Cisco Systems Inc at Wells Fargo TMT Summit Transcript

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

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : I'm sorry. But Mark, again, I appreciate it. Maybe we'll start by just to level set. When we -- Cisco is a big company. That's clear, broad-based portfolio. But how do you think about the biggest, kind of growth drivers for Cisco as we look out over the next 12, 24 months? And maybe we'll just double-click from there on some of those key themes that we're talking about.

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : Yeah. That's great. So I'll start, right, where you started AI. Let's talk about maybe, again, remind us of what you guys have done, $1.5 billion. I think we talked about $3 billion last week on the call, very strong order growth if my memory is right, $1.3 billion. But walk us through some of those numbers. And I think what I'm most interested in is to appreciate how that's evolved, right? How it's deep and how it's maybe broadened and maybe touch on that from a perspective of the web scalers, right, but also what we're starting to see in maybe enterprise and sovereign as well as far as opportunities for Cisco.

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : And I always -- the question always comes up. I mean you guys -- first, to just make sure the definitions everybody understands. It's back end, just web scalers is that number, right? To your point, it doesn't include enterprise. It doesn't include sovereign, but it also doesn't include any front-end opportunity that you might see.

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : And then the other vector within that is optics systems within systems, silicon only relative to full-on systems. Can you help maybe us appreciate those mix dynamics?

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : And then I think in the past, you've talked about -- you've had five wins at six of the top -- the six top web scalers, right? You just mentioned four new ones at four. But overall, -- that's correct, right? It's five out of the top six.

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : And how would you characterize in the switching piece of this, appreciating it ebbs and flows, Acacia comes in, optics are strong and vice versa. But the depth of your engagement in the networks, meaning I think in the past, when I've spoken with Sami and stuff, it's been more maybe top of rack. Has that gone deeper. Any color on that?

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : Yeah. Maybe I'll trans-- well, before I go there, you mentioned scale out, scale across. What is Cisco's role in scale up? What is their view on that?

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : Yeah. And part of that is the standardization the ecosystem evolving if it's [ESO] or some of the other things Okay. Shifting -- keeping with AI, but maybe shifting to the other piece, the enterprise and sovereign piece Cisco has been involved, again, in your orders, right? It doesn't include [Humane] G42. What are you seeing in sovereign? And then -- after that, I'll ask you the same question on enterprise.

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : Okay. One of the things that I thought is interesting and very unique to the Cisco story around AI is the relationship with NVIDIA. And that's deepening I think, and you're going to correct me if I'm wrong, it has a lot to do with the enterprise adoption, this idea of bringing agenetic AI into enterprises, the network piece of the equation. Today, it's been complex. So can we talk about the NVIDIA relationship, how that differentiates Cisco? When do you maybe see that becoming an incremental driver to the story? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 18, 2025 / 5:30PM, CSCO.OQ - Cisco Systems Inc at Wells Fargo TMT Summit

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : Okay. Maybe shifting over to another big topic because you brought up at the beginning of the conversation, the campus upgrade opportunity,

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : And those drivers would be WiFi 7. You've got a large installed base that comes in to support as well over the next --

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : By the way, you brought up the same slide deck several times -- there's a lot of detail in that hasn't looked through it. There's good stuff in there. The competitive dynamics in campus, right? I think everybody has talked a lot about campus upgrade cycle. You had one of your competitors recently get acquired, that create dislocation. You've got another competitor that cease campus is a large incremental opportunity for them to go after some. I'm curious of how you would describe the competitive landscape you're seeing for this opportunity.

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : That's perfect. Moving again, Silicon One maybe should have been tethered to the AI, but I think it's broader than that, right? It's definitely -- we're still early earlier, maybe we're moving towards the middle innings of what the strategy is around Silicon One. But maybe just unpack that strategy, talk a little bit about Silicon One, how important it is for the company -- how does that differentiate Cisco and where is it going?

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : And so the gross margin tailwind, the pace of innovation, I think this is one thing I asked Chuck about last week is -- you mentioned it's a critical asset within the company. How do you think about investing into that business and keeping with --

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : Before we go to the model a little bit because I would be remiss if I didn't ask the CFO about some model inputs. But the security business has kind of been a topical area these last couple of quarters? Can you talk about that for a second? What are you seeing as far as there fundamental changes going on given the recent performance that we saw last week, it seemed to be a key discussion point. So maybe give you opportunity to unpack that a little bit.

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : So that timing difference on Splunk. I mean it probably surprised you obviously, some of -- the Street, I think where maybe you punt the question, but where do you think that, that kind of normalizing? Is that a couple of quarters from now? Is it further out than that?

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : And I think to be clear on that, that's factored into the guidance, right? You got the guidance oral for that --

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : And you mentioned data points. I mean can you talk about the cross-sell and call it, portfolio go-to-market leverage that seen with Splunk at this point? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 18, 2025 / 5:30PM, CSCO.OQ - Cisco Systems Inc at Wells Fargo TMT Summit

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : Yeah. Perfect. In the minutes I've got left, I think, again, I have to ask a CFO about the model and stuff like that. So -- there is a lot of discussion right now, as you would imagine, on components, supply dynamics, memory, cost. Can you walk us through what you're seeing? And is this causing pressures on the margin or any of the kind of headline the demand dynamics of your business that you've seen?

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : And I guess this kind of encompasses that same question a little bit, but the tariff impacts, the mitigation efforts, how are you managing the pricing strategy? Have you implemented some price increases? Are you not? Because I think to your point, I mean, one of the things that's pretty remarkable about Cisco is the margin profile is very, very consistent, right? From a gross margin down to the [op] margin line. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 18, 2025 / 5:30PM, CSCO.OQ - Cisco Systems Inc at Wells Fargo TMT Summit

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : That's perfect. Government exposure, maybe we talked about that. I think it's been a little bit of a factor in getting going back to Splunk. -- obviously, coming off of a shutdown. I think in the past, you've been very adamant like you are overweighted towards the good pieces, if you will, within the spend bucket of the federal government.

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : So in the two and half minutes, I've got two questions left. One is the obligatory capital return. How do you think about that? You've integrated Spunk, We talked through that -- but how are you thinking about capital return versus maybe Cisco has been very acquisitive over its history, right? How do you think about balancing those two?

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : Perfect. The final thing, I'm going to put an open-ended question out there. I mean when you and Sami, you're talking with investors and we think about the moving parts of the Cisco story, I'd love to just give you an opportunity to talk like what are the two or three things that you feel investors maybe either don't understand, maybe don't appreciate enough that you would leave us to kind of think about coming out of this?

Question: Aaron Rakers - Wells Fargo Securities LLC - Analyst : Perfect. Mark, thank you so much. appreciate it.