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]

Financial Data and Key Metrics Changes - In Q3, total revenue was $14.1 billion, up 11% year over year [25] - Non-GAAP net income was $3.8 billion, with non-GAAP earnings per share at $0.96 [25] - Total product revenue increased to $10.4 billion, up 15%, while services revenue rose to $3.8 billion, up 3% [25] - Total annual recurring revenue (ARR) ended at $30.6 billion, a 5% increase, with subscription revenue up 15% to $7.9 billion, representing 56% of total revenue [26] Business Line Data and Key Metrics Changes - Networking revenue grew 8%, driven by double-digit growth in switching and enterprise routing, but offset by a decline in servers [26] - Security revenue surged 54%, primarily due to growth in Splunk and SASE offerings [26] - Collaboration revenue increased by 4%, while observability revenue rose by 24% [26] - Product orders were up 20% year over year, with a 9% increase when excluding Splunk [27] Market Data and Key Metrics Changes - In geographic segments, The Americas saw a 27% increase, EMEA was up 4%, and APJC grew by 21% [27] - In customer markets, Service Provider and Cloud orders increased by 32%, Enterprise orders were up 22%, and Public Sector orders rose by 8% [27] Company Strategy and Development Direction - Cisco is focusing on AI infrastructure, with over $600 million in AI infrastructure orders from web scale customers in Q3, surpassing the fiscal year target a quarter early [6][11] - The company is expanding partnerships, including a significant collaboration with NVIDIA to enhance AI deployment capabilities [12][14] - Cisco is investing in the Kingdom of Saudi Arabia as a strategic technology partner for AI infrastructure, aligning with the country's Vision 2030 [13] Management's Comments on Operating Environment and Future Outlook - Management noted that customer purchasing behavior remains strong despite macroeconomic uncertainties, particularly in AI transitions [36] - The company anticipates continued growth in AI orders, with a focus on executing and increasing capacity to meet demand [84] - Management expressed confidence in the long-term growth opportunities in AI and cloud infrastructure, expecting sustained investment from customers [50][51] Other Important Information - Cisco returned $3.1 billion to shareholders in Q3 through dividends and share repurchases [7] - The company announced the retirement of CFO Scott Herren at the end of fiscal year 2025, with Mark Patterson set to take over [20][23] Q&A Session Summary Question: What are you seeing in terms of customer buying behavior given the uncertainty with tariffs? - Management indicated no significant changes in purchasing behavior, with customers still committed to technology transitions [36][37] Question: Can you elaborate on the public sector performance? - Public sector orders were up 8%, with double-digit growth in U.S. Federal orders, despite challenges in the civilian sector [45][46] Question: Is 2025 expected to be a peak year for cloud CapEx? - Management believes that global cloud CapEx will continue to grow, with significant opportunities in enterprise AI [49][51] Question: Can you provide insights on the $600 million AI orders? - The $600 million in AI orders was not from the new Saudi AI company, but management expects substantial future opportunities in that region [56][58] Question: What is the impact of tariffs on guidance for Q4? - Management has built in expectations for tariffs in the Q4 guidance, reflecting potential impacts on gross margins [96]