Core Viewpoint - Cisco Systems has launched Cisco AI Defense to enhance security during AI transformation in enterprises, addressing risks such as data leaks and misuse of AI tools [1] Group 1: Product Launch and Market Position - The launch of Cisco AI Defense expands Cisco's cybersecurity portfolio, which includes strong demand for products like XDR, Secure Access, and Multicloud Defense suites [2] - Cisco's stock has risen 18.8% over the past 12 months, underperforming the Zacks Computer and Technology sector's return of 31.5% but outperforming the Zacks Computer – Networking industry's return of 17.8% [2] - Cisco's diverse portfolio across sectors like cybersecurity, AI infrastructure, cloud solutions, and enterprise networking is driving growth and share performance [3] Group 2: Financial Performance and Guidance - For Q2 fiscal 2025, Cisco expects revenues between $13.75 billion and $13.95 billion, with non-GAAP earnings per share between 89 cents and 91 cents [17] - The Zacks Consensus Estimate for Q2 fiscal 2025 revenues is $13.86 billion, indicating an 8.36% year-over-year growth, while earnings are expected at 91 cents per share, reflecting a 4.60% year-over-year growth [18] - For fiscal 2025, Cisco anticipates revenues of $55.3 billion to $56.3 billion, with a consensus estimate of $55.93 billion, indicating a 3.95% year-over-year growth [19] Group 3: Competitive Edge and Innovations - Cisco's innovations in wireless technology, including Wi-Fi 7 access points with built-in AI, provide secure and adaptable connectivity, enhancing smart workplace capabilities [14] - The demand for Cisco's Nexus switches, particularly the 400-gig and 800-gig models, is strengthening its position in private cloud infrastructure [13] - Cisco's software portfolio includes platforms like AppDynamics for observability and Cisco SecureX for security management, enhancing customer satisfaction and productivity through tools like Webex AI Agent [15] Group 4: Strategic Partnerships and Market Outlook - Cisco has signed a 5.5-year agreement with MGM Resorts International, enhancing guest experiences through its software solutions, showcasing Cisco's growing client base [16] - Cisco's strong partner network, including companies like Meta Platforms and Microsoft, is accelerating innovation and expanding its market presence [21] - The company's growth prospects justify its premium valuation, despite a current Value Score of C indicating a stretched valuation [9]

Core Viewpoint - Cisco has introduced Cisco AI Defense, a solution designed to enhance security and safety in AI transformations for enterprises, addressing emerging threats and vulnerabilities associated with AI technology [2][3]. Group 1: AI Defense Overview - Cisco AI Defense is specifically built for enterprises to develop, deploy, and secure AI applications confidently, responding to the rapid evolution of AI technology and its associated security challenges [2][4]. - The solution aims to provide a common layer of safety and security that protects every user and application, enabling enterprises to unlock AI innovation and adoption [4][6]. Group 2: Security Challenges and Needs - According to Cisco's 2024 AI Readiness Index, only 29% of surveyed individuals feel fully equipped to detect and prevent unauthorized tampering with AI, highlighting significant security gaps [3]. - The complexity of AI applications, which can be multi-model and multi-cloud, introduces new vulnerabilities that require a comprehensive security approach [3][6]. Group 3: Key Features of AI Defense - AI Defense offers capabilities such as securing access to AI applications, preventing data leakage, and safeguarding proprietary data, while providing consistent controls across various AI models [5][6]. - The solution includes automated testing for AI models to identify potential vulnerabilities and recommend safety guardrails, ensuring continuous validation against evolving threats [7][8]. Group 4: Integration and Industry Standards - Cisco AI Defense integrates seamlessly with existing data flows and is built into Cisco's Security Cloud, enhancing visibility and control over AI security at the network level [8]. - Cisco is actively involved in developing AI security industry standards, collaborating with organizations like MITRE, OWASP, and NIST to ensure accuracy and trustworthiness in protecting enterprise AI applications [8][9]. Group 5: Market Position and Availability - Cisco AI Defense represents a significant advancement in AI security, providing enterprises with full visibility of their AI assets and protection against evolving threats [9]. - The solution is set to be available in March, further solidifying Cisco's position as a leader in AI-driven security innovations [9].

Group 1 - The articles focus on community guidelines aimed at fostering respectful and constructive conversations among users [1][2] - Key rules include prohibitions against false information, spam, and discriminatory comments, ensuring a safe environment for discussions [2] - Users are encouraged to stay on topic and share insights while utilizing tools to report rule violations [2]

AI Market Growth - The AI market is expected to grow from $184 billion in 2024 to over $826 billion by 2030, indicating a significant expansion [1] - AI has driven a 180% surge in Nvidia's stock price over the past year through Dec 31, 2024 [1] Dividend-Paying AI Stocks - Not all dividend-paying AI stocks are equal, with Nvidia offering a dividend yield of only 0.03% [2] - IBM, Cisco Systems, and Verizon Communications are highlighted as AI companies with strong dividend yields [3] IBM's AI and Dividend Strategy - IBM offers a dividend yield of 3% and has consistently paid quarterly dividends since 1916, increasing payments for the past 29 years [4] - IBM's focus on cloud computing and AI since 2020 has led to rising revenue, with generative AI-related sales increasing by over $1 billion from Q2 to Q3 [4][5] - IBM is investing in quantum computing, which could enable more advanced AI capabilities in the future [5] Cisco's AI-Driven Growth - Cisco's expertise in computer networking is crucial for AI systems, contributing to a 20% YoY rise in product orders in Q1 FY2025 [7][8] - The company forecasts 2025 revenue between $55.3 billion and $56.3 billion, up from $53.8 billion in 2024 [8] - Cisco is integrating its custom semiconductor chip, Silicon One, into all products to support AI, while offering a dividend yield of nearly 3% [9] Verizon's AI and Edge Computing - Verizon's AI involvement focuses on edge computing, leveraging its 5G network to handle large data loads with speed and security [10][11] - Verizon's wireless service business saw a 3% YoY sales increase in Q3 2024, contributing $19.8 billion to the company's $33.3 billion revenue [12] - Verizon has a strong dividend yield of nearly 7%, supported by consistent free cash flow of $14.5 billion through the first three quarters of 2024 [13][14] Conclusion - The growth of the AI market is expected to benefit IBM, Cisco, and Verizon, with their strong dividend yields providing both investment returns and passive income opportunities [14]

Group 1: Stock Performance - Cisco Systems (CSCO) closed at $59.98, reflecting a +0.22% change from the previous day, outperforming the S&P 500 which saw a loss of 0.04% [1] - Over the past month, CSCO's stock has increased by 0.94%, underperforming compared to the Computer and Technology sector's gain of 5.93% and the S&P 500's gain of 1.05% [7] Group 2: Earnings Forecast - Cisco is expected to report an EPS of $0.91, representing a 4.6% increase from the same quarter last year [2] - The consensus estimate for quarterly revenue is $13.86 billion, which is an 8.36% increase from the previous year [2] - For the entire year, the Zacks Consensus Estimates predict earnings of $3.64 per share and revenue of $55.93 billion, indicating changes of -2.41% and +3.95% respectively compared to the previous year [8] Group 3: Analyst Estimates and Rankings - Recent changes to analyst estimates for Cisco Systems indicate a positive outlook, with the Zacks Consensus EPS estimate moving 0.05% higher in the last 30 days [3][4] - Cisco currently holds a Zacks Rank of 3 (Hold), which is indicative of a neutral outlook [4] - The Zacks Industry Rank places the Computer - Networking industry in the top 32% of all industries, suggesting a strong performance relative to others [11] Group 4: Valuation Metrics - Cisco Systems has a PEG ratio of 3.63, compared to the industry average PEG ratio of 1.38 [5] - The company is trading at a Forward P/E ratio of 16.43, which is a premium compared to the industry's average Forward P/E of 15.44 [10]

Core Viewpoint - Cisco's growth is driven by its expanding presence in various sectors such as cybersecurity, AI infrastructure, cloud solutions, and enterprise networking, positively impacting its share performance [1] Financial Performance - Cisco's stock has increased by 16% over the past 12 months, underperforming the Zacks Computer & Technology sector's growth of 30.7% and the Zacks Computer – Networking industry's return of 15.3% [11] - The consensus estimate for earnings is currently at 91 cents per share, reflecting a year-over-year growth of 4.6% [5] - For fiscal 2025, the earnings estimate is $3.64 per share, indicating a year-over-year decrease of 2.41% [6] - The Zacks Consensus Estimate for second-quarter fiscal 2025 revenues is $13.86 billion, representing an 8.36% year-over-year growth [16] - The full-year fiscal 2025 revenue estimate is $55.93 billion, indicating a 3.95% year-over-year growth [17] Market Position and Strategy - Cisco's Nexus brand is experiencing rising demand, enhancing its competitive position in the private cloud infrastructure market [8] - The security segment is a strong growth area, with high demand for solutions like XDR and Secure Access [9][12] - Strategic partnerships with industry leaders such as NVIDIA, Meta Platforms, Microsoft, and others are enhancing Cisco's market presence and driving innovation [22][29] - Cisco has introduced the Cisco Nexus HyperFabric AI cluster solution in partnership with NVIDIA, aimed at efficiently scaling generative AI workloads [19] Challenges - Cisco faces challenges in its networking segment, with a 23% year-over-year decline in networking revenues in the first quarter of fiscal 2025 due to sluggish demand from telecommunications and cable service providers [31] - The stock is currently trading above the 50-day and 200-day moving averages, indicating a bullish trend, but its Value Score of C suggests a stretched valuation [13][14]

Company Performance - Cisco Systems (CSCO) ended the latest trading session at $57.60, reflecting a +0.12% change from the previous day's close, outperforming the S&P 500's 0.09% loss [1] - Over the past month, Cisco's shares gained 0.05%, underperforming the Computer and Technology sector's 3.04% gain and outperforming the S&P 500's 0.29% loss [2] Earnings Forecast - Cisco is expected to report an EPS of $0.91, indicating a 4.6% growth year-over-year, with revenue projected at $13.86 billion, representing an 8.36% increase compared to the same quarter last year [3] - Full-year estimates predict earnings of $3.64 per share and revenue of $55.93 billion, reflecting year-over-year changes of -2.41% and +3.95%, respectively [4] Analyst Sentiment - Recent shifts in analyst projections for Cisco are crucial, as they often indicate short-term business trends and can influence share price momentum [5] - The Zacks Rank system, which assesses these estimate revisions, currently ranks Cisco at 3 (Hold), with a 0.18% decrease in the consensus EPS estimate over the last 30 days [7] Valuation Metrics - Cisco's Forward P/E ratio stands at 15.79, which is higher than the industry average of 15.13, indicating that Cisco is trading at a premium [8] - The company has a PEG ratio of 3.49, significantly above the Computer-Networking industry's average PEG ratio of 1.35, suggesting a higher expected earnings growth rate relative to its peers [9] Industry Ranking - The Computer-Networking industry, part of the broader Computer and Technology sector, holds a Zacks Industry Rank of 48, placing it in the top 20% of over 250 industries [9][10]

Core Viewpoint - Cisco Systems reported mixed results in its recent earnings report, with earnings exceeding estimates but revenues declining year-over-year, raising questions about future performance and market demand [2][3]. Financial Performance - Cisco's Q1 fiscal 2025 non-GAAP earnings were 91 cents per share, beating estimates by 4.6%, but down 18% year-over-year [2]. - Revenues totaled $13.8 billion, surpassing estimates by 0.57%, yet reflecting a 5.6% decline from the previous year [2]. - Networking revenues fell significantly by 23% year-over-year to $6.75 billion, attributed to weak demand from telecommunications and cable service providers [3]. - Collaboration revenues decreased by 3% year-over-year to $1.09 billion, impacted by declines in on-prem Webex Suite and collaboration devices [5]. - Security revenues doubled year-over-year to $2.02 billion, driven by strong demand for threat intelligence and response solutions [6]. Revenue Breakdown - Total product revenues were $10.11 billion, accounting for 73.1% of total revenues, down 9.2% year-over-year [6]. - Service revenues increased by 5.6% year-over-year to $3.7 billion, making up 26.9% of total revenues [6]. - Annualized Recurring Revenues (ARR) reached $29.9 billion, up 22% year-over-year, with product ARR growth of 42% [7]. Operating Expenses - Non-GAAP gross margin contracted to 69.3%, down 2.6% year-over-year, with product gross margin decreasing by 590 basis points to 50.4% [9]. - Total non-GAAP operating expenses rose by 9% year-over-year to $4.87 billion, representing 35.2% of revenues [9]. - R&D expenses increased by 19.5% year-over-year to $2.29 billion, while sales and marketing expenses rose by 9.8% to $2.75 billion [10]. Balance Sheet and Shareholder Returns - As of October 26, 2024, cash and cash equivalents totaled $18.67 billion, up from $17.85 billion [12]. - Total debt increased to $31.99 billion from $30.96 billion [13]. - Cisco returned $3.6 billion to shareholders through buybacks and dividends, repurchasing approximately 40 million shares for $2 billion [14]. Guidance and Market Outlook - For Q2 fiscal 2025, Cisco expects non-GAAP earnings between 89 cents and 91 cents per share, with revenues projected between $13.75 billion and $13.95 billion [15][16]. - The Zacks Consensus Estimate for Q2 revenues is $13.66 billion, indicating a year-over-year growth of 6.81% [17]. - Estimates for Cisco have trended upward recently, with a Zacks Rank of 3 (Hold), suggesting an in-line return in the coming months [20].

Summary of Cisco Systems, Inc. Conference Call Company Overview - **Company**: Cisco Systems, Inc. (NASDAQ: CSCO) - **Event**: Barclays 22nd Annual Global Technology Conference - **Date**: December 12, 2024 - **Participants**: Chuck Robbins (Chairman and CEO), Tim Long (Barclays Bank), Unidentified Company Representative Key Points Industry Insights - **Macroeconomic Outlook**: The technology industry is navigating a politically charged environment in 2024, with a focus on non-partisan growth policies [9][10] - **Tariffs and Supply Chain**: Companies are adapting to complex supply chains influenced by tax policies, tariffs, and geopolitical risks, with a shift towards resilience in supply chain management [12][13] - **AI Boom**: The rise of AI is driving urgency among customers to modernize and build AI strategies, leading to a solid IT spending environment [15][16] Company Performance - **Current Year Performance**: Cisco is experiencing a strong year with stock trading at a 52-week high and total return to shareholders exceeding 20% [17] - **Growth Drivers**: Key growth areas include AI infrastructure, cybersecurity, and technology refresh driven by a return to office trends [18][19][20] Financial Metrics - **Revenue Composition**: 57% of revenue is from recurring sources, indicating a shift towards software solutions, while 43% remains hardware-based [23] - **Order Growth**: Service provider and cloud orders increased by 22%, driven by AI infrastructure [18] Strategic Initiatives - **AI Integration**: Cisco is focusing on building AI capabilities into its products and solutions, enhancing security and infrastructure for enterprise applications [26][27][28] - **Splunk Acquisition**: The acquisition of Splunk is aimed at enhancing insights into complex technology infrastructures, leveraging AI for better cybersecurity and observability [36][37][43][44] Future Outlook - **2025 Predictions**: Anticipation of significant advancements in AI applications and an escalation in cyber threats [48] - **Enterprise Market Recovery**: Positive signs of recovery in the enterprise market, with a 17% increase in orders excluding Splunk [52] Cultural and Leadership Insights - **Innovation Culture**: Emphasis on fostering a culture of innovation and accountability within Cisco, with a focus on attracting passionate talent [29][30] - **Geopolitical Awareness**: Leaders must be aware of geopolitical and macroeconomic issues that impact technology sales and strategy [54][56] Additional Considerations - **Public-Private Partnerships**: Increased collaboration between public and private sectors on cybersecurity is expected under the new administration [42] - **Emerging Competitors**: New AI cloud specialists present opportunities for Cisco to partner and expand its service offerings [33][34] This summary encapsulates the key insights and strategic directions discussed during the conference call, highlighting Cisco's position in the technology industry and its proactive approach to emerging challenges and opportunities.

Cisco Systems, Inc. (NASDAQ:CSCO) 2024 UBS Global Technology and AI Conference December 3, 2024 12:55 PM ET Company Participants Bill Gartner - SVP and GM of Optical Systems and Optics Group Conference Call Participants David Vogt - UBS David Vogt Good. I guess it's good morning still. I'm David Vogt from the UBS Hardware and Networking team. Thank you again for joining UBS Global Tech Conference, and we're excited to have with us today this morning, Cisco Systems. With us, we have Bill Gartner, SVP and GM ...