Financial Data and Key Metrics Changes - The company reported total revenue of $14.7 billion for Q4, an increase of 8% year over year [22] - Non-GAAP net income was $4 billion, up 12%, with non-GAAP earnings per share at $0.99, reflecting a 14% increase [22][23] - For the full fiscal year, total revenue reached $56.7 billion, up 5%, with non-GAAP earnings per share at $3.81, a 2% increase [29][31] Business Line Data and Key Metrics Changes - Total product revenue was $10.9 billion, up 10%, while services revenue remained flat at $3.8 billion [23][24] - Networking revenue grew by 12%, driven by double-digit growth in internet infrastructure and enterprise routing [24] - Security revenue increased by 9%, primarily due to growth from Splunk and SASE offerings [24] - Collaboration revenue rose by 2%, supported by solid growth in devices [24] Market Data and Key Metrics Changes - Product orders in Q4 grew by 7% year over year, with the Americas up 5%, EMEA up 10%, and APJC up 7% [26] - Service provider and cloud orders surged by 49%, while enterprise orders increased by 5% and public sector orders declined by 6% [26][9] - AI infrastructure orders from web scale customers exceeded $800 million in Q4, totaling over $2 billion for the fiscal year [8][12] Company Strategy and Development Direction - The company is focusing on AI infrastructure, with a strong emphasis on networking and security solutions to support the AI era [7][12] - Cisco aims to leverage its refreshed product portfolio, including Silicon One and AI-native security solutions, to meet increasing network demands [7][12] - The company is positioned to capitalize on the growing demand for AI solutions, particularly in the enterprise and web scale markets [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for AI infrastructure and the company's ability to deliver critical solutions [7][12] - The company anticipates a strong fiscal year 2026, driven by continued growth in AI-related orders and a robust pipeline [7][34] - Management acknowledged the complexities of the current operating environment but remains optimistic about future growth opportunities [32][34] Other Important Information - The company returned $2.9 billion to shareholders in Q4, totaling $12.4 billion for the fiscal year, representing 94% of free cash flow [7][30] - The non-GAAP gross margin for Q4 was 68.4%, up 50 basis points year over year, indicating strong profitability [26][27] Q&A Session Summary Question: Regarding guidance and AI opportunity - Management clarified that the anticipated deceleration in growth is related to year-over-year comparisons and not a change in demand [38][39] Question: Outlook for security business growth - Management expressed optimism about security growth, citing strong order growth for new products and double-digit growth outside the U.S. federal sector [44][46] Question: Concerns about order pull forwards - Management stated that there is no significant evidence of order pull forwards affecting the business, based on customer feedback and order metrics [57][60] Question: Sustainability of networking growth - Management indicated confidence in maintaining growth rates, driven by AI demand and upcoming campus upgrades [68][70] Question: AI orders translating into revenue - Management confirmed that approximately $1 billion in revenue was recognized from AI infrastructure orders during FY 2025 [76]

Financial Data and Key Metrics Changes - In Q4 FY 2025, total revenue was $14.7 billion, up 8% year over year, with non-GAAP net income at $4 billion, up 12% [21][22] - Non-GAAP earnings per share (EPS) was $0.99, reflecting a 14% increase, indicating strong operating leverage [22] - For the full fiscal year, revenue reached $56.7 billion, a 5% increase, with non-GAAP EPS at $3.81, up 2% [28][29] Business Line Data and Key Metrics Changes - Total product revenue was $10.9 billion, up 10%, with networking revenue increasing by 12% and security revenue up by 9% [22][23] - Services revenue remained flat at $3.8 billion year over year [23] - Collaboration revenue grew by 2%, driven by solid growth in devices, while observability revenue increased by 4% [23] Market Data and Key Metrics Changes - Product orders in Q4 grew by 7% year over year, with service provider and cloud orders up 49% [7][25] - Enterprise product orders increased by 5%, while public sector orders decreased by 6% [8][25] - The Americas saw a 5% increase in product orders, EMEA grew by 10%, and APJC was up by 7% [25] Company Strategy and Development Direction - Cisco is focusing on AI infrastructure, with over $2 billion in AI infrastructure orders for FY 2025, more than double the original target [7][11] - The company aims to leverage its refreshed product portfolio to meet the growing demand for AI and network modernization [6][10] - Cisco is positioned to support the transition to AI by providing critical infrastructure and security solutions [12][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for Cisco's technology, particularly in AI and networking, despite a complex operating environment [6][19] - The company anticipates continued growth in AI-related orders and infrastructure as enterprises modernize their networks [11][62] - Management highlighted the importance of security in the AI era, emphasizing the need for integrated security solutions [15][79] Other Important Information - Cisco returned $2.9 billion to shareholders in Q4 FY 2025, totaling $12.4 billion for the fiscal year, representing 94% of free cash flow [6][29] - The company has a strong cash position with $16.1 billion in cash, cash equivalents, and investments [27] - Cisco's partnership with NVIDIA is expected to enhance its capabilities in AI infrastructure [11][80] Q&A Session Summary Question: Guidance and AI Opportunity - Analyst inquired about the deceleration of growth in guidance and whether it reflects conservatism or changes in demand [34] - Management clarified that the deceleration is related to year-over-year comparisons and not indicative of a demand change [36] Question: Security Growth Outlook - Analyst asked about the growth outlook for security products post-Splunk acquisition [39] - Management expressed optimism, noting double-digit growth in security orders excluding U.S. Federal [42] Question: Pull Forward Concerns - Analyst raised concerns about potential pull forwards in orders due to federal budget cuts and tariffs [50] - Management stated they have not observed significant pull forwards and provided metrics to support this [52][54] Question: Networking Cycle Sustainability - Analyst questioned the sustainability of networking growth rates amid potential spending slowdowns [84] - Management indicated strong demand signals from customers and confidence in continued growth [87] Question: AI Orders and Revenue Translation - Analyst asked about the translation of AI orders into revenue for FY 2026 [66] - Management confirmed that approximately $1 billion in revenue was recognized from AI orders in FY 2025 [71] Question: Identity and Security Partnerships - Analyst inquired about partnerships outside of NVIDIA in the AI space [91] - Management confirmed ongoing collaboration with AMD and emphasized the importance of identity in Zero Trust architectures [93][94]