Cisco Systems Inc at Raymond James TMT and Consumer Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Simon Leopold - Raymond James - Analyst : So, I prepared a group of questions that will go through informal chat of sorts. So maybe let's set the stage. Bill, tell people a little bit about your background and your current responsibilities at Cisco.

Question: Simon Leopold - Raymond James - Analyst : So I'd say one aspect of the optical market is that it's constantly evolving. There's always new stuff coming. So what are sort of the innovations that are occurring in optics that you find most interesting and why? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 3:00PM, CSCO.OQ - Cisco Systems Inc at Raymond James TMT and Consumer Conference

Question: Simon Leopold - Raymond James - Analyst : So that form factor, but more traffic, more speed over --

Question: Simon Leopold - Raymond James - Analyst : Something that small. So the basic I'd say driver for everything optics is traffic growth. So Cisco used to publish these traffic forecasts. I think you guys have stopped that. But what in terms of your forecasting your business? What kind of assumptions are you making about the dynamics of traffic growth?

Question: Simon Leopold - Raymond James - Analyst : It's interesting because I hear this question about, is AI driving growth and your statement was unambiguous. But if we think about it, the industry is really in a training phase. AI has barely been launched. So how do you think about, what's kind of the 5 and 10 year vision of what happens with traffic because of AI when we're all actually using it day to day?

Question: Simon Leopold - Raymond James - Analyst : And you've also talked about this concept of routed optical networking, which is a different approach on how to build the wide area network. Can you talk a little bit about what's made it possible and why you think it's the way to go.

Question: Simon Leopold - Raymond James - Analyst : And I think you've shared with me some metrics in the past that when somebody buys a switch, it's basically a bunch of empty sockets. And you put the optics in where -- what were the sort of proportions of the -- a fully equipped switch that were optics, let's say five years ago versus today versus what it might be in two years.

Question: Simon Leopold - Raymond James - Analyst : So I want to touch on AI of course, because we have to. So how do you think about the TAM for Cisco? What are your opportunities? What products are you selling? I know some of this may go beyond the scope of your business. But how do you size that?

Question: Simon Leopold - Raymond James - Analyst : And you've shared or Chuck shared on the call, some metrics around the AI winds and the pipeline. What portion of that is coming from optics versus switching?

Question: Simon Leopold - Raymond James - Analyst : One of the other questions that's come up a lot is related to the availability of utility power, electricity. And so AI think is what's catalyzed this topic. So it's not brand new but from a sort of Cisco perspective, how are you seeing the availability of electricity to power data centers affecting your business?

Question: Simon Leopold - Raymond James - Analyst : Yeah, I wanted to go down that route in that I feel like for the past maybe five plus years, we've been hearing about the imminent availability of co package optics and then LPO, LRO the acronyms, they're going to run out of letter soon, maybe what's your take on all of these opportunities?

Question: Simon Leopold - Raymond James - Analyst : Can I just paraphrase the way I interpret you as being willing but skeptical.

Question: Simon Leopold - Raymond James - Analyst : And is it fair to say in a sort of cynical way, you don't care because you can do it either.

Question: Simon Leopold - Raymond James - Analyst : Yeah. So the other area where I think your view would be interesting because you can do either is this idea of coherent technology, which is the technology of choice in the wide area network being used inside data center. And you've got Acacia, which is a coherent and then luxtera which is not. How do you sort of think about the prospects of coherent technology being applicable inside the data center. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 3:00PM, CSCO.OQ - Cisco Systems Inc at Raymond James TMT and Consumer Conference

Question: Simon Leopold - Raymond James - Analyst : And what's the sort of time frame when that might happen? Is it like 2027-ish?

Question: Simon Leopold - Raymond James - Analyst : And then in terms of the other technology that might sort of change some of these curves is the introduction of liquid cooling related to the primarily to keep the GPUs cool. But how does that affect your industry, your side of business?

Question: Simon Leopold - Raymond James - Analyst : The other dimension of the market around the telcom wide area networks hasn't been as big a market for you, but you've got a couple of projects there. How's that market been in terms of it had a lot of excess inventory and to be too small to show up in your overall results. But what are your observations of Telco trends?

Question: Simon Leopold - Raymond James - Analyst : So believe it or not, we've run out of time, but I always like to close with sort of a similar type question, but based on sort of your interaction with the investment community, what do you think of as the least appreciated aspect of the optical business at Cisco?

Question: Simon Leopold - Raymond James - Analyst : Great. Well, Bill, thank you very much for joining us. Appreciate it. Thank you everybody. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 3:00PM, CSCO.OQ - Cisco Systems Inc at Raymond James TMT and Consumer Conference