Investor Presentation August 2025 Safe Harbor Forward-Looking Statements - This presentation and accompanying oral presentation contain "forward-looking statements" regarding our future performance, including but not limited to estimates regarding revenue, non-GAAP gross margin, and non-GAAP operating margin for the third quarter and fiscal year 2025, statements regarding Arista's addressable market, products and services, innovation and leadership in data-driven AI networking. Forward-looking statements ar ...

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $15 million, a 4% increase from $14.5 million in Q2 2024 [20] - Gross profit was $4.8 million, with a gross margin of 31.9%, compared to $4.3 million and 29.7% in the previous year [21] - Operating loss remained at $2.4 million, with a net loss of $2 million compared to a net loss of $900,000 in Q2 2024 [22][23] Business Line Data and Key Metrics Changes - The company secured three significant design wins across its major product lines, including FPGA SmartNICs and high-performance NICs, indicating strong performance across all sectors [10][11] - The design wins reflect the breadth of the product portfolio and the depth of customer relationships, contributing to a solid growth foundation [11][14] Market Data and Key Metrics Changes - Geographical revenue breakdown showed North America at 74%, Europe and Israel at 16%, and the Far East and rest of the world at 10% [20] - The company reported a 110% plus customer contributing about 15% of revenues, indicating strong customer retention and growth potential [20] Company Strategy and Development Direction - The company aims for double-digit revenue growth in 2026 and beyond, supported by a robust pipeline of design wins and strong cash flow [9][18] - The focus on core product lines and deepening customer relationships is expected to create reliable and diversified revenue streams [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the cybersecurity market's growth and its impact on business opportunities, indicating no negative effects from market consolidation [26][27] - The company is also exploring opportunities in the AI infrastructure market, with products designed for new AI architectures [31][32] Other Important Information - The company maintains a strong balance sheet with $80 million in cash and no debt, allowing for continued investment in growth [10][23] - The expected revenue range for 2025 is between $15 million and $16 million, with growth anticipated in the low single digits for the year [17][18] Q&A Session Summary Question: Changes in the security market and impact on opportunities - Management noted that the cybersecurity market continues to grow, with no negative impacts from recent consolidations [26][27] Question: Impact of ADC market shifts towards hardware solutions - Management acknowledged the trend towards hardware solutions and highlighted upcoming products for the ADC market [28][29] Question: Effects of AI on market opportunities - Management indicated that AI could significantly affect market opportunities, with ongoing discussions about products tailored for AI architectures [31][32] Question: Competitive environment and gross margin expectations - Management reported no significant shifts in the competitive environment affecting gross margin expectations [33]

Financial Data and Key Metrics Changes - Revenue for the second quarter reached $672 million, an 11% increase year over year, exceeding the high end of guidance [6][17] - Earnings per share (EPS) grew 25% to $1.89, also above the high end of guidance [6][18] - Gross margins increased by 70 basis points year over year to 38.9%, while adjusted EBITDA margins expanded by 50 basis points to 17% [7][18] - Free cash flow for the trailing twelve months was $216 million, aligning with expectations [8][22] Business Line Data and Key Metrics Changes - Automation Solutions revenue grew 10% year over year, with orders up 11% [18][20] - Smart Infrastructure Solutions revenue increased by 13% year over year, with orders up 23% [18][21] - Broadband business revenue also saw growth, including 5% organic growth in fiber products [21] Market Data and Key Metrics Changes - All major regions experienced growth, with a book to bill ratio of 1.05 compared to 1.0 in the prior year [7] - Order activity was strong, with orders up 8% sequentially and 16% year over year [7][17] Company Strategy and Development Direction - The company is focused on solutions transformation, aiming to deliver high-value offerings and enhance earnings power [6][8] - Recent wins include a multi-site solutions award with a hyperscale data center customer and a global specification from a major US automotive manufacturer, showcasing the effectiveness of the solutions strategy [9][12] - The company is pursuing strategic acquisitions to support its solutions transformation and enhance its product offerings [8][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the automation business, noting steady improvement and growth across various geographies [35] - There is cautious optimism regarding the smart infrastructure solutions business, with some uncertainty in broader market conditions [37][39] - The medium and long-term outlook remains positive, driven by trends in reindustrialization, automation, and digitization [28][29] Other Important Information - The company has repurchased 1 million shares for $100 million, demonstrating a commitment to disciplined capital allocation [8][22] - The effective tax rate for the quarter was 12.3%, benefiting adjusted EPS by $0.11 [18][19] Q&A Session Summary Question: Insights on the second half demand environment - Management noted steady improvement in the automation business and growth in key verticals, while the smart infrastructure solutions business showed mixed signals [35][36] Question: Margin performance and future leverage - Management indicated that the EBITDA margin should continue to be modeled with a roughly 25% incremental margin year over year [40][41] Question: Concerns about sequential margin performance - Management acknowledged some noise from quarter to quarter but emphasized that underlying business conditions remain healthy [44] Question: Update on hyperscale market engagement - Management confirmed ongoing focus on both white space and gray space in data centers, with a robust pipeline of opportunities [47][50] Question: Context on the multimillion-dollar contract for modular cooling - Management highlighted the contract's significance in addressing energy management challenges faced by hyperscale data centers [57][58] Question: Tracking of solutions sales towards the 20% target - Management reported that automation solutions are on track to meet the 20% target, with ongoing investments in smart infrastructure solutions [60][61] Question: Sustainability of the lower tax rate - Management indicated that the current tax benefits are more discrete in nature, suggesting a long-term tax rate closer to 20% moving forward [65] Question: Factors affecting Smart Infrastructure Solutions margins - Management attributed margin pressures to investments in solutions initiatives and higher copper costs [70][71] Question: M&A pipeline focus areas - Management outlined a robust M&A pipeline aimed at closing technology gaps and enhancing access to end customers [72][75] Question: Insights on fiber and broadband market dynamics - Management noted strong performance in fiber sales, particularly in DOCSIS upgrades, while maintaining a focus on distribution networks [79][81] Question: Impact of copper volatility on guidance - Management confirmed that current guidance incorporates recent copper price fluctuations, with a typical two-month lag for price adjustments [83][86]

EARNINGS RESULTS July 2025 2 nd QUARTER 2025 Forward-Looking Statements and Non-GAAP Financial Measures Forward-Looking Statements Our commentary and responses to your questions may contain forward-looking statements, including our outlook for the third quarter of 2025 and beyond. Forward-looking statements include projections of sales, earnings, general economic conditions, market conditions, working capital, market shares, free cash flow, pricing levels, and effective tax rates. Belden disclaims any oblig ...

Financial Results - Silicom's revenues for Q2 2025 were $15.0 million, a 3.4% increase from $14.5 million in Q2 2024 [2] - On a GAAP basis, the net loss for Q2 2025 was $3.3 million, or $0.59 per share, compared to a net loss of $1.5 million, or $0.25 per share, in Q2 2024 [2] - On a non-GAAP basis, the net loss for Q2 2025 was $2.0 million, or $0.35 per share, compared to a net loss of $0.9 million, or $0.14 per share, in Q2 2024 [3] - For the first half of 2025, revenues were $29.4 million, up from $28.9 million in the first half of 2024 [3] - The GAAP net loss for the first half of 2025 was $6.1 million, or $1.08 per share, compared to a loss of $4.9 million, or $0.80 per share, in the first half of 2024 [4] - On a non-GAAP basis, the net loss for the first half of 2025 was $4.1 million, or $0.71 per share, compared to a loss of $3.2 million, or $0.52 per share, in the first half of 2024 [4] Guidance - Management projects Q3 2025 revenues to range from $15 million to $16 million [5] - Growth for 2025 is expected to be in the low single digits, with a double-digit annual growth rate anticipated to begin gradually in 2026 [5] Management Comments - The President and CEO highlighted strong Design Win momentum and success across all product lines, achieving 5 major new Design Wins since the beginning of the year [6] - The company has a strong balance sheet, with working capital and marketable securities representing approximately $20 per share [6] - The Design Win funnel is broad, with opportunities for Edge systems, Smart NICs, and FPGA-based solutions [6] - The company expects to achieve double-digit revenue growth in 2026 and aims for an EPS above $3 on revenues of $150 to $160 million [6]

Financial Data and Key Metrics Changes - In Q2 2025, the company reported net revenue of $170.5 million, exceeding guidance and reflecting an 18.5% year-over-year growth and a 5.2% sequential increase [7][24]. - Non-GAAP gross margins reached an all-time high of 37.8%, a significant increase from 22.4% in the prior year [29]. - Non-GAAP operating loss was $1.2 million, resulting in a non-GAAP operating margin of negative 0.7%, an improvement of 2,090 basis points year-over-year [32]. Business Line Data and Key Metrics Changes - The NFV segment led revenue growth with $82.6 million, up 38% year-over-year and 4.3% sequentially [25]. - Home Networking revenue was $67.5 million, reflecting a 13.1% year-over-year increase and a 10% sequential growth [26]. - The Mobile segment generated $20.4 million in revenue, down 16.1% year-over-year and 5% sequentially due to weaker service provider sales [27]. Market Data and Key Metrics Changes - The company noted strong demand for its ProAV managed switch products, with a 14% sequential revenue growth despite supply constraints [11][25]. - The home networking market remains competitive, with the company gaining market share during Prime Day despite aggressive competition from TP Link [66]. Company Strategy and Development Direction - The company is focused on a transformation strategy aimed at delivering long-term shareholder value through profitable growth, with positive contribution margins achieved across all business units [8][21]. - The launch of the new AV Professional Services Group is part of the strategy to enhance enterprise value and drive higher-margin revenue [12][56]. - The company is investing in software development capabilities and enhancing go-to-market strategies to support its NFV business [35][76]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position amidst geopolitical tensions, noting that most products remain exempt from tariffs and that the company does not manufacture in China [19]. - The outlook for Q3 2025 anticipates net revenue between $165 million and $180 million, with continued investments in software development and operational capabilities [35]. Other Important Information - The company completed the acquisition of Acxiom to enhance its NFV portfolio and repurchased $7.5 million of its shares during the quarter [25][33]. - The company ended Q2 with $363.5 million in cash and short-term investments, down from the previous quarter due to acquisitions and share repurchases [33]. Q&A Session Summary Question: Can you provide more details on ProAV and the supply constraints? - Management confirmed that ProAV has become a significant part of the business, contributing to about 25% of NETGEAR's overall top line, and expects to start reducing backlog towards the end of Q3 [40][43]. Question: How should we think about OpEx ramping through the back half of the year? - Management indicated a mid-single-digit increase in OpEx due to ongoing investments, with expectations for a sequential decrease in Q4 [46][49]. Question: What parts of NFB will the new professional services affect the most? - The professional services will initially support the AV business, with expectations for significant growth in recurring revenue in 2026 [56]. Question: Any updates on TP Link and the competitive landscape? - Management remains confident that the current geopolitical climate will serve as a tailwind for NETGEAR, positioning the company well to capitalize on market opportunities [58][62]. Question: Can you provide an update on software insourcing? - The company has made significant progress in insourcing software development, which is expected to lead to better product quality and faster execution [76].

The analyst in coverage noted any potential upside is already priced in Though the shares are on track for their worst day since June 13, they are still not too far removed from their June 30, 24-year high of $69.78. A familiar floor looks ready to contain any additional downside that could eat away Cisco Systems stock's 14.7% year-to-date lead. Over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 50-day call/put volume ratio of 4.71 s ...

Core Insights - Cisco Systems and Dell Technologies are leading providers of AI-powered enterprise infrastructure solutions [2][3] - The demand for AI infrastructure is driving significant growth in both companies, with Cisco securing over $1 billion in AI infrastructure orders and Dell shipping $1.8 billion in AI servers in Q1 [9][13] - IDC projects AI infrastructure spending to exceed $200 billion by 2028, with a significant portion allocated to servers with embedded accelerators [4] Company Performance - Cisco's stock has appreciated 16.2% year to date, while Dell's shares have increased by 11% [5] - Cisco's security business is thriving, with strong demand for its security solutions and a growing customer base [11][12] - Dell's PowerEdge XE9680L AI-optimized server is in high demand, contributing to a healthy backlog of $14.4 billion [13] Market Trends - Global IT spending is forecasted to reach $5.61 trillion by 2025, with data center systems expected to grow by 23.2% [4] - Enterprises with large-scale hyperscale data centers will account for over 70% of spending on AI-optimized servers by 2025 [4] Valuation and Investment Appeal - Dell Technologies is considered undervalued with a Price/Sales ratio of 0.81X compared to Cisco's 4.61X [18] - Dell holds a Zacks Rank 1 (Strong Buy), while Cisco has a Zacks Rank 3 (Hold), indicating a stronger investment appeal for Dell [21][22]

Cisco Systems (CSCO) Conference Call Summary Company Overview - **Company**: Cisco Systems (CSCO) - **Date**: July 11, 2025 - **Focus**: Discussion on Cisco's Silicon One strategy Key Points Silicon One Strategy - **Overview**: Cisco's Silicon One strategy is a continuation of its ASIC development, which has been ongoing for four decades. The strategy was significantly enhanced by the acquisition of Libra in 2017, with the first product launch in 2019 [7][8] - **Current Status**: Cisco has eight distinct platforms utilizing Silicon One solutions, with a goal to fully adopt this architecture across its portfolio in the next three to five years [9][10] - **Device Deployment**: Silicon One has been deployed across 17 devices, with recent expansions into the campus market [11][12] Market Position and Competitive Landscape - **Market Dynamics**: Cisco is competing against companies like Broadcom and Marvell in the merchant silicon space. The internal silicon strategy is expected to improve margins by eliminating third-party chip costs [20][22] - **Adoption in Hyperscalers**: Cisco has seen adoption of Silicon One in five out of six hyperscalers, offering flexibility in deployment models [17][18] - **Competitive Advantages**: Key differentiators include programmability, packet buffering capabilities, and advanced telemetry features, which enhance performance and operational efficiency [51][53][55] AI Networking Orders - **Order Conversion**: Cisco expects a tighter conversion cycle from orders to revenue recognition for AI networking orders, with a typical lag of six to nine months [30][32] - **Market Size**: The total addressable market (TAM) for AI networking is significantly larger than previously estimated, with Cisco aiming to capture a larger share through execution and technology leadership [99][100] Technology and Innovation - **Product Development**: Cisco is focused on co-optimizing silicon and systems to address challenges in cooling and signal integrity, which is crucial for advanced data center architectures [104][105] - **Ethernet Opportunities**: Cisco believes Ethernet will adapt to scale-up requirements, although it may not fully replace proprietary solutions like NVLink [89][90] Supply Chain Management - **Resilience**: Cisco has a robust supply chain management strategy, allowing flexibility and adaptability in sourcing components, which is critical in meeting demand [107][108] Future Outlook - **Execution Focus**: The company emphasizes the importance of execution in technology development, with a commitment to meeting customer needs and maintaining high-quality standards [58][60] - **Market Aspirations**: Cisco aims to grow its market share in AI networking and related technologies, leveraging its established relationships and innovative product offerings [96][98] Additional Insights - **Fragmentation in Networking**: The current networking landscape is fragmented, with various architectures for different device classes. Cisco's unified architecture aims to simplify this complexity for customers [26][27] - **Customer Engagement**: Cisco's approach involves anticipating customer needs and providing tailored solutions, which is essential for maintaining competitive advantage in a rapidly evolving market [59][62]

Investment Rating - The industry view for Telecom & Networking Equipment is rated as In-Line [5]. Core Insights - The Q2 2025 CIO Survey indicates a largely stable spending environment, with Communications growth expectations at +2.9%, a slight deceleration from previous quarters but still above 2024 expectations [4][8]. - Networking equipment has seen a decline in prioritization among CIOs, now ranking 8th, but remains a relatively defensible sector [9][25]. - AI continues to be the top priority for CIOs, with a significant portion of AI investments coming from new budget allocations rather than reallocations [11]. Summary by Sections Spending Expectations - Overall IT budgets are expected to grow by +3.6% in 2025, reflecting a deceleration from earlier expectations [4][14]. - Networking equipment is anticipated to see a spending increase from 3.7% of CIOs, down from 4.0% in Q1 2025 [9]. Communications Sector - Communications growth expectations remain stable at +2.9%, with no significant step back from earlier expectations [8]. - The sector has shown resilience despite broader IT spending challenges, maintaining growth expectations above those of 2024 [4][8]. Networking Equipment - Networking equipment ranks 8th in priority for CIOs, indicating a slight decline from the previous quarter but an improvement year-over-year [9]. - The sector is viewed as relatively defensible, with 3.7% of CIOs expecting the largest spending increase in 2025 [9][25]. AI and Cloud Trends - 60% of CIOs expect to launch AI projects in production by 2025, with 56% of AI investments funded by new budget dollars [11]. - Public cloud usage is projected to rise significantly, with CIOs expecting 68% of workloads to be in the public cloud by the end of 2027, up from 44% today [11][30].