A：In Q4, Cisco achieved record revenue of $12 billion, up significantly from the previous year, with product revenue also showing substantial year-over-year growth. This resulted in non-GAAP EPS growth of 43% for the quarter and 37% for the full year. The company's bottom line grew faster than the top line for both periods, demonstrating strong operating leverage. They returned $12 billion in capital to shareholders through share repurchases and dividends, totaling $12.7 billion in value or 90% of free cash flow for the fiscal year.

A：The adoption of AI is driving a networking super cycle as customers invest in Cisco's networking stack for inferencing across various environments. It is also expanding the threat landscape, increasing the demand for security and observability solutions. This adoption is presenting a unique opportunity for Cisco, with the potential for significant growth in the super cycle.

A：Cisco's Q4 revenue growth was broad-based globally, with total product orders up 35% year over year and hyperscale orders up over 100%. Excluding hyperscale, product orders were up 15%. In the enterprise sector, product order growth accelerated to 14% year over year in Q4, with double-digit growth in every product category and geography. Public sector order growth also increased, with continued momentum in EMEA and APJ, and accelerated growth in the Americas, notably driven by US federal customers.

A：Networking product orders grew in Q4 driven by triple-digit growth across several categories, marking the eighth consecutive quarter of double-digit growth for the networking portfolio. This growth supports the view that Cisco is in a multiyear, multibillion-dollar networking super cycle. Additionally, more than half of customers purchasing campus networking solutions also buy data center networking solutions, highlighting the value of Cisco's differentiated platform approach. The company took $1 billion in AI infrastructure orders in Q4, contributing to the total of $4.1 billion for the fiscal year, and plans to roll out Silicon 1 technology to further strengthen its competitive differentiation and position for market share gains.

A：Hyperscalers' increasing demand for AI infrastructure is shaping Cisco's business and product developments, resulting in significant order growth and market share gains. The need for hyperscalers to connect or scale across multiple data centers due to physical and power limitations is driving demand for AI infrastructure. Cisco is well-positioned with its P200-powered systems, market-leading optics, open line systems, and multi-rail optical systems to meet these requirements. The company has also won new design wins with hyperscalers for their silicon 1 powered systems and is seeing strong demand for AI infrastructure from Neo Cloud Sovereign and enterprise customers.

A：AI is shaping the company's future direction in the enterprise sector by enabling businesses to optimize both the business value and cost of AI. Enterprises require GPU clusters with low latency, high bandwidth networking, built-in security, observability, and automation. Cisco's co-designed, vertically integrated stack can meet these needs regardless of the deployment location, whether in the public cloud, on-premise, or at the edge. This focus on AI infrastructure is expected to benefit Cisco due to its depth and breadth of portfolio. The company is continuing to invest in infrastructure for both the public cloud and on-premise deployments, with strong demand for campus networking solutions and wireless products contributing to the growth.

A：Resilient infrastructure services are powered by Cisco IQ and assist customers in identifying IT risks and optimizing their infrastructure for enhanced reliability and performance.

A：Generative AI and AI systems are used across Cisco's customer experience organization, dramatically expediting quote turnaround, case resolution, and addressing over 100,000 cases by AI, thus improving service delivery.

A：In the recent quarter, Cisco delivered a very strong performance, exceeding the high end of guidance across revenue, operating margin, and EPS. Total revenue was a record, non-GAAP net income was $4.9 billion, and non-GAAP earnings per share was $1.22, also a record.

A：Total RPO was $46.7 billion, up 7% with product RPO up 9%. Total AR ended the quarter at $32.1 billion, an increase of 3% with product AR growth of 5%.

A：Non-GAAP operating margin was 13.5, with a non-GAAP tax rate of 18.8%, reflecting strong execution and operational efficiency.

A：During the quarter, Cisco returned $3.200 billion to shareholders, which included $1.1 billion for the quarterly cash dividend and $2.1 billion of share repurchases.

A：For the fiscal year, revenue was a record $60.3 billion, up 8%. The company returned $17.5 billion in capital to shareholders through cash dividends and share repurchases, with a dividend increase for the fourth consecutive year.

A：Cisco closed the acquisitions of Galileo Technologies Inc and asterisk Securities Limited to expand observability and security offerings, continuing its focus on strategic investments.

A：The guidance for fiscal Q is revenue in the range of $18 billion to $18.2 billion, non-GAAP gross margin in the range of 68% to 69%, non-GAAP operating margin in the range of 35.5% to 36.5%, and non-GAAP earnings per share ranging from $1.32 to $1.34. For the fiscal year, the revenue is expected to be in the range of $72.2 billion to $73.4 billion, with non-GAAP earnings per share expected to range from $5.50 to $5.11.

A：The company expects a slight gross margin headwind in FY 27 due to high growth opportunities, with revenue growth expected to accelerate to 15% on the top line and 17% on the bottom line. The core business is projected to grow at about Ed, with the operating margin being a better indicator of profitability, expected to reach a high watermark of approximately 12% for the full year.

A：Security revenue is expected to grow from low single digits in full year FY 26 to high single digits in full year FY 27. The company is turning the corner on security in Splunk and sees it as a focus area, with growth rates improving as the year progresses.

A：The company believes that operating margins represent a better indicator of profitability and that the projected operating margin of about 12% for the full year is a high watermark for the company. They expect profitability to improve as they capture strategic growth opportunities, especially with the hyperscalers.

A：The enterprise acknowledges that the move towards cloud and on-prem models is influenced by cost, security, and sovereignty issues. They believe that customers will make informed decisions based on use cases. For the company, if customers continue using cloud-based models, it's beneficial, but if they move towards open weight models or run on-prem, it's also positive as it means investing in more enterprise private data center networking, which has been showing continued growth.

A：The company is being prudent on the remainder of the year, taking into account the tougher comps and overall linearity of the year. They expect a good trend line with gradual increases in revenue from AI Hyperscale as they move from Q1 through the year.

A：The company is leaning into its financial strength and has a world-class supply chain team that has been voted as such for several years. They are actively entering into strategic agreements and making investments like in Naya. On the memory side, they deal directly with TSMC without any middleman, ensuring a direct supply chain that includes wafers, substrates, assembly, and test. This direct approach to the supply chain allows the company to have an adequate supply to meet their financial guidance for the year and perform above that if necessary.

A：The price increases have had a positive impact on non-AI revenue within the networking business. The impact on financials was about 5 points in terms of top-line revenue growth in Q4 of the previous fiscal year (FY26). The company expects a more pronounced impact in the first half of the current fiscal year (FY27) as they lap the price increases implemented in the second half of the previous year. The price increases are a last resort, and the company is doing everything to secure the right supply at the right prices, build up strategic inventory, and utilize advanced purchase commitments. Additionally, they have reduced memory utilization by 50% in Wi-Fi 7 through internal G2 teams. The price increases are specific to hardware and not software, and they are focused on passing on only the necessary costs to customers.

A：Enterprise customers are aware of the need to be prepared for technology shifts and are being cautious while moving quickly to avoid being at a competitive disadvantage. They recognize that pausing technological upgrades could put their companies at risk. Most are reprioritizing within their existing budgets and are looking at AI, ML, and quantum readiness similarly to how they treated cybersecurity spend in the past few years. This has led to a shift of dollars from other areas to ensure they are secure and prepared.

A：The growth in campus networking product orders is attributed to the company's platform approach to networking products, exemplified by the positive feedback and customer sign-ups for Cisco Cloud Control. This includes features like AI Canvas, which allows for the consolidation of managing cloud, on-premises, and networking devices from a single platform. This has contributed to the increased demand for campus networking products.

A：The demand for AI orders is expected to evolve positively next year, influenced by the company's platform approach and innovation, which are resonating with customers, leading to durable demand. The company has not quantified the impact of recent price increases on AI orders for next year, but the overall trend and customer feedback suggest a favorable outlook.

A：The growth in revenue from the hyperscalers is attributed to their demand for AI workloads and their need for bandwidth. The contribution from the telco business to this growth is significant as it accelerated during the quarter, impacting the total number by a meaningful 30%.

A：The AI transition has impacted the company's revenue positively, with significant growth seen from the hyperscalers and a stronger demand for their products. In preparation for future revenue reporting, the company will transition from an order target to a more traditional revenue target of $Ly Ly billion. The company will continue to provide updates on forward-looking metrics such as design wins and orders taken.

A：The company is capturing more of the opportunity presented by new variables like Mythos by working closely with their customers, many of whom are assessing their infrastructure with the help of Cisco IQ. This analysis allows customers to identify what needs to be replaced or upgraded, creating a movement of budget internally towards these new demands.

A：The company does not see any significant lead time issues and has not experienced any escalations from customers regarding lead times. The visibility into lead times is positive with the company having a direct line of communication with TSM, which allows them to manage their own destiny in controlling the supply chain and innovate more freely without waiting for allocations or commitments from merchant silicon providers.

A：The budget for new variables like Mythos is not an issue for the customers as they fund it out of necessity, a departure from the past where budget allocation might have been a concern. The customers are conducting in-depth analysis with the company's teams to understand their infrastructure and identify where upgrades are needed, including equipment from competitors that is no longer supported. They are then reassigning budget from other areas to accommodate these upgrades.

A：The AI transition is significant for the company as it has enabled them to build stronger relationships with hyperscaler customers, providing them with silicon software, systems, or a combination thereof. The company's role in this era is critical, as it views the network as essential to the success of AI deployments. The teams have worked hard to achieve this breakthrough scale, and the company is proud of their achievements and optimistic for future prospects.