design – redesigns going on. And two of our high volume products that also have good margins will begin to ship in the redesigned space sort of towards the latter into Q1, and then into the balance of the year, which we think will be helpful as well.”

“So I would see margins going up as much as 50 basis points, between our first quarter guide and where we end the year.”

“It is, obviously, over the last four quarters, it's grown 50%. From a revenue perspective, it's very supply chain dependent. So I wouldn't get too wrapped up about the revenue versus the orders right now. I think we'll work our way through that over the next four to five quarters.”

“So again, seeing pretty balanced growth across the board and that's our expectation as we roll into fiscal 2023.”

“In both our Q1 and full year guidance, we're assuming a non-GAAP effective tax rate of 19%.”

“While our software revenue was down slightly, once supply constraints improve and we begin to increase product shipments, we expect to see an improvement in software, subscription and services that are attached to hardware products in our backlog.”

“However, as you'll see in our annual guidance, we expect this margin pressure to begin to ease as the year progresses.”

“While we anticipated some moderation from the unprecedented product order growth of last year, demand signals remain solid.”

“We expect strong performance across our portfolio, driven by our continued focus on innovation and easing of supply constraints to drive solid top line growth and profitability.”

“There may be some benefit in freight and logistics. We'll see, as commercial airlift comes back online.”

“we think that will continue probably over the next 60 to 90 days.”

“I think once we get through some of the supply chain stuff that we'll start to see that be a little more reflective of what we've been planning on.”

“Zero. There is no demand impact our Q4 guide.”

“I would expect this stuff to normalize back particularly without the Russia and the extra week impact. And then when supply chain starts to clear, then we'll start to see those normalized growth rates that we would expect”

“In terms of supply, we expect the challenges we experienced in Q3 to continue into Q4.”

“In both our Q4 and full year guidance, we're assuming a non-GAAP effective tax rate of 19%.”

“We anticipate the non-GAAP gross margin to be in the range of 64% to 65%.”

“We believe that we will begin to see the benefits of these actions in the first half of next fiscal year.”

“The renewal stuff in '23, it could be helpful.”

“The teams are working on a next-generation strategy right now. And I feel confident that over the next 12 months to 18 months, you should continue to see improvement in that business, but we also need to get supply chain issues still with on the firewall front.”

“I think that next quarter, Q3, the compares definitely get tougher from a year ago, particularly because we had an extra week of order as well.”

“And I think that will just happen gradually over the course of the next few quarters. So I'm not expecting a significant bump in any given quarter.”

“All we know now is we expect this to be with us through the second half of our year.”

“In both our Q3 and full year guidance, we're assuming a non-GAAP effective tax rate of 19%.”

“For the full year of fiscal 2022, we are tightening the range as follows: we expect revenue growth to be in the range of 5.5% to 6.5% year-on-year, non-GAAP earnings per share is increasing to $3.41 to $3.46, up 5.9% to 7.5% year-on-year.”

“We continue to partner closely with our key suppliers, leveraging our volume purchasing and extended supply commitments as we address the supply challenges and cost impacts, which we expect will continue into the second half of our fiscal 2022.”

“Our customers are making strategic decisions on their future road map and recognize Cisco's unparalleled portfolio is critical to their strategies. We believe they are still in the early phases of their next-generation platform buying decisions and expect our momentum to continue.”

“The opportunity ahead of us is clear as demonstrated by our growing pipeline and record backlog, which more than doubled from a year ago and will convert into revenue in the coming quarters.”

“As more and more becomes digitized, we expect our momentum to continue.”

“But right now, with our backlog so big, that may not happen for several quarters.”

“What we have seen is stabilization... So confident in the full year.”

“So feel confident in the position that we're in, both on the Q2 guide and the full-year guide, given what we see today.”

“Demand remains strong and with the momentum in our business transformation, we have set the stage for another year of accelerated growth in fiscal 2022.”

“We are solidly on track to deliver against our long-term financial targets by investing for growth while delivering breakthrough innovation.”

“If the supply chain -- the component supply constraints began to clear up earlier in the second half, we'll be toward the high end; if it's later in the second half, we'll be toward the low end.”

“I think even looking ahead, Sami, you got to think about that price increase having a bigger effect towards the second half of the year than it will have certainly during Q2.”

“We're partnering closely with our key suppliers, leveraging our volume purchasing and extended supply commitments as we address the supply challenges and cost impacts which we expect will continue into the second half of fiscal 2022.”

“In both our Q2 and full-year guidance, we are assuming a non-GAAP effective tax rate of 19%.”

“There is no change to our full-year fiscal '22 guidance. We expect revenue growth to be in the range of 5% to 7% year-on-year, non-GAAP earnings per share is expected to range from $3.38, $3.45, also up five to 7% year-over-year.”

“While we've thoughtfully raised prices to offset this impact, the benefits are not immediate and will be recognized over the coming quarters.”

“It only assumes that our share buybacks offset dilution. So, think of that as you're doing your own modeling, think of the share count to be roughly flat to where it ends this year.”

“On the Applications front... Some of the legacy products in the supply chain created a little bit of a revenue headwind there. But again, orders were stronger than the revenues. We would expect those to normalize over the next few quarters.”

“That is our expectation, Paul. Over time, I mean, again, I don't want to predict that for this fiscal year, just given some of the uncertainties in the supply chain, but it is our expectation that it gets back there and over the longer term as we continue to build a bigger mix of software into our revenue stream, that should also provide a bit of a tailwind to our margins.”

“Think of those price increases as being something that we'll feel more of the benefit of in Q2 and Q3 versus what we see in Q1.”

“We expect the supply chain to impact us through the first half of the year. And then at the low-end of the guide, we think we continue to have supply-chain impacts through most of the second half as well, with some clear up at the end. At the high-end of the guide, we think that we've begun to clear up the supply chain issues, supply and demand come back more into balance earlier in the second half.”

“In both our Q1 and full-year outlook, we are assuming a non-GAAP effective tax rate of 19%.”

“It's a bit early and I'd say maybe the second half of next year we can get -- or this fiscal year, we can give you a little more on that. And then, into fiscal '23 is when it's a decent size number.”